MEDICAL MEDIA TELEVISION, INC.

 
 
$200,000 10% SECURED PROMISSORY NOTE DUE
 
AUGUST 11, 2007 
 
 
SECURITIES EXCHANGE AGREEMENT
 
By and Among
 
MEDICAL MEDIA TELEVISION, INC.,
 
PETCARE TELEVISION NETWORK, INC.,
 
KIDCARE MEDICAL TELEVISION NETWORK, INC.,
 
AFRICAN AMERICAN MEDICAL NETWORK, INC.,
 
and
 
VICIS CAPITAL MASTER FUND

 
DATED JUNE 15, 2007
 

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SECURITIES EXCHANGE AGREEMENT
 
 
This SECURITIES EXCHANGE AGREEMENT (the “Agreement”), dated this 15th day of
June, 2007, is made by and among MEDICAL MEDIA TELEVISION, INC., a Florida
corporation (the “Company”), PETCARE TELEVISION NETWORK, INC., a Florida
corporation (“PetCARE”), KIDCARE MEDICAL TELEVISION NETWORK, INC., a Florida
corporation (“KidCARE”), AFRICAN AMERICAN MEDICAL NETWORK, INC., a Florida
corporation (“African American Medical” and together with PetCARE and KidCARE
each a “Subsidiary” and collectively, the “Subsidiaries”), and VICIS CAPITAL
MASTER FUND (the “Purchaser”), a trust formed under the laws of the Cayman
Islands.
 
RECITALS
 
WHEREAS, the Purchaser is the holder of 20,000,000 shares (the “Exchanged
Shares”) of the Company’s common stock, par value $.0005 per share (the “Common
Stock”), which were acquired from the Company on May 31, 2007; and
 
WHEREAS, pursuant to the terms and conditions of this Agreement, the Company
wishes to issue and sell to the Purchaser, and the Purchaser wishes to acquire
from the Company, a 10% Secured Promissory Note due August 11, 2007 in the
principal amount of $200,000 and in the form attached hereto as Exhibit A (the
“Note”) in consideration for the Exchanged Shares.
 
NOW, THEREFORE,  the Company and the Purchaser hereby agree as follows:
 
ARTICLE I
PURCHASE AND SALE OF THE NOTE
 
1.1 Purchase and Sale of the Note. Subject to the terms and conditions hereof
and in reliance on the representations and warranties contained herein, or made
pursuant hereto, the Company will issue and sell to the Purchaser, and the
Purchaser will purchase from the Company at the closing of the transactions
contemplated hereby (the “Closing”), the Note for in exchange for the Exchanged
Shares.
 
1.2 Closing. The Closing shall be deemed to occur at the offices of Quarles &
Brady, LLP, 411 East Wisconsin Avenue, Milwaukee, Wisconsin at 5:00 p.m. CDT on
June 15, 2007 or at such other place, date or time as mutually agreeable to the
parties (the “Closing Date).
 
1.3 Closing Matters. On the Closing Date, subject to the terms and conditions
hereof, the following actions shall be taken:
 
(a) The Company will deliver to the Purchaser the Note dated the Closing Date,
in the principal amount of $200,000.
 
(b) The Purchaser shall deliver to the Company the Exchanged Shares.
 
 

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ARTICLE II
SECURITY DOCUMENTS
 
2.1 Company Security Documents.
 
(a) Security Agreement. All of the obligations of the Company under the Note
shall be secured by a lien on all the personal property and assets of the
Company now existing or hereinafter acquired granted pursuant to that certain
Security Agreement dated as of February 1, 2007, between the Company and
Purchaser (“Security Agreement”), which, except for Permitted Liens (as
hereinafter defined), shall be a first lien. The parties acknowledge and agree
that the term “Obligations” as defined in the Security Agreement, includes all
obligations of the Company to the Purchaser, including without limitation, those
obligations of the Company under the Note and Transaction Documents (as
hereinafter defined).
 
(b) Stock Pledge Agreement. To secure the obligations of the Company under this
Agreement and the Note, the Company shall pledge, hypothecate, and assign, to
the Purchaser all the capital stock of its Subsidiaries (the “Pledged Shares”),
pursuant to that certain Stock Pledge Agreement and Escrow Agreement, dated as
of February 1, 2007 between the Company and the Purchaser (the “Stock Pledge
Agreement”). The parties acknowledge and agree that the term “Obligations” as
defined in the Stock Pledge Agreement, includes all obligations of the Company
to the Purchaser, including without limitation, those obligations of the Company
under the Note and Transaction Documents. The Parties further acknowledge that
the Pledged Shares were previously transferred and delivered to Quarles & Brady
LLP (the “Escrow Agent”) pursuant to the terms of that certain Stock Pledge and
Escrow Agreement, dated August 11, 2006.
 
2.2 Guaranty. All of the obligations of the Company under the Note shall be
guaranteed by each Subsidiary of the Company pursuant to those certain Guaranty
Agreements, dated as of February 1, 2007 (each a “Guaranty Agreement”). The
parties acknowledge and agree that the term “Obligations” as defined in each
Guaranty Agreement, includes all obligations of the Company to the Purchaser,
including without limitation, those obligations of the Company under the Note
and Transaction Documents.
 
2.3 Guarantor Security Documents. All of the obligations of the Subsidiaries
under the Guaranty Agreement shall be secured by a lien on all the personal
property and assets of each respective Subsidiary now existing or hereinafter
acquired granted pursuant to those certain Guarantor Security Agreements dated
as of February 1, 2007 (each a “Guarantor Security Agreement”), which, except
for Permitted Liens, shall be a first lien. The parties acknowledge and agree
that the term “Obligations” as defined in each Guaranty Security Agreement,
includes all obligations of each applicable Subsidiary to the Purchaser,
including without limitation, those obligations of such Subsidiary under the
applicable Guaranty Security Agreement.
 
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
The Company hereby represents and warrants to the Purchaser as of the date of
this Agreement as follows:
 
3.1 Organization and Qualification. The Company is a corporation duly organized
and validly existing and in good standing under the laws of the jurisdiction in
which it is incorporated, and has all requisite corporate power and authority to
carry on its business as now conducted. The Company is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which its ownership of property or the nature of the business conducted by it
makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not have a Material Adverse Effect. As
used in this Agreement, “Material Adverse Effect” means any material adverse
effect on the business, properties, assets, operations, results of operations,
condition (financial or otherwise) or prospects of the Company and its
Subsidiaries or on the transactions contemplated hereby or by the agreements and
instruments to be entered into in connection herewith, or on the authority or
ability of the Company to perform its obligations under the Transaction
Documents.
 
3.2 Subsidiaries. The Company has no subsidiaries PetCARE, African American
Medical, and KidCARE. The Company owns, directly or indirectly, all of the
capital stock of its Subsidiaries, free and clear of any and all Liens, and all
the issued and outstanding shares of capital stock of each Subsidiary are
validly issued and are fully paid, non-assessable and free of preemptive and
similar rights. Each Subsidiary is a corporation duly organized and validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated, and has all requisite corporate power and authority to carry on
its business as now conducted. Each Subsidiary is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which its ownership of property or the nature of the business conducted by it
makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not have a Material Adverse Effect.
 
3.3 No Violation. Neither the Company nor any of its Subsidiaries is in
violation of: (a) any of the provisions of its certificate or articles of
incorporation, bylaws or other organizational or charter documents; or (b) any
judgment, decree or order or any statute, ordinance, rule or regulation
applicable to the Company or any of its Subsidiaries, except for possible
violations which would not, individually or in the aggregate, have a Material
Adverse Effect.
 
3.4 Capitalization.
 
(a) As of the date hereof, the Company’s authorized apital stock consists of :
(i) 250,000,000 shares of Common Stock, of which (A) 76,847,389 shares are
issued and outstanding, (B) no shares of Common Stock held in treasury, (C)
35,114,082 shares of Common Stock reserved for issuance upon the exercise of
options, warrants and other securities convertible into Common Stock; and (ii)
25,000,000 shares of Preferred Stock, of which 1,682,044 shares have been
designated as “Series A Preferred Stock,” 2,612,329 shares have been designated
as “Series B Preferred Stock,” and 400,000 shares have been designated as
“Series C Preferred Stock,” of which (X) 1,682,044 shares of the Company’s
Series A Preferred Stock are issued and outstanding, (Y) 2,612,329 shares of the
Company’s Series B Preferred Stock are issued and outstanding, and (Z) 32,242
shares of the Company’s Series C Preferred Stock are issued and outstanding. All
of such issued and outstanding shares have been, or upon issuance will be,
validly issued, are fully paid and nonassessable.
 
