SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE

AGREEMENT

Dated as of November 5, 2007

among

EDGEWATER FOODS INTERNATIONAL, INC.

and

THE PURCHASERS LISTED ON EXHIBIT A

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TABLE OF CONTENTS

PAGE

ARTICLE I Purchase and Sale of Preferred Stock

1

Section 1.1

Purchase and Sale of Stock

1

Section 1.2

Warrants

1

Section 1.3

Conversion Shares

1

Section 1.4

Purchase Price and Closing

2

ARTICLE II Representations and Warranties

3

Section 2.1

Representations and Warranties of the Company

3

Section 2.2

Representations and Warranties of the Purchasers

13

ARTICLE III Covenants

15

Section 3.1

Securities Compliance

16

Section 3.2

Registration and Listing

16

Section 3.3

Inspection Rights

16

Section 3.4

Compliance with Laws

16

Section 3.5

Keeping of Records and Books of Account

17

Section 3.6

Reporting Requirements

17

Section 3.7

Amendments

17

Section 3.8

Other Agreements.

17

Section 3.9

Distributions.

17

Section 3.10

Status of Dividends

17

Section 3.11

Use of Proceeds

18

Section 3.12

Reservation of Shares

18

Section 3.13

Transfer Agent Instructions

19

Section 3.14

Disposition of Assets

19

Section 3.15

Reporting Status

19

Section 3.16

Disclosure of Transaction

19

Section 3.17

Disclosure of Material Information

19

Section 3.18

Pledge of Securities

19

Section 3.19

Form SB-2 Eligibility

20

Section 3.20

Lock-Up Agreement

20

Section 3.21

Subsequent Financings

20

ARTICLE IV Conditions

22

Section 4.1

Conditions Precedent to the Obligation of the Company to Sell the Shares

23

Section 4.2

Conditions Precedent to the Obligation of the Purchasers to

 Purchase the Shares

23

ARTICLE V Stock Certificate Legend

26

Section 5.1

Legend

26

ARTICLE VI Indemnification

27

Section 6.1

Company Indemnity

27

Section 6.2

Indemnification Procedure

27

ARTICLE VII Miscellaneous

28

Section 7.1

Fees and Expenses

28

Section 7.2

Specific Enforcement, Consent to Jurisdiction.

28

Section 7.3

Entire Agreement; Amendment

29

Section 7.4

Notices

29

Section 7.5

Waivers

30

Section 7.6

Headings

30

Section 7.7

Successors and Assigns

30

Section 7.8

No Third Party Beneficiaries

30

Section 7.9

Governing Law

30

Section 7.10

Survival

31

Section 7.11

Counterparts

31

Section 7.12

Publicity

31

Section 7.13

Severability

31

Section 7.14

Further Assurances

31

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SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

This SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (the “Agreement”)
is dated as of November 5, 2007 by and among Edgewater Foods International,
Inc., a Nevada corporation (the “Company”), and each of the Purchasers of shares
of Series C Convertible Preferred Stock of the Company whose names are set forth
on Exhibit A hereto (individually, a “Purchaser” and collectively, the
“Purchasers”).

The parties hereto agree as follows:

ARTICLE I

Purchase and Sale of Preferred Stock

Section 1.1

Purchase and Sale of Stock.  Upon the following terms and conditions, the
Company shall issue and sell to the Purchasers and each of the Purchasers shall
purchase from the Company, the number of shares of the Company’s Series C
Convertible Preferred Stock, par value $0.001 per share (the “Preferred
Shares”), convertible into shares of the Company’s common stock, par value
$0.001 per share (the “Common Stock”), in the amounts set forth opposite such
Purchaser’s name on Exhibit A hereto.  The designation, rights, preferences and
other terms and provisions of the Series C Convertible Preferred Stock are set
forth in the Certificate of Designation of the Relative Rights and Preferences
of the Series C Convertible Preferred Stock attached hereto as Exhibit B (the
“Certificate of Designation”).  The Company and the Purchasers are executing and
delivering this Agreement in accordance with and in reliance upon the exemption
from securities registration afforded by Rule 506 of Regulation D (“Regulation
D”) as promulgated by the United States Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as amended (the “Securities
Act”) or Section 4(2) of the Securities Act.  

Section 1.2

Warrants.  Upon the following terms and conditions and for no additional
consideration, each of the Purchasers shall be issued (i) Series A Warrants, in
substantially the form attached hereto as Exhibit C-1 (the “Series A Warrants”),
to purchase the number of shares of Common Stock equal to fifty percent (50%) of
the number of Preferred Shares purchased by each Purchaser pursuant to the terms
of this Agreement, as set forth opposite such Purchaser’s name on Exhibit A
hereto, (ii) Series B Warrants, in substantially the form attached hereto as
Exhibit C-2 (the “Series B Warrants”), to purchase the number of shares of
Common Stock equal to fifty percent (50%) of the number of Preferred Shares
purchased by each Purchaser pursuant to the terms of this Agreement, as set
forth opposite such Purchaser’s name on Exhibit A hereto, (iii) Series C
Warrants, in substantially the form attached hereto as Exhibit C-3 (the “Series
C Warrants”), to purchase the number of shares of Common Stock equal to fifty
percent (50%) of the number of Preferred Shares purchased by each Purchaser
pursuant to the terms of this Agreement, as set forth opposite such Purchaser’s
name on Exhibit A hereto, (iv) Series J Warrants, in substantially the form
attached hereto as Exhibit C-4 (the “Series J Warrants”), to purchase the number
of Preferred Shares equal to one hundred percent (100%) of the number of
Preferred Shares purchased by each Purchaser, as set forth opposite such
Purchaser’s name on Exhibit A hereto, (v) Series D Warrants, in substantially
the form attached

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hereto as Exhibit C-5 (the “Series D Warrants”), to purchase the number of
shares of Common Stock equal to fifty percent (50%) of the number of Preferred
Shares purchased by each Purchaser pursuant to the terms of the Series J
Warrant, (vi) Series E Warrants, in substantially the form attached hereto as
Exhibit C-6 (the “Series E Warrants”), to purchase the number of shares of
Common Stock equal to fifty percent (50%) of the number of Preferred Shares
purchased by each Purchaser pursuant to the terms of the Series J Warrant, and
(vii) Series F Warrants, in substantially the form attached hereto as Exhibit
C-7 (the “Series F Warrants” and, together with the Series A Warrants, the
Series B Warrants, the Series C Warrants, the Series J Warrants, the Series D
Warrants and the Series E Warrants, the “Warrants”), to purchase the number of
shares of Common Stock equal to fifty percent (50%) of the number of Preferred
Shares purchased by each Purchaser pursuant to the terms of the Series J
Warrant.  Notwithstanding the foregoing to the contrary, each of the Purchasers
shall be issued Series J Warrants, Series D Warrants, Series E Warrants and
Series F Warrants only if such Purchaser’s investment amount for the purchase of
Preferred Shares pursuant to this Agreement is equal to or greater than
$250,000.  The Warrants shall expire five (5) years following the Closing Date,
except for the Series J Warrants, which shall expire one (1) year following the
Closing Date.  Each of the Warrants shall have an exercise price per share equal
to the Warrant Price (as defined in the applicable Warrant).

Section 1.3

Conversion Shares. The Company has authorized and has reserved and covenants to
continue to reserve, free of preemptive rights and other similar contractual
rights of stockholders, a number of shares of Common Stock equal to one hundred
twenty percent (120%) of the number of shares of Common Stock as shall from time
to time be sufficient to effect the conversion of all of the Preferred Shares
and exercise of the Warrants then outstanding.  Any shares of Common Stock
issuable upon conversion of the Preferred Shares (and such shares when issued)
are herein referred to as the “Conversion Shares”. Any Preferred Shares and/or
shares of Common Stock issuable upon exercise of the Warrants (and such shares
of Common Stock and/or Preferred Shares when issued) are herein referred to as
the "Warrant Shares".  The Preferred Shares, the Conversion Shares and the
Warrant Shares are sometimes collectively referred to as the “Shares”.

Section 1.4

Purchase Price and Closing.  Subject to the terms and conditions hereof, the
Company agrees to issue and sell to the Purchasers and, in consideration of and
in express reliance upon the representations, warranties, covenants, terms and
conditions of this Agreement, the Purchasers, severally but not jointly, agree
to purchase the Preferred Shares and the Warrants for an aggregate purchase
price of up to $900,000 (the “Purchase Price”).  The closing of the purchase and
sale of the Preferred Shares and the Warrants to be acquired by the Purchasers
from the Company under this Agreement shall take place at the offices of Sadis &
Goldberg, LLP, 551 Fifth Avenue, 21st Floor, New York, New York 10176 (the
“Closing”) at 10:00 a.m., New York time (i) on or before November 9, 2007;
provided, that all of the conditions set forth in Article IV hereof and
applicable to the Closing shall have been fulfilled or waived in accordance
herewith, or (ii) at such other time and place or on such date as the Purchasers
and the Company may agree upon (the "Closing Date").  Subject to the terms and
conditions of this Agreement, at the Closing the Company shall deliver or cause
to be delivered to each Purchaser (x) a certificate for the number of Preferred
Shares set forth opposite the name of such Purchaser on Exhibit A hereto, (y)
its Warrants to purchase such number of shares of

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Common Stock and/or Preferred Shares (as the case may be) as is set forth
opposite the name of such Purchaser on Exhibit A attached hereto and (z) any
other documents required to be delivered pursuant to Article IV hereof.  At the
Closing, each Purchaser shall deliver its Purchase Price by wire transfer to the
Company.

ARTICLE II

Representations and Warranties

Section 2.1

Representations and Warranties of the Company.  The Company hereby represents
and warrants to the Purchasers, as of the date hereof and the Closing Date
(except as set forth on the Schedule of Exceptions attached hereto with each
numbered Schedule corresponding to the section number herein), as follows:

(a)

Organization, Good Standing and Power.  The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Nevada and has the requisite corporate power to own, lease and operate its
properties and assets and to conduct its business as it is now being conducted.
 The Company does not have any subsidiaries except as set forth in the Company’s
Form 10-KSB for the year ended August 31, 2006, including the accompanying
financial statements (the “Form 10-KSB”), or in the Company’s Form 10-QSB for
the fiscal quarter ended May 31, 2007 (the “Form 10-QSB”), or on Schedule
2.1(g).  The Company and each such subsidiary is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary except for any jurisdiction(s) (alone or in the
aggregate) in which the failure to be so qualified will not have a Material
Adverse Effect (as defined in Section 2.1(c) hereof) on the Company’s financial
condition.

(b)

Authorization; Enforcement.  The Company has the requisite corporate power and
authority to enter into and perform this Agreement, the Registration Rights
Agreement in the form attached hereto as Exhibit D (the “Registration Rights
Agreement”), the Lock-Up Agreement (as defined in Section 3.20 hereof) in the
form attached hereto as Exhibit E, the Irrevocable Transfer Agent Instructions
(as defined in Section 3.13), the Certificate of Designation, and the Warrants
(collectively, the “Transaction Documents”) and to issue and sell the Shares and
the Warrants in accordance with the terms hereof.  The execution, delivery and
performance of the Transaction Documents by the Company and the consummation by
it of the transactions contemplated hereby and thereby have been duly and
validly authorized by all necessary corporate action, and no further consent or
authorization of the Company or its Board of Directors or stockholders is
required.  This Agreement has been duly executed and delivered by the Company.
 The other Transaction Documents will have been duly executed and delivered by
the Company at the Closing.  Each of the Transaction Documents constitutes, or
shall constitute when executed and delivered, a valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership or
similar laws relating to, or affecting generally the enforcement of, creditor’s
rights and remedies or by other equitable principles of general application.

