SECURITIES  PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT, dated as of November 30, 2012 (this
"Agreement''), is entered  into by and  between NOVATION HOLDINGS, INC., a
Florida corporation  (the "Company"),  and ISP HOLDINGS, LLC, a Utah limited
liability company, its successors and/or assigns (the "Buyer").

RECITALS:

A.         The  Company  and the  Buyer are  executing  and  delivering  this
 Agreement  in reliance upon the exemption from securities registration for
offers and sales to accredited investors afforded, inter alia, under Regulation
D ("Regulation D") as promulgated by the United States Securities and Exchange
Commission   (the  "SEC")  under  the  Securities  Act  of  1933,  as  amended
 (the  "1933   Act"),  and/or Section 4(2) of the 1933 Act.

B.         The Buyer wishes to acquire from the Company,  and the Company
 desires to issue and sell to the Buyer, the Note(s) (as defined below), which
Notes will be convertible  into shares of common stock of the Company, par value
$0.001 per share (the "Common Stock"), upon the terms and subject to the
conditions of the Notes, this Agreement and the other Transaction  Documents (as
defined below).

C.          In  partial  consideration   of  the  Note(s),  the  Buyer  wishes
 to  sell  and  assign  to  the Company,  and the Company  wishes  to purchase
 and acquire  from  the  Buyer,  the Interest  (as  defined below),  upon  the
 terms  and  subject  to  the  conditions  of  this  Agreement  and  the  other
 Transaction Documents (as defined below).

NOW THEREFORE, in consideration  of the premises and the mutual covenants
 contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

I.      CERTAIN DEFINITIONS.  As used herein, each of the following terms has
the meaning set forth below, unless the context otherwise requires:

"Affiliate" means, with respect to a specific Person referred to in the relevant
provision, another

Person who or which controls or is controlled by or is under common control with
such specified Person. "Burgoyne" means Burgoyne Internet Services, LLC, a Utah
limited liability company.

"Buyer's Counsel" means Hansen Black Anderson PLLC.

"Buyer Control Person" means  each  manager,  executive  officer,  promoter,
 and  such  other Persons as may be deemed in control of the Buyer pursuant to
Rule 405 under the 1933 Act or Section 20 of the 1934 Act (as defined below).

"Cash Consideration" means the sum of $50,000.

"Certificate of Incorporation" means the certificate of incorporation, articles
of incorporation or other charter document (howsoever denominated) of the
Company, as amended to date.

"Closing Date" means the date of the closing of the purchase and sale of the
Securities and the

Interest.

"Company Control  Person"  means each director, executive officer, promoter, and
such other Persons as may be deemed in control of the Company pursuant to Rule
405 under the 1933 Act or Section 20 of the 1934 Act.

"Company Counsel" means Haseltine Law Office.

"Company's SEC Documents" means the Company's filings on the SEC's EDGAR system.

Notes.

"Conversion Date" means the date a Holder submits a Conversion Notice, as
provided in the

"Conversion Notice" has the meaning ascribed to it in the Notes. "Conversion
Price" has the meaning ascribed to it in the Notes. "Conversion Shares" has the
meaning ascribed to it in the Notes.

"Delivery Date" means the date that Conversion Shares are required to be
delivered to Holder under Section 3 or Section 8 of the Notes, as applicable.

"DTC" means the Depository Trust Company.

"DTC/FAST Program" means the DTC's Fast Automated Securities Transfer Program.
"DWAC" means Deposit Withdrawal at Custodian as defined by the DTC.

"DWAC  Eligible  Conditions"  means that (a) the Common Stock is eligible at DTC
for full services  pursuant to DTC's  Operational Arrangements, including
without limitation transfer through DTC's DWAC system, (b) the Company has been
approved (without revocation) by the DTC's underwriting department, and (c) no
later than 180 days after the Closing Date, the Transfer Agent is approved as an
agent in the DTC/FAST Program.

"Holder" means the Person holding the relevant Securities at the relevant time.
"Ikano" means Jkano Communications, Inc., a Utah corporation.

"Interest" means a one hundred percent (100%) membership interest of Burgoyne.

"Last  Audited Date" means the date of the audit for the fiscal year ended
August 31, 2012. "Market Price" has the meaning ascribed to it in the Notes.

"Material Adverse  Effect'' means an event or combination of events, which
individually or in the aggregate, would reasonably be expected to (a) adversely
affect the legality, validity or enforceability of the Notes or any of the other
Transaction Documents, (b)  have or result in a material adverse effect on the
results of operations, assets, or financial condition of the Company and its
subsidiaries, taken as a whole, or (c) adversely impair the Company's  ability
to perform fully on a timely basis its material obligations under any of the
Transaction Documents or the transactions contemplated thereby.

"Maturity Date" has the meaning ascribed to it in the Initial Note.

"Outstanding Balance" has the meaning ascribed to it in the Notes.

"Permitted Liens" means (a) any Lien (as defined herein) for taxes not yet due
or delinquent or being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with GAAP, (b) any
statutory Lien arising in the ordinary course of business by operation of law
with respect to a liability that is not yet due or delinquent, and (c) any Lien
created by operation of law, such as materialmen's  liens, mechanics' liens and
other similar liens, arising in the ordinary course of business with respect to
a liability that is not yet due or delinquent or that are being contested in
good faith by appropriate proceedings.

"Person" means any  living person or any entity, such as,  but not necessarily
limited to, a corporation, partnership or trust.

"Principal Trading Market" means (a) NYSE Amex, (b) the New York Stock Exchange,
(c) the Nasdaq Global Market, (d) the Nasdaq Capital Market, (e) the OTC
Bulletin Board, (f) the OTCQX or OTCQB, or (g) such other market on which the
Common Stock is principally traded at the relevant time, but shall not include
OTC Pink (a.k.a., the "pink sheets").

"Purchase Price"  means the Cash Consideration plus the agreed-upon $200,000
value of the

Interest.

"Registration Statement" means a registration statement of the Company under the
1933 Act covering securities of the Company (including Common Stock) on Form
S-3, if the Company is then eligible to file using such form, and if not
eligible, on Form S-1 or other appropriate form.

"Rule 144" means (a) Rule 144 promulgated under the 1933 Act or (b) any other
similar rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Company to the public without registration under the 1933
Act.

"Second  Note Purchase  Condition" mean that the median daily dollar volume of
the Common Stock on its Principal Trading Market for any consecutive thirty
Trading Day period is equal to or in excess of $50,000, where daily dollar
volume is computed as follows: the VWAP (as defined in the Notes) for the Common
Stock multiplied by the number of shares of Common Stock traded on a given
Trading Day. Unless the Second Note Purchase Condition is satisfied within one
(I)  year of the date of this Agreement, it shall be deemed to have not been
satisfied.

"Securities" means the Notes and the Shares.

"Shares" means the shares of Common Stock representing any or all of the
Conversion Shares. "State of Incorporation" means Florida.

"Subsidiary" or "Subsidiaries" means, as of the relevant date, any subsidiary or
subsidiaries of the Company (whether or not included in the Company's  SEC
Documents) whether now existing or hereafter acquired or created.

"Trading Day" means any day during which the Principal Trading Market shall be
open for business.

"Transaction Documents"  means this Agreement, the Notes, the Transfer Agent
Letter, the

Pledge Agreement, the Burgoyne Security Agreement, the Guaranty, the Internet
Services Agreement

Assignment, the Transition Services Agreement, the !kana Consent, the Interest
Assignment, and all other certificates  (including without limitation the
Secretary's Certificate), documents, agreements,  resolutions and instruments
delivered to any party under or in connection  with this Agreement, as the same
may be amended from time to time.

"Transfer Agent" means, at any time, the transfer agent for the Common Stock.

"Wire Instructions" means the wire instructions for the Cash Consideration,  as
provided  by the

Company, set forth on ANNEX I.

2.

AGREEMENT TO PURCHASE: PURCHASE PRICE.

2.1.

Purchase and Sale of Note(s).

(a)         Subject  to  the  terms  and  conditions  of  this  Agreement  and
 the  other Transaction  Documents, the undersigned  Buyer hereby agrees to
purchase from the Company a Secured Convertible  Promissory Note in the
principal  amount of $280,000.00  substantially  in the form attached hereto as
ANNEX II (the "Initial Note"). In consideration thereof, the Buyer shall deliver
the following consideration to the Company at the Closing (defined below):

(i)         The Interest, pursuant to the terms set forth in Section 2.2 below.
The Buyer and the Company acknowledge  and agree that the Interest has a fair
market value of

$200,000 as of the Closing.

(ii)

the Cash Consideration,  which shall  be paid to the Company at

Closing (defined below) in accordance with the Wire Instructions.

(b)         In addition  to the satisfaction  of the conditions  set forth  in
Section  I 0 below, upon the satisfaction of the Second Note Purchase Condition
and provided no Event of Default (as defined in the Notes) has occurred as of
such date, the undersigned Buyer covenants to purchase from the Company an
additional Secured Convertible Promissory Note in the principal amount of
$50,000.00  (the "Second  Note,"   and  together  with  the  Initial  Note,  the
 "Notes"). The  Second   Note  shall  be  in substantially  the same form as the
Initial Note. In consideration of the Company's issuance of the Second Note,
Buyer shall pay to the Company the sum of$50,000.00 (the "Second  Note
Consideration") in cash in connection with the Company's issuance to Buyer of
the Second Note.

(c)

In  consideration   for   the   Cash   Consideration   and  the   Interest,
  the

Company shall, at the Closing (defined below):

(i)         execute  and  deliver  to  the  Transfer   Agent,  and  the
 Transfer Agent  shall  execute  to  indicate  its acceptance  thereof,  the
 irrevocable  letter  of  instructions  to transfer  agent  substantially  in
the  form  attached  hereto as ANNEX  III (the "Transfer  Agent Letter");

(ii)        cause to be executed and delivered to the Buyer a fully executed
secretary's certificate and written consent of directors evidencing the
Company's approval of the Transaction  Documents substantially  in the forms
attached  hereto as ANNEX  IV (together, the "Secretary's Certificate");

(iii)       cause to be executed and delivered to the Buyer a fully executed
share issuance resolution to be delivered to the Transfer Agent substantially
 in the form attached hereto as ANNEX V ("Share Issuance Resolution");

(iv)

execute  and deliver to the Buyer a Membership  Interest  Pledge

Agreement substantially  in the form attached hereto as ANNEX VI (the "Pledge
Agreement");

(v)        cause Burgoyne to execute and deliver to the Buyer a Security
Agreement  substantially  in the form attached  hereto as ANNEX  VII (the
"Burgoyne Security Agreement'');

(vi)       cause Burgoyne to execute and deliver to the Buyer a Guaranty
substantially  in the form attached hereto as ANNEX VIII (the "Guaranty");

(vii)      execute  and  deliver  to  the  Buyer  an  Assignment  of  Internet
Services  Agreement  substantially   in the  form  attached  hereto  as  ANNEX
 IX  (the  "Internet Services Agreement Assignment"), and cause  Ikano and
Burgoyne  to execute  and deliver  the same;

(viii)     cause Burgoyne to execute and deliver to the Buyer a Transition
Services  Agreement  substantially  in the form  attached  hereto  as ANNEX  X
(the "Transition Services Agreement"); and

(ix)      execute and deliver to the Buyer a Consent and Agreement substantially
 in the form attached hereto as ANNEX XI (the "Ikano Consent"), and cause Ikano
and Burgoyne to execute and deliver the same.

2.2.       Purchase  and  Sale  of  Interest.    Subject  to  the  terms  and
 conditions   of  this Agreement and the other Transaction  Documents, and by
way of the Interest Assignment  (as defined  in Section 9.2 below), as pa1tial
consideration  for the Initial Note, the Buyer hereby agrees to sell, assign,
transfer, convey and deliver the Interest to the Company, and the Company
 hereby agrees to purchase, acquire and accept from the Buyer, the Interest.

