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<TEXT>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    FORM 8-K


                                 CURRENT REPORT
   PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES AND EXCHANGE ACT OF 1934


          Date of Report (Date of earliest reported): February 24, 2005


                        DIGITAL DESCRIPTOR SYSTEMS, INC.
               (Exact name of registrant as specified in charter)


     DELAWARE                      000-26604                 23-2770048
(State or other jurisdiction     (Commission                (IRS Employer
  of incorporation)              File Number)             Identification No.)


    2150 HIGHWAY 35, SEA GIRT, NJ                         08750
  (Address of principal executive offices)              (Zip Code)


       Registrant's telephone number, including area code: (732) 359-0260

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

[_] Written communications pursuant to Rule 425 under the Securities Act
    (17 CFR 230.425)

[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
    (17 CFR 240.14a-12)

[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
    Act (17 CFR 240.14d-2(b))

[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))
<PAGE>

ITEM  1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT; AND
ITEM  2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS

      On March 1, 2005, Digital Descriptor Systems, Inc. (the "Company") and its
wholly-owned subsidiary, CGM Applied Security Technologies, Inc. ("CGM Sub"),
acquired substantially all of the assets of CGM Security Solutions, Inc., a
Florida corporation ("CGM"), for (i) $1,500,000 in cash and (ii) a 2.86%
promissory note (the "Note") in the principal amount of $3,500,000, subject to
adjustment (the "Acquisition"). The assets of CGM were acquired pursuant to an
Asset Purchase Agreement among the Company, CGM Sub and CGM dated as of February
25, 2005. In connection with the acquisition, the Company and CGM Sub each
entered into an employment agreement with Erik Hoffer (the "Employment
Agreement").

      The principal amount of the Note is subject to adjustment based upon the
average of (i) the gross revenues of CGM Sub for the fiscal year ending December
31, 2007 and (ii) an independent valuation of CGM Sub based upon the
consolidated audited financial statements of the Company and CGM Sub for the
fiscal years ended December 31, 2006 and 2007. In addition, the Company has
granted CGM a secondary security interest in substantially all of its assets and
intellectual property.

      In connection with the Acquisition, the Company entered into a letter
agreement with certain of its investors (the "Investors") which extended the
maturity date of debt instruments issued on November 30, 2004 until March 1,
2008, and amended the conversion price of the debt that is held by the Investors
to the lower of (i) $0.0005 or (ii) 60% of the average of the three lowest
intraday trading prices for the Company's common stock during the 20 trading
days before, but not including, the conversion date. In addition, the exercise
price of the warrants held by the Investors was amended to $.001 per share.

DESCRIPTION OF BUSINESS OF CGM

      CGM is a manufacturer and distributor of indicative and barrier security
seals, security tapes and related packaging security systems, protective
security products for palletized cargo, physical security systems for tractors,
trailers and containers as well as a number of highly specialized authentication
products.

HISTORY

      CGM Security Solutions, Inc was established as a manufacturer in February
1977.

PRODUCTS

      CGM has a patent on its Secure Tract tape, super seals water gum tape, and
sentry sensor. It also has exclusive rights on NAVATECH products and all seals.
In addition, CGM provides authentication technology and products to clients to
act as brand protection elements to finished goods. This brand protection
technology can help manufacturers reduce the incidences of "knock-offs" that are
common in the garment and accessory businesses. CGM's core products are: CGM
Tapes, Self-Wound Security Tape, Void Labels and Void Tape for Bag Closure,
SUPERSEALS(R), Custom Coated Products, CGM Conductive Inks and Membrane Switch
Components, EMAPS(R), Locks, Sentry Sensor(R) and other representative items.

      SUPERSEAL(R) and self-voiding carton sealing tape known as SECURE
T.R.A.C.(R) show a customized signature if attempts are made at removing them.
If cut and resealed, SUPERSEAL(R) further shows an "opened" legend on the seal's
center surface. With self-wound void tape, any attempt at resealing is negated
by the surface coating on the tape. An "opened" legend is also left on the tape
if removed. Since the products are manufactured in-house, CGM controls all
<PAGE>

features and has the ability to customize the products to the customer's needs.
CGM also offers converted labels, seals, and money bags. CGM manufactures a
variety of adhesives, graphics and die cut label configurations for companies
whose logos always appear on the tape or label for security purposes. No generic
product can be substituted for this product since no one makes an identical
product.

      Uses for this product and technology include such items as:

      o     Aircraft and truck seals
      o     Fiber and Steel drum seals
      o     Motor Vehicle inspection seals
      o     Box or container closure seals
      o     Cash bag components
      o     Computer seals
      o     Validation devices
      o     General security products

      Once CGM's products are applied to a particular surface, any attempt at
removal will leave a sign in the form of an indelible word or legend on the tape
and a removable or permanent legend on the enclosure. The EMAPS(R) or
Electro-Magnetic Asset Protection System, reflects entry by sending an
electronic signal if cut. EMAPS(R) products function without the need to
identify a cut visually. Both products, the labels and the scanners, are unique
and only manufactured by CGM. EMAPS(R) and SECURE T.R.A.C.(R) have been
patented.

PRODUCTION PROCESS

      The CGM manufacturing process can best be described as one of
"converting". CGM takes highly processed materials, which are manufactured
elsewhere, and converts them into finished products.

      CGM purchases processed materials from 6 to 8 key suppliers, including
Dupont, Adhesive Research, Sun Microsystems and Video Jet. For OEM products, CGM
purchases from approximately 15 different companies. CGM has an exclusive
distribution relationship in connection with some of these products, while for
other products CGM is one of few or many resellers.

MARKETS & CUSTOMERS

      The primary factors behind the need for CGM's products are: (i) the
escalation of cargo theft and tampering, (ii) the need for enhanced cargo
security because of the fear of terrorism, (iii) damage control of freight and
cargo, (iv) the need for security products, (v) brand protection and
authentication requirements and (vi) governmental and regulatory requirements.

      CGM is certified by the Customs-Trade Partnership Against Terrorism
("C-TPAT"), a joint initiative between government and business designed to
protect the security of cargo entering the United States while improving the
flow of trade. C-TPAT requires importers to take steps to assess, evolve and
communicate new practices that ensure tighter security of cargo and enhanced
security throughout the entire supply chain. In return, their goods and
conveyances will receive expedited processing into the United States
<PAGE>

PRINCIPAL CUSTOMERS

      CGM's current client base includes over 2000 national and international
companies, including producers of high value items such as perfumes, computers,
silicon chips, jewelry, cash and negotiable documents. The market for tamper
evidence includes flavors, fragrances, foodstuffs and components. CGM's products
are used by major airlines, pharmaceutical clients and numerous government
agencies. CGM's products have also been recommended by major insurance companies

SALES

      CGM has four salespeople for domestic sales and representative
distributors for sales abroad. CGM supplements its sales force with Internet
advertising, trade shows, and PR benefits from Erik Hoffer's chairmanship of
education for the National Cargo Security Council.

COMPETITION

      Several other companies manufacture products that are similar to CGM's
self-voiding label stock. Their products are limited in scope and do not
adequately address the issues of tampering by virtue of their inability to
withstand the normal means of breaching adhesive products. However, new
innovations and better sales/marketing by other companies with a
product-solutions market approach could affect our ability to market our
products. Currently, no other company manufactures the self-voiding label stock
vertically or sells the finished product in a customized tape or seal form like
CGM does. As both a manufacturer and converter, CGM delivers finished goods to
users in response to their individual needs. CGM can modify its products through
all phases of its development to make it user friendly and compatible with the
needs of its desired application.

      No other company in the industry offers the array of products that CGM
offers. There are approximately 12 seal manufacturers that offer seals and
compete with each other over price. CGM sells through threat assessment and
determine products on the basis of functionality.

INDUSTRY TRENDS

      It is estimated that losses from cargo theft each year reach 30-50
billions dollars globally and 12 billion dollars in the US, and that these
numbers will continue to rise. (L.H. Gray, Facing the Growing Problem of Loss
and Theft).

EMPLOYEES

      CGM maintains a staff of approximately 20 full-time employees, including
its salespeople.

ITEM. 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS.

      On February 24, 2005, Michael Pellegrino, age 55, was appointed as Senior
Vice President and Chief Financial Officer of the Company. From October 2003 to
February 2005, Mr. Pellegrino has served a consultant to the Company. From July
1995 to February 2005, Mr. Pellegrino has worked for the Company in the
positions of Chief Financial Officer, President and Chairman of the Board. He
received a B.S. in science in accounting from Montclair State University, and a
Masters in Finance from Rutgers University, and is a Certified Public
Accountant.

      On February 24, 2005, Anthony Shupin, age 50, was appointed as Chairman of
the Board of Directors of the Company. He has over 25 years experience in the
areas of executive management, sales, marketing and international business
<PAGE>

development with technology, computing, aerospace and professional services
companies. Since October 2003, Mr. Shupin has been President, Chief Executive
Officer and a director of the Company. Prior to joining the Company, Mr. Shupin
served in several capacities in the Technology and Management Consulting field.
In November, 2001, he founded TShupin and Associates, a management consulting
firm focused on assisting clients in the areas of Sales and Marketing, New
Business Start-Up, Operational Analysis and Business/Technology Synchronization.
From August 2000 to October 2001, he was a Business Development Executive in the
Communications and Media practice at Deloitte Consulting. From August 1999 to
August 2000, Mr. Shupin was Vice President, Business Development, of John
Richard Associates, Inc. and from August 1989 to August 1999, he was a Director
for International Business Development of Space Imaging, Inc. in Denver,
Colorado.

      On March 1, 2005, Eric Hoffer, age 58, was appointed as Executive Vice
President and a director of the Company and President of CGM Sub. Prior to
joining the Company, Mr. Hoffer has been the president and chief executive
officer of CGM, which he created in 1977. Prior to starting CGM, Mr. Hoffer was
the national sales manager of Lamart Corporation from 1972-1977. For the past 37
years, Mr. Hoffer has designed and patented a number of theft control,
authentication, barrier and theft detection products. He holds many patents and
a considerable amount on corporate trade secrets in manufacturing these
products. He is considered an expert in the areas of adhesive coating,
conductive inks and cargo security science. For the past four 4 years, Mr.
Hoffer has been the chairman of educational events for the National Cargo
Security Council and previously the co-chairman of the NCSC GMATS program. Mr.
Hoffer received a B.S. in industrial psychology from Northeastern University. He
also holds an associates degree in transportation and traffic management.

      Pursuant to the Employment Agreement, Mr. Hoffer will be employed as
Executive Vice President of the Company for an initial term of three years,
which may be extended, and President of CGM Sub for an initial term of one year,
which may be renewed for successive one-year terms. Pursuant to the Employment
Agreement, Mr. Hoffer will receive a base salary of $200,000, a bonus of 5% of
the gross margin sales increase over the prior year's gross margin sales of CGM
products and customary benefits and reimbursements.

ITEM 8.01 OTHER EVENTS

      On March 2, 2005, the Company issued a press release announcing the
acquisition. A copy of this press release has been filed with the Current Report
on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(a)   Financial statements of businesses acquired.

      1.    Audited Financial Statements of CGM for the years ended December 31,
            2004 and 2003 - To be filed by amendment

      2.    Unaudited Financial Statements of CGM for the nine-month period
            ended September 30, 2004 - To be filed by amendment.

(b)   Pro forma financial information.

      Pro forma financial information - To be filed by amendment

c)    The following exhibits are filed herewith:
<PAGE>

Exhibit No.   Description
-------------------------

4.1           2.86% Secured Convertible Promissory Note in the name of CGM
              Security Solutions, Inc., dated February 25, 2005

4.2           Security Agreement dated February 25, 2005 by and between CGM
              Applied Security Technologies, Inc. and CGM Security Solutions,
              Inc.

4.3           Intellectual Property Security Agreement dated February 25, 2005
              by and between CGM Applied Security Technologies, Inc. and CGM
              Security Solutions, Inc.

4.4           Letter Agreement, by and among the Company, AJW Partners, LLC, New
              Millennium Capital Partners II, LLC, AJW Offshore, Ltd. And AJW
              Qualified partners, LLC, dated January 31, 2005

10.1          Asset Purchase Agreement dated February 25, 2005 by and among the
              Company, CGM Applied Security Technologies, Inc. and CGM Security
              Solutions, Inc.

10.2          Employment Agreement, dated February 25, 2005, by and among the
              Company, CGM Applied Security Technologies, Inc. and Erik Hoffer

99.1          Press Release of the Company, dated March 2, 2005, announcing the
              acquisition of the assets of CGM Security Solutions, Inc.
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                 DIGITAL DESCRIPTOR SYSTEMS, INC.


Date: March 2, 2005              /s/ Anthony Shupin
                                 ---------------------------
                                 Anthony Shupin
                                 President, Chief Executive Officer,
                                 acting Chief Financial Officer and Director

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>2
<FILENAME>v013796_ex4-1.txt
<TEXT>
EXHIBIT 4.1

      THIS NOTE HAS NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933, AS
AMENDED  (THE "1933  ACT"),  OR UNDER THE  PROVISIONS  OF ANY  APPLICABLE  STATE
SECURITIES  LAWS,  BUT HAS BEEN  ACQUIRED BY THE  REGISTERED  HOLDER  HEREOF FOR
PURPOSES OF INVESTMENT  AND IN RELIANCE ON STATUTORY  EXEMPTIONS  UNDER THE 1933
ACT, AND UNDER ANY APPLICABLE  STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD,
PLEDGED,  TRANSFERRED OR ASSIGNED EXCEPT IN A TRANSACTION  WHICH IS EXEMPT UNDER
PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE  STATE SECURITIES LAWS OR PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT; AND IN THE CASE OF AN EXEMPTION, ONLY IF
THE COMPANIES HAVE RECEIVED AN OPINION OF COUNSEL  SATISFACTORY TO THE COMPANIES
THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION OF THIS NOTE.

                        DIGITAL DESCRIPTOR SERVICES, INC.


February 25, 2005                                           Sea Girt, New Jersey

$3,500,000.00, Subject to Increase Adjustment

                    2.86% SECURED CONVERTIBLE PROMISSORY NOTE

      1.    Digital Descriptor Systems, Inc., a Delaware corporation (the
"Parent") and CGM Applied Security  Technologies,  Inc., a Delaware  corporation
("Acquisition  Sub", and together with the Parent,  the "Companies"),  for value
received,  hereby  promise  to  pay,  jointly  and  severally,  to CGM  Security
Solutions,  Inc., or registered  assigns (the  "Holder") on the payment date set
forth below, at the principal offices of the Parent,  the principal sum of Three
Million Five Hundred Thousand  Dollars  ($3,500,000)  (the "Principal  Amount"),
subject to increase  pursuant  to the terms  contained  herein,  in such coin or
currency  of the United  States of  America  as at the time of payment  shall be
legal tender for the payment of public and private debts, and to pay interest on
the  outstanding  principal  sum  hereof  at the rate of 2.86%  per  annum  (the
"Note");  provided,  however,  that the Principal  Amount shall be subject to an
automatic  increase to the "New Principal  Amount",  defined below, in an amount
equal to the average of the two amounts  determined in accordance with Valuation
Procedure One and Valuation  Procedure Two (each defined below, and together the
"Procedures")  if any, and applied in accordance with the conditions  below. Any
increase in the Principal Amount and the commencement of accrual of any interest
thereon  shall be  effective  as of the date on which the results of the last of
the Procedures are received by the parties (the "Effective Date").

      2.    Pursuant to "Valuation  Procedure  One": (a) within 60 days of
December 31, 2007,  the Parent's then  independent  auditor shall  determine the
gross revenues  generated by Acquisition Sub for the fiscal year ending December
31,  2007  in  accordance  with  generally   accepted   accounting   principles,
consistently  applied  (the  "Gross  Revenue"),  and shall  certify  same to the
parties;  (b) the  Gross  Revenue  shall be  multiplied  by a  factor  of 1.0 to
determine the new value of  Acquisition  Sub (the "New CGM Value One");  and (c)
the amount of any increase in the Principal  Amount  pursuant to this  Valuation
Procedure  One shall be equal to the New CGM Value  One,  less  $5,000,000,  and
shall be referred to as the "Procedure One Principal Amount


<PAGE>


Increase". In the event that the application of Valuation Procedure One does not
result in a Procedure One Principal Amount  Increase,  then under this Valuation
Procedure One the  Principal  Amount shall be deemed the Procedure One Principal
Amount Increase for all purposes under this Valuation Procedure One.

      3.    Pursuant to "Valuation Procedure Two", an independent  investment
bank,  qualified to undertake  valuations of public  companies  (the  "Valuation
Expert"),  mutually agreed upon by the Parent and the former shareholders of the
Holder, as of the date hereof, shall establish the value of Acquisition Sub (the
"New CGM Value Two"),  in  accordance  with the  following  procedures:  (a) the
parties shall agree upon the Valuation Expert in writing,  no later than October
30,  2007,  and if not so agreed by such date,  the  Valuation  Expert  shall be
selected by the  American  Arbitration  Association,  whose  selection  shall be
binding upon the  parties;  (b) the  Valuation  Expert  shall be  authorized  to
deliver its valuation of Acquisition  Sub no later than March 31, 2008,  subject
to reasonable extensions in the discretion of the Valuation Expert, and; (c) the
amount of any  automatic  increase  in the  Principal  Amount  pursuant  to this
Valuation Procedure Two shall be equal to the New CGM Value Two, less $5,000,000
and shall be referred to as the "Procedure Two Principal  Amount  Increase".  In
the event that the  application of Valuation  Procedure Two does not result in a
Procedure Two Principal Amount Increase, then under this Valuation Procedure Two
the Principal Amount shall be deemed the Procedure Two Principal Amount Increase
for all purposes under this Valuation Procedure Two.

      4.    The Holder and the Companies  agree that when  determining  the New
CGM Value Two in Valuation  Procedure Two, the Valuation Expert,  when preparing
its valuation,  shall: (i) when required to utilize financial  statements in its
valuation, rely solely upon the consolidated audited financial statements of the
Parent and  Acquisition  Sub for the fiscal  years ended  December  31, 2007 and
2006, excluding from its valuation any and all financial information that may be
included  therein and  attributable to any other  subsidiary or affiliate of the
Parent (the "Financial Statements");  (ii) exclude extraordinary expenses as may
have been  allocated  or  charged  by the  Parent,  or any other  subsidiary  or
affiliate of Parent, to Acquisition Sub, retaining, however, for purposes of the
valuation any reasonable  fees charged  solely by Parent to Acquisition  Sub and
which  represent  any payments to the  Parent's  management  and which  directly
correspond  to  any   improvements   in  the   Acquisition   Sub's   operational
effectiveness  as  determined  by  the  Valuation  Expert,  in  accordance  with
generally  accepted  accounting  principles,  consistently  applied;  and  (iii)
exclude  any  debt  on  the  Financial  Statements  owed  to the  Parent,  other
subsidiaries  and affiliates or to the persons or entities set forth on Schedule
A.

      5.    Notwithstanding  the  foregoing,  if the gross  sales of CGM
Security  Solutions,  Inc. for the one year period ended  December 31, 2004,  as
included in the final  certified  audited  financial  statements for such period
("Actual Gross Sales") do not equal at least  $4,030,000  (the "Target  Sales"),
the  principal  amount of this Note shall be  reduced by an amount  equal to the
difference  between the Target Sales and the Actual  Gross Sales (the  "Adjusted
Note Principal Amount Reduction").

      6.    Upon  the  Effective  Date,  the  Principal  Amount  of  this  Note
of $3,500,000 shall  automatically  be: (i) increased by the amount equal to the
average of the  Procedure One  Principal  Amount  Increase and the Procedure Two
Principal  Amount  Increase,  and; (ii) decreased by the Adjusted Note Principal
Amount Reduction, if any, and if any increase in the $3,500,000 principal


                                       3
<PAGE>


amount of this Note results  therefrom,  such increase,  added together with the
original  principal  of  $3,500,000  shall be deemed for all  purposes  the "New
Principal  Amount" of this Note.  The  parties  agree that  notwithstanding  any
result of the  foregoing  calculations,  the New  Principal  Amount of this Note
shall not be less than the Principal Amount.

      7.    Accrued interest shall be payable upon the outstanding Principal
Amount  of  this  Note  on the  30th  day  following  each  of the  first  three
anniversaries  of this Note.  The  balance of any  accrued  interest  on the New
Principal  Amount,  if any, shall be due and payable 30 days after the Effective
Date.  The New Principal  Amount of this Note, as determined in accordance  with
the terms hereof and subject to the cash payment  limitation of Section 9 below,
together with unpaid accrued interest shall be payable on the 30th day following
the Effective  Date (the "Payment  Date") in like coin or currency to the Holder
hereof at the office of the Parent as hereinafter  set forth,  provided that any
payment otherwise due on a Saturday, Sunday or legal Bank holiday may be paid on
the following business day.

      8.    In the event that the Parent or Acquisition  Sub determine that for
any reason  whatsoever  any interest or other  consideration  payable  under the
terms of this Note are in violation of any applicable usury statute of the State
of New Jersey, Parent and/or Acquisition Sub shall, prior to the due date of the
New Principal Amount:  (i) provide Holder with written notice of such violation,
setting  forth the facts and  circumstances  supporting  such claims,  and; (ii)
include with such written notice, a legal opinion, addressed to the Holder, from
an attorney  admitted to  practice  in the State of New  Jersey,  containing  an
unqualified  legal opinion that under the facts and  documents  delivered by the
Parent and/or the  Acquisition  Sub that the payments due under this Note are in
violation  of one or more usury  statutes of the State of New Jersey (the "Usury
Notice").  Within 30 days' of the sending of the Usury Notice, the Parent and/or
Acquisition Sub shall institute an action seeking a declaratory  judgment in the
Superior Court, County of Somerset, State of New Jersey (the "Court"), to obtain
a judgment  (1) on the  application  of the New  Jersey  usury  statutes  to the
payments  due under  this Note,  and to obtain a ruling as to (2) the  aggregate
maximum rate of interest  payments  that could be legally  charged to Parent and
Acquisition  Sub on the  Principal  Amount under  applicable  statutes,  for the
period commencing from the date hereof through the due date of the New Principal
Amount (the "Maximum Legal Amount"). Parent and Acquisition Sub acknowledge that
they have set forth below their respective  representations,  which include that
they have performed their legal due diligence in connection with their execution
and  delivery  of this  Note and that to their  best  knowledge,  the  terms and
payments due under this Note are not in  violation  of any usury  statute of the
State of New Jersey, and that the Holder is relying upon such representations to
accept delivery of this Note,  execute and deliver the Asset Purchase  Agreement
and other documents,  all dated the date hereof and pursuant to which the Holder
is selling his entire business to the Parent and  Acquisition  Sub, and that any
subsequent sending of the Usury Notice and subsequent court action by the Parent
and/or the  Acquisition  Sub that results in the Court  concluding  that all the
payments due and payable under this Note are not in violation of any  applicable
New  Jersey  usury  statute,   would  represent  breaches  of  their  respective
representations  set forth  herein  and would  result in  serious  injury to the
Holder, entitling the Holder to liquidated damages.


                                       3
<PAGE>


Accordingly,  in the event the Usury  Notice is sent by the  Parent  and/or  the
Acquisition  Sub prior to the  payment of all sums due under this Note,  and the
Court in the declaratory judgment action, determines that the aggregate payments
due under this Note are not in violation of any New Jersey  usury  statute,  the
Parent and Acquisition Sub, jointly and severally,  shall pay to the Holder,  on
demand,  in addition to the payments due under this Note,  (A) an additional sum
equal to the difference  between the aggregate and lawful amounts due under this
Note as  determined  by the Court and the  Maximum  Legal  Amount and (B) all of
Holder's legal fees,  administrative  costs and expenses incurred by Holder as a
result of Holder's  participation  in the declaratory  judgment  action.  In the
event the Court finds that any amounts due under this Note to be usurious  under
the laws of the State of New Jersey, then so much of such interest payable under
the terms of this Note as shall be deemed to be  usurious  shall be  deducted by
the Court from the payments  due under this Note and the Parent and  Acquisition
Sub shall forthwith and immediately pay the reduced legally  permissible  amount
of principal and interest due under this Note to the Holder,  no later than five
(5) days following such Court decision.

      9.    Notwithstanding  the  foregoing,  on the Payment Date,  subject to
the  limitations  set forth  below,  the  Companies  shall either (i) pay to the
Holder the New Principal  Amount  together with any remaining  accrued  interest
thereon,  in cash,  not to  exceed  $6,000,000  (the  "Cash  Payment"),  and the
balance,  if any, shall be paid in Parent stock as more  specifically  described
below (the  "Stock  Payment"),  or (ii)  provided  that there is no  outstanding
default under the "Debt Instruments"  identified in Exhibit G to a certain Asset
Purchase  Agreement  between  the parties to this Note and dated the date hereof
(an "NIR Default",  in which case such the "Asset  Transfer" option shall not be
available to the Companies), transfer all of Acquisition Sub's assets, including
the  "Assets" as  identified  in the Asset  Purchase  Agreement,  dated the date
hereof,  among the Companies and the Holder (the "Asset  Transfer"),  as well as
the corporate  name and  trademarks,  back to the Holder,  its  shareholders  or
assigns  (as  designated  by the  Holder),  free and clear of any and all liens,
security interests or claims of any nature  whatsoever,  and unencumbered by any
debts  associated  with the  Asset  Transfer.  Costs  associated  with the Asset
Transfer shall be borne by the Companies.  The  indebtedness  under this Note is
secured by a certain  Security  Agreement  and  Intellectual  Property  Security
Agreement,  also dated the date hereof,  by and between the  Acquisition Sub and
the Holder.  The Companies shall complete the Asset Transfer no later than April
10, 2008, or as soon as practicable thereafter.

      In the event the  Companies  pay the New  Principal  Amount to the Holder,
either at their  option or  because  they are  required  to do so because of the
existence on the Payment Date of an NIR Default,  the Holder  acknowledges  that
the  Companies  shall not be  required  to pay more than  $6,000,000  of the New
Principal Amount in cash. Accordingly, the Companies shall pay the New Principal
Amount to the Holder as follows: (i) in cash, up to $6,000,000, representing the
Cash  Payment,  and (ii) the  balance of the New  Principal  Amount in excess of
$6,000,000 shall be converted  automatically and payable to the Holder in common
stock of Parent ("Common Stock"),  representing the Stock Payment.  In addition,
and subject to the sole and exclusive option of the Holder,  the Holder may also
elect to convert any portion of the Cash Payment over $3,500,000 to common stock
of the Parent (the "Qualified Portion"). The Stock Payment and, in the event the


                                       4
<PAGE>


Holder elects a Qualified  Portion,  shall be converted  into Common Stock based
upon the  average  bid and asked  sales  prices of the Common  Stock  during the
90-day  period  immediately  preceding  the  Effective  Date as  reported by the
applicable  exchange.  The Parent shall  calculate the amount of Common Stock to
which the Holder is entitled  and shall  issue  certificates  representing  such
shares to the Holder no later than 30 days  following  the Effective  Date.  The
Holder shall  exercise his option to designate a Qualified  Portion to be issued
as Common Stock by sending a complete Notice of Conversion, substantially in the
form attached hereto,  to the Parent within thirty (30) days of Holder's receipt
of the Cash Payment and Holder's check, representing the Qualified Portion.

      The  amount  of  Common  Stock  representing  the  Stock  Payment  and the
Qualified  Portion  shall not exceed 25% of the Common  Stock of the Parent then
outstanding,   assuming  the  issuance  of  shares  of  Common  Stock  hereunder
("Issuance Limit"). In the event the Issuance Limit would otherwise be exceeded,
the  Company  shall  issue such  shares of Common  Stock as equals the  Issuance
Limit, and shall also issue shares of convertible  preferred stock to the Holder
(the "Preferred  Stock"),  representing  the balance of either the Stock Payment
and/or  Qualified  Portion.   The  Preferred  Stock  shall  have  a  liquidation
preference  equal to the balance  remaining of the New Principal Amount not paid
in cash or immediately  converted and paid to the Holder in Common Stock. Twenty
percent  (20%) of the  Preferred  Stock shall be  automatically  converted  into
shares  of  Common  Stock on each of the  first  five  anniversary  dates of the
issuance of the  Preferred  Stock at a conversion  rate equal to the average bid
and asked price of the Common Stock for the 90 days prior to the Effective  Date
as reported by the applicable exchange, subject to the Issuance Limit.

      10.   Transfers of Note to Comply with the 1933 Act

      The Holder  agrees that this Note may not be sold,  transferred,  pledged,
hypothecated  or otherwise  disposed of except as follows:  (1) to a person whom
the Note may legally be transferred without registration and without delivery of
a current  prospectus  under  the 1933 Act with  respect  thereto  and then only
against  receipt of an agreement of such person to comply with the provisions of
this Section 10 with respect to any resale or other  disposition of the Note; or
(2) to any person upon delivery of a prospectus then meeting the requirements of
the 1933 Act relating to such securities and the offering  thereof for such sale
or disposition, and thereafter to all successive assignees.

      11.   Prepayment

            The Principal Amount may be prepaid by the Companies, in whole or in
part without  premium or penalty.  Upon any  prepayment of the entire  principal
amount of this  Note,  all  accrued,  but unpaid  interest  shall be paid to the
Holder on the date of prepayment. Nothing contained herein shall limit the right
of the Holder to receive the New Principal Amount.

            In the  event  the  Parent  agrees to permit the Holder to convert a
portion of the principal or interest on this Note,  or the Companies  prepay any
portion of the principal or interest on this Note, the Holder shall deliver this
Note to the Parent who shall issue a new note to the Holder, evidencing


                                       5
<PAGE>


any reduction of principal or interest so converted or prepaid.

      12.   Covenants of Companies

            The  Companies  covenant  to the  Holder  and  agree  that,  so long
as any principal of, or interest on, this Note shall remain  unpaid,  unless the
Holder shall  otherwise  consent in writing,  it will comply with the  following
terms:

            (a)  Reporting  Requirements.  The  Parent or  Acquisition  Sub,  as
applicable, will furnish to the Holder:

            (i) as soon as possible, and in any event within ten (10) days after
obtaining  knowledge  of the  occurrence  of  (A)  an  "Event  of  Default,"  as
hereinafter  defined, (B) an event which, with the giving of notice or the lapse
of time or both, would constitute an Event of Default, or (C) a material adverse
change in the condition or operations,  financial or otherwise, of the Parent or
Acquisition  Sub, taken as whole,  the written  statement of the Chief Executive
Officer or the Chief Financial Officer of the Parent and/or the Acquisition Sub,
setting  forth the details of such Event of Default,  event or material  adverse
change and the action which the Parent  and/or the  Acquisition  Sub proposes to
take with respect thereto;

            (ii) promptly after the commencement thereof, notice of each action,
suit or  proceeding  before any court or other  governmental  authority or other
regulatory body or any arbitrator as to which there is a reasonable  possibility
of a determination that would (A) materially impact the ability of the Parent or
Acquisition Sub to conduct its business, (B) materially and adversely affect the
business,  operations  or financial  condition of the Parent or the  Acquisition
Sub, or (C) impair the validity or  enforceability of the Note or the ability of
the Companies to perform their obligations under the Note.

            (b) Compliance with Laws. The Companies will comply, in all material
respects with all applicable laws, rules,  regulations and orders, except to the
extent  that  noncompliance  would not have a material  adverse  effect upon the
business, operations or financial condition of the Parent or the Acquisition Sub
taken as a whole.

            (c)  Preservation  of Existence.  So long as this Note  delivered by
Parent and  Acquisition  Sub to the Holder remains unpaid and  outstanding,  the
Parent and Acquisition Sub shall maintain their respective  corporate  existence
and shall not sell all or substantially all of their respective  assets,  except
in the event of a merger or consolidation or sale of all or substantially all of
their  assets,  where the  surviving  or  successor  entity in such  transaction
assumes the  Parent's and  Acquisition  Sub's  obligations  hereunder as well as
under a certain Asset Purchase Agreement and other "Parent Documents" as defined
therein, all dated the date hereof, between the parties hereto.



                                       6
<PAGE>


            (d)  Maintenance of Properties.  The Parent and Acquisition Sub will
each maintain and  preserve,  all of its  properties  which are necessary in the
proper  conduct of its business in good working  order and  condition,  ordinary
wear and tear excepted;  not divert any of the business or assets of Acquisition
Sub so as to reduce,  frustrate or diminish Holder's rights under this Note, the
Asset Purchase  Agreement,  the Security Agreement or the Intellectual  Security
Agreement,  and comply,  at all times with the provisions of all leases to which
it is a party as lessee or under  which it occupies  property,  so as to prevent
any forfeiture or material loss thereof or thereunder.

            (e)  Maintenance of Insurance.  The Companies  will  maintain,  with
responsible and reputable insurers, insurance with respect to its properties and
business,  in such amounts and covering such risks,  as is carried  generally in
accordance  with sound business  practice by companies in similar  businesses in
the same localities in which the Companies are situated.