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(c)

Capitalization.  The authorized capital stock of the Company and the shares
thereof currently issued and outstanding as of the date hereof are set forth on
Schedule 2.1(c) hereto.  All of the outstanding shares of the Common Stock and
the Preferred Shares have been duly and validly authorized.  Except as set forth
on Schedule 2.1(c) hereto, no shares of Common Stock are entitled to preemptive
rights or registration rights and there are no outstanding options, warrants,
scrip, rights to subscribe to, call or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of the Company.  There are no contracts, commitments, understandings, or
arrangements by which the Company is or may become bound to issue additional
shares of the capital stock of the Company or options, securities or rights
convertible into shares of capital stock of the Company.  The Company is not a
party to any agreement granting registration or anti-dilution rights to any
person with respect to any of its equity or debt securities.  The Company is not
a party to, and it has no knowledge of, any agreement restricting the voting or
transfer of any shares of the capital stock of the Company.  The offer and sale
of all capital stock, convertible securities, rights, warrants, or options of
the Company issued prior to the Closing complied with all applicable Federal and
state securities laws, and no stockholder has a right of rescission or claim for
damages with respect thereto which would have a Material Adverse Effect (as
defined below).  The Company has furnished or made available to the Purchasers
true and correct copies of the Company’s Articles of Incorporation as in effect
on the date hereof (the “Articles”), and the Company’s Bylaws as in effect on
the date hereof (the “Bylaws”).  For the purposes of this Agreement, “Material
Adverse Effect” means any material adverse effect on the business, operations,
properties, prospects, or financial condition of the Company and its
subsidiaries and/or any condition, circumstance, or situation that would
prohibit or otherwise materially interfere with the ability of the Company to
perform any of its obligations under this Agreement in any material respect.

(d)

Issuance of Shares.  The Preferred Shares and the Warrants to be issued at the
Closing have been duly authorized by all necessary corporate action and the
Preferred Shares, when paid for or issued in accordance with the terms hereof,
shall be validly issued and outstanding, fully paid and nonassessable and
entitled to the rights and preferences set forth in the Certificate of
Designation.  When the Conversion Shares and the Warrant Shares are issued in
accordance with the terms of the Certificate of Designation and the Warrants,
such shares will be duly authorized by all necessary corporate action and
validly issued and outstanding, fully paid and nonassessable, and the holders
shall be entitled to all rights accorded to a holder of Common Stock and/or
Preferred Stock, as applicable.

(e)

No Conflicts.  The execution, delivery and performance of the Transaction
Documents by the Company, the performance by the Company of its obligations
under the Certificate of Designation and the consummation by the Company of the
transactions contemplated herein and therein do not and will not (i) violate any
provision of the Company’s Articles or Bylaws, (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 agreement, mortgage, deed of trust,
indenture, note, bond, license, lease agreement, instrument or obligation to
which the Company is a party or by which it or its properties or assets are
bound, (iii) create or impose a lien, mortgage, security interest, charge or
encumbrance of any nature on any property of the Company under any

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agreement or any commitment to which the Company is a party or by which the
Company is bound or by which any of its respective properties or assets are
bound, or (iv) result in a violation of any federal, state, local or foreign
statute, 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 are bound or affected, except, in all cases other than violations
pursuant to clauses (i) and (iv) above, for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect.  The
business of the Company and its subsidiaries is not being conducted in violation
of any laws, ordinances or regulations of any governmental entity, except for
possible violations which singularly or in the aggregate do not and will not
have a Material Adverse Effect.  The Company is not required under Federal,
state or local law, rule or regulation to obtain any consent, authorization or
order of, or make any filing or registration with, any court or governmental
agency in order for it to execute, deliver or perform any of its obligations
under the Transaction Documents, or issue and sell the Preferred Shares, the
Warrants, the Conversion Shares and the Warrant Shares in accordance with the
terms hereof or thereof (other than any filings which may be required to be made
by the Company with the Commission or state securities administrators subsequent
to the Closing, any registration statement which may be filed pursuant hereto,
and the Certificate of Designation); provided that, for purposes of the
representation made in this sentence, the Company is assuming and relying upon
the accuracy of the relevant representations and agreements of the Purchasers
herein.

(f)

Commission Documents, Financial Statements.  The Common Stock of the Company is
registered pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the Company has timely filed all
reports, schedules, forms, statements and other documents required to be filed
by it with the Commission pursuant to the reporting requirements of the Exchange
Act, including material filed pursuant to Section 13(a) or 15(d) of the Exchange
Act (all of the foregoing including filings incorporated by reference therein
being referred to herein as the “Commission Documents”).  True and complete
copies of all of the Commission Documents are available to the Purchasers
through the Commission’s EDGAR database on www.sec.gov.  The Company has not
provided to the Purchasers any material non-public information or other
information which, according to applicable law, rule or regulation, was required
to have been disclosed publicly by the Company but which has not been so
disclosed, other than with respect to the transactions contemplated by this
Agreement.  At the times of their respective filings, the Commission Documents
complied in all material respects with the requirements of the Exchange Act and
the rules and regulations of the Commission promulgated thereunder and other
federal, state and local laws, rules and regulations applicable to such
documents, and, as of their respective dates, none of the Commission Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.  The financial statements of the Company included in the Commission
Documents comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission or other
applicable rules and regulations with respect thereto.  Such financial
statements have been prepared in accordance with United States generally
accepted accounting principles (“GAAP”) applied on a consistent basis during the
periods

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involved (except (i) as may be otherwise indicated in such financial statements
or the notes thereto or (ii) in the case of unaudited interim statements, to the
extent they may not include footnotes or may be condensed or summary
statements), and fairly present in all material respects the financial position
of the Company and its subsidiaries as of the dates thereof and the results of
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).

(g)

Subsidiaries.  Schedule 2.1(g) hereto sets forth each subsidiary of the Company,
showing the jurisdiction of its incorporation or organization and showing the
percentage of each person’s ownership.  For the purposes of this Agreement,
“subsidiary” shall mean any corporation or other entity of which at least a
majority of the securities or other ownership interest having ordinary voting
power (absolutely or contingently) for the election of directors or other
persons performing similar functions are at the time owned directly or
indirectly by the Company and/or any of its other subsidiaries.  All of the
outstanding shares of capital stock of each subsidiary have been duly authorized
and validly issued, and are fully paid and nonassessable.  There are no
outstanding preemptive, conversion or other rights, options, warrants or
agreements granted or issued by or binding upon any subsidiary for the purchase
or acquisition of any shares of capital stock of any subsidiary or any other
securities convertible into, exchangeable for or evidencing the rights to
subscribe for any shares of such capital stock.  Neither the Company nor any
subsidiary is subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of the capital stock of any subsidiary
or any convertible securities, rights, warrants or options of the type described
in the preceding sentence.  Neither the Company nor any subsidiary is party to,
nor has any knowledge of, any agreement restricting the voting or transfer of
any shares of the capital stock of any subsidiary.

(h)

No Material Adverse Change.  Since May 31, 2007, the Company has not experienced
or suffered any Material Adverse Effect.

(i)

No Undisclosed Liabilities.  Neither the Company nor any of its subsidiaries has
any liabilities, obligations, claims or losses (whether liquidated or
unliquidated, secured or unsecured, absolute, accrued, contingent or otherwise)
other than those incurred in the ordinary course of the Company’s or its
subsidiaries respective businesses since May 31, 2007 and which, individually or
in the aggregate, do not or would not have a Material Adverse Effect on the
Company or its subsidiaries.

(j)

No Undisclosed Events or Circumstances.  No event or circumstance has occurred
or exists with respect to the Company or its subsidiaries or their respective
businesses, properties, prospects, operations or financial condition, which,
under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed.

(k)

Indebtedness. Schedule 2.1(k) hereto sets forth as of a recent date all
outstanding secured and unsecured Indebtedness of the Company or any subsidiary,
or for which the Company or any subsidiary has commitments.  For the purposes of
this Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed money
or amounts owed in excess of $100,000 (other than trade accounts payable
incurred in the ordinary course of business), (b) all

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guaranties, endorsements and other contingent obligations in respect of
Indebtedness of others, whether or not the same are or should be reflected in
the Company’s balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (c) the present value of
any lease payments in excess of $25,000 due under leases required to be
capitalized in accordance with GAAP.  Except as set forth on Schedule 2.1(k),
neither the Company nor any subsidiary is in default with respect to any
Indebtedness.

(l)

Title to Assets.  Each of the Company and the subsidiaries has good and
marketable title to all of its real and personal property reflected in the
Commission Documents, free and clear of any mortgages, pledges, charges, liens,
security interests or other encumbrances, except for those disclosed in the Form
10-KSB or such that, individually or in the aggregate, do not cause a Material
Adverse Effect.  All leases of the Company and each of its subsidiaries are
valid and subsisting and in full force and effect.

(m)

Actions Pending.  There is no action, suit, claim, investigation, arbitration,
alternate dispute resolution proceeding or any other proceeding pending or, to
the knowledge of the Company, threatened against the Company or any subsidiary
which questions the validity of this Agreement or any of the other Transaction
Documents or the transactions contemplated hereby or thereby or any action taken
or to be taken pursuant hereto or thereto.  Except as set forth in the
Commission Documents, there is no action, suit, claim, investigation,
arbitration, alternate dispute resolution proceeding or any other proceeding
pending or, to the knowledge of the Company, threatened, against or involving
the Company, any subsidiary or any of their respective properties or assets.
 There are no outstanding orders, judgments, injunctions, awards or decrees of
any court, arbitrator or governmental or regulatory body against the Company or
any subsidiary or any officers or directors of the Company or subsidiary in
their capacities as such.

(n)

Compliance with Law.  The business of the Company and the subsidiaries has been
and is presently being conducted in accordance with all applicable federal,
state and local governmental laws, rules, regulations and ordinances, except for
such noncompliance that, individually or in the aggregate, would not cause a
Material Adverse Effect.  The Company and each of its subsidiaries have all
franchises, permits, licenses, consents and other governmental or regulatory
authorizations and approvals necessary for the conduct of its business as now
being conducted by it unless the failure to possess such franchises, permits,
licenses, consents and other governmental or regulatory authorizations and
approvals, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.

(o)

Taxes.  The Company and each of the subsidiaries has accurately prepared and
filed all federal, state and other tax returns required by law to be filed by
it, has paid or made provisions for the payment of all taxes shown to be due and
all additional assessments, and adequate provisions have been and are reflected
in the financial statements of the Company and the subsidiaries for all current
taxes and other charges to which the Company or any subsidiary is subject and
which are not currently due and payable.  None of the federal income tax returns
of the Company or any subsidiary have been audited by the Internal Revenue
Service.  The Company has no knowledge of any additional assessments,
adjustments or contingent tax

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liability (whether federal or state) of any nature whatsoever, whether pending
or threatened against the Company or any subsidiary for any period, nor of any
basis for any such assessment, adjustment or contingency.

(p)

Certain Fees.  Except as set forth on Schedule 2.1(p) hereto, no brokers,
finders or financial advisory fees or commissions will be payable by the Company
or any subsidiary or any Purchaser with respect to the transactions contemplated
by this Agreement.

(q)

Disclosure.  Neither this Agreement or the Schedules hereto nor any other
documents, certificates or instruments furnished to the Purchasers by or on
behalf of the Company or any subsidiary in connection with the transactions
contemplated by this Agreement contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements made
herein or therein, in the light of the circumstances under which they were made
herein or therein, not misleading.

(r)

Operation of Business.  The Company and each of the subsidiaries owns or
possesses all patents, trademarks, domain names (whether or not registered) and
any patentable improvements or copyrightable derivative works thereof, websites
and intellectual property rights relating thereto, service marks, trade names,
copyrights, licenses and authorizations as set forth in the Commission
Documents, and all rights with respect to the foregoing, which are necessary for
the conduct of its business as now conducted without any conflict with the
rights of others.