2.3.       Form of Payment: Deliverv of Securities.  The purchase and sale of
the Securities shall take place at a closing (the "Closing") to be held at the
offices of the Buyer on the Closing Date.  At the Closing,  the Company will
deliver the Transaction  Documents  to the Buyer against  delivery  by the Buyer
to the Company of the Cash Consideration and the Interest.

2.4.       Purchase Price. The Initial Note carries an original  issue discount
of $15,000.00 (the "OlD").  In addition, the Company agrees to pay $15,000.00
 to the Buyer to cover the Buyer's  legal fees, accounting  costs, due
diligence, monitoring and other transaction  costs incurred in connection  with
the purchase and sale of the Securities (the "Transaction Expense Amount"), all
of which is included in the  initial  principal  balance  of  the  Initial  Note
(the "Carried  Transaction  Expense Amount"). The Purchase Price for the Initial
Note (made up of both the Cash Consideration  and the value of the Interest),
therefore,  shall  be $250,000.00,  computed  as follows: $280,000.00  original
 principal  balance, less the OlD, less the Carried Transaction Expense Amount.

2.5.       Allocation.  The  Buyer and the  Company  agree  to  report  all
 items  of  income, gain, or  loss related to the  purchase and sale  of the
Interest  consistent  with the principles  set forth  in Situation  2 of
Rev-Rule  99-6  whereby: (i) Burgoyne  shall  be treated  as terminating
 pursuant  to Code Section 708(b)(I)(A); (ii) the Buyer shall report the gain or
loss on the sale of the Interest in accordance

with Code Section 741; and (iii) the Company shall treat the acquisition of the
Interest as if Burgoyne made a liquidation distribution of all of its assets and
liabilities to the Buyer and, immediately following such liquidation
distribution the Company acquired by purchase all of Burgoyne's assets and
liabilities. Accordingly, not later than ninety (90) days after the Closing
Date, the Buyer shall prepare and deliver to the Company copies of Form 8594 and
any required exhibits thereto (the "Asset Allocation Statement") allocating the
portion of the Purchase Price attributable to the Interest, i.e., $200,000.  The
Buyer shall prepare and deliver to the Company from time to time revised or
supplemental copies of the Asset Allocation Statement (the "Revised  Asset
Allocation Statements") so as to report any matters on the Asset Allocation
Statement that need updating or as may be required by Section I 060 of the Code
or applicable regulations thereunder (including Purchase Price adjustments, if
any).   The  portion of the Purchase Price attributable to the Interest, i.e.,
$200,000, shall be allocated in accordance with the Asset Allocation Statement
or, if applicable, the last Revised Asset Allocation Statement provided by the
Buyer to the Company, and all tax returns and reports filed by the Company and
the Buyer shall be prepared consistently with such allocation.  The Asset
Allocation Statement (and, if applicable, all Revised Asset Allocation
Statements) shall be prepared in the manner consistent with Section 1060 of the
Code and the Treasury regulations promulgated thereunder.

2.6.

Burgoyne Liabilities, Revenue & Cash: Settlement.   Notwithstanding any other
provision contained herein:

(a)        The Buyer shall be responsible for all accrued liabilities and
accounts payable of Burgoyne (including all amounts owed to Ikano) existing or
accrued as of October 31, 2012 (the "October 31 Liabilities"), but for no other
liabilities or accounts payable of Burgoyne.

(b)        The Buyer shall be entitled to all payments from Burgoyne customers
issued or made prior to November I, 2012 (including prepaid amounts), or that
otherwise relate to a billing period ending prior to November I, 2012 (the
"Pre-October Payments"), regardless of when such payments are actually received
by or on behalf of Burgoyne.

(c)        Prior  to  the  Closing, the  Buyer caused  Burgoyne to  prepay
certain amounts with respect to web filtering and other services provided by
Centipede.   All such  prepaid amounts shall be prorated for the applicable
pre-payment period and the Company shall cause Burgoyne to reimburse the Buyer
for all such prepaid amounts that relate to the period occurring on and after
the Closing Date (the "Post-Closing Prepaid  Expense").

(d)        Burgoyne shall be permitted to make a distribution of all of its cash
to Buyer prior to the Closing, and, regardless of whether such cash is actually
transferred from Burgoyne's accounts, all cash (and deposit accounts) of
Burgoyne as of the Closing shall be deemed to be and shall thereafter remain the
sole property of the Buyer.

On or before December 31,2012, (y) the Buyer shall reimburse Burgoyne for any
October 31 Liabilities that were discharged by Burgoyne after the Closing, and
(z) the Company shall cause Burgoyne (i) to reimburse the Buyer for the
Post-Closing Prepaid Expense and (ii) to remit to the Buyer an amount equal to
all Pre-October Payments received by or on behalf of Burgoyne.  The parties
shall share necessary information and otherwise cooperate and work together in
good faith to accomplish the foregoing settlement.

3.          BUYER  REPRESENTATIONS  AND  WARRANTIES.  The  Buyer  represents
 and warrants to, and covenants and agrees with, the Company, as of the date
hereof and as of the Closing Date, as follows:

3.1.       Binding Obligation. The Transaction  Documents to which the Buyer is
a party, and  the  transactions  contemplated  hereby  and thereby,  have  been
duly  and  validly  authorized  by the Buyer.  This Agreement  has been executed
and delivered by the Buyer, and this Agreement  is, and each of the other
Transaction  Documents to which the Buyer is a party, when executed and
delivered  by the Buyer (if necessary),  will be valid and binding obligations
 of the Buyer enforceable  in accordance  with their  respective  terms,
 subject  as to  enforceability  to general  principles  of  equity  and  to
 bankruptcy, insolvency, moratorium and other similar laws affecting the
enforcement of creditors'  rights generally.

3.2.       Accredited  Investor Status. The Buyer is an "accredited  investor"
as that term is defined in Regulation D.

3.3.       Organization;  Authority  and  Qualification.    Burgoyne  (i)  is a
 limited  liability company  duly organized,  validly existing, and in good
standing under the laws of the State of Utah, (ii) has the power and authority
to conduct the business in which  it presently  is engaged, to enter into this
Agreement, and to perform its obligations hereunder and (iii) is qualified to do
business in, and is in good standing  in, each jurisdiction  where the nature of
its business  in such jurisdiction  requires  it to  be so qualified.

3.4.

Capitalization; Title.

the Company.

(a)

The Buyer owns of record all of the outstanding  membership  interests in

(b)       There are no existing options, warrants, rights, commitments or other
agreements  of  any  character  to  which  the  Buyer  is a  party,  requiring,
 or  which  upon  conversion  or exchange  would  require, the  issuance, sale
 or transfer  of any membership  interest  in Burgoyne  or of securities
  convertible   into,  exchangeable   for  or  evidencing  the  right  to
 subscribe   for  or  purchase membership  interests in Burgoyne.

(c)         The  Buyer owns the  Interest free  and  clear  of any and  all
 mortgages, pledges, security  interests, encumbrances,  easements,
 restrictions, charges, or other liens, except as may arise under state and
federal securities laws.

3.5.       Noncontravention.    The execution,  delivery,  and  performance  by
the  Buyer of this Agreement does not and will not (a) violate or breach the
charter documents of Burgoyne, or violate, conflict with, breach, or cause a
default under (presently, with the giving of notice, or with the passage of
time) any agreement to which Burgoyne is a party or by which any of its assets
are bound, in a manner that could reasonably  be expected to have a material
adverse effect on Burgoyne's financial condition or business as now conducted,
or (c) result in the creation or imposition of any mortgage,  pledge, security
interest, encumbrance, easement, restriction, charge, or other lien upon any
assets of Burgoyne (other than as specifically provided for in the Transaction
Documents).

3.6.       Tax Returns and Payments.  Burgoyne has timely filed all tax returns
required to be filed by it with appropriate federal, state and local
governmental  agencies, except where the failure to do so would  not have a
material adverse effect on Burgoyne's financial  condition  or business  as now
conducted. These returns and reports are true and correct in all material
respects.  All taxes shown to be due and payable on such returns, any
assessments imposed, and, to Burgoyne's knowledge, all other taxes due and
payable by Burgoyne on or before the Closing have been paid.

3.7.        Absence   of  Litigation.     There   is  no  action,   suit,
  proceeding,   inquiry   or investigation  before or by any court, public board
or body pending or, to the knowledge  of the Buyer,

threatened against or affecting the Buyer or Burgoyne before or by any
governmental authority or non­ governmental department, commission, board,
bureau, agency or instrumentality or any other person, wherein an unfavorable
decision, ruling or finding would have a material adverse effect on Burgoyne's
financial condition or business as now conducted or which would adversely affect
the validity or enforceability of, or the authority or ability of Buyer to sell
the Interest pursuant to this Agreement. There are no outstanding or unsatisfied
judgments, orders, decrees, writs, injunctions or stipulations to which the
Buyer or Burgoyne is a party or by which the Buyer or Burgoyne or any of their
respective properties is bound, that involve the transactions contemplated
herein or that, alone or in the aggregate, could reasonably be expected to have
a material adverse effect on Burgoyne's financial condition or business as now
conducted.

3.8.       Internet Services Agreement. The Internet Services Agreement dated as
effective March 21, 2003, as subsequently amended, under which IKANO
Communications, Inc. is providing certain services to Burgoyne, is, and at
Closing will be, in full force and effect, without default by Burgoyne, and
there is no notice of termination or other act or circumstance known to Buyer
that would prevent or preclude the automatic extension of the Internet Services
Agreement on December I, 2012 by its terms for an additional one year period, or
which would cause a termination or default as a result of the transfer of the
Burgoyne Member Interest to the Company hereunder.

3.9.      No Other Representations; Investigation.   The Buyer acknowledges that
the Company has not made and is not making any representations or warranties
whatsoever regarding the subject  matter  of  this  Agreement, express  or
 implied, except  as  provided  this  Agreement  or  any agreement, document or
instrument contemplated hereby to which the Company is a party, and that the
Buyer is not relying and has not relied on any representations or warranties
whatsoever regarding the subject matter of this Agreement, express or implied,
except for the representations and warranties of the Company in this Agreement
or any agreement, document or instrument contemplated hereby to which the
Company is a party.    The Buyer represents that in making the decision to
transfer the Interest and to undertake the Loan, it has relied solely on its own
independent investigation, the express representations, warranties, and
covenants set forth in this Agreement, and the Buyer's  own assessment of the
past, current, and future business, federal and state regulatory requirements,
and operational requirements of the Company.  Accordingly, the Buyer
acknowledges, represents and warrants that, except as expressly set forth in
this Agreement or any other applicable Transaction Document, neither the Company
nor any officer, director, manager, consultant, or employee of the Company has
made, and the Buyer has not relied upon, any representations and warranties of
any nature whatsoever.   The Buyer acknowledges, represents and warrants that
(a) it has had an opportunity to conduct its own investigation with respect to
the  Company,  and  to  ask  such  questions of  the  Company  with  respect to
 the  Company  and  the Transaction as the Buyer considered necessary or
appropriate in connection with such investigation, (b) the Buyer has had access
to or received all information that the Buyer believes is necessary or
appropriate to enable it to make its investment decision, and (c) the Buyer has
had the opportunity to ask questions of and receive answers from officers and
management executives of the Company concerning the Company and the Transaction.
Notwithstanding the foregoing, the Company has not disclosed any material
nonpublic  information to  the  Buyer  in  connection with  the  Buyer's  due
 diligence  related  to  this Transaction or otherwise.

4.

COMPANY REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to
the Buyer as of the date hereof and as of the Closing Date that;

4.1.       Rights of Others Affecting the Transactions.  There are no preemptive
rights of any stockholder of the Company, as such, to acquire the Securities. No
other party has a currently

exercisable right of first refusal which would be applicable to any or all of
the transactions contemplated by the Transaction Documents.

