EXHIBIT 10.1

NOTE PURCHASE AGREEMENT

THIS NOTE PURCHASE AGREEMENT (the “Agreement”), dated as of the 18th day of
October, 2007, is made by and between VICIS CAPITAL MASTER FUND (the
“Purchaser”), and Medical Solutions Management Inc., a Nevada corporation (the
“Company”).

Article I

SALE OF NOTE

1.1 Sale of Note. The Company has authorized the sale to the Purchaser of a
convertible note in the original principal amount of $1,500,000 (the “Note”) in
the form attached hereto as Exhibit A.

1.2 Purchase Price. Subject to the terms and conditions hereof and on the basis
of the representations and warranties hereinafter set forth, the Company hereby
agrees to issue and sell to the Purchaser, and the Purchaser agrees to purchase
from the Company, at the Closing (as defined in Section 1.3 hereof), the Note.
This offer is only being made to the Purchaser as an “accredited investor” (as
defined in Rule 501 under the Securities Act of 1933, as amended (the
“Securities Act”)) in reliance upon an exemption from registration under
Section 4(2) of the Securities Act and/or Regulation D promulgated thereunder,
and on similar exemptions under applicable state laws.

1.3 Closing. The closing of the transactions contemplated hereunder (the
“Closing”) shall be deemed to occur at the offices of Bingham McCutchen LLP, 150
Federal Street, Boston, MA 02110, or at such other place as shall be mutually
agreeable to the parties, at 5:00 p.m., Boston Time, on October 18, 2007 or such
other date as be mutually agreeable to the parties (the “Closing Date”).

1.4 Closing Matters. At the Closing the following actions shall be taken:

(a) The Purchaser shall deliver $1,500,000 (the “Purchase Price”) to the Company
in immediately available United States funds; and

(b) The Company shall deliver the Note to the Purchaser.

(c) The Purchaser acknowledges and agrees that the Purchase Price will be
deposited in an account maintained by the Company and that there is no escrow of
funds and all funds may be utilized by the Company upon acceptance. There is no
“minimum” sale amount and funds may be released to the Company and closings
held, from time to time, as determined by the Company.

(d) The Company intends to use the proceeds derived from this sale to satisfy
its working capital requirements. Management reserves the right to utilize the
net proceeds of the sale in a manner in the best interests of the Company. The
amount of the net proceeds that will be invested in particular areas of the
Company’s business will depend upon future economic conditions and business
opportunities. To the extent that the Company continues to incur losses from
operations, such losses will be funded from its general funds, including the net
proceeds of this sale.

1.5 Convertible Debt Financing. The Purchaser acknowledges and understands the
Company intends to consummate a subsequent financing of convertible secured
debentures and warrants (which amount includes the $1,500,000 Purchase Price
received by the Company in exchange for the Note being sold hereunder) (such
financing, the “Convertible Debt Financing”). The Purchaser further acknowledges
and understands that upon the consummation of the Convertible Debt Financing,
the Note issued pursuant to this Agreement will be converted into the securities
issuable in such Convertible Debt Financing.

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Article II

REPRESENTATIONS AND WARRANTIES OF COMPANY

The Company hereby represents and warrants to the Purchaser as of the date of
this Agreement as follows:

(A) The Company owns, directly or indirectly, all of the capital stock of each
material subsidiary of the Company (a “Subsidiary”) free and clear of any and
all liens, other than restrictions on transfer under applicable securities laws,
and all the issued and outstanding shares of capital stock of each Subsidiary
are validly issued and are fully paid, non-assessable and free of preemptive and
similar rights. The Company and Subsidiary is duly organized, validly existing
and in good standing under the laws of its state of incorporation, with all
requisite power and authority to own, lease, license, and use its properties and
assets and to carry out the business in which it is engaged, except where the
failure to have or be any of the foregoing may not be expected to have a
material adverse effect on the Company’s presently conducted businesses. Neither
the Company nor any Subsidiary is in violation of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. The Company and each Subsidiary is duly
qualified to transact the business in which it is engaged and is in good
standing as a foreign corporation in every jurisdiction in which its ownership,
leasing, licensing or use of property or assets or the conduct of its business
make such qualification necessary, except where the failure to be so qualified
or in good standing, as the case may be, could not, individually or in the
aggregate, have or reasonably be expected to result in (i) a material and
adverse effect on the legality, validity or enforceability of this Agreement or
the Note, (ii) a material and adverse effect on the results of operations,
assets, prospects, business or condition (financial or otherwise) of the Company
and the Subsidiaries, taken as a whole, or (iii) an adverse impairment to the
Company’s ability to perform on a timely basis its obligations hereunder (any of
(i), (ii) or (iii), a “Material Adverse Effect”).

