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Exhibit 10.1
 
SUBSCRIPTION AGREEMENT
 
This Subscription Agreement (this “Agreement”) is being delivered to the
purchaser identified on the signature page to this Agreement (the “Subscriber”)
in connection with its investment in Silver Horn Mining Ltd., a Delaware
corporation (the “Company”).  The Company is conducting a private placement (the
“Offering”) of a minimum of 1 Million Dollars ($1,000,000) and a maximum of 2.5
Million Dollars ($2,500,000) of shares of common stock of the Company, par value
$0.0001 per share (“Common Stock”), at a purchase price of $0.05 per share of
Common Stock (the “Purchase Price”).
 
1.           SUBSCRIPTION AND PURCHASE PRICE
 
(a)           Subscription.  Subject to the conditions set forth in Section 2
hereof, the Subscriber hereby subscribes for and agrees to purchase the number
of shares of Common Stock indicated on the signature page hereof on the terms
and conditions described herein.
 
(b)           Purchase of Common Stock.  The Subscriber understands and
acknowledges that the purchase price to be remitted to the Company in exchange
for the shares of Common Stock shall be as set forth in the preamble to this
Agreement, and the Company shall round up or down to the nearest whole number
any fractional purchases per share of Common Stock, for an aggregate purchase
price as set forth on the signature pages hereof (the “Aggregate Purchase
Price”). The Subscriber’s delivery of this Agreement to the Company shall be
accompanied by payment for the shares of Common Stock subscribed for hereunder,
payable in United States Dollars, by wire transfer of immediately available
funds delivered contemporaneously with the Subscriber’s delivery of this
Agreement to the Company in accordance with the wire instructions provided on
Exhibit A.  The Subscriber understands and agrees that, subject to Section 2 and
applicable laws, by executing this Agreement, it is entering into a binding
agreement.
 
2.           ACCEPTANCE, OFFERING TERM AND CLOSING PROCEDURES
 
(a) Acceptance or Rejection. Subject to full, faithful and punctual performance
and discharge by the Company of all of its duties, obligations and
responsibilities as set forth in this Agreement, the Subscriber shall be legally
bound to purchase the shares of Common Stock pursuant to the terms and
conditions set forth in this Agreement.  For the avoidance of doubt, upon the
occurrence of the failure by the Company to fully, faithfully and punctually
perform and discharge any of its duties, obligations and responsibilities as set
forth in this Agreement, which shall have been performed or otherwise discharged
prior to the Closing (as defined below), the Subscriber may, on or prior to the
Closing, at its sole and absolute discretion, elect not to purchase the shares
of Common Stock and receive the full and immediate refund of the purchase price
remitted to the Company, without interest thereon or deduction therefrom. The
Subscriber understands and agrees that the Company reserves the right to reject
this subscription for shares in whole or part in any order at any time prior to
the Closing for any reason, notwithstanding the Subscriber’s prior receipt of
notice of acceptance of the Subscriber’s subscription.  In the event the Closing
does not take place because of (i) the rejection of subscription for shares of
Common Stock by the Company, (ii) the election not to purchase the shares of
Common Stock by the Subscriber or (iii) failure to effectuate the Closing on or
prior to May 9, 2011, unless otherwise extended at the Company’s sole discretion
to May 23, 2011, for any reason or no reason, unless waived by the Subscriber,
this Agreement and any other agreement entered into between the Subscriber and
the Company relating to this subscription shall thereafter be terminated and
have no force or effect, and the Company shall promptly return or cause to be
returned to the Subscriber the purchase price remitted to the Company, without
interest thereon or deduction therefrom.

(b)           Closing.  The closing of the purchase and sale of the shares of
Common Stock hereunder (the “Closing”) shall take place at the office of Law
Office of Benjamin S. Brauser, P.A., 4400 Biscayne Blvd, Suite 850 Miami,
Florida 33137, or such other place as determined by the Company.  The Closing
shall take place on a Business Day promptly following the satisfaction of the
conditions set forth in Section 8 below, as determined by the Company (the
“Closing Date”). “Business Day” shall mean from the hours of 9:00 a.m. (Eastern
Time) through 5:00 p.m. (Eastern Time) of a day other than a Saturday, Sunday or
other day on which commercial banks in New York, New York are authorized or
required to be closed. The shares of Common Stock purchased by the Subscriber
will be delivered by the Company promptly following the Closing.

(c)           Following Acceptance or Rejection.  The Subscriber acknowledges
and agrees that this Agreement and any other documents delivered in connection
herewith will be held by the Company. In the event that this
 
 
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Agreement is not accepted by the Company for whatever reason, which the Company
expressly reserves the right to do, this Agreement, the Aggregate Purchase Price
received (without interest thereon) and any other documents delivered in
connection herewith will be returned to the Subscriber at the address of the
Subscriber as set forth in this Agreement. If this Agreement is accepted by the
Company, the Company is entitled to treat the Aggregate Purchase Price received
as an interest free loan to the Company until such time as the Subscription is
accepted.
 
(d)           Favored Nation Provision.  Other than in connection with (i) full
or partial consideration in connection with a strategic merger, acquisition,
consolidation or purchase of substantially all of the securities or assets of a
corporation or other entity which holders of such securities or debt are not at
any time granted registration rights equal to or greater than those granted to
the Subscriber, (ii) the Company’s issuance of securities in connection with
strategic license agreements and other partnering arrangements so long as such
issuances are not for the purpose of raising capital and which holders of such
securities are not at any time granted registration rights equal to or greater
than those granted to the Subscriber, (iii) the Company’s issuance of Common
Stock or the issuances or grants of options to purchase Common Stock to
employees, directors, and consultants, pursuant to plans that shall have been
approved by a majority of the board of directors, (iv) securities issuable upon
the exercise or exchange of or conversion of any securities exercisable or
exchangeable for or convertible into shares of Common Stock issued and
outstanding on the date of this Agreement on the terms in effect on the Closing
Date including the permissible amendment thereof after the Closing Date, (v) the
Company’s issuance of Common Stock or the issuances or grants of options to
purchase Common Stock to employees, directors, consultants and service providers
and (vi) any and all securities required to be assumed by the Company by the
terms thereof as a result of any of the foregoing even if issued by a
predecessor acquired in connection with a business combination, merger or share
exchange (collectively, the foregoing (i) through (vi) are “Excepted
Issuances”), if at any time within eighteen (18) months from the date hereof,
the Company shall agree to or issue (the “Lower Price Issuance”) any Common
Stock or securities convertible into or exercisable for shares of Common Stock
(or modify any of the foregoing which may be outstanding) to any person or
entity at a price per share or conversion or exercise price per share which
shall be less than the price per share of Common Stock hereunder in effect at
such time, without the consent of the Subscriber, then the Company shall issue
to the Subscriber such additional number of shares of Common Stock such that the
Subscriber shall own an aggregate total number of shares of Common Stock as if
the Subscriber had purchased the shares hereunder at the Lower Price
Issuance.  Common Stock issued or issuable by the Company for no consideration
or for consideration that cannot be determined at the time of issue will be
deemed issuable or to have been issued for $0.0001 per share of Common
Stock.  The rights of the Subscriber set forth in this Section 2 are in addition
to any other rights the Subscriber has pursuant to this Agreement, and any other
agreement referred to or entered into in connection herewith or to which
Subscriber and Company are parties.  Notwithstanding anything herein or in any
other agreement to the contrary, the Company shall only be required to make a
single adjustment with respect to any Lower Price Issuance, regardless of the
existence of multiple basis therefore
 
