8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of first reportable event): July 7, 2009 (July 2, 2009)

VELOCITY PORTFOLIO GROUP, INC.

(Exact name of registrant as specified in Charter)

Delaware	000-161570	65-0008442
(State or other jurisdiction of incorporation)	(Commission file no.)	(IRS employer identification no.)
1800 Route 34 North Building 4, Suite 404A Wall, NJ		07719
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (201-760-6306)

(Former Name or Former Address, if Changed Since Last Report)

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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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

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

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

This Current Report on Form 8-K may contain, among other things, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements with respect to the Company’s plans, objectives, expectations and intentions; and (ii) other statements identified by words such as “may”, “could”, “would”, “should”, “believes”, “expects”, “anticipates”, “estimates”, “intends”, “plans” or similar expressions. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. These forward-looking statements involve certain risks and uncertainties that are subject to change based on various factors (many of which are beyond the Company’s control).

Item 1.01.   Entry into a Material Definitive Agreement

          On July 2, 2009, Velocity Portfolio Group, Inc. (the “Company”) consummated a closing (the “Closing”) of its private placement offering (the “Offering”) of an aggregate of $350,000 of its Units, with each Unit comprised of $35,000 principal amount secured promissory notes (the “Notes”) and warrants to purchase 10,000 shares of common stock at an exercise price of $3.50 per share (the “Warrants”, and together with the Notes, the “Securities”) to accredited investors (“Investors”). The Securities were offered and sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”). The Company sold an aggregate of 10 Units at a purchase price of $35,000 per Unit. The Company intends to use the net proceeds from the Offering primarily for the purchase of portfolios of unsecured consumer receivables and for general corporate purposes, including working capital.

          The Notes bear interest at a rate of ten percent (10%) per annum and mature on July 2, 2010. Interest is payable quarterly in arrears. The Notes are secured by a lien on all of the Company’s assets. The Notes may be redeemed by the Company at any time prior to maturity at a rate of 110% of the then outstanding principal, plus accrued but unpaid interest. The Notes contain customary default provisions. Upon the occurrence of an event of the default, the Company will be charged an interest rate of eighteen percent (18%).

          The Warrants entitle the holders to purchase shares of the Company’s common stock reserved for issuance thereunder (the “Warrant Shares”) for a period of five years from the date of issuance. The Warrants contain certain anti-dilution rights on terms specified in the Warrants.

          The investors of this Offering are not entitled to any registration rights with respect to the Securities.

          The Securities were not registered under the Securities Act of 1933, or any state securities laws, and were offered and sold only in the United States to “accredited investors” (as defined in Rule 501(a) of the Securities Act) pursuant to an exemption from registration under Section 4(2) of the Securities Act. Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission or regulatory body has approved or disapproved the securities. Any representation to the contrary is a criminal offense.

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Item 2.03.   Creation of a Direct Financial Obligation

          See Item 1.01 of this Current Report on Form 8-K, which Item is incorporated herein by this reference, for a description of the terms of the financing transaction that included the issuance of the Notes, thereby creating a direct financial obligation.

Item 3.02.   Unregistered Sales of Equity Securities

          See Item 1.01 of this Current Report on Form 8-K, which Item is incorporated herein by this reference, for a description of the terms of the financing transaction that included the issuance of the Securities.

          John C. Kleinert, the Company’s Chairman, President, and Chief Executive Officer, purchased 5 of the Units.

Item 9.01.   Financial Statements and Exhibits.

(d)	Exhibits.
	Exhibit No.	Description
	4.1	Form of Note
	4.2	Form of Warrant

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.

July 7, 2009

VELOCITY PORTFOLIO GROUP, INC.

/s/ James J. Mastriani

James J. Mastriani

Chief Financial Officer

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EX-4.1

Exhibit 4.1

NEITHER THIS SECURITY NOR ANY SECURITY INTO WHICH IT MAY BE CONVERTED HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR APPLICABLE STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY SECURITY INTO WHICH IT MAY BE CONVERTED NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF AT ANY TIME IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.

VELOCITY PORTFOLIO GROUP, INC.
a Delaware corporation

10% PROMISSORY NOTE

No. __
$_______	July __, 2009

             FOR VALUE RECEIVED, VELOCITY PORTFOLIO GROUP, INC., a Delaware corporation (the “Company”), hereby promises to pay to ________________, (hereinafter referred to as the “Holder”), or registered assigns, the principal sum of _____________ Dollars ($_______), with interest at a rate of ten percent (10.0%) per annum.

