Subscription Agreement December 2005


     

    SUBSCRIPTION
      AGREEMENT

     

     

    THIS
      SUBSCRIPTION AGREEMENT
      (this
      "Agreement"),
      dated
      as of December 13, 2005, by and among Kaire Holdings Incorporated, a Delaware
      corporation (the "Company"),
      and
      the subscribers identified on the signature page hereto (each a “Subscriber”
and
      collectively “Subscribers”).

     

    WHEREAS,
      the
      Company and the Subscribers are executing and delivering this Agreement in
      reliance upon an exemption from securities registration afforded by the
      provisions of Section 4(2), Section 4(6) and/or Regulation D (“Regulation
      D”)
      as
      promulgated by the United States Securities and Exchange Commission (the
“Commission”)
      under
      the Securities Act of 1933, as amended (the “1933
      Act”).

     

    WHEREAS,
      the
      parties desire that, upon the terms and subject to the conditions contained
      herein, the Company shall issue and sell to the Subscribers, as provided herein,
      and the Subscribers, in the aggregate, shall purchase up to Three Hundred and
      Fifty Thousand Dollars ($350,000) (the "Purchase
      Price")
      of
      principal amount of promissory notes of the Company (“Note”
or
      “Notes”),
      a
      form of which is annexed hereto as Exhibit
      A,
      convertible into shares of the Company's common stock, $.001 par value (the
      "Common
      Stock")
      at a
      per share conversion price set forth in the Note (“Conversion
      Price”).
      One
      Hundred and Fifty Thousand Dollars ($150,000) of the Purchase Price
      (“Initial
      Closing Purchase Price”)
      shall
      be payable on the Initial Closing Date. One Hundred Thousand Dollars ($100,000)
      of the Purchase Price (“Second
      Closing Purchase Price”)
      shall
      be payable on or about February 15, 2006. One Hundred Thousand Dollars
      ($100,000) of the Purchase Price (“Third
      Closing Purchase Price”)
      will
      be payable on or about March 15, 2006. The Notes and shares of Common Stock
      issuable upon conversion of the Notes (the “Shares”)
      are
      collectively referred to herein as the "Securities";
      and

     

    WHEREAS,
      the
      aggregate proceeds of the sale of the Notes contemplated hereby shall be held
      in
      escrow pursuant to the terms of a Funds Escrow Agreement to be executed by
      the
      parties substantially in the form attached hereto as Exhibit
      B
      (the
      "Escrow
      Agreement").

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and other agreements contained in this
      Agreement the Company and the Subscribers hereby agree as follows:

     

    1. Closings.

     

    (a) Initial
      Closing.
      Subject
      to the satisfaction or waiver of the terms and conditions of this Agreement,
      on
      the Initial Closing Date, each Subscriber shall purchase and the Company shall
      sell to each Subscriber a Note in the principal amount designated on the
      signature page hereto (“Initial
      Closing Notes”).
      The
      aggregate amount of the Notes to be purchased by the Subscribers on the Initial
      Closing Date shall, in the aggregate, be equal to the Initial Closing Purchase
      Price. The “Initial
      Closing Date”
shall
      be the date that subscriber funds representing the net amount due the Company
      from the Initial Closing Purchase Price of the Offering is transmitted by wire
      transfer or otherwise to or for the benefit of the Company. The consummation
      of
      the transactions contemplated herein for all closings shall take place at the
      offices of Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York,
      New York 10176, upon the satisfaction of all conditions to Closing set forth
      in
      this Agreement. Each of the Initial Closing Date, Second Closing Date and Third
      Closing Date is referred to as a “Closing
      Date”.

     

    (b) Second
      Closing.
      From
      February 7, 2006 through February 15, 2006, Subscriber may elect by written
      notice to the Company its option to purchase the Second Closing Notes. The
      closing date in relation to the Second Closing Purchase Price shall be on or
      about February 15, 2006 (the “Second
      Closing Date”).
      Subject to the satisfaction or waiver of the terms and conditions of this
      Agreement on the Second Closing Date, each Subscriber shall purchase and the
      Company shall sell to each Subscriber a Note in the principal amount designated
      on the signature page hereto (“Second
      Closing Notes”).
      The
      aggregate Purchase Price of the Second Closing Notes for all Subscribers shall
      be equal to the Second Closing Purchase Price. The Second Closing Note shall
      be
      identical to the Note issuable on the Initial Closing Date and have the same
      maturity date as the Notes issued on the Initial Closing Date. The Conversion
      Price (defined in Section 2.1 (b) of the Note) shall be equitably adjusted
      to
      offset the effect of stock splits, stock dividends, pro rata distributions
      of
      property or equity interests to the Company’s shareholders after the Initial
      Closing Date.

    


    
      
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    (c) Conditions
      to Second Closing.
      The
      occurrence of the Second Closing is expressly contingent on (i) the truth and
      accuracy on the Second Closing Date of the representations and warranties of
      the
      Company and Subscriber contained in this Agreement, (ii) continued compliance
      with the covenants of the Company set forth in this Agreement, (iii) the
      non-occurrence of any Event of Default (as defined in the Note) or other default
      by the Company of its obligations and undertakings contained in this Agreement,
      and (iv) the delivery on the Second Closing Date of Second Closing Notes.


