Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (the “Agreement”) is dated as of and
effective as of August 14, 2017 (the “Effective Date”), by and between
VISUALANT, INCORPORATED, a corporation incorporated under the laws of the State
of Nevada (the “Company”), and CLAYTON STRUVE, an individual (the “Buyer”).

WHEREAS, the Company and the Buyer is executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and
Rule 506(b) of Regulation D (“Regulation D”) as promulgated by the United States
Securities and Exchange Commission under the Securities Act.

WHEREAS, Buyer desires to purchase from Company, and the Company desires to sell
and issue to Buyer, upon the terms and subject to the conditions contained
herein, senior secured convertible redeemable debenture (the “Debenture”), in
the form attached hereto as Exhibit A, and warrants to purchase shares of Common
Stock (the “Warrants”), in the form attached hereto as Exhibit B.

NOW, THEREFORE, in consideration of the premises and the mutual covenants of the
parties hereinafter expressed and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
each intending to be legally bound, agree as follows:

ARTICLE I

RECITALS, EXHIBITS, SCHEDULES

The foregoing recitals are true and correct and, together with the Schedules and
Exhibits referred to hereafter, are hereby incorporated into this Agreement by
this reference.

ARTICLE II

DEFINITIONS

For purposes of this Agreement, except as otherwise expressly provided or
otherwise defined elsewhere in this Agreement, or unless the context otherwise
requires, the capitalized terms in this Agreement shall have the meanings
assigned to them in the Debenture or this Article as follows:

2.1       “Affiliate” means, with respect to a Person, any other Person directly
or indirectly controlling, controlled by, or under common control with, such
Person at any time during the period for which the determination of affiliation
is being made. For purposes of this definition, the term “control,”
“controlling” “controlled” and words of similar import, when used in this
context, means, with respect to any Person, the possession, directly or
indirectly, of the power to direct, or cause the direction of, management
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.

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2.2       “Assets” means all of the properties and assets of the Person in
question, as the context may so require, whether real, personal or mixed,
tangible or intangible, wherever located, whether now owned or hereafter
acquired.

2.3       “Business Day” shall mean any day other than a Saturday, Sunday or a
legal holiday on which federal banks are authorized or required to be closed for
the conduct of commercial banking business.

2.4       “Claims” means any Proceedings, Judgments, Obligations, threats,
losses, damages, deficiencies, settlements, assessments, charges, costs and
expenses of any nature or kind.

2.5       “Common Stock” means the common stock of the Company, par value $0.001
per share.

2.6       “Common Stock Equivalents” means any securities of the Company or its
subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, right,
option, warrant or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.

2.7       “Consent” means any consent, approval, order or authorization of, or
any declaration, filing or registration with, or any application or report to,
or any waiver by, or any other action (whether similar or dissimilar to any of
the foregoing) of, by or with, any Person, which is necessary in order to take a
specified action or actions, in a specified manner and/or to achieve a specific
result.

2.8       “Contract” means any written or oral contract, agreement, order or
commitment of any nature whatsoever, including, any sales order, purchase order,
lease, sublease, license agreement, services agreement, loan agreement,
mortgage, security agreement, guarantee, management contract, employment
agreement, consulting agreement, partnership agreement, shareholders agreement,
buy-sell agreement, option, warrant, debenture, subscription, call or put
required to be filed as an exhibit to the SEC Filings (as that term is defined
below).

2.9       “Debenture” shall have the meaning given to it in the preamble hereof.

2.10     “Effective Date” means the date so defined in the introductory
paragraph of this Agreement.

2.11     “Encumbrance” means any lien, security interest, pledge, mortgage,
easement, leasehold, assessment, tax, covenant, restriction, reservation,
conditional sale, prior assignment, or any other encumbrance, claim, burden or
charge of any nature whatsoever.

2.12     “Environmental Requirements” means all Laws and requirements relating
to

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human, health, safety or protection of the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants, or
Hazardous Materials in the environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata), or
otherwise relating to the treatment, storage, disposal, transport or handling of
any Hazardous Materials.

2.13     “GAAP” means generally accepted accounting principles, methods and
practices set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants, and
statements and pronouncements of the Financial Accounting Standards Board, or of
such other Person as may be approved by a significant segment of the U.S.
accounting profession, in each case as of the date or period at issue, and as
applied in the U.S. to U.S. companies.

2.14     “Governmental Authority” means any foreign, federal, state or local
government, or any political subdivision thereof, or any court, agency or other
body, organization, group, stock market or exchange exercising any executive,
legislative, judicial, quasi-judicial, regulatory or administrative function of
government.

2.15     “Hazardous Materials” means: (i) any chemicals, materials, substances
or wastes which are now or hereafter become defined as or included in the
definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,”
“extremely hazardous wastes,” “restricted hazardous wastes,” “toxic substances,”
“toxic pollutants” or words of similar import, under any Law; and (iii) any
other chemical, material, substance, or waste, exposure to which is now or
hereafter prohibited, limited or regulated by any Governmental Authority.

2.16     “Judgment” means any order, writ, injunction, fine, citation, award,
decree, or any other judgment of any nature whatsoever of any Governmental
Authority.

2.17     “Law” means any provision of any law, statute, ordinance, code,
constitution, charter, treaty, rule or regulation of any Governmental Authority.

2.18     “Leases” means all leases for real or personal property.

2.19     “Material Adverse Effect” shall mean: (i) a material adverse change in,
or a material adverse effect upon, the Assets, business, prospects, properties,
financial condition or results of operations of the Company; (ii) a material
impairment of the ability of the Company to perform any of its Obligations under
any of the Transaction Documents; or (iii) a material adverse effect on: (A) the
legality, validity, binding effect or enforceability against the Company of any
of the Transaction Documents; (B) the rights or remedies of the Buyer under any
of the Transaction Documents; or (C) a material adverse effect or impairment on
the Buyer’s ability to sell the shares of the Company’s Common Stock issuable to
Buyer under any Transaction Documents without limitation or restriction. For
purposes of determining whether any of the foregoing changes, effects,
impairments, or other events have occurred, such determination shall be made by
Buyer, in its sole, but reasonably exercised, discretion.

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2.20     “Obligation” means, now existing or in the future, any debt, liability
or obligation of any nature whatsoever (including any required performance of
any covenants or agreements), whether secured, unsecured, recourse, nonrecourse,
liquidated, unliquidated, accrued, voluntary or involuntary, direct or indirect,
absolute, fixed, contingent, ascertained, unascertained, known, unknown, whether
or not jointly owed with others, whether or not from time to time decreased or
extinguished and later decreased, created or incurred, or obligations under
Contracts, existing or incurred under this Agreement or the Debenture,  as such
obligations may be amended, supplemented, converted, extended or modified from
time to time.  

2.21     “Ordinary Course of Business” means the ordinary course of business of
the Person in question, consistent with past custom and practice (including with
respect to quantity, quality and frequency).

2.22     “Permit” means any license, permit, approval, waiver, order,
authorization, right or privilege of any nature whatsoever, granted, issued,
approved or allowed by any Governmental Authority.

2.23     “Person” means any individual, sole proprietorship, joint venture,
partnership, company, corporation, association, cooperation, trust, estate,
Governmental Authority, or any other entity of any nature whatsoever.

2.24     “Proceeding” means any demand, claim, suit, action, litigation,
investigation, audit, study, arbitration, administrative hearing, or any other
proceeding of any nature whatsoever.