1.          This Note. Unless this note (“Note”) is otherwise redeemed pursuant to Section 5 hereof, interest and principal on this Note shall be payable at the address indicated in the Subscription Agreement executed by the Holder in connection with the investment in this Note or any such other address as the Holder may from time to time designate in writing to the Company, regardless of whether payment becomes due on the Maturity Date (as defined below) or upon the occurrence of an Event of Default (as defined below).

2.          Payment of Principal and Interest. This Note will mature on July __, 2010 (the “Maturity Date”). Interest shall be payable quarterly in arrears beginning on the last day of the month that is four months from the date of this Note (each, an “Interest Payment Date”). Interest shall be computed based on the actual number of days elapsed, but on the basis of a 360-day year of twelve 30-day months calculated on the unpaid balance of the principal sum from the date of issue. Principal shall be due and payable upon the Maturity Date or upon the occurrence of an Event of Default (as defined below). Except as provided herein, all payments of principal and interest by the Company under this Note shall be made in United States dollars in immediately available funds to an account specified by the Holder.

3.          Security Interest

              (a)         To secure the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of all of the obligations and liabilities of the Company to the Holder under this Note (the “Obligations’), the Company hereby assigns, pledges and grants to Holder, a continuing security interest in and lien upon all of the Company’s property and assets (the “Collateral”), whether real or personal, tangible or intangible, and whether now owned or hereafter acquired, or in which it now has or at any time in the future may acquire any right, title or interest, including without limitation, all of the following property in which it now has or at any time in the future may acquire any right, title or interest: all accounts, inventory, equipment, goods, documents, instruments (including, without limitation, promissory notes), contract rights, general intangibles (including, without limitation, payment intangibles), chattel paper, supporting obligations, investment property, letter-of-credit rights, trademarks, tradestyles, patents and copyrights in which the Company now has or hereafter may acquire any right, title or interest, all books, records, computer programs, tapes, disks, and related data processing software that at any time evidence or contain information relating to Collateral or are otherwise necessary or helpful in the collection thereof or realization thereof; all proceeds and products thereof (including, without limitation, proceeds of insurance) and all additions, accessions and substitutions thereto or therefor. The Company authorizes the Holder to file such financing statements and amendments thereto and all other documents and instruments and to do such other acts and things as are reasonably necessary to establish and maintain a valid, enforceable, perfected security interest in the Collateral as provided herein and the other rights and security contemplated hereby all in accordance with the Uniform Commercial Code of the State of New Jersey as in effect from time to time. The security interest granted hereby shall be prior in right to all other security interests granted by the Maker in its assets, except that such security interest will be junior in right to the security interest held by Wells Fargo Foothill, LLC as set forth in Section 4 of this Note.

4.          Call of Notes by the Company. The Company shall not, directly or indirectly, call for redemption, redeem, prepay, repurchase, or otherwise acquire (any such event referred to herein as a “call”) this Note or any portion thereof except as set forth in this Section 4.

              a.          Optional Redemption Upon Call by the Company. Beginning on the date hereof, the Company may, at its option, call this Note at a price equal to the outstanding principal sum of, plus accrued but unpaid interest on, any late charges associated with this Note and a call premium equal to 110.0% of the principal amount

              b.          Notice of Call. The right of the Company to call this Note pursuant to this Section 4 shall be conditioned upon the Company’s giving notice of such call (the “Call Notice”, and the date the Call Notice is given being referred to as the “Call Notice Date”), by personal delivery, overnight courier, certified mail or by facsimile, signed by an authorized officer, to the Holder of this Note, not less than sixty (60) days prior to the date upon which the call is to be effective (the “Call Effective Date”). The Call Notice shall be irrevocable and shall specify the Call Effective Date, which may not be less than 60 days after the Call Notice Date.

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5.          Transfer. Subject to the provisions of the legend above, this Note is freely transferable, in whole or in part, by the Holder, and such transferee shall have the same rights hereunder as the Holder. The Company may not assign or delegate any of its obligations under this Note without the prior written consent of the Holder (or its successor, transferee or assignee). Upon surrender of this Note for transfer or exchange, a new Note or new Notes of the same tenor, dated the date to which interest has been paid on the surrendered Note and in an aggregate principal amount equal to the unpaid principal amount of this Note so surrendered, will be issued to and registered in the name of the transferee or transferees. The Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payments and for all other purposes.