    


    (d) Second
      Closing Deliveries.
      On the
      Second Closing Date, the Company will deliver the Second Closing Notes to the
      Escrow Agent and each Subscriber will deliver his portion of the Purchase Price
      to the Escrow Agent. On the Second Closing Date, the Company will deliver a
      certificate (“Second
      Closing Certificate”)
      signed
      by its chief executive officer or chief financial officer (i) representing
      the
      truth and accuracy of all the representations and warranties made by the Company
      contained in this Agreement, as of the Initial Closing Date and the Second
      Closing Date, as if such representations and warranties were made and given
      on
      all such dates, (ii) certifying that the information contained in the schedules
      and exhibits hereto is substantially accurate as of the Second Closing Date,
      (iii) adopting and renewing the covenants and conditions set forth in Sections
      3, 5, 6, 7, 8, 9 and 10 of this Agreement in relation to the Second Closing
      Date
      and Second Closing Notes, and (iv) certifying that an Event of Default has
      not
      occurred. A legal opinion nearly identical to the legal opinion referred to
      in
      Section 5 of this Agreement shall be delivered to each Subscriber at the Second
      Closing in relation to the Company, and Second Closing Notes (“Second
      Closing Legal Opinion”).

     

    (e) Third
      Closing.
      From
      March 1, 2006 through March 15, 2006, Subscriber may elect by written notice
      to
      the Company its option to purchase the Third Closing Notes. The closing date
      in
      relation to the Third Closing Purchase Price shall be on or about March 15,
      2006
      (the “Third
      Closing Date”).
      Subject to the satisfaction or waiver of the terms and conditions of this
      Agreement on the Third Closing Date, each Subscriber shall purchase and the
      Company shall sell to each Subscriber a Note in the principal amount designated
      on the signature page hereto (“Third
      Closing Notes”).
      The
      aggregate Purchase Price of the Third Closing Notes for all Subscribers shall
      be
      equal to the Third Closing Purchase Price. The Third Closing Note shall be
      identical to the Note issuable on the Initial Closing Date and have the same
      maturity date as the Notes issued on the Initial Closing Date. The Conversion
      Price shall be equitably adjusted to offset the effect of stock splits, stock
      dividends, pro rata distributions of property or equity interests to the
      Company’s shareholders after the Initial Closing Date.

    


    (f) Conditions
      to Third Closing.
      The
      occurrence of the Third Closing is expressly contingent on (i) the truth and
      accuracy on the Third Closing Date of the representations and warranties of
      the
      Company and Subscriber contained in this Agreement, (ii) continued compliance
      with the covenants of the Company set forth in this Agreement, (iii) the
      non-occurrence of any Event of Default (as defined in the Note) or other default
      by the Company of its obligations and undertakings contained in this Agreement,
      and (iv) the delivery on the Third Closing Date of Third Closing Notes.


    


    
      
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    (g) Third
      Closing Deliveries.
      On the
      Third Closing Date, the Company will deliver the Third Closing Notes to the
      Escrow Agent and each Subscriber will deliver his portion of the Purchase Price
      to the Escrow Agent. On the Third Closing Date, the Company will deliver a
      certificate (“Third
      Closing Certificate”)
      signed
      by its chief executive officer or chief financial officer (i) representing
      the
      truth and accuracy of all the representations and warranties made by the Company
      contained in this Agreement, as of the Initial Closing Date and the Third
      Closing Date, as if such representations and warranties were made and given
      on
      all such dates, (ii) certifying that the information contained in the schedules
      and exhibits hereto is substantially accurate as of the Third Closing Date,
      (iii) adopting and renewing the covenants and conditions set forth in Sections
      3, 5, 6, 7, 8, 9 and 10 of this Agreement in relation to the Third Closing
      Date
      and Third Closing Notes, and (iv) certifying that an Event of Default has not
      occurred. A legal opinion nearly identical to the legal opinion referred to
      in
      Section 6 of this Agreement shall be delivered to each Subscriber at the Third
      Closing in relation to the Company and Third Closing Notes (“Third
      Closing Legal Opinion”).

     

    2. Subscriber's
      Representations and Warranties.
      Each
      Subscriber hereby represents and warrants to and agrees with the Company as
      to
      such Subscriber that:

     

    (a) Information
      on Company.
      The
      Subscriber has been furnished with or has had access at the EDGAR Website of
      the
      Commission to the Company's Form 10-KSB for the year ended December 31, 2004
      as
      filed with the Commission, together with all subsequently filed Forms 10-QSB,
      8-K, and filings made with the Commission available at the EDGAR website
      (hereinafter referred to collectively as the "Reports").
      The
      Subscriber has had an opportunity to ask questions and receive answers from
      representatives of the Company. In addition, the Subscriber has received in
      writing from the Company such other information concerning its operations,
      financial condition and other matters as the Subscriber has requested in writing
      (such other information is collectively, the "Other
      Written Information"),
      and
      considered all factors the Subscriber deems material in deciding on the
      advisability of investing in the Securities.

     

    (b) Information
      on Subscriber.
      The
      Subscriber is, and will be at the time of the conversion of the Notes, an
      "accredited investor", as such term is defined in Regulation D promulgated
      by
      the Commission under the Securities Act of 1933, as amended (the “1933
      Act”),
      is
      experienced in investments and business matters, has made investments of a
      speculative nature and has purchased securities of United States publicly-owned
      companies in private placements in the past and, with its representatives,
      has
      such knowledge and experience in financial, tax and other business matters
      as to
      enable the Subscriber to utilize the information made available by the Company
      to evaluate the merits and risks of and to make an informed investment decision
      with respect to the proposed purchase, which represents a speculative
      investment. The Subscriber has the authority and is duly and legally qualified
      to purchase and own the Securities. The Subscriber is able to bear the risk
      of
      such investment for an indefinite period and to afford a complete loss thereof.
      The information set forth on the signature page hereto regarding the Subscriber
      is accurate.