            (f) Keeping of Records and Books of Account. The Companies will keep
adequate records and books of account,  with complete entries made in accordance
with generally accepted accounting  principles,  reflecting all of its financial
and other business transactions.

            (g) Compliance with the Securities  Exchange Act of 1934. The Parent
shall comply in all respects with the  requirements  of the Securities  Exchange
Act of 1934, including the timely filing of all reports due thereunder.

            (h)  Reservation of Common Stock.  The Parent further  covenants and
agrees that the Parent will at all times have authorized and reserved, free from
preemptive  rights, a sufficient number of shares of its common stock to provide
for the conversion of this Note in full.

      13.   Events of Default and Remedies

            (a) Any  one or  more  of the  following  events  which  shall  have
occurred  and be  continuing  shall  constitute  an event of default  ("Event of
Default"):

            (i) Default in the payment of interest  upon this Note,  as and when
the same shall become due; or

            (ii) Default in the payment of the  principal  of this Note,  as and
when the same shall become due; or

            (iii) The Companies shall fail to perform or observe any affirmative
covenant contained in this Note and such Default,  if capable of being remedied,
shall not have been  remedied ten (10) days after written  notice  thereof shall
have been given by the Holder to each of the Companies; or


                                       7
<PAGE>


            (iv)  The  Parent  or  Acquisition   Sub  (A)  shall  institute  any
proceeding or voluntary case seeking to adjudicate it bankrupt or insolvent,  or
seeking  dissolution,  liquidation,  winding  up  reorganization,   arrangement,
adjustment,  protection,  relief or composition of it or its debts under any law
relating to bankruptcy,  insolvency or reorganization  or relief of debtors,  or
seeking  the entry of any order for  relief or the  appointment  of a  receiver,
trustee,  custodian  or  other  similar  official  for such  the  Parent  or any
subsidiary or for any substantial part of its property,  or shall consent to the
commencement against it of such a proceeding or case, or shall file an answer in
any such case or proceeding commenced against it consenting to or acquiescing in
the commencement of such case or proceeding, or shall consent to or acquiesce in
the appointment of such a receiver,  trustee, custodian or similar official; (B)
shall be unable to pay its debts as such debts  become  due,  or shall  admit in
writing its  inability  to apply its debts  generally;  (C) shall make a general
assignment  for the  benefit  of  creditors;  or (D)  shall  take any  action to
authorize or effect any of the actions set forth above in this subsection 3(iv);
or

            (v) Any proceeding shall be instituted against the Companies seeking
to adjudicate it a bankrupt or insolvent,  or seeking dissolution,  liquidation,
winding  up,  reorganization,  arrangement,  adjustment,  protection,  relief of
debtors,  or seeking  the entry of an order for relief or the  appointment  of a
receiver,  trustee, custodian or other similar official for the Companies or for
any substantial part of its property,  and either such proceeding shall not have
been  dismissed or shall not have been stayed for a period of sixty (60) days or
any of the actions sought in such proceeding (including, without limitation, the
entry of any order for  relief  against  it or the  appointment  of a  receiver,
trustee,  custodian or other similar official for it or for any substantial part
of its property) shall occur; or

            (vi) One or more final  judgments or orders for the payment of money
in excess of $200,000 in the aggregate shall be rendered  against the Companies,
and either (A) enforcement proceedings shall have been commenced by any creditor
upon any such judgment or order, or (B) there shall be any period of thirty (30)
days  during  which  enforcement  of any such  judgment  or order  shall  not be
discharged, stayed or fully satisfied; or


            (vii) If, prior to the Payment Date, there is a sale,  conveyance or
disposition  of all or  substantially  all of the  assets  of the  Parent or the
Acquisition  Sub, the  effectuation  by the Parent or the  Acquisition  Sub of a
transaction  or series of  related  transactions  in which  more than 50% of the
voting  power  of  the  Parent  or  Acquisition  Sub  is  disposed  of,  or  the
consolidation, merger or other business combination of the Parent or Acquisition
Sub with or into any other Person (as defined  below) or Persons when the Parent
or  Acquisition  Sub is not  the  survivor,  and in the  event  of a  merger  or
consolidation or sale of all or substantially all of their assets, the surviving
or  successor  entity in such  transaction  fails to  assume  the  Parent's  and
Acquisition  Sub's  obligations  hereunder  as well as  under  a  certain  Asset
Purchase  Agreement and other "Parent  Documents" as defined therein,  all dated
the date hereof, between the parties hereto. "PERSON" shall mean any individual,
corporation, limited liability company, partnership, association, trust or other
entity or organization; or


                                       8
<PAGE>


            (viii)  upon any  default by the  Parent,  Acquisition  Sub or other
party  under  the "NIR  Letter",  dated  January  31,  2005,  a copy of which is
attached hereto, or under the "Debt Instruments" identified therein.


            (b) If an Event of Default  described  above has occurred,  then the
Holder may,  without  further  notice to the  Companies,  declare the  principal
amount  of this  Note at the time  outstanding,  together  with  accrued  unpaid
interest thereon,  and all other amounts payable under this Note to be forthwith
due and payable,  whereupon such principal,  interest and all such amounts shall
become and be forthwith due and payable.

            (c)  The  Companies  covenant  that  in  case  the principal of, and
accrued  interest  on,  the Note  becomes  due and  payable  by  declaration  or
otherwise,  then the Companies  will pay in cash to the Holder of this Note, the
whole  amount  that then  shall  have  become  due and  payable on this Note for
principal or interest, as the case may be, and in addition thereto, such further
amount as shall be  sufficient  to cover the costs and  expenses of  collection,
including  reasonable fees and  disbursements of the Holder's legal counsel.  In
case the  Companies  shall fail  forthwith  to pay such  amount,  the Holder may
commence an action or proceeding  at law or in equity for the  collection of the
sums so due and  unpaid,  and may  prosecute  any such action or  proceeding  to
judgment or final  decree  against  Companies  or other  obligor upon this Note,
wherever  situated,  the  monies  adjudicated  or  decreed  to be  payable.  The
Companies  hereby  waive notice of default,  presentment  or demand for payment,
protest or notice of  nonpayment  or dishonor  and all other  notices or demands
relative to this Note.

      14.   Miscellaneous

            (a)  This  Note  has  been  issued  by  the  Companies  pursuant  to
authorization of the Boards of Directors of the Companies.

            (b) The  Companies  may  consider and treat the entity in whose name
this Note shall be  registered  as the absolute  owner  thereof for all purposes
whatsoever  (whether or not this Note shall be overdue) and the Companies  shall
not be affected by any notice to the contrary. Subject to the limitations herein
stated,  the registered owner of this Note shall have the right to transfer this
Note by assignment,  and the transferee  thereof shall, upon his registration as
owner  of this  Note,  become  vested  with all the  powers  and  rights  of the
transferor. Registration of any new owners shall take place upon presentation of
this  Note  to  the  Parent  at  its  principal  offices,  together  with a duly
authenticated  assignment.  In  case  of  transfer  by  operation  of  law,  the
transferee  agrees to notify the  Companies of such transfer and of his address,
and to submit appropriate  evidence regarding the transfer so that this Note may
be registered in the name of the transferee.  This Note is transferable  only on
the books of the Parent by the holder hereof,  in person or by attorney,  on the
surrender  hereof,  duly endorsed.  Communications  sent to any registered owner
shall be  effective  as  against  all  holders  or  transferees  of the Note not
registered at the time of sending the communication.


                                       9
<PAGE>


            (c)  Payments of principal  and interest  shall be made as specified
above to the  registered  owner of this Note.  No interest  shall be due on this
Note for such period of time that may elapse  between the  maturity of this Note
and its presentation for payment.

            (d) The Holder  shall not,  by virtue,  hereof,  be  entitled to any
rights of a  shareholder  in the  Parent,  whether at law or in equity,  and the
rights of the Holder are limited to those expressed in this Note.

            (e)  Upon   receipt  by  the   Companies   of  evidence   reasonably
satisfactory to it of the loss,  theft,  destruction or mutilation of this Note,
and (in the  case of loss,  theft or  destruction)  of  reasonably  satisfactory
indemnification, and upon surrender and cancellation of this Note, if mutilated,
the Parent shall execute and deliver a new Note of like tenor and date.

            (f) This Note shall be construed and enforced in accordance with the
laws of the State of New Jersey.  The Companies and the Holder hereby consent to
the  jurisdiction  of any  federal  or state  court  located in the State of New
Jersey in  connection  with any action  concerning  the  provisions of this Note
instituted by the Holder against the Companies.

            (g) The Parent and Acquisition Sub, jointly and severally, represent
to the Holder that they have  reviewed all of the terms and  provisions  of this
Note with their  respective  counsel  and  performed  such due  diligence  as is
necessary  to  conclude  that all of the  terms  and  provisions  of this  Note,
including all of the payments required  hereunder,  to their best knowledge,  do
not violate any usury statute of the State of New Jersey.


                                       10
<PAGE>

            IN WITNESS WHEREOF, Digital Descriptor Systems, Inc. and CGM Applied
Security Technologies, Inc. caused this Note to be signed in each of their names
by their Chief Executive Officer.

                                    DIGITAL DESCRIPTOR SYSTEMS, INC.


                                    By: /s/ Anthony R. Shupin
                                        ----------------------------------------
                                        Anthony R. Shupin
                                        President and Chief Executive Officer


                                    CGM APPLIED SECURITY TECHNOLOGIES, INC.


                                    By: /s/ Anthony R. Shupin
                                        ----------------------------------------
                                        Anthony R. Shupin
                                        President and Chief Executive Officer



                                       11
<PAGE>


                              NOTICE OF CONVERSION

(To be executed by the Registered Holder in order to convert the Note)


      The undersigned  hereby elects to convert  $_________ of the principal and
$_________ of the interest due on the Note issued by DIGITAL DESCRIPTOR SYSTEMS,
INC. and CGM APPLIED SECURITY TECHNOLOGIES,  INC. into Common Stock according to
the  conditions  set  forth in such  Note,  as of the date  written  below.  The
undersigned  further affirms that as of the date hereof, the representations and
warranties  made by the undersigned in the  subscription  agreement of even date
with the  promissory  note  being  converted,  are true and  correct  as if such
representations and warranties were made as of the date hereof.



Date of Conversion:
                    ------------------------------------------------------------

Conversion Price:  $____________per share


Shares To Be Delivered:
                       ---------------------------------------------------------

Signature:
          ----------------------------------------------------------------------

Print Name:
           ---------------------------------------------------------------------

Address:
        ------------------------------------------------------------------------




                                       12
<PAGE>

                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                           2150 Highway 35, Suite 250
                           Sea Girt, New Jersey 08750




                                         January 31, 2005



AJW Partners, LLC
New Millennium Capital Partners II, LLC
AJW Offshore, Ltd. (f/d/a AJW/New Millennium Offshore, Ltd.)
AJW Qualified Partners, LLC (f/d/a Pegasus Capital Partners, LLC)
1044 Northern Boulevard
Suite 302
Roslyn, New York 11576

      Re:   Digital Descriptor Systems, Inc. (the "Company") -
            Acquisition of CGM Security Solutions, Inc.
            --------------------------------------------------

Ladies and Gentlemen:

      In connection with the Company's proposed acquisition of CGM Security
Solutions, Inc. ("CGM") (the "Acquisition"), this letter sets forth the
agreement of the parties hereto to: (i) extend the maturity dates of certain
debentures and notes which are convertible into shares of the Company's common
stock, par value $.001 per share (the "Common Stock"), originally issued by the
Company to the investors listed in the signature pages hereto (collectively, the
"Investors") (collectively, the "Debt Instruments"), as set forth on Schedule 1
hereto; (ii) refrain from incurring liens on the assets of the Company,
including those CGM assets purchased in the Acquisition (the "CGM Assets"),
except as provided herein; (iii) allow the Company to cure any Event of Default
(as defined in each of the Debt Instruments) within one hundred fifty days (150)
days from the date hereof; (iv) agree that a failure to pay the entire purchase
price for the CGM Assets to CGM's former shareholder pursuant to the terms of a
certain 2.86% secured convertible promissory note, dated February 24, 2005, and
given by the Company and its subsidiary to CGM (the "Note"), shall not
constitute an Event of Default under the Debt Instruments and hereby agree to
release the Investors' liens on the CGM Assets in the event of a default under
the Note; and (v) extend the expiration dates and amend the exercise price of
certain warrants originally issued by the Company to the Investors
(collectively, the "Warrants"), as set forth on Schedule 1 hereto.

      By execution hereof, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree that:

      1.    The Maturity Date of the Debt Instruments issued on November 30,
            2004 is hereby extended until March 1, 2008.

                                       13
<PAGE>


      2.    The Applicable Percentage (as defined in each of the Debt
            Instruments) shall be 40%.

      3.    So long as the Company shall have any obligations under the Debt
            Instruments, the Company shall not, without the Investors' written
            consent, transfer, pledge, hypothecate, encumber, license (except
            for non-exclusive licenses granted by the Company in the ordinary
            course of business), sell or otherwise dispose of any of the assets
            of the Company; provided that, in connection with the Acquisition,
            the Company shall grant a second priority security interest in the
            CGM Assets to the former shareholder of CGM (but not any other
            assets of the Company or any subsidiary of the Company); and further
            provided that, so long as the Company shall have any obligations
            under the Debt Instruments, the Company shall maintain a valid and
            perfected first priority security interest in favor of the Investors
            in the assets of CGM or any successor thereto.

      4.    The Investors agree to allow the Company to cure, on or prior to
            June 30, 2005, any Events of Default (as defined in each of the Debt
            Instruments), which have occurred as of the date hereof or occur on
            or prior to June 30, 2005 pursuant to the Debt Instruments; provided
            that all interest due and owing to the Investors pursuant to the
            Debt Instruments shall remain payable to the Investors in accordance
            with the terms and conditions set forth in the Debt Instruments.

      5.    The Investors agree that, in the event that the Company and its
            subsidiary fail to pay the entire purchase price for the CGM Assets
            to CGM or its assigns pursuant to the terms of the Note and,
            provided further, that an Event of Default has not occurred pursuant
            to any of the Debt Instruments, such failure to pay the Note and the
            exercise by CGM or its assigns of any rights as a result thereof
            shall not constitute an Event of Default under the terms and
            conditions set forth in any of the Debt Instruments, and CGM, as the
            holder of the Note, may exercise its remedies pursuant to the Note,
            which may include the retaking of the CGM Assets, in which event the
            Investors hereby agree to release their first priority security
            interest and liens on the CGM Assets to accommodate CGM.

      6.    The Warrants shall expire on January 31, 2012.

      7.    The Exercise Price (as defined in the Warrants) is hereby amended to
            be $.001 per share.

      8.    The Debt Instruments and the Warrants are hereby amended in
            accordance with the foregoing provisions. All other provisions of
            the Debt Instruments and the Warrants, as amended from time to time,
            shall remain in full force and effect.

      The parties shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other parties hereto
may reasonably request in order to carry out the intent an accomplish the
purposes of this letter agreement, including without limitation the issuance of
amended Debt Instruments and the Warrants.

                                       14
<PAGE>


      Please signify your agreement with the foregoing by signing a copy of this
letter where indicated and returning it to the undersigned.



                                          Sincerely,

                                          DIGITAL DESCRIPTOR SYSTEMS, INC.


                                          /s/ Anthony R. Shupin
                                          -------------------------------
                                          Anthony R. Shupin
                                          President and Chief Executive Officer

ACCEPTED AND AGREED:

AJW PARTNERS, LLC.
By:  SMS GROUP, LLC

/s/ Corey S. Ribotsky
-----------------------------
Corey S. Ribotsky, Manager


NEW MILLENNIUM CAPITAL PARTNERS II, LLC
By:  FIRST STREET MANAGER II, LLC,

/s/ Corey S. Ribotsky
-----------------------------
Corey S. Ribotsky, Manager


AJW OFFSHORE, LTD.
By:  FIRST STREET MANAGER II, LLC

/s/ Corey S. Ribotsky
------------------------------
Corey S. Ribotsky, Manager

AJW QUALIFIED PARTNERS, LLC
By:  AJW MANAGER, LLC

/s/ Corey S. Ribotsky
------------------------------
Corey S. Ribotsky, Manager
                                       15

<PAGE>



                                   SCHEDULE 1


<TABLE>
<CAPTION>
                                                 Debt Instruments   Warrants    Date of Issuance
                                                 ----------------  ----------  ------------------
<S>                                              <C>                  <C>               <C> <C>
      AJW Partners LLC                           $    125,000         375,000  December 31, 2001
      1044 Northern Blvd. Suite 302              $     75,000         225,000  January 10, 2003
      Roslyn, New York 11576                     $     37,500         112,500  February 27, 2003
                                                 $     37,500         112,500  March 31, 2003
                                                 $     50,000         150,000  May 7, 2004
                                                 $    560,000       1,680,000  November 30, 2004
                                                 ----------------  ----------  ------------------
      New Millennium Capital Partners II, LLC    $    125,000         375,000  December 31, 2001
      1044 Northern Blvd. Suite 302              $     10,175          30,525  May 7, 2004
      Roslyn, New York 11576                     $     70,000         210,000  November 30, 2004
                                                 ----------------  ----------  ------------------
      AJW Offshore, Ltd.                         $     50,000         150,000  September 30, 2002
      1044 Northern Blvd. Suite 302              $    100,000         300,000  January 10, 2003
      Roslyn, New York 11576                     $     50,000         150,000  February 27, 2003
                                                 $     50,000         150,000  March 31, 2003
                                                 $     82,500         577,500  September 30, 2003
                                                 $     22,500         157,500  November 27, 2003
                                                 $     22,500         157,500  December 3, 2003
                                                 $     22,500         157,500  February 2, 2004
                                                 $     88,700         266,100  May 7, 2004
                                                 $  1,435,000       4,305,000  November 30, 2004
                                                 ----------------  ----------  ------------------
      AJW Qualified Partners, LLC                $     50,000         150,000  September 30, 2002
      1044 Northern Blvd. Suite 302              $     75,000         225,000  January 10,2003
      Roslyn, New York 11576                     $     37,500         112,500  February 27, 2003
                                                 $     37,500         112,500  March 31, 2003
                                                 $     82,500         577,500  September 30, 2003
                                                 $     22,500         157,500  November 27, 2003
                                                 $     22,500         157,500  December 3, 2003
                                                 $     22,500         157,500  February 2, 2004
                                                 $    101,125         303,375  May 7, 2004
                                                 $  1,435,000       4,305,000  November 30, 2004
                                                 ----------------  ----------  ------------------
</TABLE>


                                       16
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>3
<FILENAME>v013796_ex4-2.txt
<TEXT>
Exhibit 4.2


                               SECURITY AGREEMENT


      SECURITY AGREEMENT (this "Agreement"), dated as of February 25, 2005, by
and between CGM Applied Security Technologies, Inc., a Delaware corporation
("Company"), and CGM Security Solutions, Inc. (the "Secured Party").

                              W I T N E S S E T H:

      WHEREAS, pursuant to a Asset Purchase Agreement, dated the date hereof
(the "Asset Purchase Agreement"), among the Company, Digital Descriptor Systems,
Inc. and the Secured Party, Company has agreed to execute and deliver to the
Secured Party and the Secured Party has agreed to accept, as partial payment for
the "Assets" defined in the Asset Purchase Agreement, a 2.86% Secured
Convertible Promissory Note (the "Note);

      WHEREAS, the Secured Party agrees and acknowledges that its rights under
this Agreement are subordinate to the rights of AJW Partners, LLC, AJW Offshore,
Ltd., AJW Qualified Partners, LLC and New Millennium Capital Partners II, LLC
(together, the "Original Secured Parties"), pursuant to a Security Agreement
between Digital Descriptor Systems, Inc. (the "Parent") and the Original Secured
Parties, dated November 30, 2004 ("NIR Security Agreement");

      Whereas, the Parent and the Original Secured Parties have entered into a
letter agreement dated as of January 31, 2005, (the "NIR Letter") which amends
certain provisions of the NIR Security Agreement and the agreements related
thereto, all of which are incorporated in this Agreement as if set forth in
their entirety herein; and

      WHEREAS, in order to induce the Secured Party to execute and deliver the
Asset Purchase Agreement and accept the Note as partial payment thereunder,
Company has agreed to execute and deliver to the Secured Party this Agreement
for the benefit of the Secured Party and to grant to it a security interest
secondary to the interests of the Original Secured Parties in certain property
of Company to secure the prompt payment, performance and discharge in full of
all of Company's obligations under the Note.

      NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:

      1.    Certain Definitions. As used in this Agreement, the following terms
shall have the meanings set forth in this Section 1. Terms used but not
otherwise defined in this Agreement that are defined in Article 9 of the UCC
(such as "general intangibles" and "proceeds") shall have the respective
meanings given such terms in Article 9 of the UCC.

            (a)   "Collateral" means the collateral in which the Secured Party
is granted a security interest by this Agreement and which shall include the
following, whether presently


<PAGE>


owned or existing or hereafter acquired or coming into existence, and all
additions and accessions thereto and all substitutions and replacements thereof,
and all proceeds, products and accounts thereof, including, without limitation,
all proceeds from the sale or transfer of the Collateral and of insurance
covering the same and of any tort claims in connection therewith:

                  (i) All Goods of the Company, including, without limitations,
            all machinery, equipment, computers, motor vehicles, trucks, tanks,
            boats, ships, appliances, furniture, special and general tools,
            fixtures, test and quality control devices and other equipment of
            every kind and nature and wherever situated, together with all
            documents of title and documents representing the same, all
            additions and accessions thereto, replacements therefor, all parts
            therefor, and all substitutes for any of the foregoing and all other
            items used and useful in connection with the Company's businesses
            and all improvements thereto (collectively, the "Equipment"); and

                  (ii) All Inventory of the Company; and

                  (iii) All of the Company's contract rights and general
            intangibles, including, without limitation, all partnership
            interests, stock or other securities, licenses, distribution and
            other agreements, computer software development rights, leases,
            franchises, customer lists, quality control procedures, grants and
            rights, goodwill, trademarks, service marks, trade styles, trade
            names, patents, patent applications, copyrights, deposit accounts,
            and income tax refunds (collectively, the "General Intangibles");
            and

                  (iv) All Receivables of the Company including all insurance
            proceeds, and rights to refunds or indemnification whatsoever owing,
            together with all instruments, all documents of title representing
            any of the foregoing, all rights in any merchandising, goods,
            equipment, motor vehicles and trucks which any of the same may
            represent, and all right, title, security and guaranties with
            respect to each Receivable, including any right of stoppage in
            transit; and

                  (v) All of the Company's documents, instruments and chattel
            paper, files, records, books of account, business papers, computer
            programs and the products and proceeds of all of the foregoing
            Collateral set forth in clauses (i)-(iv) above.

            (b)   "Company" shall mean, collectively, Company and all of the
subsidiaries of Company, a list of which is contained in Schedule A, attached
hereto.

            (c)   "Obligations" means all of the Company's obligations under
this Agreement, the Asset Purchase Agreement and the Note, in each case, whether
now or hereafter existing, voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later decreased, created or incurred, and all or any portion of such obligations
or liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from the Secured Party as a
preference, fraudulent transfer or


                                       2
<PAGE>


otherwise as such obligations may be amended, supplemented, converted, extended
or modified from time to time.

            (d)   "UCC" means the Uniform Commercial Code, as currently in
effect in the State of New York.

      2.    Grant of Security Interest. As an inducement for the Secured Party
to accept the Note and to secure the complete and timely payment, performance
and discharge in full, as the case may be, of all of the Obligations, the
Company hereby, unconditionally and irrevocably, pledges, grants and
hypothecates to the Secured Party, a continuing security interest in, a
continuing lien secondary to the interests of the Original Secured Parties, upon
an unqualified right to possession and disposition of and a right of set-off
against, in each case to the fullest extent permitted by law, all of the
Company's right, title and interest of whatsoever kind and nature in and to the
Collateral (the "Security Interest").

      3.    Representations, Warranties, Covenants and Agreements of the
Company. The Company represents and warrants to, and covenants and agrees with,
the Secured Party as follows:

            (a)   The Company has the requisite corporate power and authority to
enter into this Agreement and otherwise to carry out its obligations thereunder.
The execution, delivery and performance by the Company of this Agreement and the
filings contemplated therein have been duly authorized by all necessary action
on the part of the Company and no further action is required by the Company.
This Agreement constitutes a legal, valid and binding obligation of the Company
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditor's rights generally.

            (b)   The Company represents and warrants that it has no place of
business or offices where its respective books of account and records are kept
(other than temporarily at the offices of its attorneys or accountants) or
places where Collateral is stored or located, except as set forth on Schedule A
attached hereto;

            (c)   The Company is the sole owner of the Collateral (except for
non-exclusive licenses granted by the Company in the ordinary course of
business), free and clear of any liens, security interests, encumbrances, rights
or claims, and is fully authorized to grant the Security Interest in and to
pledge the Collateral. There is not on file in any governmental or regulatory
authority, agency or recording office an effective financing statement, security
agreement, license or transfer or any notice of any of the foregoing (other than
those that have been filed in favor of the Secured Party pursuant to this
Agreement) covering or affecting any of the Collateral. So long as this
Agreement shall be in effect, the Company shall not execute and shall not
knowingly permit to be on file in any such office or agency any such financing
statement or other document or instrument (except to the extent filed or
recorded in favor of the Secured Party pursuant to the terms of this Agreement).

            (d)   No part of the Collateral has been judged invalid or
unenforceable. No written claim has been received that any Collateral or the
Company's use of any Collateral


                                       3
<PAGE>


violates the rights of any third party. There has been no adverse decision to
the Company's claim of ownership rights in or exclusive rights to use the
Collateral in any jurisdiction or to the Company's right to keep and maintain
such Collateral in full force and effect, and there is no proceeding involving
said rights pending or, to the best knowledge of the Company, threatened before
any court, judicial body, administrative or regulatory agency, arbitrator or
other governmental authority.

            (e)   The Company shall at all times maintain its books of account
and records relating to the Collateral at its principal place of business and
its Collateral at the locations set forth on Schedule A attached hereto and may
not relocate such books of account and records or tangible Collateral unless it
delivers to the Secured Party at least 30 days prior to such relocation (i)
written notice of such relocation and the new location thereof (which must be
within the United States) and (ii) evidence that appropriate financing
statements and other necessary documents have been filed and recorded and other
steps have been taken to perfect the Security Interest to create in favor of the
Secured Party valid, perfected and continuing first priority liens in the
Collateral.

            (f)   This Agreement creates in favor of the Secured Party a valid
security interest in the Collateral securing the payment and performance of the
Obligations and, upon making the filings described in the immediately following
sentence, a perfected first priority security interest in such Collateral.
Except for the filing of financing statements on Form-1 under the UCC with the
jurisdictions indicated on Schedule B, attached hereto, no authorization or
approval of or filing with or notice to any governmental authority or regulatory
body is required either (i) for the grant by the Company of, or the
effectiveness of, the Security Interest granted hereby or for the execution,
delivery and performance of this Agreement by the Company or (ii) for the
perfection of or exercise by the Secured Party of its rights and remedies
hereunder.

            (g)   On the date of execution of this Agreement, the Company will
deliver to the Secured Party one or more executed UCC financing statements on
Form-1 with respect to the Security Interest for filing with the jurisdictions
indicated on Schedule B, attached hereto and in such other jurisdictions as may
be requested by the Secured Party.

            (h)   The execution, delivery and performance of this Agreement does
not conflict with or cause a breach or default, or an event that with or without
the passage of time or notice, shall constitute a breach or default, under any
agreement to which the Company is a party or by which the Company is bound. No
consent (including, without limitation, from stock holders or creditors of the
Company) is required for the Company to enter into and perform its obligations
hereunder.

            (i)   The Company shall at all times maintain the liens and Security
Interest provided for hereunder as valid and perfected first priority liens and
security interests in the Collateral in favor of the Secured Party until this
Agreement and the Security Interest hereunder shall terminate pursuant to
Section 11. The Company hereby agrees to defend the same against any and all
persons. The Company shall safeguard and protect all Collateral for the account
of the Secured Party. At the request of the Secured Party, the Company will sign
and deliver to the Secured Party at any time or from time to time one or more
financing statements pursuant to the


                                       4
<PAGE>


UCC (or any other applicable statute) in form reasonably satisfactory to the
Secured Party and will pay the cost of filing the same in all public offices
wherever filing is, or is deemed by the Secured Party to be, necessary or
desirable to effect the rights and obligations provided for herein. Without
limiting the generality of the foregoing, the Company shall pay all fees, taxes
and other amounts necessary to maintain the Collateral and the Security Interest
hereunder, and the Company shall obtain and furnish to the Secured Party from
time to time, upon demand, such releases and/or subordinations of claims and
liens which may be required to maintain the priority of the Security Interest
hereunder.

            (j)   The Company will not transfer, pledge, hypothecate, encumber,
license (except for non-exclusive licenses granted by the Company in the
ordinary course of business), sell or otherwise dispose of any of the Collateral
without the prior written consent of the Secured Party.

            (k)   The Company shall keep and preserve its Equipment, Inventory
and other tangible Collateral in good condition, repair and order and shall not
operate or locate any such Collateral (or cause to be operated or located) in
any area excluded from insurance coverage.

            (l)   The Company shall, within ten (10) days of obtaining knowledge
thereof, advise the Secured Party promptly, in sufficient detail, of any
substantial change in the Collateral, and of the occurrence of any event which
would have a material adverse effect on the value of the Collateral or on the
Secured Party's security interest therein.

            (m)   The Company shall promptly execute and deliver to the Secured
Party such further deeds, mortgages, assignments, security agreements, financing
statements or other instruments, documents, certificates and assurances and take
such further action as the Secured Party may from time to time request and may
in its sole discretion deem necessary to perfect, protect or enforce its
security interest in the Collateral including, without limitation, the execution
and delivery of a separate security agreement with respect to the Company's
intellectual property ("Intellectual Property Security Agreement") in which the
Secured Party has been granted a security interest hereunder, substantially in a
form acceptable to the Secured Party, which Intellectual Property Security
Agreement, other than as stated therein, shall be subject to all of the terms
and conditions hereof.

            (n)   The Company shall permit the Secured Party and its
representatives and agents to inspect the Collateral at any time, and to make
copies of records pertaining to the Collateral as may be requested by the
Secured Party from time to time.

            (o)   The Company will take all steps reasonably necessary to
diligently pursue and seek to preserve, enforce and collect any rights, claims,
causes of action and accounts receivable in respect of the Collateral.

            (p)   The Company shall promptly notify the Secured Party in
sufficient detail upon becoming aware of any attachment, garnishment, execution
or other legal process levied against any Collateral and of any other
information received by the Company that may materially affect the value of the
Collateral, the Security Interest or the rights and remedies of the Secured
Party hereunder.


                                       5
<PAGE>


            (q)   All information heretofore, herein or hereafter supplied to
the Secured Party by or on behalf of the Company with respect to the Collateral
is accurate and complete in all material respects as of the date furnished.

            (r)   Schedule A attached hereto contains a list of all of the
subsidiaries of Company.

            (s)   The Company shall not, without the prior written consent of
the Secured Party, (i) create, incur, assume or suffer to exist any indebtedness
in excess of "$1,000,000" (exclusive of trade debt) whether secured or unsecured
other than existing as of the date hereof; (ii) directly or indirectly declare,
pay or make any dividend or distribution on any class of its stock or apply any
of its funds, property or assets to the purchase, redemption or other retirement
of any of its stock, or issue any class of stock (iii) make or permit to exist
any loans or advances to any other person or entity, including any partnership
or joint venture, except travel advances; (iv) enter into any merger,
consolidation or other reorganization with or into any other entity, unless it
is the surviving entity of such merger or consolidation; (v) materially change
the nature of the business in which it is presently engaged; (vi) enter into any
transaction with any employee, director or affiliate, except in the ordinary
course on arms-length terms; (vii) except for the sale of inventory in the
ordinary course of business, sell, lease, transfer or otherwise dispose of any
of its properties or assets.

      4.    Defaults. The following events shall be "Events of Default":

            (a)   The occurrence of an Event of Default (as defined in the Note)
under the Note or under the Asset Purchase Agreement;

            (b)   Any representation or warranty of the Company in this
Agreement or in the Intellectual Property Security Agreement shall prove to have
been incorrect in any material respect when made;

            (c)   The failure by the Company to observe or perform any of its
obligations hereunder or in the Intellectual Property Security Agreement or
under the Asset Purchase Agreement for twenty (20) days after receipt by the
Company of notice of such failure from the Secured Party; or

            (d)   Any failure to perform their obligations or any breach of
their promises set forth in the NIR Letter by any of the Original Secured
Parties identified therein.

      5.    Duty To Hold In Trust. Upon the occurrence of any Event of Default
and at any time thereafter, the Company shall, upon receipt by it of any
revenue, income or other sums subject to the Security Interest, whether payable
pursuant to the Note or otherwise, or of any check, draft, note, trade
acceptance or other instrument evidencing an obligation to pay any such sum,
hold the same in trust for the Secured Party and shall forthwith endorse and
transfer any such sums or instruments, or both, to the Secured Party for
application to the satisfaction of the Obligations.