(e)           Extraordinary Events Regarding Common Stock.  In the event that
the Company shall (i) issue additional shares of Common Stock as a dividend or
other distribution on outstanding Common Stock, (ii) subdivide its outstanding
shares of Common Stock or (iii) combine its outstanding shares of the Common
Stock into a smaller number of shares of Common Stock, then, in each such event,
the Purchase Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Purchase Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Purchase Price then in effect. The Purchase
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein. The number of shares of
Common Stock that the Subscriber shall thereafter be entitled to receive shall
be adjusted to a number determined by multiplying the number of shares of Common
Stock that would otherwise (but for the provisions of this Section) be issuable
on such exercise by a fraction of which (i) the numerator is the Purchase Price
that would otherwise (but for the provisions of this Section) be in effect, and
(ii) the denominator is the Purchase Price in effect on the date of such
exercise.
 
(f)           Certificate as to Adjustments.  In each case of any adjustment or
readjustment in the shares of Common Stock issuable hereunder, the Company at
its expense will promptly cause its Chief Executive Officer or other appropriate
designee to compute such adjustment or readjustment in accordance with the terms
hereof and prepare a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or readjustment is
based, including a statement of (i) the consideration received or receivable by
the Company for any additional shares of Common Stock (or other securities)
issued or sold or deemed to have been issued or sold, (ii) the number of shares
of Common Stock (or other securities) outstanding or deemed to be
 
 
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outstanding and (iii) the Purchase Price and the number of shares of Common
Stock to be received in effect immediately prior to such adjustment or
readjustment and as adjusted or readjusted as provided herein. The Company will
forthwith mail a copy of each such certificate to the Subscriber.
 
3.RISKS RELATING TO THE ORGANIZATION AND COMMON STOCK OF THE COMPANY
 
The Company is subject to the reporting requirements of federal securities laws,
which can be expensive and may divert resources from other projects, thus
impairing its ability to grow.
 
The Company is a public reporting company and, accordingly, is subject to the
information and reporting requirements of the Securities and Exchange Act of
1934, as amended (the “Exchange Act”) and other federal securities laws,
including compliance with the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”).  The costs of preparing and filing annual and quarterly reports, proxy
statements and other information with the Securities and Exchange Commission
(the “SEC”) and furnishing audited reports to stockholders will cause its
expenses to be higher than they would have been if the Company were privately
held.

If the Company fails to maintain an effective system of internal control, it may
not be able to report its financial results accurately or to prevent fraud. Any
inability to report and file its financial results accurately and timely could
harm its reputation and adversely impact the trading price of the Common Stock.
 
It may be time consuming, difficult and costly for the Company to implement the
internal controls and reporting procedures required by the Sarbanes-Oxley Act.
It may need to hire additional financial reporting, internal controls and other
finance personnel in order to develop and implement appropriate internal
controls and reporting procedures. Effective internal control is necessary for
the Company to provide reliable financial reports and prevent fraud. If it
cannot provide reliable financial reports or prevent fraud, the Company may not
be able to manage its business as effectively as it would if an effective
control environment existed, and its business and reputation with investors may
be harmed.
 
Public company compliance may make it more difficult for the Company to attract
and retain officers and directors.
 
The Sarbanes-Oxley Act and new rules subsequently implemented by the SEC have
required changes in corporate governance practices of public companies. These
new rules and regulations may increase the Company’s compliance costs and to
make certain activities more time consuming and costly. These new rules and
regulations may make it more difficult and expensive for the Company to obtain
director and officer liability insurance in the future and it may be required to
accept reduced policy limits and coverage or incur substantially higher costs to
obtain the same or similar coverage. As a result, it may be more difficult for
the Company to attract and retain qualified persons to serve on its Board of
Directors or as executive officers. 

The price of the Common Stock may be volatile.
 
The market price of the Common Stock is likely to be highly volatile and could
fluctuate widely in price in response to various factors, many of which are
beyond the control of the Company, including the following:
 

 
·
ability to obtain working capital financing;

 

 
·
additions or departures of key personnel;

 

 
·
limited “public float” in the hands of a small number of persons whose sales or
lack of sales could result in positive or negative pricing pressure on the
market price for the Common Stock;

 

 
·
sales of the Common Stock;

 

 
·
The Company’s ability to execute its business plan;

 

 
·
operating results that fall below expectations;

 

 
·
loss of any strategic relationship;

 
 
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·
economic and other external factors; and

 

 
·
period-to-period fluctuations in the Company’s financial results.

 
In addition, the securities markets have from time to time experienced
significant price and volume fluctuations that are unrelated to the operating
performance of particular companies. These market fluctuations may also
materially and adversely affect the market price of the Common Stock.
 
The Company has not paid dividends in the past and may not pay dividends in the
future. Any return on investment may be limited to the value of the Common
Stock.
 
The Company has never paid cash dividends on the Common Stock and does not
anticipate doing so in the foreseeable future. The payment of dividends on the
Common Stock will depend on earnings, financial condition and other business and
economic factors affecting the Company at such time as the Board of Directors
may consider relevant. If the Company does not pay dividends, the Common Stock
may be less valuable because a return on the Subscriber’s investment will only
occur if the Common Stock price appreciates.
 
There is currently no liquid trading market for the Common Stock and the Company
cannot ensure that one will ever develop or be sustained.
 
To date there has been no liquid trading market for the Common Stock. The
Company cannot predict how liquid the market for the Common Stock might become.
As soon as is practicable, the Company anticipates applying for listing of the
Common Stock on either the NYSE Amex Equities, The Nasdaq OMX or other national
securities exchange, assuming that it can satisfy the initial listing standards
for such exchange. It currently does not satisfy the initial listing standards,
and cannot ensure that it will be able to satisfy such listing standards or that
the Common Stock will be accepted for listing on any such exchange. Should it
fail to satisfy the initial listing standards of such exchanges, or the Common
Stock is otherwise rejected for listing and remains quoted on the OTC Bulletin
Board, is suspended from the OTC Bulletin Board, or trades on the Pink Sheets,
the trading price of the Common Stock could suffer and the trading market for
the Common Stock may be less liquid and the Common Stock price may be subject to
increased volatility.
 