     

    (c) Purchase
      of Notes.
      On each
      Closing Date, the Subscriber will purchase the Notes as principal for its own
      account and not with a view to any distribution thereof.

     

    (d) Compliance
      with Securities Act.
      The
      Subscriber understands and agrees that the Securities have not been registered
      under the 1933 Act or any applicable state securities laws, by reason of their
      issuance in a transaction that does not require registration under the 1933
      Act
      (based in part on the accuracy of the representations and warranties of
      Subscriber contained herein), and that such Securities must be held indefinitely
      unless a subsequent disposition is registered under the 1933 Act or any
      applicable state securities laws or is exempt from such registration. In any
      event, and subject to compliance with applicable securities laws, the Subscriber
      may enter into hedging transactions with third parties, which may in turn engage
      in short sales of the Securities in the course of hedging the position they
      assume and the Subscriber may also enter into short positions or other
      derivative transactions relating to the Securities, or interests in the
      Securities, and deliver the Securities, or interests in the Securities, to
      close
      out their short or other positions or otherwise settle short sales or other
      transactions, or loan or pledge the Securities, or interests in the Securities,
      to third parties that in turn may dispose of these Securities.

     

    
      
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    (e) Shares
      Legend.
      The
      Shares shall bear the following or similar legend:

     

    "THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD, OFFERED FOR
      SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW
      OR AN
      OPINION OF COUNSEL REASONABLY SATISFACTORY TO KAIRE HOLDINGS INCORPORATED THAT
      SUCH REGISTRATION IS NOT REQUIRED."

    


    (f) Note
      Legend.
      The
      Note shall bear the following legend:

     

    "THIS
      NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE
      COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED
      FOR
      SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO KAIRE HOLDINGS INCORPORATED THAT SUCH REGISTRATION IS NOT
      REQUIRED."

     

    (g) Communication
      of Offer.
      The
      offer to sell the Securities was directly communicated to the Subscriber by
      the
      Company. At no time was the Subscriber presented with or solicited by any
      leaflet, newspaper or magazine article, radio or television advertisement,
      or
      any other form of general advertising or solicited or invited to attend a
      promotional meeting otherwise than in connection and concurrently with such
      communicated offer.

     

    (h) Authority;
      Enforceability.
      This
      Agreement and other agreements delivered together with this Agreement or in
      connection herewith have been duly authorized, executed and delivered by the
      Subscriber and are valid and binding agreements enforceable in accordance with
      their terms, subject to bankruptcy, insolvency, fraudulent transfer,
      reorganization, moratorium and similar laws of general applicability relating
      to
      or affecting creditors' rights generally and to general principles of equity;
      and Subscriber has full corporate power and authority necessary to enter into
      this Agreement and such other agreements and to perform its obligations
      hereunder and under all other agreements entered into by the Subscriber relating
      hereto.

     

    (i) No
      Market Manipulation.
      The
      Subscriber has not taken, and will not take, directly or indirectly, any action
      designed to, or that might reasonably be expected to, cause or result in
      stabilization or manipulation of the price of the common stock of the Company
      to
      facilitate the sale or resale of the Securities or affect the price at which
      the
      Securities may be issued or resold.

     

    
      
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    (j) Correctness
      of Representations.
      Subscriber represents as to such Subscriber that the foregoing representations
      and warranties are true and correct as of the date hereof and will be true
      and
      correct as of each closing date and unless a Subscriber otherwise notifies
      the
      Company prior to any closing date, shall be true and correct as of such closing
      dates. The foregoing representations and warranties shall survive the latest
      Closing Date for a period of three years.

     

    3. Company
      Representations and Warranties.
      The
      Company represents and warrants to and agrees with each Subscriber
      that:

     

    (a) Due
      Incorporation.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the jurisdiction of its incorporation and has the requisite
      corporate power to own its properties and to carry on its business is disclosed
      in the Reports.
      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 a Material
      Adverse Effect. For purpose of this Agreement, a “Material
      Adverse Effect”
shall
      mean a material adverse effect on the financial condition, results of
      operations, properties or business of the Company taken as a whole. For purposes
      of this Agreement, “Subsidiary”
means,
      with respect to any entity at any date, any corporation, limited or general
      partnership, limited liability company, trust, estate, association, joint
      venture or other business entity) of which more than 50% of (i) the
      outstanding capital stock having (in the absence of contingencies) ordinary
      voting power to elect a majority of the board of directors or other managing
      body of such entity, (ii) in the case of a partnership or limited liability
      company, the interest in the capital or profits of such partnership or limited
      liability company or (iii) in the case of a trust, estate, association,
      joint venture or other entity, the beneficial interest in such trust, estate,
      association or other entity business is, at the time of determination, owned
      or
      controlled directly or indirectly through one or more intermediaries, by such
      entity. All the Company’s Subsidiaries as of the Initial Closing Date are set
      forth on Schedule
      3(a)
      hereto.