(s)

Environmental Compliance.  The Company and each of its subsidiaries have
obtained all material approvals, authorization, certificates, consents,
licenses, orders and permits or other similar authorizations of all governmental
authorities, or from any other person, that are required under any
 Environmental Laws.  The Commission Documents describe all material permits,
licenses and other authorizations issued under any Environmental Laws to the
Company or its subsidiaries.  “Environmental Laws” shall mean all applicable
laws relating to the protection of the environment including, without
limitation, all requirements pertaining to reporting, licensing, permitting,
controlling, investigating or remediating emissions, discharges, releases or
threatened releases of hazardous substances, chemical substances, pollutants,
contaminants or toxic substances, materials or wastes, whether solid, liquid or
gaseous in nature, into the air, surface water, groundwater or land, or relating
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of hazardous substances, chemical substances, pollutants,
contaminants or toxic substances, material or wastes, whether solid, liquid or
gaseous in nature.  The Company has all necessary governmental approvals
required under all Environmental Laws and used in its business or in the
business of any of its subsidiaries.  The Company and each of its subsidiaries
are also in compliance with all other limitations, restrictions, conditions,
standards, requirements, schedules and timetables required or imposed under all
Environmental Laws.  Except for such instances as would not individually or in
the aggregate have a Material Adverse Effect, there are no past or present
events, conditions, circumstances, incidents, actions or omissions relating to
or in any way affecting the Company or its subsidiaries that violate or may
violate any Environmental Law after the Closing Date or that may give rise to
any environmental liability, or otherwise form the basis of any claim, action,
demand, suit, proceeding, hearing, study or investigation (i) under any
Environmental Law, or

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(ii) based on or related to the manufacture, processing, distribution, use,
treatment, storage (including without limitation underground storage tanks),
disposal, transport or handling, or the emission, discharge, release or
threatened release of any hazardous substance.  

(t)

Books and Record Internal Accounting Controls.  The books and records of the
Company and its subsidiaries accurately reflect in all material respects the
information relating to the business of the Company and the subsidiaries, the
location and collection of their assets, and the nature of all transactions
giving rise to the obligations or accounts receivable of the Company or any
subsidiary.  The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient, in the judgment of the Company, to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate actions is taken
with respect to any differences.

(u)

Material Agreements.  Neither the Company nor any subsidiary is a party to any
written or oral contract, instrument, agreement, commitment, obligation, plan or
arrangement, a copy of which would be required to be filed with the Commission
as an exhibit to a registration statement on Form S-3 or applicable form
(collectively, “Material Agreements”) if the Company or any subsidiary were
registering securities under the Securities Act.  Except as set forth on
Schedule 2.1(u) hereto, no written or oral contract, instrument, agreement,
commitment, obligation, plan or arrangement of the Company or of any subsidiary
limits or shall limit the payment of dividends on the Company’s Preferred
Shares, other preferred stock, if any, or its Common Stock.

(v)

Transactions with Affiliates.  Except as set forth in the Commission Documents,
there are no loans, leases, agreements, contracts, royalty agreements,
management contracts or arrangements or other continuing transactions between
(a) the Company or any subsidiary on the one hand, and (b) on the other hand,
any officer, employee, consultant or director of the Company, or any of its
subsidiaries, or any person owning any capital stock of the Company or any
subsidiary or any member of the immediate family of such officer, employee,
consultant, director or stockholder or any corporation or other entity
controlled by such officer, employee, consultant, director or stockholder, or a
member of the immediate family of such officer, employee, consultant, director
or stockholder.

(w)

Securities Act of 1933.  Based in material part upon the representations herein
of the Purchasers, the Company has complied and will comply with all applicable
federal and state securities laws in connection with the offer, issuance and
sale of the Shares and the Warrants hereunder.  Neither the Company nor anyone
acting on its behalf, directly or indirectly, has or will sell, offer to sell or
solicit offers to buy any of the Shares, the Warrants or similar securities to,
or solicit offers with respect thereto from, or enter into any preliminary
conversations or negotiations relating thereto with, any person, or has taken or
will take any action so as to bring the issuance and sale of any of the Shares
and the Warrants under the registration provisions of the Securities Act and
applicable state securities laws, and neither the

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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 any of the Shares and the Warrants.

(x)

Governmental Approvals.  Except for the filing of any notice prior or subsequent
to the Closing Date that may be required under applicable state and/or Federal
securities laws (which if required, shall be filed on a timely basis), including
the filing of a Form D and a registration statement or statements pursuant to
the Registration Rights Agreement, and the filing of the Certificate of
Designation with the Secretary of State for the State of Nevada, no
authorization, consent, approval, license, exemption of, filing or registration
with any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, is or will be necessary for, or in
connection with, the execution or delivery of the Preferred Shares and the
Warrants, or for the performance by the Company of its obligations under the
Transaction Documents.

(y)

Employees.  Neither the Company nor any subsidiary has any collective bargaining
arrangements or agreements covering any of its employees.  Neither the Company
nor any subsidiary has any employment contract, agreement regarding proprietary
information, non-competition agreement, non-solicitation agreement,
confidentiality agreement, or any other similar contract or restrictive
covenant, relating to the right of any officer, employee or consultant to be
employed or engaged by the Company or such subsidiary.  No officer, consultant
or key employee of the Company or any subsidiary whose termination, either
individually or in the aggregate, could have a Material Adverse Effect, has
terminated or, to the knowledge of the Company, has any present intention of
terminating his or her employment or engagement with the Company or any
subsidiary.

(z)

Absence of Certain Developments.  Except as set forth in the Commission
Documents or on Schedule 2.1(z) hereto, since May 31, 2007, neither the Company
nor any subsidiary has:

(i)

issued any stock, bonds or other corporate securities or any rights, options or
warrants with respect thereto;

(ii)

borrowed any amount or incurred or become subject to any liabilities (absolute
or contingent) except current liabilities incurred in the ordinary course of
business which are comparable in nature and amount to the current liabilities
incurred in the ordinary course of business during the comparable portion of its
prior fiscal year, as adjusted to reflect the current nature and volume of the
Company’s or such subsidiary’s business;

(iii)

discharged or satisfied any lien or encumbrance or paid any obligation or
liability (absolute or contingent), other than current liabilities paid in the
ordinary course of business;

(iv)

declared or made any payment or distribution of cash or other property to
stockholders with respect to its stock, or purchased or redeemed, or made any
agreements so to purchase or redeem, any shares of its capital stock;

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(v)

sold, assigned or transferred any other tangible assets, or canceled any debts
or claims, except in the ordinary course of business;

(vi)

sold, assigned or transferred any patent rights, trademarks, trade names,
copyrights, trade secrets or other intangible assets or intellectual property
rights, or disclosed any proprietary confidential information to any person
except to customers in the ordinary course of business or to the Purchasers or
their representatives;

(vii)

suffered any substantial losses or waived any rights of material value, whether
or not in the ordinary course of business, or suffered the loss of any material
amount of prospective business;

(viii)

made any changes in employee compensation except in the ordinary course of
business and consistent with past practices;

(ix)

made capital expenditures or commitments therefor that aggregate in excess of
$100,000;

(x)

entered into any other transaction other than in the ordinary course of
business, or entered into any other material transaction, whether or not in the
ordinary course of business;

(xi)

made charitable contributions or pledges in excess of $25,000;

(xii)

suffered any material damage, destruction or casualty loss, whether or not
covered by insurance;

(xiii)

experienced any material problems with labor or management in connection with
the terms and conditions of their employment;

(xiv)

effected any two or more events of the foregoing kind which in the aggregate
would be material to the Company or its subsidiaries; or

(xv)

entered into an agreement, written or otherwise, to take any of the foregoing
actions.

(aa)

Public Utility Holding Company Act and Investment Company Act Status.  The
Company is not a “holding company” or a “public utility company” as such terms
are defined in the Public Utility Holding Company Act of 1935, as amended.  The
Company is not, and as a result of and immediately upon the Closing will not be,
an “investment company” or a company “controlled” by an “investment company,”
within the meaning of the Investment Company Act of 1940, as amended.

(bb)

ERISA.  No liability to the Pension Benefit Guaranty Corporation has been
incurred with respect to any Plan (as defined below) by the Company or any of
its subsidiaries which is or would be materially adverse to the Company and its
subsidiaries.  The execution and delivery of this Agreement and the issuance and
sale of the Preferred Shares will

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not involve any transaction which is subject to the prohibitions of Section 406
of ERISA or in connection with which a tax could be imposed pursuant to Section
4975 of the Internal Revenue Code of 1986, as amended, provided that, if any of
the Purchasers, or any person or entity that owns a beneficial interest in any
of the Purchasers, is an “employee pension benefit plan” (within the meaning of
Section 3(2) of ERISA) with respect to which the Company is a “party in
interest” (within the meaning of Section 3(14) of ERISA), the requirements of
Sections 407(d)(5) and 408(e) of ERISA, if applicable, are met.  As used in this
Section 2.1(bb), the term “Plan” shall mean an “employee pension benefit plan”
(as defined in Section 3 of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Company or
any subsidiary or by any trade or business, whether or not incorporated, which,
together with the Company or any subsidiary, is under common control, as
described in Section 414(b) or (c) of the Code.

(cc)

Dilutive Effect.  The Company understands and acknowledges that its obligation
to issue Conversion Shares upon conversion of the Preferred Shares in accordance
with this Agreement and the Certificate of Designation and its obligations to
issue the Warrant Shares upon the exercise of the Warrants in accordance with
this Agreement and the Warrants, is, in each case, absolute and unconditional
regardless of the dilutive effect that such issuance may have on the ownership
interest of other stockholders of the Company.

(dd)

No Integrated Offering.  Neither the Company, nor any of its affiliates, nor any
person acting on its or 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 cause the offering of the Shares pursuant to this
Agreement to be integrated with prior offerings by the Company for purposes of
the Securities Act which would prevent the Company from selling the Shares
pursuant to Rule 506 under the Securities Act, or any applicable
exchange-related stockholder approval provisions, nor will the Company or any of
its affiliates or subsidiaries take any action or steps that would cause the
offering of the Shares to be integrated with other offerings.  The Company does
not have any registration statement pending before the Commission or currently
under the Commission’s review and since July 18, 2007, the Company has not
offered or sold any of its equity securities or debt securities convertible into
shares of Common Stock.

(ee)

Sarbanes-Oxley Act.  The Company is in compliance with the applicable provisions
of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and the rules and
regulations promulgated thereunder, that are effective, and intends to comply
with other applicable provisions of the Sarbanes-Oxley Act, and the rules and
regulations promulgated thereunder, upon the effectiveness of such provisions.

(ff)

Independent Nature of Purchasers.  The Company acknowledges that the obligations
of each Purchaser under the Transaction Documents are several and not joint with
the obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance of the obligations of any other Purchaser under the
Transaction Documents.  The Company acknowledges that the decision of each
Purchaser to purchase securities pursuant to this Agreement has been made by
such Purchaser independently of any other purchase and independently of any
information, materials, statements or opinions as to the business, affairs,

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operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company or of its Subsidiaries
which may have made or given by any other Purchaser or by any agent or employee
of any other Purchaser, and no Purchaser or any of its agents or employees shall
have any liability to any Purchaser (or any other person) relating to or arising
from any such information, materials, statements or opinions.  The Company
acknowledges that nothing contained herein, or in any Transaction Document, and
no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Purchasers are in any
way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents.  The Company
acknowledges that each Purchaser shall be entitled to independently protect and
enforce its rights, including without limitation, the rights arising out of this
Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.  The Company acknowledges that for reasons of
administrative convenience only, the Transaction Documents have been prepared by
counsel for one of the Purchasers and such counsel does not represent all of the
Purchasers but only such Purchaser and the other Purchasers have retained their
own individual counsel with respect to the transactions contemplated hereby. 
The Company acknowledges that it has elected to provide all Purchasers with the
same terms and Transaction Documents for the convenience of the Company and not
because it was required or requested to do so by the Purchasers.  The Company
acknowledges that such procedure with respect to the Transaction Documents in no
way creates a presumption that the Purchasers are in any way acting in concert
or as a group with respect to the Transaction Documents or the transactions
contemplated hereby or thereby.

(gg)

Transfer Agent.  The name, address, telephone number, fax number, contact person
and email address of the Company’s current transfer agent is set forth on
Schedule 2.1(gg) hereto.

Section 2.2

Representations and Warranties of the Purchasers.  Each of the Purchasers hereby
makes the following representations and warranties to the Company with respect
solely to itself and not with respect to any other Purchaser:

(a)

Organization and Standing of the Purchasers.  If the Purchaser is an entity,
such Purchaser is a corporation or partnership duly incorporated or organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization.

(b)

Authorization and Power.  Each Purchaser has the requisite power and authority
to enter into and perform this Agreement and to purchase the Preferred Shares
and Warrants being sold to it hereunder.  The execution, delivery and
performance of this Agreement and the Registration Rights Agreement by such
Purchaser and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate or partnership
action, and no further consent or authorization of such Purchaser or its Board
of Directors, stockholders, or partners, as the case may be, is required.  Each
of this Agreement and the Registration Rights Agreement has been duly
authorized, executed and delivered by such Purchaser and constitutes, or shall
constitute when executed and delivered, a valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance

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with the terms thereof.