      6.    Rights and Remedies Upon Default. Upon occurrence of any Event of
Default and at any time thereafter, the Secured Party shall have the right to
exercise all of the remedies


                                       6
<PAGE>


conferred hereunder and under the Note, and the Secured Party shall have all the
rights and remedies of a secured party under the UCC and/or any other applicable
law (including the Uniform Commercial Code of any jurisdiction in which any
Collateral is then located). Without limitation, the Secured Party shall have
the following rights and powers:

            (a)   The Secured Party shall have the right to take possession of
the Collateral and, for that purpose, enter, with the aid and assistance of any
person, any premises where the Collateral, or any part thereof, is or may be
placed and remove the same, and the Company shall assemble the Collateral and
make it available to the Secured Party at places which the Secured Party shall
reasonably select, whether at the Company's premises or elsewhere, and make
available to the Secured Party, without rent, all of the Company's respective
premises and facilities for the purpose of the Secured Party taking possession
of, removing or putting the Collateral in saleable or disposable form.

            The Secured Party shall have the right to operate the business of
            the Company using the Collateral and shall have the right to assign,
            sell, lease or otherwise dispose of and deliver all or any part of
            the Collateral, at public or private sale or otherwise, either with
            or without special conditions or stipulations, for cash or on credit
            or for future delivery, in such parcel or parcels and at such time
            or times and at such place or places, and upon such terms and
            conditions as the Secured Party may deem commercially reasonable,
            all without (except as shall be required by applicable statute and
            cannot be waived) advertisement or demand upon or notice to the
            Company or right of redemption of the Company, which are hereby
            expressly waived. Upon each such sale, lease, assignment or other
            transfer of Collateral, the Secured Party may, unless prohibited by
            applicable law which cannot be waived, purchase all or any part of
            the Collateral being sold, free from and discharged of all trusts,
            claims, right of redemption and equities of the Company, which are
            hereby waived and released.

      7.    Applications of Proceeds. The proceeds of any such sale, lease or
other disposition of the Collateral hereunder shall be applied first, to the
expenses of retaking, holding, storing, processing and preparing for sale,
selling, and the like (including, without limitation, any taxes, fees and other
costs incurred in connection therewith) of the Collateral, to the reasonable
attorneys' fees and expenses incurred by the Secured Party in enforcing its
rights hereunder and in connection with collecting, storing and disposing of the
Collateral, and then to satisfaction of the Obligations, and to the payment of
any other amounts required by applicable law, after which the Secured Party
shall pay to the Company any surplus proceeds. If, upon the sale, license or
other disposition of the Collateral, the proceeds thereof are insufficient to
pay all amounts to which the Secured Party is legally entitled, the Company will
be liable for the deficiency, together with interest thereon, at the rate of 8%
per annum (the "Default Rate"), and the reasonable fees of any attorneys
employed by the Secured Party to collect such deficiency. To the extent
permitted by applicable law, the Company waives all claims, damages and demands
against the Secured Party arising out of the repossession, removal, retention or
sale of the Collateral, unless due to the gross negligence or willful misconduct
of the Secured Party.

      8.    Costs and Expenses. The Company agrees to pay all out-of-pocket
fees, costs and expenses incurred in connection with any filing required
hereunder, including without


                                        7
<PAGE>


limitation, any financing statements, continuation statements, partial releases
and/or termination statements related thereto or any expenses of any searches
reasonably required by the Secured Party. The Company shall also pay all other
claims and charges which in the reasonable opinion of the Secured Party would
prejudice, imperil or otherwise materially affect the Collateral or the Security
Interest therein. The Company will also, upon demand, pay to the Secured Party
the amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which the Secured Party
may incur in connection with (i) the enforcement of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, or (iii) the exercise or enforcement of
any of the rights of the Secured Party under the Note. Until so paid, any fees
payable hereunder shall be added to the principal amount of the Note and shall
bear interest at the Default Rate.

      9.    Responsibility for Collateral. The Company assumes all liabilities
and responsibility in connection with all Collateral, and the obligations of the
Company hereunder or under the Note shall in no way be affected or diminished by
reason of the loss, destruction, damage or theft of any of the Collateral or its
unavailability for any reason.

      10.   Security Interest Absolute. All rights of the Secured Party and all
Obligations of the Company hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
the Note or any agreement entered into in connection with the foregoing, or any
portion hereof or thereof; (b) any change in the time, manner or place of
payment or performance of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the Note or any other agreement entered into in connection with the
foregoing; (c) any exchange, release or nonperfection of any of the Collateral,
or any release or amendment or waiver of or consent to departure from any other
collateral for, or any guaranty, or any other security, for all or any of the
Obligations; (d) any action by the Secured Party to obtain, adjust, settle and
cancel in its sole discretion any insurance claims or matters made or arising in
connection with the Collateral; or (e) any other circumstance which might
otherwise constitute any legal or equitable defense available to the Company, or
a discharge of all or any part of the Security Interest granted hereby. Until
the Obligations shall have been paid and performed in full, the rights of the
Secured Party shall continue even if the Obligations are barred for any reason,
including, without limitation, the running of the statute of limitations or
bankruptcy. The Company expressly waives presentment, protest, notice of
protest, demand, notice of nonpayment and demand for performance. In the event
that at any time any transfer of any Collateral or any payment received by the
Secured Party hereunder shall be deemed by final order of a court of competent
jurisdiction to have been a voidable preference or fraudulent conveyance under
the bankruptcy or insolvency laws of the United States, or shall be deemed to be
otherwise due to any party other than the Secured Party, then, in any such
event, the Company's obligations hereunder shall survive cancellation of this
Agreement, and shall not be discharged or satisfied by any prior payment thereof
and/or cancellation of this Agreement, but shall remain a valid and binding
obligation enforceable in accordance with the terms and provisions hereof. The
Company waives all right to require the Secured Party to proceed against any
other person or to apply any Collateral which the Secured Party may hold at any
time, or to marshal assets, or to pursue any


                                       8
<PAGE>


other remedy. The Company waives any defense arising by reason of the
application of the statute of limitations to any obligation secured hereby.

      11.   Term of Agreement. This Agreement and the Security Interest shall
terminate on the date on which all payments under the Note have been made in
full and all other Obligations have been paid or discharged. Upon such
termination, the Secured Party, at the request and at the expense of the
Company, will join in executing any termination statement with respect to any
financing statement executed and filed pursuant to this Agreement.

      12.   Power of Attorney; Further Assurances.

            (a)   The Company authorizes the Secured Party, and does hereby
make, constitute and appoint it, and its respective officers, agents, successors
or assigns with full power of substitution, as the Company's true and lawful
attorney-in-fact, with power, in its own name or in the name of the Company, to,
after the occurrence and during the continuance of an Event of Default, (i)
endorse any notes, checks, drafts, money orders, or other instruments of payment
(including payments payable under or in respect of any policy of insurance) in
respect of the Collateral that may come into possession of the Secured Party;
(ii) to sign and endorse any UCC financing statement or any invoice, freight or
express bill, bill of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with accounts, and
other documents relating to the Collateral; (iii) to pay or discharge taxes,
liens, security interests or other encumbrances at any time levied or placed on
or threatened against the Collateral; (iv) to demand, collect, receipt for,
compromise, settle and sue for monies due in respect of the Collateral; and (v)
generally, to do, at the option of the Secured Party, and at the Company's
expense, at any time, or from time to time, all acts and things which the
Secured Party deems necessary to protect, preserve and realize upon the
Collateral and the Security Interest granted therein in order to effect the
intent of this Agreement and the Note, all as fully and effectually as the
Company might or could do; and the Company hereby ratifies all that said
attorney shall lawfully do or cause to be done by virtue hereof. This power of
attorney is coupled with an interest and shall be irrevocable for the term of
this Agreement and thereafter as long as any of the Obligations shall be
outstanding.

            (b)   On a continuing basis, the Company will make, execute,
acknowledge, deliver, file and record, as the case may be, in the proper filing
and recording places in any jurisdiction, including, without limitation, the
jurisdictions indicated on Schedule B, attached hereto, all such instruments,
and take all such action as may reasonably be deemed necessary or advisable, or
as reasonably requested by the Secured Party, to perfect the Security Interest
granted hereunder and otherwise to carry out the intent and purposes of this
Agreement, or for assuring and confirming to the Secured Party the grant or
perfection of a security interest in all the Collateral.

            (c)   The Company hereby irrevocably appoints the Secured Party as
the Company's attorney-in-fact, with full authority in the place and stead of
the Company and in the name of the Company, from time to time in the Secured
Party's discretion, to take any action and to execute any instrument which the
Secured Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including the filing, in its sole discretion, of one or


                                       9
<PAGE>


more financing or continuation statements and amendments thereto, relative to
any of the Collateral without the signature of the Company where permitted by
law.

      13.   Notices. All notices, requests, demands and other communications
hereunder shall be in writing, with copies to all the other parties hereto, and
shall be deemed to have been duly given when (i) if delivered by hand, upon
receipt, (ii) if sent by facsimile, upon receipt of proof of sending thereof,
(iii) if sent by nationally recognized overnight delivery service (receipt
requested), the next business day or (iv) if mailed by first-class registered or
certified mail, return receipt requested, postage prepaid, four days after
posting in the U.S. mails, in each case if delivered to the following addresses:

If to the Company:        CGM Applied Security Technologies, Inc.
                          2150 Highway 35, Suite 250
                          Sea Girt, New Jersey 08750
                          Attention:  President and Chief Executive Officer
                          Telephone:  (732) 359-0260
                          Facsimile:  (732) 359-0265


With copy to:             Sichenzia Ross Friedman Ference LLP
                          1065 Avenue of the Americas
                          New York, New York 10018
                          Attention:  Gregory Sichenzia, Esq.
                          Telephone:  (212) 930-9700
                          Facsimile:  (212) 930-9725


If to the Secured Party:  Mr. Erik Hoffer

                          24156 Yacht Club Blvd.
                          Punta Gorda, Florida 33955
                          Tel:  941-575-0971
                          Fax:  941-575-0971

With a copy to:           Joseph J. Tomasek, Esq.
                          77 North Bridge Street
                          Somerville, New Jersey 08876
                          Telephone:  (908) 429-0030
                          Facsimile:  (908) 429-0040


      14.   Other Security. To the extent that the Obligations are now or
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Secured Party shall have the right, in its sole discretion, to pursue,
relinquish, subordinate, modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Secured Party's rights and
remedies hereunder.


                                       10
<PAGE>

      15.   Miscellaneous.

            (a)   No course of dealing between the Company and the Secured
Party, nor any failure to exercise, nor any delay in exercising, on the part of
the Secured Party, any right, power or privilege hereunder or under the Note
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or thereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.

            (b)   All of the rights and remedies of the Secured Party with
respect to the Collateral, whether established hereby or by the Note or by any
other agreements, instruments or documents or by law shall be cumulative and may
be exercised singly or concurrently.

            (c)   This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and is intended to supersede all prior
negotiations, understandings and agreements with respect thereto. Except as
specifically set forth in this Agreement, no provision of this Agreement may be
modified or amended except by a written agreement specifically referring to this
Agreement and signed by the parties hereto.

            (d)   In the event that any provision of this Agreement is held to
be invalid, prohibited or unenforceable in any jurisdiction for any reason,
unless such provision is narrowed by judicial construction, this Agreement
shall, as to such jurisdiction, be construed as if such invalid, prohibited or
unenforceable provision had been more narrowly drawn so as not to be invalid,
prohibited or unenforceable. If, notwithstanding the foregoing, any provision of
this Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other jurisdiction.

            (e)   No waiver of any breach or default or any right under this
Agreement shall be considered valid unless in writing and signed by the party
giving such waiver, and no such waiver shall be deemed a waiver of any
subsequent breach or default or right, whether of the same or similar nature or
otherwise.

            (f)   This Agreement shall be binding upon and inure to the benefit
of each party hereto and its successors and assigns.

            (g)   Each party shall take such further action and execute and
deliver such further documents as may be necessary or appropriate in order to
carry out the provisions and purposes of this Agreement.

            (h)   This Agreement shall be construed in accordance with the laws
of the State of New Jersey, except to the extent the validity, perfection or
enforcement of a security interest hereunder in respect of any particular
Collateral which are governed by a jurisdiction other than the State of New
Jersey in which case such law shall govern. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of New Jersey, Superior Court,
Somerset County over any action or proceeding arising out of or relating to this
Agreement, and the parties hereto hereby irrevocably agree that all claims in
respect of such action or proceeding may be


                                       11
<PAGE>


heard and determined in such New Jersey court. The parties hereto agree that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. The parties hereto further waive any objection to venue in the
State of New Jersey and any objection to an action or proceeding in the State of
New Jersey on the basis of forum non conveniens.

            (i)   EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF
ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER
OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY
HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY
ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO A JURY TRIAL
FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING THAT,
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF A
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

            (j)   This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and, all of
which taken together shall constitute one and the same Agreement. In the event
that any signature is delivered by facsimile transmission, such signature shall
create a valid binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.



                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



                                       12
<PAGE>


      IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed on the day and year first above written.


                                     CGM APPLIED SECURITY TECHNOLOGIES, INC.



                                     By:  /s/ Anthony R. Shupin
                                          -------------------------------------
                                          Anthony R. Shupin
                                          President and Chief Executive Officer



                                     CGM SECURITY SOLUTONS, INC.



                                     By:  /s/ Erik Hoffer
                                          -------------------------------------
                                          Erik Hoffer, President











</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.3
<SEQUENCE>4
<FILENAME>v013796_ex4-3.txt
<TEXT>
Exhibit 4.3

                    INTELLECTUAL PROPERTY SECURITY AGREEMENT

      INTELLECTUAL PROPERTY SECURITY AGREEMENT (this "Agreement" dated as of
February 25, 2005, by and between, CGM Applied Security Technologies, Inc., a
Delaware corporation (the "Company"), and CGM Security Solutions, Inc., a
Florida corporation (the "Secured Party").

                              W I T N E S S E T H :

      WHEREAS, pursuant to a Asset Purchase Agreement, dated the date hereof
(the "Asset Purchase Agreement"), among the Company, Digital Descriptor Systems,
Inc. and the Secured Party, Company has agreed to execute and deliver to the
Secured Party and the Secured Party has agreed to accept, as partial payment for
the "Assets" defined in the Asset Purchase Agreement, a 2.86% Secured
Convertible Promissory Note (the "Note); and

      WHEREAS, the Secured Party agrees and acknowledges that its rights under
this Agreement are subordinate to the rights of AJW Partners, LLC, AJW Offshore,
Ltd., AJW Qualified Partners, LLC and New Millennium Capital Partners II, LLC
(together, the "Original Secured Parties"), pursuant to an Intellectual Property
Security Agreement between Digital Descriptor Systems, Inc. (the "Parent") and
the Original Secured Parties, dated November 30, 2004 (the "NIR IP Security
Agreement");

      Whereas, the Parent and the Original Secured Parties have entered into a
letter agreement dated as of January 31, 2005, (the "NIR Letter") which amends
certain provisions of the NIR Security Agreement and the agreements related
thereto, all of which are incorporated in this Agreement as if set forth in
their entirety herein; and

      WHEREAS, in order to induce the Secured Party to execute and deliver the
Asset Purchase Agreement and accept the Note as partial payment thereunder,
Company has agreed to execute and deliver to the Secured Party this Agreement
for the benefit of the Secured Party and to grant to it a security interest
secondary to the interests of the Original Secured Parties in certain
Intellectual Property (defined below) of Company to secure the prompt payment,
performance and discharge in full of all of Company's obligations under the
Note.

      NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:

            1.    Defined Terms. Unless otherwise defined herein, terms which
are defined in the Purchase Agreement and used herein are so used as so defined;
and the following terms shall have the following meanings:

                  "Software Intellectual Property" shall mean:


<PAGE>


                  (a)   all software programs (including all source code, object
code and all related applications and data files), whether now owned, upgraded,
enhanced, licensed or leased or hereafter acquired by the Company, above;

                  (b)   all computers and electronic data processing hardware
and firmware associated therewith;

                  (c)   all documentation (including flow charts, logic
diagrams, manuals, guides and specifications) with respect to such software,
hardware and firmware described in the preceding clauses (a) and (b); and

                  (d)   all rights with respect to all of the foregoing,
including, without limitation, any and all upgrades, modifications, copyrights,
licenses, options, warranties, service contracts, program services, test rights,
maintenance rights, support rights, improvement rights, renewal rights and
indemnifications and substitutions, replacements, additions, or model
conversions of any of the foregoing.

                  "Copyrights" shall mean (a) all copyrights, registrations and
applications for registration, issued or filed, including any reissues,
extensions or renewals thereof, by or with the United States Copyright Office or
any similar office or agency of the United States, any state thereof, or any
other country or political subdivision thereof, or otherwise, including, all
rights in and to the material constituting the subject matter thereof,
including, without limitation, any referred to in Schedule B hereto, and (b) any
rights in any material which is copyrightable or which is protected by common
law, United States copyright laws or similar laws or any law of any State,
including, without limitation, any thereof referred to in Schedule B hereto.

                  "Copyright License" shall mean any agreement, written or oral,
providing for a grant by the Company of any right in any Copyright, including,
without limitation, any thereof referred to in Schedule B hereto.

                  "Intellectual Property" shall means, collectively, the
Software Intellectual Property, Copyrights, Copyright Licenses, Patents, Patent
Licenses, Trademarks, Trademark Licenses and Trade Secrets.

                  "Obligations" means all of the Company's obligations under
this Agreement, the Asset Purchase Agreement and the Note, in each case, whether
now or hereafter existing, voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later decreased, created or incurred, and all or any portion of such obligations
or liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from the Secured Party as a
preference, fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time.

                  "Patents" shall mean (a) all letters patent of the United
States or any other country or any political subdivision thereof, and all
reissues and extensions thereof, including, without limitation, any thereof
referred to in Schedule B hereto, and (b) all applications for letters patent of
the United States and all divisions, continuations and continuations-in-part


                                       2
<PAGE>


thereof or any other country or any political subdivision, including, without
limitation, any thereof referred to in Schedule B hereto.

                  "Patent License" shall mean all agreements, whether written or
oral, providing for the grant by the Company of any right to manufacture, use or
sell any invention covered by a Patent, including, without limitation, any
thereof referred to in Schedule B hereto.

                  "Security Agreement" shall mean the a Security Agreement,
dated the date hereof between Company and the Secured Party.

                  "Trademarks" shall mean (a) all trademarks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers, and the
goodwill associated therewith, now existing or hereafter adopted or acquired,
all registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any state thereof or any other
country or any political subdivision thereof, or otherwise, including, without
limitation, any thereof referred to in Schedule B hereto, and (b) all reissues,
extensions or renewals thereof.

                  "Trademark License" shall mean any agreement, written or oral,
providing for the grant by the Company of any right to use any Trademark,
including, without limitation, any thereof referred to in Schedule B hereto.

                  "Trade Secrets" shall mean common law and statutory trade
secrets and all other confidential or proprietary or useful information and all
know-how obtained by or used in or contemplated at any time for use in the
business of the Company (all of the foregoing being collectively called a "Trade
Secret"), whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying, incorporating
or referring in any way to such Trade Secret, all Trade Secret licenses,
including each Trade Secret license referred to in Schedule B hereto, and
including the right to sue for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.

            2.    Grant of Security Interest. In accordance with Section 3(m) of
the Security Agreement, to secure the complete and timely payment, performance
and discharge in full, as the case may be, of all of the Obligations, the
Company hereby, unconditionally and irrevocably, pledges, grants and
hypothecates to the Secured Party, a continuing security interest in, a
continuing lien upon secondary to the interests of the Original Secured Parties
an unqualified right to possession and disposition of and a right of set-off
against, in each case to the fullest extent permitted by law, all of the
Company's right, title and interest of whatsoever kind and nature in and to the
Intellectual Property (the "Security Interest").

            3.    Representations and Warranties. The Company hereby represents
and warrants, and covenants and agrees with, the Secured Party as follows:

                  (a)   The Company has the requisite corporate power and
authority to enter into this Agreement and otherwise to carry out its
obligations thereunder. The execution, delivery and performance by the Company
of this Agreement and the filings contemplated


                                       3
<PAGE>


therein have been duly authorized by all necessary action on the part of the
Company and no further action is required by the Company. This Agreement
constitutes a legal, valid and binding obligation of the Company enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditor's rights generally.

                  (b)   The Company represents and warrants that it has no place
of business or offices where its respective books of account and records are
kept (other than temporarily at the offices of its attorneys or accountants) or
places where the Intellectual Property is stored or located, except as set forth
on Schedule A attached hereto;

                  (c)   The Company is the sole owner of the Intellectual
Property (except for non-exclusive licenses granted by the Company in the
ordinary course of business), free and clear of any liens, security interests,
encumbrances, rights or claims, and is fully authorized to grant the Security
Interest in and to pledge the Intellectual Property. There is not on file in any
governmental or regulatory authority, agency or recording office an effective
financing statement, security agreement, license or transfer or any notice of
any of the foregoing (other than those that have been filed in favor of the
Secured Party pursuant to this Agreement) covering or affecting any of the
Intellectual Property. So long as this Agreement shall be in effect, the Company
shall not execute and shall not knowingly permit to be on file in any such
office or agency any such financing statement or other document or instrument
(except to the extent filed or recorded in favor of the Secured Party pursuant
to the terms of this Agreement), except for a financing statement covering
assets acquired by the Company after the date hereof, provided that the value of
the Intellectual Property covered by this Agreement along with the Collateral
(as defined in the Security Agreement) is equal to at least 150% of the
Obligations.

                  (d)   The Company shall at all times maintain its books of
account and records relating to the Intellectual Property at its principal place
of business and its Intellectual Property at the locations set forth on Schedule
A attached hereto and may not relocate such books of account and records unless
it delivers to the Secured Party at least 30 days prior to such relocation (i)
written notice of such relocation and the new location thereof (which must be
within the United States) and (ii) evidence that the necessary documents have
been filed and recorded and other steps have been taken to perfect the Security
Interest to create in favor of the Secured Party valid, perfected and continuing
first priority liens in the Intellectual Property to the extent they can be
perfected through such filings.

                  (e)   This Agreement creates in favor of the Secured Party a
valid security interest in the Intellectual Property securing the payment and
performance of the Obligations and, upon making the filings required hereunder,
a perfected first priority security interest in such Intellectual Property to
the extent that it can be perfected through such filings.

                  (f)   Upon request of the Secured Party, the Company shall
execute and deliver any and all agreements, instruments, documents, and papers
as the Secured Party may request to evidence the Secured Party's security
interest in the Intellectual Property and the goodwill and general intangibles
of the Company relating thereto or represented thereby, and the Company hereby
appoints the Secured Party its attorney-in-fact to execute and file all such
writings for the foregoing purposes, all acts of such attorney being hereby
ratified and


                                       4
<PAGE>


confirmed; such power being coupled with an interest is irrevocable until the
Obligations have been fully satisfied and are paid in full.

                  (g)   The execution, delivery and performance of this
Agreement does not conflict with or cause a breach or default, or an event that
with or without the passage of time or notice, shall constitute a breach or
default, under any agreement to which the Company is a party or by which the
Company is bound. No consent (including, without limitation, from stock holders
or creditors of the Company) is required for the Company to enter into and
perform its obligations hereunder.

                  (h)   The Company shall at all times maintain the liens and
Security Interest provided for hereunder as valid and perfected first priority
liens and security interests in the Intellectual Property to the extent they can
be perfected by filing in favor of the Secured Party until this Agreement and
the Security Interest hereunder shall terminate pursuant to Section 11. The
Company hereby agrees to defend the same against any and all persons. The
Company shall safeguard and protect all Intellectual Property for the account of
the Secured Party. Without limiting the generality of the foregoing, the Company
shall pay all fees, taxes and other amounts necessary to maintain the
Intellectual Property and the Security Interest hereunder, and the Company shall
obtain and furnish to the Secured Party from time to time, upon demand, such
releases and/or subordinations of claims and liens which may be required to
maintain the priority of the Security Interest hereunder.

                  (i)   The Company will not transfer, pledge, hypothecate,
encumber, license (except for non-exclusive licenses granted by the Company in
the ordinary course of business), sell or otherwise dispose of any of the
Intellectual Property without the prior written consent of the Secured Party.

                  (j)   The Company shall, within ten (10) days of obtaining
knowledge thereof, advise the Secured Party promptly, in sufficient detail, of
any substantial change in the Intellectual Property, and of the occurrence of
any event which would have a material adverse effect on the value of the
Intellectual Property or on the Secured Party's security interest therein.

                  (k)   The Company shall permit the Secured Party and its
representatives and agents to inspect the Intellectual Property at any time, and
to make copies of records pertaining to the Intellectual Property as may be
requested by the Secured Party from time to time.

                  (l)   The Company will take all steps reasonably necessary to
diligently pursue and seek to preserve, enforce and collect any rights, claims,
causes of action and accounts receivable in respect of the Intellectual
Property.

                  (m)   The Company shall promptly notify the Secured Party in
sufficient detail upon becoming aware of any attachment, garnishment, execution
or other legal process levied against any Intellectual Property and of any other
information received by the Company that may materially affect the value of the
Intellectual Property, the Security Interest or the rights and remedies of the
Secured Party hereunder.


                                       5
<PAGE>

                  (n)   All information heretofore, herein or hereafter supplied
to the Secured Party by or on behalf of the Company with respect to the
Intellectual Property is accurate and complete in all material respects as of
the date furnished. (o) Schedule A attached hereto contains a list of all of the
subsidiaries of Company.

                  (p)   Schedule B attached hereto includes all Licenses, and
all Patents and Patent Licenses, if any, owned by the Company in its own name as
of the date hereof. Schedule B hereto also includes all Trademarks and Trademark
Licenses, if any, owned by the Company in its own name as of the date hereof.
Schedule B hereto includes all Copyrights and Copyright Licenses, if any, owned
by the Company in its own name as of the date hereof. To the best of the
Company's knowledge, each License, Patent, Trademark and Copyright is valid,
subsisting, unexpired, enforceable and has not been abandoned. Except as set
forth in Schedule B, none of such Licenses, Patents, Trademarks and Copyrights
is the subject of any licensing or franchise agreement. To the best of the
Company's knowledge, no holding, decision or judgment has been rendered by any
Governmental Body which would limit, cancel or question the validity of any
License, Patent, Trademark or Copyright. No action or proceeding is pending (i)
seeking to limit, cancel or question the validity of any License, Patent,
Trademark or Copyright, or (ii) which, if adversely determined, would have a
material adverse effect on the value of any License, Patent, Trademark or
Copyright. The Company has used and will continue to use for the duration of
this Agreement, proper statutory notice in connection with its use of the
Patents, Trademarks and Copyrights and consistent standards of quality in
products leased or sold under the Patents, Trademarks and Copyrights.

                  (q)   With respect to any Intellectual Property:

                        (i)   such Intellectual Property is subsisting and has
                              not been adjudged invalid or unenforceable, in
                              whole or in part;

                        (ii)  such Intellectual Property is valid and
                              enforceable;

                        (iii) the Company has made all necessary filings and
                              recordations to protect its interest in such
                              Intellectual Property, including, without
                              limitation, recordations of all of its interests
                              in the Patents, Patent Licenses, Trademarks and
                              Trademark Licenses in the United States Patent and
                              Trademark Office and in corresponding offices
                              throughout the world and its claims to the
                              Copyrights and Copyright Licenses in the United
                              States Copyright Office and in corresponding
                              offices throughout the world;

                        (iv)  other than as set forth in Schedule B, the Company
                              is the exclusive owner of the entire and
                              unencumbered right, title and interest in and to
                              such Intellectual Property and no claim has been
                              made that the use of such Intellectual


                                       6
<PAGE>

                              Property infringes on the asserted rights of any
                              third party; and

                        (v)   the Company has performed and will continue to
                              perform all acts and has paid all required fees
                              and taxes to maintain each and every item of
                              Intellectual Property in full force and effect
                              throughout the world, as applicable.

                  (r)   Except with respect to any Trademark or Copyright that
the Company shall reasonably determine is of negligible economic value to the
Company, the Company shall

                        (i)   maintain each Trademark and Copyright in full
                              force free from any claim of abandonment for
                              non-use, maintain as in the past the quality of
                              products and services offered under such Trademark
                              or Copyright; employ such Trademark or Copyright
                              with the appropriate notice of registration; not
                              adopt or use any mark which is confusingly similar
                              or a colorable imitation of such Trademark or
                              Copyright unless the Secured Party shall obtain a
                              perfected security interest in such mark pursuant
                              to this Agreement; and not (and not permit any
                              licensee or sublicensee thereof to) do any act or
                              knowingly omit to do any act whereby any Trademark
                              or Copyright may become invalidated;

                        (ii)  not, except with respect to any Patent that it
                              shall reasonably determine is of negligible
                              economic value to it, do any act, or omit to do
                              any act, whereby any Patent may become abandoned
                              or dedicated; and

                        (iii) notify the Secured Party immediately if it knows,
                              or has reason to know, that any application or
                              registration relating to any Patent, Trademark or
                              Copyright may become abandoned or dedicated, or of
                              any adverse determination or development
                              (including, without limitation, the institution
                              of, or any such determination or development in,
                              any proceeding in the United States Patent and
                              Trademark Office, United States Copyright Office
                              or any court or tribunal in any country) regarding
                              its ownership of any Patent, Trademark or
                              Copyright or its right to register the same or to
                              keep and maintain the same.

                  (s)   Whenever the Company, either by itself or through any
agent, employee, licensee or designee, shall file an application for the
registration of any Patent, Trademark or Copyright with the United States Patent
and Trademark Office, United States Copyright Office or any similar office or
agency in any other country or any political subdivision thereof or acquire
rights to any new Patent, Trademark or Copyright whether or not registered,
report such filing to the Secured Party within five business days after the last
day of the fiscal quarter in which such filing occurs.

                  (t)   The Company shall take all reasonable and necessary
steps, including, without limitation, in any proceeding before the United States
Patent and Trademark Office, United States Copyright Office or any similar
office or agency in any other country or any political subdivision thereof, to
maintain and pursue each application (and to obtain the


                                       7
<PAGE>


relevant registration) and to maintain each registration of the Patents,
Trademarks and Copyrights, including, without limitation, filing of applications
for renewal, affidavits of use and affidavits of incontestability.

                  (u)   In the event that any Patent, Trademark or Copyright
included in the Intellectual Property is infringed, misappropriated or diluted
by a third party, promptly notify the Secured Party after it learns thereof and
shall, unless it shall reasonably determine that such Patent, Trademark or
Copyright is of negligible economic value to it, which determination it shall
promptly report to the Secured Party, promptly sue for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution,
or take such other actions as it shall reasonably deem appropriate under the
circumstances to protect such Patent, Trademark or Copyright. If the Company
lacks the financial resources to comply with this Section 3(t), the Company
shall so notify the Secured Party and shall cooperate fully with any enforcement
action undertaken by the Secured Party on behalf of the Company.

            4.    Defaults. The following events shall be "Events of Default":

                  (a)   The occurrence of an Event of Default (as defined in the
Note) under the Note or under the Asset Purchase Agreement;

                  (b)   Any representation or warranty of the Company in this
Agreement or in the Security Agreement shall prove to have been incorrect in any
material respect when made;

                  (c)   The failure by the Company to observe or perform any of
its obligations hereunder or in the Security Agreement or under the Asset
Purchase Agreement for twenty (20) days after receipt by the Company of notice
of such failure from the Secured Party; or

                  (d)   Any failure to perform their obligations or any breach
of their promises set forth in the NIR Letter by any of the Original Secured
Parties identified therein.

            5.    Duty To Hold In Trust. Upon the occurrence of any Event of
Default and at any time thereafter, the Company shall, upon receipt by it of any
revenue, income or other sums subject to the Security Interest, whether payable
pursuant to the Note or otherwise, or of any check, draft, note, trade
acceptance or other instrument evidencing an obligation to pay any such sum,
hold the same in trust for the Secured Party and shall forthwith endorse and
transfer any such sums or instruments, or both, to the Secured Party for
application to the satisfaction of the Obligations.

            6.    Rights and Remedies Upon Default. Upon occurrence of any Event
of Default and at any time thereafter, the Secured Party shall have the right to
exercise all of the remedies conferred hereunder and under the Note, and the
Secured Party shall have all the rights and remedies of a secured party under
the UCC and/or any other applicable law (including the


                                       8
<PAGE>


Uniform Commercial Code of any jurisdiction in which any Intellectual Property
is then located). Without limitation, the Secured Party shall have the following
rights and powers:

                  (a)   The Secured Party shall have the right to take
possession of the Intellectual Property and, for that purpose, enter, with the
aid and assistance of any person, any premises where the Intellectual Property,
or any part thereof, is or may be placed and remove the same, and the Company
shall assemble the Intellectual Property and make it available to the Secured
Party at places which the Secured Party shall reasonably select, whether at the
Company's premises or elsewhere, and make available to the Secured Party,
without rent, all of the Company's respective premises and facilities for the
purpose of the Secured Party taking possession of, removing or putting the
Intellectual Property in saleable or disposable form.