     

    (b) Outstanding
      Stock.
      All
      issued and outstanding shares of capital stock of the Company have been duly
      authorized and validly issued and are fully paid and nonassessable.

     

    (c) Authority;
      Enforceability.
      This
      Agreement, the Note, the Escrow Agreement, and any other agreements delivered
      together with this Agreement or in connection herewith (collectively
“Transaction
      Documents”)
      have
      been duly authorized, executed and delivered by the Company and are valid and
      binding agreements enforceable in accordance with their terms, subject to
      bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
      similar laws of general applicability relating to or affecting creditors' rights
      generally and to general principles of equity. The Company has full corporate
      power and authority necessary to enter into and deliver the Transaction
      Documents and to perform its obligations thereunder.

     

    (d) Additional
      Issuances.
      There
      are no outstanding agreements or preemptive or similar rights affecting the
      Company's common stock or equity and no outstanding rights, warrants or options
      to acquire, or instruments convertible into or exchangeable for, or agreements
      or understandings with respect to the sale or issuance of any shares of common
      stock or equity of the Company or other equity interest in any of the
      Subsidiaries of the Company except as described on Schedule
      3(d).

     

    
      
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    (e) Consents.
      No
      consent, approval, authorization or order of any court, governmental agency
      or
      body or arbitrator having jurisdiction over the Company, or any of its
      Affiliates, the OTC Bulletin Board (“Bulletin
      Board”),
      any
      Principal Market (as defined in Section 9(b) of this Agreement), nor the
      Company's shareholders is required for the execution by the Company of the
      Transaction Documents and compliance and performance by the Company of its
      obligations under the Transaction Documents, including, without limitation,
      the
      issuance and sale of the Securities.

     

    (f) No
      Violation or Conflict.
      Assuming the representations and warranties of the Subscribers in Section 2
      are
      true and correct, neither the issuance and sale of the Securities nor the
      performance of the Company’s obligations under this Agreement and all other
      agreements entered into by the Company relating thereto by the Company
      will:

     

    (i) violate,
      conflict with, result in a breach of, or constitute a default (or an event
      which
      with the giving of notice or the lapse of time or both would be reasonably
      likely to constitute a default in any material respect) of a material nature
      under (A) the articles or certificate of incorporation, charter or bylaws of
      the
      Company, (B) to the Company's knowledge, any decree, judgment, order, law,
      treaty, rule, regulation or determination applicable to the Company of any
      court, governmental agency or body, or arbitrator having jurisdiction over
      the
      Company or over the properties or assets of the Company or any of its
      Affiliates, (C) the terms of any bond, debenture, note or any other evidence
      of
      indebtedness, or any agreement, stock option or other similar plan, indenture,
      lease, mortgage, deed of trust or other instrument to which the Company or
      any
      of its Affiliates is a party, by which the Company or any of its Affiliates
      is
      bound, or to which any of the properties of the Company or any of its Affiliates
      is subject, or (D) the terms of any "lock-up" or similar provision of any
      underwriting or similar agreement to which the Company, or any of its Affiliates
      is a party except the violation, conflict, breach, or default of which would
      not
      have a Material Adverse Effect;
      or

     

    (ii) result
      in
      the creation or imposition of any lien, charge or encumbrance upon the
      Securities or any of the assets of the Company or any of its Affiliates;
      or

     

    (iii) except
      as
      described on Schedule 4(d), result in the activation of any anti-dilution rights
      or a reset or repricing of any debt or security instrument of any other creditor
      or equity holder of the Company, nor result in the acceleration of the due
      date
      of any obligation of the Company; or

     

    (iv) result
      in
      the activation of any piggy-back registration rights of any person or entity
      holding securities or debt of the Company or having the right to receive
      securities of the Company.

     

    (g) The
      Securities.
      The
      Securities upon issuance:

     

    (i) are,
      or
      will be, free and clear of any security interests, liens, claims or other
      encumbrances, subject to restrictions upon transfer under the 1933 Act and
      any
      applicable state securities laws;

    


    (ii) have
      been, or will be, duly and validly authorized and on the date of issuance of
      the
      Shares will be duly and validly issued, fully paid and nonassessable or if
      registered pursuant to the 1933 Act, and resold pursuant to an effective
      registration statement will be free trading and unrestricted);

     

    
      
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    (iii) will
      not
      have been issued or sold in violation of any preemptive or other similar rights
      of the holders of any securities of the Company;

     

    (iv) will
      not
      subject the holders thereof to personal liability by reason of being such
      holders provided Subscriber’s representations herein are true and accurate and
      Subscribers take no actions or fail to take any actions required for their
      purchase of the Securities to be in compliance with all applicable laws and
      regulations; and

     

    (v) will
      not
      result in a violation of Section 5 under the 1933 Act.


       

      (h) Litigation.
        There
        is no pending or, to the best knowledge of the Company, threatened action,
        suit,
        proceeding or investigation before any court, governmental agency or body,
        or
        arbitrator having jurisdiction over the Company, or any of its Affiliates
        that
        would affect the execution by the Company or the performance by the Company
        of
        its obligations under the Transaction Documents. Except as disclosed in the
        Reports, there is no pending or, to the best knowledge of the Company, basis
        for
        or threatened action, suit, proceeding or investigation before any court,
        governmental agency or body, or arbitrator having jurisdiction over the Company,
        or any of its Affiliates which litigation if adversely determined would have
        a
        Material Adverse Effect.