4.2.  Status.  The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Incorporation and has the
requisite corporate power to own its properties and to carry on its business as
now being conducted.  The Company is duly qualified as a foreign corporation to
do business and is in good standing in each jurisdiction where the nature of the
business conducted  or  property owned  by  it  makes such  qualification
 necessary, other  than  those jurisdictions in which the failure to so qualifY
would not have or result in a Material Adverse Effect. The Company  has
 registered  its  stock  under Section 12(g) of  the  Securities Exchange Act
 of  I 934,  as amended (the "1934 Act"), and is obligated to file reports
pursuant to Section 13 or Section 15(d) of the

I 934 Act. The Company has not taken any action designed to terminate, or which
to its knowledge is

likely to have the effect of, terminating the registration of the Common Stock
under the 1934 Act, nor has the Company received any notification that the SEC
is contemplating terminating such registration.  The Common Stock is quoted on
the Principal Trading Market.  The Company has received no notice, either oral
or written, with respect to the continued eligibility of the Common Stock for
quotation on the Principal Trading Market, and the Company has maintained all
requirements on its part for the continuation of such quotation. The Company has
not, in the twelve (I2) months preceding the date hereof, received notice from
the Principal Trading Market on which the Common Stock is or has been listed or
quoted to the effect that the Company is not in compliance with the listing or
maintenance requirements of such Principal Trading Market. The Company is, and
has no reason to believe that it will not in the foreseeable future continue to
be, in compliance with all such listing and maintenance requirements.

4.3.

Authorized Shares.

(a)        The authorized capital stock of the Company consists of 500,000,000
shares of Common Stock, $0.001 par value per share, of which 33,287,857 are
outstanding at November

7, 2012.  Of the outstanding shares of Common Stock, approximately 5,940,568
shares are owned (either directly or beneficially) by Affiliates of the Company.

(b)        Other than as set forth in the Company's SEC Documents, there are no
outstanding securities which are convertible into or exchangeable for shares of
Common Stock, whether such conversion is currently exercisable or exercisable
only upon some future date or the occurrence of some event in the future.

(c)       All issued and outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable. After
considering all other commitments that may require the issuance of Common Stock,
the Company has sufficient authorized and unissued shares of Common Stock as may
be necessary to effect the issuance of the Shares on the Closing Date, were the
Notes issued and fully converted on that date.

(d)        The Shares have been duly authorized by all necessary corporate
action on the part of the Company as of or prior to the Closing in accordance
with the terms of this Agreement, and, when issued on conversion of, or in
payment of interest on the Notes in accordance with the terms thereof, will have
been duly and validly issued, fully paid and non-assessable, free from all
taxes, liens, claims, pledges, mortgages, restrictions, obligations, security
interests and encumbrances of any kind, nature and description, and will not
subject the Holder thereof to personal liability by reason of being a Holder.

Company presently has no claims or defenses of any nature whatsoever with
respect to the Conversion

Shares.

4.4.      Transaction Documents and Stock. This Agreement and each of the other
Transaction Documents, and the transactions contemplated hereby and thereby,
have been duly and validly authorized by the Company. This Agreement has been
duly executed and delivered by the Company and this Agreement is, and the Notes,
and each of the other Transaction Documents, when executed and delivered by the
Company, will be, valid and binding obligations of the Company enforceable in
accordance with their respective terms, subject as to enforceability to general
principles of equity and to bankruptcy, insolvency, moratorium, and other
similar laws affecting the enforcement of creditors' rights generally.

4.5.      Non-contravention. The execution and delivery of this Agreement and
each of the other Transaction Documents by the Company, the issuance of the
Securities in accordance with the terms hereof and thereof, and the consummation
by the Company of the other transactions contemplated by this Agreement, the
Notes, and the other Transaction Documents do not and will not conflict with or
result in a breach by the Company of any of the terms or provisions of, or
constitute a default under (a) the Certificate of Incorporation or bylaws of the
Company, each as currently in effect, (b) any indenture, mortgage, deed of
trust, or other material agreement or instrument to which the Company is a party
or by which such party or any of its properties or assets are bound, including
any listing agreement for the Common Stock except as herein set forth, or (c) to
the Company's  knowledge, any existing applicable law, rule, or regulation or
any applicable decree, judgment, or order of any court, United States federal or
state regulatory body, administrative agency, or other governmental body having
jurisdiction over the Company or any of the Company's  properties or assets,
except such conflict, breach or default which would not have or result in a
Material Adverse Effect.

4.6.       Approvals.  No authorization, approval or consent of any court,
governmental body, regulatory agency, self-regulatory organization, or stock
exchange or market or the stockholders of the Company is required to be obtained
by the Company for the issuance and sale of the Securities to the Buyer as
contemplated by this Agreement, except such authorizations, approvals and
consents that have been obtained.

4.7.       Filings:  Financial  Statements.    None  of  the  Company's   SEC
 Documents contained, at the time they were filed, any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances  under  which  they  were  made,  not  misleading. The  Company
 has  filed  all  reports, schedules, forms, statements and other documents
required to be filed by the Company with the SEC under the 1934 Act on a timely
basis or has received a valid extension of such time of filing and has filed any
 such  report, schedule, form, statement or  other document prior to  the
expiration  of  any such extension.   As of their respective dates, the
financial statements of the Company included in the Company's  SEC Documents
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto.   Such financial statements have been prepared in accordance with
generally accepted accounting principles, consistently applied,  during  the
 periods  involved (except  (a)  as  may  be  otherwise  indicated  in  such
 financial statements or the notes thereto, or (b) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).  No other
information provided by or on behalf of the Company to the Buyer which is not

   included in the Company's SEC Documents, including, without limitation,
information referred to in this

Agreement, contains any untrue statement of a material fact or omits to state
any material fact necessary

in order to make the statements therein, in the light of the circumstance under
which they are or were made, not misleading.

4.8.       Absence of Certain Changes.   Since the Last Audited Date, there has
been no Material Adverse Effect. Since the Last Audited Date, the Company has
not (a) incurred or become subject to any material liabilities (absolute or
contingent) except liabilities incurred in the ordinary course of business
consistent with past practices; (b) discharged or satisfied any material lien or
encumbrance or paid any material obligation or liability (absolute or
contingent), other than current liabilities paid in the ordinary  course  of
 business consistent  with  past  practices; (c)  declared  or  made  any
 payment  or distribution of cash or other property to stockholders with respect
to its capital stock, or purchased or redeemed, or made any agreements to
 purchase or redeem, any shares of its capital stock; (d) sold, assigned or
transferred any other material tangible assets, or canceled any material debts
owed to the Company by any third party or material claims of the Company against
any third party, except in the ordinary course of  business consistent with
 past practices; (e) waived any rights of  material value, whether or not in the
ordinary course of business, or suffered the loss of any material amount of
existing business; (f) made any increases in employee compensation, except in
the ordinary course of business consistent with past practices; or (g)
experienced any material problems with labor or management in connection with
the terms and conditions of their employment.

4.9.       Full Disclosure.  There is no fact known to the Company or that the
Company should  know after having made all reasonable inquiries (other than
 conditions  known to the  public generally or as disclosed in the Company's SEC
Documents since the Last Audited Date) that has not been disclosed in writing to
the Buyer that would reasonably be expected to have or result in a Material
Adverse Effect.

4.10.     Absence  of   Litigation.  There   is  no  action,  suit,  proceeding,
 inquiry  or investigation before or by any court, public board or body pending
or, to the knowledge of the Company, threatened against or affecting the Company
before or by any governmental authority or non­ governmental department,
commission, board, bureau, agency or instrumentality or any other person,
wherein an unfavorable decision, ruling or finding would have a Material Adverse
Effect or which would adversely affect the validity or enforceability of, or the
authority or ability of the Company to perform its obligations under, any of the
Transaction Documents. The Company is not aware of any valid basis for any such
claim that (either individually or in the aggregate with all other such events
and circumstances) could reasonably be expected to have a Material Adverse
Effect. There are no outstanding or unsatisfied judgments, orders, decrees,
writs, injunctions or stipulations to which the Company is a party or by which
the Company or any of its properties is bound, that involve the transactions
contemplated herein or that, alone or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

4.11.     Absence of Events of Default.  Neither the Company nor any of its
Subsidiaries is in violation of or in default with respect to (a) its
Certificate of Incorporation or bylaws or other organizational documents, each
as currently in effect, or any material judgment, order, writ, decree, statute,
rule or regulation applicable to such entity; or (b) any material mortgage,
indenture, agreement, instrument or contract to which such entity is a party or
by which it or any of its properties or assets are bound (nor is there any
waiver in effect which, if not in effect, would result in such a violation or
default), except such breach or default which would not have or result in a
Material Adverse Effect.

4.12.     Absence of Certain Company Control Person Actions or Events.  None of
the following has occurred during the past five (5) years with respect to a
Company Control Person:

11

                                            (a) A petition under the federal
bankruptcy laws or any state insolvency law

was filed by or against, or a receiver, fiscal agent or similar officer was
appointed by a court for the business or property of such Company Control
Person, or any partnership in which he or she was a general partner at or within
two (2) years before the time of such filing, or any corporation or business
association of which he or she was an executive officer at or within two (2)
years before the time of such

filing;

(b)        Such Company Control Person was convicted in a criminal proceeding or
is a named subject of a pending criminal proceeding (excluding traffic
violations and other minor offenses);

(c)        Such Company Control Person was the subject of any order, judgment or
decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining him or her from, or
otherwise limiting, the following activities:

(i)         acting, as an investment advisor, underwriter, broker or dealer in
securities, or as an affiliated person, director or employee of any investment
company, bank, savings and loan association or insurance company, as a futures
commission merchant, introducing broker, commodity trading advisor, commodity
pool operator, floor broker, any other Person regulated by the Commodity Futures
Trading Commission ("CFTC") or engaging in or continuing any conduct or practice
in connection with such activity;

(ii)

engaging in any type of business practice; or

(iii)      engaging in any activity in connection with the purchase or sale of
any security or commodity or in connection with any violation of federal or
state securities laws or federal commodities laws;

(d)        Such Company Control Person was the subject of any order, judgment or
decree, not subsequently reversed, suspended or vacated, of any federal or state
authority barring, suspending or otherwise limiting for more than sixty (60)
calendar days the right of such Company Control Person to engage in any activity
described in Section 4.12(c)) above, or to be associated with Persons engaged in
any such activity; or

(e)       Such Company Control Person was found by a court of competent
jurisdiction in a civil action or by the CFTC or SEC to have violated any
federal or state securities law, and the judgment in such civil action or
finding by the CFTC or SEC has not been subsequently reversed, suspended, or
vacated.

4.13.     No  Undisclosed  Liabilities  or  Events.  The  Company  has  no
 liabilities  or obligations other than those disclosed in the Transaction
Documents or the Company's most recently filed SEC Documents (Form 10-K or 10-Q)
or those incurred in the ordinary course of the Company's business since the
Last Audited Date, or which individually or in the aggregate, do not or would
not have a Material Adverse Effect. No event or circumstance has occurred or
exists with respect to the Company or its properties, business, operations,
condition (financial or otherwise), or results of operations, which, under
applicable laws, rules or regulations, requires public disclosure or
announcement prior to the date hereof by the Company but which has not been so
publicly announced or disclosed.   There are no proposals currently under
consideration or currently anticipated to be under consideration by the Board of
Directors or the executive officers of the Company which proposal would (a)
change the Certificate of Incorporation or  bylaws of  the Company, each as
currently  in effect, with or  without stockholder approval,  which  change
 would  reduce or  otherwise adversely affect  the  rights  and  powers of  the

stockholders of the Common Stock, or (b) materially or substantially adversely
change the business, assets or capital of the Company, including its interests
in Subsidiaries.