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(b) Except as disclosed in the Company’s reports, financial statements,
schedules, forms, statements and other documents required to be filed by it with
the Securities and Exchange Commission (the “SEC”) pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) or otherwise on Schedule 3.4(b), prior to the date hereof (the “SEC
Documents”):
 
(i) no holder of shares of the Company’s capital stock has any preemptive rights
or any other similar rights or has been granted or holds any liens or
encumbrances suffered or permitted by the Company;
 
(ii) except for annual issuances of Common Stock that will be issued in
connection with the Company’s ESOP and to an advisory board that in the
aggregate will not exceed, during any calendar year, 1.576% of the Company’s
outstanding Common Stock calculated on a fully-diluted basis at a per share
price of $.17, 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, or exercisable or exchangeable for, any
shares of capital stock of the Company or any of its Subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional shares of capital stock
of the Company or any of its Subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, or exercisable or exchangeable for, any
shares of capital stock of the Company or any of its Subsidiaries;
 
(iii) there are no outstanding debt securities, notes, credit agreements, credit
facilities or other agreements, documents or instruments evidencing Indebtedness
(as defined in Section 3.14 hereof) of the Company or any of its Subsidiaries or
by which the Company or any of its Subsidiaries is or may become bound;
 
(iv) there are no financing statements securing obligations in any material
amounts, either singly or in the aggregate, filed in connection with the Company
any of its Subsidiaries;
 
(v) there are no agreements or arrangements under which the Company or any of
its Subsidiaries is obligated to register the sale of any of their securities
under the Securities Act of 1933, as amended, (the “Securities Act”);
 
(vi) there are no outstanding securities or instruments of the Company or any of
its Subsidiaries that contain any redemption or similar provisions, and there
are no contracts, commitments, understandings or arrangements by which the
Company or any of its Subsidiaries is or may become bound to redeem a security
of the Company or any of its Subsidiaries;
 
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(vii) there are no securities or instruments containing antidilution or similar
provisions that will be triggered by the issuance of the Note; and
 
(viii) the Company does not have any stock appreciation rights or “phantom
stock” plans or agreements or any similar plan or agreement.
 
3.5 Issuance of the Note. The Note to be issued hereunder is duly authorized
and, upon payment and issuance in accordance with the terms hereof, shall be
free from all taxes, Liens and charges with respect to the issuance thereof. All
actions by the Board, the Company and its stockholders necessary for the valid
issuance of the Note.
 
3.6 Authorization; Enforcement; Validity. The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Security Agreement, the Stock Pledge Agreement, the Guaranty
Agreement, the Guarantor Security Agreement, the Note, and each of the other
agreements or instruments entered into by the parties hereto in connection with
the transactions contemplated by this Agreement (collectively, the “Transaction
Documents”) and to issue the Note in accordance with the terms hereof and
thereof. The execution and delivery of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby, including, without limitation, and the issuance of the Note, have been
duly authorized by the board of directors of the Company (the “Board”), and no
further consent or authorization is required by the Company, the Board or its
stockholders. This Agreement and the other Transaction Documents of even date
herewith have been duly executed and delivered by the Company, and constitute
the legal, valid and binding obligations of the Company enforceable against the
Company in accordance with their respective terms, except (i) as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies, or (ii) as any rights to indemnity or contribution
hereunder may be limited by federal and state securities laws and public policy
consideration.
 
3.7 [Intentionally Omitted]
 
3.8 No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby will not (i) result in a violation of any
articles or certificate of incorporation, any certificate of designations,
preferences and rights of any outstanding series of preferred stock or bylaws of
the Company or any of its Subsidiaries or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any material agreement, indenture or instrument
to which the Company or any of its Subsidiaries is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws and regulations) applicable to the Company or
any of its Subsidiaries or by which any property or asset of the Company or any
of its Subsidiaries is bound or affected, except in the case of clauses (ii) and
(iii), for such breaches or defaults as would not be reasonably expected to have
a Material Adverse Effect.
 
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3.9 Governmental Consents. Except for the filing of a Form D with the SEC, the
Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court, governmental agency or any
regulatory or self-regulatory agency or any other Person (as hereinafter
defined) in order for it to execute, deliver or perform any of its obligations
under or contemplated by the Transaction Documents, in each case, in accordance
with the terms hereof or thereof. All consents, authorizations, orders, filings
and registrations which the Company is required to obtain at or prior to the
Closing pursuant to the preceding sentence have been obtained or effected. The
Company is unaware of any facts or circumstances which might prevent the Company
from obtaining or effecting any of the foregoing.
 
3.10 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 sale of the Note.
 
3.11 No Integrated Offering. None of the Company, its subsidiaries, any of their
affiliates, and 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 the Note under
the Securities Act or cause this offering of the Note to be integrated with
prior offerings by the Company for purposes of the Securities Act or any
applicable stockholder approval provisions.
 
3.12 Placement Agent’s Fees. No brokerage or finder’s fee or commission are or
will be payable to any Person with respect to the transactions contemplated by
this Agreement based upon arrangements made by the Company or any of its
affiliates.
 
3.13 Litigation. There is no action, suit, proceeding, inquiry or investigation
before or by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the Company, threatened
against or affecting the Company, the transactions contemplated by the
Transaction Documents, the Common Stock or any of its Subsidiaries or any of
their respective current or former officers or directors in their capacities as
such. To the knowledge of the Company, there has not been within the past two
(2) years, and there is not pending, any investigation by the SEC involving the
Company or any current or former director or officer of the Company (in his or
her capacity as such). The SEC has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company
under the Securities Act within the past two (2) years.
 
3.14 Indebtedness and Other Contracts. Except as disclosed in the SEC Documents
or otherwise set forth on Schedule 3.14, neither the Company nor any of its
Subsidiaries (a) has any outstanding Indebtedness (as defined below), (b) is a
party to any contract, agreement or instrument, the violation of which, or
default under, by any other party to such contract, agreement or instrument
would result in a Material Adverse Effect, (c) is in violation of any term of or
in default under any contract, agreement or instrument relating to any
Indebtedness, except where such violations and defaults would not result,
individually or in the aggregate, in a Material Adverse Effect, or (d) is a
party to any contract, agreement or instrument relating to any Indebtedness, the
performance of which, in the judgment of the Company’s officers, has or is
expected to have a Material Adverse Effect. For purposes of this Agreement:
(x) ”Indebtedness” of any Person means, without duplication (i) all indebtedness
for borrowed money, (ii) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than trade payables
entered into in the ordinary course of business), (iii) all reimbursement or
payment obligations with respect to letters of credit, surety bonds and other
similar instruments, (iv) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses, (v) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property), (vi) all
monetary obligations under any leasing or similar arrangement which, in
connection with generally accepted accounting principles, consistently applied
for the periods covered thereby, is classified as a capital lease, (vii) all
indebtedness referred to in clauses (i) through (vi) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, change, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment of
such indebtedness, and (viii) all Contingent Obligations in respect of
indebtedness or obligations of others of the kinds referred to in clauses (i)
through (vii) above; (y) ”Contingent Obligation” means, as to any Person, any
direct or indirect liability, contingent or otherwise, of that Person with
respect to any indebtedness, lease, dividend or other obligation of another
Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such liability
will be protected (in whole or in part) against loss with respect thereto; and
(z) ”Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
 
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3.15 Financial Information; SEC Documents. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the Exchange Act. As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder applicable to such SEC Documents, and none of such SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. As of
their respective dates, the financial statements of the Company included in such
SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance with
generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to the Purchaser that is not
included in the SEC Documents contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstance under which they are or were made, not
misleading.
 