(B) The Company is authorized to issue 100,000,000 shares of Common Stock,
$0.0001 par value per share (the “Common Stock”), and 5,000,0000 shares of
Preferred Stock, $0.0001 par value per share. Except as set forth in that
certain Amended and Restated Investor Rights Agreement dated as of June 28,
2006, by and among the Company, and the Investors, Founders and others party
thereto, no securities of the Company are entitled to preemptive or similar
rights, and no entity or person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the
transactions contemplated by this Agreement unless any such rights have been
waived. Except as set forth on Schedule II(B) (and other than as a result of the
purchase and sale of the Note), there are no outstanding options, warrants,
scrip rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any entity or person any right to subscribe for or
acquire, any shares of Common Stock, or contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock, or securities or rights convertible or
exchangeable into shares of Common Stock. The issue and sale of the Note will
not (except pursuant to their terms thereunder), immediately or with the passage
of time, obligate the Company to issue shares of Common Stock or other
securities to any entity or person and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset
price under such securities.

(C) The Company has the requisite corporate power and authority to enter into,
deliver and consummate the transactions contemplated by this Agreement, to
issue, sell and deliver the Note, and otherwise to carry out its obligations
hereunder. The execution and delivery of this Agreement and the consummation by
it of the transactions contemplated thereby have been duly authorized by the
Company and no further action is required by the Company in connection
therewith. When executed and delivered by the Company, this Agreement will
constitute the legal, valid and binding obligation of the Company, enforceable
as to the Company in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent
conveyance or transfer,

 

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moratorium or other laws or court decisions, now or hereinafter in effect,
relating to or affecting the rights of creditors generally and as may be limited
by general principles of equity and the discretion of the court having
jurisdiction in an enforcement action (regardless of whether such enforceability
is considered in a proceeding in equity or at law).

(D) No consent, authorization, approval, order, license, certificate or permit
of or from, or declaration or filing with, any federal, state, local or other
governmental authority or any court or any other tribunal is required by the
Company for the execution, delivery or performance by the Company of this
Agreement or the execution, issuance, sale or delivery of the Note.

(E) Neither the Company nor any Subsidiary is required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other person or entity in connection with the
execution, delivery and performance by the Company of this Agreement or the
issuance, sale or delivery of the Note other than (i) any filings required by
state securities laws, (ii) the filing of a Notice of a Sale of Securities on
Form D with the Commission under Regulation D of the Securities Act, and
(iii) those that have been made or obtained prior to or contemporaneously with
the date of this Agreement.

(F) The execution, delivery and performance of this Agreement by the Company and
the consummation by the Company of the transactions contemplated hereby do not
and will not: (i) conflict with or violate any provision of the Company’s or any
Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) violate, conflict with, or
constitute a default or breach (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other understanding to
which the Company or any Subsidiary is a party or by which any property or asset
of the Company or any Subsidiary is bound or affected, or (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company or
a Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such
as could not, individually or in the aggregate, have or reasonably be expected
to result in a Material Adverse Effect.

(G) The Note has been duly authorized and, when issued and paid for in
accordance with this Agreement, will be duly and validly issued, fully paid and
nonassessable, will not be issued in violation of any preemptive or other rights
of stockholders, and will be issued free and clear of all liens and
encumbrances, other than restrictions on transfer under applicable securities
laws.

(H) Since December 30, 2006, the Company has filed all reports required to be
filed by it under the Securities Act of 1933, as amended (the “Securities Act”),
and the Exchange Act of 1934, as amended (the “Exchange Act”), including
pursuant to Section 13(a) or 15(d) thereof, for the period from December 30,
2006 and ending as of the date hereof (or such shorter period as the Company was
required by law to file such reports) (the foregoing materials filed during such
period being collectively referred to herein as the “SEC Reports”) on a timely
basis or has timely filed a valid extension of such time of filing and has filed
any such SEC Reports prior to the expiration of any such extension. As of their
respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
in the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been
prepared in accordance with generally accepted

 

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accounting principles in the United States applied on a consistent basis during
the periods involved (“GAAP”), except as may be otherwise specified in such
financial statements or the notes thereto, and fairly present in all material
respects the financial position of the Company and its consolidated Subsidiaries
as of and for the dates thereof and the results of operations and cash flows for
the periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.

Article III

REPRESENTATIONS AND WARRANTIES OF PURCHASER

By signing this Agreement, the Purchaser hereby represents and warrants to the
Company as follows as an inducement to the Company to accept the subscription of
the Purchaser:

(A) The Purchaser acknowledges and agrees that (i) the offering and sale of the
Note is intended to be exempt from registration under the Securities Act by
virtue of Section 4(2) of the Securities Act and/or Regulation D promulgated
thereunder, (ii) the Note has not been registered under the Securities Act and
(iii) that the Company has represented to the Purchaser (assuming the veracity
of the representations of the Purchaser made herein) that the Note has been
offered and sold by the Company in reliance upon an exemption from registration
provided in Section 4(2) of the Securities Act and Regulation D thereunder. In
accordance therewith and in furtherance thereof, the Purchaser represents and
warrants to and agrees with the Company that it is an accredited investor (as
defined in Rule 501 promulgated under the Securities Act).