     

    (i) Reporting
      Company.
      The
      Company is a publicly-held company subject to reporting obligations pursuant
      to
      Section 13 of the 1934
      Act
      and has
      a class of common shares registered pursuant to Section 12(g) of the 1934 Act.
      Pursuant to the provisions of the 1934 Act, the Company has filed all reports
      and other materials required to be filed thereunder with the Commission during
      the preceding twelve months.

     

    (j) No
      Market Manipulation.
      The
      Company and its Affiliates have not taken, and will not take, directly or
      indirectly, any action designed to, or that might reasonably be expected to,
      cause or result in stabilization or manipulation of the price of the Common
      Stock to
      facilitate the sale or resale of the Securities or affect the price at which
      the
      Securities may be issued or resold, provided, however, that this provision
      shall
      not prevent the Company from engaging in normal investor relations/public
      relations activities.

     

    (k) Information
      Concerning Company.
      The
      Reports contain all material information relating to the Company and its
      operations and financial condition as of their respective dates and all the
      information required to be disclosed therein. Since the date of the most recent
      audited financial statements included in the Reports (“Latest
      Financial Date”),
      and
      except as modified in the Other Written Information or in the Schedules hereto,
      there has been no Material Adverse Event relating to the Company's business,
      financial condition or affairs not disclosed in the Reports. The Reports do
      not
      contain any untrue statement of a material fact or omit to state a material
      fact
      required to be stated therein or necessary to make the statements therein not
      misleading in light of the circumstances when made.

     

    (l) Stop
      Transfer.
      The
      Company will not issue any stop transfer order or other order impeding the
      sale,
      resale or delivery of any of the Securities, except as may be required by any
      applicable federal or state securities laws and unless contemporaneous notice
      of
      such instruction is given to the Subscriber.

     

    (m) Defaults.
      The
      Company is not in violation of its articles of incorporation or bylaws. The
      Company is (i) not in default under or in violation of any other material
      agreement or instrument to which it is a party or by which it or any of its
      properties are bound or affected, which default or violation would have a
      Material Adverse Effect,
      (ii)
      not in default with respect to any order of any court, arbitrator or
      governmental body or subject to or party to any order of any court or
      governmental authority arising out of any action, suit or proceeding under
      any
      statute or other law respecting antitrust, monopoly, restraint of trade, unfair
      competition or similar matters, or (iii) to the Company’s knowledge not in
      violation of any statute, rule or regulation of any governmental authority
      which
      violation would have a Material Adverse Effect.

     

    
      
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    (n) Not
      an
      Integrated Offering.
      Neither
      the Company, nor any of its Affiliates, nor any person acting on its or their
      behalf, has directly or indirectly made any offers or sales of any security
      or
      solicited any offers to buy any security under circumstances that would cause
      the offer of the Securities pursuant to this Agreement to be integrated with
      prior offerings by the Company for purposes of the 1933 Act.

     

    (o) No
      General Solicitation.
      Neither
      the Company, nor any of its Affiliates, nor to its knowledge, any person acting
      on its or their behalf, has engaged in any form of general solicitation or
      general advertising (within the meaning of Regulation D under the 1933 Act)
      in
      connection with the offer or sale of the Securities.

     

    


     

    (p) Listing.
      The
      Company's common stock is quoted on the Bulletin Board. The Company has not
      received any oral or written notice that its common stock is not eligible nor
      will become ineligible for quotation on the Bulletin Board nor that its common
      stock does not meet all requirements for the continuation of such quotation
      and
      the Company satisfies all the requirements for the continued quotation of its
      common stock on the Bulletin Board.

     

    (q)
 No
      Undisclosed Liabilities.  The Company has no
      liabilities or obligations which are material, individually or in the aggregate,
      which are not disclosed in the Reports and Other Written Information, other
      than
      those incurred in the ordinary course of the Company's business since Lastest
      Financial Date and which, individually or in the aggregate, would reasonably
      be
      expected to have a Material Adverse Effect, except as disclosed on
Schedule 3(q).   

     

     

     

    (s)  Capitalization.
      The
      authorized and outstanding capital stock of the Company as of the date of this
      Agreement and the Initial Closing Date (not including the Securities) are set
      forth on Schedule
      3(d).
      Except
      as set forth on Schedule
      3(d),
      there
      are no options, warrants, or rights to subscribe to, securities, rights or
      obligations convertible into or exchangeable for or giving any right to
      subscribe for any shares of capital stock of the Company or any of its
      Subsidiaries. All of the outstanding shares of Common Stock of the Company
      have
      been duly and validly authorized and issued and are fully paid and
      nonassessable.

     

    (t)  Dilution.
      The
      Company's executive officers and directors understand the nature of the
      Securities being sold hereby and recognize that the issuance of the Securities
      will have a potential dilutive effect on the equity holdings of other holders
      of
      the Company’s equity or rights to receive equity of the Company. The board of
      directors of the Company has concluded, in its good faith business judgment
      that
      the issuance of the Securities is in the best interests of the Company. The
      Company specifically acknowledges that its obligation to issue the Shares upon
      conversion of the Notes is binding upon the Company and enforceable regardless
      of the dilution such issuance may have on the ownership interests of other
      shareholders of the Company or parties entitled to receive equity of the
      Company.