6.          Note Register. This Note is transferable only upon the books of the Company which it shall cause to be maintained for such purpose. The Company may treat the registered holder of this Note as the Holder appears on the Company’s books at any time as the Holder for all purposes.

7.          Defaults and Remedies. The entire unpaid principal of this Note shall become and be immediately due and payable upon written demand by the Holder, without any other notice or demand of any kind or any presentment or protest, if any one of the following events (each, an “Event of Default”) shall occur and be continuing at the time of such demand, whether voluntarily or involuntarily, or, without limitation, occurring or brought about by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any governmental body:

              a.          the Company is delinquent in payment of any interest for a period of more than 30 days or the Company fails to pay the entire principal amount of this Note within ten days after the Maturity Date;

              b.          the Company defaults in any of its other financial obligations in excess of $500,000 that are not cured within 30 days;

              c.          the Company, pursuant to or within the meaning of any applicable U.S. federal and state laws relating to bankruptcy, insolvency, winding up, administration, receivership and other similar matters for the relief of creditors (each, a “Bankruptcy Law”):

                           i.          commences a voluntary case;

                           ii.         consents to the entry of an order for relief against it in an involuntary case;

                           iii.        consents to the appointment of a custodian of it or for any substantial part of its property;

                           iv.         makes a general assignment for the benefit of its creditors; or

                           v.          is unable to, or admits in writing its inability to, pay its debts as they become due.

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              d.          there shall be commenced against the Company any case, proceeding or action of the type referred to below or a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

                           i.          is for relief against the Company in an involuntary case;

                           ii.         appoints a custodian of the Company or for any substantial part of its property; or

                           iii.        orders the winding up or liquidation of the Company.

Upon an Event of Default, without any further notice or demand, in addition to and not in limitation of any other rights or remedies which the Holder may otherwise have, the Company shall pay the Holder a late charge computed at the rate of 18% per annum of the amount not paid. Notwithstanding the foregoing, an Event of Default under Section 9(b) hereof shall not constitute an Event of Default without written notice from the holders of a majority of the principal amount of the Notes then outstanding.

8.          Parity of Notes. In the event any other holder of notes issued contemporaneously with this Note (each, and “Offering Note” and, collectively, the “Offering Notes”) elects to accelerate the Offering Note held by such holder as a result of an Event of Default, the Company shall notify the Holder of this Note of such event and all holders of Offering Notes shall be deemed to have equal parity.

9.          Loss, Etc., of Note. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, and of indemnity reasonably satisfactory, to the Company if lost, stolen or destroyed, and upon surrender and cancellation of this Note if mutilated, and upon reimbursement of the Company’s reasonable incidental expenses, the Company shall execute and deliver to the Holder a new Note of like date, tenor and denomination.

10.        Amendment, Waiver Etc., By Holder. The terms of this Note may be amended or waived upon the written consent of the Company and the Holder.

11.        Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New Jersey.

12.        Waiver. The Company hereby waives presentment, demand, notice of nonpayment, protest and all other demands and notices in connection with the delivery, acceptance, performance or enforcement of this Note. If an action is brought for collection under this Note, the Holder shall be entitled to receive all costs of collection, including, but not limited to, its reasonable attorneys’ fees.

[Signature Page Follows]

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          WITNESS the following signature and seal:

VELOCITY PORTFOLIO GROUP, INC.
By:
	John C. Kleinert
	President and CEO

[Corporate Seal]

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EX-4.2

Exhibit 4.2

Form of Warrant

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

Warrant No. ___	Number of Shares: 10,000 (subject to adjustment)
Date of Issuance: July __, 2009

VELOCITY PORTFOLIO GROUP, INC.

Common Stock Warrant

Velocity Portfolio Group, Inc. (the “Company”), for value received, hereby certifies that _________, or its registered assigns (the “Registered Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at any time after the date hereof and on or before the Expiration Date (as defined in Section 6 below), up to 10,000 shares (as adjusted from time to time pursuant to the provisions of this Warrant) of common stock of the Company, $.001 par value per share, at a per share Exercise Price equal to $3.50 (subject to adjustment for stock splits, dividends and the like and as set forth in Section 3 hereof). The shares purchasable upon exercise of this Warrant and the exercise price per share, as adjusted from time to time pursuant to the provisions of this Warrant, are hereinafter referred to as the “Warrant Stock” and the “Exercise Price,” respectively.