                  (b) The Secured Party shall have the right to operate the
business of the Company using the Intellectual Property and shall have the right
to assign, sell, lease or otherwise dispose of and deliver all or any part of
the Intellectual Property, at public or private sale or otherwise, either with
or without special conditions or stipulations, for cash or on credit or for
future delivery, in such parcel or parcels and at such time or times and at such
place or places, and upon such terms and conditions as the Secured Party may
deem commercially reasonable, all without (except as shall be required by
applicable statute and cannot be waived) advertisement or demand upon or notice
to the Company or right of redemption of the Company, which are hereby expressly
waived. Upon each such sale, lease, assignment or other transfer of Intellectual
Property, the Secured Party may, unless prohibited by applicable law which
cannot be waived, purchase all or any part of the Intellectual Property being
sold, free from and discharged of all trusts, claims, right of redemption and
equities of the Company, which are hereby waived and released.

            7.    Applications of Proceeds. The proceeds of any such sale, lease
or other disposition of the Intellectual Property hereunder shall be applied
first, to the expenses of retaking, holding, storing, processing and preparing
for sale, selling, and the like (including, without limitation, any taxes, fees
and other costs incurred in connection therewith) of the Intellectual Property,
to the reasonable attorneys' fees and expenses incurred by the Secured Party in
enforcing its rights hereunder and in connection with collecting, storing and
disposing of the Intellectual Property, and then to satisfaction of the
Obligations, and to the payment of any other amounts required by applicable law,
after which the Secured Party shall pay to the Company any surplus proceeds. If,
upon the sale, license or other disposition of the Intellectual Property, the
proceeds thereof are insufficient to pay all amounts to which the Secured Party
is legally entitled, the Company will be liable for the deficiency, together
with interest thereon, at the rate of 8% per annum (the "Default Rate"), and the
reasonable fees of any attorneys employed by the Secured Party to collect such
deficiency. To the extent permitted by applicable law, the Company waives all
claims, damages and demands against the Secured Party arising out of the
repossession, removal, retention or sale of the Intellectual Property, unless
due to the gross negligence or willful misconduct of the Secured Party.

            8.    Costs and Expenses. The Company agrees to pay all
out-of-pocket fees, costs and expenses incurred in connection with any filing
required hereunder, including without limitation, any financing statements,
continuation statements, partial releases and/or termination statements related
thereto or any expenses of any searches reasonably required by the Secured


                                       9
<PAGE>


Party. The Company shall also pay all other claims and charges which in the
reasonable opinion of the Secured Party would prejudice, imperil or otherwise
materially affect the Intellectual Property or the Security Interest therein.
The Company will also, upon demand, pay to the Secured Party the amount of any
and all reasonable expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, which the Secured Party may incur in
connection with (i) the enforcement of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the Intellectual Property, or (iii) the exercise or enforcement of any of the
rights of the Secured Party under the Note. Until so paid, any fees payable
hereunder shall be added to the principal amount of the Note and shall bear
interest at the Default Rate.

            9.    Responsibility for Intellectual Property. The Company assumes
all liabilities and responsibility in connection with all Intellectual Property,
and the obligations of the Company hereunder or under the Note shall in no way
be affected or diminished by reason of the loss, destruction, damage or theft of
any of the Intellectual Property or its unavailability for any reason.

            10. Security Interest Absolute. All rights of the Secured Party and
all Obligations of the Company hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
the Note or any agreement entered into in connection with the foregoing, or any
portion hereof or thereof; (b) any change in the time, manner or place of
payment or performance of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the Note or any other agreement entered into in connection with the
foregoing; (c) any exchange, release or nonperfection of any of the Intellectual
Property, or any release or amendment or waiver of or consent to departure from
any other Intellectual Property for, or any guaranty, or any other security, for
all or any of the Obligations; (d) any action by the Secured Party to obtain,
adjust, settle and cancel in its sole discretion any insurance claims or matters
made or arising in connection with the Intellectual Property; or (e) any other
circumstance which might otherwise constitute any legal or equitable defense
available to the Company, or a discharge of all or any part of the Security
Interest granted hereby. Until the Obligations shall have been paid and
performed in full, the rights of the Secured Party shall continue even if the
Obligations are barred for any reason, including, without limitation, the
running of the statute of limitations or bankruptcy. The Company expressly
waives presentment, protest, notice of protest, demand, notice of nonpayment and
demand for performance. In the event that at any time any transfer of any
Intellectual Property or any payment received by the Secured Party hereunder
shall be deemed by final order of a court of competent jurisdiction to have been
a voidable preference or fraudulent conveyance under the bankruptcy or
insolvency laws of the United States, or shall be deemed to be otherwise due to
any party other than the Secured Party, then, in any such event, the Company's
obligations hereunder shall survive cancellation of this Agreement, and shall
not be discharged or satisfied by any prior payment thereof and/or cancellation
of this Agreement, but shall remain a valid and binding obligation enforceable
in accordance with the terms and provisions hereof. The Company waives all right
to require the Secured Party to proceed against any other person or to apply any
Intellectual Property which the Secured Party may hold at any time, or to
marshal assets, or to pursue any other remedy. The Company waives any defense
arising by reason of the application of the statute of limitations to any
obligation secured hereby.


                                       10
<PAGE>


            11.   Term of Agreement. This Agreement and the Security Interest
shall terminate on the date on which all payments under the Note have been made
in full and all other Obligations have been paid or discharged. Upon such
termination, the Secured Party, at the request and at the expense of the
Company, will join in executing any termination statement with respect to any
financing statement executed and filed pursuant to this Agreement.

            12.   Power of Attorney; Further Assurances.

                  (a)   The Company authorizes the Secured Party, and does
hereby make, constitute and appoint it, and its respective officers, agents,
successors or assigns with full power of substitution, as the Company's true and
lawful attorney-in-fact, with power, in its own name or in the name of the
Company, to, after the occurrence and during the continuance of an Event of
Default, (i) endorse any notes, checks, drafts, money orders, or other
instruments of payment (including payments payable under or in respect of any
policy of insurance) in respect of the Intellectual Property that may come into
possession of the Secured Party; (ii) to sign and endorse any UCC financing
statement or any invoice, freight or express bill, bill of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications and
notices in connection with accounts, and other documents relating to the
Intellectual Property; (iii) to pay or discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on or threatened
against the Intellectual Property; (iv) to demand, collect, receipt for,
compromise, settle and sue for monies due in respect of the Intellectual
Property; and (v) generally, to do, at the option of the Secured Party, and at
the Company's expense, at any time, or from time to time, all acts and things
which the Secured Party deems necessary to protect, preserve and realize upon
the Intellectual Property and the Security Interest granted therein in order to
effect the intent of this Agreement and the Note, all as fully and effectually
as the Company might or could do; and the Company hereby ratifies all that said
attorney shall lawfully do or cause to be done by virtue hereof. This power of
attorney is coupled with an interest and shall be irrevocable for the term of
this Agreement and thereafter as long as any of the Obligations shall be
outstanding.

                  (b)   On a continuing basis, the Company will make, execute,
acknowledge, deliver, file and record, as the case may be, in the proper filing
and recording places in any jurisdiction, including, without limitation, the
jurisdictions indicated on Schedule C, attached hereto, all such instruments,
and take all such action as may reasonably be deemed necessary or advisable, or
as reasonably requested by the Secured Party, to perfect the Security Interest
granted hereunder and otherwise to carry out the intent and purposes of this
Agreement, or for assuring and confirming to the Secured Party the grant or
perfection of a security interest in all the Intellectual Property.

                  (c) The Company hereby irrevocably appoints the Secured Party
as the Company's attorney-in-fact, with full authority in the place and stead of
the Company and in the name of the Company, from time to time in the Secured
Party's discretion, to take any action and to execute any instrument which the
Secured Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including the filing, in its sole discretion, of one or more
financing or continuation statements and amendments thereto, relative to any of
the Intellectual Property without the signature of the Company where permitted
by law.


                                       11
<PAGE>


            13.   Notices. All notices, requests, demands and other
communications hereunder shall be in writing, with copies to all the other
parties hereto, and shall be deemed to have been duly given when (i) if
delivered by hand, upon receipt, (ii) if sent by facsimile, upon receipt of
proof of sending thereof, (iii) if sent by nationally recognized overnight
delivery service (receipt requested), the next business day or (iv) if mailed by
first-class registered or certified mail, return receipt requested, postage
prepaid, four days after posting in the U.S. mails, in each case if delivered to
the following addresses:

If to the Company:       CGM Applied Security Technologies, Inc.
                         2150 Highway 35, Suite 250
                         Sea Girt, New Jersey 08750
                         Attention:    President and Chief Executive Officer
                         Telephone:  (732) 359-0260
                         Facsimile:   (732) 359-0265


With copy to:            Sichenzia Ross Friedman Ference LLP
                         1065 Avenue of the Americas
                         New York, New York 10018
                         Attention:  Gregory Sichenzia, Esq.
                         Telephone:  (212) 930-9700
                         Facsimile:  (212) 930-9725


If to the Secured Party: Mr. Erik Hoffer

                         24156 Yacht Club Blvd.
                         Punta Gorda, Florida 33955
                         Tel:  941-575-0971
                         Fax:  941-575-0971

With a copy to:          Joseph J. Tomasek, Esq.
                         77 North Bridge Street
                         Somerville, New Jersey 08876
                         Telephone:  (908) 429-0030
                         Facsimile:   (908) 429-0040

            14.   Other Security. To the extent that the Obligations are now or
hereafter secured by property other than the Intellectual Property or by the
guarantee, endorsement or property of any other person, firm, corporation or
other entity, then the Secured Party shall have the right, in its sole
discretion, to pursue, relinquish, subordinate, modify or take any other action
with respect thereto, without in any way modifying or affecting any of the
Secured Party's rights and remedies hereunder.


                                       12
<PAGE>

            15.   Miscellaneous.

                  (a)   No course of dealing between the Company and the Secured
Party, nor any failure to exercise, nor any delay in exercising, on the part of
the Secured Party, any right, power or privilege hereunder or under the Note
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or thereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.

                  (b)   All of the rights and remedies of the Secured Party with
respect to the Intellectual Property, whether established hereby or by the Note
or by any other agreements, instruments or documents or by law shall be
cumulative and may be exercised singly or concurrently.

                  (c)   This Agreement and the Security Agreement constitute the
entire agreement of the parties with respect to the subject matter hereof and is
intended to supersede all prior negotiations, understandings and agreements with
respect thereto. Except as specifically set forth in this Agreement, no
provision of this Agreement may be modified or amended except by a written
agreement specifically referring to this Agreement and signed by the parties
hereto.

                  (d)   In the event that any provision of this Agreement is
held to be invalid, prohibited or unenforceable in any jurisdiction for any
reason, unless such provision is narrowed by judicial construction, this
Agreement shall, as to such jurisdiction, be construed as if such invalid,
prohibited or unenforceable provision had been more narrowly drawn so as not to
be invalid, prohibited or unenforceable. If, notwithstanding the foregoing, any
provision of this Agreement is held to be invalid, prohibited or unenforceable
in any jurisdiction, such provision, as to such jurisdiction, shall be
ineffective to the extent of such invalidity, prohibition or unenforceability
without invalidating the remaining portion of such provision or the other
provisions of this Agreement and without affecting the validity or
enforceability of such provision or the other provisions of this Agreement in
any other jurisdiction.

                  (e)   No waiver of any breach or default or any right under
this Agreement shall be considered valid unless in writing and signed by the
party giving such waiver, and no such waiver shall be deemed a waiver of any
subsequent breach or default or right, whether of the same or similar nature or
otherwise.

                  (f)   This Agreement shall be binding upon and inure to the
benefit of each party hereto and its successors and assigns.

                  (g)   Each party shall take such further action and execute
and deliver such further documents as may be necessary or appropriate in order
to carry out the provisions and purposes of this Agreement.

                  (h) This Agreement shall be construed in accordance with the
laws of the State of New Jersey, except to the extent the validity, perfection
or enforcement of a security interest hereunder in respect of any particular
Intellectual Property which are governed by a jurisdiction other than the State
of New Jersey in which case such law shall govern. Each of the parties hereto
irrevocably submit to the exclusive jurisdiction of New Jersey Superior Court,
Somerset County, over any action or proceeding arising out of or relating to
this Agreement, and


                                       13
<PAGE>


the parties hereto hereby irrevocably agree that all claims in respect of such
action or proceeding may be heard and determined in such New Jersey. The parties
hereto agree that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. The parties hereto further waive any
objection to venue in the State of New Jersey and any objection to an action or
proceeding in the State of New Jersey on the basis of forum non conveniens.

                  (i)   EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING
OF ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR
EACH PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY
RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL
CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY
FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL, AND THAT SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO
A JURY TRIAL FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING
THAT, NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE
EVENT OF A LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.

                  (j) This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.



                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       14
<PAGE>




      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.


                                       CGM APPLIED SECURITY TECHNOLOGIES, INC.


                                       By: /s/ Anthony R. Shupin
                                           -------------------------------------
                                           Anthony R. Shupin
                                           President and Chief Executive Officer


                                       CGM SECURITY SOLUTIONS, INC.


                                       By: /s/ Erik Hoffer
                                           -------------------------------------
                                           Erik Hoffer, President
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.4
<SEQUENCE>5
<FILENAME>v013796_ex4-4.txt
<TEXT>
                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                           2150 Highway 35, Suite 250
                           Sea Girt, New Jersey 08750




                                         January 31, 2005



AJW Partners, LLC
New Millennium Capital Partners II, LLC
AJW Offshore, Ltd. (f/d/a AJW/New Millennium Offshore, Ltd.)
AJW Qualified Partners, LLC (f/d/a Pegasus Capital Partners, LLC)
1044 Northern Boulevard
Suite 302
Roslyn, New York 11576

      Re:   Digital Descriptor Systems, Inc. (the "Company") -
            Acquisition of CGM Security Solutions, Inc.
            --------------------------------------------------

Ladies and Gentlemen:

      In connection with the Company's proposed acquisition of CGM Security
Solutions, Inc. ("CGM") (the "Acquisition"), this letter sets forth the
agreement of the parties hereto to: (i) extend the maturity dates of certain
debentures and notes which are convertible into shares of the Company's common
stock, par value $.001 per share (the "Common Stock"), originally issued by the
Company to the investors listed in the signature pages hereto (collectively, the
"Investors") (collectively, the "Debt Instruments"), as set forth on Schedule 1
hereto; (ii) refrain from incurring liens on the assets of the Company,
including those CGM assets purchased in the Acquisition (the "CGM Assets"),
except as provided herein; (iii) allow the Company to cure any Event of Default
(as defined in each of the Debt Instruments) within one hundred fifty days (150)
days from the date hereof; (iv) agree that a failure to pay the entire purchase
price for the CGM Assets to CGM's former shareholder pursuant to the terms of a
certain 2.86% secured convertible promissory note, dated February 24, 2005, and
given by the Company and its subsidiary to CGM (the "Note"), shall not
constitute an Event of Default under the Debt Instruments and hereby agree to
release the Investors' liens on the CGM Assets in the event of a default under
the Note; and (v) extend the expiration dates and amend the exercise price of
certain warrants originally issued by the Company to the Investors
(collectively, the "Warrants"), as set forth on Schedule 1 hereto.

      By execution hereof, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree that:

      1.    The Maturity Date of the Debt Instruments issued on November 30,
            2004 is hereby extended until March 1, 2008.


<PAGE>


      2.    The Applicable Percentage (as defined in each of the Debt
            Instruments) shall be 40%.

      3.    So long as the Company shall have any obligations under the Debt
            Instruments, the Company shall not, without the Investors' written
            consent, transfer, pledge, hypothecate, encumber, license (except
            for non-exclusive licenses granted by the Company in the ordinary
            course of business), sell or otherwise dispose of any of the assets
            of the Company; provided that, in connection with the Acquisition,
            the Company shall grant a second priority security interest in the
            CGM Assets to the former shareholder of CGM (but not any other
            assets of the Company or any subsidiary of the Company); and further
            provided that, so long as the Company shall have any obligations
            under the Debt Instruments, the Company shall maintain a valid and
            perfected first priority security interest in favor of the Investors
            in the assets of CGM or any successor thereto.

      4.    The Investors agree to allow the Company to cure, on or prior to
            June 30, 2005, any Events of Default (as defined in each of the Debt
            Instruments), which have occurred as of the date hereof or occur on
            or prior to June 30, 2005 pursuant to the Debt Instruments; provided
            that all interest due and owing to the Investors pursuant to the
            Debt Instruments shall remain payable to the Investors in accordance
            with the terms and conditions set forth in the Debt Instruments.

      5.    The Investors agree that, in the event that the Company and its
            subsidiary fail to pay the entire purchase price for the CGM Assets
            to CGM or its assigns pursuant to the terms of the Note and,
            provided further, that an Event of Default has not occurred pursuant
            to any of the Debt Instruments, such failure to pay the Note and the
            exercise by CGM or its assigns of any rights as a result thereof
            shall not constitute an Event of Default under the terms and
            conditions set forth in any of the Debt Instruments, and CGM, as the
            holder of the Note, may exercise its remedies pursuant to the Note,
            which may include the retaking of the CGM Assets, in which event the
            Investors hereby agree to release their first priority security
            interest and liens on the CGM Assets to accommodate CGM.

      6.    The Warrants shall expire on January 31, 2012.

      7.    The Exercise Price (as defined in the Warrants) is hereby amended to
            be $.001 per share.

      8.    The Debt Instruments and the Warrants are hereby amended in
            accordance with the foregoing provisions. All other provisions of
            the Debt Instruments and the Warrants, as amended from time to time,
            shall remain in full force and effect.

      The parties shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other parties hereto
may reasonably request in order to carry out the intent an accomplish the
purposes of this letter agreement, including without limitation the issuance of
amended Debt Instruments and the Warrants.


<PAGE>


      Please signify your agreement with the foregoing by signing a copy of this
letter where indicated and returning it to the undersigned.



                                          Sincerely,

                                          DIGITAL DESCRIPTOR SYSTEMS, INC.


                                          /s/ Anthony R. Shupin
                                          -------------------------------
                                          Anthony R. Shupin
                                          President and Chief Executive Officer

ACCEPTED AND AGREED:

AJW PARTNERS, LLC.
By:  SMS GROUP, LLC

/s/ Corey S. Ribotsky
-----------------------------
Corey S. Ribotsky, Manager


NEW MILLENNIUM CAPITAL PARTNERS II, LLC
By:  FIRST STREET MANAGER II, LLC,

/s/ Corey S. Ribotsky
-----------------------------
Corey S. Ribotsky, Manager


AJW OFFSHORE, LTD.
By:  FIRST STREET MANAGER II, LLC

/s/ Corey S. Ribotsky
------------------------------
Corey S. Ribotsky, Manager

AJW QUALIFIED PARTNERS, LLC
By:  AJW MANAGER, LLC

/s/ Corey S. Ribotsky
------------------------------
Corey S. Ribotsky, Manager


<PAGE>



                                   SCHEDULE 1


<TABLE>
<CAPTION>
                                                 Debt Instruments   Warrants    Date of Issuance
                                                 ----------------  ----------  ------------------
<S>                                              <C>                  <C>               <C> <C>
      AJW Partners LLC                           $    125,000         375,000  December 31, 2001
      1044 Northern Blvd. Suite 302              $     75,000         225,000  January 10, 2003
      Roslyn, New York 11576                     $     37,500         112,500  February 27, 2003
                                                 $     37,500         112,500  March 31, 2003
                                                 $     50,000         150,000  May 7, 2004
                                                 $    560,000       1,680,000  November 30, 2004
                                                 ----------------  ----------  ------------------
      New Millennium Capital Partners II, LLC    $    125,000         375,000  December 31, 2001
      1044 Northern Blvd. Suite 302              $     10,175          30,525  May 7, 2004
      Roslyn, New York 11576                     $     70,000         210,000  November 30, 2004
                                                 ----------------  ----------  ------------------
      AJW Offshore, Ltd.                         $     50,000         150,000  September 30, 2002
      1044 Northern Blvd. Suite 302              $    100,000         300,000  January 10, 2003
      Roslyn, New York 11576                     $     50,000         150,000  February 27, 2003
                                                 $     50,000         150,000  March 31, 2003
                                                 $     82,500         577,500  September 30, 2003
                                                 $     22,500         157,500  November 27, 2003
                                                 $     22,500         157,500  December 3, 2003
                                                 $     22,500         157,500  February 2, 2004
                                                 $     88,700         266,100  May 7, 2004
                                                 $  1,435,000       4,305,000  November 30, 2004
                                                 ----------------  ----------  ------------------
      AJW Qualified Partners, LLC                $     50,000         150,000  September 30, 2002
      1044 Northern Blvd. Suite 302              $     75,000         225,000  January 10,2003
      Roslyn, New York 11576                     $     37,500         112,500  February 27, 2003
                                                 $     37,500         112,500  March 31, 2003
                                                 $     82,500         577,500  September 30, 2003
                                                 $     22,500         157,500  November 27, 2003
                                                 $     22,500         157,500  December 3, 2003
                                                 $     22,500         157,500  February 2, 2004
                                                 $    101,125         303,375  May 7, 2004
                                                 $  1,435,000       4,305,000  November 30, 2004
                                                 ----------------  ----------  ------------------
</TABLE>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>6
<FILENAME>v013796_ex10-1.txt
<TEXT>
EXHIBIT 10.1


                            ASSET PURCHASE AGREEMENT

                                      AMONG

                        DIGITAL DESCRIPTOR SYSTEMS, INC.,


                     CGM APPLIED SECURITY TECHNOLOGIES, INC.

                                       AND

                          CGM SECURITY SOLUTIONS, INC.



                          Dated as of February 25, 2005


<PAGE>

                                TABLE OF CONTENTS

Section                                                                     Page
-------                                                                     ----

ARTICLE I SALE AND PURCHASE OF ASSETS..........................................1
   1.1    Sale of Assets.......................................................1
   1.2    Excluded Assets......................................................2
   1.3    Assumed Liabilities; Excluded Liabilities; Employees.................2
   1.4    Purchase Price; Adjustment; Payment..................................3
   1.5    Purchase Price Allocation............................................3
   1.6    Records and Contracts................................................4
   1.7    Further Assurances...................................................4
   1.8    Sales and Transfer Taxes.............................................4

ARTICLE II CLOSING AND TERMINATION.............................................4
   2.1    Closing Date.........................................................4
   2.2    Termination of Agreement.............................................4
   2.3    Procedure Upon Termination...........................................5
   2.4    Effect of Termination................................................5


ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER.......................5
   3.1    Organization and Good Standing.......................................5
   3.2    Authorization of Agreement...........................................5
   3.3    Capitalization.......................................................6
   3.4    No Subsidiaries......................................................6
   3.5    Corporate Records....................................................6
   3.6    Conflicts; Consents of Third Parties.................................6
   3.7    Ownership and Transfer of Assets.....................................7
   3.8    Financial Statements.................................................7
   3.9    No Undisclosed Liabilities...........................................7
   3.10   Absence of Certain Developments......................................7
   3.11   Taxes................................................................9
   3.12   Real Property.......................................................10
   3.13   Tangible Personal Property..........................................11
   3.14   Intangible Property.................................................12
   3.15   Material Contracts..................................................12
   3.16   Employee Benefits...................................................13
   3.17   Labor...............................................................15
   3.18   Litigation..........................................................15
   3.19   Compliance with Laws; Permits.......................................16
   3.20   Environmental Matters...............................................16
   3.21   Insurance...........................................................17
   3.22   Inventories; Receivables; Payables..................................17
   3.23   Customers and Suppliers.............................................17
   3.24   Banks...............................................................17
   3.25   Gross Sales.........................................................17
   3.26    No Misrepresentations..............................................18
   3.27   Financial Advisors. ................................................18
   3.28   Investment Intention................................................18
   3.29   Accredited Investor.................................................18


                                       i
<PAGE>

   3.30   Patriot Act.........................................................18


ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER.........................19
   4.1    Organization and Good Standing......................................19
   4.2    Authorization of Agreement..........................................19
   4.3    Conflicts; Consents of Third Parties................................20
   4.4    Litigation..........................................................22
   4.5    Financial Advisors..................................................21
   4.6     Patriot Act........................................................22

ARTICLE VI COVENANTS..........................................................22
   5.1    Access to Information...............................................22
   5.2    Conduct of the Business Pending the Closing.........................23
   5.3    Consents............................................................25
   5.4    Other Actions.......................................................25
   5.5    No Solicitation.....................................................25
   5.6    Preservation of Records.............................................25
   5.7    Publicity...........................................................26
   5.8    Use of Name.........................................................26
   5.9    Environmental Matters...............................................26
   5.10   Non-Competition Agreements..........................................26
   5.11   Financial Statements................................................26

ARTICLE VI CONDITIONS TO CLOSING..............................................27
   6.1    Conditions Precedent to Obligations of Parent.......................27
   6.2    Conditions Precedent to Obligations of the Seller...................28

ARTICLE VII DOCUMENTS TO BE DELIVERED.........................................29
   7.1    Documents to be Delivered by the Seller.............................29
   7.2    Documents to be Delivered by the Parent.............................29

ARTICLE VIII INDEMNIFICATION..................................................30
   8.1    Non-Tax Indemnification.............................................30
   8.2    Limitations on Indemnification for Breaches of
            Representations and Warranties....................................31
   8.3    Non-Tax Indemnification Procedures..................................32


ARTICLE IX MISCELLANEOUS......................................................29
   9.1    Payment of Sales, Use or Similar Taxes..............................29
   9.2    Survival of Representations and Warranties..........................33
   9.3    Expenses............................................................33
   9.4    Specific Performance................................................33
   9.5    Further Assurances..................................................33
   9.6    Submission to Jurisdiction; Consent to Service of Process...........33
   9.7    Table of Contents and Headings......................................34
   9.8    Notices.............................................................34
   9.9    Severability........................................................35
   9.10   Binding Effect; Assignment..........................................35


                                       ii
<PAGE>

                            ASSET PURCHASE AGREEMENT


      ASSET PURCHASE AGREEMENT, dated as of February 25, 2005 (the "Agreement"),
between Digital Descriptor Systems,  Inc., a corporation existing under the laws
of  Delaware  (the  "Parent"),  CGM  Applied  Security  Technologies,   Inc.,  a
corporation existing under the laws of Delaware and a wholly owned subsidiary of
the Parent  ("Acquisition  Sub") and CGM Security  Solutions,  Inc., a privately
held Florida corporation (the "Seller").


                              W I T N E S S E T H:
                              - - - - - - - - - -

      WHEREAS,  subject to the terms and  conditions  hereof,  Seller desires to
sell,  transfer and assign to Acquisition  Sub, and  Acquisition  Sub desires to
purchase from Seller, all of the properties,  rights and assets constituting the
business of Seller (the "Business"); and

      WHEREAS,  simultaneous  with the execution and delivery of this Agreement,
the Parent and Acquisition Sum shall execute and deliver to the Seller a secured
convertible  promissory note (the "Note"),  a security  agreement (the "Security
Agreement"),  and  intellectual  property  security  agreement (the "IP Security
Agreement", and together with the Security Agreement, the "Security Agreements")
and an employment agreement for the major shareholder of Seller (the "Employment
Agreement"), all as more specifically described below.

      NOW, THEREFORE,  in consideration of the premises and the mutual covenants
and agreements hereinafter contained, the parties hereby agree as follows:


                                   ARTICLE I
                          PURCHASE AND SALE OF ASSETS.

      1.1 Sale of Assets. Seller agrees to sell, assign, transfer and deliver to
Acquisition  Sub, and  Acquisition  Sub agrees to purchase  from Seller,  all of
Seller's right,  title and interest in and to all of the properties,  assets and
business  of  the  Business,  of  every  kind  and  description,   tangible  and
intangible,  real,  personal or mixed, and wherever  located,  but excluding the
Excluded Assets, including, without limitation, the following:

         (a) Equipment. All improvements and all other fixed assets,  equipment,
furniture,  fixtures, leasehold improvements located within the Seller's offices
located at 223 Churchill  Avenue,  Somerset,  New Jersey 08873 and at 55 LaSalle
Street,  Staten Island, New York 10303, parts,  accessories,  inventory,  office
materials, software, supplies and other tangible personal property of every kind
and description  owned by Seller and used or held for use in connection with the
Business, all as set forth on Schedule 1.1(a) attached hereto ("Equipment");

         (b)  Contracts.  All of the rights of Seller  under,  and  interest  of
Seller  in and to,  all  contracts  relating  to the  Business  (other  than the
Excluded  Contracts),  a true,  correct and complete list of which  contracts is
attached hereto as Schedule 1.1(b) ("Contracts");

         (c)  Intellectual  Property.  All  of  Seller's  Intellectual  Property
relating to the Business, as set forth on Schedule 1.1(c) attached hereto;


<PAGE>

         (d)  Goodwill.  All of the goodwill of Seller in, and the going concern
value of, the Business, and all of the business and customer lists and accounts,
proprietary  information,  marketing  materials and trade secrets related to the
Business; and

         (e) Records. All of Seller's customer logs, location files and records,
and other business files and records, in each case relating to the Business.

      The Equipment,  Contracts,  Intellectual Property,  Goodwill,  Records and
business of Seller  being sold to and  purchased by  Acquisition  Sub under this
Section 1.1 are referred to herein collectively as the "Assets."

      1.2 Excluded Assets.  There shall be excluded from the Assets and retained
by Seller, the following assets (the "Excluded Assets"):

         (a)  Accounts   Receivable;   Other  Assets.  All  accounts  receivable
generated by the  Business and work in process  prior to the date of the Closing
of this Agreement, all assets identified on Schedule 1.2(a) attached hereto, and
all other assets of Seller which are not used or held for use in connection with
the Business or otherwise  necessary to the operation of the Business,  provided
however,  Acquisition  Sub shall charge CGM a cost of $100 per man hour plus any
costs  associated  with materials  needed to be purchased by Acquisition  Sub to
convert the work in process to finished goods;


         (b)   Corporate   Records.   All  of  Seller's   corporate   and  other
organizational records;

         (c) Cash.  Cash on hand,  exclusive of cash  reserves  associated  with
undelivered service; and

         (d)  Judgments.  All awards granted by the court in favor of the Seller
against (i) Ron Busch and (ii) Molecuwire.

         1.3 Assumed Liabilities; Excluded Liabilities; Employees.
              ----------------------------------------------------

         (a) Assumed  Liabilities.  Acquisition Sub shall accept and assume, and
shall  become  and be fully  liable  and  responsible  for,  and  other  than as
expressly  set  forth  herein   Seller  shall  have  no  further   liability  or
responsibility  for or with respect to, (i) liabilities and obligations  arising
out of events  occurring on and after the date of the Closing of this  Agreement
related to  Acquisition  Sub's  ownership  of the Assets and  Acquisition  Sub's
operation  of the  Business  after  the  Closing  of this  Agreement;  (ii)  all
obligations  and  liabilities of Seller which are to be performed after the date
hereof arising under the Contracts;  and, including but not limited to (iii) the
liabilities  identified on Schedule 1.3(a) attached  hereto  (collectively,  the
"Assumed Liabilities"). The assumption of the Assumed Liabilities by Acquisition
Sub hereunder  shall not enlarge any rights of third parties under  contracts or
arrangements  with  Parent or Seller or any of their  respective  affiliates  or
subsidiaries,  except,  however, if such enlarged rights are provided for in any
Contract  assumed or arise out of events  occurring  on or after the  Closing of
this Agreement.

         (b) Excluded  Liabilities.  It is expressly understood that, except for
the Assumed Liabilities,  Acquisition Sub shall not assume, pay or be liable for
any liability or obligation of Seller of any kind or nature at any time existing
or asserted,  whether,  known,  unknown,  fixed,  contingent or  otherwise,  not
specifically  assumed herein by Parent or Acquisition  Sub,  including,  without
limitation, the judgment awarded to Coronet Paper on December 21, 2001 ("Coronet
Paper  Judgment")   against  Seller  and  Erik  Hoffer,  as  Seller's  President
("Seller's Stockholder"), and any liability or obligation relating to, resulting


                                       2
<PAGE>

from or  arising  out of (i) the  Excluded  Assets,  (ii) the  employees  of the
Business or (iii) any fact existing or event  occurring prior to, or relating to
the operation of the Business prior to, the date hereof.


         (c) Employees, Wages and Benefits.
             ------------------------------


                            (i) Seller  shall  terminate or  reassign all of its
         employees  related to the  Business  effective  as of the  Closing  and
         neither Parent nor Acquisition Sub shall assume or have any obligations
         or  liabilities  with respect to such  employees or such  terminations,
         including, without limitation, any severance obligation.