2.25     “Securities” means, collectively, the Debentures, and Warrants and any
additional shares of Common Stock issuable (i) in connection with a conversion
of the Debentures, (ii) exercise of the Warrants or (iii) issuance in accordance
with any of the terms or provisions of this Agreement or any other Transaction
Documents.

2.26     “Subordination Agreement” means the Subordination Agreement dated the
date hereof by and between the Buyer and Ron Erickson, the form of which is
attached hereto as Exhibit C.

2.27     “Tax” means (i) any foreign, federal, state or local income, profits,
gross receipts, franchise, sales, use, occupancy, general property, real
property, personal property, intangible property, transfer, fuel, excise,
accumulated earnings, personal holding company, unemployment compensation,
social security, withholding taxes, payroll taxes, or any other tax of any
nature whatsoever, (ii) any foreign, federal, state or local organization fee,
qualification fee, annual report fee, filing fee, occupation fee, assessment,
rent, or any other fee or charge of any nature whatsoever, or (iii) any
deficiency, interest or penalty imposed with respect to any of the foregoing.

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2.28     “Tax Return” means any tax return, filing, declaration, information
statement or other form or document required to be filed in connection with or
with respect to any Tax.

2.29     “Transaction Documents” means this Agreement any and all documents or
instruments executed or to be executed by the Company in connection with this
Agreement, including the Debenture, the Warrant, the Security Agreement and
Subordination Agreement together with all modifications, amendments, extensions,
future advances, renewals, and substitutions thereof.

2.30     “Underlying Shares” means collectively the shares of Common Stock
issuable upon conversion of the Debenture and the shares of Common Stock
issuable upon exercise of the Warrants.

2.31     “Variable Rate Transaction” shall have the meaning set forth in Section
4.5 of this Agreement.

2.32     “Warrant(s)” means the five (5) year Common Stock Purchase Warrants of
the Company, the form of which is attached hereto as Exhibit B.

2.33     “Warrant Shares” means all shares of Common Stock issuable upon
exercise of the Warrants and/or any other securities issuable upon exercise of
the Warrants.

ARTICLE III

INTERPRETATION

In this Agreement, unless the express context otherwise requires: (i) the words
“herein,” “hereof” and “hereunder” and words of similar import refer to this
Agreement as a whole and not to any particular provision of this Agreement; (ii)
references to the words “Article” or “Section” refer to the respective Articles
and Sections of this Agreement, and references to “Exhibit” or “Schedule” refer
to the respective Exhibits and Schedules attached hereto; (iii) references to a
“party” mean a party to this Agreement and include references to such party’s
permitted successors and permitted assigns; (iv) references to a “third party”
mean a Person not a party to this Agreement; (v) references to the words “share”
or “shareholder”, if in reference to the Company, shall refer to “units” or
“unitholder” respectively and (v) the terms “dollars” and “$” means U.S.
dollars; (vi) wherever the word “include,” “includes” or “including” is used in
this Agreement, it will be deemed to be followed by the words “without
limitation”.

ARTICLE IV

PURCHASE AND SALE OF DEBENTURE

4.1       Purchase and Sale of Debentures and Warrants. Subject to the
satisfaction (or waiver) of the terms and conditions of this Agreement, Buyer
agrees to purchase, and

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Company agrees to sell and issue to Buyer, the Debentures and the Warrants in
the amount of the Purchase Price set forth on Schedule 1 attached hereto. The
Purchase Price for each Debenture purchased shall be twenty (20%) less than the
aggregate principal amount of each such Debenture purchased, which 20% discount
shall constitute original issue discount.  The aggregate principal of Debentures
which may be purchased under this Agreement from time to time shall not exceed
$1,000,000.  The initial Debenture sale shall be for an aggregate purchase price
of $300,000 and a principal amount of $360,000.

4.2       Closing Date. The purchase and sale of the Debentures and Warrants
shall take place on the Effective Date, or such later date as the Company and
the Buyer may agree in writing, subject to satisfaction of the conditions set
forth in this Agreement (the “Closing Date”). Additional closings may be held
from time to time upon the mutual agreement of the parties.

4.3       Form of Payment. Subject to the satisfaction of the terms and
conditions of this Agreement, on the Closing Date: (i) the Buyer shall deliver
to the Company, to a Company account designated by the Company, the Purchase
Price for the Debenture and Warrants to be issued and sold to Buyer, minus the
fees to be paid directly from the proceeds as set forth in this Agreement, in
the form of wire transfers of immediately available U.S. dollars; and (ii) the
Company shall deliver to Buyer the Securities which Buyer is purchasing
hereunder, duly executed on behalf of the Company, together with any other
documents required to be delivered pursuant to this Agreement.

4.4       Security Interest. The Company agrees that within five (5) Business
Days of the filing of a UCC-3 termination statement to terminate the security
interest held by Capital Source Business Finance Group in all of the assets of
the Company, the Security Agreement, in the form attached hereto as Exhibit C,
shall take effect and shall be deemed to be effective to bestow on the Buyer a
valid security interest in the assets of the Company.

ARTICLE V

BUYER’S REPRESENTATIONS AND WARRANTIES

Buyer represents and warrants to the Company, that:

5.1       Investment Purpose. Buyer is acquiring the Securities for its own
account for investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof.

5.2       Accredited Buyer Status. Buyer is an “accredited investor” as that
term is defined in Rule 501 of Regulation D, as promulgated under the Securities
Act of 1933.

5.3       Reliance on Exemptions. Buyer understands that the Securities are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and Buyer’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of Buyer set forth herein in

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order to determine the availability of such exemptions and the eligibility of
Buyer to acquire the Securities.

5.4       Information. Buyer and its advisors, if any, have been furnished with
all materials they have requested relating to the business, finances and
operations of the Company and information Buyer deemed material to making an
informed investment decision regarding its purchase of the Securities. Buyer and
its advisors, if any, have been afforded the opportunity to ask questions of the
Company and its management and have received response from the Company or
management satisfactory to the Buyer  Neither such inquiries, nor any materials
provided to Buyer, nor any other due diligence investigations conducted by Buyer
or its advisors, if any, or its representatives, shall modify, amend or affect
Buyer’s right to fully rely on the Company’s representations and warranties
contained in Article VI below. Buyer understand that its investment in the
Securities involved a high degree of risk.  Buyer is in a position regarding the
Company, which, based upon economic bargaining power, enabled and enables Buyer
to obtain information from the Company in order to evaluate the merits and risks
of this investment. Buyer has sought such accounting, legal and tax advice as it
has considered necessary to make an informed investment decision with respect to
its acquisition of the Securities.

5.5       No Governmental Review. Buyer understands that no United States
federal or state Governmental Authority has passed on or made any recommendation
or endorsement of the Securities, or the fairness or suitability of the
investment in the Securities, nor have such Governmental Authorities passed upon
or endorsed the merits of the offering of the Securities.