     

    
      
        8

      

      
         

        
          

        

      

      
         

      

    

    (u)  No
      Disagreements with Accountants and Lawyers.
      There
      are no disagreements of any kind presently existing, or reasonably anticipated
      by the Company to arise, between the Company and the accountants and lawyers
      formerly or presently employed by the Company, including but not limited to
      disputes or conflicts over payment owed to such accountants and
      lawyers.

    


    (v) Investment
      Company.
      Neither
      the Company nor any Affiliate is an “investment company” within the meaning of
      the Investment Company Act of 1940, as amended.

    


    (w) Subsidiary
      Representations.
      The
      Company makes each of the representations contained in Sections 3(a), (b),
      (d),
      (e), (f), (h), of this Agreement, as same relate to each Subsidiary of the
      Company.

    


    (x) Company
      Predecessor.
      All
      representations made by or relating to the Company of a historical or
      prospective nature and all undertaking described in this Section shall relate
      and refer to the Company, its predecessors, and the Subsidiaries.

    


    (y) Correctness
      of Representations.
      The
      Company represents that the foregoing representations and warranties are true
      and correct as of the date hereof in all material respects, and, unless the
      Company otherwise notifies the Subscribers prior to each Closing Date, shall
      be
      true and correct in all material respects as of each Closing Date.

     

    (z) Survival.
      The
      foregoing representations and warranties shall survive until three years after
      the latest Closing Date.

     

    4. Regulation
      D Offering.
      The
      offer and issuance of the Securities to the Subscribers is being made pursuant
      to the exemption from the registration provisions of the 1933 Act afforded
      by
      Section 4(2) or Section 4(6) of the 1933 Act and/or Rule 506 of Regulation
      D
      promulgated thereunder. On each Closing Date, the Company will provide an
      opinion reasonably acceptable to Subscriber from the Company's legal counsel
      opining on the availability of an exemption from registration under the 1933
      Act
      as it relates to the offer and issuance of the Securities and other matters
      reasonably requested by Subscribers. A form of the legal opinion is annexed
      hereto as Exhibit
      C.
      The
      Company will provide, at the Company's expense, such other legal opinions in
      the
      future as are reasonably necessary for the issuance and/or resale of the Common
      Stock issuable upon conversion of the Notes pursuant to an effective
      registration statement. Subscriber agrees that any legal opinions required
      hereunder or under any other Transaction Documents may be supplied by the
      Company’s in house General Counsel.

    


    5.1. Conversion
      of Note.

    


    (a) Upon
      the
      conversion of the Note or part thereof, the Company shall, at its own cost
      and
      expense, take all necessary action, including obtaining and delivering, an
      opinion of counsel to assure that the Company's transfer agent shall issue
      stock
      certificates in the name of Subscriber (or its nominee) or such other persons
      as
      designated by Subscriber and in such denominations to be specified at conversion
      representing the number of shares of common stock issuable upon such conversion.
      The Company warrants that no instructions other than these instructions have
      been or will be given to the transfer agent of the Company's Common Stock and
      that, unless waived by the Subscriber, the Shares will be free-trading, and
      freely transferable, and will not contain a legend restricting the resale or
      transferability of the Shares provided the Shares are being sold pursuant to
      an
      effective registration statement covering the Shares or are otherwise exempt
      from registration. 

    


    
      
        9

      

      
         

        
          

        

      

      
         

      

    

    (b) Subscriber
      will give notice of its decision to exercise its right to convert the Note
      or
      part thereof by telecopying an executed and completed Notice of Conversion
      (a
      form of which is annexed to Exhibit
      A
      to the
      Note) to the Company via confirmed telecopier transmission or otherwise pursuant
      to Section 11(a) of this Agreement. The Subscriber will not be required to
      surrender the Note until the Note has been fully converted or satisfied. Each
      date on which a Notice of Conversion is telecopied to the Company in accordance
      with the provisions hereof shall be deemed a Conversion Date. The Company will
      itself or cause the Company’s transfer agent to transmit the Company's Common
      Stock certificates representing the Shares issuable upon conversion of the
      Note
      to the Subscriber via express courier for receipt by such Subscriber within
      three (3) business days after receipt by the Company of the Notice of Conversion
      (the "Delivery
      Date").
      In
      the event the Shares are electronically transferable, then delivery of the
      Shares must
      be made
      by electronic transfer provided request for such electronic transfer has been
      made by the Subscriber. A Note representing the balance of the Note not so
      converted will be provided by the Company to the Subscriber if requested by
      Subscriber, provided the Subscriber delivers an original Note to the Company.
      To
      the extent that a Subscriber elects not to surrender a Note for reissuance
      upon
      partial payment or conversion, the Subscriber hereby indemnifies the Company
      against any and all loss or damage attributable to a third-party claim in an
      amount in excess of the actual amount then due under the Note.

    


    (c) The
      Company understands that a delay in the delivery of the Shares in the form
      required pursuant to Section 5 hereof, or the Mandatory Redemption Amount
      described in Section 5.2 hereof, beyond the Delivery Date or Mandatory
      Redemption Payment Date (as hereinafter defined) could result in economic loss
      to the Subscriber. As compensation to the Subscriber for such loss, the Company
      agrees to pay to the Subscriber for late issuance of Shares in the form required
      pursuant to Section 6 hereof upon Conversion of the Note in the amount of $100
      per business day after the Delivery Date for each $10,000 of Note principal
      amount being converted, of the corresponding Shares which are not timely
      delivered. The Company shall pay any payments incurred under this Section in
      immediately available funds upon demand. Furthermore, in addition to any other
      remedies which may be available to the Subscriber, in the event that the Company
      fails for any reason to effect delivery of the Shares by the Delivery Date
      or
      make payment by the Mandatory Redemption Payment Date, the Subscriber will
      be
      entitled to revoke all or part of the relevant Notice of Conversion or rescind
      all or part of the notice of Mandatory Redemption by delivery of a notice to
      such effect to the Company whereupon the Company and the Subscriber shall each
      be restored to their respective positions immediately prior to the delivery
      of
      such notice, except that late payment charges described above shall be payable
      through the date notice of revocation or rescission is given to the
      Company.