          This Warrant is issued pursuant to that certain Subscription Agreement dated approximately concurrently herewith among the Company and the Registered Holder (the “Subscription Agreement”). Any capitalized terms used herein, but not defined herein, shall carry those definitions ascribed to them in the Subscription Agreement.

          1.          Fully Vested Shares. The shares of Warrant Stock are fully vested and exercisable as of July __, 2009.

          2.          Exercise.

                       (a)        Method of Exercise.

                                    This Warrant may be exercised by the Registered Holder, in whole or in part, by surrendering this Warrant, with the purchase/exercise form appended hereto as Exhibit A duly executed by such Registered Holder or by such Registered Holder’s duly authorized attorney, at the principal office of the Company, or at such other office or agency as the Company may designate in writing prior to the date of such exercise, accompanied by payment in full of the Exercise Price payable in respect of the number of shares of Warrant Stock purchased upon such exercise. The Exercise Price may be paid by cash, check, wire transfer or by the surrender of promissory notes or other instruments representing indebtedness of the Company to the Registered Holder.

                       (b)       Effective Time of Exercise. Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant shall have been surrendered to the Company as provided in Section 2(a) above. At such time, the person or persons in whose name or names any certificates for Warrant Stock shall be issuable upon such exercise as provided in Section 2(c) below shall be deemed to have become the holder or holders of record of the Warrant Stock represented by such certificates.

                        (c)       Delivery to Holder. As soon as practicable after the exercise of this Warrant in whole or in part, and in any event within 10 business days thereafter, the Company at its expense will cause to be issued in the name of, and delivered to, the Registered Holder, or as such Registered Holder (upon payment by such Registered Holder of any applicable transfer taxes) may direct:

                                   (i)           a certificate or certificates for the number of shares of Warrant Stock to which such Registered Holder shall be entitled, and

                                   (ii)          in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of shares of Warrant Stock equal (giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant minus the number of such shares purchased by the Registered Holder upon such exercise as provided in Section 2(a) above.

          3.          Adjustments.

                       (a)        Stock Splits and Dividends. If the outstanding shares of the Company’s Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Exercise Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If outstanding shares of Common Stock shall be combined into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased. When any adjustment is required to be made in the Exercise Price, the number of shares of Warrant Stock purchasable upon the exercise of this Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Exercise Price in effect immediately prior to such adjustment, by (ii) the Exercise Price in effect immediately after such adjustment.

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                       (b)          Merger Sale, Reclassification, Etc. In case of any (i) consolidation or merger (including a merger in which the Company is the surviving entity), (ii) sale or other disposition of all or substantially all of the Company’s assets or distribution of property to shareholders (other than distributions payable out of earnings or retained earnings), or reclassification, change or conversion of the outstanding securities of the Company or of any reorganization of the Company (or any other corporation the stock or securities of which are at the time receivable upon the exercise of this Warrant) or any similar corporate reorganization on or after the date hereof, then and in each such case the holder of this Warrant, upon the exercise hereof at any time thereafter shall be entitled to receive, in lieu of the stock or other securities and property receivable upon the exercise hereof prior to such consolidation, merger, sale or other disposition, reclassification, change, conversion or reorganization, the stock or other securities or property to which such holder would have been entitled upon such consummation if such holder had exercised this Warrant immediately prior thereto, all subject to further adjustment as provided in Section 3(a) or 3(b); and in each such case, the terms of this Section 3 shall be applicable to the shares of stock or other securities properly receivable upon the exercise of this Warrant after such consolidation, merger, sale or other disposition, reclassification, change, conversion or reorganization.

                       (c)          Adjustment Certificate. When any adjustment is required to be made in the Warrant Stock or the Exercise Price pursuant to this Section 3, the Company shall promptly mail to the Registered Holder a certificate setting forth (i) a brief statement of the facts requiring such adjustment, (ii) the Exercise Price after such adjustment and (iii) the kind and amount of stock or other securities or property into which this Warrant shall be exercisable after such adjustment.

          4.          Transfers.

                       (a)          Unregistered Security. Each holder of this Warrant acknowledges that this Warrant and the Warrant Stock have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this Warrant or any Warrant Stock issued upon its exercise in the absence of (i) an effective registration statement under the Securities Act as to this Warrant or such Warrant Stock and registration or qualification of this Warrant or such Warrant Stock under any applicable U.S. federal or state securities law then in effect or (ii) an opinion of counsel, reasonably satisfactory to the Company, that such registration and qualification are not required. Each certificate or other instrument for Warrant Stock issued upon the exercise of this Warrant shall bear a legend substantially to the foregoing effect.