(c)

No Conflicts.  The execution, delivery and performance of this Agreement and the
Registration Rights Agreement and the consummation by such Purchaser of the
transactions contemplated hereby and thereby or relating hereto do not and will
not (i) result in a violation of such Purchaser’s charter documents or bylaws or
other organizational documents 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 agreement, indenture or instrument or obligation to which
such Purchaser is a party or by which its properties or assets are bound, or
result in a violation of any law, rule, or regulation, or any order, judgment or
decree of any court or governmental agency applicable to such Purchaser or its
properties (except for such conflicts, defaults and violations as would not,
individually or in the aggregate, have a material adverse effect on such
Purchaser).  Such Purchaser is not required to obtain any consent, authorization
or order of, or make any filing or registration with, any court or governmental
agency in order for it to execute, deliver or perform any of its obligations
under this Agreement or the Registration Rights Agreement or to purchase the
Preferred Shares or acquire the Warrants in accordance with the terms hereof,
provided that for purposes of the representation made in this sentence, such
Purchaser is assuming and relying upon the accuracy of the relevant
representations and agreements of the Company herein.

(d)

Acquisition for Investment.  Each Purchaser is acquiring the Preferred Shares
and the Warrants solely for its own account for the purpose of investment and
not with a view to or for sale in connection with distribution.  Each Purchaser
does not have a present intention to sell the Preferred Shares or the Warrants,
nor a present arrangement (whether or not legally binding) or intention to
effect any distribution of the Preferred Shares or the Warrants to or through
any person or entity; provided, however, that by making the representations
herein and subject to Section 2.2(h) below, such Purchaser does not agree to
hold the Shares or the Warrants for any minimum or other specific term and
reserves the right to dispose of the Shares or the Warrants at any time in
accordance with Federal and state securities laws applicable to such
disposition.  Each Purchaser acknowledges that it is able to bear the financial
risks associated with an investment in the Preferred Shares and the Warrants and
that it has been given full access to such records of the Company and the
subsidiaries and to the officers of the Company and the subsidiaries and
received such information as it has deemed necessary or appropriate to conduct
its due diligence investigation and has sufficient knowledge and experience in
investing in companies similar to the Company in terms of the Company’s stage of
development so as to be able to evaluate the risks and merits of its investment
in the Company.

(e)

Status of Purchasers.  Such Purchaser is an “accredited investor” as defined in
Regulation D promulgated under the Securities Act.  Such Purchaser is not
required to be registered as a broker-dealer under Section 15 of the Exchange
Act and such Purchaser is not a broker-dealer.

(f)

Opportunities for Additional Information.  Each Purchaser acknowledges that such
Purchaser has had the opportunity to ask questions of and receive answers from,
or obtain additional information from, the executive officers of the Company
concerning the

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financial and other affairs of the Company, and to the extent deemed necessary
in light of such Purchaser’s personal knowledge of the Company’s affairs, such
Purchaser has asked such questions and received answers to the full satisfaction
of such Purchaser, and such Purchaser desires to invest in the Company.

(g)

No General Solicitation.  Each Purchaser acknowledges that the Preferred Shares
and the Warrants were not offered to such Purchaser by means of any form of
general or public solicitation or general advertising, or publicly disseminated
advertisements or sales literature, including (i) any advertisement, article,
notice or other communication published in any newspaper, magazine, or similar
media, or broadcast over television or radio, or (ii) any seminar or meeting to
which such Purchaser was invited by any of the foregoing means of
communications.

(h)

Rule 144.  Such Purchaser understands that the Shares must be held indefinitely
unless such Shares are registered under the Securities Act or an exemption from
registration is available.  Such Purchaser acknowledges that such Purchaser is
familiar with Rule 144 of the rules and regulations of the Commission, as
amended, promulgated pursuant to the Securities Act (“Rule 144”), and that such
person has been advised that Rule 144 permits resales only under certain
circumstances.  Such Purchaser understands that to the extent that Rule 144 is
not available, such Purchaser will be unable to sell any Shares without either
registration under the Securities Act or the existence of another exemption from
such registration requirement.

(i)

General.  Such Purchaser understands that the Shares are being offered and sold
in reliance on a transactional exemption from the registration requirement of
Federal and state securities laws and the Company is relying upon the truth and
accuracy of the representations, warranties, agreements, acknowledgments and
understandings of such Purchaser set forth herein in order to determine the
applicability of such exemptions and the suitability of such Purchaser to
acquire the Shares.

(j)

Independent Investment.  Except as may be disclosed in any filings with the
Commission by the Purchasers under Section 13 and/or Section 16 of the Exchange
Act, no Purchaser has agreed to act with any other Purchaser for the purpose of
acquiring, holding, voting or disposing of the Shares purchased hereunder for
purposes of Section 13(d) under the Exchange Act, and each Purchaser is acting
independently with respect to its investment in the Shares.

(k)

Trading Activities.  Each Purchaser’s trading activities with respect to the
Shares shall be in compliance with all applicable federal and state securities
laws.  No Purchaser nor any of its affiliates has an open short position in the
Common Stock, each Purchaser agrees that it shall not, and that it will cause
its affiliates not to, engage in any short sales with respect to the Common
Stock.

ARTICLE III

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Covenants

The Company covenants with each of the Purchasers as follows, which covenants
are for the benefit of the Purchasers and their permitted assignees (as defined
herein).

Section 3.1

Securities Compliance.  The Company shall notify the Commission in accordance
with their rules and regulations, of the transactions contemplated by any of the
Transaction Documents, including filing a Form D with respect to the Preferred
Shares, Warrants, Conversion Shares and Warrant Shares as required under
Regulation D, and shall take all other necessary action and proceedings as may
be required and permitted by applicable law, rule and regulation, for the legal
and valid issuance of the Preferred Shares, the Warrants, the Conversion Shares
and the Warrant Shares to the Purchasers or subsequent holders.

Section 3.2

Registration and Listing.  The Company shall cause its Common Stock to continue
to be registered under Sections 12(b) or 12(g) of the Exchange Act, to comply in
all respects with its reporting and filing obligations under the Exchange Act,
to comply with all requirements related to any registration statement filed
pursuant to this Agreement, and to not take any action or file any document
(whether or not permitted by the Securities Act or the rules promulgated
thereunder) to terminate or suspend such registration or to terminate or suspend
its reporting and filing obligations under the Exchange Act or Securities Act,
except as permitted herein.  The Company will take all action necessary to
continue the listing or trading of its Common Stock on the OTC Bulletin Board or
other exchange or market on which the Common Stock is trading.  Subject to the
terms of the Transaction Documents, the Company further covenants that it will
take such further action as the Purchasers may reasonably request, all to the
extent required from time to time to enable the Purchasers to sell the Shares
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 promulgated under the Securities Act.  Upon the
request of the Purchasers, the Company shall deliver to the Purchasers a written
certification of a duly authorized officer as to whether it has complied with
such requirements.

Section 3.3

Inspection Rights.  The Company shall permit, during normal business hours and
upon reasonable request and reasonable notice, each Purchaser or any employees,
agents or representatives thereof, so long as such Purchaser shall be obligated
hereunder to purchase the Preferred Shares or shall beneficially own any
Preferred Shares, or shall own Conversion Shares which, in the aggregate,
represent more than 2% of the total combined voting power of all voting
securities then outstanding, for purposes reasonably related to such Purchaser’s
interests as a stockholder to examine and make reasonable copies of and extracts
from the records and books of account of, and visit and inspect the properties,
assets, operations and business of the Company and any subsidiary, and to
discuss the affairs, finances and accounts of the Company and any subsidiary
with any of its officers, consultants, directors, and key employees.  

Section 3.4

Compliance with Laws.  The Company shall comply, and cause each subsidiary to
comply, with all applicable laws, rules, regulations and orders, noncompliance
with which could have a Material Adverse Effect.

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Section 3.5

Keeping of Records and Books of Account.  The Company shall keep and cause each
subsidiary to keep adequate records and books of account, in which complete
entries will be made in accordance with GAAP consistently applied, reflecting
all financial transactions of the Company and its subsidiaries, and in which,
for each fiscal year, all proper reserves for depreciation, depletion,
obsolescence, amortization, taxes, bad debts and other purposes in connection
with its business shall be made.

Section 3.6

Reporting Requirements.  If the Commission ceases making periodic reports filed
under the Exchange Act available via the Internet, then at a Purchaser’s request
the Company shall furnish the following to such Purchaser so long as such
Purchaser shall be obligated hereunder to purchase the Preferred Shares or shall
beneficially own any Shares:

(a)

Quarterly Reports filed with the Commission on Form 10-QSB as soon as practical
after the document is filed with the Commission, and in any event within five
(5) days after the document is filed with the Commission;

(b)

Annual Reports filed with the Commission on Form 10-KSB as soon as practical
after the document is filed with the Commission, and in any event within five
(5) days after the document is filed with the Commission; and

(c)

Copies of all notices and information, including without limitation notices and
proxy statements in connection with any meetings, that are provided to holders
of shares of Common Stock, contemporaneously with the delivery of such notices
or information to such holders of Common Stock.

Section 3.7

Amendments.  The Company shall not amend or waive any provision of the Articles
or Bylaws of the Company in any way that would adversely affect the liquidation
preferences, dividends rights, conversion rights, voting rights or redemption
rights of the Preferred Shares; provided, however, that any creation and
issuance of another series of Junior Stock (as defined in the Certificate of
Designation) or any other class or series of equity securities which by its
terms shall rank on parity with the Preferred Shares shall not be deemed to
materially and adversely affect such rights, preferences or privileges.

Section 3.8

Other Agreements.  The Company shall not enter into any agreement in which the
terms of such agreement would restrict or impair the right or ability to perform
of the Company or any subsidiary under any Transaction Document.

Section 3.9

Distributions.  So long as any Preferred Shares or Warrants remain outstanding,
the Company agrees that it shall not (i) declare or pay any dividends or make
any distributions to any holder(s) of Common Stock or (ii) purchase or otherwise
acquire for value, directly or indirectly, any Common Stock or other equity
security of the Company.

Section 3.10

Status of Dividends.  The Company covenants and agrees that (i) no Federal
income tax return or claim for refund of Federal income tax or other submission
to the Internal Revenue Service (the “Service”) will adversely affect the
Preferred Shares, any other

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series of its Preferred Stock, or the Common Stock, and no deduction shall
operate to jeopardize the availability to Purchasers of the dividends received
deduction provided by Section 243(a)(1) of the Code or any successor provision,
(ii) in no report to shareholders or to any governmental body having
jurisdiction over the Company or otherwise will it treat the Preferred Shares
other than as equity capital or the dividends paid thereon other than as
dividends paid on equity capital unless required to do so by a governmental body
having jurisdiction over the accounts of the Company or by a change in generally
accepted accounting principles required as a result of action by an
authoritative accounting standards setting body, and (iii) it will take no
action which would result in the dividends paid by the Company on the Preferred
Shares out of the Company’s current or accumulated earnings and profits being
ineligible for the dividends received deduction provided by Section 243(a)(1) of
the Code.  The preceding sentence shall not be deemed to prevent the Company
from designating the Preferred Stock as “Convertible Preferred Stock” in its
annual and quarterly financial statements in accordance with its prior practice
concerning other series of preferred stock of the Company.  In the event that
the Purchasers have reasonable cause to believe that dividends paid by the
Company on the Preferred Shares out of the Company’s current or accumulated
earnings and profits will not be treated as eligible for the dividends received
deduction provided by Section 243(a)(1) of the Code, or any successor provision,
the Company will, at the reasonable request of the Purchasers of 51% of the
outstanding Preferred Shares, join with the Purchasers in the submission to the
Service of a request for a ruling that dividends paid on the Shares will be so
eligible for Federal income tax purposes, at the Purchasers expense.  In
addition, the Company will reasonably cooperate with the Purchasers (at
Purchasers’ expense) in any litigation, appeal or other proceeding challenging
or contesting any ruling, technical advice, finding or determination that
earnings and profits are not eligible for the dividends received deduction
provided by Section 243(a)(1) of the Code, or any successor provision to the
extent that the position to be taken in any such litigation, appeal, or other
proceeding is not contrary to any provision of the Code.  Notwithstanding the
foregoing, nothing herein contained shall be deemed to preclude the Company from
claiming a deduction with respect to such dividends if (i) the Code shall
hereafter be amended, or final Treasury regulations thereunder are issued or
modified, to provide that dividends on the Preferred Shares or Conversion Shares
should not be treated as dividends for Federal income tax purposes or that a
deduction with respect to all or a portion of the dividends on the Shares is
allowable for Federal income tax purposes, or (ii) in the absence of such an
amendment, issuance or modification and after a submission of a request for
ruling or technical advice, the Service shall issue a published ruling or advise
that dividends on the Shares should not be treated as dividends for Federal
income tax purposes.  If the Service specifically determines that the Preferred
Shares or Conversion Shares constitute debt, the Company may file protective
claims for refund.