                  (i) Parent and Acquisition Sub specifically reserve the right,
         on or after  the date  hereof,  to employ  or  reject  any of  Seller's
         employees  or other  applicants  in its sole and  absolute  discretion.
         nothing  in this  Agreement  shall  be  construed  as a  commitment  or
         obligation of Parent to accept for  employment,  or otherwise  continue
         the employment of, any of Seller's employees,  and no employee shall be
         a third-party beneficiary of this Agreement.

                  (ii) Seller shall pay all wages,  salaries,  commissions,  and
         the cost of all fringe  benefits  provided to its employees which shall
         have  become due for work  performed  as of and  through the Closing of
         this Agreement and Seller shall collect and pay all Taxes in respect of
         such wages, salaries, commissions and benefits.


                  (iii) Seller  acknowledges  and agrees that neither Parent nor
         Acquisition  Sub shall acquire any rights or interests of Seller in, or
         assume or have any  obligations  or  liabilities  of Seller under,  any
         benefit plans maintained by Seller, or for the benefit of any employees
         of Seller, including, without limitation,  obligations for severance or
         vacation accrued but not taken.

         1.4      Purchase Price; Adjustment; Payment.
                  ------------------------------------

                            (a) Purchase Price. In  consideration of the sale by
         Seller to Acquisition Sub of the Assets,  and subject to the assumption
         by Acquisition Sub of the Assumed  Liabilities and  satisfaction of the
         conditions contained herein, Parent shall pay to Seller an amount equal
         to Five Million Dollars ($5,000,000), which amount shall be adjusted in
         accordance with Section 1.4(b).

                            (b)      Payment of Purchase Price. The Purchase
         Price will be paid as follows:


                      Closing  Payment.  On the date  hereof,  the Parent  shall
deliver to the  Seller  (i) a  non-refundable  payment  of  $1,500,000  via wire
transfer of immediately available funds into an account designated by the Seller
and (ii) a $3,500,000 2.86% Secured Convertible  Promissory Note,  substantially
in the form attached hereto as Exhibit A (the "Note").

      1.5 Purchase Price Allocation.  Parent,  Acquisition Sub and Seller hereby
agree on the  allocation  of the  Purchase  Price as set forth on  Schedule  1.5
attached hereto.  Such allocation shall be binding upon Parent,  Acquisition Sub
and Seller for all purposes (including financial accounting purposes,  financial
and regulatory reporting purposes and tax purposes). Parent, Acquisition Sub and
Seller each further  agrees to file its Federal income tax returns and its other
tax returns reflecting such allocation, Form 8594 and any other reports required
by Section 1060 of the Internal Revenue Code of 1986, as amended (the "Code").


                                       3
<PAGE>

      1.6 Records and Contracts.  Seller shall deliver to Parent and Acquisition
Sub  all of the  Contracts,  with  such  assignments  thereof  and  consents  to
assignments  as are necessary to assure Parent and  Acquisition  Sub of the full
benefit of the same. Seller shall also deliver to Parent and Acquisition Sub all
of Seller's files and records constituting Assets.

      1.7  Further  Assurances.  Seller  shall,  from  time  to time  after  the
consummation of the transactions  contemplated  herein, at the request of Parent
or  Acquisition  Sub and  without  further  consideration,  execute  and deliver
further  instruments  of transfer and  assignment  and take such other action as
Parent or Acquisition Sub may reasonably  require to more  effectively  transfer
and assign to, and vest in, Parent or Acquisition  Sub the Assets free and clear
of all Liens.

      1.8 Sales and  Transfer  Taxes.  All sales,  transfer,  use,  recordation,
documentary,  stamp,  excise taxes,  personal  property  taxes,  fees and duties
(including  any real estate  transfer  taxes) under  applicable  law incurred in
connection with this Agreement or the transactions  contemplated  hereby will be
borne and paid by Parent.


                                   ARTICLE II
                             CLOSING AND TERMINATION

      2.1 Closing Date.
           ------------

      Subject to the  satisfaction  of the  conditions set forth in Sections 6.1
and 6.2  hereof  (or the  waiver  thereof  by the party  entitled  to waive that
condition),  the closing of the sale and purchase of the Assets  provided for in
Section 1.1 hereof (the "Closing")  shall take place at the offices of Sichenzia
Ross Friedman  Ference located at 1605 Avenue of the Americas,  21st Floor,  New
York,  NY 10018 (or at such other place as the parties may designate in writing)
on February  ___,  2005,  or on such other date as the Seller and the Parent may
designate in writing. The date on which the Closing shall be held is referred to
in this Agreement as the "Closing Date".


      2.2 Termination of Agreement.
          -------------------------

      This Agreement may be terminated prior to the Closing as follows:

      (a) at the  election of the Seller or the Parent on or after  December 31,
2004,  if the Closing  shall not have  occurred by the close of business on such
date,  provided  that  the  terminating  party is not in  default  of any of its
obligations hereunder;

      (b) by mutual written consent of the Seller and the Parent; or

      (c) by the  Seller  or the  Parent  if there  shall  be in  effect a final
nonappealable  order of a court,  government or  governmental  agency or body of
competent   jurisdiction   ("Governmental   Body")  of  competent   jurisdiction
restraining,   enjoining  or  otherwise  prohibiting  the  consummation  of  the
transactions  contemplated hereby; it being agreed that the parties hereto shall
promptly appeal any adverse determination which is not nonappealable (and pursue
such appeal with reasonable diligence).


                                       4
<PAGE>

      2.3 Procedure Upon Termination.
          ---------------------------

      In the event of termination  and  abandonment by the Parent or the Seller,
or both, pursuant to Section 2.2 hereof,  written notice thereof shall forthwith
be given to the other party or parties, and this Agreement shall terminate,  and
the purchase of the Assets hereunder shall be abandoned,  without further action
by the Parent or the Seller.  If this Agreement is terminated as provided herein
each party shall redeliver all documents,  work papers and other material of any
other  party  relating  to the  transactions  contemplated  hereby,  whether  so
obtained before or after the execution hereof, to the party furnishing the same.

      2.4 Effect of Termination.
          ----------------------

      In the event that this Agreement is validly terminated as provided herein,
then each of the  parties  shall be  relieved  of their  duties and  obligations
arising  under  this  Agreement  after  the  date of such  termination  and such
termination  shall be without  liability  to the Parent  the  Seller;  provided,
however,  that the  obligations  of the  parties set forth in Section 9.4 hereof
shall survive any such termination and shall be enforceable hereunder; provided,
further,  however,  that nothing in this Section 2.4 shall relieve the Parent or
the Seller of any liability for a breach of this Agreement.

                                  ARTICLE III
                  REPRESENTATIONS AND WARRANTIES OF THE SELLER



      The Seller and the Seller's  Stockholder,  as listed on the signature page
hereto (the "Seller's  Shareholder")  jointly and severally hereby represent and
warrant to the Parent and Acquisition Sub that:

      3.1 Organization and Good Standing.
          -------------------------------

      The Seller is a corporation  duly organized,  validly existing and in good
standing under the laws of the  jurisdiction of its  incorporation  as set forth
above and has all  requisite  corporate  power and  authority to own,  lease and
operate its properties and to carry on its business as now conducted. The Seller
is duly qualified or authorized to do business as a foreign  corporation  and is
in good standing under the laws of each  jurisdiction in which it owns or leases
real property and each other  jurisdiction  in which the conduct of its business
or the ownership of its properties requires such qualification or authorization,
except where failure to be so qualified would not have a material adverse effect
on the  business,  assets or financial  condition of the Seller taken as a whole
("Material Adverse Effect").

      3.2 Authorization of Agreement.
          ---------------------------

      The  Seller has all  requisite  power,  authority  and legal  capacity  to
execute and deliver  this  Agreement,  and each other  agreement,  document,  or
instrument or  certificate  contemplated  by this Agreement or to be executed by
the Seller in connection with the consummation of the transactions  contemplated
by this Agreement (together with this Agreement, the "Seller Documents"), and to
consummate the transactions  contemplated hereby and thereby. This Agreement has
been, and each of the Seller Documents will be at or prior to the Closing,  duly
and  validly  executed  and  delivered  by the  Seller  and  (assuming  the  due
authorization,  execution and delivery by the other parties  hereto and thereto)
this Agreement  constitutes,  and each of the Seller  Documents when so executed
and delivered  will  constitute,  legal,  valid and binding  obligations  of the
Seller,  enforceable  against  the Seller in  accordance  with their  respective
terms, subject to applicable bankruptcy, insolvency, reorganization,  moratorium


                                       5
<PAGE>

and  similar  laws  affecting  creditors'  rights and  remedies  generally,  and
subject,  as to  enforceability,  to general  principles  of  equity,  including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).

      3.3 Capitalization.
          ---------------

      The  authorized  capital  stock of the  Seller  consists  of 100 shares of
common Stock, no par value (the "Common  Stock").  As of the date hereof,  there
are 62.5 shares of Common Stock issued and  outstanding  and no shares of Common
Stock  are  held  by the  Seller  as  treasury  stock.  All of  the  issued  and
outstanding  shares of Common  Stock were duly  authorized  for issuance and are
validly issued, fully paid and non-assessable.

      3.4 No Subsidiaries.
          ----------------

      The Seller has no subsidiaries.

      3.5 Corporate Records.
          ------------------

      (a) The Seller has  delivered  to the  Parent  and  Acquisition  Sub true,
correct and complete  copies of its certificate of  incorporation  (certified by
the  Secretary  of State of  Florida  and  by-laws  (certified  by the  Seller's
secretary, assistant secretary or other appropriate officer) of the Seller.

      (b) The minute books of the Seller previously made available to the Parent
contain complete and accurate records of all meetings and accurately reflect all
other corporate  action of the  stockholders  and board of directors  (including
committees  thereof)  of the  Seller.  The  stock  certificate  books  and stock
transfer ledgers of the Seller previously made available to the Parent are true,
correct and complete. All stock transfer taxes levied or payable with respect to
all  transfers  of shares of the Seller  prior to the date hereof have been paid
and appropriate transfer tax stamps affixed.

      3.6 Conflicts; Consents of Third Parties.
          -------------------------------------

      Except as set forth in Schedule 3.6 hereof:

      (a) The  execution  and delivery by the Seller of this  Agreement  and the
Seller Documents,  the consummation of the transactions  contemplated  hereby or
thereby,  or  compliance  by the  Seller  with any of the  provisions  hereof or
thereof will (i) conflict with, or result in the breach of, any provision of the
certificate  of  incorporation  or by-laws of the Seller;  (ii)  conflict  with,
violate,  result in the breach or termination  of, or constitute a default under
any note, bond, mortgage,  indenture,  license, agreement or other instrument or
obligation  to which  the  Seller  is a party or by which  any of them or any of
their respective properties or assets is bound; (iii) violate any statute, rule,
regulation,  order or decree of any governmental  body or authority by which the
Seller is bound;  or (iv) result in the creation of any Lien upon the properties
or assets of the Seller  except,  in case of clauses (ii),  (iii) and (iv),  for
such  violations,  breaches  or defaults  as would not,  individually  or in the
aggregate, have a Material Adverse Effect.

      (b) No consent,  waiver,  approval,  order, permit or authorization of, or
declaration or filing with, or notification to, any person or Governmental  Body
is  required  on the part of the  Seller,  the  Seller  in  connection  with the
execution  and  delivery  of this  Agreement  or the  Seller  Documents,  or the
compliance by the Seller as the case may be, with any of the  provisions  hereof
or thereof.

                                       6
<PAGE>

      3.7 Ownership and Transfer of Assets.
           --------------------------------

      The Seller is the record and  beneficial  owner of the Assets,  and except
for the judgment  awarded to Coronet  Paper on December 21, 2001 against  Seller
and Erik Hoffer, as Seller's President, the Assets are free and clear of any and
all Liens.  The Seller has the corporate power and authority to sell,  transfer,
assign and deliver such Assets as provided in this Agreement,  and such delivery
will convey to the  Acquisition  Sub good and  marketable  title to such Assets,
free and clear of any and all  Liens,  except as they may be  encumbered  by the
aforementioned judgment.

      3.8 Financial Statements.
          ---------------------

      The  Seller  has  delivered  to  the  Parent  copies  of (i)  the  audited
consolidated  balance  sheets of the  Seller  as at  December  31,  2003 and the
related  audited  consolidated  statements  of income  and of cash  flows of the
Seller for the year then ended and (ii) the unaudited but reviewed  consolidated
balance  sheet  of  the  Seller  as  at  September  30,  2004  and  the  related
consolidated  statements  of  income  and  cash  flows  of the  Seller  for  the
nine-month period then ended (such audited and unaudited  statements,  including
the  related  notes  and  schedules  thereto,  are  referred  to  herein  as the
"Financial  Statements").  Each of the Financial  Statements is, and the Closing
Date Balance Sheet (as defined in Section 5.11) when delivered will be, complete
and correct in all material  respects,  will be prepared in accordance with GAAP
(subject to normal year-end adjustments in the case of the unaudited statements)
and in conformity with the practices  consistently applied by the Seller without
modification of the accounting principles used in the preparation thereof and or
will present fairly the financial position, results of operations and cash flows
of the Seller as at the dates and for the periods indicated.

      For the purposes hereof, the unaudited but reviewed  consolidated  balance
sheet of the Seller as at  September  30, 2004 is  referred  to as the  "Balance
Sheet" and September 30, 2004 is referred to as the "Balance Sheet Date".

      3.9 No Undisclosed Liabilities.
          ---------------------------

      The Seller has no  indebtedness,  obligations  or  liabilities of any kind
(whether  accrued,  absolute,  contingent  or  otherwise,  and whether due or to
become due) that would have been required to be reflected in,  reserved  against
or  otherwise  described  on the  Balance  Sheet  or in  the  notes  thereto  in
accordance  with GAAP  which was not fully  reflected  in,  reserved  against or
otherwise  described  in the  Balance  Sheet  or the  notes  thereto  or was not
incurred in the ordinary course of business  consistent with past practice since
the Balance Sheet Date.

      3.10 Absence of Certain Developments.
           --------------------------------

      Except as  expressly  contemplated  by this  Agreement  or as set forth on
Schedule  3.10,  since the Balance  Sheet Date and  continuing  through the date
hereof:


      (i) there has not been any Material  Adverse Change nor has there occurred
any event which is reasonably likely to result in a Material Adverse Change;

      (ii) there has not been any damage,  destruction  or loss,  whether or not
covered by  insurance,  with  respect to the  property  and assets of the Seller
having a  replacement  cost of more than $50,000 for any single loss or $125,000
for all such losses;


                                       7
<PAGE>

      (iii) there has not been any declaration,  setting aside or payment of any
dividend or other  distribution in respect of any shares of capital stock of the
Seller or any repurchase,  redemption or other  acquisition by the Seller of any
outstanding  shares of capital stock or other  securities of, or other ownership
interest in, the Seller;

      (iv)  except for the  bonuses  paid to the major  shareholder  and certain
employees of the Seller in 2004,  the Seller has not awarded or paid any bonuses
to employees of the Seller with respect to the fiscal year ended 2004, except to
the extent accrued on the Balance Sheet or entered into any employment, deferred
compensation, severance or similar agreement (nor amended any such agreement) or
agreed to increase the compensation payable or to become payable by it to any of
the Seller's directors, officers, employees, agents or representatives or agreed
to  increase  the  coverage  or  benefits  available  under any  severance  pay,
termination  pay,  vacation  pay,  company  awards,   salary   continuation  for
disability,  sick  leave,  deferred  compensation,   bonus  or  other  incentive
compensation,  insurance,  pension or other  employee  benefit plan,  payment or
arrangement made to, for or with such directors,  officers, employees, agents or
representatives  (other than normal increases in the ordinary course of business
consistent  with past practice and that in the aggregate  have not resulted in a
material increase in the benefits or compensation expense of the Seller);

      (v) there  has not been any  change by the  Seller  in  accounting  or Tax
reporting principles, methods or policies;

      (vi) the  Seller has not  entered  into any  transaction  or  Contract  or
conducted its business other than in the ordinary  course  consistent  with past
practice;

      (vii) the Seller  has not failed to  promptly  pay and  discharge  current
liabilities except where disputed in good faith by appropriate proceedings;

      (viii)  the  Seller   has  not  made  any  loans,   advances   or  capital
contributions to, or investments in, any Affiliate of Seller or paid any fees or
expenses to the Seller's Stockholder or any Affiliate of the Seller;

      (ix) the Seller has not mortgaged, pledged or subjected to any Lien any of
its assets,  or acquired any assets or sold,  assigned,  transferred,  conveyed,
leased or  otherwise  disposed  of any assets of the  Seller,  except for assets
mortgaged,  pledged  or  subjected  to any  Lien,  acquired  or sold,  assigned,
transferred, conveyed, leased or otherwise disposed of in the ordinary course of
business consistent with past practice;

      (x) the Seller  has not  discharged  or  satisfied  any Lien,  or paid any
obligation or liability (fixed or contingent),  except in the ordinary course of
business consistent with past practice and which, in the aggregate, would not be
material to the Seller;

      (xi) the  Seller  has not  canceled  or  compromised  any debt or claim or
amended, canceled, terminated,  relinquished, waived or released any Contract or
right except in the ordinary  course of business  consistent  with past practice


                                       8
<PAGE>

      (xii)  the  Seller  has  not  made  or   committed  to  make  any  capital
expenditures   or  capital   additions  or  betterments  in  excess  of  $10,000
individually  or  $100,000 in the  aggregate  except in the  ordinary  course of
business consistent with past practice and which, in the aggregate, would not be
material to the Seller;

      (xiii) except with respect to its settlement of the  outstanding  judgment
of Coronet  Paper,  the Seller has not  instituted or settled any material legal
proceeding; and

      (xiv) the Seller has not agreed to do anything  set forth in this  Section
3.10.

      3.11 Taxes.
           -----

      (a)  Except as set forth on  Schedule  3.11,  to the best of the  Seller's
knowledge,  (A) all Tax  returns  required  to be filed by or on  behalf  of the
Seller  have  been  properly  prepared  and  duly  and  timely  filed  with  the
appropriate  taxing  authorities in all  jurisdictions in which such Tax returns
are required to be filed (after giving effect to any valid extensions of time in
which to make such  filings),  and all such Tax returns were true,  complete and
correct in all material  respects;  (B) all Taxes payable by or on behalf of the
Seller or in respect of its  income,  assets or  operations  have been fully and
timely paid, [and adequate  reserves or accruals for Taxes have been provided in
the Closing Date Balance  Sheet with respect to any period for which Tax Returns
have not yet been filed or for which Taxes are not yet due and  owing];  and (C)
the Seller has not executed or filed with the IRS or any other taxing  authority
any agreement,  waiver or other document or arrangement  extending or having the
effect of extending the period for assessment or collection of Taxes (including,
but not  limited  to, any  applicable  statute of  limitation),  and no power of
attorney  with respect to any Tax matter is  currently in force.  "Tax or Taxes"
means all federal,  state, local or other taxes or similar governmental charges,
fees, levies or assessments.

      (b) The Seller has complied in all material  respects with all  applicable
laws (as defined in Section 3.19), rules and regulations relating to the payment
and  withholding  of Taxes  and has  duly  and  timely  withheld  from  employee
salaries,  wages and  other  compensation  and has paid over to the  appropriate
taxing  authorities all amounts required to be so withheld and paid over for all
periods under all Laws.

      (c) Parent has received complete copies of (A) all federal,  state,  local
and  foreign  income or  franchise  Tax  Returns of the Seller  relating  to the
taxable periods since 2002 and (B) any audit report issued within the last three
years relating to any material Taxes due from or with respect to the its income,
assets or operations. All income and franchise Tax returns filed by or on behalf
of the Seller for the taxable years ended on the  respective  dates set forth on
Schedule 3.11 have been examined by the relevant taxing authority or the statute
of limitations with respect to such Tax Returns has expired.

      (d)  Schedule  3.11 lists all  material  types of Taxes paid and  material
types of Tax returns filed by or on behalf of the Seller. Except as set forth on
Schedule  3.11, no claim has been made by a taxing  authority in a  jurisdiction
where the Seller does not file Tax Returns  such that it is or may be subject to
taxation by that jurisdiction.

      (e) Except as set forth on Schedule  3.11,  all  deficiencies  asserted or
assessments  made as a result of any examinations by the IRS or any other taxing
authority  of the Tax Returns of or covering or  including  the Seller have been
fully  paid,  and there  are no other  audits or  investigations  by any  taxing
authority in progress,  nor has the Seller  received any written notice from any
taxing authority that it intends to conduct such an audit or  investigation.  No
issue has been raised in writing by a federal,  state,  local or foreign  taxing
authority in any current or prior examination  which, by application of the same


                                       9
<PAGE>

or similar  principles,  could  reasonably  be  expected to result in a proposed
deficiency for any subsequent taxable period.

      (f)  Except  as set  forth on 3.11,  the  Seller  has (A)  filed a consent
pursuant to Section  341(f) of the Code or agreed to have  Section  341(f)(2) of
the Code apply to any  disposition  of a  subsection  (f) asset (as such term is
defined in Section 341(f)(4) of the Code) owned by the Seller,  (B) agreed to or
is required to make any  adjustments  pursuant to Section  481(a) of the Code or
any similar  provision  of state,  local or foreign law by reason of a change in
accounting method initiated by the Seller or has any knowledge that the Internal
Revenue Service ("IRS") has proposed any such adjustment or change in accounting
method,  or has any  application  pending with any taxing  authority  requesting
permission for any changes in accounting  methods that relate to the business or
operations  of the  Seller,  (C)  executed or entered  into a closing  agreement
pursuant to Section 7121 of the Code or any predecessor provision thereof or any
similar provision of state,  local or foreign law with respect to the Seller, or
(D) requested  any extension of time within which to file any Tax Return,  which
Tax Return has since not been filed.

      (g) No property owned by the Seller is (i) property required to be treated
as being owned by another Person pursuant to the provisions of Section 168(f)(8)
of the Internal Revenue Code of 1954, as amended and in effect immediately prior
to the enactment of the Tax Reform Act of 1986, (ii) constitutes "tax-exempt use
property"  within  the  meaning  of  Section  168(h)(1)  of the Code or (iii) is
"tax-exempt bond financed  property" within the meaning of Section 168(g) of the
Code.

      (h) The Seller is not a foreign  person within the meaning of Section 1445
of the Code.

      (i) The Seller is not a party to any tax sharing or similar  agreement  or
arrangement  (whether  or not  written)  pursuant  to  which  it will  have  any
obligation to make any payments after the Closing.

      (j) There is no  contract,  agreement,  plan or  arrangement  covering any
person that, individually or collectively, could give rise to the payment of any
amount that would not be  deductible  by the  Parent,  the  Affiliates  or their
respective affiliates by reason of Section 280G of the Code, or would constitute
compensation  in excess of the  limitation  set forth in  Section  162(m) of the
Code.

      (k) The Seller is not subject to any private  letter  ruling of the IRS or
comparable rulings of other taxing authorities.

      (l)  There are no liens as a result of any  unpaid  Taxes  upon any of the
assets of the Seller.

      (m) Except as set forth on Schedule  3.11,  the Seller has no elections in
effect for federal  income tax purposes  under Sections 108, 168, 338, 441, 463,
472, 1017, 1033 or 4977 of the code..

      (n) The  Seller  has never  owned any  Subsidiaries  and has never  been a
member of any consolidated, combined or affiliated group of corporations for any
Tax purposes.

      3.12 Real Property.
           --------------

      (a) Schedule  3.12(a) sets forth a complete  list of (i) all real property
and  interests in real  property  owned in fee by the Seller  (individually,  an
"Owned Property" and collectively,  the "Owned  Properties"),  and (ii) all real
property and interests in real property leased by the Seller, or an affiliate of
the  Seller  (individually,  a "Real  Property  Lease"  and the real  properties
specified in such leases, together with the Owned Properties,  being referred to
herein


                                       10
<PAGE>

individually as a "Seller Property" and collectively as the "Seller Properties")
as lessee or lessor. The Seller has good and marketable fee title to all Owned
Property, free and clear of all Liens of any nature whatsoever except (A) Liens
set forth on Schedule 3.12(a) and (B) Permitted Exceptions. The Seller Property
constitutes all interests in real property currently used or currently held for
use in connection with the business of the Seller and which are necessary for
the continued operation of the business of the Seller as the business is
currently conducted. The Seller has a valid and enforceable leasehold interest
under each of the Real Property Leases, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity), and Seller has not received any written notice
of any default or event that with notice or lapse of time, or both, would
constitute a default by the Seller under any of the Real Property Leases. All of
the Seller Property, buildings, fixtures and improvements thereon owned or
leased by the Seller are in good operating condition and repair (subject to
normal wear and tear). The Seller has delivered or otherwise made available to
the Parent true, correct and complete copies of (i) all deeds, title reports and
surveys for the Owned Properties and (ii) the Real Property Leases, together
with all amendments, modifications or supplements, if any, thereto.


      (b) The Seller has all material  certificates  of occupancy and Permits of
any  Governmental  Body necessary or useful for the current use and operation of
each  Seller  Property,  and the Seller  has fully  complied  with all  material
conditions of the Permits  applicable  to it. No default or violation,  or event
that with the lapse of time or giving of notice or both  would  become a default
or violation, has occurred in the due observance of any Permit.

      (c) There  does not  exist any  actual  or, to the best  knowledge  of the
Seller,  threatened or contemplated  condemnation or eminent domain  proceedings
that  affect any Seller  Property  or any part  thereof,  and the Seller has not
received any notice,  oral or written, of the intention of any Governmental Body
or other Person to take or use all or any part thereof.

      (d) The Seller has not  received  any written  notice  from any  insurance
company that has issued a policy with respect to any Seller  Property  requiring
performance  of any  structural or other repairs or  alterations  to such Seller
Property.

      (e) The Seller does not own or hold, and is not obligated under or a party
to, any option,  right of first refusal or other  contractual right to purchase,
acquire,  sell,  assign or dispose of any real estate or any portion  thereof or
interest therein.

      3.13 Tangible Personal Property.
           ---------------------------

      (a) Schedule 3.13(a) sets forth all leases of personal property ("Personal
Property  Leases")  involving  annual payments in excess of $10,000  relating to
personal property used in the business of the Seller or to which the Seller is a
party or by which the  properties  or assets of the Seller is bound.  The Seller
has  delivered or  otherwise  made  available  to the Parent  true,  correct and
complete copies of the Personal  Property Leases,  together with all amendments,
modifications or supplements thereto.

      (b) The Seller has a valid  leasehold  interest under each of the Personal
Property  Leases under which it is a lessee,  subject to applicable  bankruptcy,
insolvency,  reorganization,  moratorium and similar laws  affecting  creditors'
rights and remedies  generally  and subject,  as to  enforceability,  to general
principles  of  equity  (regardless  of  whether  enforcement  is  sought  in  a
proceeding  at law or in  equity),  and there is no default  under any  Personal
Property  Lease by the Seller or, to the best  knowledge  of the Seller,  by any


                                       11
<PAGE>

other party  thereto,  and no event has occurred  that with the lapse of time or
the giving of notice or both would constitute a default thereunder.

      (c) The  Seller  has good  and  marketable  title  to all of the  items of
tangible  personal  property  reflected in the Balance  Sheet (except as sold or
disposed of  subsequent  to the date thereof in the ordinary  course of business
consistent with past  practice),  free and clear of any and all liens other than
as set forth on  Schedule  3.13.  All such items of tangible  personal  property
which,  individually  or in the aggregate,  are material to the operation of the
business of the Seller are in good condition and in a state of good  maintenance
and repair  (ordinary  wear and tear excepted) and are suitable for the purposes
used.

      (d) All of the items of  tangible  personal  property  used by the  Seller
under the Personal  Property  Leases are in good condition and repair  (ordinary
wear and tear excepted) and are suitable for the purposes used.

      3.14 Intangible Property.
           --------------------

      Schedule  3.14  contains  a  complete  and  correct  list of each  patent,
trademark, trade name, service mark and copyright owned or used by the Seller as
well as all registrations  thereof and pending applications  therefor,  and each
license or other  agreement  relating  thereto.  Except as set forth on Schedule
3.14,  each of the  foregoing  is owned by the party  shown on such  Schedule as
owning  the  same,  free and clear of all  mortgages,  claims,  liens,  security
interests,  charges and encumbrances and is in good standing and not the subject
of any challenge. There have been no claims made and the Seller has not received
any notice or otherwise knows or has reason to believe that any of the foregoing
is  invalid  or  conflicts  with the  asserted  rights  of  others.  The  Seller
possesses,   owns  or  licenses  all  patents,  patent  licenses,  trade  names,
trademarks,  service  marks,  brand marks,  brand names,  copyrights,  know-how,
formulate and other  proprietary  and trade rights  necessary for the conduct of
its business as now conducted,  not subject to any  restrictions and without any
known  conflict  with the rights of others and has not  forfeited  or  otherwise
relinquished any such patent,  patent license,  trade name,  trademark,  service
mark,  brand  mark,  brand  name,  copyright,   know-how,   formulate  or  other
proprietary  right necessary for the conduct of its business as conducted on the
date  hereof.  The Seller is not under any  obligation  to pay any  royalties or
similar  payments  in  connection  with any  license to any  Affiliate  thereof.
"Affiliate"  means,  with respect to any person,  any other  person  directly or
indirectly  controlling,  controlled by or under common control with such person
and for purposes of individuals, Affiliates would include an individual's spouse
and minor children.

      3.15 Material Contracts.
           -------------------

      Schedule  3.15 sets  forth  all of the  following  Contracts  to which the
Seller  is a  party  or  by  which  it is  bound  (collectively,  the  "Material
Contracts"):  (i) Contracts with any current  officer or director of the Seller;
(ii) Contracts with any labor union or association  representing any employee of
the Seller;  (iii) Contracts pursuant to which any party is required to purchase
or sell a stated portion of its requirements or output from or to another party;
(iv) Contracts for the sale of any of the assets of the Seller other than in the
ordinary  course of business or for the grant to any person of any  preferential
rights to  purchase  any of its  assets;  (v)  joint  venture  agreements;  (vi)
material Contracts containing covenants of the Seller not to compete in any line
of  business or with any person in any  geographical  area or  covenants  of any
other  person not to compete  with the Seller in any line of  business or in any
geographical  area; (vii) Contracts relating to the acquisition by the Seller of
any  operating  business  or the  capital  stock  of any  other  person;  (viii)
Contracts relating to the borrowing of money; or (ix) any other Contracts, other
than Real Property  Leases,  which involve the expenditure of more than $200,000
in the aggregate or $50,000  annually or require  performance  by any party more
than one year  from the date  hereof.  There  have been  made  available  to the


                                       12
<PAGE>

Parent, its affiliates and their representatives true and complete copies of all
of the  Material  Contracts.  Except as set forth on Schedule  3.15,  all of the
Material Contracts and other agreements are in full force and effect and are the
legal,  valid and binding  obligation of the Seller,  enforceable  against it in
accordance  with  its  terms,  subject  to  applicable  bankruptcy,  insolvency,
reorganization,  moratorium  and similar laws  affecting  creditors'  rights and
remedies generally and subject,  as to enforceability,  to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity).  Except as set forth on Schedule  3.15, the Seller is not in default in
any material respect under any Material Contracts,  nor, to the knowledge of the
Seller, is any other party to any Material Contract in default thereunder in any
material respect.

      3.16 Employee Benefits.
           ------------------

      (a)  Schedule  3.16(a)  sets forth a complete  and correct list of (i) all
"employee benefit plans", as defined in Section 3(3) of the Employee  Retirement
Income Security Act of 1974, as amended  ("ERISA"),  and any other pension plans
or employee  benefit  arrangements,  programs or payroll  practices  (including,
without  limitation,   severance  pay,  vacation  pay,  company  awards,  salary
continuation  for disability,  sick leave,  retirement,  deferred  compensation,
bonus or other incentive compensation,  stock purchase arrangements or policies,
hospitalization,  medical  insurance,  life insurance and scholarship  programs)
maintained by the Seller or to which the Seller  contributes  or is obligated to
contribute thereunder with respect to employees of the Seller ("Employee Benefit
Plans") and (ii) all  "employee  pension  plans",  as defined in Section 3(2) of
ERISA,  maintained  by the  Seller  or any  trade or  business  (whether  or not
incorporated)  which  are  under  control,  or  which  are  treated  as a single
employer,  with Seller  under  Section  414(b),  (c),  (m) or (o) of the ("ERISA
Affiliate")  or to which the  Seller or any ERISA  Affiliate  contributed  or is
obligated to contribute  thereunder ("Pension Plans").  Schedule 3.16(a) clearly
identifies, in separate categories, Employee Benefit Plans or Pension Plans that
are (i) subject to Section 4063 and 4064 of ERISA ("Multiple  Employer  Plans"),
(ii)   multiemployer   plans  (as  defined  in  Section   4001(a)(3)  of  ERISA)
("Multiemployer  Plans") or (iii) "benefit plans", within the meaning of Section
5000(b)(1) of the Code providing  continuing  benefits after the  termination of
employment  (other than as  required  by Section  4980B of the Code or Part 6 of
Title  I of  ERISA  and at the  former  employee's  or  his  beneficiary's  sole
expense).