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3.16 Absence of Certain Changes. Except as disclosed in the SEC Documents, since
December 31, 2005, there has been no material adverse change and no material
adverse development in the business, properties, operations, condition
(financial or otherwise), results of operations or prospects of the Company or
its Subsidiaries. Since December 31, 2005, the Company has not (i) declared or
paid any dividends, (ii) sold any assets, individually or in the aggregate, in
excess of $50,000 outside of the ordinary course of business or (iii) had
capital expenditures, individually or in the aggregate, in excess of $100,000.
The Company has not taken any steps to seek protection pursuant to any
bankruptcy law nor does the Company have any knowledge or reason to believe that
its creditors intend to initiate involuntary bankruptcy proceedings or any
actual knowledge of any fact which would reasonably lead a creditor to do so.
After giving effect to the transactions contemplated hereby to occur at the
Closing, the Company will not be Insolvent (as hereinafter defined). For
purposes of this Agreement, “Insolvent” means (i) the present fair saleable
value of the Company’s assets is less than the amount required to pay the
Company’s total indebtedness, contingent or otherwise, (ii) the Company is
unable to pay its debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured, (iii) the Company
intends to incur or believes that it will incur debts that would be beyond its
ability to pay as such debts mature or (iv) the Company has unreasonably small
capital with which to conduct the business in which it is engaged as such
business is now conducted and is proposed to be conducted.
 
3.17 Foreign Corrupt Practices.
 
(a) Neither the Company, nor any director, officer, agent, employee or other
Person acting on behalf of the Company has, in the course of its actions
(a) used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expenses relating to political activity, (b) made any direct
or indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds, (c) violated or is in violation of any provision
of the U.S. Foreign Corrupt Practices Act of 1977, as amended or (d) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to any foreign or domestic government official or employee.
 
(b) None of the Subsidiaries of the Company, nor any of their respective
directors, officers, agents, employees or other Persons acting on behalf of such
subsidiaries has, in the course of their respective actions (a) used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity, (b) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds, (c) violated or is in violation of any provision
of the U.S. Foreign Corrupt Practices Act of 1977, as amended or (d) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to any foreign or domestic government official or employee.
 
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3.18 Transactions With Affiliates. Except as set forth in the SEC Documents,
none of the officers, directors or employees of the Company is presently a party
to any transaction with the Company or any of its Subsidiaries (other than for
ordinary course services as employees, officers or directors), including any
contract, agreement or other arrangement 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 such officer, director or
employee or, to the knowledge of the Company, any corporation, partnership,
trust or other entity in which any such officer, director, or employee has a
substantial interest or is an officer, director, trustee or partner.
 
3.19 Insurance. The Company and each of its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as management of the Company believes to be prudent and customary in the
businesses in which the Company and each of its Subsidiaries are engaged.
Neither the Company nor any of its Subsidiaries has been refused any insurance
coverage sought or applied for and neither the Company nor any of its
Subsidiaries has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.
 
3.20 Employee Relations. Neither the Company nor any of its Subsidiaries is a
party to any collective bargaining agreement or employs any member of a union.
No Executive Officer of the Company (as defined in Rule 501(f) of the Securities
Act) has notified the Company that such officer intends to leave the Company or
otherwise terminate such officer’s employment with the Company. No Executive
Officer of the Company, to the knowledge of the Company, is, or is now, in
violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or
any other contract or agreement or any restrictive covenant, and the continued
employment of each such executive officer does not subject the Company or any of
its Subsidiaries to any liability with respect to any of the foregoing matters.
The Company and each of its Subsidiaries are in compliance with all federal,
state, local and foreign laws and regulations respecting employment and
employment practices, terms and conditions of employment and wages and hours,
except where failure to be in compliance would not, either individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect.
 
3.21 Title. The Company and each of its Subsidiaries have good and marketable
title to all personal property owned by them which is material to their
respective business, in each case free and clear of all liens, encumbrances and
defects except such as are described in the SEC Documents or such as do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and its
Subsidiaries. Any real property and facilities held under lease by the Company
and each of its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and each of its Subsidiaries.
 
3.22 Intellectual Property Rights. Schedule 3.22 sets forth a list of all of the
Company’s patents, trademarks, trade names, service marks copyrights, and
registrations and applications therefor, trade secrets and any other
intellectual property right (collectively, “Intellectual Property Rights”),
identifying whether owned by the Company, any of its Subsidiaries or a third
party. The Intellectual Property Rights are, to the best of the Company’s
knowledge, fully valid and are in full force and effect. The Company does not
have any knowledge of any infringement by the Company or any of its Subsidiaries
of Intellectual Property Rights of others. There is no claim, action or
proceeding being made or brought, or to the knowledge of the Company, being
threatened, against the Company or any of its Subsidiaries regarding its
Intellectual Property Rights that could have a Material Adverse Effect. The
Company is unaware of any facts or circumstances which might give rise to any of
the foregoing infringements or claims, actions or proceedings. The Company and
its Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of their Intellectual Property Rights.
 
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3.23 Environmental Laws. The Company and each of its Subsidiaries (a) are in
compliance with any and all Environmental Laws (as hereinafter defined),
(b) have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(c) are in compliance with all terms and conditions of any such permit, license
or approval where, in each of the foregoing clauses (a), (b) and (c), the
failure to so comply could be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect. The term “Environmental Laws” means
all federal, state, local or foreign laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.
 
3.24 Tax Matters. The Company and each of its Subsidiaries (a) have made or
filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject, (b) have paid
all taxes and other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and (c) have set aside on its books
reasonably adequate provision for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply,
except where such failure would not have a Material Adverse Effect. 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.
 
3.25 Sarbanes-Oxley Act. The Company is in compliance with any and all
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date
hereof and applicable to it, and any and all rules and regulations promulgated
by the SEC thereunder that are effective and applicable to it as of the date
hereof, except where such noncompliance would not have a Material Adverse
Effect.
 
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3.26 Investment Company Status. The Company is not, and immediately after
receipt of payment for the Note will not be, an “investment company,” an
“affiliated person” of, “promoter” for or “principal underwriter” for, or an
entity “controlled” by an “investment company,” within the meaning of the
Investment Company Act.
 
3.27 Material Contracts. Each contract of the Company that involves expenditures
or receipts in excess of $100,000 (each an “Applicable Contract”) is in full
force and effect and is valid and enforceable in accordance with its terms. The
Company is and has been in full compliance with all applicable terms and
requirements of each Applicable Contract and , to the Company’s knowledge, no
event has occurred or circumstance exists that (with or without notice or lapse
of time) may contravene, conflict with or result in a violation or breach of, or
give the Company or any other entity the right to declare a default or exercise
any remedy under, or to accelerate the maturity or performance of, or to cancel,
terminate or modify any Applicable Contract. The Company has not given or
received from any other entity any notice or other communication (whether oral
or written) regarding any actual, alleged, possible or potential violation or
breach of, or default under, any Applicable Contract.
 
3.28 Inventory. All inventory of the Company consists of a quality and quantity
usable and salable in the ordinary course of business, except for obsolete items
and items of below-standard quality, all of which have been or will be written
off or written down to net realizable value on the unaudited consolidated
balance sheet of the Company and its Subsidiaries as of December 31, 2006. The
quantities of each type of inventory (whether raw materials, work-in-process, or
finished goods) are not excessive, but are reasonable and warranted in the
present circumstances of the Company.
 
3.29 Disclosure. The Company confirms that neither it nor any other Person
acting on its behalf has provided the Purchaser or its agents or counsel with
any information that constitutes or might constitute material, nonpublic
information that has not been disclosed in the SEC Documents. The Company
understands and confirms that the Purchaser will rely on the foregoing
representations in effecting transactions in securities of the Company. All
disclosure provided to the Purchaser regarding the Company, its business and the
transactions contemplated hereby, including the Schedules to this Agreement,
furnished by or on behalf of the Company are true and correct and do not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
 
The Purchaser hereby represents and warrants to the Company as of the date of
this Agreement as follows:
 
4.1 Organization. The Purchaser is a corporation, limited liability company or
partnership duly incorporated or organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization.
 
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4.2 Authorization. This Agreement has been duly authorized, validly executed and
delivered by the Purchaser and is a valid and binding agreement and obligation
of the Purchaser enforceable against the Purchaser in accordance with its terms,
subject to limitations on enforcement by general principles of equity and by
bankruptcy or other laws affecting the enforcement of creditors’ rights
generally, and the Purchaser has full power and authority to execute and deliver
this Agreement and the other agreements and documents contemplated hereby and to
perform its obligations hereunder and thereunder.
 