(B) The Purchaser hereby represents and warrants that the Purchaser is acquiring
the Note hereunder for its own account for investment and not with a view to
distribution, and with no present intention of distributing the Note or selling
the Note for distribution. The Purchaser understands that the Note is being sold
to the Purchaser in a transaction which is exempt from the registration
requirements of the Securities Act. Accordingly, the Purchaser acknowledges that
it has been advised that the Note has not been registered under the Securities
Act and are being sold by the Company in reliance upon the veracity of the
Purchaser’s representations contained herein and upon the exemption from the
registration requirements provided by the Securities Act and the securities laws
of all applicable states. The Purchaser’s acquisition of the Note shall
constitute a confirmation of the foregoing representation and warranty and
understanding thereof.

(C) The Purchaser has such knowledge and experience in financial and business
matters as is required for evaluating the merits and risks of making this
investment, and the Purchaser has received such information requested by the
Purchaser concerning the business, management and financial affairs of the
Company in order to evaluate the merits and risks of making this investment.
Further, the Purchaser acknowledges that the Purchaser has had the opportunity
to ask questions of, and receive answers from, the officers of the Company
concerning the terms and conditions of this investment and to obtain information
relating to the organization, operation and business of the Company and of the
Company’s contracts, agreements and obligations or needed to verify the accuracy
of any information contained herein or any other information about the Company.
Except as set forth in this Agreement, no representation or warranty is made by
the Company to induce the Purchaser to make this investment, and any
representation or warranty not made herein or therein is specifically disclaimed
and no information furnished to the Purchaser or the Purchaser’s advisor(s) in
connection with the sale were in any way inconsistent with the information
stated herein. The Purchaser further understands and acknowledges that no person
has been authorized by the Company to make any representations or warranties
concerning the Company, including as to the accuracy or completeness of the
information contained in this Agreement.

(D) The Purchaser is making the foregoing representations and warranties with
the intent that they may be relied upon by the Company in determining the
suitability of the sale of the Note to the Purchaser for purposes of federal and
state securities laws. Accordingly, the Purchaser represents and warrants that
the information stated herein is true, accurate and complete, and agrees to
notify and supply

 

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corrective information promptly to the Company as provided above if any of such
information becomes inaccurate or incomplete. The Purchaser has completed this
Agreement, has delivered it herewith and represents and warrants that it is
accurate and true in all respects and that it accurately and completely sets
forth the financial condition of the Purchaser on the date hereof. The Purchaser
has no reason to expect there will be any material adverse change in its
financial condition and will advise the Company of any such changes occurring
prior to the Closing.

(E) The Purchaser is not subscribing for the Note as a result of or subsequent
to any advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, any
seminar or meeting, or any solicitation of a subscription by a person not
previously known to the Purchaser in connection with investments in the Note
generally.

(F) The Purchaser has received certain information regarding the Company,
including this Agreement, and other accompanying documents of the Company
receipt of which is hereby acknowledged. The Purchaser has carefully reviewed
all information provided to it and has carefully evaluated and understands the
risks described therein related to the Company and an investment in the Company,
and understands and has relied only on the information provided to it in writing
by the Company relating to this investment. No agent prepared any of the
information to be delivered to prospective investors in connection with this
transaction. The Purchaser is advised to conduct its own review of the business,
properties and affairs of the Company before subscribing to purchase the Note.

(G) The Purchaser also understands and agrees that, although the Company will
use its best efforts to keep the information provided in this Agreement strictly
confidential, the Company or its counsel may present this Agreement and the
information provided in answer to it to such parties as they may deem advisable
if called upon to establish the availability under any federal or state
securities laws of an exemption from registration of the private placement or if
the contents thereof are relevant to any issue in any action, suit or proceeding
to which the Company or its affiliates is a party, or by which they are or may
be bound or as otherwise required by law or regulatory authority.

(H) The individual signing below on behalf of any entity hereby warrants and
represents that he/she is authorized to execute this Agreement on behalf of such
entity. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all requisite
action, if any, in respect thereof on the part of the Purchaser and no other
proceedings on the part of the Purchaser are necessary to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Purchaser and constitutes a valid and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms (subject to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and subject, as to enforceability, to
general principles of equity (whether applied in a proceeding in equity or at
law)).

(I) The purchase of the Note involves risks which the Purchaser has evaluated,
and the Purchaser is able to bear the economic risk of the purchase of such Note
and the loss of its entire investment. The undersigned is able to bear the
substantial economic risk of the investment for an indefinite period of time,
has no need for liquidity in such investment and can afford a complete loss of
such investment. The Purchaser’s overall commitment to investments that are not
readily marketable is not, and his acquisition of the Note will not cause such
overall commitment to become, disproportionate to his net worth and the
Purchaser has adequate means of providing for its current needs and
contingencies.

(J) The Purchaser acknowledges and agrees that there is no “minimum” offering
amount for the Note and that there is no escrow of the funds deposited by the
Purchaser for the purchase of the Note. The Purchaser acknowledges and agrees
that funds may be immediately released to the Company.