Furthermore, for companies whose securities are quoted on the OTC Bulletin Board
or the Pink Sheets, it is more difficult (1) to obtain accurate quotations, (2)
to obtain coverage for significant news events because major wire services
generally do not publish press releases about such companies and (3) to obtain
needed capital.
 
The Common Stock may be deemed a “penny stock,” which would make it more
difficult for investors to sell their shares.
 
The Common Stock may be subject to the “penny stock” rules adopted under Section
15(g) of the Exchange Act. The penny stock rules generally apply to companies
whose common stock is not listed on The Nasdaq OMX or other national securities
exchange and trades at less than $5.00 per share, other than companies that have
had average revenue of at least $6,000,000 for the last three years or that have
tangible net worth of at least $5,000,000 ($2,000,000 if the company has been
operating for three or more years). These rules require, among other things,
that brokers who trade penny stock to persons other than “established customers”
complete certain documentation, make suitability inquiries of investors and
provide investors with certain information concerning trading in the security,
including a risk disclosure document and quote information under certain
circumstances. Many brokers have decided not to trade penny stocks because of
the requirements of the penny stock rules and, as a result, the number of
broker-dealers willing to act as market makers in such securities is limited. If
the Company remains subject to the penny stock rules for any significant period,
it could have an adverse effect on the market, if any, for its securities. If
the Company’s securities are subject to the penny stock rules, investors will
find it more difficult to dispose of its securities.
 
 Offers or availability for sale of a substantial number of shares of the Common
Stock may cause the price of the Common Stock to decline.
 
If the Company’s stockholders sell substantial amounts of the Common Stock in
the public market, including shares issued in this Offering upon the
effectiveness of the Registration Statement (as defined below), or
 
 
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upon the expiration of any statutory holding period under Rule 144 (“Rule 144”)
promulgated under the Securities Act of 1933, as amended (the “Securities Act”),
or issued upon the exercise of outstanding options or warrants, it could create
a circumstance commonly referred to as an “overhang” and in anticipation of
which the market price of the Common Stock could fall. The existence of an
overhang, whether or not sales have occurred or are occurring, also could make
more difficult the Company’s ability to raise additional financing through the
sale of equity or equity-related securities in the future at a time and price
that it deems reasonable or appropriate.

The Company may apply the proceeds of the Offering to uses that ultimately do
not improve its operating results or increase the price of its common stock.
 
The Company intends to use the net proceeds from the Offering for general
corporate purposes including acquisitions, growth initiatives and capital
expenditures.  Prior to April 2011, and for the past approximately twelve (12)
months, the Company was principally engaged in the business of entertainment,
internet and media with its acquisitions of Superdraft and Rootzoo, which
businesses are presently inactive, discontinued or have been disposed
of.  Operating under the name EClips Media Technologies, Inc. until April 25,
2011 (previously EClips Energy Technologies, Inc.), when the effectiveness of
the change of name to the present company name takes effect, the Company has
failed to generate any significant results of operations or business
activities.  The Company intends to utilize the proceeds from the Offering to
change its business and pursue resource related acquisitions, initially
involving silver exploration and development, and dispose of or suspend its
historical businesses. The Company and its management have no experience in
resources, mining or the operation of such businesses, and anticipate adding
additional experienced management from its acquisitions to assist the Company
and in pursuing its new line of activity.  However, the Company does not have
more specific plans for the net proceeds from the Offering.  Moreover, its
management has broad discretion in how it actually uses these proceeds.  These
proceeds could be applied in ways that do not ultimately improve its operating
results or otherwise increase the value of the Common Stock.  Additional
information about the Company’s prior activities can be found at
http://sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001058307&owner=exclude&count=40
for Eclips Media Technologies, Inc. and predecessors, including additional risk
factors related to the Company:  www.sec.gov.
 
The Company’s Chief Executive Officer and sole director beneficially owns 100%
of the outstanding shares of the Company’s Series A Convertible Preferred Stock,
which enables him to influence many significant corporate actions and in certain
circumstances may prevent a change in control that would otherwise be beneficial
to the Company’s stockholders.
 
Glenn Kesner beneficially owns 100% of the outstanding shares of Series A
Convertible Preferred Stock of the Company, which has a 500:1 voting right with
the Common Stock. As such, he has a substantial impact on matters requiring the
vote of the stockholders, including the election of the Company’s board of
directors and most of its corporate actions. This control could delay, defer, or
prevent others from initiating a potential merger, takeover or other change in
the Company’s control, even if these actions would benefit the Company’s
stockholders and the Company. This control could adversely affect the voting and
other rights of the Company’s other stockholders and could depress the market
price of the Common Stock.

Investor Relations and Shareholder Awareness Campaigns and activities, nominal
“float” and supply and demand factors that may affect the price of our stock.
 
The Company expects to utilize various techniques such as non-deal road shows
and investor relations campaigns in order to create investor awareness for the
Company.  These campaigns may include personal, video and telephone conferences
with investors and prospective investors in which our business practices are
described.  The Company may provide compensation to investor relations firms and
pay for newsletters, websites, mailings and email campaigns that are produced by
third-parties based upon publicly-available information concerning the
Company.  The Company will not be responsible for the content of analyst reports
and other writings and communications by investor relations firms not authored
by the Company or from publicly available information.  The Company does not
intend to review or approve the content of such analysts’ reports or other
materials based upon analysts’ own research or methods.  Investor relations
firms should generally disclose when they are compensated for their efforts, but
whether such disclosure is made or complete is not under our control.   In
addition, investors in the Company may, from time to time, also take steps to
encourage investor awareness through similar activities that may be undertaken
at the expense of the investors.  Investor awareness activities may also be
suspended or discontinued which may impact the trading market our common stock.
  