4.3 Investment Investigation. The Purchaser understands that no Federal, state,
local or foreign governmental body or regulatory authority has made any finding
or determination relating to the fairness of an investment in the Note and that
no Federal, state, local or foreign governmental body or regulatory authority
has recommended or endorsed, or will recommend or endorse, any investment in the
Note. The Purchaser, in making the decision to purchase the Note, has relied
upon independent investigation made by it and has not relied on any information
or representations made by third parties.
 
4.4 Accredited Investor. The Purchaser is an “accredited investor” as defined
under Rule 501 of Regulation D promulgated under the Securities Act.
 
4.5 No Distribution. The Purchaser is and will be acquiring the Note for its own
account, and not with a view to any resale or distribution of the Note in whole
or in part, in violation of the Securities Act or any applicable securities
laws.
 
4.6 Resale. The parties intend that the offer and sale of the Note be exempt
from registration under the Securities Act, by virtue of Section 4(2) and/or
Rule 506 of Regulation D promulgated under the Securities Act. The Purchaser
understands that the Note purchased hereunder has not been, and may never be,
registered under the Securities Act and that the Note cannot be sold or
transferred unless its is first registered under the Securities Act and such
state and other securities laws as may be applicable or in the opinion of
counsel for the Company an exemption from registration under the Securities Act
is available (and then the Note may be sold or transferred only in compliance
with such exemption and all applicable state and other securities laws).
 
4.7 Reliance. The Purchaser understands that the Note is being offered and sold
to it in reliance on specific provisions of Federal and state securities laws
and that the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings of
the Purchaser set forth herein for purposes of qualifying for exemptions from
registration under the Securities Act, and applicable state securities laws.
 
4.8 Title to Exchanged Shares. The Purchaser is the lawful owner of the
Exchanged Shares and has good title thereto, free and clear of all liens, claims
and encumbrances of any kind.
 
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ARTICLE V
CONDITIONS TO CLOSING OF THE PURCHASERS
 
The obligation of the Purchaser to purchase the Note at the Closing is subject
to the fulfillment to the Purchaser’s satisfaction on or prior to the Closing
Date of each of the following conditions, any of which may be waived by the
Purchaser:
 
5.1 Representations and Warranties Correct. The representations and warranties
in Article III hereof shall be true and correct when made, and shall be true and
correct on the Closing Date with the same force and effect as if they had been
made on and as of the Closing Date.
 
5.2 Performance. All covenants, agreements and conditions contained in this
Agreement to be performed or complied with by the Company on or prior to the
Closing Date shall have been performed or complied with by the Company in all
material respects.
 
5.3 No Impediments. Neither the Company nor any Purchaser shall be subject to
any order, decree or injunction of a court or administrative agency of competent
jurisdiction that prohibits the transactions contemplated hereby or would impose
any material limitation on the ability of such Purchaser to exercise full rights
of ownership of the Note. At the time of the Closing, the purchase of the Note
to be purchased by the Purchaser hereunder shall be legally permitted by all
laws and regulations to which the Purchaser and the Company are subject.
 
5.4 Other Agreements and Documents. Company and/or its Subsidiaries, as
applicable, shall have executed and delivered the following agreements and
documents:
 
(a) The Note in the form of Exhibit A attached hereto;
 
(b) A certificate of the Company’s CEO, dated the Closing Date, certifying
(i) the fulfillment of the conditions specified in Sections 5.1 and 5.2 of this
Agreement, (ii) the Board resolutions approving this Agreement and the
transactions contemplated hereby, and (iii) other matters as the Purchaser shall
reasonably request;
 
(c) A written waiver, in form and substance satisfactory to the Purchaser, from
each person, other than the Purchaser and those Persons set forth on Schedule
5.4(c), who has any of the following rights:
 
(i) any currently effective right of first refusal to acquire the Note; or
 
(ii) any right to an anti-dilution adjustment of securities issued by the
Company that are held by such person that will be triggered as a result of the
issuance of the Note; and
 
(d) All necessary consents or waivers, if any, from all parties to any other
material agreements to which the Company is a party or by which it is bound
immediately prior to the Closing in order that the transactions contemplated
hereby may be consummated and the business of the Company may be conducted by
the Company after the Closing without adversely affecting the Company.
 
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5.5 Due Diligence Investigation. No fact shall have been discovered, whether or
not reflected in the Schedules hereto, which in the Purchaser’s determination
would make the consummation of the transactions contemplated by this Agreement
not in the Purchaser’s best interests.
 
5.6 Post-Closing Deliveries. Within 10 days after Closing, the Company shall
deliver to Purchaser a completed and executed Florida Department of Revenue
Documentary Stamp Tax Return Form DR-228, or such other successor form specified
by the Florida Department of Revenue.
 
ARTICLE VI
CONDITIONS TO CLOSING OF THE COMPANY
 
The Company’s obligation to sell the Note at the Closing is subject to the
fulfillment to its satisfaction on or prior to the Closing Date of each of the
following conditions:
 
6.1 Representations. The representations made by the Purchaser pursuant to
Article IV hereof shall be true and correct when made and shall be true and
correct on the Closing Date.
 
6.2 No Impediments. Neither the Company nor any Purchaser shall be subject to
any order, decree or injunction of a court or administrative agency of competent
jurisdiction that prohibits the transactions contemplated hereby or would impose
any material limitation on the ability of such Purchaser to exercise full rights
of ownership of the Note. At the time of the Closing, the purchase of the Note
to be purchased by the Purchaser hereunder shall be legally permitted by all
laws and regulations to which the Purchaser and the Company are subject.
 
6.3 Payment of Purchase Price. The Company shall have received the Exchanged
Shares.
 
ARTICLE VII
AFFIRMATIVE COVENANTS
 
The Company hereby covenants and agrees, so long as the Note remains
outstanding, as follows:
 
7.1 Maintenance of Corporate Existence. The Company shall and shall cause its
Subsidiaries to, maintain in full force and effect its corporate existence,
rights and franchises and all material terms of licenses and other rights to use
licenses, trademarks, trade names, service marks, copyrights, patents or
processes owned or possessed by it and necessary to the conduct of its business.
 
7.2 Maintenance of Properties. The Company shall and shall cause its
Subsidiaries to, keep each of its properties necessary to the conduct of its
business in good repair, working order and condition, reasonable wear and tear
excepted, and from time to time make all needful and proper repairs, renewals,
replacements, additions and improvements thereto; and the Company shall and
shall cause its Subsidiaries to at all times comply with each material provision
of all leases to which it is a party or under which it occupies property.
 
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7.3 Payment of Taxes. The Company shall and shall cause its Subsidiaries to,
promptly pay and discharge, or cause to be paid and discharged when due and
payable, all lawful taxes, assessments and governmental charges or levies
imposed upon the income, profits, assets, property or business of the Company
and its Subsidiaries; provided, however, that any such tax, assessment, charge
or levy need not be paid if the validity thereof shall be contested timely and
in good faith by appropriate proceedings, if the Company or its Subsidiaries
shall have set aside on its books adequate reserves with respect thereto, and
the failure to pay shall not be prejudicial in any material respect to the
holder of the Note, and provided, further, that the Company or its Subsidiaries
will pay or cause to be paid any such tax, assessment, charge or levy forthwith
upon the commencement of proceedings to foreclose any lien which may have
attached as security therefor.
 
7.4 Payment of Indebtedness. The Company shall and shall cause its Subsidiaries
to pay or cause to be paid all Indebtedness incident to the operations of the
Company or its Subsidiaries (including, without limitation, claims or demands of
workmen, materialmen, vendors, suppliers, mechanics, carriers, warehousemen and
landlords) which, if unpaid might become a lien (except for Permitted Liens)
upon the assets or property of the Company or its Subsidiaries.
 
7.5 Maintenance of Insurance. The Company shall and shall cause its Subsidiaries
to, keep its assets which are of an insurable character insured by financially
sound and reputable insurers against loss or damage by theft, fire, explosion
and other risks customarily insured against by companies in the line of business
of the Company or its Subsidiaries, in amounts sufficient to prevent the Company
and its Subsidiaries from becoming a co-insurer of the property insured; and the
Company shall and shall cause its Subsidiaries to maintain, with financially
sound and reputable insurers, insurance against other hazards and risks and
liability to persons and property to the extent and in the manner customary for
companies in similar businesses similarly situated or as may be required by law,
including, without limitation, general liability, fire and business interruption
insurance, and product liability insurance as may be required pursuant to any
license agreement to which the Company or its Subsidiaries is a party or by
which it is bound.
 