 

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(K) In entering into this Agreement and in purchasing the Note, the Purchaser
further acknowledges that:

(i) The Company has informed the Purchaser that the Note has not been offered
for sale by means of general advertising or solicitation and the Purchaser
acknowledges that it has either a pre-existing personal or business relationship
with either the Company or any of its officers, directors or controlling person,
of a nature and duration such as would enable a reasonable prudent investor to
be aware of the character, business acumen, and general business and financial
circumstances of the Company and an investment in the Note.

(ii) Neither the Note nor any interest therein may be resold by the Purchaser in
the absence of a registration under the Securities Act or an exemption from
registration. In particular, the Purchaser is aware that all of the foregoing
described Note will be “restricted securities”, as such term is defined in Rule
144 promulgated under the Securities Act (“Rule 144”), and they may not be sold
pursuant to Rule 144, unless the conditions thereof are met. Other than set
forth in this Agreement, the Company has no obligation to register any
securities purchased or issuable hereunder.

(iii) The following legends (or similar language) shall be placed on the
certificate(s) or other instruments evidencing the Note:

NEITHER THIS NOTE NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THE CONVERSION
RIGHTS SET FORTH IN THIS NOTE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND NEITHER THIS NOTE NOR
THE SECURITIES ISSUABLE UPON EXERCISE OF THE CONVERSION RIGHTS SET FORTH IN THIS
NOTE CAN BE SOLD OR TRANSFERRED UNLESS THE REGISTRATION PROVISIONS OF THE SAID
ACT AND APPLICABLE STATE SECURITIES LAWS HAVE BEEN COMPLIED WITH OR UNLESS
COMPLIANCE WITH SUCH PROVISIONS IS NOT REQUIRED.

(iv) The Company may at any time place a stop transfer order on its transfer
books against the Note. Such stop order will be removed, and further transfer of
the Note will be permitted, upon an effective registration of the respective
Note, or the receipt by the Company of an opinion of counsel satisfactory to the
Company that such further transfer may be effected pursuant to an applicable
exemption from registration.

Article IV

INDEMNIFICATION

4.1 Indemnification by the Company. The Company agrees to defend, indemnify and
hold harmless the Purchaser and shall reimburse the Purchaser for, from and
against each claim, loss, liability, cost and expense (including without
limitation, interest, penalties, costs of preparation and investigation, and the
reasonable fees, disbursements and expenses of attorneys, accountants and other
professional advisors) (collectively, “Losses”) directly or indirectly relating
to, resulting from or arising out of any untrue representation,
misrepresentation, breach of warranty or non-fulfillment of any covenant,
agreement or other obligation by or of the Company contained herein or in any
certificate, document, or instrument delivered to the Purchaser pursuant hereto.

4.2 Indemnification by the Purchaser. The Purchaser agrees to defend, indemnify
and hold harmless the Company and shall reimburse the Company for, from and
against all Losses directly or indirectly relating to, resulting from or arising
out of any untrue representation, misrepresentation, breach of warranty or
non-fulfillment of any covenant, agreement or other obligation of the Purchaser
contained herein or in any certificate, document or instrument delivered to the
Company pursuant hereto.

 

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4.3 Procedure. The indemnified party shall promptly notify the indemnifying
party of any claim, demand, action or proceeding for which indemnification will
be sought under Sections 4.1 or 4.2 of this Agreement, and, if such claim,
demand, action or proceeding is a third party claim, demand, action or
proceeding, the indemnifying party will have the right at its expense to assume
the defense thereof using counsel reasonably acceptable to the indemnified
party. The indemnified party shall have the right to participate, at its own
expense, with respect to any such third party claim, demand, action or
proceeding. In connection with any such third party claim, demand, action or
proceeding, the Purchaser and the Company shall cooperate with each other and
provide each other with access to relevant books and records in their
possession. No such third party claim, demand, action or proceeding shall be
settled without the prior written consent of the indemnified party, which shall
not be unreasonably withheld. If a firm written offer is made to settle any such
third party claim, demand, action or proceeding and the indemnifying party
proposes to accept such settlement and the indemnified party refuses to consent
to such settlement, then: (i) the indemnifying party shall be excused from, and
the indemnified party shall be solely responsible for, all further defense of
such third party claim, demand, action or proceeding; and (ii) the maximum
liability of the indemnifying party relating to such third party claim, demand,
action or proceeding shall be the amount of the proposed settlement if the
amount thereafter recovered from the indemnified party on such third party
claim, demand, action or proceeding is greater than the amount of the proposed
settlement.

ARTICLE V

MISCELLANEOUS

5.1 Survival. The representations and warranties set forth in Articles II and
III hereof shall survive the Closing. No investigation made by or on behalf of
either party shall affect the representations and warranties made pursuant to
this Agreement. No party makes any additional or implied representations other
than those set forth herein.

5.2 Expenses. Each party hereto shall bear and pay all costs and expenses
incurred by it in connection with the transactions contemplated hereby,
including fees and expenses of its own brokers, finders, financial consultants,
accountants and counsel.