      (b) The Seller will not have any withdrawal or other liability (contingent
or otherwise) under Title IV of ERISA with respect to any Multiple Employer Plan
or  Multiemployer  Plan if Seller had not sold the Assets to Acquisition  Sub at
the Closing in accordance with the terms of this Agreement.


      (c) Each of the  Employee  Benefit  Plans and  Pension  Plans  intended to
qualify  under  Section 401 of the Code  ("Qualified  Plans") so qualify and the
trusts maintained  thereto are exempt from federal income taxation under Section
501 of the Code,  and,  except as  disclosed  on Schedule  3.16(c),  nothing has
occurred  with  respect to the  operation of any such plan which could cause the
loss of such  qualification  or exemption or the  imposition  of any  liability,
penalty or tax under ERISA or the Code.

      (d) All  contributions and premiums required by Law or by the terms of any
Employee  Benefit Plan or Pension Plan which are defined  benefit plans or money
purchase plans or any agreement  relating thereto have been timely made (without
regard to any  waivers  granted  with  respect  thereto)  to any funds or trusts
established  thereunder or in connection  therewith,  and no accumulated funding
deficiencies exist in any of such plans subject to Section 412 of the Code.


                                       13
<PAGE>

      (e) The benefit  liabilities,  as defined in Section 4001(a)(16) of ERISA,
of each of the Employee  Benefit  Plans and Pension Plans subject to Title IV of
ERISA using the actuarial  assumptions that would be used by the Pension Benefit
Guaranty  Corporation  (the "PBGC") in the event it terminated each such plan do
not  exceed  the  fair  market  value  of the  assets  of each  such  plan.  The
liabilities of each Employee  Benefit Plan that has been terminated or otherwise
wound up, have been fully discharged in full compliance with applicable Law.

      (f)  There has been no  "reportable  event"  as that  term is  defined  in
Section 4043 of ERISA and the regulations  thereunder with respect to any of the
Employee Benefit Plans or Pension Plans subject to Title IV of ERISA which would
require the giving of notice, or any event requiring notice to be provided under
Section 4041(c)(3)(C) or 4063(a) of ERISA.

      (g) There has been no  violation  of ERISA  with  respect to the filing of
applicable returns, reports, documents and notices regarding any of the Employee
Benefit  Plans or Pension  Plans with the Secretary of Labor or the Secretary of
the Treasury or the furnishing of such notices or documents to the  participants
or beneficiaries of the Employee Benefit Plans or Pension Plans.

      (h) True,  correct and complete  copies of the following  documents,  with
respect to each of the Employee Benefit Plans and Pension Plans (as applicable),
have been delivered to the Parent (A) any plans and related trust documents, and
all amendments thereto,  (B) the most recent Forms 5500 for the past three years
and schedules  thereto,  (C) the most recent financial  statements and actuarial
valuations  for the past  three  years,  (D) the most  recent  Internal  Revenue
Service  determination  letter,  (E) the most recent  summary plan  descriptions
(including  letters  or other  documents  updating  such  descriptions)  and (F)
written  descriptions  of all  non-written  agreements  relating to the Employee
Benefit Plans and Pension Plans.

      (i) There are no pending  Legal  Proceedings  which have been  asserted or
instituted  against any of the  Employee  Benefit  Plans or Pension  Plans,  the
assets  of any  such  plans or the  Seller,  or the  plan  administrator  or any
fiduciary of the  Employee  Benefit  Plans or Pension  Plans with respect to the
operation of such plans (other than routine,  uncontested  benefit claims),  and
there  are no facts or  circumstances  which  could  form the basis for any such
Legal Proceeding.


      (j) (A) Each of the  Employee  Benefit  Plans and  Pension  Plans has been
maintained,  in all  material  respects,  in  accordance  with its terms and all
provisions of applicable  Law, and; (B) all amendments  and actions  required to
bring each of the Employee  Benefit Plans and Pension  Plans into  conformity in
all material  respects with all of the applicable  provisions of ERISA and other
applicable  Laws  have  been  made or  taken  except  to the  extent  that  such
amendments  or actions are not  required by law to be made or taken until a date
after the Closing Date and are disclosed on Schedule 3.16(j).


      (k) The Seller and any ERISA  Affiliate  which maintains a "benefits plan"
within the meaning of Section 5000(b)(1) of ERISA, have complied with the notice
and continuation  requirements of Section 4980B of the Code or Part 6 of Title I
of ERISA and the applicable regulations thereunder.

      (l) None of the Seller,  any ERISA Affiliate or any  organization to which
any is a successor  or parent  corporation,  has divested any business or entity
maintaining or sponsoring a defined benefit pension plan having unfunded benefit
liabilities  (within the meaning of Section 4001(a)(18) of ERISA) or transferred
any such plan to any person other than the Seller or any ERISA Affiliate  during
the five-year period ending on the Closing Date.

                                       14
<PAGE>

      (m)  Neither  the  Seller  nor any "party in  interest"  or  "disqualified
person" with respect to the Employee  Benefit Plans or Pension Plans has engaged
in a "prohibited  transaction" within the meaning of Section 4975 of the Code or
Section 406 of ERISA.

      (n) Neither the Seller nor any ERISA Affiliate has terminated any Employee
Benefit  Plan or Pension  Plan  subject to Title IV of ERISA,  or  incurred  any
outstanding  liability  under  Section  4062 of  ERISA  to the  Pension  Benefit
Guaranty Corporation or to a trustee appointed under Section 4042 of ERISA.

      (o)  Neither  the  execution  and  delivery  of  this  Agreement  nor  the
consummation  of the  transactions  contemplated  hereby  will (i) result in any
payment  becoming due to any employee of the Seller;  (ii) increase any benefits
otherwise  payable  under any Employee  Benefit Plan or Pension  Plan;  or (iii)
result  in the  acceleration  of the  time of  payment  or  vesting  of any such
benefits.

      (p) No stock or other  security  issued  by Seller  forms or has  formed a
material part of the assets of any Employee Benefit Plan or Pension Plan.

      3.17 Labor.
           ------

      (a) Except as set forth on  Schedule  3.17(a),  the Seller is not party to
any  labor  or  collective  bargaining  agreement  and  there  are no  labor  or
collective  bargaining  agreements which pertain to employees of the Seller. The
Seller has delivered or otherwise made available to the Parent true, correct and
complete  copies  of the labor or  collective  bargaining  agreements  listed on
Schedule  3.17(a),  together with all amendments,  modifications  or supplements
thereto.

      (b) Except as set forth on Schedule  3.17(b),  no  employees of the Seller
are  represented by any labor  organization.  No labor  organization or group of
employees of the Seller has made a pending demand for recognition, and there are
no representation  proceedings or petitions seeking a representation  proceeding
presently  pending or, to the best  knowledge  of the Seller,  threatened  to be
brought  or  filed,  with the  National  Labor  Relations  Board or other  labor
relations tribunal. There is no organizing activity involving the Seller pending
or, to the best knowledge of the Seller, threatened by any labor organization or
group of employees of the Seller.

      (c) There are no (i)  strikes,  work  stoppages,  slowdowns,  lockouts  or
arbitrations or (ii) material  grievances or other labor disputes pending or, to
the best  knowledge of the Seller,  threatened  against or involving the Seller.
There are no unfair labor practice charges, grievances or complaints pending or,
to the best knowledge of the Seller,  threatened by or on behalf of any employee
or group of employees of the Seller.

      3.18 Litigation.
           -----------

      Except  as  set  forth  in  Schedule  3.18,  there  is  no  suit,  action,
proceeding,  investigation,  claim or order  pending or, to the knowledge of the
Seller,  overtly  threatened  against  the  Seller (or to the  knowledge  of the
Seller,  pending or  threatened,  against any of the officers,  directors or key
employees of the Seller with respect to their  business  activities on behalf of
the Seller,  or to which the Seller is  otherwise a party,  which,  if adversely
determined,  would have a Material  Adverse Effect,  before any court, or before
any governmental department, commission, board, agency, or instrumentality;  nor
to the  knowledge  of the  Seller  is there  any  reasonable  basis for any such
action, proceeding, or investigation. The Seller is not subject to any judgment,
order or decree of any court or  governmental  agency  except to the  extent the
same are not  reasonably  likely to have a  Material  Adverse  Effect and is not
engaged in any legal action to recover  monies due it,  except as may be pending


                                       15
<PAGE>

or  instituted  by Seller  to  collect  accounts  receivable  and are  otherwise
Excluded Assets under this Agreement, or for damages sustained by it.


      3.19 Compliance with Laws; Permits.
           ------------------------------

      (a) The  Seller  is in  compliance  with  all  federal,  state  and  local
statutes, laws, rules, regulations, orders and ordinances ("Laws") applicable to
it or to the conduct of its business or operations or the use of its  properties
(including any leased properties) and assets, except for such non-compliances as
would not, individually or in the aggregate, have a Material Adverse Effect. The
Seller has all governmental  permits and approvals from state,  federal or local
authorities which are required for it to operate its business,  except for those
the  absence  of which  would  not,  individually  or in the  aggregate,  have a
Material Adverse Effect.

      3.20 Environmental Matters.
           ----------------------

      Except as set forth on Schedule 3.20 hereto:

      (a) the  operations  of the Seller are in compliance  with all  applicable
laws promulgated by any governmental entity which prohibit,  regulate or control
any hazardous material or hazardous material activity ("Environmental Laws") and
all permits issued pursuant to Environmental Laws or otherwise;

      (b)  except as to the  operation  of a certain  "oxidizer"  located at the
Seller's  Staten  Island  business  premises  (the  "Oxidizer"),  the Seller has
obtained all permits required under all applicable  Environmental Laws necessary
to operate its business;

      (c) the Seller is not the  subject  of any  outstanding  written  order or
Contract with any governmental  authority or person respecting (i) Environmental
Laws,  (ii)  Remedial  Action or (iii) any  release or  threatened  release of a
Hazardous Material ("Release");

      (d) the Seller has not received any written communication  alleging either
or both that it may be in  violation  of any  Environmental  Law,  or any permit
issued  pursuant  to  Environmental  Law,  or may have any  liability  under any
Environmental Law;

      (e)  the  Seller  does  not  have  any  current  contingent  liability  in
connection  with any  Release  into the indoor or outdoor  environment  (whether
on-site or off-site);

      (f) there are no investigations of the business,  operations, or currently
or  previously  owned,  operated  or leased  property  of the Seller  pending or
threatened  which  could lead to the  imposition  of any  liability  pursuant to
Environmental Law;

      (g) there is not  located at any of the  properties  of the Seller any (i)
underground storage tanks, (ii) asbestos-containing  material or (iii) equipment
containing polychlorinated biphenyls; and,

      (h) the Seller has  provided  to the  Parent all  environmentally  related
audits, studies, reports, analyses, and results of investigations that have been
performed with respect to the currently or previously owned,  leased or operated
properties of the Seller.


                                       16
<PAGE>

      3.21 Insurance.
           ----------

      Schedule  3.21 sets forth a complete and accurate  list of all policies of
insurance  of any kind or nature  covering  the Seller or any of its  employees,
properties  or  assets,  including,   without  limitation,   policies  of  life,
disability,  fire,  theft,  workers  compensation,  employee  fidelity and other
casualty  and  liability  insurance.  All such  policies  are in full  force and
effect,  and,  to the  Seller's  knowledge,  it is in default  of any  provision
thereof,  except  for  such  defaults  as  would  not,  individually  or in  the
aggregate, have a Material Adverse Effect.

      3.22 Inventories; Receivables; Payables.
           -----------------------------------

      (a) The  inventories of the Seller are in good and  marketable  condition,
and are saleable in the ordinary course of business. Adequate reserves have been
reflected  in the  Balance  Sheet  for  shorts,  drops,  off-cuts,  obsolete  or
otherwise  unusable  inventory,  which  reserves  were  calculated  in a  manner
consistent with past practice and in accordance with GAAP consistently applied.

      (b) All  accounts  receivable  of the Seller  have  arisen  from bona fide
transactions in the ordinary  course of business  consistent with past practice.
All accounts  receivable  of the Seller  reflected on the Balance Sheet are good
and collectible at the aggregate recorded amounts thereof, net of any applicable
reserve for returns or doubtful accounts reflected  thereon,  which reserves are
adequate and were  calculated in a manner  consistent  with past practice and in
accordance with GAAP consistently applied. All accounts receivable arising after
the  Balance  Sheet  Date are good and  collectible  at the  aggregate  recorded
amounts thereof, net of any applicable reserve for returns or doubtful accounts,
which reserves are adequate and were calculated in a manner consistent with past
practice and in accordance with GAAP consistently applied.

      (c) All accounts  payable of the Seller  reflected in the Balance Sheet or
arising after the date thereof are the result of bona fide  transactions  in the
ordinary course of business and have been paid or are not yet due and payable.

      3.23 Customers and Suppliers.
           ------------------------

      Schedule  3.23 sets forth a list of the twenty (20) largest  customers and
the twenty  (20)  largest  suppliers  of the  Seller,  as measured by the dollar
amount of purchases therefrom or thereby,  during each of the fiscal years ended
2003 and 2002,  showing the  approximate  total sales by the Seller to each such
customer  and the  approximate  total  purchases  by the  Seller  from each such
supplier,  during such period.  Since September 30, 2004, there has not been any
material  adverse  change in the  business  relationship  of the Seller with any
customer or supplier listed on Schedule 3.23.

      3.24 Banks.
           -----

      Schedule  3.24  contains  a  complete  and  correct  list of the names and
locations of all banks in which the Seller has  accounts or safe  deposit  boxes
and the  names of all  persons  authorized  to draw  thereon  or to have  access
thereto.  Except  as set forth on  Schedule  3.24,  no  person  holds a power of
attorney to act on behalf of the Seller.

                                       17
<PAGE>

      3.25 Gross Sales.
           ------------

      The gross sales for fiscal  year 2004 of Seller  shall be equal to no less
than $4.03  million.  In the event gross sales for the fiscal year 2004 are less
than $4.03 million,  determined in accordance with GAAP,  consistently  applied,
the sole result and legal consequence shall be an adjustment to the terms of the
Note,  pursuant  to the  terms set forth  therein,  and there  shall be no legal
consequence or other effect on any of the terms or provisions of this Agreement,
including  but not  limited to the  non-refundable  character  and amount of the
closing payment of Section 1.4(b)(i).

      3.26 No Misrepresentations.
           ----------------------

      No representation or warranty of the Seller contained in this Agreement or
in any schedule  hereto or in any certificate or other  instrument  furnished by
the  Seller to the  Parent or  Acquisition  Sub  pursuant  to the terms  hereof,
contains any untrue  statement  of a material  fact or omits to state a material
fact  necessary  to  make  the  statements   contained  herein  or  therein  not
misleading.

      3.27 Financial Advisors.
           -------------------

      Except for R&M  Financial  Associates,  no Person has acted,  directly  or
indirectly,  as a  broker,  finder  or  financial  advisor  for  the  Seller  in
connection with the transactions contemplated by this Agreement and no Person is
entitled to any fee or commission or like payment in respect thereof.

      3.28 Investment Intention.
           ---------------------

      In the event the Seller  determines  to convert a portion of the Note into
shares of common  stock of the  Parent  ("Shares"),  the Seller  represents  and
warrants  that it is acquiring  the Shares for its own account,  for  investment
purposes only and not with a view to the  distribution  (as such term is used in
Section 2(11) of the Securities Act of 1933, as amended (the  "Securities  Act")
thereof.  The Seller  understands that the Shares have not been registered under
the Securities Act and cannot be sold unless  subsequently  registered under the
Securities Act or an exemption from such registration is available.

      3.29 Accredited Investor.
           --------------------

      The Seller is an "accredited  investor"  within the meaning of Rule 501 of
the Securities Act of 1933, as amended. The Seller is in a financial position to
hold the Shares and is able to bear the economic  risk and  withstand a complete
loss of the Seller's  investment in the Shares.  The Seller  recognizes that the
Shares involve a high degree of risk. The Seller is a sophisticated investor, is
able to fend for itself in the transaction  contemplated by this Agreement,  and
has such  knowledge and  experience  in financial and business  matters that the
Seller  is  capable  of  evaluating  the  merits  and  risks of the  prospective
investment in the Shares.

      3.30 Patriot Act.
           ------------

      The Seller  certifies  that,  to the best of the Seller's  knowledge,  the
Seller has not been designated,  and is not owned or controlled, by a "suspected
terrorist" as defined in Executive Order 13224.  The Seller hereby  acknowledges
that the  Parent  seeks to comply  with all  applicable  Laws  concerning  money
laundering and related activities.  In furtherance of those efforts,  the Seller
hereby  represents,  warrants and agrees that:  (i) none of the cash or property
owned by the  Seller  has been or shall be  derived  from,  or  related  to, any
activity  that  is  deemed  criminal  under  United  States  law;  and  (ii)  no
contribution  or payment by the Seller has, and this  Agreement  will not, cause
the Seller to be in violation of the United  States Bank Secrecy Act, the United


                                       18
<PAGE>

States  International  Money Laundering Control Act of 1986 or the United States
International  Money Laundering  Abatement and  Anti-Terrorist  Financing Act of
2001.

                                   ARTICLE IV
          REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION SUB

      The Parent and the  Acquisition  Sub jointly and  severally  represent and
warrant to the Seller and Seller's Shareholder that:

      4.1 Organization and Good Standing.
          -------------------------------

      (a) The Parent is a corporation  duly organized,  validly  existing and in
good  standing  under the laws of the State of  Delaware  and has all  requisite
corporate  power and authority to own,  lease and operate its  properties and to
carry  on its  business  as now  conducted.  The  Parent  is duly  qualified  or
authorized to do business as a foreign corporation and is in good standing under
the laws of each  jurisdiction in which it owns or leases real property and each
other  jurisdiction in which the conduct of its business or the ownership of its
properties requires such qualification or authorization, except where failure to
be so qualified would not have a material adverse effect on the business, assets
or financial condition of the Parent taken as a whole ; and

      (b)  Acquisition  Sub  is a  corporation  duly  incorporated  and  validly
existing  and in good  standing  under the laws of the State of  Delaware,  is a
wholly owned subsidiary of the Parent and has all requisite  corporate power and
authority to own,  lease and operate its properties and to carry on its business
as now conducted. As of the Closing of this Agreement,  Acquisition Sub shall be
duly qualified or authorized to do business as a foreign  corporation  and shall
be in good standing under the laws of the States of New York and New Jersey.

      4.2 Authorization of Agreement.
          ---------------------------

The Parent and the  Acquisition  Sub have full corporate  power and authority to
execute and deliver this  Agreement,  the Note, the Security  Agreement,  the IP
Security  Agreement  and the  Employment  Agreement  and each  other  agreement,
document,  instrument or  certificate  contemplated  by this  Agreement or to be
executed by the Parent and Acquisition  Sub in connection with the  consummation
of  the  transactions   contemplated  hereby  and  thereby  (together  with  the
Employment   Agreement,   the  "Parent   Documents"),   and  to  consummate  the
transactions  contemplated  hereby and  thereby.  The  execution,  delivery  and
performance by the Parent and  Acquisition Sub of this Agreement and each Parent
Document have been duly authorized by all necessary  corporate  action on behalf
of the Parent and  Acquisition  Sub. This  Agreement  has been,  and each Parent
Document will be at or prior to the Closing,  duly executed and delivered by the
Parent and Acquisition Sub, and (assuming the due  authorization,  execution and
delivery by the other parties  hereto and thereto) this  Agreement  constitutes,
and each Parent Document when so executed and delivered will constitute,  legal,
valid and binding  obligations of the Parent and  Acquisition  Sub,  enforceable
against  the Parent and  Acquisition  Sub in  accordance  with their  respective
terms, subject to applicable bankruptcy, insolvency, reorganization,  moratorium
and  similar  laws  affecting  creditors'  rights and  remedies  generally,  and
subject,  as to  enforceability,  to general  principles  of  equity,  including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).


                                       19
<PAGE>

      4.3 Capitalization.
          ---------------

      (a) As of the date  hereof,  the  authorized  capital  stock of the Parent
consists  of (i)  9,999,000,000  shares of Common  Stock,  of which  210,716,359
shares are issued and  outstanding,  4,000,000  shares are reserved for issuance
pursuant to the  Parent's  stock  option  plans;  and (ii)  1,000,000  shares of
preferred  stock, of which no shares are issued and  outstanding.  Following the
Parent's  contemplated  one-for 100 reverse stock split, there will be 2,107,164
shares of Common Stock and no shares of preferred stock  outstanding and, except
as set forth on Schedule 4.3, no shares shall be reserved for issuance  pursuant
to outstanding debentures,  options,  warrants,  scrip, rights to subscribe for,
puts,  calls,  rights of first refusal,  agreements,  understandings,  claims or
other  commitments  or  rights  of any  character  whatsoever  relating  to,  or
securities or rights  convertible into or exchangeable for any shares of capital
stock of the Parent or any of its  Subsidiaries,  or  arrangements  by which the
Parent or any of its  Subsidiaries  is or may become  bound to issue  additional
shares of capital  stock of the Parent or any of its  Subsidiaries.  All of such
outstanding  shares  of  capital  stock  are,  or upon  issuance  will be,  duly
authorized, validly issued, fully paid and nonassessable. Except as set forth on
Schedule 4.3, no shares of capital stock of the Parent are subject to preemptive
rights or any other  similar  rights of the  shareholders  of the  Parent or any
liens or  encumbrances  imposed  through  the  actions  or failure to act of the
Parent.

      (b) As of the Closing, the authorized capital stock of the Acquisition Sub
consists of 200 shares of common Stock, no par value (the "Common Stock"). As of
the date of the Closing,(i) there shall be 200 shares of Common Stock issued and
outstanding,  all of which  shall be owned by the Parent,  and;  (ii) all of the
issued and  outstanding  shares of Common Stock shall have been duly  authorized
for issuance and validly issued,  fully paid and  non-assessable.  Except as set
forth on Schedule 4.3 and as of the Closing,  no shares of capital  stock of the
Acquisition  Sub shall be  subject  to  preemptive  rights or any other  similar
rights of the  shareholders  or debtors of the Parent or the Acquisition Sub nor
to any liens or  encumbrances  imposed  through the actions or failure to act of
the Parent or Acquisition Sub.

      4.4 Subsidiaries.
          -------------

      Except for the Acquisition Sub, the Parent has no subsidiaries.

      4.5 Corporate Records.
          ------------------

      The Parent and the  Acquisition  Sub have  delivered  to the Seller  true,
correct and complete copies of their certificates of incorporation (certified by
the  Secretary  of  the  State  of  Delaware)  and  by-laws  (certified  by  the
secretaries,  assistant secretaries or other appropriate officers) of the Parent
and the Acquisition Sub, respectively.

      4.6 Conflicts; Consents of Third Parties.
        ---------------------------------------

      (a) Except as set forth on Schedule 4.6 hereto,  neither of the execution,
delivery  and  performance  by the  Parent  or  Acquisition  Sub  of the  Parent
Documents,  nor the compliance by the Parent and the Acquisition Sub with any of
the provisions hereof or thereof will (i) conflict with, or result in the breach
of, any provision of the certificate of  incorporation or by-laws of the Parent,
(ii) conflict  with,  violate,  result in the breach of, or constitute a default
under  any  note,  bond,  mortgage,   indenture,  license,  agreement  or  other
obligation to which the Parent Acquisition Sub is a party or by which the Parent
or its  properties  or assets  are bound or (iii)  violate  any  statute,  rule,
regulation,  order or decree of any governmental  body or authority by which the
Parent Acquisition Sub is bound,  except, in the case of clauses (ii) and (iii),
for such violations,  breaches or defaults as would not,  individually or in the
aggregate, have a material adverse effect on the business,  properties,  results
of operations,  prospects, conditions (financial or otherwise) of the Parent and
its subsidiaries, taken as a whole.


                                       21
<PAGE>


      (b) No consent,  waiver,  approval,  order, permit or authorization of, or
declaration or filing with, or notification to, any Person or Governmental  Body
is required on the part of the Parent or Acquisition  Sub in connection with the
execution  and  delivery  of  this  Agreement  or the  Parent  Documents  or the
compliance by Parent or  Acquisition  Sub with any of the  provisions  hereof or
thereof.

      4.7 SEC Documents and Financial Statements
          --------------------------------------

      Except as disclosed in Schedule 4.7, since January 1, 2004, the Parent has
timely  filed all  reports,  schedules,  forms  statements  and other  documents
required to be filed by it with the SEC pursuant to the  reporting  requirements
of the Securities  Exchange Act of 1934, as amended (the "1934 Act") (all of the
foregoing filed prior to the date hereof and all exhibits  included  therein and
financial statements and schedules thereto and documents (other than exhibits to
such documents) incorporated by reference therein, being hereinafter referred to
herein as the `SEC Documents").  As of their respective dates, the SEC Documents
complied in all material  respects with the requirements of the 1934 Act and the
rules and  regulations of the SEC promulgated  thereunder  applicable to the SEC
Documents,  and none of the SEC Documents,  at the time they were filed with the
SEC,  contained  any untrue  statement of a material  fact or omitted to state a
material  fact  required to be stated  therein or necessary in order to make the
statements  therein,  in light of the circumstances  under which they were made,
not misleading. None of the statements made in any such SEC Documents is, or has
been,  required to be amended or updated under  applicable  law (except for such
statements as have been amended or updated in subsequent  filings prior the date
hereof).  As of their respective dates, the financial  statements of the Company
included in the SEC Documents  complied as to form in all material respects with
applicable  accounting  requirements  and the published rules and regulations of
the SEC with  respect  thereto.  Such final  statements  have been  prepared  in
accordance  with  United  States  generally  accepted   accounting   principles,
consistently  applied,  during  the  periods  involved  (except  (i)  as  may be
otherwise  indicated in such financial  statements or the notes thereto, or (ii)
in the case of unaudited interim statements,  to the extent they may not include
footnotes or may be condensed or summary  statements)  and fairly present in all
material  respects the  consolidated  financial  position of the Company and its
consolidated  Subsidiaries as of the dates thereof and the consolidated  results
of their  operations and cash flows for the periods then ended (subject,  in the
case of unaudited statements,  to normal year-end audit adjustments).  Except as
set  forth  in the  financial  statements  of the  Company  included  in the SEC
Documents, the Company has no liabilities,  contingent or otherwise,  other than
(i)  liabilities  incurred  in the  ordinary  course of business  subsequent  to
December 31, 2003 and (ii) obligations under contracts and commitments  incurred
in the ordinary  course of business and not required  under  generally  accepted
accounting  principles  to be reflected  in such  financial  statements,  which,
individually or in the aggregate, are not material to the financial condition or
operating results of the Company.

      4.8 Litigation
          ----------

      There are no Legal  Proceedings  pending or, to the best  knowledge of the
Parent,  threatened  that are  reasonably  likely to prohibit  or  restrain  the
ability of the Parent or  Acquisition  Sub to enter into this  Agreement and the
Parent Documents, consummate or perform the transactions contemplated hereby.

      4.9 Permits; Compliance.
          --------------------

      The  Parent  and or the  Acquisition  Sub,  as the case may be:  (i) is in
possession  of  all  franchises,  grants,  authorizations,   licenses,  permits,
easements, variances, exemptions,  consents, certificates,  approvals and orders
necessary to own,  lease and operate its properties and to carry on its business
as it is now being conducted (collectively,  the "Parent Permits"), except where
the  failure  would not have a  material  adverse  effect and there is no action
pending or, to the knowledge of the Parent,  threatened  regarding suspension or


                                       21
<PAGE>

cancellation of any of the Parent Permits, and; (ii) is not in conflict with, or
in default or  violation  of,  any of the  Parent  Permits,  except for any such
conflicts, defaults or violations which, individually or in the aggregate, would
not reasonably be expected to have a material adverse effect. Since December 31,
2004,  the Parent has not  received  any  notification  with respect to possible
conflicts,  defaults  or  violations  of  applicable  laws,  except for  notices
relating  to  possible  conflicts,  defaults  or  violations,  which  conflicts,
defaults or violations would not have a material adverse effect.

      4.10 Financial Advisors.
           -------------------

      No person  has  acted,  directly  or  indirectly,  as a broker,  finder or
financial   advisor  for  the  Parent  in  connection   with  the   transactions
contemplated  by  this  Agreement  and no  person  is  entitled  to  any  fee or
commission or like payment in respect thereof.

      4.11 No Misrepresentations.
           ----------------------

      No  representation  or  warranty  of the  Parent  or the  Acquisition  Sub
contained in this Agreement or in any schedule  hereto or in any  certificate or
other  instrument  furnished by the Parent or the  Acquisition Sub to the Seller
pursuant to the terms hereof,  contains any untrue  statement of a material fact
or omits to state a material  fact  necessary to make the  statements  contained
herein or therein not misleading.

      4.12 Patriot Act.
           ------------

      The Parent  certifies  that,  to the best of the Parent's  knowledge,  the
Parent has not been designated,  and is not owned or controlled, by a "suspected
terrorist" as defined in Executive Order 13224.  The Parent hereby  acknowledges
that the  Seller  seeks to comply  with all  applicable  Laws  concerning  money
laundering and related activities.  In furtherance of those efforts,  the Parent
hereby  represents,  warrants and agrees that:  (i) none of the cash or property
owned by the  Seller  has been or shall be  derived  from,  or  related  to, any
activity  that  is  deemed  criminal  under  United  States  law;  and  (ii)  no
contribution  or payment by the Parent has, and this  Agreement  will not, cause
the Parent to be in violation of the United  States Bank Secrecy Act, the United
States  International  Money Laundering Control Act of 1986 or the United States
International  Money Laundering  Abatement and  Anti-Terrorist  Financing Act of
2001.


                                    ARTICLE V
                                    COVENANTS

      5.1 Access to Information.
          ----------------------

      The Seller  agrees that,  prior to the Closing  Date,  the Parent shall be
entitled,  through  its  officers,  employees  and  representatives  (including,
without  limitation,   its  legal  advisors  and  accountants),   to  make  such
investigation  of the  properties,  businesses  and operations of the Seller and
such examination of the books,  records and financial condition of the Seller as
it  reasonably  requests  and to make  extracts  and  copies  of such  books and
records.  Any such  investigation  and  examination  shall be  conducted  during
regular business hours and under reasonable circumstances,  and the Seller shall
cooperate fully therein.  No  investigation  by the Parent prior to or after the
date of this  Agreement  shall  diminish or obviate any of the  representations,
warranties,  covenants  or  agreements  of the  Seller  contained  in the Seller
Documents.  In order  that the  Parent  may have full  opportunity  to make such
physical, business, accounting and legal review, examination or investigation as


                                       22
<PAGE>

it may reasonably  request of the affairs of the Seller,  Seller shall cause its
officers,  employees,  consultants,  agents,  accountants,  attorneys  and other
representatives to cooperate fully with such  representatives in connection with
such review and examination.

      5.2 Conduct of the Business Pending the Closing.
          -------------------------------------------

      (a) Except as otherwise  expressly  contemplated by this Agreement or with
the prior written consent of the Parent, the Seller shall:

         (i) conduct its business only in the ordinary  course  consistent  with
past practice;

         (ii)  use  its  best  efforts  to (A)  preserve  its  present  business
operations,  organization  (including,  without  limitation,  management and the
sales force) and goodwill and (B) preserve its present relationship with Persons
having business dealings with it;

         (iii)  maintain (A) all of its assets and  properties  in their current
condition,  ordinary wear and tear  excepted and (B)  insurance  upon all of its
properties  and assets in such amounts and of such kinds  com-parable to that in
effect on the date of this Agreement;

         (iv) (A)  maintain  its books,  accounts  and  records in the  ordinary
course of  business  consistent  with past  practices,  (B)  continue to collect
accounts  receivable and pay accounts payable  utilizing  normal  procedures and
without  discounting or  accelerating  payment of such accounts,  and (C) comply
with all contractual and other obligations applicable to its operation; and

         (v) comply in all material  respects with applicable  Laws,  including,
without limitation, Environmental Laws.