7.6 Notice of Adverse Change. The Company shall promptly give notice to the
holder of the Note (but in any event within seven (7) days) after becoming aware
of the existence of any condition or event which constitutes, or the occurrence
of, any of the following:
 
(a) any Event of Default (as hereinafter defined);
 
(b) any other event of noncompliance by the Company or its Subsidiaries under
this Agreement;
 
(c) the institution or threatening of institution of an action, suit or
proceeding against the Company or any Subsidiary before any court,
administrative agency or arbitrator, including, without limitation, any action
of a foreign government or instrumentality, which, if adversely decided, could
materially adversely affect the business, prospects, properties, financial
condition or results of operations of the Company and its Subsidiaries, taken as
a whole whether or not arising in the ordinary course of business; or
 
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(d) any information relating to the Company or any Subsidiary which could
reasonably be expected to materially and adversely affect the assets, property,
business or condition (financial or otherwise) of the Company or its ability to
perform the terms of this Agreement. Any notice given under this Section 7.6
shall specify the nature and period of existence of the condition, event,
information, development or circumstance, the anticipated effect thereof and
what actions the Company has taken and/or proposes to take with respect thereto.
 
7.7 Compliance With Agreements. The Company shall and shall cause its
Subsidiaries to comply in all material respects, with the terms and conditions
of all material agreements, commitments or instruments to which the Company or
any of its Subsidiaries is a party or by which it or they may be bound.
 
7.8 Compliance With Laws. The Company shall and shall cause each of its
Subsidiaries to duly comply in all material respects with any material laws,
ordinances, rules and regulations of any foreign, Federal, state or local
government or any agency thereof, or any writ, order or decree, and conform to
all valid requirements of governmental authorities relating to the conduct of
their respective businesses, properties or assets.
 
7.9 Protection of Licenses, etc. The Company shall and shall cause its
Subsidiaries to, maintain, defend and protect to the best of their ability
licenses and sublicenses (and to the extent the Company or a Subsidiary is a
licensee or sublicensee under any license or sublicense, as permitted by the
license or sublicense agreement), trademarks, trade names, service marks,
patents and applications therefor and other proprietary information owned or
used by it or them and shall keep duplicate copies of any licenses, trademarks,
service marks or patents owned or used by it, if any, at a secure place selected
by the Company.
 
7.10 Accounts and Records; Inspections.
 
(a) The Company shall keep true records and books of account in which full, true
and correct entries will be made of all dealings or transactions in relation to
the business and affairs of the Company and its Subsidiaries in accordance with
generally accepted accounting principles applied on a consistent basis.
 
(b) The Company shall permit each holder of the Note or any of such holder’s
officers, employees or representatives during regular business hours of the
Company, upon forty-eight (48) hours notice and as often as such holder may
reasonably request, to visit and inspect the offices and properties of the
Company and its Subsidiaries and to make extracts or copies of the books,
accounts and records of the Company or its Subsidiaries at such holder’s
expense.
 
(c) Nothing contained in this Section 7.10 shall be construed to limit any
rights which a holder of any Note may otherwise have with respect to the books
and records of the Company and its Subsidiaries, to inspect its properties or to
discuss its affairs, finances and accounts.
 
7.11 Maintenance of Office. The Company will maintain its principal office at
the address of the Company set forth in Section 12.6 of this Agreement where
notices, presentments and demands in respect of this Agreement and of the Note
may be made upon the Company, until such time as the Company shall notify the
holder of the Note in writing, at least thirty (30) days prior thereto, of any
change of location of such office.
 
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7.12 Use of Proceeds. The Company shall use all the proceeds received from the
sale of the Note pursuant to this Agreement solely for the purpose of working
capital and the repayment of certain payables incurred in the ordinary course of
business not for the repayment of debt.
 
7.13 Payment of the Note. The Company shall pay the principal of and interest on
the Note in the time, the manner and the form provided therein, except to the
extent that such principal and/or interest shall have been converted into Common
Stock in accordance with its terms.
 
7.14 SEC Reporting Requirements. The Company shall comply with its reporting and
filing obligations pursuant to Section 13 or 15(d) of the Exchange Act. The
Company shall provide copies of such reports to the holder of the Note promptly
upon such holder’s request.
 
7.15 Authorization of and Reservation of Additional Shares of Common Stock. The
Company will at all times cause there to be reserved for issuance a sufficient
number of shares of Common Stock for the issuance of the Note Shares.
 
7.16 Further Assurances. From time to time the Company shall execute and deliver
to the Purchaser and the Purchaser shall execute and deliver to the Company such
other instruments, certificates, agreements and documents and take such other
action and do all other things as may be reasonably requested by the other party
in order to implement or effectuate the terms and provisions of this Agreement
and the Note.
 
ARTICLE VIII
NEGATIVE COVENANTS
 
The Company hereby covenants and agrees, so long as the Note remains
outstanding, it will not (and not allow any of its Subsidiaries to), directly or
indirectly, without the prior written consent of the Purchaser, as follows:
 
8.1 Payment of Dividends; Stock Purchase. Declare or pay any cash dividends on,
or make any distribution to the holders of, any shares of capital stock of the
Company, other than dividends or distributions payable in such capital stock, or
purchase, redeem or otherwise acquire or retire for value any shares of capital
stock of the Company or warrants or rights to acquire such capital stock, other
than in connection with repurchases upon the termination of employment of
employee equityholders.
 
8.2 Stay, Extension and Usury Laws. At any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereinafter in force, which
may affect the covenants or the performance of the Note, the Company hereby
expressly waiving all benefit or advantage of any such law, or by resort to any
such law, hinder, delay or impede the execution of any power herein granted to
the Purchaser but will suffer and permit the execution of every such power as
though no such law had been enacted.
 
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8.3 Reclassification. Effect any reclassification, combination or reverse stock
split of the Common Stock.
 
8.4 Liens. Except as otherwise provided in this Agreement, create, incur, assume
or permit to exist any mortgage, lien, pledge, charge, security interest or
other encumbrance, or any interest or title of any vendor, lessor, lender or
other secured party to or of the Company or any Subsidiary under any conditional
sale or other title retention agreement or any capital lease, upon or with
respect to any property or asset of the Company or any subsidiary (each a “Lien”
and collectively, “Liens”), except that the foregoing restrictions shall not
apply to:
 
(a) liens for taxes, assessments and other governmental charges, if payment
thereof shall not at the time be required to be made, and provided such reserve
as shall be required by generally accepted accounting principles consistently
applied shall have been made therefor;
 
(b) liens of workmen, materialmen, vendors, suppliers, mechanics, carriers,
warehouseman and landlords or other like liens, incurred in the ordinary course
of business for sums not then due or being contested in good faith, if an
adverse decision in which contest would not materially affect the business of
the Company;
 
(c) liens securing indebtedness of the Company or any Subsidiaries which is in
an aggregate principal amount not exceeding $100,000 and which liens are
subordinate to liens on the same assets held by the Purchaser;
 
(d) statutory liens of landlords, statutory liens of banks and rights of
set-off, and other liens imposed by law, in each case incurred in the ordinary
course of business (i) for amounts not yet overdue or (ii) for amounts that are
overdue and that are being contested in good faith by appropriate proceedings,
so long as such reserves or other appropriate provisions, if any, as shall be
required by generally accepted accounting principles shall have been made for
any such contested amounts;
 
(e) liens incurred or deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money);
 
(f) any attachment or judgment lien not constituting an Event of Default;
 
(g) easements, rights-of-way, restrictions, encroachments, and other minor
defects or irregularities in title, in each case which do not and will not
interfere in any material respect with the ordinary conduct of the business of
the Company or any of its subsidiaries;
 
(h) any (i) interest or title of a lessor or sublessor under any lease,
(ii) restriction or encumbrance that the interest or title of such lessor or
sublessor may be subject to, or (iii) subordination of the interest of the
lessee or sublessee under such lease to any restriction or encumbrance referred
to in the preceding clause (ii), so long as the holder of such restriction or
encumbrance agrees to recognize the rights of such lessee or sublessee under
such lease;
 
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(i) liens in favor of customs and revenue authorities arising as a matter of law
to secure payment of customs duties in connection with the importation of goods;
 
(j) any zoning or similar law or right reserved to or vested in any governmental
office or agency to control or regulate the use of any real property;
 
(k) liens securing obligations (other than obligations representing debt for
borrowed money) under operating, reciprocal easement or similar agreements
entered into in the ordinary course of business of the Company and its
Subsidiaries; and
 
(l) the replacement, extension or renewal of any lien permitted by this
Section 8.4 upon or in the same property theretofore subject or the replacement,
extension or renewal (without increase in the amount or change in any direct or
contingent obligor) of the indebtedness secured thereby.
 