5.3 Entire Agreement. This Agreement, including the Exhibits and Schedules,
contains the entire agreement and understanding of the parties with respect to
its subject matter. This Agreement supersedes all prior arrangements and
understandings between the parties, either written or oral, with respect to its
subject matter.

5.4 Binding Effect of Subscription. The Purchaser hereby acknowledges and
agrees, subject to any applicable state securities laws that the subscription
and application hereunder are irrevocable, that the Purchaser is not entitled to
cancel, terminate or revoke this Agreement and that this Agreement shall be
binding upon and inure to the benefit of the Purchaser and its successors and
assigns.

5.5 Captions. The table of contents and captions contained in this Agreement are
for reference purposes only and are not part of this Agreement.

5.6 No Waiver. Neither this Agreement nor any provisions hereof shall be waived,
modified, discharged, or terminated except by an instrument in writing signed by
the party against whom any such waiver, modification, discharge, or termination
is sought.

5.7 Notices. Any notice, demand or other communication which any party hereto
may be required, or may elect, to give to anyone interested hereunder shall be
sufficiently given if (a) deposited, postage prepaid, in a United States mail
box, stamped, registered or certified mail, return receipt requested, addressed
to such address as may be listed on the books of the Company, or, if to the
Company, the Company’s executive office, or (b) delivered personally at such
address.

 

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5.8 Execution. This Agreement may be executed through the use of separate
signature pages or in any number of counterparts, and each of such counterparts
shall, or all purposes, constitute one agreement binding on all parties,
notwithstanding that all parties are not signatories to the same counterpart.

5.9 Severability. Each provision of this Agreement is intended to be severable
from every other provisions, and the invalidity or illegality of any portion
hereof, shall not affect the validity or legality of the remainder hereof.

5.10 Non-Assignment. This Agreement is not transferable or assignable by the
Purchaser except as may be provided herein.

5.11 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the Commonwealth
of Massachusetts, without regard to the principles of conflicts of law thereof.
Each party hereto hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby. If
either party shall commence a proceeding to enforce any provisions of this
Agreement, then the prevailing party in such proceeding shall be reimbursed by
the other party for its reasonable attorney’s fees and other reasonable costs
and expenses incurred with the investigation, preparation and prosecution of
such proceeding.

5.12 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Company, the Purchaser and their respective successors and
permitted assigns.

[Remainder of Page Intentionally Left Blank]

 

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SIGNATURE PAGE TO NOTE PURCHASE AGREEMENT

IN WITNESS WHEREOF, the parties hereto have executed or caused this Agreement to
be executed by their signature as natural persons or by individuals by their
duly authorized officers as of the date first written above.

 

THE COMPANY: MEDICAL SOLUTIONS MANAGEMENT INC.:    

/s/ Brian Lesperance

By:   Brian Lesperance Title:   President PURCHASER: VICIS CAPITAL MASTER FUND  
 

/s/ Keith W. Hughes

By:   Vicis Capital, LLC Name:   Keith W. Hughes Title:   Chief Financial
Officer

 

Address of Purchaser    c/o Vicis Capital, LLC       126 E. 56th Street, 7th
Floor       New York, NY 10022       Attn: Shad Stastney   

The Purchaser is an Accredited Investor because the Purchaser is (check
appropriate item):

¨ an organization described in Section 501(c)(3) of the Internal Revenue Code, a
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the Note offered, with total assets in
excess of $5,000,000;

¨ a natural person whose individual net worth or joint net worth with that
person’s spouse, at the time of his purchase exceeds $l,000,000;

¨ a natural person who had an individual income in excess of $200,000 in each of
the two most recent years or joint income with that person’s spouse in excess of
$300,000 in each of those years and has a reasonable expectation of reaching the
same income level in the current year;

¨ a trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Note offered, whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) of the Securities Act;

¨ an entity in which all of the equity owners are accredited investors. (If this
alternative is checked, the Purchaser must identify each equity owner and
provide statements signed by each demonstrating how each qualifies as an
accredited investor); or

¨ a director or officer of the Company.

 

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EXHIBIT A

Form of Note

NEITHER THIS NOTE NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THE CONVERSION
RIGHTS SET FORTH IN THIS NOTE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND NEITHER THIS NOTE NOR
THE SECURITIES ISSUABLE UPON EXERCISE OF THE CONVERSION RIGHTS SET FORTH IN THIS
NOTE CAN BE SOLD OR TRANSFERRED UNLESS THE REGISTRATION PROVISIONS OF THE SAID
ACT AND APPLICABLE STATE SECURITIES LAWS HAVE BEEN COMPLIED WITH OR UNLESS
COMPLIANCE WITH SUCH PROVISIONS IS NOT REQUIRED.

MEDICAL SOLUTIONS MANAGEMENT INC.