 
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 The SEC and FINRA enforce various statutes and regulations intended to prevent
manipulative or deceptive devices in connection with the purchase or sale of any
security and carefully scrutinize trading patterns and company news and other
communications for false or misleading information, particularly in cases where
the hallmarks of “pump and dump” activities may exist, such as rapid share price
increases or decreases.  We, and our shareholders may be subjected to enhanced
regulatory scrutiny due to the small number of holders who initially will own
the registered shares of our common stock publicly available for resale, and the
limited trading markets in which such shares may be offered or sold which have
often been associated with improper activities concerning penny-stocks, such as
the OTC Bulletin Board or the OTCQB Marketplace (Pink OTC) or pink
sheets.  Until such time as the common stock sold in the Offering is registered
and until such time as our restricted shares are registered or available for
resale under Rule 144, there will continue to be a small percentage of shares
held by a small number of investors, many of whom acquired such shares in
privately negotiated purchase and sale transactions, that will constitute the
entire available trading market.  The Supreme Court has stated that manipulative
action is a term of art connoting intentional or willful conduct designed to
deceive or defraud investors by controlling or artificially affecting the price
of securities.  Often times, manipulation is associated by regulators with
forces that upset the supply and demand factors that would normally determine
trading prices.  Since a small percentage of the outstanding common stock of the
Company will initially be available for trading, held by a small number of
individuals or entities, the supply of our common stock for sale will be
extremely limited for an indeterminate amount of time, which could result in
higher bids, asks or sales prices than would otherwise exist.  Securities
regulators have often cited factors such as thinly-traded markets, small numbers
of holders, and awareness campaigns as hallmarks  of claims of price
manipulation and other violations of law when combined with manipulative
trading, such as wash sales, matched orders or other manipulative trading timed
to coincide with false or touting press releases.  There can be no assurance
that the Company’s or third-parties’ activities, or the small number of
potential sellers or small percentage of stock in the “float,” or determinations
by purchasers or holders as to when or under what circumstances or at what
prices they may be willing to buy or sell stock will not artificially impact (or
would be claimed by regulators to have affected) the normal supply and demand
factors that determine the price of the stock.

 
4.           THE SUBSCRIBER’S REPRESENTATIONS, WARRANTIES AND COVENANTS
 
The Subscriber hereby acknowledges, agrees with and represents, warrants and
covenants to the Company, as follows:
 
(a)           The Subscriber has full power and authority to enter into this
Agreement, the execution and delivery of which has been duly authorized, if
applicable, and this Agreement constitutes a valid and legally binding
obligation of the Subscriber.
 
(b)           The Subscriber acknowledges its understanding that the Offering
and sale of the shares of Common Stock is intended to be exempt from
registration under the Securities Act, by virtue of Section 4(2) of the
Securities Act and the provisions of Regulation D promulgated thereunder
(“Regulation D”) or by virtue of Rule 903 of Regulation S promulgated under the
Securities Act (“Regulation S”).  In furtherance thereof, the Subscriber
represents and warrants to the Company and its affiliates as follows:
 
(i)           The Subscriber realizes that the basis for the exemption from
registration may not be available if, notwithstanding the Subscriber’s
representations contained herein, the Subscriber is merely acquiring the
Securities for a fixed or determinable period in the future, or for a market
rise, or for sale if the market does not rise. The Subscriber does not have any
such intention.
 
(ii)           The Subscriber realizes that the basis for exemption would not be
available if the Offering is part of a plan or scheme to evade registration
provisions of the Securities Act or any applicable state or federal securities
laws.
 
(iii)           The Subscriber is acquiring the shares of Common Stock solely
for the Subscriber’s own beneficial account, for investment purposes, and not
with a view towards, or resale in connection with, any distribution of the
Securities.
 
 
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(iv)           The Subscriber has the financial ability to bear the economic
risk of the Subscriber’s investment, has adequate means for providing for its
current needs and contingencies, and has no need for liquidity with respect to
an investment in the Company.
 
(v)           The Subscriber and the Subscriber’s attorney, accountant,
purchaser representative and/or tax advisor, if any (collectively, the
“Advisors”) has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of a prospective investment
in the Common Stock. If other than an individual, the Subscriber also represents
it has not been organized solely for the purpose of acquiring the Common Stock.
 
(vi)           The Subscriber (together with its Advisors, if any) has received
all documents requested by the Subscriber, if any, has carefully reviewed them
and understands the information contained therein, prior to the execution of
this Agreement.
 
(c)           The Subscriber is not relying on the Company or any of its
employees, agents, sub-agents or advisors with respect to the legal, tax,
economic and related considerations involved in this investment. The Subscriber
has relied on the advice of, or has consulted with, only its Advisors. Each
Advisor, if any, has disclosed to the Subscriber in writing (a copy of which is
annexed to this Agreement) the specific details of any and all past, present or
future relationships, actual or contemplated, between the Advisor and the
Company or any affiliate or sub-agent thereof.
 
(d)           The Subscriber has carefully considered the potential risks
relating to the Company and a purchase of the shares of Common Stock, and fully
understands that the shares of Common Stock are a speculative investment that
involves a high degree of risk of loss of the Subscriber’s entire investment.
 
(e)           The Subscriber will not sell or otherwise transfer any shares of
Common Stock without registration under the Securities Act or an exemption
therefrom, and fully understands and agrees that the Subscriber must bear the
economic risk of its purchase because, among other reasons, the shares of Common
Stock have not been registered under the Securities Act or under the securities
laws of any state and, therefore, cannot be resold, pledged, assigned or
otherwise disposed of unless they are subsequently registered under the
Securities Act and under the applicable securities laws of such states, or an
exemption from such registration is available.  In particular, the Subscriber is
aware that the shares of Common Stock are “restricted securities,” as such term
is defined in Rule 144, and they may not be sold pursuant to Rule 144 unless all
of the conditions of Rule 144 are met. The Subscriber also understands that the
Company is under no obligation to register the shares of Common Stock on behalf
of the Subscriber or to assist the Subscriber in complying with any exemption
from registration under the Securities Act or applicable state securities laws.
The Subscriber understands that any sales or transfers of shares of Common Stock
purchased under this Agreement are further restricted by state securities laws
and the provisions of this Agreement.
 
(f)           No oral or written representations or warranties have been made,
or information furnished, to the Subscriber or its Advisors, if any, by the
Company or any of its officers, employees, agents, sub-agents, affiliates,
advisors or subsidiaries in connection with the Offering, other than any
representations of the Company contained herein, and in subscribing for the
shares of Common Stock, the Subscriber is not relying upon any representations
other than those contained herein.
 
(g)           The Subscriber’s overall commitment to investments that are not
readily marketable is not disproportionate to the Subscriber’s net worth, and an
investment in the Common Stock will not cause such overall commitment to become
excessive.
 