      (b) Except as otherwise  expressly  contemplated by this Agreement or with
the prior written consent of the Parent, the Seller shall not:

         (i) declare,  set aside, make or pay any dividend or other distribution
in respect of its capital stock or repurchase,  redeem or otherwise  acquire any
outstanding  shares  of the  capital  stock or  other  securities  of,  or other
ownership interests in it;

         (ii)  transfer,  issue,  sell or dispose  of any shares of its  capital
stock or other securities or grant options,  warrants,  calls or other rights to
purchase or otherwise acquire shares of its capital stock or other securities;

         (iii)  effect any  recapitalization,  reclassification,  stock split or
like change in the capitalization;

         (iv) amend its certificate of incorporation or by-laws;

         (v) (A) materially  increase the annual level of compensation of any of
its employee, (B) increase the annual level of compensation payable or to become
payable by the it to any of its  executive  officers,  (C) grant any  unusual or
extraordinary  bonus,  benefit or other direct or indirect  compensation  to any
employee,  director or consultant,  other than in the ordinary course consistent
with past  practice  and in such  amounts as are fully  reserved  against in the
Financial Statements,  (D) increase the coverage or benefits available under any
(or create any new)  severance  pay,  termination  pay,  vacation  pay,  company


                                       23
<PAGE>

awards, salary continuation for disability,  sick leave, deferred  compensation,
bonus or other  incentive  compensation,  insurance,  pension or other  employee
benefit  plan  or  arrangement  made  to,  for,  or with  any of its  directors,
officers,  employees,  agents or representatives or otherwise modify or amend or
terminate  any such  plan or  arrangement  or (E)  enter  into  any  employment,
deferred  compensation,   severance,  consulting,   non-competition  or  similar
agreement  (or  amend any such  agreement)  involving  a  director,  officer  or
employee of the Seller in his or her capacity as a director, officer or employee
of the Seller;

         (vi) except for trade payables and for  indebtedness for borrowed money
incurred in the ordinary  course of business and consistent  with past practice,
borrow  monies  for any  reason  or  draw  down on any  line of  credit  or debt
obligation,  or become the guarantor,  surety,  endorser or otherwise liable for
any debt, obligation or liability (contingent or otherwise) of any other Person;

         (vii)  subject to any Lien  (except  for liens  that do not  materially
impair the use of the property subject thereto in their respective businesses as
presently  conducted),  any of its  properties  or assets  (whether  tangible or
intangible);

         (viii)  acquire  any  material  properties  or assets or sell,  assign,
transfer,  convey,  lease or otherwise dispose of any of its material properties
or assets  (except for fair  consideration  in the  ordinary  course of business
consistent  with past  practice)  except,  with  respect to the items  listed on
Schedule 5.2(b)(viii) hereto, as previously consented to by the Parent;

         (ix) except with respect to the recent  settlement of the Coronet Paper
judgment,  cancel  or  compromise  any debt or claim  or  waive or  release  any
material right except in the ordinary  course of business  consistent  with past
practice;

         (x) enter into any  commitment  for capital  expenditures  in excess of
$10,000 for any individual  commitment  and $100,000 for all  commitments in the
aggregate;

         (xi) enter into, modify or terminate any labor or collective bargaining
agreement or, through negotiation or otherwise, make any commitment or incur any
liability to any labor organization with respect to it;

         (xii)  introduce  any material  change with  respect to its  operation,
including any material  change in the types,  nature,  composition or quality of
its products or services,  experience any material change in any contribution of
its product lines to its revenues or net income,  or, other than in the ordinary
course of business, make any change in product specifications or prices or terms
of distributions of such products;

         (xiii)  enter into any  transaction  or make or enter into any Contract
which by  reason  of its size or  otherwise  is not in the  ordinary  course  of
business consistent with past practice;

         (xiv)  enter into or agree to enter  into any  merger or  consolidation
with,  any  corporation  or other entity,  and not engage in any new business or
invest in, make a loan, advance or capital contribution to, or otherwise acquire
the securities of any other Person;
         (xv) except for  transfers of cash  pursuant to normal cash  management
practices,  make any investments in or loans to, or pay any fees or expenses to,
or enter into or modify any Contract with any Affiliate; or

                                       24
<PAGE>

         (xvi) agree to do anything  prohibited  by this Section 5.2 or anything
which would make any of the representations and warranties of the Seller in this
Agreement or the Seller Documents untrue or incorrect in any material respect as
of any time through and including the Effective Time.

      5.3 Consents.
          --------

      The Seller shall use its best efforts, and the Parent shall cooperate with
the  Seller,  to  obtain  at the  earliest  practicable  date all  consents  and
approvals   required  to  consummate  the  transactions   contemplated  by  this
Agreement, including, without limitation, the consents and approvals referred to
in Section 3.5(b)  hereof;  provided,  however,  that neither the Seller nor the
Parent shall be obligated to pay any  consideration  therefor to any third party
from whom consent or approval is requested.

      5.4 Other Actions.
          -------------

      Each of the Seller,  Parent and Acquisition Sub shall use its best efforts
to (i) take all actions  necessary or appropriate to consummate the transactions
contemplated  by this  Agreement and (ii) cause the  fulfillment at the earliest
practicable  date of all of the  conditions to their  respective  obligations to
consummate the transactions contemplated by this Agreement.

      5.5 No Solicitation.
          ----------------

      The Seller  will not,  and will not cause or permit any of its  directors,
officers,    employees,    representatives   or   agents   (collectively,    the
"Representatives")   to,  directly  or  indirectly,   (i)  discuss,   negotiate,
undertake,  authorize,  recommend, propose or enter into, either as the proposed
surviving,  merged, acquiring or acquired corporation, any transaction involving
a merger,  consolidation,  business combination,  purchase or disposition of any
amount of the assets or capital stock or other equity  interest in it other than
the transactions contemplated by this Agreement (an "Acquisition  Transaction"),
(ii) facilitate,  encourage,  solicit or initiate  discussions,  negotiations or
submissions  of  proposals or offers in respect of an  Acquisition  Transaction,
(iii)  furnish  or  cause  to be  furnished,  to  any  Person,  any  information
concerning its business, operations,  properties or assets in connection with an
Acquisition Transaction,  or (iv) otherwise cooperate in any way with, or assist
or participate in,  facilitate or encourage,  any effort or attempt by any other
Person to do or seek any of the foregoing.  The Seller will inform the Parent in
writing immediately following the receipt by the Seller or any Representative of
any proposal or inquiry in respect of any Acquisition Transaction.

      5.6 Preservation of Records.
          ------------------------

      Subject to Section  8.4(e)  hereof  (relating to the  preservation  of Tax
records),  the Seller,  the Parent and  Acquisition  Sub agree that each of them
shall  preserve  and keep the records held by it relating to the business of the
Seller  for a period of three  years from the  Closing  Date and shall make such
records and personnel  available to the other as may be  reasonably  required by
such party in  connection  with,  among other things,  any insurance  claims by,
legal  proceedings  against or governmental  investigations  of the Seller,  the
Parent or Acquisition  Sub or any of their  Affiliates or in order to enable the
Seller,   the  Parent  or  Acquisition  Sub  to  comply  with  their  respective
obligations  under  this  Agreement,  the  Employment  Agreement  and each other
agreement,  document or instrument  contemplated hereby or thereby. In the event
the Seller,  the Parent or Acquisition  Sub wishes to destroy such records after
that time,  such party shall first give ninety (90) days prior written notice to
the other and such other party  shall have the right at its option and  expense,
upon prior  written  notice  given to such party  within  that  ninety  (90) day


                                       25
<PAGE>

period,  to take  possession of the records  within one hundred and eighty (180)
days after the date of such notice.

      5.7 Publicity.
          ---------

      Neither the  Seller,  the Parent nor the  Acquisition  Sub shall issue any
press  release  or  public   announcement   concerning  this  Agreement  or  the
transactions contemplated hereby without obtaining the prior written approval of
the other party  hereto,  which  approval will not be  unreasonably  withheld or
delayed, unless, in the sole judgment of the Parent or the Seller, disclosure is
otherwise  required by applicable  Law or by the  applicable  rules of any stock
exchange on which the Parent or the Seller lists  securities,  provided that, to
the extent  required by applicable Law, the party intending to make such release
shall use its best efforts  consistent  with such applicable Law to consult with
the other party with respect to the text thereof.

      5.8 Use of Name.
          -----------

      The Seller hereby agrees that upon the  consummation  of the  transactions
contemplated hereby, the Parent and Acquisition Sub shall have the sole right to
the use of the name "CGM Security Solutions" and the Seller shall not, and shall
not  cause  or  permit  any  Affiliate  to use  such  name or any  variation  or
simulation thereof.

      5.9 Environmental Matters.
          ----------------------

      (a) The Seller shall permit the Parent and Acquisition Sub to conduct such
investigations  (including  investigations  known as  "Phase I" and  "Phase  II"
environmental audits) of the environmental conditions of the Seller's properties
and facilities as Parent and Acquisition  Sub, in their sole  discretion,  shall
deem  necessary.  Such  investigations  shall  be  conducted  in a  manner  that
minimizes the disruption of the operations of the Seller.

      (b) Seller shall promptly file all materials required under  Environmental
Laws (including,  without  limitation,  foreign or state property transfer laws)
and all requests required for the issuance,  transfer or reissuance to Parent of
Permits necessary to conduct the Seller's business prior to the Closing Date.

      5.10 Parent Documents.
           -----------------

      The Parent,  Acquisition Sub and the Seller hereby agree that, on or prior
to the  Closing  Date,  (i) the Parent and  Acquisition  Sub shall  execute  and
deliver to the  Seller the Note  substantially  in the form  attached  hereto as
Exhibit A, the Security  Agreement  substantially in the form attached hereto as
Exhibit  B and the IP  Security  Agreement  substantially  in the form  attached
hereto as Exhibit C, and to the Seller  Shareholder,  the Employment  Agreement,
substantially  in the  form  attached  hereto  as  Exhibit  D  (the  "Employment
Agreement"),  and;  (ii) the Seller  shall  cause its  Seller's  Shareholder  to
execute and deliver to Parent and Acquisition Sub the Employment Agreement.


                                       26
<PAGE>

      5.11 Financial Statements.
           ---------------------

      The Seller  shall  cooperate  with the Parent to provide  all  information
required for the completion of audited financial  statements of the Seller to be
prepared and delivered no later than 60 days from the Closing Date (the "Closing
Date Balance Sheet").

      5.12 Corporate Existence.
           --------------------

      So long as the Note  delivered  by Parent  and  Acquisition  Sub to Seller
remains unpaid and  outstanding,  the Parent and  Acquisition Sub shall maintain
their respective corporate existence and shall not sell all or substantially all
of their respective assets,  except in the event of a merger or consolidation or
sale of all or  substantially  all of  their  assets,  where  the  surviving  or
successor entity in such transaction  assumes the Parent's and Acquisition Sub's
obligations hereunder as well as under the Note and other Parent Documents.

      5.13 So long as the Note delivered by Parent and Acquisition Sub to Seller
remains  unpaid and  outstanding,  the Parent and  Acquisition  Sub shall notify
Seller in writing within five (5) days' of Parent's or Acquisition Sub's receipt
of any verbal or written  notice that either or both are in default or in breach
of any term or provision of any debt  instrument of any nature  whatsoever  that
could result in any material impairment of Seller's rights under this Agreement,
the Note or the Security Agreements.

                                   ARTICLE VI
                              CONDITIONS TO CLOSING

      6.1 Conditions Precedent to Obligations of Parent and Acquisition Sub.
          -----------------------------------------------------------------

      The  obligation  of the  Parent  and  Acquisition  Sub to  consummate  the
transactions contemplated by this Agreement is subject to the fulfillment, on or
prior to the Closing Date, of each of the  following  conditions  (any or all of
which may be waived by the Parent in whole or in part to the extent permitted by
applicable Law):

      (a) all  representations  and  warranties of the Seller  contained  herein
shall be true and correct as of the date hereof;

      (b) all  representations  and  warranties of the Seller  contained  herein
qualified as to materiality shall be true and correct,  and the  representations
and  warranties of the Seller  contained  herein not qualified as to materiality
shall be true and  correct in all  material  respects,  at and as of the Closing
Date with the same effect as though those  representations  and  warranties  had
been made again at and as of that time;

      (c) the Seller shall have performed and complied in all material  respects
with all obligations and covenants required by this Agreement to be performed or
complied with by it on or prior to the Closing Date;

      (d) the Parent  shall have been  furnished  with  certificates  (dated the
Closing date and in form and substance  reasonably  satisfactory  to the Parent)
executed  by the  Seller  certifying  as to the  fulfillment  of the  conditions
specified in Sections 6.1(a), 6.1(b) and 6.1(c) hereof;

      (e) the Parent shall have obtained all consents and waivers referred to in
Section  4.3  hereof  with  respect  to the  transactions  contemplated  by this
Agreement and the Parent Documents;

      (f) there shall not have been or occurred any Material Adverse Change;

                                       27
<PAGE>

      (g) the Seller shall have obtained all consents and waivers referred to in
Section 3.5  hereof,  in a form  reasonably  satisfactory  to the  Parent,  with
respect  to the  transactions  contemplated  by this  Agreement  and the  Seller
Documents;

      (h) no Legal Proceedings shall have been instituted or threatened or claim
or demand made against the Seller or the Parent  seeking to restrain or prohibit
or to  obtain  substantial  damages  with  respect  to the  consummation  of the
transactions  contemplated hereby, and there shall not be in effect any order by
a  Governmental  Body  of  competent  jurisdiction  restraining,   enjoining  or
otherwise prohibiting the consummation of the transactions contemplated hereby;

      (i) Seller's  Stockholder shall have entered into an employment  agreement
with the Parent.

      (j)  the  Parent's  investigation  of  environmental   conditions  at  the
properties   and   facilities   of  the  Seller  shall  not  have  revealed  any
circumstances  which could reasonably result in (1) the criminal  prosecution of
Seller or any employee of Seller under Environmental Laws, (2) any suspension or
closure of  operations  at the  Seller's  properties  or  facilities  or (3) any
liabilities  arising  under  Environmental  Laws which,  individually  or in the
aggregate, could reasonably give rise to a Material Adverse Effect;

      (k) Seller shall have obtained the issuance, reissuance or transfer of all
Permits required under  Environmental Laws for the Parent and Acquisition Sub to
conduct the operations of the Seller's business as of the Closing Date; and

      (l) Seller shall have satisfied all property transfer requirements arising
under Environmental Laws.

      6.2 Conditions Precedent to Obligations of the Seller.
          -------------------------------------------------

      The obligations of the Seller to consummate the transactions  contemplated
by this  Agreement  are subject to the  fulfillment,  prior to or on the Closing
Date, of each of the following  conditions (any or all of which may be waived by
the Seller in whole or in part to the extent permitted by applicable law):

      (a) all  representations  and warranties of the Parent and Acquisition Sub
contained herein shall be true and correct as of the date hereof;

      (b) all  representations  and warranties of the Parent and Acquisition Sub
contained herein qualified as to materiality shall be true and correct,  and all
representations  and  warranties  of the Parent and  Acquisition  Sub  contained
herein not qualified as to materiality shall be true and correct in all material
respects,  at and as of the Closing  Date with the same  effect as though  those
representations and warranties had been made again at and as of that date;

      (c) the Parent and  Acquisition  Sub shall have  performed and complied in
all  material  respects  with all  obligations  and  covenants  required by this
Agreement to be performed or complied with by Parent and  Acquisition  Sub on or
prior to the Closing Date;

      (d) the Seller  shall have been  furnished  with  certificates  (dated the
Closing Date and in form and substance  reasonably  satisfactory  to the Seller)
executed  by the Chief  Executive  Officer  and Chief  Financial  Officer of the
Parent  and  the  Acquisition  Sub  certifying  as to  the  fulfillment  of  the


                                       28
<PAGE>

conditions  specified in Sections 6.2(a),  6.2(b) and 6.2(c), and resolutions of
the Board of  Directors  of the  Parent  and  Acquisition  Sub  authorizing  the
acquisition of the Seller;

      (e)  there  shall not be in effect  any  order by a  Governmental  Body of
competent  jurisdiction  restraining,  enjoining  or otherwise  prohibiting  the
consummation of the transactions contemplated hereby;

      (f) the Parent and  Acquisition Sub shall have entered into the Employment
Agreement with Seller's Stockholder; and

      (g) the  Acquisition  Sub and the  Seller  shall  have  entered  into  the
Security Agreements,  dated as of the date of the Closing, pursuant to which the
Acquisition  Sub shall  have  granted a security  interest  to the Seller in the
Assets secondary to the interests of the Original Secured Parties (as defined in
the Security Agreements), and the Parent and Acquisition Sub shall have executed
and delivered to the Seller the Note.

                                  ARTICLE VII
                            DOCUMENTS TO BE DELIVERED

      7.1 Documents to be Delivered by the Seller.
          ---------------------------------------

      At the Closing, the Seller shall deliver, or cause to be delivered, to the
Parent and Acquisition Sub the following:

      (a) the  opinion of Joseph  Tomasek,  special  counsel to the  Seller,  in
substantially the form of Exhibit E hereto;

      (b) copies of all  consents  and  waivers  referred  to in Section  6.1(g)
hereof;

      (c) Employment  Agreement,  substantially in the form of Exhibit D hereto,
duly executed by Seller's Stockholder; and

      (d)  such  other  documents  as  the  Parent  and  Acquisition  Sub  shall
reasonably request.


      7.2 Documents to be Delivered by the Parent and Acquisition Sub.
          -----------------------------------------------------------

      At the Closing,  the Parent  and/or  Acquisition  Sub shall deliver to the
Seller the following

      (a) evidence of the wire transfer referred to in Section 1.4(b)(i) hereof;

      (b) the certificates and resolutions referred to in Section 6.2(d) hereof;

      (c) the Note, the Security  Agreement,  the IP Security  Agreement and the
Employment Agreement, all in substantially the forms attached hereto as Exhibits
A, B, C and D, respectively;

      (d) the opinion of Sichenzia  Ross  Friedman  Ference LLP,  counsel to the
Parent and Acquisition Sub, in substantially the form of Exhibit F hereto;

                                       29
<PAGE>

      (e) the  letter  agreement,  dated  the date  hereof,  signed  by  Parent,
Acquisition Sub and the "Investors"  identified  therein,  in substantially  the
form attached hereto as Exhibit G; and

      (e) such other documents as the Sellers shall reasonably request.

                                  ARTICLE VIII
                                 INDEMNIFICATION

      8.1 Indemnification.
          ----------------

      (a) Subject to Section 8.2 hereof, the Seller and the Seller's Stockholder
hereby agree to jointly and severally indemnify and hold the Parent, Acquisition
Sub and their respective directors,  officers,  employees,  Affiliates,  agents,
successors and assigns (collectively, the "Parent Indemnified Parties") harmless
from and against:

         (i) any and all  liabilities of the Seller and Seller's  Stockholder of
every kind,  nature and  description,  absolute  or  contingent,  including  the
Coronet Paper Judgment and any other lawsuits or judgments against Seller and/or
Seller's  Stockholder,  arising  from the  Business  prior to the  Closing  Date
hereof,  existing as against the Seller prior to and  including the Closing Date
or  thereafter  coming  into  being or  arising  by reason of any state of facts
existing,  or any  transaction  entered  into,  on or prior to the Closing Date,
except to the extent that the same have been fully provided for (and accrued and
applied as a liability)  in the Closing Date Balance  Sheet or were  incurred in
the ordinary  course of business  between the Balance Sheet Date and the Closing
Date;

         (ii)  subject  to  Section  9.3,  any  and  all  losses,   liabilities,
obligations,  damages,  costs  and  expenses  based  upon,  attributable  to  or
resulting from the failure of any  representation  or warranty of the Seller set
forth in Section 3 hereof, or any  representation  or warranty  contained in any
certificate  delivered by or on behalf of the Seller pursuant to this Agreement,
to be true and correct in all respects as of the date made;

         (iii) any and all losses, liabilities,  obligations, damages, costs and
expenses  based  upon,  attributable  to or  resulting  from the  breach  of any
covenant or other agreement on the part of the Seller under this Agreement;

         (iv) any and all losses  (including any loss of use of Seller  Property
or  any  of  the  tangible  personal  property  of  the  Seller),   liabilities,
obligations, claims, damages, costs and expenses arising from:

            (A)  any  failure  of  any  of the  representations  and  warranties
      contained  in Section 3.20 of this  Agreement,  or any  representation  or
      warranty  with  respect  to   environmental   matters   contained  in  any
      certificate  delivered  by or on behalf  of the  Seller  pursuant  to this
      Agreement,  to have been true and  correct in all  respects as of the date
      made;

            (B) any  Release  in, on, at, or from the  Seller  Properties  which
      occurred,  or resulted from  operations  occurring,  as of or prior to the
      Closing;

            (C) any tort  liability to third parties as a result of any Releases
      or from exposure to Hazardous Materials arising from any Releases as of or
      prior to the Closing;

                                       30
<PAGE>

            (D)  notification or designation  under any  Environmental  Law as a
      potentially  responsible party for onsite or offsite disposal of Hazardous
      Materials,  which disposal occurred as of or prior to the Closing,  or the
      listing of any Purchased Asset on the CERCLA  National  Priorities List or
      any  similar  list  under  any  Environmental  Law as a result  of  onsite
      disposal of Hazardous Materials as of or prior to the Closing;

            (E)  any  fines  or  penalties  with  respect  to any  violation  of
      Environmental Law occurring as of or prior to the Closing; and

            (F) any costs or fees associated with obtaining any required permits
      for the  Oxidizer and any other  environmental  permits as required by the
      State of New York, and

         (v) any and all notices, actions, suits, proceedings,  claims, demands,
assessments,  judgments, costs, penalties and expenses, including attorneys' and
other professionals' fees and disbursements (collectively,  "Expenses") incident
to any and all losses,  liabilities,  obligations,  damages,  costs and expenses
with  respect to which  indemnification  is  provided  hereunder  (collectively,
"Losses").

      (b)  Subject to Section  8.2,  Parent and  Acquisition  Sub hereby  agree,
jointly  and  severally,  to  indemnify  and hold the Seller  and its  officers,
directors, employees,  Affiliates, agents, successors and assigns as well as the
Seller's Stockholder  (collectively,  the "Seller Indemnified Parties") harmless
from and against:

         (i)  subject  to  Section  9.3,   any  and  all  losses,   liabilities,
obligations,  damages,  costs  and  expenses  based  upon,  attributable  to  or
resulting  from the failure of any  representation  or warranty of the Parent or
Acquisition Sub set forth in Section 4 hereof, or any representation or warranty
contained  in  any  certificate  delivered  by or on  behalf  of the  Parent  or
Acquisition  Sub  pursuant  to this  Agreement,  to be true and  correct  in all
respects as of the date made;


         (ii) any and all  liabilities of the Parent or the  Acquisition  Sub of
any kind, nature an description,  absolute or contingent, including any lawsuits
or judgments  against the Parent or  Acquisition  Sub prior to and including the
Closing Date or  thereafter  coming into being or arising by reason of any state
of facts existing,  or any transaction  entered into, on or prior to the Closing
Date ;

         (iii)  any  and  all,  liabilities,  obligations,  damages,  costs  and
expenses  based  upon,  attributable  to or  resulting  from the  breach  of any
covenant or other  agreement on the part of the Parent and Acquisition Sub under
this Agreement; and

         (iv) any and all Expenses incident to any and all losses,  liabilities,
obligations,  damages,  costs and expenses with respect to which indemnification
is provided hereunder.

      8.2 Limitations on  Indemnification  for Breaches of  Representations  and
          ----------------------------------------------------------------------
                Warranties.
                -----------

      An  indemnifying   party  shall  not  have  any  liability  under  Section
8.1(a)(ii) or Section 8.1(b)(i) hereof unless the aggregate amount of Losses and
Expenses to the indemnified parties finally determined to arise thereunder based
upon,  attributable  to or resulting from the failure of any  representation  or
warranty to be true and correct,  other than the  representations and warranties
set forth in Sections  3.7,  3.11,  3.16,  3.20,  3.28,  4.6,  4.7, 4.8 and 5.12
hereof,  exceeds  $15,000 (the  "Basket") and, in such event,  the  indemnifying
party shall be required to pay the entire  amount of such Losses and Expenses in
excess of $15,000 (the "Deductible").


                                       31
<PAGE>

      8.3 Indemnification Procedures.
          ---------------------------

      (a) In the event that any Legal  Proceedings  shall be  instituted or that
any claim or demand  ("Claim")  shall be  asserted  by any  Person in respect of
which payment may be sought under Section 8.1 hereof  (regardless  of the Basket
or the Deductible referred to above), the indemnified party shall reasonably and
promptly  cause  written  notice of the  assertion  of any Claim of which it has
knowledge which is covered by this indemnity to be forwarded to the indemnifying
party.  The  indemnifying  party  shall have the right,  at its sole  option and
expense,  to be represented  by counsel of its choice,  which must be reasonably
satisfactory to the indemnified party, and to defend against,  negotiate, settle
or otherwise deal with any Claim which relates to any Losses indemnified against
hereunder. If the indemnifying party elects to defend against, negotiate, settle
or otherwise deal with any Claim which relates to any Losses indemnified against
hereunder,  it shall within five (5) days (or sooner, if the nature of the Claim
so  requires)  notify  the  indemnified  party of its  intent  to do so.  If the
indemnifying party elects not to defend against,  negotiate, settle or otherwise
deal with any Claim which relates to any Losses  indemnified  against hereunder,
fails to notify the  indemnified  party of its  election  as herein  provided or
contests its obligation to indemnify the indemnified party for such Losses under
this Agreement, the indemnified party may defend against,  negotiate,  settle or
otherwise deal with such Claim. If the indemnified party defends any Claim, then
the indemnifying party shall reimburse the indemnified party for the Expenses of
defending  such Claim upon  submission of periodic  bills.  If the  indemnifying
party  shall  assume  the  defense  of any  Claim,  the  indemnified  party  may
participate,  at his or its own expense, in the defense of such Claim; provided,
however,  that such  indemnified  party shall be entitled to  participate in any
such defense with separate counsel at the expense of the indemnifying  party if,
(i) so  requested  by the  indemnifying  party  to  participate  or  (ii) in the
reasonable  opinion of counsel to the indemnified party, a conflict or potential
conflict exists between the indemnified  party and the  indemnifying  party that
would make such separate representation  advisable; and provided,  further, that
the  indemnifying  party  shall  not be  required  to pay for more than one such
counsel for all indemnified  parties in connection  with any Claim.  The parties
hereto agree to cooperate  fully with each other in connection with the defense,
negotiation or settlement of any such Claim.

      (b) After any final judgment or award shall have been rendered by a court,
arbitration  board or  administrative  agency of competent  jurisdiction and the
expiration of the time in which to appeal therefrom,  or a settlement shall have
been consummated, or the indemnified party and the indemnifying party shall have
arrived at a mutually binding  agreement with respect to a Claim hereunder,  the
indemnified party shall forward to the indemnifying party notice of any sums due
and owing by the  indemnifying  party pursuant to this Agreement with respect to
such matter and the indemnifying  party shall be required to pay all of the sums
so due and  owing to the  indemnified  party  by wire  transfer  of  immediately
available funds within 10 business days after the date of such notice.

      (c) The failure of the indemnified  party to give reasonably prompt notice
of any Claim  shall not  release,  waive or  otherwise  affect the  indemnifying
party's  obligations  with  respect  thereto  except  to  the  extent  that  the
indemnifying party can demonstrate actual loss and prejudice as a result of such
failure.


                                       32
<PAGE>

                                   ARTICLE IX
                                  MISCELLANEOUS

      9.1 Payment of Sales, Use or Similar Taxes.
          --------------------------------------

      All sales, use, transfer,  intangible,  recordation,  documentary stamp or
similar Taxes or charges, of any nature whatsoever,  applicable to, or resulting
from, the  transactions  contemplated  by this  Agreement  shall be borne by the
Seller

      9.2 Survival of Representations and Warranties.
          -------------------------------------------

      The parties  hereto hereby agree that the  representations  and warranties
contained  in this  Agreement  or in any  certificate,  document  or  instrument
delivered in  connection  herewith,  shall survive the execution and delivery of
this Agreement, and the Closing hereunder,  regardless of any investigation made
by the  parties  hereto;  provided,  however,  that any claims or  actions  with
respect  thereto  (other than claims for  indemnifications  with  respect to the
representation and warranties contained in Sections 3.7, 3.11, 3.16, 3.20, 3.27,
4.6,  4.7, 4.8, and 5.12 which shall  survive for periods  coterminous  with any
applicable statutes of limitation) shall terminate unless within thirty-six (36)
months  after the  Closing  Date  written  notice of such claims is given to the
Seller,  the Parent  and/or  the  Acquisition  Sub,  as the case may be, or such
actions are commenced.

      9.3 Expenses.
          --------

      Except as otherwise provided in this Agreement, the Seller, the Parent and
Acquisition Sub shall each bear its own expenses incurred in connection with the
negotiation and execution of this Agreement and each other  agreement,  document
and  instrument  contemplated  by this  Agreement  and the  consummation  of the
transactions contemplated hereby and thereby.

      9.4 Specific Performance.
          ---------------------

      The Seller acknowledges and agrees that the breach of this Agreement would
cause  irreparable  damage to the Parent and Acquisition Sub and that the Parent
and  Acquisition  Sub will not have an adequate  remedy at law.  Therefore,  the
obligations of the Seller under this Agreement,  including;  without limitation,
the Seller's  obligation to sell the Assets to the Parent and  Acquisition  Sub,
shall be enforceable by a decree of specific  performance issued by any court of
competent jurisdiction, and appropriate injunctive relief may be applied for and
granted in connection therewith. Such remedies shall, however, be cumulative and
not exclusive and shall be in addition to any other remedies which any party may
have under this Agreement or otherwise.

      9.5 Further Assurances.
          -------------------

      The  Seller,  the Parent and  Acquisition  Sub each  agrees to execute and
deliver such other  documents or agreements and to take such other action as may
be reasonably  necessary or desirable for the  implementation  of this Agreement
and the consummation of the transactions contemplated hereby.

      9.6 Submission to Jurisdiction; Consent to Service of Process.
           ---------------------------------------------------------

      (a) The parties  hereto  hereby  irrevocably  submit to the  non-exclusive
jurisdiction  of any federal or state court located within the State of New York
over any dispute  arising out of or  relating  to this  Agreement  or any of the
transactions contemplated hereby, except, however, any dispute arising out of or
relating to the Employment  Agreement  where consent to the  jurisdiction of the
courts of New Jersey is provided for therein and in which cases this Section 9.6
shall not apply,  and each party  hereby  irrevocably  agrees that all claims in
respect of such dispute or any suit,  action  proceeding  related thereto may be
heard and determined in such courts.  The parties hereby  irrevocably  waive, to
the fullest extent permitted by applicable Law, any objection which they may now
or  hereafter  have to the laying of venue of any such  dispute  brought in such


                                       33
<PAGE>

court or any defense of inconvenient  forum for the maintenance of such dispute.
Each of the parties  hereto  agrees  that a judgment in any such  dispute may be
enforced in other  jurisdictions  by suit on the judgment or in any other manner
provided by law.

      (b) Each of the parties hereto hereby  consents to process being served by
any party to this Agreement in any suit,  action or proceeding by the mailing of
a copy thereof in accordance with the provisions of Section 9.11.

      (c) Entire Agreement;  Amendments and Waivers.  This Agreement  (including
the schedules  and exhibits  hereto)  represents  the entire  understanding  and
agreement  between the parties  hereto with respect to the subject matter hereof
and can be amended,  supplemented  or changed,  and any provision  hereof can be
waived,  only by written  instrument making specific reference to this Agreement
signed by the party against whom enforcement of any such amendment,  supplement,
modification  or waiver is sought.  No action taken pursuant to this  Agreement,
including  without  limitation,  any investigation by or on behalf of any party,
shall be  deemed to  constitute  a waiver by the  party  taking  such  action of
compliance with any  representation,  warranty,  covenant or agreement contained
herein.  The  waiver by any party  hereto of a breach of any  provision  of this
Agreement shall not operate or be construed as a further or continuing waiver of
such breach or as a waiver of any other or subsequent  breach. No failure on the
part of any party to exercise,  and no delay in exercising,  any right, power or
remedy  hereunder  shall  operate as a waiver  thereof,  nor shall any single or
partial exercise of such right, power or remedy by such party preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
All  remedies  hereunder  are  cumulative  and are not  exclusive  of any  other
remedies provided by law.

      (d) Governing  Law. This  Agreement  shall be governed by and construed in
accordance with the laws of the State of New York.

      9.7 Table of Contents and Headings.
          -------------------------------

      The table of contents  and  section  headings  of this  Agreement  are for
reference  purposes  only and are to be given no effect in the  construction  or
interpretation of this Agreement.