CONVERTIBLE PROMISSORY NOTE

 

$1,500,000.00    Marlboro, Massachusetts    October     , 2007

FOR VALUE RECEIVED, upon the terms and subject to the conditions set forth in
this convertible promissory note (this “Note”), MEDICALSOLUTIONS MANAGEMENT
INC., a Nevada corporation with its principal place of business at 237 Cedar
Hill Street, Marlboro, MA (the “Company”), absolutely and unconditionally
promises to pay to the order of VICIS CAPITAL MASTER FUND (the “Holder”), the
principal amount of One Million Five Hundred Thousand Dollars ($1,500,000.00),
together with interest as specified in §2 hereof. Notwithstanding anything to
the contrary set forth in this Note, in the event of the consummation of a
Convertible Debt Financing (as defined in §5.2 hereof) while any portion of the
Loan Balance (as defined in §5.2 hereof) shall remain outstanding, the then
outstanding Loan Balance shall, contemporaneously with the consummation of such
Convertible Debt Financing, be converted into a Convertible Debenture (as
defined in §5.2 hereof). This Note is issued in connection with a certain Note
Purchase Agreement, of even date herewith, between the Company and the Holder
(the “Purchase Agreement”), all terms of which are incorporated herein by this
reference and hereby made a part of this Note. By its acceptance of this Note,
the Holder agrees to be bound by the terms of the Purchase Agreement.

§1. Maturity; Waivers. The entire outstanding Loan Balance shall automatically
become due and payable on the earlier of (a) 5:00 P.M., Boston, Massachusetts
time on October 12, 2008, and (b) the date of the consummation of a Convertible
Debt Financing (in any such case, the “Maturity Date”). The Company and every
endorser and guarantor of this Note or the obligations represented hereby
expressly waive presentment, demand, notice, protest and all other demands and
notices in connection with the delivery, acceptance, performance, default or
enforcement of this Note, assent to any extension or postponement of the time of
payment or any other indulgence, and to the addition or release of any other
party or person primarily or secondarily liable.

 

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§2. Interest; No Commitment. This Note shall bear interest on the principal
amount outstanding and unpaid from time to time at a rate of 10% per annum from
the date hereof until paid in full. Interest shall be calculated on the basis of
a 360-day year and paid for the actual number of days elapsed, and shall accrue
and be payable upon the Maturity Date or, thereafter, if any amounts are due and
owing by the Company under this Note, then upon demand.

§3. Prepayment. The Company may prepay, in whole or in part, the outstanding
Loan Balance, without the prior written consent of the Holder and without
premium or prepayment penalty; provided, that the Company shall pay all accrued
and unpaid interest through the date of prepayment (unless such interest
included in the Loan Balance has been converted pursuant to the terms of §5
hereof) on the principal amount prepaid. All payments to be made by the Company
hereunder shall be made in U.S. dollars in immediately available funds, without
setoff or counterclaim and without any withholding or deduction whatsoever.

§4. Acceleration Events. If any of the following events or circumstances (each
an “Acceleration Event”) shall occur:

(a) the Company shall fail to pay any amount of principal or interest or other
amount (if any) due under this Note within ten (10) days after the date on which
such amount is due and payable hereunder or thereunder; or

(b) the Company (or a material subsidiary of the Company) shall make an
assignment for the benefit of creditors, or admit in writing its inability to
pay its debts as they mature or become due, or shall petition or apply for the
appointment of a trustee or other custodian, liquidator or receiver of the
Company (or a material subsidiary of the Company) or of any substantial part of
its assets or shall commence any case or other proceeding relating to its assets
under any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law of any jurisdiction, or shall
take any action to authorize or in furtherance of any of the foregoing; or any
such petition or application shall be filed or any such case or other proceeding
shall be commenced against the Company (or a material subsidiary of the
Company), and the same shall not have been dismissed within sixty (60) days of
the filing or commencement thereof or the Company (or a material subsidiary of
the Company) shall indicate its approval thereof, consent thereto or
acquiescence therein; or a decree or order shall be entered appointing any such
trustee, custodian, liquidator or receiver or adjudicating the Company (or a
material subsidiary of the Company) bankrupt or insolvent, or approving a
petition in any such case or other proceeding, or a decree or order for relief
shall be entered in respect of the Company (or a material subsidiary of the
Company) in an involuntary case under any such bankruptcy or insolvency laws; or

(c) the Company (or a material subsidiary of the Company) shall take any
corporate action to liquidate its assets, dissolve or sell all or substantially
all of its assets or capital stock, or otherwise, or shall take any corporate
action to consolidate or merge with or into any other corporation or business
entity unless the Company shall be the surviving legal entity of such
consolidation or merger;

then, the Holder, at the Holder’s option at any time thereafter, may declare the
then entire and unpaid Loan Balance and all fees and expenses (if any) payable
on or in respect of this Note and the obligations evidenced hereby due and
payable, and the same shall

 

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thereupon forthwith become and be due and payable to the Holder (an
“Acceleration”) without presentment, demand, protest, notice of protest or any
other formalities of any kind, all of which are hereby expressly and irrevocably
waived by the Company; provided, that in the event of an Acceleration under §§
4(b) or 4(c) hereof, all such amounts shall become and be immediately due and
payable, and an Acceleration shall be deemed for all purposes hereof to have
occurred, automatically and without any requirement of notice from the Holder.