    


    (d) Nothing
      contained herein or in any document referred to herein or delivered in
      connection herewith shall be deemed to establish or require the payment of
      a
      rate of interest or other charges in excess of the maximum permitted by
      applicable law. In the event that the rate of interest or dividends required
      to
      be paid or other charges hereunder exceed the maximum permitted by such law,
      any
      payments in excess of such maximum shall be credited against amounts owed by
      the
      Company to the Subscriber and thus refunded to the Company.

    


    
      
        10

      

      
         

        
          

        

      

      
         

      

    

    5.2. Mandatory
      Redemption at Subscriber’s Election.
      In the
      event the Company is prohibited from issuing Shares, or fails to timely deliver
      Shares on a Delivery Date, or upon the occurrence of any other Event of Default
      (as defined in the Note or in this Agreement) that is not cured during any
      applicable cure period and an additional ten days thereafter, then at the
      Subscriber's election, the Company must pay to the Subscriber ten (10) business
      days after request by the Subscriber, at the Subscriber’s election, a sum of
      money determined by (i) multiplying up to the outstanding principal amount
      of
      the Note designated by the Subscriber by 115%, or (ii) multiplying the number
      of
      Shares otherwise deliverable upon conversion of an amount of Note principal
      and/or interest designated by the Subscriber (with the date of giving of such
      designation being a “Deemed
      Conversion Date”)
      at the
      then Conversion Price that would be in effect on the Deemed Conversion Date
      by
      the highest closing price of the Common Stock on the principal market for the
      period commencing on the Deemed Conversion Date until the day prior to the
      receipt of the Mandatory Redemption Payment, whichever is greater, together
      with
      accrued but unpaid interest thereon and any other sums arising and outstanding
      under the Transaction Documents ("Mandatory
      Redemption Payment").
      The
      Mandatory Redemption Payment must be received by the Subscriber on the same
      date
      as the Company Shares otherwise deliverable or within ten (10) business days
      after request, whichever is sooner ("Mandatory
      Redemption Payment Date").
      Upon
      receipt of the Mandatory Redemption Payment, the corresponding Note principal
      and interest will be deemed paid and no longer outstanding. Liquidated damages
      calculated pursuant to Section 5.1(c) hereof, that have been paid or accrued
      for
      the twenty day period prior to the actual receipt of the Mandatory Redemption
      Payment by the Subscriber shall be credited against the Mandatory Redemption
      Payment calculated pursuant to subsections (i) and (ii) above of this Section
      5.2. In the event of a “Change
      in Control”
(as
      defined below), the Subscriber may demand, and the Company shall pay, a
      Mandatory Redemption Payment equal to 115% of the outstanding principal amount
      of the Note designated by the Subscriber together with accrued but unpaid
      interest thereon and any other sums arising and outstanding under the
      Transaction Documents. For purposes of this Section 5.2, “Change
      in Control”
shall
      mean (i) the Company no longer having a class of shares publicly tradable and
      listed on a Principal Market, (ii) the Company becoming a Subsidiary of another
      entity or merging into or with another entity, (iii) a majority of the board
      of
      directors of the Company as of the Closing Date no longer serving as directors
      of the Company, other than due to natural causes, (iv) if the holders of the
      Company’s Common Stock as of the Closing Date beneficially owning at any time
      after the Closing Date less than thirty-five percent of the Common stock owned
      by them on the Closing Date, or (v) the sale, lease, license or transfer of
      substantially all the assets of the Company or Subsidiaries.

    


    5.3. Maximum
      Conversion.
      The
      Subscriber shall not be entitled to convert on a Conversion Date that amount
      of
      the Note in connection with that number of shares of Common Stock which would
      be
      in excess of the sum of (i) the number of shares of common stock beneficially
      owned by the Subscriber and its affiliates on a Conversion Date, and (ii) the
      number of shares of Common Stock issuable upon the conversion of the Note with
      respect to which the determination of this provision is being made on a
      Conversion Date, which would result in beneficial ownership by the Subscriber
      and its affiliates of more than 4.99% of the outstanding shares of common stock
      of the Company on such Conversion Date. For the purposes of the provision to
      the
      immediately preceding sentence, beneficial ownership shall be determined in
      accordance with Section 13(d) of the Securities Exchange Act of 1934, as
      amended, and Regulation 13d-3 thereunder. Subject to the foregoing, the
      Subscriber shall not be limited to aggregate conversions of only 4.99% and
      aggregate conversions by the Subscriber may exceed 4.99%. The Subscriber may
      void the conversion limitation described in this Section 5.3 upon and effective
      after 61 days prior written notice to the Company. The Subscriber may allocate
      which of the equity of the Company deemed beneficially owned by the Subscriber
      shall be included in the 4.99% amount described above and which shall be
      allocated to the excess above 4.99%.