(h)           The Subscriber understands and agrees that the certificates for
the shares of Common Stock shall bear substantially the following legend until
(i) such Securities shall have been registered under the Securities Act and
effectively disposed of in accordance with a registration statement that has
been declared effective or (ii) in the opinion of counsel for the Company, such
shares of Common Stock may be sold without registration under the Securities
Act, as well as any applicable “blue sky” or state securities laws:
 
For U.S. Persons:
 

 
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE
STATE SECURITIES LAWS.  SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT
PURPOSES AND MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FILED BY THE ISSUER WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION
COVERING SUCH SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
 
For Non-U.S. Persons
 
THESE SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT
U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”) PURSUANT TO REGULATION S UNDER THE SECURITIES
ACT.  ACCORDINGLY, NONE OF THE SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT, OR ANY U.S. STATE SECURITIES LAWS,
AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES OR,
DIRECTLY OR INDIRECTLY, TO U.S. PERSONS (AS DEFINED IN REGULATION S PROMULGATED
UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN EACH CASE ONLY IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.  IN ADDITION, HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE
WITH THE SECURITIES ACT.

 
(i)           Neither the SEC nor any state securities commission has approved
the shares of Common Stock or passed upon or endorsed the merits of the
Offering. There is no government or other insurance covering any of the shares
of Common Stock.
 
(j)           The Subscriber and its Advisors, if any, have had a reasonable
opportunity to ask questions of and receive answers from a person or persons
acting on behalf of the Company concerning the Offering and the business,
financial condition, results of operations and prospects of the Company, and all
such questions have been answered to the full satisfaction of the Subscriber and
its Advisors, if any.
 
(k)           The Subscriber is unaware of, is in no way relying on, and did not
become aware of, the Offering through or as a result of, any form of general
solicitation or general advertising, including, without limitation, any article,
notice, advertisement or other communication published in any newspaper,
magazine or similar media or broadcast over television or radio, or electronic
mail over the Internet, in connection with the Offering and is not subscribing
for shares of Common Stock and did not become aware of the Offering through or
as a result of any seminar or meeting to which the Subscriber was invited by, or
any solicitation of a subscription by, a person not previously known to the
Subscriber in connection with investments in securities generally.
 
(l)           The Subscriber has taken no action that would give rise to any
claim by any person for brokerage commissions, finders’ fees or the like
relating to this Agreement or the transactions contemplated hereby.
 
(m)           The Subscriber is not relying on the Company or any of its
employees, agents, or advisors with respect to the legal, tax, economic and
related considerations of an investment in the shares of Common Stock, and the
Subscriber has relied on the advice of, or has consulted with, only its own
Advisors.
 
(n)           The Subscriber acknowledges that any estimates or forward-looking
statements or projections furnished by the Company to the Subscriber were
prepared by the management of the Company in good faith, but that the attainment
of any such projections, estimates or forward-looking statements cannot be
guaranteed by the Company or its management and should not be relied upon.
 
 
8

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(o)           No oral or written representations have been made, or oral or
written information furnished, to the Subscriber or its Advisors, if any, in
connection with the Offering that are in any way inconsistent with the
information contained herein.
 
(p)           (For ERISA plans only) The fiduciary of the ERISA plan (the
“Plan”) represents that such fiduciary has been informed of and understands the
Company’s investment objectives, policies and strategies, and that the decision
to invest “plan assets” (as such term is defined in ERISA) in the Company is
consistent with the provisions of ERISA that require diversification of plan
assets and impose other fiduciary responsibilities. The Subscriber or Plan
fiduciary (i) is responsible for the decision to invest in the Company; (ii) is
independent of the Company and any of its affiliates; (iii) is qualified to make
such investment decision; and (iv) in making such decision, the Subscriber or
Plan fiduciary has not relied primarily on any advice or recommendation of the
Company or any of its affiliates.
 
(q)           This Agreement is not enforceable by the Subscriber unless it has
been accepted by the Company, and the Subscriber acknowledges and agrees that
the Company reserves the right to reject any subscription for any reason.
 
(r)           The Subscriber will indemnify and hold harmless the Company and,
where applicable, its directors, officers, employees, agents, advisors,
affiliates and shareholders, and each other person, if any, who controls any of
the foregoing from and against any and all loss, liability, claim, damage and
expense whatsoever (including, but not limited to, any and all fees, costs and
expenses whatsoever reasonably incurred in investigating, preparing or defending
against any claim, lawsuit, administrative proceeding or investigation whether
commenced or threatened) (a “Loss”) arising out of or based upon any
representation or warranty of the Subscriber contained herein or in any document
furnished by the Subscriber to the Company in connection herewith being untrue
in any material respect or any breach or failure by the Subscriber to comply
with any covenant or agreement made by the Subscriber herein or therein;
provided, however, that the Subscriber shall not be liable for any Loss that in
the aggregate exceeds the Subscriber’s Aggregate Purchase Price tendered
hereunder.
 
(s)           The Subscriber is, and on each date on which the Subscriber
continues to own restricted securities from the Offering will be, an “Accredited
Investor” as defined in Rule 501(a) under the Securities Act. In general, an
“Accredited Investor” is deemed to be an institution with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with his or her
spouse.  Notwithstanding the foregoing, if the Subscriber is a Non-U.S. Person
(a “Reg S Person”), such Subscriber hereby represents that the representations
contained in paragraphs (1) through (7) of this Section 4(s) are true and
correct with respect to such Subscriber:
 
(1) (i) the issuance and sale to such Reg S Person of the shares of Common Stock
is intended to be exempt from the registration requirements of the Securities
Act, pursuant to the provisions of Regulation S; (ii) it is not a “U.S. Person,”
as such term is defined in Regulation S, and is not acquiring the shares of
Common Stock for the account or benefit of any U.S. Person; and (iii) the offer
and sale of the shares of Common Stock has not taken place, and is not taking
place, within the United States of America or its territories or
possessions.  Such Reg S Person acknowledges that the offer and sale of the
shares of Common Stock has taken place, and is taking place in an “offshore
transaction,” as such term is defined in Regulation S.
 
(2) Such Reg S Person acknowledges and agrees that, pursuant to the provisions
of Regulation S, the shares of Common Stock cannot be sold, assigned,
transferred, conveyed, pledged or otherwise disposed of to any U.S. Person or
within the United States of America or its territories or possessions for a
period of one year from and after the Closing Date, unless such shares of Common
Stock are registered for sale in the United States pursuant to an effective
registration statement under the Securities Act or another exemption from such
registration is available.  Such Reg S Person acknowledges that it has not
engaged in any hedging transactions with regard to the shares of Common Stock.
 
(3) Such Reg S Person consents to the placement of a legend on any certificate,
note or other document evidencing the Common Stock and understands that the
Company shall be required to refuse to register any transfer of securities not
made in accordance with applicable U.S. securities laws.
 
 
9

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(4) Such Reg S Person is not a “distributor” of securities, as that term is
defined in Regulation S, nor a dealer in securities.
 
(5) Such Reg S Person understands that the shares of Common Stock have not been
registered under the Securities Act, or the securities laws of any state and are
subject to substantial restrictions on resale or transfer.  The shares of Common
Stock are “restricted securities” within the meaning of Regulation S and Rule
144.
 