§5. Conversion. This Note shall be convertible pursuant to the terms and
provisions of this §5.

§5.1. Conversion Rights. Upon the consummation of a Convertible Debt Financing,
the then entire outstanding Loan Balance shall be required to be converted,
simultaneously with the closing of such Convertible Debt Financing and without
any action required of the Holder, into a Convertible Debenture. Upon any such
conversion, the principal amount of the Convertible Debenture shall equal the
then outstanding Loan Balance.

§5.2. Certain Definitions. For all purposes of this Note, the following terms
shall have the respective meanings set forth below:

“Common Stock” shall mean and include the Company’s Common Stock, $0.0001 par
value per share, authorized as at the date of this Note, and any class or series
of capital stock of the Company into which such Common Stock is reclassified or
exchanged after the date of this Note as provided herein.

“Convertible Debenture” shall mean the convertible secured debentures of the
Company issued in the Convertible Debt Financing.

“Convertible Debt Financing” shall mean the Company’s issuance and sale after
the date of this Note, at one or more related closings, to one or more venture
capital firms, other institutional investors or other accredited investors, for
the purpose of raising capital for the Company, of Convertible Debt Financing
Securities, for an aggregate sales price of not less than $1,500,000 (which
amount shall include the then outstanding Loan Balance being converted into a
Convertible Debenture in connection therewith), on substantially the terms and
conditions set forth in the term sheet included as part of the Purchase
Agreement.

“Convertible Debt Financing Securities” shall mean the Convertible Debentures
and the Convertible Debt Financing Warrants.

“Convertible Debt Financing Warrants” shall mean the Common Stock purchase
warrants of the Company issued in connection with the Convertible Debt
Financing.

“Loan Balance” shall mean, as of any relevant date, the entire unpaid principal
balance of this Note as of such date, together with all then accrued but unpaid
interest thereon.

 

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§5.3. Conversion Mechanism.

(a) The Company agrees to give the Holder prior written notice of the
contemplation of the Convertible Debt Financing, including all of the material
terms and provisions thereof, not later than ten (10) days prior to the
anticipated completion thereof. This Note shall automatically and without any
required action of the Holder convert into a Convertible Debenture upon the
consummation of a Convertible Debt Financing. Conversion of this Note shall be
made upon surrender of this Note by the Holder to the Company at its principal
place of business set forth in §7 hereof (or at such other office as the Company
shall designate by notice in writing to the Holder from time to time in
accordance with the provisions of §7 hereof); provided, however, that no
Convertible Debenture shall be issued to the Holder until the Holder shall have
surrendered this Note as aforesaid, and until such time, this Note shall
represent only the right to receive a Convertible Debenture upon the surrender
hereof.

(b) The Company agrees that, at the time of such surrender by the Holder of this
Note in compliance with the provisions hereof, the Convertible Debenture
issuable pursuant to such surrender shall be and be deemed to be issued to the
Holder (or the Holder’s permitted transferee or designee) as the record owner of
such Convertible Debenture as of the close of business of the Company on the
date on which this Note shall have been so surrendered as aforesaid. In
addition, the Holder shall thereupon (i) be permitted to become a party to, and
shall have the benefit of all of the rights granted to and shall be subject to
all of the obligations of the other purchasers of Convertible Debt Financing
Securities in connection with the Convertible Debt Financing pursuant to, each
of the documents, instruments and agreements executed and delivered by and
between and/or among the Company and such other purchasers of Convertible Debt
Financing Securities in connection with such the Convertible Debt Financing, and
(ii) upon its surrender of this Note and execution of the appropriate agreements
and instruments for the Convertible Debt Financing, shall be issued a
Convertible Debt Financing Warrant for such number of shares of Common Stock as
is specified in the appropriate agreements or instruments executed in connection
with the Convertible Debt Financing.

(c) The instruments evidencing the Convertible Debt Financing Securities to be
issued to the Holder shall be delivered to the Holder (or the Holder’s permitted
transferee or designee) within a reasonable time, not exceeding five (5) days,
after the date on which this Note shall have been surrendered by the Holder.

(d) This Note may be converted once and only once.

§6. Loss, Theft, Destruction or Mutilation of Note. Upon receipt by the Company
of evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Note, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it, and upon reimbursement to
the Company of all reasonable expenses incidental thereto, and upon surrender
and cancellation of this Note, if mutilated, the Company will make and deliver a
new promissory note of like tenor and date, and in the principal balance then
outstanding, in lieu of this Note.