5.6       Authorization, Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of Buyer and is a valid and binding
agreement of Buyer, enforceable in accordance with its terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

To induce the Buyer to purchase the Securities, the Company makes the following
representations and warranties to Buyer, each of which shall be true and correct
in all respects as of the date of the execution and delivery of this Agreement,
and which shall survive the execution and delivery of this Agreement:

6.1       Organization. The Company is a corporation, duly incorporated, validly
existing and in good standing under the Laws of the State of Nevada. The Company
has the full power and authority and all necessary certificates, licenses,
approvals and Permits to: (i) enter into and execute this Agreement and the
Transaction Documents and to perform all of its Obligations hereunder and
thereunder; and (ii) own and operate its Assets and properties and to conduct
and carry on its business as and to the extent now conducted. The Company is

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duly qualified to transact business and is in good standing as a foreign
corporation in each jurisdiction where the character of its business or the
ownership or use and operation of its Assets or properties requires such
qualification. The exact legal name of the Company is as set forth in the
preamble to this Agreement, and the Company does not currently conduct, nor has
the Company, during the last five (5) years conducted, business under any other
name or trade name.

6.2       Authority and Approval of Agreement; Binding Effect. The execution and
delivery by Company of this Agreement and the Transaction Documents, and the
performance by Company of all of its Obligations hereunder and thereunder,
including the issuance of the Securities, have been duly and validly authorized
and approved by the Company and its board of directors pursuant to all
applicable Laws and no other action or Consent on the part of Company, its board
directors or any other Person is necessary or required by the Company to execute
this Agreement and the Transaction Documents, consummate the transactions
contemplated herein and therein, perform all of Company’s Obligations hereunder
and thereunder, or to issue the Securities. This Agreement and each of the
Transaction Documents have been duly and validly executed by Company (and the
officer executing this Agreement and all such other Transaction Documents is
duly authorized to act and execute same on behalf of Company) and constitute the
valid and legally binding agreements of Company, enforceable against Company in
accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies.

6.3       Capitalization.  The authorized capital stock of the Company consists
of 100,000,000 shares of Common Stock, par value $0.001 per share and 5,000,000
shares of blank check preferred stock, par value $0.001 per share (the
“Preferred Stock”), of shares of Common Stock are issued and outstanding as of
the date hereof, and 2,825,053 shares of Preferred Stock are issued and
outstanding as of the date hereof.  All of such outstanding shares have been
validly issued and are fully paid and nonassessable, have been issued in
compliance with all foreign, federal and state securities laws and none of such
outstanding shares were issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities.  The Company has no subsidiaries
other than TransTech Systems, Inc.  As of the Effective Date, no shares of the
Company’s capital stock are subject to preemptive rights or any other similar
rights or any Claims or Encumbrances suffered or permitted by the Company.
Except for the Securities to be issued pursuant to this Agreement, and except as
disclosed in the Company’s filings with the Securities and Exchange Commission
(the “SEC Filings”), as of the date hereof: (i) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company, or Contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
issue additional shares of capital stock of the Company, or options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of the Company; (ii) except as disclosed in the SEC Filings, there are no
outstanding debt securities, notes, credit agreements, credit facilities or
other Contracts

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or instruments evidencing indebtedness of the Company or any of its, or by which
the Company is or may become bound; (iii) there are no outstanding registration
statements with respect to the Company or any of its securities; (iv) there are
no agreements or arrangements under which the Company is obligated to register
the sale of any of their securities under the Securities Act (except pursuant to
this Agreement); (v) there are no financing statements securing obligations
filed in connection with the Company or any of its Assets; (vi) there are no
securities or instruments containing anti-dilution or similar provisions that
will be triggered by this Agreement or any related agreement or the consummation
of the transactions described herein or therein; and (vii) there are no
outstanding securities or instruments of the Company which contain any
redemption or similar provisions, and there are no Contracts by which the
Company is or may become bound to redeem a security of the Company. The Company
has furnished to the Buyer true, complete and correct copies of: (I) the
Company’s Articles of Incorporation, as amended and as in effect on the date
hereof; and (II) the Company’s Bylaws, as in effect on the date hereof
(together, the “Organizational Documents”). Except for the Organizational
Documents, there are no other shareholder agreements, voting agreements or other
Contracts of any nature or kind that restrict, limit or in any manner impose
Obligations on the governance of the Company.  No further approval or
authorization of any stockholder, the Board of Directors or others is required
for the issuance and sale of the Securities.

6.4       No Conflicts; Consents and Approvals. The execution, delivery and
performance of this Agreement and the Transaction Documents, and the
consummation of the transactions contemplated hereby and thereby, including the
issuance of any of the Securities, will not: (i) constitute a violation of or
conflict with the Organizational Documents of the Company; (ii) constitute a
violation of, or a default or breach under (either immediately, upon notice,
upon lapse of time, or both), or conflicts with, or gives to any other Person
any rights of termination, amendment, acceleration or cancellation of, any
provision of any Contract to which Company is a party or by which any of its
Assets or properties may be bound; (iii) constitute a violation of, or a default
or breach under (either immediately, upon notice, upon lapse of time, or both),
or conflict with, any Judgment; (iv) constitute a violation of, or conflict
with, any Law (including United States federal and state securities Laws); or
(v) result in the loss or adverse modification of, or the imposition of any
fine, penalty or other Encumbrance with respect to, any Permit granted or issued
to, or otherwise held by or for the use of, Company or any of Company’s Assets.
The Company is not in violation of its Organizational Documents and the Company
is not in default or breach (and no event has occurred which with notice or
lapse of time or both could put the Company in default or breach) under, and the
Company has not taken any action or failed to take any action that would give to
any other Person any rights of termination, amendment, acceleration or
cancellation of, any Contract to which the Company is a party or by which any
property or Assets of the Company are bound or affected. The businesses of the
Company are not being conducted, and shall not be conducted so long as Buyer
owns any of the Securities, in violation of any Law. Except as specifically
contemplated by this Agreement, and except for Consents required to permit the
issuance of “Variable Rate Securities” as set forth in the Organizational
Documents, the Company is not required to obtain any Consent of, from, or with
any Governmental Authority, or any other Person, in order for it to execute,
deliver or perform any of its Obligations under this Agreement or the

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Transaction Documents in accordance with the terms hereof or thereof, or to
issue and sell the Securities in accordance with the terms hereof. All Consents
which the Company is required to obtain pursuant to the immediately preceding
sentence have been obtained or effected on or prior to the date hereof. The
Company is not aware of any facts or circumstances which might give rise to any
of the foregoing.

6.5       Issuance of Securities. The Securities are duly authorized and, upon
issuance in accordance with the terms hereof, shall be duly issued, fully paid
and non-assessable, and free from all Encumbrances with respect to the issue
thereof, and will be issued in compliance with all applicable United States
federal and state securities Laws.

6.6       Absence of Litigation or Adverse Matters. No condition, circumstance,
event, agreement, document, instrument, restriction, litigation or Proceeding
(or threatened litigation or Proceeding or basis therefor) exists which: (i)
could adversely affect the ability of the Company to perform its Obligations
under the Transaction Documents; (ii) would constitute a default under any of
the Transaction Documents; (iii) would constitute such a default with the giving
of notice or lapse of time or both; or (iv) would constitute or give rise to a
Material Adverse Effect. In addition: (v) there is no Proceeding before or by
any Governmental Authority or any other Person, pending, or the best of
Company’s knowledge, threatened or contemplated by, against or affecting the
Company, its business or Assets; (vi) there is no outstanding Judgments against
or affecting the Company, its business or Assets; (vii) the Company is not in
breach or violation of any Contract; and (viii) the Company has not received any
material complaint from any customer, supplier, vendor or employee.