4.14.    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 offer or sale of any security of the Company or solicited any offer to buy
any such security under circumstances that would eliminate the availability of
the exemption from registration under Regulation D in connection with the offer
and sale of the Securities as contemplated hereby.

4.15.     Dilution.  Each of the Company and its executive officers and
directors is aware that the number of shares of Common Stock issuable upon the
execution of this Agreement, the conversion of the Notes, or pursuant to the
other terms of the Transaction Documents may have a dilutive effect on the
ownership interests of the other stockholders (and Persons having the right to
become stockholders) of the Company. The Company specifically acknowledges that
its obligation to issue the Conversion Shares upon each conversion of the Notes
is binding upon the Company and enforceable regardless of the dilution such
issuances may have on the ownership interests of other stockholders of the
Company, and the Company will honor such obligations, including honoring every
Conversion Notice, unless the Company is subject to an injunction (which
injunction was not sought by the Company or any of its directors or executive
officers) prohibiting the Company from doing so.

4.I 6.     Fees to Brokers. Placement Agents and Others  The Company has taken
no action which would give rise to any claim by any Person for a brokerage
commission, placement agent or finder's fees or similar payments by the Buyer
relating to this Agreement or the transactions contemplated hereby.  Except for
such fees arising as a result of any agreement or arrangement entered into by
the Buyer without the knowledge of the Company (a "Buyer's Fee"), the Buyer
shall have no obligation with respect to such fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated in this
subsection that may be due in connection with the transactions contemplated
hereby. The Company shall indemnify and hold harmless each of the Buyer, its
employees, officers, directors, stockholders, managers, agents, and partners,
and their respective Affiliates, from and against all claims, losses, damages,
costs (including the costs of preparation and attorneys' fees) and expenses
suffered in respect of any such claimed or existing fees (other than a Buyer's
Fee, if any).

4.17.     Disclosure.  All information relating to or concerning the Company set
forth in the Transaction Documents or in the Company's SEC Documents or other
public filings provided by or on behalf of the Company to the Buyer is true and
correct in all material respects and the Company has not omitted to state any
material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.  No event or
circumstance has occurred or exists with respect to the Company or its business,
properties, prospects, operations or financial conditions, which under
applicable laws, rules or regulations, requires public disclosure or
announcement by the Company.

4.18.     Confirmation.  The Company agrees that, if, to the knowledge of the
Company, any events occur or circumstances exist prior to the payment of the
Cash Consideration or transfer of the Interest by the Buyer to the Company which
would make any of the Company's  representations or warranties set forth herein
materially untrue or materially inaccurate as of such date, the Company shall
immediately notify the Buyer in writing prior to such date of such events or
circumstances, specifying which representations or warranties are affected and
the reasons therefor.

4.19.    Title. The Company and the Subsidiaries, if applicable, own and have
good and marketable title in fee simple absolute to, or a valid  leasehold
interest in, all  their  respective real

properties and good title to their other respective assets and properties,
subject to no liens, claims or encumbrances except as have been disclosed to the
Buyer.

4.20.

Intellectual Property.

(a)        Ownership.     The  Company  owns  or  possesses  or  can  obtain  on
commercially reasonable terms sufficient legal rights to all patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses
(software or otherwise), information, know-how, inventions, discoveries,
published and unpublished works of authorship, processes and any and all other
proprietary rights ("Intellectual Property") necessary to the business of the
Company as presently conducted, the lack of which could reasonably be expected
to have a Material Adverse Effect.  Except for agreements with its own employees
or consultants, standard end-user license agreements, support/maintenance
agreements and agreements entered in the ordinary course of the Company's
business, all of which have been made available for review by the Buyer, there
are no outstanding options, licenses or agreements relating to the Intellectual
Property of the Company, and the Company is not bound by or a party to any
options, licenses or agreements with respect to the Intellectual Property of any
other person or entity. The Company has not received any written communication
alleging that the Company has violated or, by conducting its business as
currently conducted, would violate any of the Intellectual Property of any other
person or entity, nor is the Company aware of any basis therefor. The Company is
not obligated to make any payments by way of royalties, fees or otherwise to any
owner or licensor of or claimant to any Intellectual Property with respect to
the use thereof in connection with the present conduct of its business other
than in the ordinary course of its business. There are no agreements,
understandings, instruments, contracts, judgments, orders or decrees to which
the Company is a party or by which it is bound which involve indemnification by
the Company with respect to infringements of intellectual  Property, other than
in the ordinary course of its business.

(b)        No Breach by Employees.  The Company is not aware that any of its
employees is obligated under any contract or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would
materially interfere with the use of his or her efforts to promote the interests
of the Company or that would conflict with the Company's  business as presently
conducted.  Neither the execution nor delivery of this Agreement, nor the
carrying on of the Company's business by the employees of the Company, nor the
conduct of the Company's  business as presently conducted, will, to the
Company's knowledge, conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any such employee is now obligated.   The
 Company does not believe it  is or will  be necessary to  use any inventions of
any of its employees made prior to their employment by the Company of which it
is aware.

4.21.     No Shell Company. The Company is not, nor has it been for at least a
period of one year or more prior to the date of this Agreement, the type of
"issuer" defined in Rule 144(i)( I) under the 1933 Act.

4.22.

Environmental Matters.

(a)        No Violation. There are, to the Company's knowledge, with respect to
the Company or any of its Subsidiaries or any predecessor of the Company, no
past or present violations of Environmental Laws (as defined below), releases of
any material into the environment, actions, activities, circumstances,
conditions, events, incidents, or contractual obligations which may give rise to
any common law environmental liability or any liability under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 or similar
federal, state, local or foreign laws and neither the Company nor any of its
Subsidiaries has received any notice with respect to any of the foregoing, nor
is any action pending or, to the Company's knowledge, threatened in connection
with any

of the foregoing. The term "Environmental Laws" means all federal, state, local
or foreign laws relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata), including, without limitation,
laws relating to emissions, discharges, releases or threatened releases of
chemicals, pollutants contaminants, or toxic or hazardous  substances  or
 wastes  (collectively,  "Hazardous  Materials")  into  the  environment,  or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations issued, entered, promulgated or approved thereunder.

(b)        No Hazardous Materials. Other than those that are or were stored,
used or disposed of in compliance with applicable law, no Hazardous Materials
are contained on or about any real  property currently owned,  leased or  used
by the Company or  any  of  its Subsidiaries, and  no Hazardous Materials were
released on or about any real property previously owned, leased or used by the
Company or any of its Subsidiaries during the period the property was owned,
leased or used by the Company or any of its Subsidiaries, except in the normal
course of the Company's or any of its Subsidiaries' business.

(c)        No Storage Tanks.  There are no underground storage tanks on or under
any real  property owned, leased or  used by the Company or any of  its
Subsidiaries that are not in compliance with applicable law.

4.23.     No Other Representations: Investigation.  The Company acknowledges
that the Buyer has not made nor is making any representations or warranties
whatsoever regarding the subject matter of this Agreement, express or implied,
except as provided this Agreement or any agreement, document or instrument
contemplated hereby to which the Buyer is a party, and that the Company is not
relying and has not relied on any representations or warranties whatsoever
regarding the subject matter of this Agreement, express or implied, except for
the representations and warranties of the Buyer in this Agreement or any
agreement, document or instrument contemplated hereby to which the Buyer is a
party. The Company represents that in making the decision to purchase and
acquire the Interest, it has relied solely on its own independent investigation,
the express representations, warranties, and covenants set forth in this
Agreement, and the Company's own assessment of the past, current, and future
business, federal and state regulatory requirements, and operational
requirements of Burgoyne.  Accordingly, the Company acknowledges, represents and
warrants that, except as expressly set forth in this Agreement or any other
applicable Transaction Document, neither the Buyer nor any officer, manager or
employee of the Buyer or Burgoyne has made, and the Company has not relied upon,
any representations and warranties of any nature whatsoever. The Company
acknowledges, represents and warrants that (a) it has had an opportunity to
conduct its own investigation with respect to Burgoyne and the Interest, and to
ask such questions of the Buyer and Burgoyne with respect to the Interest and
Burgoyne as the Company considered necessary or appropriate in connection with
such investigation, (b) the Company has had access to or received all
information that the Company believes is necessary or appropriate to enable it
to make its investment decision, and (c) the Company has had the opportunity to
ask questions of and receive answers from officers and management executives of
Burgoyne concerning the  Interest and Burgoyne.

4.24.    Investment Intent.   The Company is acqumng and will hold the Interest
for investment for its account only and not with a view to, or for resale in
connection with, any "distribution" thereof within the meaning of the 1933 Act.

   4.25.

  No Registration.    The Company understands that the Interest has not been

registered under the 1933 Act by reason of exemption therefrom and that the
Interest must be held indefinitely, unless the Interest is subsequently
registered under the 1933 Act or an exemption applies.

4.26.    Risk of Loss.   The Company is aware that its purchase of the Interest
is a speculative investment that has limited liquidity and is subject to the
risk of complete loss. The Company is able, without impairing its financial
condition, to hold the Interest for an indefinite period and to suffer a
complete loss of the Company's investment in the Interest.

5.         CERTAIN COVENANTS AND ACKNOWLEDGMENTS.

5.1.

Covenants and Acknowledgements of the Buyer.

(a)        Transfer Restrictions.  The Buyer acknowledges that (i) the
Securities have not been and are not being registered under the provisions of
the 1933 Act and, except as included in an effective Registration Statement, the
Shares have not been and are not being registered under the 1933

Act, and may not be transferred unless (A) subsequently registered thereunder,
or (B) the Buyer shall have delivered to the  Company an  opinion of  counsel,
reasonably satisfactory  in form,  scope and

substance to the Company, to the effect that the Securities to be sold or
transferred may be sold or transferred pursuant to an exemption from
registration under the 1933 Act; (ii) any sale of the Securities made in
reliance on Rule 144 may be made only in accordance with the terms of such Rule
and further, if such Rule is not applicable, any resale of such Securities under
circumstances in which the seller, or the Person through whom the sale is made,
may be deemed to be an underwriter, as that term is used in the 1933 Act, may
require compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (iii) except as otherwise provided
herein, neither the Company nor any other Person is under any obligation to
register the Securities under the 1933 Act or to comply with the terms and
conditions of any exemption thereunder.

(b)        Restrictive Legend. The Buyer acknowledges and agrees that, until
such time as the relevant Securities have been registered under the 1933 Act,
and may be sold in accordance with an effective Registration Statement, or until
such Securities can otherwise be sold without restriction, whichever is earlier,
the certificates and other instruments representing any of the Securities not
delivered via DWAC shall bear a restrictive legend in substantially the
following form (and a stop-transfer order may be placed against transfer of any
such Securities):

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR
AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF
COUNSEL IN COMPARABLE TRANSACTIONS OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS SOLD PURSUANT TO RULE 144
UNDER SAID ACT.

5.2.      Covenants. Acknowledgements and Agreements of the Company. As a
condition to the Buyer's obligation to purchase the Securities contemplated by
this Agreement, and as a material inducement for the Buyer to enter into this
Agreement and the other Transaction Documents, until all of the Company's
obligations hereunder and the Notes are paid and performed in full, or within
the timeframes otherwise specifically set forth below, the Company shall comply
with the following covenants:

(a)

       Filings.