§7. Communications and Notices. All notices, demands, requests, certificates or
other communications under this Note shall be in writing and shall be either
mailed by certified mail, postage prepaid, in which case such notice, demand,
request, certificate or other

 

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communications shall be deemed to have been given three (3) days after the date
on which it is first deposited in the mails, or hand delivered or sent by
facsimile transmission, by tested or otherwise authenticated telex or cable, or
by private expedited courier for over-night delivery with signature required, in
each such case, such notice, demand, request, certificate or other
communications being deemed to have been given upon delivery or receipt, as the
case may be:

(a) if to the Company, at 237 Cedar Hill Street, Marlboro, MA 01752 Attention:
President, or at such other address as the Company may have furnished in writing
to the Holder; and

(b) if to the Holder, at c/o Vicis Capital, LLC, 126 E. 56th Street, 7th Floor,
New York, NY 10022, Attn: Shad Stastney, or at such other address as the Holder
may have furnished in writing to the Company.

§8. Miscellaneous.

(a) If the last or appointed day for the taking of any action required or the
expiration of any right granted herein shall be a Sunday or a Saturday or shall
be a legal holiday or a day on which banking institutions in the City of Boston,
Massachusetts, are authorized or required by law to remain closed, then such
action may be taken or right may be exercised on the next succeeding day which
is not a Sunday, a Saturday or a legal holiday and not a day on which banking
institutions in the City of Boston, Massachusetts, are authorized or required by
law to remain closed.

(b) The Holder may not assign, pledge or otherwise transfer this Note, or the
Holder’s rights or obligations hereunder, without the prior written consent of
the Company. Subject to the foregoing, this Note shall be binding upon, and
inure to the benefit of, the Company’s and the Holder’s respective successors in
title and assigns.

(c) This Note for all purposes shall be construed in accordance with and
governed by the laws of the Commonwealth of Massachusetts (without regard to the
laws or rules of law applicable to conflict or choice of law).

(d) The Company hereby irrevocably waives notice of acceptance, presentment,
notice of nonpayment, protest, notice of protest, suit and all other conditions
precedent in connection with the delivery, acceptance, collection and/or
enforcement of this Note or any collateral or security therefor. The failure of
the Holder to exercise any or all of its rights, remedies, powers or privileges
hereunder in any instance shall not constitute a waiver thereof in that or any
other instance. All rights and remedies existing hereunder are cumulative to,
and not exclusive of, any rights or remedies otherwise available.

(e) Should all or any part of the indebtedness represented by this Note be
collected by action at law, or in bankruptcy, insolvency, receivership or other
court proceedings, or should this Note be placed in the hands of attorneys for
collection after default, the Company hereby promises to pay to the Holder, upon
demand by the Holder at any time, in addition to the outstanding Loan Balance
and all (if any) other amounts payable on or in respect of this Note, all court
costs and reasonable attorneys’ fees and other collection charges and expenses
incurred or sustained by the Holder.

 

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(f) This Note and any provision hereof may be amended only by an instrument in
writing signed by the Company and the Holder.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Company has caused this Convertible Promissory Note to
be signed in its corporate name and its corporate seal to be impressed hereon by
its duly authorized officers as of the first date written above.

 

MEDICAL SOLUTIONS MANAGEMENT INC. By:  

 

Name:   Brian Lesperance Title:   President and Treasurer

 

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SCHEDULE II(B)

Summary of Outstanding Options

 

Option Holder

   Number of Shares Underlying Options    Per Share Exercise Price

Robert G. Coffill, Jr.

   500,000    $ 0.01

Summary of Outstanding Warrants

 

Warrant No.

  

Holder

   Number of Shares Underlying Warrant    Per Share Exercise Price

A-3

   Vicis Capital Master Fund    146,667    $ 0.20

A-4

   Apogee Financial Investments, Inc.    120,000    $ 0.20

B-3

   Vicis Capital Master Fund    146,667    $ 0.20

B-4

   Apogee Financial Investments, Inc.    120,000    $ 0.20

BD-14

   Marshall Sterman    40,000    $ 0.20

BD-15

   Douglas Arnold    40,000    $ 0.20

BD-19

   Apogee Financial Investments, Inc.    190,467    $ 0.20

BD-21

   Apogee Financial Investments, Inc.    190,467    $ 0.20

BD-22

   Apogee Financial Investments, Inc.    154,468    $ 0.20

CS-3

   FP Associates    300,000    $ 0.01

CS-4

   Midtown Partners & Co., LLC    153,000    $ 0.20

CS-7

   Apogee Financial Investments Inc.    720,000    $ 0.20

CS-9

   Apogee Financial Investments, Inc.    720,000    $ 0.20

CS-12

   Midtown Partners & Co.    153,000    $ 0.20

Summary of Outstanding Debentures

 

Debenture No.

  

Holder

  

Number of Shares Underlying

Debenture

   Conversion Rate    Principal Amount    Due date

N-1

   Vicis Capital Master Fund    9,661,088    $ 0.10    $ 2,000,000   
June 28, 2008

1

   Vicis Capital Master Fund    3,500,000    $ 0.10    $ 1,050,000   
April 17, 2009

2

   Apogee Financial Investments Inc.    750,000    $ 0.30    $ 216,000    April
17, 2009