6.7       Title to Assets. The Company has good and marketable title to, or a
valid leasehold interest in, all of its Assets which are material to the
business and operations of the Company as presently conducted, free of any
Encumbrance. Except as would not have a Material Adverse Effect, the Company’s
Assets are in good operating condition and repair, ordinary wear and tear
excepted, and are free of any latent or patent defects which might impair their
usefulness, and are suitable for the purposes for which they are currently used
and for the purposes for which they are proposed to be used.

6.8       Compliance with Laws. The Company is and at all times has been in full
compliance with all Laws, except for any instances which would not have a
Material Adverse Effect. The Company has not received any notice that it is in
violation of, has violated, or is under investigation with respect to, or has
been threatened to be charged with, any violation of any Law.

6.9       Labor and Employment Matters. The Company is not involved in any labor
dispute or, to the knowledge of the Company, is any such dispute threatened. To
the knowledge of the Company and its officers, none of the Company’s employees
is a member of a union and the Company believes that its relations with its
employees are good. To the knowledge of the Company and its officers, the
Company has complied in all material respects with all Laws relating to
employment matters, civil rights and equal employment opportunities.

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6.10       Employee Benefit Plans. Except as disclosed to the Buyer in writing
prior to the date hereof, the Company does not have and has not ever maintained,
and has no Obligations with respect to any employee benefit plans or
arrangements, including employee pension benefit plans, as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), multiemployer plans, as defined in Section 3(37) of ERISA, employee
welfare benefit plans, as defined in Section 3(1) of ERISA, deferred
compensation plans, stock option plans, bonus plans, stock purchase plans,
hospitalization, disability and other insurance plans, severance or termination
pay plans and policies, whether or not described in Section 3(3) of ERISA, in
which employees, their spouses or dependents of the Company participate
(collectively, the “Employee Benefit Plans”). To the Company’s knowledge, all
Employee Benefit Plans meet the minimum funding standards of Section 302 of
ERISA, where applicable, and each such Employee Benefit Plan that is intended to
be qualified within the meaning of Section 401 of the Internal Revenue Code of
1986 is qualified. No withdrawal liability has been incurred under any such
Employee Benefit Plans and no “Reportable Event” or “Prohibited Transaction” (as
such terms are defined in ERISA), has occurred with respect to any such Employee
Benefit Plans, unless approved by the appropriate Governmental Authority. To the
Company’s knowledge, the Company has promptly paid and discharged all
Obligations arising under ERISA of a character which if unpaid or unperformed
might result in the imposition of an Encumbrance against any of its Assets or
otherwise have a Material Adverse Effect.

6.11       Tax Matters. The Company has made and timely filed all Tax Returns
required by any jurisdiction to which it is subject, and each such Tax Return
has been prepared in compliance with all applicable Laws, and all such Tax
Returns are true and accurate in all respects. Except and only to the extent
that the Company has set aside on its books provisions reasonably adequate for
the payment of all unpaid and unreported Taxes, the Company has timely paid all
Taxes shown or determined to be due on such Tax Returns, except those being
contested in good faith, and the Company has set aside on its books provision
reasonably adequate for the payment of all Taxes for periods subsequent to the
periods to which such Tax Returns apply. There are no unpaid Taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Company know of no basis for any such claim. The Company
has withheld and paid all Taxes to the appropriate Governmental Authority
required to have been withheld and paid in connection with amounts paid or owing
to any Person. There is no Proceeding or Claim for refund now in progress,
pending or threatened against or with respect to the Company regarding Taxes.

6.12       Insurance. The Company is covered by valid, outstanding and
enforceable policies of insurance which were issued to it by reputable insurers
of recognized financial responsibility, covering its properties, Assets and
businesses against losses and risks normally insured against by other
corporations or entities in the same or similar lines of businesses as the
Company is engaged and in coverage amounts which are prudent and typically and
reasonably carried by such other corporations or entities (the “Insurance
Policies”). Such Insurance Policies are in full force and effect, and all
premiums due thereon have been paid. None of the Insurance Policies will lapse
or terminate as a result of the transactions contemplated by this Agreement. The
Company has complied with the provisions of such

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Insurance Policies. The Company has not been refused any insurance coverage
sought or applied for and the Company does not have any reason to believe that
it will not be able to renew its existing Insurance Policies as and when such
Insurance Policies expire or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a cost that would not materially
and adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company.

6.13       Permits. The Company possesses all Permits necessary to conduct its
business, and the Company has not received any notice of, or is otherwise
involved in any Proceedings relating to, the revocation or modification of any
such Permits. All such Permits are valid and in full force and effect and the
Company is in full compliance with the respective requirements of all such
Permits.

6.14       Environmental Laws.         Except as are used in such amounts as are
customary in the Company’s Ordinary Course of Business and in compliance with
all applicable Environmental Laws, the Company represents and warrants to Buyer
that: (i) the Company has not generated, used, stored, treated, transported,
manufactured, handled, produced or disposed of any Hazardous Materials, on or
off any of the premises of the Company (whether or not owned by the Company) in
any manner which at any time violates any Environmental Law or any Permit,
certificate, approval or similar authorization thereunder; (ii) the operations
of the Company comply in all material respects with all Environmental Laws and
all Permits certificates, approvals and similar authorizations thereunder; (iii)
there has been no investigation, Proceeding, complaint, order, directive, Claim,
citation or notice by any Governmental Authority or any other Person, nor is any
pending or, to the Company’s knowledge, threatened; and (iv) the Company does
not have any liability, contingent or otherwise, in connection with a release,
spill or discharge, threatened or actual, of any Hazardous Materials or the
generation, use, storage, treatment, transportation, manufacture, handling,
production or disposal of any Hazardous Material.

6.15       Illegal Payments. Neither the Company, nor any director, officer,
agent, employee or other Person acting on behalf of the Company has, in the
course of his actions for, or on behalf of, the Company: (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment to any
foreign or domestic government official or employee.

6.16       Related Party Transactions.  Except for arm’s length transactions
pursuant to which the Company makes payments in the Ordinary Course of Business
upon terms no less favorable than the Company could obtain from third parties,
and except as described in the SEC filings, none of the officers, directors or
employees of the Company, nor any stockholders who own, legally or beneficially,
five percent (5%) or more of the issued and outstanding shares of any class of
the Company’s capital stock (each a “Material Shareholder”), is presently a
party to any transaction with the Company (other than for

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services as employees, officers and directors), including any Contract providing
for the furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or from, any
officer, director or such employee or Material Shareholder or, to the best
knowledge of the Company, any other Person in which any officer, director, or
any such employee or Material Shareholder has a substantial or material interest
in or of which any officer, director or employee of the Company or Material
Shareholder is an officer, director, trustee or partner. There are no Claims or
disputes of any nature or kind between the Company and any officer, director or
employee of the Company or any Material Shareholder, or between any of them,
relating to the Company and its business.

6.17       Acknowledgment Regarding Buyer’s Purchase of the Securities. The
Company acknowledges and agrees that Buyer is acting solely in the capacity of
an arm’s length purchaser with respect to this Agreement and the transactions
contemplated hereby. The Company further acknowledges that Buyer is not acting
as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to this Agreement and the transactions contemplated hereby and any
advice given by Buyer or any of its representatives or agents in connection with
this Agreement and the transactions contemplated hereby is merely incidental to
Buyer’s purchase of the Securities. The Company further represents to Buyer that
the Company’s decision to enter into this Agreement has been based solely on the
independent evaluation by the Company, and its representatives.