Section 3.11

Use of Proceeds.  The net proceeds from the sale of the Shares hereunder shall
be used by the Company for working capital and general corporate purposes, and
not to redeem any Common Stock or securities convertible, exercisable or
exchangeable into Common Stock or to settle any outstanding litigation.  

Section 3.12

Reservation of Shares.  So long as any of the Preferred Shares or Warrants
remain outstanding, the Company shall take all action necessary to at all times
have authorized, and reserved for the purpose of issuance, no less than one
hundred twenty percent

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(120%) the aggregate number of shares of Common Stock needed to provide for the
issuance of the Conversion Shares and the Warrant Shares.

Section 3.13

Transfer Agent Instructions.  The Company shall issue irrevocable instructions
to its transfer agent, and any subsequent transfer agent, to issue certificates,
registered in the name of each Purchaser or its respective nominee(s), for the
Conversion Shares and the Warrant Shares in such amounts as specified from time
to time by each Purchaser to the Company upon conversion of the Preferred Shares
or exercise of the Warrants in the form of Exhibit F attached hereto (the
“Irrevocable Transfer Agent Instructions”).  Prior to registration of the
Conversion Shares and the Warrant Shares under the Securities Act, all such
certificates shall bear the restrictive legend specified in Section 5.1 of this
Agreement.  The Company warrants that no instruction other than the Irrevocable
Transfer Agent Instructions referred to in this Section 3.13 will be given by
the Company to its transfer agent and that the Shares shall otherwise be freely
transferable on the books and records of the Company as and to the extent
provided in this Agreement and the Registration Rights Agreement.  If a
Purchaser provides the Company with an opinion of counsel, in a generally
acceptable form, to the effect that a public sale, assignment or transfer of the
Shares may be made without registration under the Securities Act, the Company
shall permit the transfer, and, in the case of the Conversion Shares and the
Warrant Shares, promptly instruct its transfer agent to issue one or more
certificates in such name and in such denominations as specified by such
Purchaser and without any restrictive legend.  The Company acknowledges that a
breach by it of its obligations under this Section 3.13 will cause irreparable
harm to the Purchasers by vitiating the intent and purpose of the transaction
contemplated hereby.  Accordingly, the Company acknowledges that the remedy at
law for a breach of its obligations under this Section 3.13 will be inadequate
and agrees, in the event of a breach or threatened breach by the Company of the
provisions of this Section 3.13, that the Purchasers shall be entitled, in
addition to all other available remedies, to an order and/or injunction
restraining any breach and requiring immediate issuance and transfer, without
the necessity of showing economic loss and without any bond or other security
being required.

Section 3.14

Disposition of Assets.  So long as the Preferred Shares remain outstanding,
neither the Company nor any Subsidiary shall sell, transfer or otherwise dispose
of any of its properties, assets and rights including, without limitation, its
software and intellectual property, to any person except for sales to customers
in the ordinary course of business or with the prior written consent of the
holders of a majority of the Preferred Shares then outstanding.

Section 3.15

Reporting Status.  So long as a Purchaser beneficially owns any of the Shares,
the Company shall timely file all reports required to be filed with the
Commission pursuant to the Exchange Act, and the Company shall not terminate its
status as an issuer required to file reports under the Exchange Act even if the
Exchange Act or the rules and regulations thereunder would permit such
termination.  

Section 3.16

Disclosure of Transaction.  The Company shall file with the Commission a Current
Report on Form 8-K (the “Form 8-K”) describing the material terms of the
transactions contemplated hereby (and attaching as exhibits thereto this
Agreement, the Registration Rights Agreement, the Certificate of Designation,
the Lock-Up Agreement and the form of each series of Warrant) as soon as
practicable following the Closing Date but in no event more than two (2) Trading
Days following the Closing Date, which Form 8-K shall be subject to

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prior review and comment by the Purchasers.  "Trading Day" means any day during
which the OTC Bulletin Board (or other principal exchange on which the Common
Stock is traded) shall be open for trading.  

Section 3.17

Disclosure of Material Information.  The Company covenants and agrees that
neither it nor any other person acting on its behalf has provided or will
provide any Purchaser or its agents or counsel with any information that the
Company believes constitutes material non-public information, unless prior
thereto such Purchaser shall have executed a written agreement regarding the
confidentiality and use of such information.  The Company understands and
confirms that each Purchaser shall be relying on the foregoing representations
in effecting transactions in securities of the Company.

Section 3.18

Pledge of Securities.  The Company acknowledges and agrees that the Shares may
be pledged by a Purchaser in connection with a bona fide margin agreement or
other loan or financing arrangement that is secured by the Common Stock.  The
pledge of Common Stock shall not be deemed to be a transfer, sale or assignment
of the Common Stock hereunder, and no Purchaser effecting a pledge of Common
Stock shall be required to provide the Company with any notice thereof or
otherwise make any delivery to the Company pursuant to this Agreement or any
other Transaction Document; provided that a Purchaser and its pledgee shall be
required to comply with the provisions of Article V hereof in order to effect a
sale, transfer or assignment of Common Stock to such pledgee. At the Purchasers'
expense, the Company hereby agrees to execute and deliver such documentation as
a pledgee of the Common Stock may reasonably request in connection with a pledge
of the Common Stock to such pledgee by a Purchaser.

Section 3.19

Form SB-2 Eligibility.  The Company currently meets the "registrant eligibility"
and transaction requirements set forth in the general instructions to Form SB-2
applicable to "resale" registrations on Form SB-2 and the Company shall file all
reports required to be filed by the Company with the Commission in a timely
manner.

Section 3.20

Lock-Up Agreement.  The persons listed on Schedule 3.20 attached hereto shall be
subject to the terms and provisions of a lock-up agreement in substantially the
form as Exhibit E hereto (the “Lock-Up Agreement”), which shall provide the
manner in which such persons will sell, transfer or dispose of their shares of
Common Stock.  

Section 3.21

Subsequent Financings.  

(a)

For a period of one (1) year following the following the effective date of the
registration statement providing for the resale of the Conversion Shares and the
Warrant Shares, the Company covenants and agrees to promptly notify (in no event
later than eight (8) days after making or receiving an applicable offer) in
writing (a "Rights Notice") each Purchaser who has purchased at least $250,000
of Preferred Shares pursuant to this Agreement (an “Eligible Purchaser”) of the
terms and conditions of any proposed offer or sale to, or exchange with (or
other type of distribution to) any third party (a “Subsequent Financing”), of
Common Stock or any debt or equity securities convertible, exercisable or
exchangeable into Common Stock; provided, however, prior to delivering a Rights
Notice to each Eligible Purchaser, the Company shall first deliver to each
Eligible Purchaser a written notice of the Company’s

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intention to effect a Subsequent Financing (“Pre-Notice”) within three (3)
Trading Days of receiving an applicable offer, which Pre-Notice shall ask such
Eligible Purchaser if it wants to review the details of such financing.  Each
Eligible Purchaser must notify the Company within three (3) Trading Days of
receipt of the Pre-Notice that such Eligible Purchaser elects to review the
details of such financing (“Pre-Notice Acceptance”). Notwithstanding anything
contained herein to the contrary, the parties agree that all Pre-Notices and
Pre-Notice Acceptances shall be sent via facsimile or email. Upon the Company’s
receipt of a Pre-Notice Acceptance, and only upon the Company’s receipt of a
Pre-Notice Acceptance, the Company shall promptly, but no later than two (2)
Trading Days after such receipt, deliver a Rights Notice to such Eligible
Purchaser. For further clarification, the parties agree that if the Company does
not receive the Pre-Notice Acceptance by the fourth (4th) Trading Day following
the date the Company sent the Pre-Notice to the Eligible Purchasers, the Company
shall not submit a Rights Notice to such Eligible Purchaser. The Rights Notice
shall describe, in reasonable detail, the proposed Subsequent Financing, the
names and investment amounts of all investors participating in the Subsequent
Financing, the proposed closing date of the Subsequent Financing, which shall be
within twenty (20) calendar days from the date of the Rights Notice, and all of
the terms and conditions thereof and proposed definitive documentation to be
entered into in connection therewith.  The Rights Notice shall provide each
Eligible Purchaser an option (the “Rights Option”) during the seven (7) Trading
Days following delivery of the Rights Notice (the “Option Period”) to inform the
Company whether such Eligible Purchaser will purchase up to its pro rata portion
of all or a portion of the securities being offered in such Subsequent Financing
on the same, absolute terms and conditions as contemplated by such Subsequent
Financing.  If any Eligible Purchaser elects not to participate in such
Subsequent Financing, the other Eligible Purchasers may participate on a
pro-rata basis so long as such participation in the aggregate does not exceed
the aggregate Purchase Price of all Eligible Purchasers hereunder.  For purposes
of this Section, all references to “pro rata” means, for any Eligible Purchaser
electing to participate in such Subsequent Financing, the percentage obtained by
dividing (x) the number of Preferred Shares purchased by such Eligible Purchaser
at the Closing by (y) the total number of all of the Preferred Shares purchased
by all of the participating Eligible Purchasers at the Closing.  Delivery of any
Rights Notice constitutes a representation and warranty by the Company that
there are no other material terms and conditions, arrangements, agreements or
otherwise except for those disclosed in the Rights Notice, to provide additional
compensation to any party participating in any proposed Subsequent Financing,
including, but not limited to, additional compensation based on changes in the
Purchase Price or any type of reset or adjustment of a purchase or conversion
price or to issue additional securities at any time after the closing date of a
Subsequent Financing.  If the Company does not receive notice of exercise of the
Rights Option from the Eligible Purchasers within the Option Period, the Company
shall have the right to close the Subsequent Financing on the scheduled closing
date with a third party; provided that all of the material terms and conditions
of the closing are the same as those provided to the Eligible Purchasers in the
Rights Notice.  If the closing of the proposed Subsequent Financing does not
occur on that date, any closing of the contemplated Subsequent Financing or any
other Subsequent Financing shall be subject to all of the provisions of this
Section 3.21(a), including, without limitation, the delivery of a new Rights
Notice.  The provisions of this Section 3.21(a) shall not apply to issuances of
securities in a Permitted Financing.

(b)  For purposes of this Agreement, a Permitted Financing (as defined

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hereinafter) shall not be considered a Subsequent Financing.  A "Permitted
Financing" shall mean (i) securities issued (other than for cash) in connection
with a merger, acquisition, or consolidation, (ii) securities issued pursuant to
the conversion or exercise of convertible or exercisable securities issued or
outstanding on or prior to the date of this Agreement or issued pursuant to this
Agreement (so long as the conversion or exercise price in such securities are
not amended to lower such price and/or adversely affect the Purchasers), (iii)
securities issued in connection with bona fide strategic license agreements or
other partnering arrangements so long as such issuances are not for the purpose
of raising capital, (iv) Common Stock issued or the issuance or grants of
options to purchase Common Stock pursuant to the Company’s stock option plans
and employee stock purchase plans outstanding as they exist on the date of this
Agreement, (v) the payment of dividends on the Preferred Shares, or other
preferred stock issued and outstanding on or prior to the date of this
Agreement, in shares of Common Stock, (vi) the issuance of up to 500,000 shares
of Common Stock relating to investor relations or public relations activities,
(vii) Common Stock issued as payment of dividends on: the Series A Convertible
Preferred Stock issued pursuant to the Series A Convertible Preferred Stock
Purchase Agreements by and among the Issuer and the purchasers named therein,
the Series B Convertible Preferred Stock issued pursuant to the Series B
Convertible Preferred Stock Purchase Agreements by and among the Issuer and the
purchasers named therein and the Series C Convertible Preferred Stock issued
pursuant to this Agreement and (viii) any warrants issued to the placement
consultant and its designees for the transactions contemplated by this
Agreement.