  From the date hereof until the date that is six (6) months after all

the Conversion Shares either have been sold by the Buyer, or may permanently be
sold by the Buyer without any restrictions pursuant to Rule 144 (the
"Registration Period"),  the Company shall   timely make all filings required to
be made by it under the 1933 Act, the 1934 Act, Rule 144 or any United States
state securities laws and regulations thereof applicable to the Company or by
the rules and regulations of the Principal Trading Market, and such filings
shall conform to the requirements of applicable laws, regulations and government
agencies, and, unless such filings are publicly available on the SEC's EDGAR
system (via the SEC's web site at no additional charge), the Company shall
provide a copy thereof to the Buyer promptly after such filings. Without
limiting the foregoing, the Company agrees to file a Form D with respect to the
Securities as required under Regulation D and to provide a copy thereof to the
Buyer promptly after such filing. Additionally, within four (4) Trading Days
following the date of this Agreement, the Company shall file a current report on
Form 8-K describing the terms of the transactions contemplated by the
Transaction Documents in the form required by the 1934 Act and approved by the
Buyer and attaching the material Transaction Documents as exhibits to such
filing. The Company shall  further  redact  all  confidential  information from
 such  Form  8-K.  Additionally, the Company shall furnish to the Buyer, so long
as the Buyer owns any Securities, promptly upon request, (i) a written statement
by the Company that it has complied with the reporting requirements of Rule 144,
the

1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly
report of the Company, and (iii) such other information as may be reasonably
requested to permit the Buyer to sell such Securities pursuant to Rule 144
without registration.

(b)        Reporting Status.  So long as the Buyer beneficially owns Securities
and for at least twenty (20) Trading Days thereafter, the Company shall file all
reports required to be filed with the SEC pursuant to Sections 13 or 15(d) of
the 1934 Act, and shall take all reasonable action under its control to ensure
that adequate current public information with respect to the Company, as
required in accordance with Rule 144, is publicly available, and shall not
terminate its status as an issuer required to file reports under the 1934 Act
even if the 1934 Act or the rules and regulations thereunder would permit such
termination.

(c)        Listing. The Common Stock shall be listed or quoted for trading on
any of (i) NYSE Amex, (ii) the New York Stock Exchange, (iii) the Nasdaq Global
Market, (iv) the Nasdaq Capital Market, (v) the  OTC Bulletin Board, or (vi) the
OTCQX or OTCQB. The  Company shall promptly secure the listing of all of the
Conversion Shares upon each national securities exchange and automated quotation
system, if any, upon which the Common Stock is then listed (subject to official
notice of issuance) and shall maintain such listing of all securities from time
to time issuable under the terms of the Transaction Documents. The Company shall
comply in all material respects with the Company's  reporting, filing and other
obligations under the bylaws or rules of the Principal Trading Market and/or the
Financial Industry Regulatory Authority, Inc. ("FINRA")  or any successor
thereto, as the case may be, applicable to it at least through the date which is
sixty (60) calendar days after the date on which each Note has been converted or
paid in full.

(d)        Use of Proceeds. The Company shall use the net cash proceeds received
hereunder for working capital and general corporate purposes only; provided,
however, the Company will not use such proceeds to pay fees payable (i) to any
broker or finder relating to the offer and sale of the Notes, or (ii) to any
other party relating to any financing transaction effected prior to the Closing
Date.

(e)        Publicitv, Filings, Releases, Etc.   Neither party shall disseminate
any information relating to the Transaction Documents or the transactions
contemplated thereby, including issuing any press releases, holding any press
conferences or other forums, or filing any reports (collectively, "Publicity"),
without giving the other party reasonable advance notice and an opportunity

to comment on the contents thereof.   Neither party will include in any such
Publicity  any statement  or statements or other material to which the other
party reasonably objects, unless in the reasonable opinion of counsel to the
party proposing such statement, such statement is legally required to be
included.  In furtherance  of the foregoing, the Company shall provide to the
Buyer's  Counsel a draft of the first current report on Form 8-K or a quarterly
or annual report on Form I 0-Q or I 0-K, as the case may be, intended to be
 made  with  the  SEC  which  refers  to the  Transaction  Documents  or the
 transactions  contemplated thereby as soon as practicable (but at least two (2)
Trading Days before such filing will be made) and shall not include in such
filing (or any other filing filed before then) any statement or statements or
other material  to  which  the  Buyer  reasonably  objects,  unless  in the
 reasonable  opinion  of  counsel  to  the Company  such statement  is legally
required to be included. Notwithstanding  the foregoing, each of the parties
hereby consents to the inclusion of the text of the Transaction Documents in
filings made with the SEC (but any descriptive text accompanying or part of such
filing shall be subject to the other provisions of this subsection).

(f)         FINRA Rule 5110. In the event that the Corporate  Financing Rule
5110 of FINRA is or becomes applicable to the transactions contemplated  by the
Transaction  Documents or to the sale by a Holder of any of the Securities, then
the Company shall, to the extent required by such rule, timely make any filings
and cooperate with any broker or selling stockholder  in respect of any
consents, authorizations  or approvals  that  may be necessary  for  FINRA to
timely  and  expeditiously  permit  the Holder to sell the Securities.

(g)        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 shall be made in accordance with GAAP consistently applied,
reflecting all financial transactions of the Company and such 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.

(h)        Corporate  Existence.   The Company shall (i) do all things necessary
 to remain duly qualified and in good standing  in each jurisdiction  in which
the character of the properties owned or leased by it or in which the
transaction of its business makes such qualification  necessary; (ii) preserve
and keep in full force and effect all licenses or similar qualifications
 required by it to engage in its business in all jurisdictions in which it is at
the time so engaged; (iii) continue to engage in business of the  same  general
 type  as conducted  as of  the  date  hereof;  and  (iv)  continue  to  conduct
 its business substantially as now conducted or as otherwise permitted
hereunder.

(i)       Taxes.   The Company  shall  pay and discharge  promptly  when  due
all taxes, assessments and governmental charges or levies imposed upon it or
upon its income or profits or in respect of its property before the same shall
become delinquent or in default, which, if unpaid, might reasonably be expected
to give rise to liens or charges upon such properties or any part thereof,
unless, in each case, the validity or amount thereof is being contested in good
faith by appropriate  proceedings and the Company has maintained adequate
reserves with respect thereto in accordance with GAAP.

(j)           Compliance. The Company shall comply in all material respects with
all federal, state and local laws and regulations, orders, judgments, decrees,
injunctions, rules, regulations, permits,  licenses, authorizations  and
 requirements  (collectively, "Requirements")  of all  governmental bodies,
insurers, departments, commissions, boards, courts, authorities, officials or
officers which are applicable to the Company, its business, operations, or any
of its properties, except where the failure to so comply would not have a
Material Adverse Effect; provided, however, that nothing provided herein shall
prevent the Company from contesting in good faith the validity or the
application of any Requirements.

(k)

Intentionally Deleted.

(1)        Litigation.  From and after the date hereof and until all of the
Company's obligations hereunder and the Notes are paid and performed in full,
the Company shall notify the Buyer in writing, promptly upon learning thereof,
of any litigation or administrative proceeding commenced or threatened against
the Company involving a claim in excess of $100,000.00.

(m)       Performance  of  Obligations.    The  Company  shall  promptly  and
 in  a timely fashion perform and honor all demands, notices, requests and
obligations  that exist or may arise under the Transaction Documents.

(n)        Failure  to  Make  Timely  Filings.     The  Company  agrees  that,
 if  the Company  fails to timely  file on the SEC's  EDGAR system any
 information  required  to be filed  by it, whether  on a Form  I 0-K, Form  I
0-Q, Form 8-K, Proxy Statement  or otherwise  so as to be deemed  a "reporting
issuer" with current public information  under the 1934 Act, the Company shall
 be liable to pay to the Holder, in addition to any other available remedies in
the Transaction  Documents or at law or in equity,  an  amount  based  on  the
 following  schedule  (where,  for  purposes  of  this  subsection,  "No.
Trading Days Late" refers to each Trading Day after the latest due date for the
relevant filing):

No. Trading Days Late

Late Filing Payment For

Each $10,000.00 of

Outstanding Principal of the Notes

I

2

3

4

5

6

7

8

9

10

>10

$100.00

$200.00

$300.00

$400.00

$500.00

$600.00

$700.00

$800.00

$900.00

$1,000.00

$1,000.00 + $200.00 for each Trading

Day late beyond I 0

The Company shall pay any payments incurred under this subsection in immediately
available funds upon demand  by the  Holder; provided, however, that the  Holder
 making  the demand  may specify  that  the payment shall be made in shares of
Common Stock at the Conversion Price applicable to the date of such demand.
   If the  payment  is to  be made in shares of Common  Stock, such  shares
 shall  be considered Conversion Shares under the Notes, with the "Delivery
Date" for such shares being determined from the date  of such  demand. The
 demand  for  payment of such amount  in shares  of Common  Stock shall  be
considered a "Conversion Notice" under the Notes (but the delivery of such
shares shall be in payment of the amount contemplated by this subsection and not
in payment of any principal or interest on the Notes).

(o)        Share   Reserve.   In  order  to  allow   for,  as  of  the
  relevant   date  of determination,  the conversion of the entire Outstanding
Balance into Common Stock, the Company shall take  all  action  necessary  from
 time  to  time  to  reserve  for  the  benefit  of  the  Holder  the  number
 of authorized   but  unissued  shares  of  Common  Stock  equal  to  the
 amount  calculated  as  follows  (such calculated  amount  is referred  to as
the "Share Reserve"): two times the higher of (i) the Outstanding

Balance divided by the Conversion Price, and (ii) the Outstanding Balance
divided by the Market Price. If at any time the Share Reserve is less than
required herein, the Company shall immediately increase the Share Reserve in an
amount equal to no less than the deficiency. If the Company does not have
sufficient authorized and unissued shares of Common Stock available to increase
the Share Reserve, the Company shall call a special meeting of the stockholders
as soon as practicable after such occurrence, but in no event later than thirty
(30) calendar days after such occurrence, and hold such  meeting as soon as
practicable thereafter, but in no event later than sixty (60) calendar days
after such occurrence (subject to compliance with all required regulatory
filings for such a meeting), for the purpose of increasing the number of
authorized shares of Common Stock. The Company's management shall recommend to
the Company's  stockholders to vote in favor of increasing the number of
authorized shares of Common Stock.  Management shall also vote all of its shares
in favor of increasing the number of authorized shares of Common Stock. The
Company shall use its best efforts to cause such additional shares of Common
Stock to be authorized so as to comply with the requirements of this subsection.
All calculations with respect to determining the Share Reserve shall be made
without regard to any limitations on conversion of the Notes.

(p)        DWAC Eligibility. At all times during which any portion of either
Note remains outstanding, the Company shall cause all DWAC Eligible Conditions
to be satisfied.

(q)        Anti-Dilution Certification.  For so long as any portion of either
Note remains outstanding, the Company shall deliver to the Buyer on or before
the 1Oth day of each month a certification in the form attached hereto as ANNEX
XII whereby the Company shall notifY the Buyer of a Dilutive Issuance (as
defined in the Notes) or any other event(s) that occurred during the previous
month that triggers anti-dilution protection or other adjustments to the
applicable Conversion Price (each an "Anti-Dilution  Event"),  or, if no
Anti-Dilution Event occurred, certifying to the Buyer that no Anti­ Dilution
Event occurred during the previous month.

(r)         Change  in  Nature  of  Business. The  Company  shall  not  directly
 or indirectly engage in any material line of business substantially different
from those lines of business conducted by or publicly contemplated to be
conducted by the Company on the date of this Agreement or any business
substantially related or incidental thereto. The Company shall not, and the
Company shall cause each of its Subsidiaries to not, directly or indirectly,
modify its or their corporate structure or purpose if such modification may have
a material adverse effect on any rights of, or benefits to, the Holder under any
of the Transaction Documents.

(s)        Maintenance  of  Properties,  Etc.  The  Company  shall  maintain
 and preserve, and cause each of  its Subsidiaries to maintain and preserve, all
of its properties which are necessary or useful in the proper conduct of its
business, in good working order and condition, ordinary wear and tear excepted,
and comply, and cause each of its Subsidiaries to comply, at all times with the
provisions of all leases to which it is a party as lessee or under which it
occupies property, so as to prevent any loss or forfeiture thereof or
thereunder.