(6) Such Reg S Person acknowledges that the shares of Common Stock may only be
sold offshore in compliance with Regulation S or pursuant to an effective
registration statement under the Securities Act or another exemption from such
registration, if available.  In connection with any resale of the shares of
Common Stock pursuant to Regulation S, the Company will not register a transfer
not made in accordance with Regulation S, pursuant to an effective registration
statement under the Securities Act or in accordance with another exemption from
the Securities Act.
 
(7) Such Reg S Person makes the representations, declarations and warranties as
contained in this Section 4(s) (1)-(7) with the intent that the same shall be
relied upon by the Company in determining its suitability as a purchaser of such
shares of Common Stock.
 
(t)           The Subscriber, either alone or together with its representatives,
has such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the Offering,
and has so evaluated the merits and risks of such investment. The Subscriber has
not authorized any person or entity to act as its Purchaser Representative (as
that term is defined in Regulation D of the General Rules and Regulations under
the Securities Act) in connection with the Offering. The Subscriber is able to
bear the economic risk of an investment in the Common Stock and, at the present
time, is able to afford a complete loss of such investment.
 
(u)           The Subscriber has reviewed, or had an opportunity to review, all
of the SEC Filings.
 
5.           THE COMPANY’S REPRESENTATIONS, WARRANTIES AND COVENANTS
 
The Company hereby acknowledges, agrees with and represents, warrants and
covenants to the Subscriber, as follows:
 
(a)           The Company has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. This Agreement
has been duly authorized, executed and delivered by the Company and is valid,
binding and enforceable against the Company in accordance with its terms.
 
(b)           The shares of Common Stock to be issued to the Subscriber pursuant
to this Agreement, when issued and delivered in accordance with the terms of
this Agreement, will be duly and validly issued and will be fully paid and
non-assessable.
 
(c)           Neither the execution and delivery nor the performance of this
Agreement by the Company will conflict with the Company’s organizational
materials, as amended to date, or result in a breach of any terms or provisions
of, or constitute a default under, any material contract, agreement or
instrument to which the Company is a party or by which the Company is bound.
 
(d)           The Company is subject to, and in full compliance with, the
reporting requirements of Section 13 or 15(d) of the Exchange Act. The Company
has made available to each Subscriber through the EDGAR system true and complete
copies of each of the Company’s Quarterly Reports on Form 10-Q, Annual Reports
on Form 10-K and Current Reports on Form 8-K, in each case filed since September
30, 2009 (collectively, the “SEC Filings”), and all such SEC Filings are
incorporated herein by reference.  The SEC Filings, when they were filed with
the SEC (or, if any amendment with respect to any such document was filed, when
such amendment was filed), complied in all material respects with the applicable
requirements of the Exchange Act and the rules and regulations thereunder and
did not, as of such date, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. All reports and statements required to be filed by
the Company under the Securities Act and the Exchange Act have been filed,
together with all exhibits required to be filed therewith. The Company
 
 
10

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and each of its direct and indirect subsidiaries (collectively, the
“Subsidiaries”), are engaged in all material respects only in the business
described in the SEC Filings, and the SEC Filings contain a complete and
accurate description in all material respects of the business of the Company and
the Subsidiaries.
 
(e)           The Company acknowledges and agrees that the Subscriber is acting
solely in the capacity of an arm’s length purchaser with respect to shares of
Common Stock purchased under this Agreement and the transactions contemplated
hereby. The Company further acknowledges that the Subscriber 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 the Subscriber or any of its representatives or agents in
connection with this Agreement and the transactions contemplated hereby is
merely incidental to the Subscriber’s purchase of the shares of Common Stock.
The Company further represents to the Subscriber that the Company’s decision to
enter into this Agreement has been based solely on the independent evaluation of
the transactions contemplated hereby by the Company and its representatives.
 
(f)           The Company will indemnify and hold harmless the Subscriber and,
where applicable, its directors, officers, employees, agents, advisors and
shareholders, from and against any and all Loss arising out of or based upon any
representation or warranty of the Company contained herein or in any document
furnished by the Company to the Subscriber in connection herewith being untrue
in any material respect or any breach or failure by the Company to comply with
any covenant or agreement made by the Company to the Subscriber in connection
therewith; provided, however, that the Company’s liability shall not exceed the
Subscriber’s Aggregate Purchase Price tendered hereunder.
 
6.           USE OF PROCEEDS
 
The Company anticipates using the gross proceeds from the Offering for general
corporate purposes including growth initiatives and capital expenditures.

7.           INTENTIONALLY OMITTED
 
8.           CONDITIONS TO ACCEPTANCE OF SUBSCRIPTION
 
The Company’s right to accept the subscription of the Subscriber is conditioned
upon satisfaction of the following conditions precedent on or before the date
the Company accepts such subscription:
 
(a)           As of the Closing, no legal action, suit or proceeding shall be
pending that seeks to restrain or prohibit the transactions contemplated by this
Agreement.
 
(b)           The representations and warranties of the Company contained in
this Agreement shall have been true and correct in all material respects on the
date of this Agreement and shall be true and correct as of the Closing as if
made on the Closing Date.
 
9.
MISCELLANEOUS PROVISIONS

 
(a)           All parties hereto have been represented by counsel, and no
inference shall be drawn in favor of or against any party by virtue of the fact
that such party’s counsel was or was not the principal draftsman of this
Agreement.
 
(b)           Each of the parties hereto shall be responsible to pay the costs
and expenses of its own legal counsel in connection with the preparation and
review of this Agreement and related documentation.
 
(c)           Neither this Agreement, nor any provisions hereof, shall be
waived, modified, discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, modification, discharge or
termination is sought.
 
(d)           The representations, warranties and agreement of the Subscriber
and the Company made in this Agreement shall survive the execution and delivery
of this Agreement and the delivery of the Common Stock purchased herein.
 
 
11

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(e)           Any party may send any notice, request, demand, claim or other
communication hereunder to the Subscriber at the address set forth on the
signature page of this Agreement or to the Company at its primary office
(including personal delivery, expedited courier, messenger service, fax,
ordinary mail or electronic mail), but no such notice, request, demand, claim or
other communication will be deemed to have been duly given unless and until it
actually is received by the intended recipient. Any party may change the address
to which notices, requests, demands, claims and other communications hereunder
are to be delivered by giving the other parties written notice in the manner
herein set forth.
 