All of the Foregoing Liens described in subsections (a) - (l) above shall be
referred to as “Permitted Liens”.
 
8.5 Indebtedness. Create, incur, assume, suffer, permit to exist, or guarantee,
directly or indirectly, any Indebtedness, excluding, however, from the operation
of this covenant:
 
(a) any indebtedness or the incurring, creating or assumption of any
indebtedness secured by liens permitted by the provisions of Section 8.4(c)
above;
 
(b) the endorsement of instruments for the purpose of deposit or collection in
the ordinary course of business;
 
(c) indebtedness which may, from time to time be incurred or guaranteed by the
Company which in the aggregate principal amount does not exceed $100,000 and is
subordinate to the indebtedness under this Agreement;
 
(d) indebtedness under the Note and any Indebtedness otherwise existing on the
date hereof;
 
(e) indebtedness relating to contingent obligations of the Company and its
subsidiaries under guaranties in the ordinary course of business of the
obligations of suppliers, customers, and licensees of the Company and its
Subsidiaries;
 
(f) indebtedness relating to loans from the Company to its Subsidiaries;
 
(g) indebtedness relating to capital leases in an amount not to exceed $100,000;
 
(h) accounts or notes payable arising out of the purchase of merchandise or
services in the ordinary course of business; or
 
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(i) indebtedness (if any) expressly permitted by, and in accordance with, the
terms and conditions of this Agreement.
 
8.6 Liquidation or Sale. Sell, transfer, lease or otherwise dispose of 10% or
more of its consolidated assets (as shown on the most recent financial
statements of the Company or the Subsidiaries, as the case may be) in any single
transaction or series of related transactions (other than the sale of inventory
in the ordinary course of business), or liquidate, dissolve, recapitalize or
reorganize in any form of transaction, or acquire all or substantially all of
the capital stock or assets of another business or entity.
 
8.7 Change in Control Transaction. Enter into a Change in Control Transaction.
For purposes of this Agreement, “Change in Control Transaction” means, except
with respect to acquisitions by the Company in the normal course of business,
the occurrence of (a) an acquisition by an individual or legal entity or “group”
(as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital
stock of the Company, by contract or otherwise) of in excess of fifty percent
(50%) of the voting securities of the Company (except that the acquisition of
voting securities by the Purchaser shall not constitute a Change of Control
Transaction for purposes hereof), (b) a replacement at one time or over time of
more than one-half of the members of the Board of the Company which is not
approved by a majority of those individuals who are members of the Board on the
date hereof (or by those individuals who are serving as members of the Board on
any date whose nomination to the Board was approved by a majority of the members
of the Board who are members on the date hereof), (c) the merger or
consolidation of the Company or any subsidiary of the Company in one or a series
of related transactions with or into another entity (except in connection with a
reincorporation merger involving the Company or with respect to which the
Company is the survivor), or (d) the execution by the Company of an agreement to
which the Company is a party or by which it is bound, providing for any of the
events set forth above in (a), (b) or (c).
 
8.8 Amendment of Charter Documents. Make any further amendment to the articles
of incorporation or by-laws of the Company or any of its Subsidiaries.
 
8.9 Loans and Advances. Except for loans and advances outstanding as of the
Closing Date, directly or indirectly, make any advance or loan to, or guarantee
any obligation of, any person, firm or entity, except for intercompany loans or
advances and those provided for in this Agreement.
 
8.10 Transactions with Affiliates.
 
(a) Make any intercompany transfers of monies or other assets in any single
transaction or series of transactions, except as otherwise permitted in this
Agreement.
 
(b) Engage in any transaction with any of the officers, directors, employees or
affiliates of the Company or of its Subsidiaries, except on terms no less
favorable to the Company or the Subsidiary as could be obtained in an arm’s
length transaction.
 
(c) Divert (or permit anyone to divert) any business or opportunity of the
Company or subsidiary to any other corporate or business entity.
 
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8.11 Other Business. Enter into or engage, directly or indirectly, in any
business other than the business currently conducted or proposed to be conducted
as of the date of this Agreement by the Company or any Subsidiary.
 
8.12 Investments. Make any investments in, or purchase any stock, option,
warrant, or other security or evidence of indebtedness of, any person or entity
(exclusive of any Subsidiary), other than obligations of the United States
Government or certificates of deposit or other instruments maturing within one
year from the date of purchase from financial institutions with capital in
excess of $50 million.
 
ARTICLE IX
EVENTS OF DEFAULT
 
9.1 Events of Default. The occurrence and continuance of any of the following
events shall constitute an event of default under this Agreement and the Note
(each an “Event of Default” and, collectively, “Events of Default”):
 
(a) if the Company shall default in the payment of (i) any part of the principal
of the Note, when the same shall become due and payable, whether at maturity or
at a date fixed for prepayment or by acceleration or otherwise; or (ii) the
interest on the Note; when the same shall become due and payable; and in each
case such default shall have continued without cure for ten (10) business days
after written notice (a “Default Notice”) is given to the Company of such
default;
 
(b) if the Company shall default in the performance of any of the covenants
contained in Articles VIII or IX hereof and such default shall have continued
without cure for thirty (30) days after a Default Notice is given to the
Company;
 
(c) if the Company shall default in the performance of any other material
agreement or covenant contained in this Agreement and such default shall not
have been remedied to the satisfaction of the Purchaser within thirty-five (35)
days after a Default Notice shall have been given to the Company;
 
(d) if the Company shall have failed to obtain the waivers of all persons
holding preemptive or anti-dilution adjustment rights as required by
Section 5.4(l) hereof and such default shall not have been remedied to the
satisfaction of the Purchaser, within thirty-five (35) days after a Default
Notice shall have been given to the Company
 
(e) if any representation or warranty made in this Agreement or in or any
certificate delivered pursuant hereto shall prove to have been incorrect in any
material respect when made;
 
(f) if any default shall occur under any indenture, mortgage, agreement,
instrument or commitment (other than a default under any trade payable or the
continuation of default under those agreements set forth on Schedule 3.14)
evidencing or under which there is at the time outstanding any indebtedness of
the Company or a Subsidiary, in excess of $25,000, or which results in such
indebtedness, in an aggregate amount (with other defaulted indebtedness) in
excess of $50,000 becoming due and payable prior to its due date and if such
indenture or instrument so requires, the holder or holders thereof (or a trustee
on their behalf) shall have declared such indebtedness due and payable;
 
21

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(g) if any of the Company or its Subsidiaries shall default in the observance or
performance of any term or provision of an agreement, other than those
agreements set forth on Schedule 3.14, to which it is a party or by which it is
bound, which default will have a Material Adverse Effect and such default is not
waived or cured within the applicable grace period provided for in such
agreement;
 
(h) if a final judgment which, either alone or together with other outstanding
final judgments against the Company and its Subsidiaries, exceeds an aggregate
of $100,000 shall be rendered against the Company or any Subsidiary and such
judgment shall have continued undischarged or unstayed for thirty-five (35) days
after entry thereof;
 
(i) if the Company or any Subsidiary shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts; or if the
Company or any Subsidiary shall suffer a receiver or trustee for it or
substantially all of its assets to be appointed, and, if appointed without its
consent, not to be discharged or stayed within ninety (90) days; or if the
Company or any Subsidiary shall suffer proceedings under any law relating to
bankruptcy, insolvency or the reorganization or relief of debtors to be
instituted by or against it, and, if contested by it, not to be dismissed or
stayed within ninety (90) days; or if the Company or any Subsidiary shall suffer
any writ of attachment or execution or any similar process to be issued or
levied against it or any significant part of its property which is not released,
stayed, bonded or vacated within ninety (90) days after its issue or levy; or if
the Company or any Subsidiary takes corporate action in furtherance of any of
the aforesaid purposes or conditions; or
 
9.2 Remedies.
 
(a) Upon the occurrence and continuance of an Event of Default, the Purchaser
may at any time (unless all defaults shall theretofore have been remedied) at
its option, by written notice or notices to the Company (i) declare the Note to
be due and payable, whereupon the same shall forthwith mature and become due and
payable, together with interest accrued thereon, without presentment, demand,
protest or notice, all of which are hereby waived; and (ii) declare any other
amounts payable to the Purchaser under this Agreement or as contemplated hereby
due and payable.
 