(c)

For a period of two (2) years following the Closing Date, the Company shall be
prohibited from effecting or entering into an agreement to effect any Subsequent
Financing involving a “Variable Rate Transaction”.  The term “Variable Rate
Transaction” shall mean a transaction in which the Company issues or sells (i)
any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive additional shares of Common
Stock at a conversion, exercise or exchange rate or other price that is based
upon and/or varies with the trading prices of or quotations for the shares of
Common Stock at any time after the initial issuance of such debt or equity
securities or (ii) enters into any agreement, including, but not limited to, an
equity line of credit, whereby the Company may sell securities at a future
determined price.  Notwithstanding the foregoing, except for any equity line of
credit or similar agreement referred to in subclause (ii) of this Section
3.21(c), the prohibition against Variable Rate Transactions shall not apply in
connection with a transaction that contains a definite minimum price of $1.00
upon conversion or issuance below which such securities cannot be converted or
issued.

(d)

For the period commencing on the Closing Date and ending on the date that is one
hundred eighty (180) days following the effective date of the Registration
Statement (as defined in the Registration Rights Agreement), the Company shall
not file any registration statement (not including amendments required to be
filed to registration statements filed prior to the date of this Agreement)
under the Securities Act without the prior written consent of the Purchasers.

ARTICLE IV

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CONDITIONS

Section 4.1

Conditions Precedent to the Obligation of the Company to Sell the Shares.  The
obligation hereunder of the Company to issue and sell the Preferred Shares and
the Warrants to the Purchasers is subject to the satisfaction or waiver, at or
before the Closing, of each of the conditions set forth below.  These conditions
are for the Company’s sole benefit and may be waived by the Company at any time
in its sole discretion.

(a)

Accuracy of Each Purchaser’s Representations and Warranties.  The
representations and warranties of each Purchaser shall be true and correct in
all material respects as of the date when made and as of the Closing Date as
though made at that time, except for representations and warranties that are
expressly made as of a particular date, which shall be true and correct in all
material respects as of such date.

(b)

Performance by the Purchasers.  Each Purchaser shall have performed, satisfied
and complied in all respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by such
Purchaser at or prior to the Closing.

(c)

No Injunction.  No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.

(d)

Delivery of Purchase Price.  The Purchase Price for the Preferred Shares and
Warrants has been delivered to the Company at the Closing Date.

(e)

Delivery of Transaction Documents.  The Transaction Documents shall have been
duly executed and delivered by the Purchasers to the Company.

(f)

Delivery of Series J Warrants.  The following warrants issued to the Purchaser
in January 2007: (i) Series J (No. W-J-07-01); (ii) Series D (No. W-J-07-01);
(iii) Series E (No. W-J-07-01); and (iv) Series F (No. W-J-07-01) shall have
been delivered to the Company.

Section 4.2

Conditions Precedent to the Obligation of the Purchasers to Purchase the Shares.
 The obligation hereunder of each Purchaser to acquire and pay for the Preferred
Shares and the Warrants is subject to the satisfaction or waiver, at or before
the Closing, of each of the conditions set forth below.  These conditions are
for each Purchaser’s sole benefit and may be waived by such Purchaser at any
time in its sole discretion.

(a)

Accuracy of the Company’s Representations and Warranties.  Each of the
representations and warranties of the Company in this Agreement and the
Registration Rights Agreement shall be true and correct in all respects as of
the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that are expressly made as of a
particular date), which shall be true and correct in all respects as of such

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date.

(b)

Performance by the Company.  The Company shall have performed, satisfied and
complied in all respects with all covenants, agreements and conditions required
by this Agreement to be performed, satisfied or complied with by the Company at
or prior to the Closing.

(c)

No Suspension, Etc.  Trading in the Company’s Common Stock shall not have been
suspended by the Commission or the OTC Bulletin Board (except for any suspension
of trading of limited duration agreed to by the Company, which suspension shall
be terminated prior to the applicable Closing), and, at any time prior to the
Closing Date, trading in securities generally as reported by Bloomberg Financial
Markets (“Bloomberg”) shall not have been suspended or limited, or minimum
prices shall not have been established on securities whose trades are reported
by Bloomberg, or on the New York Stock Exchange, nor shall a banking moratorium
have been declared either by the United States or New York State authorities,
nor shall there have occurred any material outbreak or escalation of hostilities
or other national or international calamity or crisis of such magnitude in its
effect on, or any material adverse change in any financial market which, in each
case, in the judgment of such Purchaser, makes it impracticable or inadvisable
to purchase the Preferred Shares.

(d)

No Injunction.  No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.

(e)

No Proceedings or Litigation.  No action, suit or proceeding before any
arbitrator or any governmental authority shall have been commenced, and no
investigation by any governmental authority shall have been threatened, against
the Company or any subsidiary, or any of the officers, directors or affiliates
of the Company or any subsidiary seeking to restrain, prevent or change the
transactions contemplated by this Agreement, or seeking damages in connection
with such transactions.

(f)

Certificate of Designation of Rights and Preferences.  Prior to the Closing, the
Certificate of Designation in the form of Exhibit B attached hereto shall have
been filed with the Secretary of State of Nevada.

(g)

Opinion of Counsel, Etc. At the Closing, the Purchasers shall have received an
opinion of counsel to the Company, dated the date of the Closing, in the form of
Exhibit G hereto, and such other certificates and documents as the Purchasers or
its counsel shall reasonably require incident to the Closing.

(h)

Registration Rights Agreement.  At the Closing, the Company shall have executed
and delivered the Registration Rights Agreement to each Purchaser.

(i)

Cancellation of Certain Warrants.  Prior to the Closing, the Company shall

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have cancelled the following warrants issued to Vision Opportunity Master Fund,
Ltd. in January 2007: (i) Series J (No. W-J-07-01); (ii) Series D (No.
W-J-07-01); (iii) Series E (No. W-J-07-01); and (iv) Series F (No. W-J-07-01).

(j)

Certificates.  The Company shall have executed and delivered to the Purchasers
the certificates (in such denominations as such Purchaser shall request) for the
Preferred Shares and the Warrants being acquired by such Purchaser at the
Closing (in such denominations as such Purchaser shall request).

(k)

Resolutions.  The Board of Directors of the Company shall have adopted
resolutions consistent with Section 2.1(b) hereof in a form reasonably
acceptable to such Purchaser (the "Resolutions").

(l)

Reservation of Shares.  As of the Closing Date, the Company shall have reserved
out of its authorized and unissued Common Stock, solely for the purpose of
effecting the conversion of the Preferred Shares and the exercise of the
Warrants, a number of shares of Common Stock equal to one hundred twenty percent
(120%) of the aggregate number of Conversion Shares issuable upon conversion of
the Preferred Shares outstanding on the Closing Date and the number of Warrant
Shares issuable upon exercise of the number of Warrants assuming such Warrants
were granted on the Closing Date.

(m)

Transfer Agent Instructions.  The Irrevocable Transfer Agent Instructions, in
the form of Exhibit F attached hereto, shall have been delivered to and
acknowledged in writing by the Company’s transfer agent.

(n)

Lock-Up Agreement.  As of the Closing Date, the persons listed on Schedule 3.20
hereto shall have delivered to the Purchasers a fully executed Lock-Up Agreement
in the form of Exhibit E attached hereto.

(o)

Secretary’s Certificate.  The Company shall have delivered to such Purchaser a
secretary’s certificate, dated as of the Closing Date, as to (i) the
Resolutions, (ii) the Articles, (iii) the Bylaws, (iv) the Certificate of
Designation, each as in effect at the Closing, and (iv) the authority and
incumbency of the officers of the Company executing the Transaction Documents
and any other documents required to be executed or delivered in connection
therewith.

(p)

Officer’s Certificate.  The Company shall have delivered to the Purchasers a
certificate of an executive officer of the Company, dated as of the Closing
Date, confirming the accuracy of the Company’s representations, warranties and
covenants as of such Closing Date and confirming the compliance by the Company
with the conditions precedent set forth in this Section 4.2 as of the Closing
Date.

(q)

Material Adverse Effect.  No Material Adverse Effect shall have occurred at or
before the Closing Date.

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ARTICLE V

Stock Certificate Legend

Section 5.1

Legend.  Each certificate representing the Preferred Shares and the Warrants,
and, if appropriate, securities issued upon conversion thereof, shall be stamped
or otherwise imprinted with a legend substantially in the following form (in
addition to any legend required by applicable state securities or “blue sky”
laws):

THESE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR EDGEWATER FOODS INTERNATIONAL, INC. SHALL HAVE RECEIVED
AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES
ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.

The Company agrees to reissue certificates representing any of the Conversion
Shares and the Warrant Shares, without the legend set forth above if at such
time, prior to making any transfer of any such securities, such holder thereof
shall give written notice to the Company describing the manner and terms of such
transfer and removal as the Company may reasonably request.  Such proposed
transfer and removal will not be effected until: (a) either (i) the Company has
received an opinion of counsel reasonably satisfactory to the Company, to the
effect that the registration of the Conversion Shares or the Warrant Shares
under the Securities Act is not required in connection with such proposed
transfer, (ii) a registration statement under the Securities Act covering such
proposed disposition has been filed by the Company with the Commission and has
become effective under the Securities Act or (iii) the Company has received
other evidence reasonably satisfactory to the Company that such registration and
qualification under the Securities Act and state securities laws are not
required; and (b) either (i) the Company has received an opinion of counsel
reasonably satisfactory to the Company, to the effect that registration or
qualification under the securities or "blue sky" laws of any state is not
required in connection with such proposed disposition, or (ii) compliance with
applicable state securities or "blue sky" laws has been effected or a valid
exemption exists with respect thereto.  The Company will respond to any such
notice from a holder within five (5) business days.  In the case of any proposed
transfer under this Section 5.1, the Company will use reasonable efforts to
comply with any such applicable state securities or "blue sky" laws, but shall
in no event be required, (x) to qualify to do business in any state where it is
not then qualified, (y) to take any action that would subject it to tax or to
the general service of process in any state where it is not then subject, or (z)
to comply with state securities or “blue sky” laws of any state for which
registration by coordination is unavailable to the Company.  The restrictions on
transfer contained in this Section 5.1 shall be in addition to, and not by way
of limitation of, any other restrictions on transfer contained in any other
section of this Agreement.  Whenever a certificate

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representing the Conversion Shares or Warrant Shares is required to be issued to
a Purchaser without a legend, in lieu of delivering physical certificates
representing the Conversion Shares or Warrant Shares (provided that a
registration statement under the Securities Act providing for the resale of the
Warrant Shares and Conversion Shares is then in effect and such request is in
connection with a sale), the Company shall cause its transfer agent to
electronically transmit the Conversion Shares or Warrant Shares to a Purchaser
by crediting the account of such Purchaser's Prime Broker with the Depository
Trust Company (“DTC”) through its Deposit Withdrawal Agent Commission (“DWAC”)
system (to the extent not inconsistent with any provisions of this Agreement)
provided that the Company and the Company’s transfer agent are participating in
DTC through the DWAC system.

ARTICLE VI

Indemnification

Section 6.1

Company Indemnity.  The Company agrees to indemnify and hold harmless the
Purchasers (and their respective directors, officers, managers, partners,
members, shareholders, affiliates, agents, successors and assigns) from and
against any and all losses, liabilities, deficiencies, costs, damages and
expenses (including, without limitation, reasonable attorneys’ fees, charges and
disbursements) incurred by the Purchasers as a result of any inaccuracy in or
breach of the representations, warranties or covenants made by the Company
herein.   