(t)         Maintenance of Insurance. The Company shall maintain, and cause each
of its Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations (including, without limitation,
comprehensive general liability, hazard, rent and business interruption
insurance) with respect to its properties (including all real properties leased
or owned by it) and business, in such amounts and covering such risks as is
required by any governmental authority having jurisdiction with respect thereto
or as is carried generally in accordance with sound business practice by
companies in similar businesses similarly situated.

(u)        Restriction  on  Redemption.  The   Company  shall  not,   directly
 or indirectly, redeem or repurchase its capital stock without the prior express
written consent of the Holder.

(v)        Restriction on  Transfer  of  Assets. The  Company shall  not, and
 the Company shall cause each of its Subsidiaries to not, directly or
indirectly, sell, lease, license, assign, transfer, convey or otherwise dispose
of any assets or rights of the Company or any Subsidiary owned or hereafter
acquired, whether in a single transaction or a series of related transactions,
other than (i) sales, leases, licenses, assignments, transfers, conveyances and
other dispositions of such assets or rights supported by fair market value
consideration as determined in the reasonable discretion of the board of
directors or the Chief Executive Officer ofthe Company or its Subsidiary, as the
case may be, or (ii) sales of inventory in the ordinary course of business.

(w)       Existence of  Liens. The Company shall  not, and the Company shall
cause each of its Subsidiaries to not, directly or indirectly, allow, grant, or
suffer to exist any mortgage, lien,  deed  of  trust,  pledge,  charge,
 security  interest,  tax  lien,  judgment,  or  other  encumbrance
(collectively, "Liens"),  upon the property or assets (including accounts and
contract rights) owned by the Company or any of its Subsidiaries, other than
Permitted Liens.

(x)        Intellectual Property.  The Company shall not, and the Company shall
not permit any of its Subsidiaries, directly or indirectly, to encumber or allow
any Liens on, any of its copyright rights, copyright applications, copyright
registrations and  like protections in each work of authorship and derivative
work, whether published or unpublished, any patents, patent applications and
like protections, including improvements, divisions, continuations, renewals,
reissues, extensions, and continuations-in-part of the same, trademarks, service
marks and, to the extent permitted under applicable law, any applications
therefor, whether registered or not, and the goodwill of the business of the
Company and its Subsidiaries connected with and symbolized thereby, know-how,
operating manuals, trade secret rights, rights to unpatented inventions, and any
claims for damage by way of any past, present, or future infringement of any of
the foregoing, other than Permitted Liens.

(y)        Transactions with Affiliates. The Company shall not, nor shall it
permit any of its Subsidiaries to, enter into, renew, extend or be a party to,
any transaction or series of related transactions (including, without
limitation, the purchase, sale, lease, transfer or exchange of property or
assets of any kind or the rendering of services of any kind) with any Affiliate,
except in the ordinary course of business in a manner and to an extent
consistent with past practice and necessary or desirable for the prudent
operation of its business, for fair consideration and on terms no less favorable
to it or its Subsidiaries than would be obtainable in a comparable arm's length
transaction with a person that is not an Affiliate thereof.

(z)        Certain Negative Covenants of the Company.  From and after the date
hereof and until all of the Company's obligations hereunder and each Note are
paid and performed in full, the Company shall not:

(i)         Incur any new indebtedness for borrowed money that includes an
equity conversion component with a conversion feature more favorable than that
available to the Buyer as provided herein or in the Notes, taking into account
the original issue discount, provisions relating to  conversion  rights, and fee
 reimbursement as  provided  in  the  Notes; provided, however, that if the
Company is in breach of any of its obligations under this Agreement, then Buyer
shall also have the right, in its sole and absolute discretion, to disallow any
new indebtedness for borrowed money without the prior written consent of Buyer.

(ii)       Enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of property or the rendering of any service,
with any Affiliate of the Company, or amend or modifY any agreement related to
any of the foregoing, except on terms that are no less favorable, in any
material respect, than those obtainable from any person or entity who is not an
Affiliate of the Company.

(iii)       So long as either Note is outstanding, the Company shall not, and
the Company shall not permit any of its Subsidiaries to, directly or
 indirectly, pay cash dividends or distributions on any equity securities of the
Company or of its Subsidiaries.

(aa)     Piggyback Registrations. (i) During the ninety (90) calendar days
immediately following the Closing Date, and (ii) any time after the six-month
anniversary of the Closing Date during which  the Buyer is not eligible to sell
Shares under Rule 144, the Company shall notifY the Buyer in writing at least
fifteen (15) Trading Days prior to the filing of any Registration Statement for
purposes of a public offering of securities of the Company (including, but not
limited to, Registration Statements relating to secondary offerings of
securities of the Company) and will afford the Buyer an opportunity to include
in such Registration Statement all or part of the Shares it holds. If the Buyer
desires to include in any such Registration Statement all or any part of the
Shares held by it, the Buyer shall, within fifteen (15) Trading Days after the
above-described notice from the Company, so notifY the Company in writing. Such
notice shall state the intended method of disposition of the Shares by the
Buyer. In the event the Buyer desires to include less than all of its Shares in
any Registration Statement it shall continue to have the right to include any
Shares in any subsequent Registration Statement or Registration Statements as
may be filed by the Company with respect to offerings of its securities, all
upon the terms and conditions set forth herein.  Any piggy-back registration
rights shall be subject to approval of the underwriter of the offering which is
the subject of such Registration Statement, and the number of shares, if any,
which may be included in such Registration Statement shall be limited by
restrictions in SEC and other regulatory agencies regulations on the maximum
number of shares allowed in the offering.

(bb)      Rule 144 Opinion. Either counsel to the Company has delivered to the
Buyer an opmmn letter, or the Company shall accept, in its reasonable
discretion, an opinion letter prepared by legal counsel of Buyer's choosing (in
either case, the "Opinion  Letter"),  stating that (i) the Company is not a
shell company or the type of"issuer" defined in Rule 144(i)(I) under the 1933
Act (a "Shell  Company"),  (ii)  the  Company has  never  been  a  Shell
 Company,  (iii)  the  Company  is  in compliance with all filing requirements
under Rule 144 as of the date hereof, and (iv) the Shares may be sold by the
Buyer without any restrictions pursuant to Rule 144, so long as the applicable
holding period specified by Rule 144 is satisfied, and, as applicable, the
Company shall give instructions to its Transfer Agent to issue shares of Common
Stock upon conversion of the Notes based upon or otherwise consistent with such
Opinion Letter.

(cc)      Transfer Agent Reserve. From and after the date hereof and until all
of the Company's obligations hereunder and each Note are paid and performed in
full:

(i)         the Company shall at  all times require its Transfer Agent to
establish a reserve of shares of authorized but unissued Common Stock in an
amount not less than the Share Reserve (the "Transfer Agent Reserve");

(ii)       the  Company  shall  require  its  Transfer  Agent  to  hold  the
Transfer Agent Reserve for the exclusive benefit of the Holder and shall
authorize the Transfer Agent to issue the shares of Common Stock held in the
Transfer Agent Reserve to the Holder only (subject to subsection (iii)
immediately below);

(iii)      the Company shall cause the Transfer Agent to agree that when the
Transfer Agent issues shares of Common Stock to the Holder pursuant to the
Transaction Documents, the Transfer Agent will not issue such shares from the
Transfer Agent Reserve, unless such issuance is pre-approved in writing by the
Holder;

(iv)      the Company shall cause the Transfer Agent to agree that it will not
reduce the Transfer Agent Reserve under any circumstances, unless such reduction
is pre­ approved in writing by the Holder;

(v)        no less frequently than at the end of each calendar quarter, the
Company shall recalculate the Transfer Agent Reserve as of such time (each a
"Transfer Agent Reserve Calculation"),  and if additional shares of Common Stock
are required to be added to the Transfer Agent Reserve pursuant to subsection
(i) immediately above, the Company shall immediately give written instructions
to the Transfer Agent to cause the Transfer Agent to set aside and increase the
Transfer Agent Reserve by the necessary number of shares of Common Stock; and

(vi)       no less frequently than quarterly, the Company shall certify in
writing to the Holder (A) the correctness of the Company's Transfer Agent
Reserve Calculation and (B) that either (I)  the Company has instructed the
Transfer Agent to increase the Transfer Agent Reserve in accordance with the
terms hereof, or (2) there was no need to increase the Transfer Agent Reserve,
in either case consistent with the Transfer Agent Reserve Calculation.

For the avoidance of any doubt, the requirements of this Section 5.2 are
material to this Agreement and any violation or breach thereof by the Company
shall constitute a default under this Agreement.

6.

TRANSFER AGENT.

6.1.       Instructions. The Company covenants that, with respect to the
Securities, other than the stop transfer instructions to give effect to Section
5.l(a)  hereof, the Company will give the Transfer  Agent  no  instructions
inconsistent with the Transfer  Agent Letter.  Except as  required  by Sections
5.l(a)  and 5.l(b) of this Agreement and the Transfer Agent Letter, 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 other Transaction
Documents. Nothing in this subsection shall affect in any way the Buyer's
 obligations and agreement to comply with all applicable securities  laws upon
resale of the Securities.  If the Buyer provides the Company with an opinion of
counsel reasonably satisfactory to the Company that registration of a resale by
the Buyer of any of the Securities in accordance with clause (i)(B) of Section
5.1(a) of this Agreement is not required under the 1933 Act or upon request from
a Holder while an applicable Registration Statement is effective, the Company
shall (except as provided in clause (ii) of Section 5.!(a) of this Agreement)
permit the transfer of the Securities and, in the case of the Conversion Shares,
use its best efforts to cause the Transfer Agent to promptly deliver to the
Holder or its broker, as applicable, such Conversion Shares by way of the OWAC
system.

6.2.       DWAC Eligible. The Company specifically covenants that, as of the
Closing Date, all OWAC Eligible Conditions are satisfied. The Buyer hereby
acknowledges that the current transfer agent is not approved as an agent in the
DTC/FAST Program. However, the Company covenants and agrees that no later than
180 days after the Closing Date, the Company's Transfer Agent will be approved
as an agent in the DTC/FAST Program. After such 180-day period, the Company
shall notify the Buyer in writing if the Company at any time while the Holder
holds Securities becomes aware of any plans of the Transfer Agent to voluntarily
or involuntarily terminate its participation in the DTC/FAST Program.
Furthermore, after such I 80-day period, while any Holder holds Securities, the
Company shall

at all times maintain  a transfer agent which participates  in the DTC/FAST
 Program, and the Company shall not appoint any transfer agent which does not
participate in the DTC/FAST Program. Nevertheless, if at any time the Company
receives a Conversion Notice and all OWAC Eligible Conditions are not then
satisfied   (including  without  limitation  because  the  Transfer  Agent  is
 not  then  participating   in  the DTC/FAST  Program or the Conversion  Shares
 are not otherwise transferrable  via the OWAC system), then  the Company  shall
 instruct the Transfer  Agent  to immediately  issue one or more certificates
 for Common  Stock  without  legend  in such  name and  in such  denominations
 as  specified  by the  Holder consistent with the terms and conditions of the
Transaction Documents.

6.3.       Transfer  Fees. The Company  shall assume any fees or charges  of the
Transfer Agent  or  Company  Counsel  regarding  (a)  the  removal  of a  legend
 or  stop  transfer  instructions  with respect to the Securities, and (b) the
issuance of certificates or DWAC registration to or in the name of the Holder or
the Holder's  designee or to a transferee as contemplated by an effective
Registration Statement.

7.

DELIVERY OF SHARES.

7.I.

Delay in Issuing Shares.