(b) Notwithstanding anything contained in Section 9.2(a), in the event that at
any time after the principal of the Note shall so become due and payable and
prior to the date of maturity stated in the Note all arrears of principal of and
interest on the Note (with interest at the rate specified in the Note on any
overdue principal and, to the extent legally enforceable, on any interest
overdue) shall be paid by or for the account of the Company, then the Purchaser,
by written notice or notices to the Company, may (but shall not be obligated to)
waive such Event of Default and its consequences and rescind or annul such
declaration, but no such waiver shall extend to or affect any subsequent Event
of Default or impair any right resulting therefrom.
 
9.3 Enforcement. In case any one or more Events of Default shall occur and be
continuing, the Purchaser may proceed to protect and enforce its rights by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in the Note or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law. In case of a
default in the payment of any principal of or interest on the Note, the Company
will pay to the Purchaser such further amount as shall be sufficient to cover
the cost and the expenses of collection, including, without limitation,
reasonable attorney’s fees, expenses and disbursements. No course of dealing and
no delay on the part of the Purchaser in exercising any rights shall operate as
a waiver thereof or otherwise prejudice the Purchaser’s rights. No right
conferred hereby or by the Note upon the Purchaser shall be exclusive of any
other right referred to herein or therein or now available at law in equity, by
statute or otherwise.
 
22

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ARTICLE X

[INTENTIONALLY OMITTED]
 
ARTICLE XI
INDEMNIFICATION
 
11.1 Indemnification by the Company. The Company agrees to defend, indemnify and
hold harmless the Purchaser and shall reimburse the Purchaser for, from and
against each claim, loss, liability, cost and expense (including without
limitation, interest, penalties, costs of preparation and investigation, and the
reasonable fees, disbursements and expenses of attorneys, accountants and other
professional advisors) (collectively, “Losses”) directly or indirectly relating
to, resulting from or arising out of any untrue representation,
misrepresentation, breach of warranty or non-fulfillment of any covenant,
agreement or other obligation by or of the Company contained herein or in any
certificate, document, or instrument delivered to the Purchaser pursuant hereto.
 
11.2 Indemnification by the Purchaser. The Purchaser agrees to defend, indemnify
and hold harmless the Company and shall reimburse the Company for, from and
against all Losses directly or indirectly relating to, resulting from or arising
out of any untrue representation, misrepresentation, breach of warranty or
non-fulfillment of any covenant, agreement or other obligation of the Purchaser
contained herein or in any certificate, document or instrument delivered to the
Company pursuant hereto.
 
11.3 Procedure. The indemnified party shall promptly notify the indemnifying
party of any claim, demand, action or proceeding for which indemnification will
be sought under Sections 11.1 or 11.2 of this Agreement, and, if such claim,
demand, action or proceeding is a third party claim, demand, action or
proceeding, the indemnifying party will have the right at its expense to assume
the defense thereof using counsel reasonably acceptable to the indemnified
party. The indemnified party shall have the right to participate, at its own
expense, with respect to any such third party claim, demand, action or
proceeding. In connection with any such third party claim, demand, action or
proceeding, the Purchaser and the Company shall cooperate with each other and
provide each other with access to relevant books and records in their
possession. No such third party claim, demand, action or proceeding shall be
settled without the prior written consent of the indemnified party, which shall
not be unreasonably withheld. If a firm written offer is made to settle any such
third party claim, demand, action or proceeding and the indemnifying party
proposes to accept such settlement and the indemnified party refuses to consent
to such settlement, then: (i) the indemnifying party shall be excused from, and
the indemnified party shall be solely responsible for, all further defense of
such third party claim, demand, action or proceeding; and (ii) the maximum
liability of the indemnifying party relating to such third party claim, demand,
action or proceeding shall be the amount of the proposed settlement if the
amount thereafter recovered from the indemnified party on such third party
claim, demand, action or proceeding is greater than the amount of the proposed
settlement.
 
23

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ARTICLE XII
MISCELLANEOUS
 
12.1 Governing Law. This Agreement and the rights of the parties hereunder shall
be governed in all respects by the laws of the State of New York wherein the
terms of this Agreement were negotiated.
 
12.2 Survival. Except as specifically provided herein, the representations,
warranties, covenants and agreements made herein shall survive the Closing.
 
12.3 Amendment. This Agreement may not be amended, discharged or terminated (or
any provision hereof waived) without the written consent of the Company and the
Purchaser.
 
12.4 Successors and Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon and
enforceable by and against, the successors, assigns, heirs, executors and
administrators of the parties hereto. The Purchaser may assign its rights
hereunder (provided, that the Purchaser may not so assign any of such rights to
any competitor of the Company), and the Company may not assign its rights or
obligations hereunder without the consent of the Purchaser or any of its
successors, assigns, heirs, executors and administrators.
 
12.5 Entire Agreement. This Agreement, the Transaction Documents and the other
documents delivered pursuant hereto and simultaneously herewith constitute the
full and entire understanding and agreement between the parties with regard to
the subject matter hereof and thereof.
 
12.6 Notices, etc. All notices, demands or other communications given hereunder
shall be in writing and shall be sufficiently given if delivered personally, via
facsimile, or by a nationally recognized courier service marked for next
business day delivery or sent in a sealed envelope by first class mail, postage
prepaid and either registered or certified, addressed as follows:
 
(a)               if to the Company:
 
Mr. Philip Cohen, President/CEO
Medical Media Television, Inc.
8406 Benjamin Road, Suite C
Tampa, FL 33634
Phone: (813) 888-7330
Fax: (813) 888-7375
 
24

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   with a copy to:
 
John N. Giordano, Esq.
Bush Ross, P.A.
220 S. Franklin Street
Tampa, Florida 33602
Phone: (813) 224-9255
Fax: (813) 223-9620
 
(b)              if to a Purchaser:
 
Vicis Capital Master Fund
Tower 56, Suite 700
126 E. 56th Street, 7th Floor
New York, NY 10022
Phone: (212) 909-4600
Fax: (212) 909-4601
Attn: Shad Stastney
 
with a copy to:
 
Andrew D. Ketter, Esq.
Quarles & Brady LLP
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Phone: (414) 277-5629
Fax: (414) 978-8972
 
12.7 Delays or Omissions. No delay or omission to exercise any right, power or
remedy accruing to the holder of the Note upon any breach or default of the
Company under this Agreement shall impair any such right, power or remedy of
such holder nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence, therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any holder of any breach or default under this Agreement, or any
waiver on the part of any holder of any provisions or conditions of this
Agreement must be, made in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any holder, shall be cumulative and
not alternative.
 
25

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12.8 Severability. The invalidity of any provision or portion of a provision of
this Agreement shall not affect the validity of any other provision of this
Agreement or the remaining portion of the applicable provision. It is the desire
and intent of the parties hereto that the provisions of this Agreement shall be
enforced to the fullest extent permissible under the laws and public policies
applied in each jurisdiction in which enforcement is sought. Accordingly, if any
particular provision of this Agreement shall be adjudicated to be invalid or
unenforceable, such provision shall be deemed amended to delete therefrom the
portion thus adjudicated to be invalid or unenforceable, such deletion to apply
only with respect to the operation of such provision in the particular
jurisdiction in which such adjudication is made.
 
12.9 Expenses. Each party shall bear its own expenses and legal fees incurred on
its behalf with respect to the negotiation, execution and consummation of the
transactions contemplated by this Agreement.
 