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                        (b)          Transferability. Subject to the provisions of Section 4(a) hereof, this Warrant and all rights hereunder are transferable, in whole or in part, to (i) any entity controlling, controlled by or under common control of the Registered Holder, or (ii) to any other proposed transferee by surrendering the Warrant with a properly executed assignment (in the form of Exhibit B hereto) at the principal office of the Company.

                        (c)          Warrant Register. The Company will maintain a register containing the names and addresses of the Registered Holders of this Warrant. Until any transfer of this Warrant is made in the warrant register, the Company may treat the Registered Holder of this Warrant as the absolute owner hereof for all purposes; provided, however, that if this Warrant is properly assigned in blank, the Company may (but shall not be required to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. Any Registered Holder may change such Registered Holder’s address as shown on the warrant register by written notice to the Company requesting such change.

          5.          No Impairment. The Company will not, by amendment of its certificate of incorporation or through reorganization, consolidation, merger, dissolution, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will (subject to Section 14 below) at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against impairment.

          6.          Termination. This Warrant (and the right to purchase securities upon exercise hereof) shall terminate on July __, 2014 (the “Expiration Date”).

          7.          Notices of Certain Transactions. In case:

                       (a)          the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time deliverable upon the exercise of this Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, or

                       (b)          of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company, any consolidation or merger of the Company with or into another corporation (other than a consolidation or merger in which the Company is the surviving entity), or any transfer of all or substantially all of the assets of the Company, or

                       (c)          of the voluntary or involuntary dissolution, liquidation or winding-up of the Company,

then, and in each such case, the Company will mail or cause to be mailed to the Registered Holder of this Warrant a notice specifying, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other stock or securities at the time deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up) are to be determined.

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          8.           Reservation of Stock. The Company will at all times have authorized, reserve and keep available, solely for the issuance and delivery upon the exercise of this Warrant, such shares of Warrant Stock and other stock, securities and property, as from time to time shall be issuable upon the exercise of this Warrant.

          9.           Exchange of Warrants. Upon the surrender by the Registered Holder of any Warrant or Warrants, properly endorsed, to the Company at the principal office of the Company, the Company will, subject to the provisions of Section 4 hereof, issue and deliver to or upon the order of such Holder, at the Company’s expense, a new Warrant or Warrants of like tenor, in the name of such Registered Holder or as such Registered Holder (upon payment by such Registered Holder of any applicable transfer taxes) may direct, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant or Warrants so surrendered.

          10.          Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.

          11.          Notices. Any notice required or permitted by this Warrant shall be in writing and shall be deemed duly given upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, or 48 hours after being deposited in the regular mail as certified or registered mail (airmail if sent internationally) with postage prepaid, addressed (a) if to the Registered Holder, to the address of the Registered Holder most recently furnished in writing to the Company and (b) if to the Company, to the address set forth on the signature page of this Warrant or as subsequently modified by written notice to the Registered Holder.

          12.          No Rights as Stockholder. Until the exercise of this Warrant, the Registered Holder of this Warrant shall not have or exercise any rights by virtue hereof as a stockholder of the Company.

          13.          No Fractional Shares. No fractional shares of Common Stock will be issued in connection with any exercise hereunder. In lieu of any fractional shares which would otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied by the fair market value of one share of Common Stock on the date of exercise, in accordance with Section 2(2)(ii).

          14.          Amendment or Waiver. Any term of this Warrant may be amended or waived upon written consent of the Company and the registered holders of at least 50% of the Common Stock issuable upon exercise of the outstanding warrants purchased pursuant to the Purchase Agreement. By acceptance hereof, the Registered Holder acknowledges that in the event the required consent is obtained, any term of this Warrant may be amended or waived with or without the consent of the Registered Holder; provided, however, that any amendment hereof that would materially adversely affect the Registered Holder in a manner different from the holders of the remaining warrants issued pursuant to the Purchase Agreement shall also require the consent of Registered Holder.

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          15.          Headings. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

          16.          Governing Law. This Warrant and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New Jersey, without giving effect to principles of conflicts of law.