6.18       Brokerage Fees. There is no Person acting on behalf of the Company
who is entitled to or has any claim for any brokerage or finder’s fee or
commission in connection with the execution of this Agreement or the
consummation of the transactions contemplated hereby, except for a 10% fee in
cash and warrants payable to Garden State Securities, Inc.

6.19       No General Solicitation.  Neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or issuance
of the Securities.

6.20       No Disqualification Events.  With respect to the Securities to be
offered and sold hereunder in reliance on Rule 506 under the Securities Act,
none of the Company, any of its predecessors, any affiliated issuer, any
director, executive officer, other officer of the Company participating in the
offering hereunder, any beneficial owner of 20% or more of the Company’s
outstanding voting equity securities, calculated on the basis of voting power,
nor any promoter (as that term is defined in Rule 405 under the Securities Act)
connected with the Company in any capacity at the time of sale (each, an “Issuer
Covered Person” and, together, “Issuer Covered Persons”) is subject to any of
the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under
the Securities Act (a “Disqualification Event”), except for a Disqualification
Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable
care to determine whether any Issuer Covered Person is subject to a
Disqualification Event. The Company has complied, to the extent applicable, with
its disclosure obligations under Rule 506(e), and has furnished to the Buyer a
copy of any disclosures provided thereunder.

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6.21       No Integrated Offering.  None of the Company, any of its Affiliates,
or any Person acting on their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security,
under circumstances that would require registration of any of the Securities
under the 1933 Act or cause this offering of the Securities to be integrated
with prior offerings of the Company’s securities for purposes of the 1933 Act.
 None of the Company, its Affiliates and any Person acting on their behalf will
take any action or steps referred to in the preceding sentence that would
require registration of any of the Securities under the 1933 Act or cause the
offering of the Securities to be integrated with other offerings.

6.22       Management.  During the past ten-year period, no current officer or
director or, to the knowledge of the Company, no current five percent (5%) or
greater stockholder of the Company has been the subject of:

(i)        a petition under bankruptcy laws or any other insolvency or
moratorium law or the appointment by a court of a receiver, fiscal agent or
similar officer for such Person, or any partnership in which such person was a
general partner at or within two years before the filing of such petition or
such appointment, or any corporation or business association of which such
person was an executive officer at or within two years before the time of the
filing of such petition or such appointment;

(ii)       a conviction in a criminal proceeding or a named subject of a pending
criminal proceeding (excluding traffic violations that do not relate to driving
while intoxicated or driving under the influence);

(iii)      any order, judgment or decree, not subsequently reversed, suspended
or vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining any such person from, or otherwise limiting, the following activities:

(1)       Acting as a futures commission merchant, introducing broker, commodity
trading advisor, commodity pool operator, floor broker, leverage transaction
merchant, any other person regulated by the United States Commodity Futures
Trading Commission or an associated person of any of the foregoing, or as an
investment adviser, underwriter, broker or dealer in securities, or as an
affiliated person, director or employee of any investment company, bank, savings
and loan association or insurance company, or engaging in or continuing any
conduct or practice in connection with such activity;

(2)       Engaging in any particular type of business practice; or

(3)       Engaging in any activity in connection with the purchase or sale of
any security or commodity or in connection with any violation of securities laws
or commodities laws;

(iv)      any order, judgment or decree, not subsequently reversed, suspended or
vacated, of any authority barring, suspending or otherwise limiting for more
than sixty

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(60) days the right of any such person to engage in any activity described in
the preceding sub paragraph, or to be associated with persons engaged in any
such activity;

(v)       a finding by a court of competent jurisdiction in a civil action or by
the SEC or other authority to have violated any securities law, regulation or
decree and the judgment in such civil action or finding by the SEC or any other
authority has not been subsequently reversed, suspended or vacated; or

(vi)      a finding by a court of competent jurisdiction in a civil action or by
the Commodity Futures Trading Commission to have violated any federal
commodities law, and the judgment in such civil action or finding has not been
subsequently reversed, suspended or vacated.

6.23     Full Disclosure. All the representations and warranties made by Company
herein or in the Schedules hereto, and all of the financial statements,
schedules, certificates, confirmations, agreements, contracts, and other
materials submitted to the Buyer in connection with or in furtherance of this
Agreement or pertaining to the transaction contemplated herein, whether made or
given by Company, its agents or representatives, are complete and accurate to
the best of the knowledge of the Company, its officers and directors, and do not
omit any information required to make the statements and information provided,
in light of the transaction contemplated herein and in light of the
circumstances under which they were made, not misleading, accurate and
meaningful.

ARTICLE VII

COVENANTS

7.1       Covenants.

(a)        Corporate Existence. The Company shall at all times preserve and
maintain its: (i) existence and good standing in the jurisdiction of its
organization; and (ii) its qualification to do business and good standing in
each jurisdiction where the nature of its business makes such qualification
necessary, and shall at all times continue as a going concern in the business
which the Company is presently conducting.

(b)        Tax Liabilities. The Company shall at all times pay and discharge all
Taxes upon, and all Claims (including claims for labor, materials and supplies)
against the Company or any of its properties or Assets, before the same shall
become delinquent and before penalties accrue thereon, unless and to the extent
that the same are being contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP are being maintained.

(c)        Notice of Proceedings. The Company shall, promptly, but not more than
five (5) days after knowledge thereof shall have come to the attention of any
officer of the Company, give written notice to the Buyer of all threatened or
pending material Proceedings before any Governmental Authority or otherwise
affecting the Company or any of its Assets.

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(d)        Material Adverse Effect.  The Company shall, promptly, but not more
than five (5) days after knowledge thereof shall have come to the attention of
any officer of the Company, give written notice to the Buyer of any event,
circumstance, fact or other matter that could in any way have or be reasonably
expected to have a Material Adverse Effect.

(e)        Notice of Default. The Company shall, promptly, but not more than
five (5) days after the commencement thereof, give notice to the Buyer in
writing of the occurrence of any “Event of Default” (as such term is defined in
any of the Transaction Documents) or of any event which, with the lapse of time,
the giving of notice or both, would constitute an Event of Default hereunder or
under any other Transaction Documents.

(f)        Maintain Property. The Company shall at all times maintain, preserve
and keep all of its Assets in good repair, working order and condition, normal
wear and tear excepted, and shall from time to time, as the Company deems
appropriate in its reasonable judgment, make all needful and proper repairs,
renewals, replacements, and additions thereto so that at all times the
efficiency thereof shall be fully preserved and maintained.

(g)        ERISA Liabilities; Employee Plans. The Company shall: (i) keep in
full force and effect any and all Employee Plans which are presently in
existence or may, from time to time, come into existence under ERISA, and not
withdraw from any such Employee Plans, unless such withdrawal can be effected or
such Employee Plans can be terminated without liability to the Company; (ii)
make contributions to all of such Employee Plans in a timely manner and in a
sufficient amount to comply with the standards of ERISA, including the minimum
funding standards of ERISA; (iii) comply with all material requirements of ERISA
which relate to such Employee Plans; (iv) notify Buyer immediately upon receipt
by the Company of any notice concerning the imposition of any withdrawal
liability or of the institution of any Proceeding or other action which may
result in the termination of any such Employee Plans or the appointment of a
trustee to administer such Employee Plans; (v) promptly advise Buyer of the
occurrence of any “Reportable Event” or “Prohibited Transaction” (as such terms
are defined in ERISA), with respect to any such Employee Plans; and (vi) amend
any Employee Plan that is intended to be qualified within the meaning of Section
401 of the Internal Revenue Code of 1986 to the extent necessary to keep the
Employee Plan qualified, and to cause the Employee Plan to be administered and
operated in a manner that does not cause the Employee Plan to lose its qualified
status.