12.10 Consent to Jurisdiction; Waiver of Jury Trial. EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED THE STATE AND COUNTY OF NEW
YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND THE TRANSACTION DOCUMENTS. EACH OF THE PARTIES TO THIS AGREEMENT
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
SUCH PARTY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
PROCEEDING BROUGHT IN ANY SUCH COURTS AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN ANY SUCH COURTS HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF
THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY RIGHT TO TRIAL BY JURY IN ANY SUCH LEGAL PROCEEDING. EACH OF THE PARTIES TO
THIS AGREEMENT HEREBY CONSENTS TO SERVICE OF PROCESS BY NOTICE IN THE MANNER
SPECIFIED IN SECTION 12.6 AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION SUCH PARTY MAY NOW OR HEREAFTER HAVE TO SERVICE
OF PROCESS IN SUCH MANNER.
 
12.11 Titles and Subtitles. The titles of the articles, sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
 
12.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
 
12.13 Disclosure Schedules. The representations and warranties of the Company
set forth in this Agreement are made and given subject to disclosures contained
in (a) the schedules attached to this agreement (collectively, the “Disclosure
Schedules”), and (b) where specifically referenced by the particular
representation or warranty, the SEC Documents. The Company will not be, nor will
it be deemed to be, in any breach of any such representations or warranties in
connection with any such matter so disclosed in the Disclosure Schedules or in
the SEC Documents, provided that such representation or warranty made specific
reference to the SEC Documents. Where only brief particulars of a matter are set
out or referred to in the Disclosure Schedules, or a reference is made only to a
particular part of a disclosed document, full particulars of the matter and the
full contents of the document are deemed to be disclosed. Inclusion of
information in the Disclosure Schedules will not be construed as an admission
that such information is material to the business, operations or condition
(financial or otherwise) of the Company, taken as a whole, or as an admission of
liability or obligation of the Company to any third party. The specific
disclosures set forth in the Disclosure Schedules have been organized to
correspond to section references in this Agreement to which the disclosure may
be most likely to relate, together with appropriate cross references when
disclosure is applicable to other sections of this Agreement; provided, however,
that any disclosure in the Disclosure Schedules will apply to and will be deemed
to be disclosed for the purposes of this Agreement generally. In the event that
there is any inconsistency between this Agreement and matters disclosed in the
Disclosure Schedules, information contained in the Disclosure Schedules will
prevail and will be deemed to be the relevant disclosure.
 
26

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IN WITNESS WHEREOF, the parties hereto have duly executed this Securities
Exchange Agreement, as of the day and year first above written.
 

       
COMPANY:
      MEDICAL MEDIA TELEVISION, INC.  
   
   /s/ Philip M. Cohen  

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

Philip M. Cohen
President and Chief Executive Officer
 

 

       
SUBSIDIARIES:
      PETCARE TELEVISION NETWORK, INC.,  
   
   /s/ Philip M. Cohen  

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

Philip M. Cohen
President and Chief Executive Officer
 

 

            KIDCARE MEDICAL TELEVISION NETWORK, INC.,  
   
   /s/ Philip M. Cohen  

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

Philip M. Cohen
President and Chief Executive Officer
 

 

            AFRICAN AMERICAN MEDICAL NETWORK, INC.  
   
   /s/ Philip M. Cohen  

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

Philip M. Cohen
President and Chief Executive Officer
 

 

        PURCHASER:      
VICIS CAPITAL MASTER FUND
By: Vicis Capital LLC
 
   
   /s/ Keith Hughes  

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

Keith Hughes,
Chief Financial Officer
 

 
27

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EXHIBIT A

FORM OF NOTE

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

SCHEDULE 3.2

THE COMPANY HAS PLEDGED THE STOCK OF ITS SUBSIDIARIES, PETCARE TELEVISION
NETWORK, INC., AFRICAN AMERICAN MEDICAL NETWORK, INC. AND KIDCARE MEDICAL
TELEVISION NETWORK, INC. TO VICIS CAPITAL MASTER FUND PURSUANT TO THAT CERTAIN
NOTE PURCHASE AGREEMENT DATED AUGUST 11, 2006 AND THE ACCOMPANYING PROMISSORY
NOTE IN THE AMOUNT OF $1,302,000.
 

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

 
SCHEDULE 3.4(b)

NONE.
 

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

 
SCHEDULE 3(b)(ii)
 
WARRANT DATE
 
WARRANT DESCRIPTION
 
WARRANT HOLDER
 
NUMBER OF WARRANTS
             
5/17/04
 
Common Stock Purchase Warrant-W-HCW-04-01
 
H.C. Wainwright & Co., Inc.
 
 
7,396
 
5/17/04
 
Common Stock Purchase Warrant-W-HCW-04-02
 
Apogee Business Consultants, LLC
 
 
3,556
 
5/17/04
 
Common Stock Purchase Warrant-W-HCW-04-03
 
 
John R. Clarke
 
 
3,067
 
5/17/04
 
Common Stock Purchase Warrant-W-HCW-04-04
 
 
Scott F. Koch
 
 
3,067
 
5/17/04
 
Common Stock Purchase Warrant-W-HCW-04-05
 
 
Ari J. Fuchs
 
 
347
 
5/17/04
 
Common Stock Purchase Warrant-W-HCW-04-06
 
 
Richard Kreger
 
 
347
           
 
17,780
             
7/28/04
 
Common Stock Purchase Warrant
 
TotalCFO, LLC
 
10,000
             
 
3/16/05
 
 
Common Stock Purchase Warrant
 
MidTown Partners & Co., LLC
 
 
1,667
5/6/05
 
Series D Common Stock Warrant-05-0605-D-MP
 
MidTown Partners & Co., LLC
 
 
 
20,000
7/19/05
 
Series BB Common Stock Warant-05-0719AM
 
MidTown Partners & Co., LLC
 
 
 
50,000
           
 
71,667
                 
TOTAL WARRANTS
 
 
99,447

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

SCHEDULE 3.13

THE COMPANY RECEIVED A COMMENT LETTER FROM THE SECURITIES AND EXCHANGE
COMMISSION, DIVISION OF CORPORATION FINANCE, DATED AUGUST 25, 2006 REGARDING THE
COMPANY’S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 2005 AND
ITS REPORTS ON FORM 10-QSB FOR THE QUARTERS ENDED MARCH 31, JUNE 30, AND
SEPTEMBER 30, 2006 FILED WITH THE SEC ON MAY 15, AUGUST 21, AND NOVEMBER 20,
2006 (THE “COMMENT LETTER”). ON MAY 31, 2007, THE COMPANY RECEIVED A LETTER FROM
THE SEC INDICATING THEY HAD COMPLETED A REVIEW OF THE FORM 10KSB FOR YEAR ENDED
DECEMBER 31, 2006 AT THEY HAVE NO FURTHER COMMENTS AT THIS TIME.
 

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

 
SCHEDULE 3.14

SEE SCHEDULE 3.4(B).
 

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

 
SCHEDULE 3.15

THE COMPANY DID NOT FILE ITS FORM 8-K REFLECTING THE LOAN TRANSACATION OF
FEBRUARY 1, 2007 FOR $250,000 WITH VICIS CAPITAL MASTER FUND.

SEE SCHEDULE 3.13.
 

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

 
SCHEDULE 3.21

VICIS CAPITAL MASTER FUND HAS A LIEN IN ALL OF THE ASSETS OF THE COMPANY AND ITS
SUBSIDIARIES, PETCARE TELEVISION NETWORK, INC., AFRICAN AMERICAN MEDICAL
NETWORK, INC. AND KIDCARE MEDICAL TELEVISION NETWORK, INC.

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

SCHEDULE 3.22

INTELLECTUAL PROPERTY RIGHTS

NOTICE OF PUBLICATION WAS RECEIVED INDICATING THAT THE LOGO (SUBJECT MARK) OF
AFRICAN AMERICAN MEDICAL NETWORK, INC. HAS BEEN APPROVED BY THE UNITED STATES
PATENT AND TRADEMARK OFFICE. SERIAL NUMBER: 78/473792; FILING DATE: 08/26/04;
INTERNATIONAL CLASSES 009 AND 042.

THE COMPANY HAS PLEDGED ITS INTELLECTUAL PROPERTY TO VICIS CAPITAL MASTER FUND
TO SECURE THE COMPANY’S PERFORMANCE UNDER THAT CERTAIN NOTE PURCHASE AGREEMENT
DATED AUGUST 11, 2006.

 

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