          17.          Representations and Covenants of the Holder. This Warrant has been entered into by the Company in reliance upon the following representations and covenants of the Registered Holder:

                        (a)          Investment Purpose. The Registered Holder is acquiring the Warrant and the Common Stock issuable upon exercise of the Warrant for its own account, not as a nominee or agent and with no present intention of selling or otherwise distributing any part thereof.

                        (b)          Private Issue. The Registered Holder understands, except as provided in the Registration Rights Agreement, (i) that neither the Warrant nor the Common Stock issuable upon exercise of this Warrant is, nor will be, registered under the Securities Act or qualified under applicable state securities laws on the ground that the issuance contemplated by this Warrant will be exempt from the registration and qualifications requirements thereof pursuant to Section 4(2) of the Securities Act and any applicable state securities laws, and (ii) that the Company’s reliance on such exemption is predicated on the representations set forth in this Section 17.

                        (c)          Disposition of Holder’s Rights. In no event will the Registered Holder make a disposition of the Warrant or the Common Stock issuable upon exercise of the Warrant in the absence of (i) an effective registration statement under the Securities Act as to this Warrant or such Warrant Stock and registration or qualification of this Warrant or such Warrant Stock under any applicable U.S. federal or state securities law then in effect or (ii) an opinion of counsel, reasonably satisfactory to the Company, that such registration and qualification are not required. Notwithstanding the foregoing, the restrictions imposed upon the transferability of any of its rights to acquire Common Stock or Common Stock issuable on the exercise of such rights do not apply to transfers from the beneficial owner of any of the aforementioned securities to its nominee or from such nominee to its beneficial owner, and shall terminate as to any particular share of Common Stock when (1) such security shall have been effectively registered under the Securities Act and sold by the holder thereof in accordance with such registration or (2) such security shall have been sold without registration in compliance with Rule 144 under the Securities Act, or (3) a letter shall have been issued to the Registered Holder at its request by the staff of the Securities and Exchange Commission (the “SEC”) or a ruling shall have been issued to the Registered Holder at its request by the SEC stating that no action shall be recommended by such staff or taken by SEC, as the case may be, if such security is transferred without registration under the Securities Act in accordance with the conditions set forth in such letter or ruling and such letter or ruling specifies that no subsequent restrictions on transfer are required. Whenever the restrictions imposed hereunder shall terminate, as hereinabove provided, the Registered Holder or holder of a share of Common Stock then outstanding as to which such restrictions have terminated shall be entitled to receive from the Company, without expense to such holder, one or more new certificates for the Warrant or for such shares of Common Stock not bearing any restrictive legend.

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                         (d)          Financial Risk. The Registered Holder has such business and financial experience as is required to give it the capacity to protect its own interests in connection with its investment.

                         (e)          Accredited Investor. The Registered Holder is an “accredited investor” as defined by Rule 501 of Regulation D under the Securities Act, as presently in effect.

          18.          Representations and Warranties of the Company. This Warrant has been entered into by the Registered Holder in reliance upon the following representations and covenants of the Company:

                         (a)          Authorization. The Warrant has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies.

                         (b)          Valid Issuance. The Warrant Stock is duly authorized and reserved for issuance, and when issued, sold and delivered in accordance with the terms of this Warrant will be duly and validly issued, fully paid and nonassessable.

                         (c)          No Conflict. The execution and delivery of this Warrant do not, and the consummation of the transactions contemplated hereby will not, conflict with, or result in any violation of, breach or default (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation or acceleration of any obligation or to a loss of a material benefit, under, any provision of the Certificate of Incorporation or Bylaws of the Company or any material agreement attached as an exhibit to the Company’s SEC Documents (as defined in the Purchase Agreement), or any judgment, order, decree, statute, law, ordinance, rule, listing requirement or regulation applicable to the Company, its properties or assets, which conflict, violation, default or right would have a material adverse effect on the business, properties, prospects, financial condition or operations of the Company.

          19.          Counterparts. This Warrant may be executed in counterparts, and each such counterpart shall be deemed an original for all purposes.

[Signature Pages Follow]

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          IN WITNESS WHEREOF, the parties have executed this Common Stock Warrant as of the date first above written.

VELOCITY PORTFOLIO GROUP, INC.
	By
	Name:
		(print)
	Title:
	Address:		Velocity Portfolio Group, Inc.
			1800 Route 34 North
			Building 4, Suite 404A
			Wall, NJ 07719
			Attention: Chief Financial Officer
	Fax Number: (732) 556-2365

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