Section 6.2

Indemnification Procedure.  Any party entitled to indemnification under this
Article VI (an “indemnified party”) will give written notice to the indemnifying
party of any matters giving rise to a claim for indemnification; provided, that
the failure of any party entitled to indemnification hereunder to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under this Article VI except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice.  In case any action,
proceeding or claim is brought against an indemnified party in respect of which
indemnification is sought hereunder, the indemnifying party shall be entitled to
participate in and, unless in the reasonable judgment of the indemnified party a
conflict of interest between it and the indemnifying party may exist with
respect of such action, proceeding or claim, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party.  In the event that the
indemnifying party advises an indemnified party that it will contest such a
claim for indemnification hereunder, or fails, within thirty (30) days of
receipt of any indemnification notice to notify, in writing, such person of its
election to defend, settle or compromise, at its sole cost and expense, any
action, proceeding or claim (or discontinues its defense at any time after it
commences such defense), then the indemnified party may, at its option, defend,
settle or otherwise compromise or pay such action or claim.  In any event,
unless and until the indemnifying party elects in writing to assume and does so
assume the defense of any such claim, proceeding or action, the indemnified
party’s costs and expenses arising out of the defense, settlement or compromise
of any such action, claim or proceeding shall be losses subject to
indemnification hereunder.  The indemnified party shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such
action or claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably

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available to the indemnified party which relates to such action or claim.  The
indemnifying party shall keep the indemnified party fully apprised at all times
as to the status of the defense or any settlement negotiations with respect
thereto.  If the indemnifying party elects to defend any such action or claim,
then the indemnified party shall be entitled to participate in such defense with
counsel of its choice at its sole cost and expense.  The indemnifying party
shall not be liable for any settlement of any action, claim or proceeding
effected without its prior written consent.  Notwithstanding anything in this
Article VI to the contrary, the indemnifying party shall not, without the
indemnified party’s prior written consent, settle or compromise any claim or
consent to entry of any judgment in respect thereof which imposes any future
obligation on the indemnified party or which does not include, as an
unconditional term thereof, the giving by the claimant or the plaintiff to the
indemnified party of a release from all liability in respect of such claim.  The
indemnification required by this Article VI shall be made by periodic payments
of the amount thereof during the course of investigation or defense, as and when
bills are received or expense, loss, damage or liability is incurred, so long as
the indemnified party irrevocably agrees to refund such moneys if it is
ultimately determined by a court of competent jurisdiction that such party was
not entitled to indemnification.  The indemnity agreements contained herein
shall be in addition to (a) any cause of action or similar rights of the
indemnified party against the indemnifying party or others, and (b) any
liabilities the indemnifying party may be subject to pursuant to the law.

ARTICLE VII

Miscellaneous

Section 7.1

Fees and Expenses.  Except as otherwise set forth in this Agreement and the
other Transaction Documents, each party shall pay the fees and expenses of its
advisors, counsel, accountants and other experts, if any, and all other
expenses, incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement, provided that the Company
shall pay all actual attorneys' fees and expenses (including disbursements and
out-of-pocket expenses) incurred by the Purchasers in connection with (i) the
preparation, negotiation, execution and delivery of this Agreement and the other
Transaction Documents and the transactions contemplated thereunder, which
payment shall be made at Closing and shall not exceed $25,000, (ii) the filing
and declaration of effectiveness by the Commission of the Registration Statement
(as defined in the Registration Rights Agreement) and (iii) any amendments,
modifications or waivers of this Agreement or any of the other Transaction
Documents.  The Company shall also pay all reasonable fees and expenses incurred
by the Purchasers in connection with the enforcement of this Agreement or any of
the other Transaction Documents, including, without limitation, all reasonable
attorneys' fees and expenses.  

Section 7.2

Specific Enforcement, Consent to Jurisdiction.  

(a)

The Company and the Purchasers acknowledge and agree that irreparable damage
would occur in the event that any of the provisions of this Agreement or the
other Transaction Documents were not performed in accordance with their specific
terms or were otherwise breached.  It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent or cure breaches of
the provisions of this Agreement or the Registration

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Rights Agreement and to enforce specifically the terms and provisions hereof or
thereof, this being in addition to any other remedy to which any of them may be
entitled by law or equity.

(b)

Each of the Company and the Purchasers (i) hereby irrevocably submits to the
jurisdiction of the United States District Court sitting in the Southern
District of New York and the courts of the State of New York located in New York
county for the purposes of any suit, action or proceeding arising out of or
relating to this Agreement or any of the other Transaction Documents or the
transactions contemplated hereby or thereby and (ii) hereby waives, and agrees
not to assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper.  Each of the Company and the Purchasers
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof.  Nothing in this Section 7.2
shall affect or limit any right to serve process in any other manner permitted
by law.

Section 7.3

Entire Agreement; Amendment.  This Agreement and the Transaction Documents
contains the entire understanding and agreement of the parties with respect to
the matters covered hereby and, except as specifically set forth herein or in
the Transaction Documents, neither the Company nor any of the Purchasers makes
any representations, warranty, covenant or undertaking with respect to such
matters and they supersede all prior understandings and agreements with respect
to said subject matter, all of which are merged herein.  No provision of this
Agreement may be waived or amended other than by a written instrument signed by
the Company and the holders of a majority of the Preferred Shares then
outstanding, and no provision hereof may be waived other than by an a written
instrument signed by the party against whom enforcement of any such amendment or
waiver is sought.  No such amendment shall be effective to the extent that it
applies to less than all of the holders of the Preferred Shares then
outstanding.  No consideration shall be offered or paid to any person to amend
or consent to a waiver or modification of any provision of any of the
Transaction Documents unless the same consideration is also offered to all of
the parties to the Transaction Documents or holders of Preferred Shares, as the
case may be.

Section 7.4

Notices.  Any notice, demand, request, waiver or other communication required or
permitted to be given hereunder shall be in writing and shall be effective (a)
upon hand delivery by telex (with correct answer back received), telecopy,
e-mail or facsimile at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur.  The addresses for such
communications shall be:

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If to the Company:

Edgewater Foods International, Inc.

400 Professional Drive, Suite 310

Gaithersburg, Maryland 20879

Attention: Michael Boswell

Tel. No.: (240) 864-0449

Fax No.:  (240) 864-0450

  

with copies to:

(which shall not constitute notice)

Leser, Hunter, Taubman & Taubman
17 State Street, Suite 1610
New York, New York  10004

Attention:  Louis E. Taubman

Tel. No.:  (212) 732-7184

Fax No.:  (212) 202-6380

  

If to any Purchaser:

At the address of such Purchaser set forth on Exhibit A to this Agreement, with
copies to Purchaser’s counsel as set forth on Exhibit A or as specified in
writing by such Purchaser with copies to (which shall not constitute notice):

    

Sadis & Goldberg, LLP

551 Fifth Avenue – 21st Floor

New York, New York 10176

Attention: Ron Geffner

Tel No.: (212) 573-6660

Fax No.: (212) 573-6661

Any party hereto may from time to time change its address for notices by giving
at least ten (10) days written notice of such changed address to the other party
hereto.

Section 7.5

Waivers.  No waiver by either party of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any other provisions, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.

Section 7.6

Headings.  The article, section and subsection headings in this Agreement are
for convenience only and shall not constitute a part of this Agreement for any
other purpose and shall not be deemed to limit or affect any of the provisions
hereof.

Section 7.7

Successors and Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and assigns.  

Section 7.8

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

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Section 7.9

Governing Law.  This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York, without giving effect to any of
the conflicts of law principles which would result in the application of the
substantive law of another jurisdiction.  This Agreement shall not be
interpreted or construed with any presumption against the party causing this
Agreement to be drafted.

Section 7.10

Survival.  The representations and warranties of the Company and the Purchasers
shall survive the execution and delivery hereof and the Closing until the second
anniversary of the Closing Date, except the agreements and covenants set forth
in Articles I, III, V, VI and VII of this Agreement shall survive the execution
and delivery hereof and the Closing hereunder.

Section 7.11

Counterparts.  This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and, all of
which taken together shall constitute one and the same Agreement and shall
become effective when counterparts have been signed by each party and delivered
to the other parties hereto, it being understood that all parties need not sign
the same counterpart.  In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.

Section 7.12

Publicity.  The Company agrees that it will not disclose, and will not include
in any public announcement, the name of the Purchasers without the consent of
the Purchasers unless and until such disclosure is required by law or applicable
regulation, and then only to the extent of such requirement.

Section 7.13

Severability.  The provisions of this Agreement and the Transaction Documents
are severable and, in the event that any court of competent jurisdiction shall
determine that any one or more of the provisions or part of the provisions
contained in this Agreement or the Transaction Documents shall, for any reason,
be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision or part of a
provision of this Agreement or the Transaction Documents and such provision
shall be reformed and construed as if such invalid or illegal or unenforceable
provision, or part of such provision, had never been contained herein, so that
such provisions would be valid, legal and enforceable to the maximum extent
possible.

Section 7.14

Further Assurances.  From and after the date of this Agreement, upon the request
of any Purchaser or the Company, each of the Company and the Purchasers shall
execute and deliver such instrument, documents and other writings as may be
reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement and the transactions
contemplated thereby, the Preferred Shares, the Conversion Shares, the Warrants,
the Warrant Shares, the Certificate of Designation, and the Registration Rights
Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officer as of the date first above
written.

 

EDGEWATER FOODS INTERNATIONAL, INC.

       

By:

 

      Name: Michael Boswell

      Title:   Acting Chief Financial Officer

 

PURCHASER

          

By:

Name:

Title:   

                

             

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EXHIBIT A to the

SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

EDGEWATER FOODS INTERNATIONAL, INC.

  

Names and Addresses

of Purchasers

 

Number of Preferred shares

 & Warrants Purchased

 

Dollar Amount of

Investment

        

Preferred Shares: 747,870

 

$[_________]

  

Series A Warrants: 373,935

     

Series B Warrants: 373,935

     

Series C Warrants: 373,935

     

Series J Warrants: 747,870

     

Series D Warrants 373,935

     

Series E Warrants: 373,935

     

Series F Warrants: 373,935

  

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EXHIBIT B to the

SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

EDGEWATER FOODS INTERNATIONAL, INC.

FORM OF CERTIFICATE OF DESIGNATION

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EXHIBIT C-1 to the

SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

EDGEWATER FOODS INTERNATIONAL, INC.

FORM OF SERIES A WARRANT

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EXHIBIT C-2 to the

SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

EDGEWATER FOODS INTERNATIONAL, INC.

FORM OF SERIES B WARRANT

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EXHIBIT C-3 to the

SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

EDGEWATER FOODS INTERNATIONAL, INC.

FORM OF SERIES C WARRANT

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EXHIBIT C-4 to the

SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

EDGEWATER FOODS INTERNATIONAL, INC.

FORM OF SERIES J WARRANT

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EXHIBIT C-5 to the

SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

EDGEWATER FOODS INTERNATIONAL, INC.

FORM OF SERIES D WARRANT

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EXHIBIT C-6 to the

SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

EDGEWATER FOODS INTERNATIONAL, INC.

FORM OF SERIES E WARRANT

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EXHIBIT C-7 to the

SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

EDGEWATER FOODS INTERNATIONAL, INC.

FORM OF SERIES F WARRANT

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EXHIBIT D to the

SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

EDGEWATER FOODS INTERNATIONAL, INC.

FORM OF REGISTRATION RIGHTS AGREEMENT

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EXHIBIT E to the

SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

EDGEWATER FOODS INTERNATIONAL, INC.

FORM OF LOCK-UP AGREEMENT

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EXHIBIT F to the

SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

EDGEWATER FOODS INTERNATIONAL, INC.