{a)        The  Company  understands  that  a delay  in the  delivery  of
Conversion Shares,  whether  on conversion  of all or any portion of a Note
and/or  in payment  of accrued  interest, beyond the relevant Delivery Date
could result in economic loss to the Holder. As compensation  to the Holder for
such loss, in addition to any other available remedies in the Transaction
 Documents or at law or  in equity, the  Company  shall  pay late payments to
the  Holder for  late delivery  of the Conversion Shares in accordance  with the
following schedule (where, for purposes of this subsection, "No. Trading Days
Late" is defined as the number of Trading Days beyond three (3) Trading Days
after the applicable Delivery Date):

No. Trading Days Late

Late Payment for Each $10,000.00

of Principal or Interest Being Converted under the Notes

                                             1  

2

3

4

5

6

7

8

9

10

>10

$100.00

$200.00

$300.00

$400.00

$500.00

$600.00

$700.00

$800.00

$900.00

$!,000.00

$1,000.00 + $200.00 for each Trading Day Late beyond 10

As elected  by the Holder, the amount of any payments incurred under this
Section 7.l(a) shall either be automatically  added  to the  principal  balance
 of the applicable  Note (without  the  need to  provide  any notice to the
Company) or otherwise paid by the Company in immediately available funds upon
demand. Nothing  herein shall limit the Holder's  right to pursue additional
 damages for the Company's failure to issue  and  deliver  the  Conversion
 Shares  to  the  Holder  within  a  reasonable  time.    The  Company
acknowledges  that if the Company fails to effect delivery of the Conversion
Shares as and when required,

the Holder may revoke the Conversion Notice or Notice of Exercise pursuant to
the terms set forth in the Notes.   Notwithstanding any such revocation, the
charges described in this Section 7.1(a) which have accrued through the date of
such revocation shall remain due and owing to the Holder.

(b)

Intentionally Deleted.

7.2.

Intentionally Deleted.

8.

CLOSING DATE.

8.1.      The Closing Date shall occur on the date which is the first Trading
Day after each of the conditions contemplated by Sections 9 and I 0 hereof shall
have either been satisfied or been waived by the party in whose favor such
conditions run.

8.2.

Closing shall occur at the offices of the Buyer and shall take place no later
than

3:00 P.M., Eastern Time, or on such day or such other time as is mutually agreed
upon by the Company

and the Buyer.

9.          CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL THE NOTES AND
PURCHASE THE INTEREST. The Company's  obligation to sell the Securities to the
Buyer and to purchase the Interest from the Buyer  pursuant to this Agreement on
the Closing Date is conditioned upon and subject to the fulfillment, on or prior
to the Closing Date, of all of the following conditions, any of which may be
waived in whole or in part by the Company:

9.1.

The  execution and  delivery of  this Agreement and, as  applicable, the  other

Transaction Documents by the Buyer.

9.2.      The execution and delivery by the Buyer of that certain Interest
Assignment substantially in the form attached hereto as ANNEX XIII (the
"Interest Assignment"), whereby the sale, assignment, transfer, conveyance and
delivery of the Interest from Buyer to the Company shall be effected.

9.3.      Delivery by the Buyer of the Interest (by way of the Interest
Assignment) and the Cash Consideration as payment in full of an amount equal to
the Purchase Price in accordance with this Agreement, with respect to the
Initial Note, and payment by the Buyer of the Second Note Consideration, with
respect to the Second Note.

9.4.       The accuracy on the Closing Date of the representations and
warranties of the Buyer contained in this Agreement, each as if made on such
date, and the performance by the Buyer on or before such date of all covenants
and agreements of the Buyer required to be performed on or before such date.

9.5.      There shall not be in effect any law, rule or regulation prohibiting
or restricting the transactions contemplated hereby, or requiring any consent or
approval which shall not have been obtained.

10.       CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE THE NOTES AND SELL
THE INTEREST. The Buyer's obligation to purchase the Securities from the Company
and to sell the Interest to the Company pursuant to this Agreement on the
Closing Date is conditioned upon and subject to the fulfillment, on or prior to
the Closing Date, of all of the following conditions, any of which may be waived
in whole or in part by the Buyer:

I 0.1.    The execution and delivery of this Agreement, the Transfer Agent
Letter, the Secretary's Certificate, the Interest Assignment, and, as
applicable, the other Transaction Documents by the Company.

I 0.2.

The  execution  and  delivery  of  the  Guaranty  and  the  Burgoyne  Security

Agreement by Burgoyne.

10.3.

The execution and delivery of the Internet Services Agreement Assignment by

!kana, the Company and Burgoyne.

10.4.

The execution and delivery of the Transition Services Agreement by Burgoyne.

Burgoyne.

I 0.5.

The execution and delivery of the !kana  Consent by Ikano, the Company and

I 0.6.    The delivery by the Company to the Buyer of the Note, in original
form, duly executed by the Company, in accordance with this Agreement.

10.7.    On  the  Closing  Date, each  of  the  Transaction  Documents executed
 by the Company on or before such date shall be in full force and effect and the
Company shall not be in default thereunder.

I 0.8.    The Company shall have authorized and reserved for the purpose of
issuance under the Transaction Documents shares of Common Stock in an amount no
less than the Share Reserve as of the Closing Date.

10.9.    The accuracy in all material respects on the Closing Date of the
representations and warranties of the Company contained in this Agreement and
the other Transaction Documents, each as if made on such date, and the
performance by the Company on or before such date of all covenants and
agreements of the Company required to be performed on or before such date.

I 0.10.  There shall not be in effect any law, rule or regulation prohibiting or
restricting the transactions contemplated hereby, or requiring any consent or
approval which shall not have been obtained.

10.1 I. From and after the date hereof up to and including the Closing Date,
each of the following conditions will remain in effect: (a) the trading of the
Common Stock shall not have been suspended by the SEC or on the Principal
Trading Market; (b) trading in securities generally on the Principal Trading
Market shall not have been suspended or limited; (c) no minimum prices shall
been established for securities traded on the Principal Trading Market; (d)
there shall not have been any material adverse change in any financial market;
and (e) there shall not have occurred any Material Adverse Effect.

I 0.12.   Except for any notices required or permitted to be filed after the
Closing Date with certain federal and state securities commissions, the Company
shall have obtained (a) all governmental approvals required in connection with
the lawful sale and issuance of the Securities, and (b) all third party
approvals required to be obtained by the Company in connection with the
execution and delivery of the Transaction Documents by the Company or the
performance of the Company's obligations thereunder.

contemplated at the Closing and all documents and instruments incident to such
transactions shall be

reasonably satisfactory in substance and form to the Buyer.

10.14.  With  respect to the  Second  Note only, the satisfaction  of  the
 Second  Note

Purchase Condition.

II.

INDEMNIFICATION.

11.1.    The Company agrees to defend, indemnify and forever hold harmless the
Buyer and its stockholders, directors, officers, managers, members, partners,
Affiliates, employees, attorneys, and agents, and each Buyer Control Person
(collectively, the "Buyer  Parties") from and against any losses, claims,
damages, liabilities or expenses incurred (collectively, "Damages"),  joint or
several, and any action in respect thereof to which the Buyer or any of the
other Buyer Parties becomes subject, resulting from, arising out of or relating
to any misrepresentation, breach of warranty or nonfulfillment of or failure to
perform any covenant or agreement on the part of the Company contained in this
Agreement or any of the other Transaction Documents, as such Damages are
incurred. The Buyer Parties with the right to be indemnified under this
subsection (the "Indemnified  Parties") shall have the right to defend any such
action or proceeding with attorneys of their own selection, and the Company
shall be solely responsible for all costs and expenses related thereto.  If the
Indemnified Parties opt not to retain their own counsel, the Company shall
defend any such action or proceeding with attorneys of its choosing at its sole
cost and expense, provided that such attorneys have been pre-approved by the
Indemnified Parties, which approval shall not be unreasonably withheld, and
provided further that the Company may not settle any such action or proceeding
without first obtaining the written consent of the Indemnified Parties.

11.2.    The indemnity contained in this Agreement shall be in addition to (a)
any cause of action or similar rights of the Buyer Parties against the Company
or others, and (b) any other liabilities the Company may be subject to.

12.       SPECIFIC PERFORMANCE. The Company and the Buyer acknowledge and agree
that irreparable damage would occur in the event that any provision of this
Agreement or any of the other Transaction Documents were not performed in
accordance with its specific terms or were otherwise breached. It is accordingly
agreed that the parties (including any Holder) shall be entitled to an
injunction or  injunctions, without the necessity to  post a  bond (except as
specified below), to  prevent or cure breaches of the provisions of this
Agreement or any of the other Transaction Documents 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; provided, however,
that the Company, upon receipt of a Conversion Notice, may not fail or refuse to
deliver certificates representing shares of Common Stock and the related legal
opinions, if any, or if there is a claim for a breach by the Company of any
other provision of this Agreement or any of the other Transaction Documents, the
Company shall not raise as a legal defense any claim that the Holder or anyone
associated or affiliated with the Holder has violated any provision hereof or
any of the other Transaction Documents or has engaged in any violation of law or
any other claim or defense, unless the Company has first posted a bond for one
hundred fifty percent (150%) of the principal amount and, if relevant, then
obtained a court order specifically directing it not to deliver such
certificates to the Holder. The proceeds of such bond shall be payable to the
Holder to the extent that the Holder obtains judgment or its defense is
recognized.  Such bond shall remain in effect until the completion of the
relevant proceeding and, if the Holder appeals therefrom, until all such appeals
are exhausted.  This provision is deemed incorporated by reference into each of
the Transaction Documents as if set forth therein in full.

receive shares of Common Stock in payment of interest or principal under the
Notes or upon conversion of  the Notes, so that the Buyer would,  together  with
other shares of Common  Stock  held by it or  its Affiliates,  hold by virtue of
such action or receipt of additional  shares of Common Stock a number of shares
exceeding the Maximum Percentage (as defined in the Notes), the Company shall
not be obligated and shall not issue to the Buyer shares of Common Stock which
would exceed the Maximum Percentage, but only until such time as the Maximum
Percentage would no longer be exceeded by any such receipt of shares of Common
Stock by the Buyer. The foregoing limitations regarding the Maximum Percentage
are enforceable, unconditional and non-waivable and shall apply to all
Affiliates and assigns of the Buyer. Additionally,  if at any time after the
Closing the Market Capitalization of the Common Stock (as defined in the Notes)
falls below $3,000,000,  then from that point on, for so long as the Buyer or
its Affiliate owns Common Stock or rights to acquire Common Stock, the Company
shall post (or cause to be posted), no less frequently than every thirty (30)
calendar days, the then-current number of issued and outstanding shares of its
capital stock to the Company's web page located at OTCmarkets.com  (or such
other web page approved  by the Holder). The Company understands that its
failure to so post its shares outstanding could result in economic loss to the
Holder.  As compensation to the Holder for such loss, in addition to any other
available remedies in the Transaction  Documents or at law or in equity, the
Company shall pay the Holder a late fee of $500.00  per calendar day for each
calendar day that the Company fails to comply with the foregoing obligation to
post its shares outstanding.  As elected by the Holder, the amount of any late
fees incurred under this Section 13 shall either be automatically added to the
principal balance of the applicable  Note  (without  the  need  to  provide  any
 notice  to  the  Company)  or  otherwise  paid  by the Company in immediately
available funds upon demand.

14.

RESTRICTIONS  ON ISSUANCE OF COMPANY SECURITIES.

14.1.

Intentionally Deleted.

14.2.

Intentionally Deleted.

14.3.

Intentionally Deleted.

15.

MISCELLANEOUS.