(h)        Reservation of Shares.  So long as any Securities are owned
beneficially and/or of record by any Buyer or any transferee thereof,  the
Company covenants and agrees that it will at all times reserve and keep
available out of its authorized and unissued shares of Common Stock a number of
shares of Common Stock sufficient for the sole purpose of issuance upon
conversion of the Debentures, payment of interest on the Debenture and exercise
of the Warrants (and/or any transferee thereof), free from preemptive rights or
any other actual contingent purchase rights of persons other than the applicable
Buyer (and any other holders of any Debenture and/or Warrants transferred from a
Buyer).

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(i)       The Company shall grant the Buyer a first priority lien in all of the
Company’s assets pursuant to a security agreement in the form of Exhibit D and
to be delivered within five (5) days of the filing of UCC-3 termination
statement to terminate the security interest held by Capital Source Business
Finance Group in all of the assets of the Company, to secure the Company’s
obligations under the Debenture.

7.2       Piggyback Registration.  If, at any time after the date hereof, the
Company shall determine to prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of others
under the Securities Act of any of its equity securities, other than on Form S-4
or Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in connection with
any acquisition of any entity or business or equity securities issuable in
connection with the Company’s stock option or other employee benefit plans, then
the Company shall deliver to the Buyer a written notice of such determination
and, if within fifteen days after the date of the delivery of such notice, any
the Buyer shall so request in writing, the Company shall include in such
registration statement all or any part of the Underlying Shares such Buyer
requests to be registered; provided, however, that the Company shall not be
required to register any Registrable Securities pursuant to this Section 7.2
that are eligible for resale pursuant to Rule 144 (without volume restrictions
or current public information requirements) promulgated by the Commission
pursuant to the Securities Act or that are the subject of a then effective
registration Statement.

7.3       Variable Rate Transaction. For as long as any Debentures and/or
Warrants remain outstanding, the Company shall be prohibited from effecting or
entering into an agreement to effect any issuance by the Company or any of its
subsidiaries of Common Stock or Common Stock Equivalents (or a combination of
units thereof) involving a Variable Rate Transaction.  “Variable Rate
Transaction” means a transaction in which the Company (i) issues or sells any
debt or equity securities that are convertible into, exchangeable or exercisable
for, or include the right to receive, additional shares of Common Stock either
(A) at a conversion price, exercise price or exchange rate or other price that
is based upon, and/or varies with, the trading prices of or quotations for the
shares of Common Stock at any time after the initial issuance of such debt or
equity securities or (B) with a conversion, exercise or exchange price that is
subject to being reset at some future date after the initial issuance of such
debt or equity security or upon the occurrence of specified or contingent events
directly or indirectly related to the business of the Company or the market for
the Common Stock or (ii) enters into, or effects any transaction under, any
agreement, including, but not limited to, an equity line of credit, an
“at-the-market” offering or similar agreement, whereby the Company may issue
securities at a future determined price.  Any Buyer shall be entitled to obtain
injunctive relief against the Company to preclude any such issuance, which
remedy shall be in addition to any right to collect damages.

7.4       No Grant of Security Interest. For as long as any Debentures and/or
Warrants remain outstanding, the Company shall not grant a security interest in
the Company’s assets or allow any liens to be placed on the Company’s assets of
those of its subsidiaries.

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ARTICLE VIII

INDEMNIFICATION

8.1       Indemnification by the Company. The Company will indemnify and hold
Buyer and its directors, officers, stockholders, members, partners, employees
and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other
title), each Person who controls such Buyer (within the meaning of Section 15 of
the 1933 Act and Section 20 of the Exchange Act), and the directors, officers,
stockholders, agents, members, partners or employees (and any other Persons with
a functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling person (each, a
“Buyer Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Buyer Party may suffer or incur as a result
of (i) any breach of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or any Transaction Document or
(ii) any action instituted against a Buyer Party in any capacity, or any of them
or their respective Affiliates, by any stockholder of the Company who is not an
Affiliate of such Buyer Party, with respect to any of the transactions
contemplated by this Agreement.  The Company will not be liable to any Buyer
Party under this Agreement to the extent, but only to the extent that a loss,
claim, damage or liability is attributable to any Buyer Party’s breach of any of
the representations, warranties, covenants or agreements made by such Buyer
Party in this Agreement or any Transaction Document; provided that such a claim
for indemnification relating to any breach of any of the representations or
warranties made by the Company in this Agreement is made within 18 months from
the Closing.

8.2       Conduct of Indemnification Proceedings. Promptly after receipt by any
Person (the “Indemnified Person”) of notice of any demand, claim or
circumstances which would or might give rise to a claim or the commencement of
any action, proceeding or investigation in respect of which indemnity may be
sought pursuant to Article VIII, such Indemnified Person shall promptly notify
the Company in writing and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Person, and shall assume the payment of all fees and expenses; provided,
however, that the failure of any Indemnified Person so to notify the Company
shall not relieve the Company of its obligations hereunder except to the extent
that the Company is actually and materially and adversely prejudiced by such
failure to notify. In any such proceeding, any Indemnified Person shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such Indemnified Person unless: (i) the Company and the
Indemnified Person shall have mutually agreed to the retention of such counsel;
(ii) the Company shall have failed promptly to assume the defense of such
proceeding and to employ counsel reasonably satisfactory to such Indemnified
Person in such proceeding; or (iii) in the reasonable judgment of counsel to
such Indemnified Person, representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. The Company shall not be liable for any settlement of any proceeding
effected without its written consent, which consent shall not be unreasonably
withheld, delayed or conditioned. Without the prior written consent of the
Indemnified Person, which consent shall not be unreasonably withheld, delayed or
conditioned, the Company shall not effect any settlement of any pending or
threatened

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proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Party,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability arising out of such proceeding.

ARTICLE IX

CONDITIONS PRECEDENT TO THE COMPANY’S OBLIGATIONS TO SELL

The obligation of the Company hereunder to issue and sell the Securities to the
Buyer is subject to the satisfaction, at or before the Closing Date, of each of
the following conditions, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole
discretion:

9.1       Buyer shall have executed the Transaction Documents and delivered the
Purchase Price to the Company.

9.2       The representations and warranties of the Buyer shall be true and
correct in all material respects as of the Closing Date (except for
representations and warranties that speak as of a specific date), and the Buyer
shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the Buyer at or prior to the Closing Date.

9.3       The Company shall have received such certificates, confirmations,
resolutions, acknowledgements or other documentation necessary or advisable from
all applicable Governmental Authorities, including, but not limited to, those
located in the State of Nevada, as the Company may require in order to evidence
such Governmental Authorities’ approval of this Agreement, the Transaction
Documents and the purchase of the Debenture contemplated hereby.

ARTICLE X

CONDITIONS PRECEDENT TO THE BUYER’S OBLIGATIONS TO PURCHASE

The obligation of the Buyer hereunder to purchase the Debenture is subject to
the satisfaction, at or before the Closing Date, of each of the following
conditions (in addition to any other conditions precedent elsewhere in this
Agreement), provided that these conditions are for the Buyer’s sole benefit and
may be waived by the Buyer at any time in its sole discretion:

10.1     The Company, and/or the President (as applicable) shall have executed
and delivered the Transaction Documents to the Buyer.