(f)           Except as otherwise provided herein, this Agreement shall be
binding upon, and inure to the benefit of, the parties to this Agreement and
their heirs, executors, administrators, successors, legal representatives and
assigns.  If the Subscriber is more than one person or entity, the obligation of
the Subscriber shall be joint and several and the agreements, representations,
warranties and acknowledgments contained herein shall be deemed to be made by,
and be binding upon, each such person or entity and its heirs, executors,
administrators, successors, legal representatives and assigns. This Agreement
sets forth the entire agreement and understanding between the parties as to the
subject matter hereof and merges and supersedes all prior discussions,
agreements and understandings of any and every nature among them.
 
(g)           This Agreement is not transferable or assignable by the
Subscriber.
 
(h)           This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to conflicts of
law principles.
 
(i)           The Company and the Subscriber hereby agree that any dispute that
may arise between them arising out of or in connection with this Agreement shall
be adjudicated before a court located in the City of New York, Borough of
Manhattan, and they hereby submit to the exclusive jurisdiction of the federal
and state courts of the State of New York located in the City of New York,
Borough of Manhattan with respect to any action or legal proceeding commenced by
any party, and irrevocably waive any objection they now or hereafter may have
respecting the venue of any such action or proceeding brought in such a court or
respecting the fact that such court is an inconvenient forum, relating to or
arising out of this Agreement or any acts or omissions relating to the sale of
the securities hereunder, and consent to the service of process in any such
action or legal proceeding by means of registered or certified mail, return
receipt requested, postage prepaid, in care of the address set forth herein or
such other address as either party shall furnish in writing to the other.
 
(j)           This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
 
[Signature Pages Follow]
 
 
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ALL SUBSCRIBERS MUST COMPLETE THIS PAGE

IN WITNESS WHEREOF, the Subscriber has executed this Agreement on the ____ day
of ____ 2011.
 

 
X $0.05                      =
 
Shares of Common Stock subscribed for
 
      Aggregate Purchase Price

Manner in which Title is to be held (Please Check One):
 
1.
___
Individual
7.
___
Trust/Estate/Pension or Profit sharing Plan
Date Opened:______________
2.
___
Joint Tenants with Right of Survivorship
8.
___
As a Custodian for
________________________________
Under the Uniform Gift to Minors Act of the State of
________________________________
3.
___
Community Property
9.
___
Married with Separate Property
4.
___
Tenants in Common
10.
___
Keogh
5.
___
Corporation/Partnership/ Limited Liability Company
11.
___
Tenants by the Entirety
6.
___
IRA
     

ALTERNATIVE DISTRIBUTION INFORMATION
 
To direct distribution to a party other than the registered owner, complete the
information below. YOU MUST COMPLETE THIS SECTION IF THIS IS AN IRA INVESTMENT.
 
Name of Firm (Bank, Brokerage, Custodian):
 
Account Name:
 
Account Number:
 
Representative Name:
 
Representative Phone Number:
 
Address:
 
City, State, Zip:
 
 
 
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IF MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER MUST SIGN.
 
INDIVIDUAL SUBSCRIBERS MUST COMPLETE THIS PAGE 14.
 
SUBSCRIBERS WHICH ARE ENTITIES MUST COMPLETE PAGE 15.
 
EXECUTION BY NATURAL PERSONS
 
_____________________________________________________________________________
Exact Name in Which Title is to be Held
_________________________________
Name (Please Print)
 
_________________________________
Name of Additional Purchaser
_________________________________
Residence: Number and Street
 
_________________________________
Address of Additional Purchaser
_________________________________
City, State and Zip Code
 
_________________________________
City, State and Zip Code
_________________________________
Social Security Number
 
_________________________________
Social Security Number
_________________________________
Telephone Number
 
_________________________________
Telephone Number
_________________________________
Fax Number (if available)
 
________________________________
Fax Number (if available)
_________________________________
E-Mail (if available)
 
________________________________
E-Mail (if available)
__________________________________
(Signature)
 
 
 
________________________________
(Signature of Additional Purchaser)
ACCEPTED this ___ day of _____ 2011, on behalf of the Company.
 
 
By:_________________________________
Name: Glenn Kesner
Title: Chief Executive Officer
   

 
 
 
14

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EXECUTION BY SUBSCRIBER WHICH IS AN ENTITY
(Corporation, Partnership, LLC, Trust, Etc.)
 

_____________________________________________________________________________
Name of Entity (Please Print)
Date of Incorporation or Organization:
State of Principal Office:
Federal Taxpayer Identification Number:
____________________________________________
Office Address
 
____________________________________________
City, State and Zip Code
 
____________________________________________
Telephone Number
 
____________________________________________
Fax Number (if available)
 
____________________________________________
E-Mail (if available)
 
 
By: _________________________________
Name:
Title:
[seal]
Attest: _________________________________
(If Entity is a Corporation)
_________________________________
_________________________________
Address
   
ACCEPTED this ____ day of ________, 2011, on behalf of the Company.
 
 
 
By: _________________________________
Name: Glenn Kesner
Title: Chief Executive Officer

 
 

 
 
15

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INVESTOR QUESTIONNAIRE
 
Instructions:  Check all boxes below which correctly describe you.
 
o
You are (i) a bank, as defined in Section 3(a)(2) of the Securities Act of 1933,
as amended (the “Securities Act”), (ii) a savings and loan association or other
institution, as defined in Section 3(a)(5)(A) of the Securities Act, whether
acting in an individual or fiduciary capacity, (iii) a broker or dealer
registered pursuant to Section 15 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), (iv) an insurance company as defined in Section
2(13) of the Securities Act, (v) an investment company registered under the
Investment Company Act of 1940, as amended (the “Investment Company Act”), (vi)
a business development company as defined in Section 2(a)(48) of the Investment
Company Act, (vii) a Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301 (c) or (d) of the Small Business
Investment Act of 1958, as amended, (viii) a plan established and maintained by
a state, its political subdivisions, or an agency or instrumentality of a state
or its political subdivisions, for the benefit of its employees and you have
total assets in excess of $5,000,000, or (ix) an employee benefit plan within
the meaning of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”) and (1) the decision that you shall subscribe for and purchase shares
of common stock, is made by a plan fiduciary, as defined in Section 3(21) of
ERISA, which is either a bank, savings and loan association, insurance company,
or registered investment adviser, or (2) you have total assets in excess of
$5,000,000 and the decision that you shall subscribe for and purchase the Shares
is made solely by persons or entities that are accredited investors, as defined
in Rule 501 of Regulation D promulgated under the Securities Act (“Regulation
D”) or (3) you are a self-directed plan and the decision that you shall
subscribe for and purchase the Shares of Common Stock is made solely by persons
or entities that are accredited investors.

 
o
You are a private business development company as defined in Section 202(a)(22)
of the Investment Advisers Act of 1940, as amended.