      9.8 Notices.
          --------

      All  notices and other  communications  under this  Agreement  shall be in
writing  and  shall be  deemed  given  when  delivered  personally  or mailed by
certified  mail,  return  receipt  requested,  to the parties (and shall also be
transmitted  by  facsimile  to the  Persons  receiving  copies  thereof)  at the
following  addresses (or to such other address as a party may have  specified by
notice given to the other party pursuant to this provision):


If to Parent or Acquisition Sub:    Digital Descriptor Systems, Inc.
                                    2150 Highway 35, Suite 250
                                    Sea Girt, New Jersey 08750
                                    Attention:    President and Chief Executive
                                                  Officer
                                    Telephone:  (732) 359-0260
                                    Facsimile:   (732) 359-0265


With copy to:                       Sichenzia Ross Friedman Ference LLP
                                    1065 Avenue of the Americas
                                    New York, New York 10018
                                    Attention:  Gregory Sichenzia, Esq.
                                    Telephone:  (212) 930-9700
                                    Facsimile:  (212) 930-9725


                                       34
<PAGE>

If to Seller:

                                    Mr. Erik Hoffer
                                    24156 Yacht Club Blvd.
                                    Punta Gorda, Florida 33955
                                    Tel: 941-575-0971
                                    Fax: 941-575-0971

With a copy to:                     Joseph J. Tomasek, Esq.
                                    77 North Bridge Street
                                    Somerville, New Jersey 08876
                                    Telephone:  (908) 429-0030
                                    Facsimile:  (908) 429-0040

      9.9 Severability.
          -------------

      If any  provision  of this  Agreement  is  invalid or  unenforceable,  the
balance of this Agreement shall remain in effect.

      9.10 Binding Effect; Assignment.
           ---------------------------

      This  Agreement  shall be  binding  upon and inure to the  benefit  of the
parties and their respective  successors and permitted assigns.  Nothing in this
Agreement shall create or be deemed to create any third party beneficiary rights
in any person or entity not a party to this Agreement  except as provided below.
No assignment of this Agreement or of any rights or obligations hereunder may be
made by either the Seller or the Parent or the  Acquisition Sub (by operation of
law or otherwise)  without the prior written consent of the other parties hereto
and any attempted assignment without the required consents shall be void.


                                       35
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on the day and year first above written.


                       DIGITAL DESCRIPTOR SYSTEMS, INC.


                       By:  /s/ Anthony Shupin
                            -------------------------------------
                            Anthony Shupin
                            Chief Executive Officer and President


                       CGM APPLIED SECURITY TECHNOLOGIES, INC.


                       By:  /s/ Anthony Shupin
                            -------------------------------------
                            Anthony Shupin
                            Chief Executive Officer and President


                       CGM SECURITY SOLUTIONS, INC.


                       By:  /s/ Erik Hoffer
                            -------------------------------------
                            Erik Hoffer
                            Chief Executive Officer and President


                     /s/ Erik Hoffer
                     --------------------------------------------
                     Erik Hoffer,
                     Solely with respect to Articles III and VIII


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>7
<FILENAME>v013796_ex10-2.txt
<TEXT>
EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

THIS  EMPLOYMENT  AGREEMENT  (the  "Agreement")  is made as of the  25th  day of
February, 2005 (the "Effective Date")

BY AND AMONG:

            DIGITAL  DESCRIPTOR  SYSTEMS,  INC.,  a  Delaware  corporation  (the
            "Company" or the "Employer"),

            CGM APPLIED  SECURITY  TECHNOLOGIES,  INC.,  a Delaware  corporation
            ("CGM Sub")

            AND

            ERIK  HOFFER,  an  individual  having an address at 24156 Yacht Club
            Boulevard, Punta Gorda, Florida ("Executive")

WHEREAS,  the Company,  CGM Sub and CGM  Security  Solutions,  Inc.  ("CGM") are
parties to an Asset  Purchase  Agreement,  (the "Purchase  Agreement"),  a 2.86%
Secured  Convertible  Promissory  Note (the "Note"),  a Security  Agreement (the
"Security  Agreement") and an Intellectual  Property Security Agreement (the "IP
Security Agreement"), all dated as of the date hereof; and

WHEREAS, as a condition to the Purchase Agreement, Executive has agreed to serve
as (i) Vice President the Company ("Vice  President")  and (ii) President of the
CGM Sub  ("CGM  President"),  and the  Company  and CGM Sub have  agreed to hire
Executive as such, pursuant to the terms and conditions of this Agreement.

NOW THEREFORE THIS AGREEMENT  WITNESSETH THAT in  consideration  of the premises
and the mutual covenants,  agreements,  representations and warranties contained
herein, the Purchase Agreement,  and other good and valuable consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  Executive  and the
Company hereby agree as follows:

                                    ARTICLE 1
                                   EMPLOYMENT

Employer and CGM Sub hereby affirm the employment of Executive as Vice President
of the  Company and  President  of CGM Sub,  and  Executive  hereby  affirms and
accepts  such  employment  by Employer and CGM Sub for the "Term" (as defined in
Article 3 below), upon the terms and conditions set forth herein.

                                    ARTICLE 2
                                     DUTIES

During  the  Term,  Executive  shall  serve  Employer  and CGM  Sub  faithfully,
diligently and to the best of his ability,  under the direction and  supervision
of the Boards of Directors of Employer and CGM Sub ("Boards of  Directors")  and
shall use his best efforts to promote the interests and goodwill of Employer and
CGM  Sub  and  any  affiliates,   successors,   assigns,   parent  corporations,

<PAGE>

subsidiaries, and/or future purchasers of Employer, subject, in the event of any
contemplated  transfer of any rights or  obligations  under this  Agreement,  to
Article 13.8,  below.  Executive  shall render such services  during the Term at
Employer  and CGM Sub's  principal  place of  business or at such other place of
business as may be determined  by the Boards of  Directors,  as Employer and CGM
Sub may from time to time reasonably require of him, and shall devote all of his
business time to the performance thereof.  Executive shall have those duties and
powers as  generally  pertain to each of the  offices of which he holds,  as the
case may be,  subject to the control of the Boards of  Directors.  Employer  and
Executive also agree that Employer's Board of Directors shall nominate Executive
to Employer's  Board of Directors as soon as practicable  after the beginning of
the Term.

                                    ARTICLE 3
                                      TERM

EMPLOYER VICE PRESIDENT

3.1   The "Term" of this Agreement in connection with the Executive's  position
of Vice President  shall commence on the Effective Date and continue  thereafter
for a term of three (3) years, as may be extended or earlier terminated pursuant
to the terms and  conditions of this  Agreement.  The Term is renewable upon the
agreement of the parties hereto.

      During the period between the third  anniversary date and final payment of
monies due pursuant to the Note ("Final  Payment")  Executive,  Executive  shall
continue to serve as Vice  President and a Director of Employer.  Once the Final
Payment has been made,  Executive will resign his positions  unless the Board of
Directors of Employer has renewed this Agreement.

CGM PRESIDENT

3.2   Executive shall serve as CGM President  commencing on the Effective Date
for a one (1) year  period,  which may be renewed  for  successive  one (1) year
periods unless, prior to the 30th calendar day preceding the expiration thereof,
the Board of Directors of CGM Sub provides  written notice to the Executive that
it elects not to renew.

                                    ARTICLE 4
                                  COMPENSATION

SALARY

4.1   (a) In consideration of Executive's services to both Employer and CGM
Sub,  Employer  shall pay to  Executive an annual  salary (the  "Salary") of Two
Hundred  Thousand Dollars  ($200,000.00  and sometimes  referred to as the "Full
Salary") ,  payable in equal  installments  at the end of such  regular  payroll
accounting periods as are established by Employer, or in such other installments
upon which the parties  hereto shall  mutually  agree,  and in  accordance  with
Employer's  usual  payroll  procedures,  but no less  frequently  than  monthly;
provided,  however,  that the Full Salary may be deferred or reduced by Employer
if the  Compensation  Committee  of the Board of  Directors  of the  Employer so
determines  ( a "Salary  Reduction")  and shall be paid in full as funds  become
available  during  the  balance of that  calendar  year or  thereafter  ("Salary
Payments"); but in no event shall the Salary Reduction exceed $100,000 per year.
Any Salary Reduction shall be memorialized in a demand promissory note, accruing
interest in the amount of ten (10%) per annum, executed by Employer and CGM Sub,

<PAGE>

jointly and  severally,  and issued no later than ten days following any quarter
during which Executive receives less than his Full Salary. Provided further that
in the event Executive's Full Salary is reduced at any time during the Term, (i)
all Employer and CGM Sub officers'  and  directors'  compensation  shall also be
proportionately  reduced and (ii)  Employer  and CGM Sub shall not  increase the
compensation  of any officer,  director or employee  during any periods in which
Executive's  Full Salary is reduced  until all of the Salary  Reduction  amounts
have been repaid to Executive in full.  Notwithstanding anything to the contrary
set forth in this Agreement, Employer and CGM Sub, jointly and severally, hereby
agree to pay the Full Salary, as well as the benefits,  expense  reimbursements,
bonus and other compensation  described in Sections 4.2, 4.3, 4.4 and 4.5 below,
to Executive  throughout the Term hereof,  subject only to the Salary  Reduction
right of this Article 4.1(a), even though Executive's  position as CGM President
is not renewed after the first year of the Term.

 BENEFITS

4.2   (a) During the Term,  Executive  shall be  entitled  to  participate  in
all medical and other Executive benefit plans,  including vacation,  sick leave,
retirement  accounts and other Executive benefits provided by Employer to any of
the other senior  officers of the Employer or CGM Sub on terms and conditions no
less favorable than those offered to such senior  officers.  Such  participation
shall be  subject  to the terms of the  applicable  plan  documents,  Employer's
generally applicable  policies,  and the discretion of the Board of Directors or
any  administrative or other committee provided for in, or contemplated by, such
plan, but in no event shall  Executive's  participation in any medical and other
Executive  benefit  plans be less than the  participation  of any  other  senior
officer during the Term.

      (b)  Employer  shall  agree to review  the  current  Long Term  Disability
Insurance  policy held by Executive ("LTD  Insurance").  If Employer  determines
that is it  economically  viable for Employer to provide LTD Insurance on behalf
of the  Executive,  Employer  shall also  provide  LTD  Insurance  to  similarly
situated Executives on terms and conditions no less favorable than those offered
to Executive. Employer shall be under no obligation to provide LTD Insurance.

EXPENSE REIMBURSEMENT

4.3   Employer and CGM Sub shall reimburse  Executive for reasonable and neces-
sary  expenses  incurred  by  him on  behalf  of  Employer  and  CGM  Sub in the
performance  of his  duties  hereunder  during the Term,  including  any and all
travel expenses related to the Employer's business in accordance with Employer's
then customary policies, provided that such expenses are adequately documented.

BONUS

4.4   In  addition  to the  Salary,  Executive  shall be  entitled  to  receive
an incentive  bonus for each calendar year of this Agreement  equal to 5% of the
gross  margin  sales  increase  over the prior  year's gross margin sales of CGM
products ("Bonus").  Each year's Bonus shall be paid to the Executive within 110
days of the  Company's  calendar  year end.  "Gross  margin" shall be defined in
accordance  with GAAP,  as  reviewed  and  approved  by  Employer's  independent
auditors.

<PAGE>

OTHER COMPENSATION

4.5   Executive  shall receive a monthly  allowance of $500,  for a total of
$6000 per year, in connection with transportation expenses in the performance of
his duties on behalf of Employer and CGM Sub.

                                    ARTICLE 5
                                OTHER EMPLOYMENT

During the Term of this Agreement,  Executive shall devote  substantially all of
his business and professional time and effort,  attention,  knowledge, and skill
to the management,  supervision and direction of Employer and CGM Sub's business
and affairs as Executive's  highest  professional  priority.  Except as provided
below,  Employer  shall be entitled  to all  benefits,  profits or other  issues
arising  from or  incidental  to all work,  services  and  advice  performed  or
provided by Executive.  Nothing in this Agreement shall preclude  Executive from
devoting reasonable periods required for:

      (a)   serving as a director or member of a committee  of any  organization
            or corporation  involving no conflict of interest with the interests
            of  Employer or CGM Sub,  provided  that  Executive  must obtain the
            written consent of Employer and CGM Sub;

      (b)   serving as a  consultant  in his area of  expertise  (in areas other
            than in  connection  with the business of Employer and CGM Sub),  to
            government,  industrial,  and  academic  panels  where  it does  not
            conflict with the interests of Employer and CGM Sub; and

      (c)   managing  his  personal   investments   or  engaging  in  any  other
            non-competing business;

provided  that such  activities  do not  materially  interfere  with the regular
performance of his duties and responsibilities under this Agreement.

                                    ARTICLE 6
                       CONFIDENTIAL INFORMATION/INVENTIONS

CONFIDENTIAL INFORMATION

6.1   Executive  shall not, in any manner,  for any reasons,  either  directly
or indirectly,  divulge or communicate to any person,  firm or corporation,  any
confidential  information  concerning  any  matters not  generally  known in the
Public Sector  Safety,  Cargo and  Transportation,  product  authentication  and
unattended  cargo,  Homeland  Security and Shipping and Distribution  industries
(together,  the "Security Industry") or otherwise made public by Employer or CGM
Sub which  affects or  relates  to  Employer  or CGM Sub's  business,  finances,
marketing  and/or  operations,  research,  development,   inventions,  products,
designs,  plans,   procedures,   or  other  data  (collectively,   "Confidential
Information")  except in the  ordinary  course of  business  or as  required  by
applicable law.  Without regard to whether any item of Confidential  Information
is deemed or considered confidential, material, or important, the parties hereto
stipulate  that as between them, to the extent such item is not generally  known
in the Security Industry, such item is important, material, and confidential and
affects the successful conduct of Employer's business and goodwill, and that any
breach of the terms of this Section 6.1 shall be a material and incurable breach
of this Agreement.  Confidential  Information shall not include: (i) information
obtained or which became known to Executive other than through his employment by
Employer and CGM Sub; (ii)  information  in the public domain at the time of the
disclosure of such  information by Executive;  (iii)  information that Executive
can document was independently developed by Executive; and (iv) information that
is disclosed by Executive with the prior written consent of Employer or CGM Sub.

DOCUMENTS

6.2   Executive  further  agrees that all  documents  and  materials  furnished
to  Executive  by Employer and CGM Sub and relating to the Employer or CGM Sub's
business or prospective  business are and shall remain the exclusive property of
Employer. Executive shall deliver all such documents and materials, uncopied, to
Employer or CGM Sub upon demand  therefore  and in any event upon  expiration or
earlier  termination  of this  Agreement.  Any  payment of sums due and owing to
Executive  by Employer or CGM Sub upon such  expiration  or earlier  termination
shall be  conditioned  upon  returning  all such  documents and  materials,  and
Executive expressly authorizes Employer and CGM Sub to withhold any payments due
and owing pending return of such documents and materials.

INVENTIONS

6.3   All ideas,  inventions,  and other developments or improvements conceived
or reduced to practice by  Executive,  alone or with others,  during the Term of
this Agreement,  whether or not during working hours,  that are within the scope
of the  business  of Employer or CGM Sub or that relate to or result from any of
Employer or CGM Sub's work or projects or the services  provided by Executive to
Employer or CGM Sub pursuant to this Agreement,  shall be the exclusive property
of Employer.  Executive agrees to assist  Employer,  at Employer's  expense,  to
obtain patents and copyrights on any such ideas, inventions, writings, and other
developments,  and agrees to execute  all  documents  necessary  to obtain  such
patents and copyrights in the name of Employer.

DISCLOSURE

6.4   During the Term, Executive will promptly disclose to the Boards of Direct-
ors full information  concerning any interest,  direct or indirect, of Executive
(as owner, shareholder,  partner, lender or other investor,  director,  officer,
Executive, consultant or otherwise) or any member of his immediate family in any
business that is reasonably  known to Executive to purchase or otherwise  obtain
services or products from, or to sell or otherwise  provide services or products
to, Employer, CGM Sub or any of their suppliers or customers.


                                    ARTICLE 7
                             COVENANT NOT TO COMPETE

(a)   Except as expressly  permitted  in Article 5 above,  during the Term of
this Agreement,  Executive shall not engage in any of the following  competitive
activities:  (a)  engaging  directly or  indirectly  in any business or activity
substantially  similar to any business or activity engaged in (or proposed to be
engaged in) by Employer or CGM Sub; (b) engaging  directly or  indirectly in any
business or activity  competitive  with any business or activity  engaged in (or
proposed to be engaged in) by Employer or CGM Sub; (c) soliciting or taking away
any Executive, agent,  representative,  contractor,  supplier, vendor, customer,
franchisee,  lender or investor of Employer, or attempting to so solicit or take

<PAGE>

away;  (d)  interfering  with  any  contractual  or other  relationship  between
Employer  or CGM Sub  and  any  Executive,  agent,  representative,  contractor,
supplier,  vendor, customer,  franchisee,  lender or investor; or (e) using, for
the  benefit  of any  person or  entity  other  than  Employer  or CGM Sub,  any
Confidential Information of Employer or CGM Sub.

(b)   The foregoing covenant prohibiting  competitive activities shall survive
the termination of this Agreement and shall extend, and shall remain enforceable
against  Executive,  for the  period  of two (2) years  following  the date this
Agreement is terminated  provided,  however,  this  Agreement is not  terminated
either by  Executive  pursuant to  Article10.1  and 10.2 or by Employer  without
cause  pursuant  to  Article  10.3  in  which  case  such  Articles  5, 6 and 7,
respectively,  shall not be binding upon Executive nor survive such termination.
In addition,  during the two-year  period  following such  expiration or earlier
termination,  neither  Executive,  Employer nor CGM Sub shall make or permit the
making of any negative  statement of any kind  concerning  Employer,  CGM Sub or
their affiliates, or their directors, officers or agents or Executive.

                                    ARTICLE 8
                                    SURVIVAL

Executive  agrees  that the  provisions  of  Articles  6, 7 and 9 shall  survive
expiration  or earlier  termination  of this  Agreement and shall remain in full
force  and  effect  thereafter  for any  reasons  other  than in the  events  of
termination  either by Executive pursuant to Article10.1 and 10.2 or by Employer
without cause pursuant to Article 10.3.


                                    ARTICLE 9
                                INJUNCTIVE RELIEF

Executive  acknowledges  and  agrees  that  the  covenants  and  obligations  of
Executive  set  forth  in  Articles  6 and 7 with  respect  to  non-competition,
non-solicitation,  confidentiality  and Employer's  property  relate to special,
unique and  extraordinary  matters and that a  violation  of any of the terms of
such covenants and obligations will cause Employer or CGM Sub irreparable injury
for which  adequate  remedies  are not  available at law.  Therefore,  Executive
agrees that Employer or CGM Sub shall be entitled to an injunction,  restraining
order or such other equitable relief (without the requirement to post bond) as a
court of competent  jurisdiction  may deem  necessary or appropriate to restrain
Executive  from  committing  any  violation  of the  covenants  and  obligations
referred to in this Article 9, provided,  however,  such injunctive relief shall
not be available if this Agreement is terminated either by Executive pursuant to
Article10.1  and 10.2 or by Employer  without  cause  pursuant to Article  10.3.
These injunctive remedies are cumulative and in addition to any other rights and
remedies Employer may have at law or in equity.


                                   ARTICLE 10
                                   TERMINATION

TERMINATION BY EXECUTIVE

10.1  Executive may terminate this Agreement for Good Reason at any time upon 30
days'  written  notice to Employer or CGM Sub,  provided the Good Reason has not
been cured within such period of time.

<PAGE>

GOOD REASON

10.2  In this Agreement,  "Good Reason" means,  without Executive's prior
written consent, the occurrence of any of the following events,  unless Employer
or CGM Sub shall have fully cured all grounds for such termination within thirty
(30) days after Executive gives notice thereof:

      (i)   any reduction in his then-current  Salary,  except as provided under
            Section 4.1;

      (ii)  any material failure to timely grant, or timely honor, any equity or
            long-term incentive award;

      (iii) failure to pay or provide required compensation and benefits;

      (iv)  any  failure to appoint him as a Director of Employer or the removal
            of him  from  such  position,  other  than  by  vote  of  Employer's
            shareholders   following  his  nomination  by  Employer's  Board  of
            Directors at a meeting thereof, during the Term;

      The written  notice  given  hereunder  by Executive to Employer or CGM Sub
      shall specify in  reasonable  detail the cause for  termination,  and such
      termination  notice  shall not be  effective  until thirty (30) days after
      Employer or CGM Sub's  receipt of such notice,  during which time Employer
      shall have the right to respond to Executive's  notice and cure the breach
      or other event giving rise to the termination.

TERMINATION BY EMPLOYER

10.3  Employer or CGM Sub may terminate  its  employment of Executive  under
this  Agreement  for  cause at any time by  written  notice  to  Executive.  For
purposes of this Agreement,  the term "cause" for termination by Employer or CGM
Sub  shall  be (a) a  conviction  of or plea of  guilty  or nolo  contendere  by
Executive to a felony,  or any crime  involving fraud or  embezzlement;  (b) the
refusal by Executive to perform his material duties and  obligations  hereunder;
(c)  Executive's  willful or  intentional  misconduct in the  performance of his
duties and  obligations;  or (d) if  Executive or any member of his family makes
any personal  profit arising out of or in connection with a transaction to which
Employer  or CGM Sub is a party or with which it is  associated  without  making
disclosure to and obtaining  the prior  written  consent of Parent.  The written
notice  given  hereunder by Employer or CGM Sub to  Executive  shall  specify in
reasonable  detail the cause for  termination.  For purposes of this  Agreement,
"family"  shall  mean  Executive's  spouse  and/or  children.  In the  case of a
termination  for the causes  described  in (a) and (d) above,  such  termination
shall be effective upon receipt of the written notice. In the case of the causes
described in (b) and (c) above,  such termination  notice shall not be effective
until thirty (30) days after  Executive's  receipt of such notice,  during which
time  Executive  shall have the right to respond to Employer or CGM Sub's notice
and cure the breach or other event giving rise to the termination.

SEVERANCE

10.4  Upon a termination  of this  Agreement  without Good Reason by Executive
or with  cause by  Employer  or CGM Sub,  Employer  shall pay to  Executive  all
accrued and unpaid  compensation as of the date of such  termination,  including
any amounts due  Executive  under  Article 4 subject to the provision of Section
6.2.  Upon a  termination  of this  Agreement  with Good Reason by  Executive or
without  cause by  Employer  or CGM Sub,  Employer  shall pay to  Executive  the

<PAGE>

"Severance Payment." The Severance Payment shall be payable over a period of six
months  from  the date of  termination,  subject  to  Employer's  statutory  and
customary withholdings.  The first two-fifth's of the Severance Payment shall be
paid by Employer  within  thirty (30)  business  days of the  expiration  of any
applicable cure period and the remaining  three-fifth's of the Severance Payment
shall be paid within 90 days of the  expiration of any  applicable  cure period.
The "Severance  Payment" shall equal the total amount of the Full Salary payable
to  Executive  under  Section  4.1 of  this  Agreement  from  the  date  of such
termination  until  the  end of the  Term of this  Agreement  (prorated  for any
partial  month),  together  with a prorated  amount of any bonus  payable  under
Section  4.4 as well as any  amounts due under any  promissory  notes  issued or
issuable  pursuant to any Salary  Reduction  amounts  outstanding at the date of
termination and which may accrue through the Term hereof.

TERMINATION UPON DEATH

10.5 If Executive dies during the Term of this  Agreement,  this Agreement shall
terminate,  except that Executive's legal  representatives  shall be entitled to
receive any earned but unpaid compensation or expense  reimbursement,  including
any amounts due Executive  under Article 4, as well as any amounts due under any
promissory  notes issued or issuable  pursuant to any Salary  Reduction  amounts
outstanding through the date of death.

TERMINATION UPON DISABILITY

10.6 If, during the Term of this Agreement,  Executive  suffers and continues to
suffer from a "Disability" (as defined below),  then Employer may terminate this
Agreement by  delivering  to Executive  ten (10)  calendar  days' prior  written
notice of termination  based on such Disability,  setting forth with specificity
the nature of such Disability and the  determination  of Disability by Employer.
For the purposes of this Agreement,  "Disability"  means Executive's  inability,
with reasonable  accommodation,  to substantially  perform  Executive's  duties,
services and obligations  under this Agreement due to physical or mental illness
or other  disability  for a  continuous,  uninterrupted  period  of  sixty  (60)
calendar days or ninety (90) days during any twelve month period.  Upon any such
termination  for  Disability,  Executive shall be entitled to receive any earned
but unpaid  compensation  or expense  reimbursement  as well as any  amounts due
under any promissory  notes issued or issuable  pursuant to any Salary Reduction
amounts outstanding due hereunder through the date of termination.

                                   ARTICLE 11
                  PERSONNEL POLICIES, CONDITIONS, AND BENEFITS

      Except as  otherwise  provided  herein,  Executive's  employment  shall be
subject to the  personnel  policies and benefit  plans which apply  generally to
Employer's  executives  as the  same may be  interpreted,  adopted,  revised  or
deleted from time to time,  during the Term of this Agreement,  by Parent in its
sole discretion,  except,  however,  the provisions of this Article 11 shall not
operate to diminish,  reduce,  invalidate  or terminate  any of the  Executive's
compensation or other rights granted pursuant to Articles 1,3, 4, 5, 7, 8, 9 and
10. During the Term hereof,  Executive shall be entitled to vacation during each
year of the Term at the rate of four (4) weeks per  year.  Within 30 days  after
the end of each year of the Term,  Employer  shall  elect to (a) carry  over and
allow  Executive the right to use any accrued and unused  vacation of Executive,
or (ii) pay Executive  for such  vacation in a lump sum in  accordance  with its
standard  payroll  practices.  Executive  shall  take  such  vacation  at a time
approved in advance by the Board of Directors of Employer,  which  approval will
not  be   unreasonably   withheld  but  will  take  into  account  the  staffing

<PAGE>

requirements of Employer and the need for the timely  performance of Executive's
responsibilities.

                                   ARTICLE 12
                           BENEFICIARIES OF AGREEMENT

This  Agreement  shall  inure  to  the  benefit  of  Executive,  his  heirs  and
successors,  and to Employer, CGM Sub and any affiliates,  successors,  assigns,
parent  corporations,  subsidiaries,  and/or purchasers of Employer or Parent as
they now or shall exist while this Agreement is in effect, subject, in the event
of a contemplated transfer of any rights or obligations under this Agreement, to
Article 13.8 below.

                                   ARTICLE 13
                               GENERAL PROVISIONS

NO WAIVER

13.1  No failure by either party to declare a default  based on any breach by
the other  party of any  obligation  under this  Agreement,  nor failure of such
party to act quickly with regard thereto,  shall be considered to be a waiver of
any such obligation, or of any future breach.

MODIFICATION

13.2  No waiver or modification of this Agreement or of any covenant,
condition,  or limitation  herein contained shall be valid unless in writing and
duly executed by the parties to be charged therewith.

SUBMISSION TO JURISDICTION; CONSENT TO SERVICE OF PROCESS.

13.3  The parties hereto irrevocably submit to the exclusive  jurisdiction of
any  federal or state  court  located  within  the State of New Jersey  over any
dispute arising out of or relating to this Agreement and each party  irrevocably
agrees  that all  claims in  respect  of such  dispute  or any  suit,  action or
proceeding  related  thereto may be heard and  determined  in such  courts.  The
parties hereby  irrevocably waive, to the fullest extent permitted by applicable
law, any objection  which they may now or hereafter  have to the laying of venue
of any such dispute,  suit,  action or  proceeding  brought in such court or any
defense of  inconvenient  forum for the  maintenance of any such dispute,  suit,
action or  proceeding.  Each of the parties hereby agrees that a judgment in any
such dispute,  suit, action or proceeding may be enforced in other jurisdictions
by suit on the judgment or in any other manner  provided by law. This  Agreement
shall be governed by and construed in  accordance  with the laws of the State of
New Jersey, without regard to any conflict of laws principles.

ENTIRE AGREEMENT

13.4  This  Agreement  embodies the whole  agreement  between the parties  here-
to regarding the subject matter hereof and there are no  inducements,  promises,
terms, conditions,  or obligations made or entered into by Employer or Executive
other than contained herein.

<PAGE>

SEVERABILITY

13.5  Certain of the agreements and covenants contained herein are severable,
and in the event any of them,  with the exception of those contained in Articles
1, 2, 3, 4, 5, 7, 8, 9, 10, 11 and 12 hereof, shall be held to be invalid by any
competent  court,  this  Agreement  shall  be  interpreted  as if  such  invalid
agreements or covenants were not contained herein.

HEADINGS

13.6  The headings  contained herein are for the convenience of reference and
are not to be used in interpreting this Agreement.

INDEPENDENT LEGAL ADVICE

13.7  Employer  has obtained  legal advice  concerning  this  Agreement  and has
requested that Executive  obtain  independent  legal advice with respect to same
before  executing  this  Agreement.  Executive,  in  executing  this  Agreement,
represents  and  warranties  to  Employer  that he has been so advised to obtain
independent  legal advice,  and that prior to the execution of this Agreement he
has so obtained  independent legal advice, or has, in his discretion,  knowingly
and willingly elected not to do so.

NO ASSIGNMENT

13.8  No party may assign,  pledge or encumber its interest in this Agreement
nor assign or  transfer  any of its rights or duties  under this  Agreement,  by
operation of law or otherwise,  to any affiliates,  successors,  assigns, parent
corporations,  subsidiaries,  and/or future  purchasers of Employer  without the
prior written consent of the other parties.

<PAGE>

      IN WITNESS  WHEREOF the parties have executed this Agreement  effective as
of the day and year first above written.

                                   DIGITAL DESCRIPTOR SYSTEMS, INC.


                                   By: /s/ Anthony Shupin
                                       -----------------------------------
                                       Anthony Shupin, President


                                   CGM APPLIED SECURITY TECHNOLOGIES, INC.


                                   By: /s/ Anthony Shupin
                                       -----------------------------------
                                       Anthony Shupin, President


                                   EXECUTIVE:

                                   /s/ Erik Hoffer
                                   ---------------------------------------
                                   ERIK HOFFER

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>8
<FILENAME>v013796_ex99-1.txt
<TEXT>
Exhibit 99.1

Contact: Anthony R. Shupin       2150 Highway 35
DDSI                             Suite 250
Phone 732 359 0260               Sea Girt, NJ 08750
Fax 732 359 0265                 Toll Free: 866 263 0682

CGM                              223 Churchill Avenue
Applied Security Technologies    Somerset, NJ 08873
Phone 732 448 1400
Fax 732 448 1406

Press Release

Digital Descriptor Systems, Inc.

DDSI acquires CGM Security Solutions, Inc. a leading manufacturer of specialty
products for global supply chain security.

SEA GIRT, N.J. March 1, 2005: Digital Descriptor Systems, Inc. (symbol: DDSI)
has announced it has acquired substantially all of the assets of CGM Security
Solutions, Inc., a Florida corporation ("CGM"), for $1,500,000 in cash and a
2.86% promissory note in the principle amount of $3,500,000, subject to
adjustment.

A manufacturer of specialized security products for the packaging, cargo and
transportation industries since 1977, the new operation will be called CGM
Applied Security Technologies, Inc., a DDSI company. "CGM's excellent
reputation, and extensive experience in Supply Chain security issues, combined
with its licensed and patented technologies made it a perfect fit for our growth
strategy," states Anthony Shupin, President and CEO of DDSI. "Our combined
talents and technologies provide a powerful solution-set to the needs of
domestic and global agencies or companies dealing with the process of accurate
identification and asset security. The acquisition also allows us to immediately
expand DDSI's product and services offering to our 300+ client base of law
enforcement and criminal justice agencies."

In connection with the acquisition, the Company and CGM Sub each entered into an
employment agreement with the founder and principal shareholder of CGM Security
Solutions, Inc., Erik Hoffer, for a three-year period and one-year period,
respectively. Mr. Hoffer will remain as president of the new subsidiary. "With
over 2000 regular clients and world wide distribution, CGM looks forward to
joining with DDSI. Our venture will enable us to further expand CGM's sales
coverage and refine our line of products to adapt to a changing world supply
chain," comments Erik Hoffer.

The corporate Headquarters for the combined enterprise will remain in Sea Girt,
New Jersey. CGM will remain in its Somerset Corporate plant and office location
as well as its main factory in Staten Island, NY.

ABOUT CGM APPLIED SECURITY TECHNOLOGIES, INC.

CGM is a leading manufacturer and distributor of indicative and barrier security
seals, security tapes and related packaging security systems, protective
security products for palletized cargo, physical security systems for tractors,
trailers and containers as well as a number of highly specialized authentication
products. The Internet Web-site address is www.tamper.com.

<PAGE>


ABOUT DIGITAL DESCRIPTOR SYSTEMS, INC.

DDSI develops, markets, implements and supports integrated enterprise-wide image
applications designed especially for criminal justice organizations. With more
than 300 customers worldwide, DDSI is an industry-leading imaging solutions
provider. The Company's customers include states, cities, counties, corrections,
justice, and public safety agencies. In addition to the current criminal justice
marketplace, DDSI is introducing its technology into other commercial markets
such as cargo and transportation, access control and the biometric
identification industry. Digital Descriptor Systems, Inc. is headquartered in
Sea Girt, New Jersey. The Internet Web-site address is HTTP://WWW.DDSI-CPC.COM.

                                     ******

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: Statements in this press release regarding DDSI's business which are not
historical facts are "forward-looking statements" that involve risks and
uncertainties. Please invest wisely. DDSI invites you to examine our 2003 10K
and 8K filings for more information regarding the company and this transaction.
</TEXT>
</DOCUMENT>
</SUBMISSION>