10.2     The representations and warranties of the Company shall be true and
correct in all material respects (except to the extent that any of such
representations and warranties are already qualified as to materiality in
Article VI above, in which case, such representations

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and warranties shall be true and correct in all respects without further
qualification) as of the Closing Date (except for representations and warranties
that speak as of a specific date) and the Company shall have performed,
satisfied and complied in all material respects with the covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing Date.

10.3     The Company shall have executed and delivered to Buyer a closing
certificate, certified as true, complete and correct by an officer of the
Company, in substance and form required by Buyer, which closing certificate
shall include and attach as exhibits: (i) a true copy of a certificate of good
standing evidencing the formation and good standing of the Company from the
secretary of state (or comparable office) from the jurisdiction in which the
Company is formed; (ii) the Company’s Organizational Documents; and (iii) copies
of the resolutions of the board of directors of the Company as adopted by the
Company’s or board of directors, in a form acceptable to Buyer, approving and
authorizing the execution, delivery and performance of the Transaction Documents
to which it is party and the transactions contemplated thereby, in a form
acceptable to the Buyer.

10.4     No event shall have occurred which could reasonably be expected to have
a Material Adverse Effect.

10.5     The Buyer shall have received copies of UCC search reports, issued by
the Secretary of State of the state of incorporation of the Company, dated such
a date as is reasonably acceptable to Buyer, listing all effective financing
statements which name the Company, under its present name and any previous
names, as debtors, together with copies of such financing statements.

10.6     The Company shall have executed such other agreements, certificates,
confirmations or resolutions as the Buyer may require to consummate the
transactions contemplated by this Agreement and the Transaction Documents,
including a closing statement and joint disbursement instructions as may be
required by Buyer.

ARTICLE XI

MISCELLANEOUS

11.1     Notices. All notices of request, demand and other communications
hereunder shall be addressed to the parties as follows:

If to the Company:

Visualant, Incorporated

 

500 Union Street, Suite 810

 

Seattle, WA, 98101

 

Attn: Ronald P. Erickson, CEO

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If to the Buyer

Clayton Struve

 

 

 

 

 

Attn:

 

 

With a copy to:

 

(which shall not constitute notice)

Sichenzia Ross Ference Kesner LLP

 

61 Broadway

 

New York, NY 10006

 

Attn: Thomas A. Rose, Esq.

unless the address is changed by the party by like notice given to the other
parties. Notice shall be in writing and shall be deemed delivered: (i) if mailed
by certified mail, return receipt requested, postage prepaid and properly
addressed to the address below, then three (3) business days after deposit of
same in a regularly maintained U.S. Mail receptacle; or (ii) if mailed by
Federal Express, UPS or other nationally recognized overnight courier service,
next business morning delivery, then one (1) business day after deposit of same
in a regularly maintained receptacle of such overnight courier; or (iii) if hand
delivered or sent by email, then upon hand delivery or receipt thereof to the
address indicated on or prior to 5:00 p.m., EST, on a business day. Any notice
hand delivered after 5:00 p.m., EST, shall be deemed delivered on the following
business day. Notwithstanding the foregoing, notice, consents, waivers or other
communications referred to in this Agreement may be sent by facsimile, e-mail,
or other method of delivery, but shall be deemed to have been delivered only
when the sending party has confirmed (by reply e-mail or some other form of
written confirmation from the receiving party) that the notice has been received
by the other party.

11.2     Entire Agreement. This Agreement and the other Transaction Documents:
(i) are valid, binding and enforceable against the Company and Buyer in
accordance with its provisions and no conditions exist as to their legal
effectiveness; (ii) constitute the entire agreement between the parties; and
(iii) are the final expression of the intentions of the Company and Buyer. No
promises, either expressed or implied, exist between the Company and Buyer,
unless contained herein or in the Transaction Documents. This Agreement and the
Transaction Documents supersede all negotiations, representations, warranties,
commitments, offers, contracts (of any kind or nature, whether oral or written)
prior to or contemporaneous with the execution hereof.

11.3     Amendments; Waivers. No amendment, modification, termination, discharge
or waiver of any provision of this Agreement or of the Transaction Documents, or
consent to any departure by the Company therefrom, shall in any event be
effective unless the same shall be in writing and signed by Buyer, and then such
waiver or consent shall be effective only for the specific purpose for which
given.

11.4     WAIVER OF JURY TRIAL. BUYER, THE COMPANY AFTER CONSULTING OR HAVING HAD
THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES, IRREVOCABLY, THE RIGHT TO TRIAL BY JURY WITH RESPECT TO
ANY LEGAL PROCEEDING BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION

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WITH THIS AGREEMENT, ANY TRANSACTION DOCUMENT OR ANY OF THE OBLIGATIONS
HEREUNDER, OR ANY OTHER AGREEMENT EXECUTED OR CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT OR COURSE OF DEALING
IN WHICH BUYER AND THE COMPANY AND/OR THE GUARNATORS ARE ADVERSE PARTIES. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR BUYER PURCHASING THE DEBENTURES.

11.5     Assignability. Buyer may at any time assign Buyer’s rights in this
Agreement, the Debentures, any Transaction Document, or any part thereof.  In
addition, Buyer may at any time sell one or more participations in the
Debentures. The Company may not sell or assign this Agreement, any Transaction
Document or any other agreement with Buyer, or any portion thereof, either
voluntarily or by operation of law, nor delegate any of its duties of
obligations hereunder or thereunder, without the prior written consent of Buyer,
which consent may be withheld or conditioned in Buyer’s sole and absolute
discretion. This Agreement shall be binding upon Buyer and the Company and their
respective legal representatives, successors and permitted assigns. All
references herein to a Company shall be deemed to include any successors,
whether immediate or remote. In the case of a joint venture or partnership, the
term “Company shall be deemed to include all joint venturers or partners
thereof, who shall be jointly and severally liable hereunder.

11.6     Publicity. Buyer shall have the right to approve, before issuance, any
press release or any other public statement with respect to the transactions
contemplated hereby made by the Company; provided, however, that the Company
shall be entitled, without the prior approval of Buyer, to issue any press
release or other public disclosure with respect to such transactions required
under applicable securities or other laws or regulations. Notwithstanding the
foregoing, the Company shall use its best efforts to consult Buyer in connection
with any such press release or other public disclosure prior to its release and
Buyer shall be provided with a copy thereof upon release thereof. Buyer shall
have the right to make any press release with respect to the transactions
contemplated hereby without Company’s approval. In addition, with respect to any
press release to be made by Buyer, the Company hereby authorizes and grants
blanket permission to Buyer to include the Company’s stock symbol, if any, in
any press releases. The Company shall, promptly upon request, execute any
additional documents of authority or permission as may be requested by Buyer in
connection with any such press releases.