 
o
You are an organization described in Section 501(c)(3) of the Internal Revenue
Code of 1986, as amended (the “Code”), a corporation, Massachusetts or similar
business trust or a partnership, in each case not formed for the specific
purpose of making an investment in the Shares of Common Stock and its underlying
securities in excess of $5,000,000.

 
o
You are a director or executive officer of the Company.

 
o
You are a natural person whose individual net worth, or joint net worth with
your spouse, exceeds $1,000,000 at the time (exclusive of residence) of your
subscription for and purchase of the Shares of Common Stock.

 
o
You are a natural person who had an individual income in excess of $200,000 in
each of the two most recent years or joint income with your spouse in excess of
$300,000 in each of the two most recent years, and who has a reasonable
expectation of reaching the same income level in the current year.

 
o
You are a trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Shares of Common Stock and whose subscription
for and purchase of the Shares of Common Stock is directed by a sophisticated
person as described in Rule 506(b)(2)(ii) of Regulation D.

 
o
You are an entity in which all of the equity owners are persons or entities
described in one of the preceding paragraphs.

 
o
  You are a non-U.S. Person (a “Reg S Person”), and as such Reg S Person, you
hereby represent that the representations contained in paragraphs (1) through
(7) below are true and correct:

 
(1) (i) the issuance and sale to such Reg S Person of the shares of Common Stock
is intended to be exempt from the registration requirements of the Securities
Act, pursuant to the provisions of Regulation S; (ii) you are not a “U.S.
Person,” as such term is defined in Regulation
 
 
16

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  S, and are not acquiring the shares of Common Stock for the account or benefit
of any U.S. Person; and (iii) the offer and sale of the shares of Common Stock
has not taken place, and is not taking place, within the United States of
America or its territories or possessions.  Such Reg S Person acknowledges that
the offer and sale of the shares of Common Stock has taken place, and is taking
place in an “offshore transaction,” as such term is defined in Regulation S.

 
(2) Such Reg S Person acknowledges and agrees that, pursuant to the provisions
of Regulation S, the shares of Common Stock cannot be sold, assigned,
transferred, conveyed, pledged or otherwise disposed of to any U.S. Person or
within the United States of America or its territories or possessions for a
period of one year from and after the Closing Date, unless such shares of Common
Stock are registered for sale in the United States pursuant to an effective
registration statement under the Securities Act or another exemption from such
registration is available.  Such Reg S Person acknowledges that it has not
engaged in any hedging transactions with regard to the shares of Common Stock.
 
(3) Such Reg S Person consents to the placement of a legend on any certificate,
note or other document evidencing the shares of Common Stock and understands
that the Company shall be required to refuse to register any transfer of
securities not made in accordance with applicable U.S. securities laws.
 
(4) Such Reg S Person is not a “distributor” of securities, as that term is
defined in Regulation S, nor a dealer in securities.
 
(5) Such Reg S Person understands that the shares of Common Stock have not been
registered under the Securities Act, or the securities laws of any state and are
subject to substantial restrictions on resale or transfer.  The shares of Common
Stock are “restricted securities” within the meaning of Regulation S and Rule
144, promulgated under the Securities Act.
 
(6) Such Reg S Person acknowledges that the shares of Common Stock may only be
sold offshore in compliance with Regulation S or pursuant to an effective
registration statement under the Securities Act or another exemption from such
registration, if available.  In connection with any resale of the shares of
Common Stock pursuant to Regulation S, the Company will not register a transfer
not made in accordance with Regulation S, pursuant to an effective registration
statement under the Securities Act or in accordance with another exemption from
the Securities Act.
 
(7) Such Reg S Person makes the representations, declarations and warranties as
contained in this Agreement with the intent that the same shall be relied upon
by the Company in determining its suitability as a purchaser of such shares of
Common Stock.
 

 
 
17

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

 
 
Check all boxes below which correctly describe you.
 
With respect to this investment in the Shares of Common Stock, your:
 

  Investment Objectives:  o    Aggressive Growth  o Speculation              
Risk Tolerance:  o Low Risk  o Moderate Risk  o   High Risk

 
Are you associated with a FINRA Member
Firm?                                                                                                            o Yes                       o No
 
 
Your initials (purchaser and co-purchaser, if applicable) are required for each
item below:

 
____   ____ 
I/We understand that this investment is not guaranteed.

 
____   ____ 
I/We are aware that this investment is not liquid.

 
____   ____ 
I/We are sophisticated in financial and business affairs and are able to
evaluate the risks and merits of an investment in this offering.

 
____   ____ 
I/We confirm that this investment is considered “high risk.” (This type of
investment is considered high risk due to the inherent risks including lack of
liquidity and lack of diversification.  Success or

 
 
failure of private placements such as this is dependent on the corporate issuer
of these securities and is outside the control of the investors. While potential
loss is limited to the amount invested, such loss is possible.)

 
The Subscriber hereby represents and warrants that all of its answers to this
Investor Questionnaire are true as of the date of its execution of the
Subscription Agreement pursuant to which it purchased the Shares of Common
Stock.
 
 
 
___________________________________
Name of Purchaser  [please print]
___________________________________
Signature of Purchaser (Entities please
provide signature of Purchaser’s duly
authorized signatory.)
___________________________________
Name of Signatory (Entities only)
___________________________________
Title of Signatory (Entities only)
 
 
___________________________________
Name of Co-Purchaser  [please print]
___________________________________
Signature of Co-Purchaser

 
 
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VERIFICATION OF INVESTMENT ADVISOR/BROKER
 
I state that I am familiar with the financial affairs and investment objectives
of the investor named above and reasonably believe that a purchase of the
securities is a suitable investment for this investor and that the investor,
either individually or together with his or her purchaser representative,
understands the terms of and is able to evaluate the merits of this offering.  I
acknowledge:
 
 
(a)
that I have reviewed the Subscription Agreement and forms of securities
presented to me, and attachments (if any) thereto;

 
 
(b)
that the Subscription Agreement and attachments thereto have been fully
completed and executed by the appropriate party; and

 
 
(c)
that the subscription will be deemed received by the Company upon acceptance of
the Subscription Agreement.

 
 
Deposit securities from this offering directly to purchaser’s account?o Yes o No

 
 
If “Yes,” please indicate the account number:
_____________________________________

 
 

        Broker/Dealer   Account Executive                   (Name of
Broker/Dealer)    (Signature)                   (Street Address of Broker/Dealer
Office)    (Print Name)                   (City of Broker/Dealer
Office)  (State)  (Zip)       (Representative I.D. Number)                  
(Telephone Number of Broker/Dealer Office)    (Date)                   (Fax
Number of Broker/Dealer Office)      (E-mail Address of Account Executive)  

 
 19

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