15.I.     Governing Law: Venue. This Agreement shall be governed  by and
interpreted in accordance  with the laws of the State of Utah for contracts  to
be wholly  performed  in such state and without giving effect to the principles
thereof regarding the conflict of laws.  Each party hereto hereby (a) consents
 to and  expressly  submits  to the  exclusive  personal jurisdiction  of  any
 state  or federal  court sitting in Salt Lake County, Utah in connection with
any dispute or proceeding arising out of or relating to this Agreement, (b)
agrees that all claims in respect of any such dispute or proceeding may only be
heard and determined  in any such court, (c) expressly submits to the venue of
any such court for the purposes hereof, and (d) waives any claim of improper
venue and any claim or objection that such courts are an inconvenient  forum  or
 any  other  claim  or  objection  to the  bringing  of  any  such  proceeding
 in such jurisdictions  or to any claim that such  venue of the suit, action or
proceeding  is improper.  Each  party hereto hereby irrevocably  consents to the
service of process of any of the aforementioned  courts in any such proceeding
by the mailing of copies thereof by reputable overnight courier (e.g., FedEx) or
certified mail, postage prepaid, to its address as set forth herein, such
service to become effective ten (10) calendar days after such mailing.

15.2.     Successors and Assigns:Third  Partv Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the successors  and permitted
assigns of the parties hereto. Except as

otherwise expressly provided herein, no Person other than the parties hereto and
their successors and permitted assigns is intended to be a beneficiary of this
Agreement.

15.3.    Pronouns. All pronouns and any variations thereof in this Agreement
refer to the masculine, feminine or neuter, singular or plural, as the context
may permit or require.

15.4.    Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument. The parties hereto confirm that any
electronic copy of another party's executed counterpart of this Agreement (or
its signature page thereof) will be deemed to be an executed original thereof.

15.5.    Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

15.6.    Severabilitv. Whenever possible, each provision of this Agreement shall
be interpreted in such a manner as to be effective and valid under applicable
Jaw, but if any provision of this Agreement shall be invalid or unenforceable in
any jurisdiction, such provision shall be modified to achieve the objective of
the parties to the fullest extent permitted and such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.

15.7.    Entire  Agreement.  This  Agreement,  together   with  the   other
 Transaction Documents, constitutes and contains the entire agreement and
understanding between the parties hereto, and supersedes all prior oral or
written agreements and understandings between Buyer, Company, their Affiliates
and Persons acting on their behalf with respect to the matters discussed herein
and therein, and, except as specifically set forth herein or therein, neither
Company nor Buyer makes any representation, warranty, covenant or undertaking
with respect to such matters.

15.8.    Amendment. Any amendment, supplement or modification of or to any
provision of this Agreement, shall be effective only if it is made or given by
an instrument in writing (excluding any email message) and signed by Company and
Buyer.

15.9.    No Waiver. No forbearance, failure or delay on the part of a party
hereto in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. Any waiver of any provision of this
Agreement shall be effective (a) only if it is made or given in writing
(including an email message) and (b) only in the specific instance and for the
specific purpose for which made or given.

15.10.  Currency. All dollar amounts referred to or contemplated by this
Agreement or any other Transaction Documents shall be deemed to refer to US
Dollars, unless otherwise explicitly stated to the contrary.

15.11.  Assignment. Notwithstanding anything to the contrary herein, the rights,
interests or obligations of the Company hereunder may not be assigned, by
operation of law or otherwise, in whole or  in part, by the Company without the
prior written consent of the Buyer, which consent may be withheld at the sole
discretion of the Buyer; provided, however, that in the case of a merger, sale
of substantially all of the Company's  assets or other corporate reorganization,
the Buyer shall not unreasonably withhold, condition or delay such consent. This
Agreement or any of the severable rights and obligations inuring to the benefit
of or to be performed by Buyer hereunder may be assigned by

Buyer to a third party, including its financing sources, in whole or in part,
without the need to obtain the

Company's consent thereto.

15.12.  Advice of Counsel. In connection with the preparation of this Agreement
and all other Transaction Documents, the Company, for itself and on behalf of
its stockholders, officers, agents, and representatives acknowledges and agrees
that Buyer's Counsel prepared initial drafts of this Agreement and all of the
other Transaction Documents and acted as legal counsel to the Buyer only. The
Company, for itself and on behalf of its stockholders, officers, agents, and
representatives, (a) hereby acknowledges that he/she/it has been, and hereby is,
advised to seek legal counsel and to review this Agreement and all of the other
Transaction Documents with legal counsel of his/her/its choice, and (b) either
has sought such legal counsel or hereby waives the right to do so.

15.13.  No Strict Construction. The language used in this Agreement is the
language chosen mutually by the parties hereto and no doctrine of construction
shall be applied for or against any party.

15.14.  Attorney's  Fees. In the event of any action at law or in equity to
enforce or interpret the terms of this Agreement or any of the other Transaction
Documents, the parties agree that the party who is awarded the most money shall
be deemed the prevailing party for all purposes and shall therefore be entitled
to an additional award of the full amount of the attorneys' fees and expenses
paid by such prevailing party in connection with the litigation and/or dispute
without reduction or apportionment based upon the individual claims or defenses
giving rise to the fees and expenses.  Nothing herein shall restrict or impair a
court's power to award fees and expenses for frivolous or bad faith pleading.

15.15. Waiver  of  Jury  Trial. EACH  PARTY  TO  THIS  AGREEMENT IRREVOCABLY
WAIVES  ANY  AND  ALL  RIGHTS  IT MAY  HAVE  TO DEMAND THAT ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANYWAY RELATED  TO   THIS
  AGREEMENT  OR   THE   RELATIONSHIPS  OF   THE   PARTIES HERETO  BE TRIED  BY
JURY.   THIS  WAIVER  EXTENDS TO  ANY  AND  ALL  RIGHTS TO   DEMAND  A   TRIAL
   BY   JURY   ARISING    UNDER    COMMON  LAW   OR   ANY APPLICABLE STATUTE,
LAW,  RULE  OR REGULATION. FURTHER, EACH  PARTY HERETO ACKNOWLEDGES THAT  IT IS
KNOWINGLY AND  VOLUNTARILY WAIVING ITS RIGHT TO DEMAND TRIAL  BY JURY.

15.16.  Rights and Remedies Cumulative. All rights, remedies, and powers
conferred in this Agreement and the Transaction Documents are cumulative and not
exclusive of any other rights or remedies, and shall be in addition to every
other right, power, and remedy that Buyer may have, whether specifically granted
in this Agreement or any other Transaction Document, or existing at law, in
equity, or by statute; and any and all such rights and remedies may be exercised
from time to time and as often and in such order as the Buyer may deem
expedient.

15.17.  Further Assurances. Each party shall do and perform or cause to be done
and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the  intent and accomplish
the purposes of this Agreement and the consummation of the transactions
contemplated hereby.

15.18.  Notices. Any notice required or permitted hereunder shall be given in
writing

(unless otherwise specified herein) and shall be deemed effectively given on the
earliest of:

(a)

the date delivered, if delivered by personal delivery as against written receipt
therefor or by confirmed facsimile or electronic mail transmission,

(b)

the fifth Trading Day after deposit, postage prepaid, in the United States

Postal Service by registered or certified mail, or

(c)

the third Trading Day after mailing by domestic or international express
courier, with delivery costs and fees prepaid,

in each case, addressed to each of the other parties thereunto entitled at the
following addresses (or at such other addresses as such party may designate by
ten (10) calendar days'  advance written notice similarly given to each of the
other parties hereto):

If to the Company:

Novation Holdings, Inc. Attn: Michael Gelmon

1800 NW Corporate Boulevard, Suite 201

Boca Raton, FL 3343 I

with a copy to (which shall not constitute notice): Novation Holdings, Inc.

Attn: Ezequiel Rodriguez, Secretary and Corporate

1365 N. Courtenay Parkway, Suite A Merritt Island, Fl32953

Telephone: 321-452-9091

If to the Buyer:

ISP Holdings, LLC Attn: John M. Fife

303 East Wacker Drive, Suite 1200

Chicago, Illinois 6060 I

with a copy to (which shall not constitute notice): Hansen Black Anderson PLLC

Attn: Jonathan K. Hansen

2940 West Maple Loop Drive, Suite I 03

Lehi, Utah 84043

Telephone: 801.922.5000

15.19. Cross Default. Any Event of Default shall be deemed a default under this
Agreement. Upon such a default of this Agreement by the Company, the Buyer shall
have all those rights and remedies available at law or in equity, including
without limitation those remedies set forth in the Notes.

15.20.  Expenses. Except as provided in Section 15.14, and except for the
Transaction

Expense Amount required to be paid by the Company to the Buyer pursuant to
Section 2.4, the Company

and  the  Buyer  shall  be  responsible  for  paying  such  party's  own  fees
 and  expenses  (including  legal expenses)  incurred in connection with the
preparation and negotiation of this Agreement and the other Transaction
 Documents and the closing of the transactions contemplated  hereby and thereby.

15.21.   Replacement of the Notes. Subject to any restrictions on or conditions
to transfer set forth in the Notes, the Holder of a Note, at its option, may in
person or by duly authorized  attorney surrender the same for exchange at the
Company's  principal corporate office, and promptly thereafter and at the
Company's expense, except  as provided  below, receive  in exchange  therefor
 one or more new secured convertible  promissory note(s), each in the principal
amount requested  by such Holder, dated the date to which interest shall have
been paid on the Note so surrendered or, if no interest shall have yet been so
paid, dated the date of the Note so surrendered and registered in the name of
such person or persons as shall have been designated in writing by such Holder
or its attorney for the same principal amount as the then unpaid principal
amount of the Note so surrendered. As applicable, upon receipt by the Company of
evidence  reasonably satisfactory  to it of the ownership of and the loss,
theft, destruction  or mutilation of the Note and (a) in the case of loss, theft
or destruction, of indemnity reasonably satisfactory  to it; or (b) in the case
of mutilation, upon surrender thereof, the Company, at its expense, will execute
and deliver in lieu thereof a new secured convertible  promissory note executed
 in the same manner as the Note being replaced, in the same principal amount as
the unpaid principal amount of such Note and dated the date to which  interest
shall have been paid on the Note or, if no interest shall have yet been so paid,
dated the date of the Note.

16.        SURVIVAL   OF  COVENANTS,   REPRESENTATIONS   AND   WARRANTIES.   The
Company's and the Buyer's  covenants, agreements, representations and warranties
contained herein shall survive  the  execution  and  delivery  of this
 Agreement  and  the  other  Transaction  Documents  and  the Closing hereunder
for the maximum time allowed by applicable  law, and shall inure to the benefit
of the Buyer and the Company and their respective successors and permitted
assigns.

[Remainder of the page intentionally left blank; signature page to follow]

IN WITNESS  WHEREOF, each of the undersigned represents that  the foregoing
statements made by it above are true and correct and that it has caused this
Agreement to be duly executed on its behalf (if an entity, by one of its
officers thereunto duly authorized) as of the date first above written.

THE BUYER:

ISP HOLDINGS, LLC

/s/ John Fife

By: FIFE TRADING, INC., its Manager

THE COMPANY:

NOVATION HOLDINGS, INC.

By:

/s/ Michael Gelmon

Name: Michael Gelmon

Title:     Chairman and CEO

[Signature Page To Securities Purchase Agreement]

ATTACHMENTS:

ANNEX I ANNEX II ANNEX III ANNEX IV ANNEXV ANNEX VI ANNEX VII ANNEX VIII ANNEX
IX ANNEX X ANNEX XI ANNEX XII ANNEX XIII

WIRE INSTRUCTIONS NOTE

TRANSFER AGENT LETTER

SECRETARY'S CERTIFICATE SHARE ISSUANCE RESOLUTION PLEDGE AGREEMENT

BURGOYNE SECURITY AGREEMENT

GUARANTY

INTERNET SERVICES AGREEMENT ASSIGNMENT TRANSITION  SERVICES AGREEMENT

IKANO CONSENT

ANTI-DILUTION CERTIFICATION INTEREST ASSIGNMENT