11.7     Binding Effect. This Agreement shall become effective upon execution by
the Company and Buyer.

11.8     Governing Law. This Agreement shall be governed by and be construed in
accordance with the laws of the State of New York without regard to the
conflicts of law rules of such state.  The parties hereby irrevocably and
unconditionally submit, for themselves and their property, to the jurisdiction
of the courts sitting in New York, New York (Manhattan) and any appellate court
from any thereof, in respect of actions brought against it in any action, suit
or proceeding arising out of or relating to this Agreement, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that

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all claims in respect of any such action, suit or proceeding may be heard and
determined in such courts. Each of the parties hereto agrees that a final
judgment in any such action, suit 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. Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any
action, suit or proceeding arising out of or relating to this Agreement in any
court referred to above.  Each of the parties further hereby irrevocably waives,
to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action, suit proceeding in any such court and waives any
other right to which it may be entitled on account of its place of residence or
domicile.  To the fullest extent permitted by applicable law, the parties agree
to bring all actions or proceedings regarding this Agreement in the courts
(Federal or State) of the State of New York located in the County of New York,
City of New York.

11.9     Enforceability. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by,
unenforceable or invalid under any jurisdiction, such provision shall as to such
jurisdiction, be severable and be ineffective to the extent of such prohibition
or invalidity, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.

11.10   Survival of Company’s Representations. All covenants, agreements,
representations and warranties made by the Company herein shall, notwithstanding
any investigation by Buyer, be deemed material and relied upon by Buyer and
shall survive the making and execution of this Agreement and the Transaction
Documents and the sale and purchase of the Debenture, and shall be deemed to be
continuing representations and warranties until such time as the Company have
fulfilled all of its Obligations to Buyer hereunder and under all other
Transaction Documents, and Buyer has been indefeasibly paid in full.

11.11   Time of Essence. Time is of the essence in making payments of all
amounts due Buyer under this Agreement and the other Transaction Documents and
in the performance and observance by the Company of each covenant, agreement,
provision and term of this Agreement and the other Transaction Documents. The
parties agree that in the event that any date on which performance is to occur
falls on a day other than a Business Day, then the time for such performance
shall be extended until the next Business Day thereafter occurring.

11.12   Interpretation. If any provision in this Agreement requires judicial or
similar interpretation, the judicial or other such body interpreting or
construing such provision shall not apply the assumption that the terms hereof
shall be more strictly construed against one party because of the rule that an
instrument must be construed more strictly against the party which itself or
through its agents prepared the same. The parties hereby agree that all parties
and their agents have participated in the preparation hereof equally.

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11.13   Compliance with Federal Law. The Company shall: (i) ensure that no
Person who owns a controlling interest in or otherwise controls the Company is
or shall be listed on the Specially Designated Nationals and Blocked Person List
or other similar lists maintained by the Office of Foreign Assets Control
(“OFAC”), the Department of the Treasury, included in any Executive Orders or
any other similar lists from any Governmental Authority, foreign or national;
(ii) not use or permit the use of the proceeds of the Debenture to violate any
of the foreign asset control regulations of OFAC or any enabling statute or
Executive Order relating thereto, or any other similar national or foreign
governmental regulations; and (iii) comply with all applicable Lender Secrecy
Act laws and regulations, as amended. As required by federal law and Buyer’s
policies and practices, Buyer may need to obtain, verify and record certain
customer identification information and documentation in connection with opening
or maintaining accounts or establishing or continuing to provide services.

11.14   Termination. Upon payment in full of the Debenture purchased hereunder,
together with all other charges, fees and costs due and payable under this
Agreement or under any of the Transaction Documents, the Company shall have the
right to terminate this Agreement upon written notice to the Buyer.

11.15   Gender and Use of Singular and Plural. All pronouns shall be deemed to
refer to the masculine, feminine, neuter, singular or plural, as the identity of
the party or parties or their personal representatives, successors and assigns
may require.

11.16   Execution. This Agreement may be executed in one or more counterparts,
all of which taken together shall be deemed and considered one and the same
Agreement, and same shall become effective when counterparts have been signed by
each party and each party has delivered its signed counterpart to the other
party. In the event that any signature is delivered by facsimile transmission or
by e-mail delivery of a “.pdf’ format file or other similar format file, such
signature shall be deemed an original for all purposes and shall create a valid
and binding obligation of the party executing same with the same force and
effect as if such facsimile or “.pdf’ signature page was an original thereof.

11.17   Headings. The article and section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of the Agreement.

11.18   Further Assurances. The Company will execute and deliver such further
instruments and do such further acts and things as may be reasonably required by
Buyer to carry out the intent and purposes of this Agreement.

11.19   No Third Party Beneficiaries. This Agreement is intended for the benefit
of the parties hereto and their respective permitted successors and assigns, and
is not for the benefit of, nor may any provision hereof be enforced by, any
other Person.

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11.20   Usury. To the extent it may lawfully do so, the Company hereby agrees
not to insist upon or plead or in any manner whatsoever claim, and will resist
any and all efforts to be compelled to take the benefit or advantage of, usury
laws wherever enacted, now or at any time hereafter in force, in connection with
any claim, action or proceeding that may be brought by Buyer in order to enforce
any right or remedy under any Transaction Document. Notwithstanding any
provision to the contrary contained in any Transaction Document, it is expressly
agreed and provided that the total liability of the Company under the
Transaction Documents for payments in the nature of interest shall not exceed
the maximum lawful rate authorized under applicable law (the “Maximum Rate”),
and, without limiting the foregoing, in no event shall any rate of interest or
default interest, or both of them, when aggregated with any other sums in the
nature of interest that the Company may be obligated to pay under the
Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum
contract rate of interest allowed by law and applicable to the Transaction
Documents is increased or decreased by statute or any official governmental
action subsequent to the date hereof, the new maximum contract rate of interest
allowed by law will be the Maximum Rate applicable to the Transaction Documents
from the effective date thereof forward, unless such application is precluded by
applicable law. If under any circumstances whatsoever, interest in excess of the
Maximum Rate is paid by the Company to the Buyer with respect to indebtedness
evidenced by the Transaction Documents, such excess shall be applied by the
Buyer to the unpaid principal balance of any such indebtedness or be refunded to
the Company, the manner of handling such excess to be at the Buyer’s election.

11.21   Fees and Expenses. At the Closing, the Company shall reimburse Buyer or
their counsel for attorney’s fees and expenses for the transactions contemplated
by this Agreement, in an amount of $10,000, together with an additional amount
of $5,000 for any subsequent closing of the sale of Securities. The Company
shall also be directly responsible for the payment the fees or commissions
payable to the placement agent for the offering, Garden State Securities, Inc.,
in the amount of 10% of the aggregate cash invested by the Buyer and Warrants to
purchase 10% of the securities sold in this Offering, upon the same terms and
conditions as the Buyer.

11.22   Series D Consent.  Buyer, as sole owner of shares of the Company’s
Series D Preferred Stock, hereby consents to the terms and conditions of the
Debenture, including but not limited to the variable conversion price which may
apply under certain circumstances.

[signature pages follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date and year set forth above.

COMPANY:

VISUALANT, INCORPORATED

By:/s/ Ronald P. Erickson

Name: Ronald P. Erickson

Title: Chief Executive Officer and President

BUYER:

/s/ Clayton Struve

Clayton Struve

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SCHEDULE 1

PURCHASE PRICE; SECURITIES PURCHASED

Name of

Buyer

Purchase Price

for Debenture

Being Purchased

Aggregate Principal Amount of
Debenture being
Purchased

Number of Warrant

Shares issuable upon

exercise of Warrant

Purchased

Clayton Struve

$300,000

$360,000

1,440,000

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EXHIBIT A

FORM OF DEBENTURE

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EXHIBIT B

FORM OF WARRANT

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EXHIBIT C

FORM OF SUBORDINATION AGREEMENT

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EXHIBIT D

FORM OF SECURITY AGREEMENT

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