FORM OF IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

EDGEWATER FOODS INTERNATIONAL, INC.

as of November 5, 2007

[Name and address of Transfer Agent]

Attn:  _____________

Ladies and Gentlemen:

Reference is made to that certain Series C Convertible Preferred Stock Purchase
Agreement (the “Purchase Agreement”), dated as of November 5, 2007, by and among
Edgewater Foods International, Inc., a Nevada corporation (the “Company”), and
the purchasers named therein (collectively, the “Purchasers”) pursuant to which
the Company is issuing to the Purchasers shares of its Series C Convertible
Preferred Stock, par value $0.001 per share, (the “Preferred Shares”) and
warrants (the “Warrants”) to purchase Preferred Shares and/or shares of the
Company’s common stock, par value $0.001 per share (the “Common Stock”), as the
case may be.  This letter shall serve as our irrevocable authorization and
direction to you provided that you are the transfer agent of the Company at such
time) to issue (a) shares of Common Stock upon conversion of the Preferred
Shares (the “Conversion Shares”) and (b) Common Stock and/or Preferred Shares
(as the case may be) upon exercise of the Warrants (the “Warrant Shares”) to or
upon the order of a Purchaser from time to time upon (i) surrender to you of a
properly completed and duly executed Conversion Notice or Exercise Notice, as
the case may be, in the form attached hereto as Exhibit I and Exhibit II,
respectively, (ii) in the case of the conversion of Preferred Shares, a copy of
the certificates (with the original certificates delivered to the Company)
representing Preferred Shares being converted or, in the case of Warrants being
exercised, a copy of the Warrants (with  the original Warrants delivered to the
Company) being exercised (or, in each case, an indemnification undertaking with
respect to such share certificates or the warrants in the case of their loss,
theft or destruction), and (iii) delivery of a treasury order or other
appropriate order duly executed by a duly authorized officer of the Company.  So
long as you have previously received (x) written confirmation from counsel to
the Company that a registration statement covering resales of the Conversion
Shares or Warrant Shares, as applicable, has been declared effective by the
Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933,
as amended (the “1933 Act”), and no subsequent notice by the Company or its
counsel of the suspension or termination of its effectiveness and (y) a copy of
such registration statement, and if the Purchaser represents in writing that the
Conversion Shares or the Warrant Shares, as the case may be, were sold pursuant
to the Registration Statement, then certificates representing the Conversion
Shares and the Warrant Shares, as the case may be, shall not bear any legend
restricting transfer of the Conversion Shares and the Warrant Shares, as the
case may be, thereby and should not be subject to any stop-transfer restriction.
 Provided, however, that if you have not previously received those items and
representations listed above, then the certificates for the Conversion Shares
and the Warrant Shares shall bear the following legend:

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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 STATE
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS, OR
EDGEWATER FOODS INTERNATIONAL, INC. SHALL HAVE RECEIVED AN OPINION OF ITS
COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER
THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.”

and, provided further, that the Company may from time to time notify you to
place stop-transfer restrictions on the certificates for the Conversion Shares
and the Warrant Shares in the event a registration statement covering the
Conversion Shares and the Warrant Shares is subject to amendment for events then
current.

A form of written confirmation from counsel to the Company that a registration
statement covering resales of the Conversion Shares and the Warrant Shares has
been declared effective by the SEC under the 1933 Act is attached hereto as
Exhibit III.

Please be advised that the Purchasers are relying upon this letter as an
inducement to enter into the Purchase Agreement and, accordingly, each Purchaser
is a third party beneficiary to these instructions.

Please execute this letter in the space indicated to acknowledge your agreement
to act in accordance with these instructions.  Should you have any questions
concerning this matter, please contact me at ___________.

Very truly yours,

EDGEWATER FOODS INTERNATIONAL, INC.

By:

Name:

Title:  

ACKNOWLEDGED AND AGREED:

[TRANSFER AGENT]

By:

Name:

Title:

Date:

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EXHIBIT I

EDGEWATER FOODS INTERNATIONAL, INC.

CONVERSION NOTICE

Reference is made to the Certificate of Designation of the Relative Rights and
Preferences of the Series C Preferred Stock of Edgewater Foods International,
Inc. (the “Certificate of Designation”).  In accordance with and pursuant to the
Certificate of Designation, the undersigned hereby elects to convert the number
of shares of Series C Preferred Stock, par value $0.001 per share (the
“Preferred Shares”), of Edgewater Foods International, Inc., a Nevada
corporation (the “Company”), indicated below into shares of Common Stock, par
value $0.001 per share (the “Common Stock”), of the Company, by tendering the
stock certificate(s) representing the share(s) of Preferred Shares specified
below as of the date specified below.

Date of Conversion:

Number of Preferred Shares to be converted:

Stock certificate no(s). of Preferred Shares to be converted:

The Common Stock have been sold pursuant to the Registration Statement (as
defined in the Registration Rights Agreement): YES ____NO____

Please confirm the following information:

Conversion Price:

Number of shares of Common Stock

to be issued:

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the Date of Conversion: _________________________

Please issue the Common Stock into which the Preferred Shares are being
converted and, if applicable, any check drawn on an account of the Company in
the following name and to the following address:

Issue to:

Facsimile Number:

Authorization:

By:  

Title:  

Dated:

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EXHIBIT II

FORM OF EXERCISE NOTICE

EXERCISE FORM

EDGEWATER FOODS INTERNATIONAL, INC.

The undersigned _______________, pursuant to the provisions of the within
Warrant, hereby elects to purchase _____ shares of Common Stock of Edgewater
Foods International, Inc. covered by the within Warrant.

Dated: _________________

Signature

___________________________

Address

_____________________

_____________________

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the date of Exercise: _________________________

ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant on the books of the within named corporation.

Dated: _________________

Signature

___________________________

Address

_____________________

_____________________

PARTIAL ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ shares of Warrant Stock
evidenced by the within Warrant together with all rights therein, and does
irrevocably constitute and appoint ___________________, attorney, to transfer
that part of the said Warrant on the books of the within named corporation.

Dated: _________________

Signature

___________________________

Address

_____________________

_____________________

FOR USE BY THE ISSUER ONLY:

This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day
of ___________, _____, shares of Common Stock issued therefor in the name of
_______________, Warrant No. W-_____ issued for ____ shares of Common Stock in
the name of _______________.

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EXHIBIT III

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

[Name and address of Transfer Agent]

Attn:  _____________

Re:

Edgewater Foods International, Inc.  

Ladies and Gentlemen:

We are counsel to Edgewater Foods International, Inc., a Nevada corporation (the
“Company”), and have represented the Company in connection with that certain
Series C Convertible Preferred Stock Purchase Agreement (the “Purchase
Agreement”), dated as of November 5, 2007, by and among the Company and the
purchasers named therein (collectively, the “Purchasers”) pursuant to which the
Company issued to the Purchasers shares of its Series C Convertible Preferred
Stock, par value $0.001 per share, (the “Preferred Shares”) and warrants (the
“Warrants”) to purchase shares of the Company’s common stock, par value $0.001
per share (the “Common Stock”) and/or Preferred Shares, as applicable.  Pursuant
to the Purchase Agreement, the Company has also entered into a Registration
Rights Agreement with the Purchasers (the “Registration Rights Agreement”),
dated as of November 5, 2007, pursuant to which the Company agreed, among other
things, to register the Registrable Securities (as defined in the Registration
Rights Agreement), including the shares of Common Stock issuable upon conversion
of the Preferred Shares and exercise of the Warrants, under the Securities Act
of 1933, as amended (the “1933 Act”).  In connection with the Company’s
obligations under the Registration Rights Agreement, on ________________, 2007,
the Company filed a Registration Statement on Form SB-2 (File No. 333-________)
(the “Registration Statement”) with the Securities and Exchange Commission (the
“SEC”) relating to the resale of the Registrable Securities which names each of
the present Purchasers as a selling stockholder thereunder.

In connection with the foregoing, we advise you that a member of the SEC’s staff
has advised us by telephone that the SEC has entered an order declaring the
Registration Statement effective under the 1933 Act on [ENTER DATE OF
EFFECTIVENESS] and we have no knowledge, after telephonic inquiry of a member of
the SEC’s staff, that any stop order suspending its effectiveness has been
issued or that any proceedings for that purpose are pending before, or
threatened by, the SEC and accordingly, the Registrable Securities are available
for resale under the 1933 Act pursuant to the Registration Statement.

Very truly yours,

[COMPANY COUNSEL]

By:

 

cc:

[LIST NAMES OF PURCHASERS]

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EXHIBIT G to the

SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

EDGEWATER FOODS INTERNATIONAL, INC.

FORM OF OPINION OF COUNSEL

1.

The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the state of Nevada and has the requisite corporate
power to own, lease and operate its properties and assets, and to carry on its
business as presently conducted.  The Company is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary.

2.

The Company has the requisite corporate power and authority to enter into and
perform its obligations under the Transaction Documents and to issue the
Preferred Shares, the Warrants the Common Stock issuable upon conversion of the
Preferred Stock and the Common Stock and/or and the Preferred Shares issuable
upon exercise of the Warrants.  The execution, delivery and performance of each
of the Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly and validly authorized by all
necessary corporate action and no further consent or authorization of the
Company or its Board of Directors or stockholders is required.  Each of the
Transaction Documents have been duly executed and delivered, and the Preferred
Shares and the Warrants have been duly executed, issued and delivered by the
Company and each of the Transaction Documents constitutes a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its respective terms.  The Common Stock issuable upon conversion of the
Preferred Stock and the Common Stock and/or Preferred Shares issuable upon
exercise of the Warrants, as applicable, are not subject to any preemptive
rights under the Articles of Incorporation or the Bylaws.

3.

The Preferred Shares and the Warrants have been duly authorized and, when
delivered against payment in full as provided in the Purchase Agreement, will be
validly issued, fully paid and nonassessable.  The shares of Common Stock
issuable upon conversion of the Preferred Stock and the Common Stock and/or and
the Preferred Shares issuable upon exercise of the Warrants, have been duly
authorized and reserved for issuance,  and, when delivered upon conversion or
against payment in full as provided in the Certificate of Designation and the
Warrants, as applicable, will be validly issued, fully paid and nonassessable.

4.

The execution, delivery and performance of and compliance with the terms of the
Transaction Documents and the issuance of the Preferred Shares, the Warrants,
the Common Stock issuable upon conversion of the Preferred Stock and the Common
Stock and/or and the Preferred Shares issuable upon exercise of the Warrants do
not (i) violate any provision of the Articles of Incorporation or Bylaws, (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,
mortgage, deed of trust, indenture, note, bond, license, lease agreement,
instrument or obligation to which the Company is a party, (iii) create or impose
a lien, charge or encumbrance on any property of the Company under any agreement
or any commitment to which the Company is a party or by which the Company is
bound or by which any of its respective properties or assets are bound, or (iv)
result in a violation of any federal, state, local or foreign statute, rule,
regulation, order, judgment, injunction or decree (including Federal and state
securities laws and regulations) applicable to the Company or by which any
property or asset of the Company is bound or affected, except, in all cases
other than violations pursuant to clauses (i) and (iv) above, for such
conflicts, default, terminations, amendments, acceleration, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect.

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5.

No consent, approval or authorization of or designation, declaration or filing
with any governmental authority on the part of the Company is required under
Federal, state or local law, rule or regulation in connection with the valid
execution and delivery of the Transaction Documents, or the offer, sale or
issuance of the Preferred Shares, the Warrants or the Common Stock issuable upon
conversion of the Preferred Stock and the Common Stock and/or and the Preferred
Shares issuable upon exercise of the Warrants other than the Certificate of
Designation and the Registration Statement.

6.

There is no action, suit, claim, investigation or proceeding pending or
threatened against the Company which questions the validity of this Agreement or
the transactions contemplated hereby or any action taken or to be taken pursuant
hereto or thereto.  There is no action, suit, claim, investigation or proceeding
pending, or to our knowledge, threatened, against or involving the Company or
any of its properties or assets and which, if adversely determined, is
reasonably likely to result in a Material Adverse Effect.  There are no
outstanding orders, judgments, injunctions, awards or decrees of any court,
arbitrator or governmental or regulatory body against the Company or any
officers or directors of the Company in their capacities as such.

7.

The offer, issuance and sale of the Preferred Shares and the Warrants and the
offer, issuance and sale of the shares of Common Stock issuable upon conversion
of the Preferred Stock and the Common Stock and/or and the Preferred Shares
issuable upon exercise of the Warrants pursuant to the Purchase Agreement, the
Certificate of Designation and the Warrants, as applicable, are exempt from the
registration requirements of the Securities Act.

8.

The Company is not, and as a result of and immediately upon Closing will not be,
an "investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.

  Very truly yours,

[COMPANY COUNSEL]

 

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