    


    5.4. Injunction
      - Posting of Bond.
      In the
      event a Subscriber shall elect to convert a Note or part thereof, the Company
      may not refuse conversion or exercise based on any claim that such Subscriber
      or
      any one associated or affiliated with such Subscriber has been engaged in any
      violation of law, or for any other reason, unless, an injunction from a court,
      on notice, restraining and or enjoining conversion of all or part of said Note
      or exercise of all or part of said Warrant shall have been sought and obtained
      and the Company has posted a surety bond for the benefit of such Subscriber
      in
      the amount of 130% of the amount of the Note, or aggregate purchase price of
      the
      Warrant Shares which are subject to the injunction, which bond shall remain
      in
      effect until the completion of arbitration/litigation of the dispute and the
      proceeds of which shall be payable to such Subscriber to the extent Subscriber
      obtains judgment.

     

    
      
        11

      

      
         

        
          

        

      

      
         

      

    

    5.5. Buy-In.
      In
      addition to any other rights available to the Subscriber, if the Company fails
      to deliver to the Subscriber such shares issuable upon conversion of a Note
      by
      the Delivery Date and if ten (10) days after the Delivery Date the Subscriber
      purchases (in an open market transaction or otherwise) shares of Common Stock
      to
      deliver in satisfaction of a sale by such Subscriber of the Common Stock which
      the Subscriber anticipated receiving upon such conversion (a "Buy-In"),
      then
      the Company shall pay in cash to the Subscriber (in addition to any remedies
      available to or elected by the Subscriber) the amount by which (A) the
      Subscriber's total purchase price (including brokerage commissions, if any)
      for
      the shares of Common Stock so purchased exceeds (B) the aggregate principal
      and/or interest amount of the Note for which such conversion was not timely
      honored, together with interest thereon at a rate of 15% per annum, accruing
      until such amount and any accrued interest thereon is paid in full (which amount
      shall be paid as liquidated damages and not as a penalty). For example, if
      the
      Subscriber purchases shares of Common Stock having a total purchase price of
      $11,000 to cover a Buy-In with respect to an attempted conversion of $10,000
      of
      note principal and/or interest, the Company shall be required to pay the
      Subscriber $1,000, plus interest. The Subscriber shall provide the Company
      written notice indicating the amounts payable to the Subscriber in respect
      of
      the Buy-In. The delivery date by which Common Stock must be delivered pursuant
      to this Section 5.5 shall be tolled for the amount of days that the Subscriber
      does not deliver information reasonably requested by the Company’s transfer
      agent.

    


    5.6 Adjustments. The
      Conversion Price, and amount of Shares issuable upon conversion of the Notes
      shall be adjusted as described in this Agreement and the Notes.

    


    5.7. Redemption.
      The
      Note shall not be redeemable or callable except as described in the
      Note.

     

    6. Legal
      Fee. The
      Company shall pay to Grushko & Mittman, P.C., a fee of $5,000 (“Legal
      Fees”)
      as
      reimbursement for services rendered to the Subscribers in connection with this
      Agreement and the purchase and sale of the Notes (the “Offering”)
      and
      acting as Escrow Agent for the Offering. The Legal Fees will be payable out
      of
      the funds held pursuant to the Escrow Agreement.

     

    7. Covenants
      of the Company.
      The
      Company covenants and agrees with the Subscribers as follows:

     

    (a) Listing.
      The
      Company shall promptly secure the listing of the Shares upon each national
      securities exchange, or electronic or automated quotation system upon which
      they
      are or become eligible for listing and shall maintain such listing so long
      as
      any Notes are outstanding. The Company will maintain the listing of its Common
      Stock on the American Stock Exchange, Nasdaq SmallCap Market, Nasdaq National
      Market System, OTC Bulletin Board, Pink Sheets or New York Stock Exchange
      (whichever of the foregoing is at the time the principal trading exchange or
      market for the Common Stock (the “Principal
      Market”)),
      and
      will comply in all respects with the Company's reporting, filing and other
      obligations under the bylaws or rules of the Principal Market, as applicable.
      The Company will provide the Subscribers copies of all notices it receives
      notifying the Company of the threatened and actual delisting of the Common
      Stock
      from any Principal Market. As of the date of this Agreement and the Closing
      Date, the Bulletin Board is and will be the Principal Market.

     

    (b) Market
      Regulations.
      The
      Company shall notify the Commission, the Principal Market and applicable state
      authorities, in accordance with their requirements, of the transactions
      contemplated by this Agreement, and shall take all other necessary action and
      proceedings as may be required and permitted by applicable law, rule and
      regulation, for the legal and valid issuance of the Securities to the
      Subscribers and promptly provide copies thereof to Subscriber.

     

    
      
        12

      

      
         

        
          

        

      

      
         

      

    

    (c) Filing
      Requirements.
      From
      the date of this Agreement and until the sooner of (i) three (3) years after
      the
      Third Closing Date, or (ii) until all the Shares have been resold or transferred
      by all the Subscribers pursuant to Rule 144, without regard to volume
      limitation, the Company will (A) cause its Common Stock to continue to be
      registered under Section 12(b) or 12(g) of the 1934 Act, (B) comply in all
      respects with its reporting and filing obligations including permissible
      extensions under the 1934 Act, (C) comply with all reporting requirements that
      are applicable to an issuer with a class of shares registered pursuant to
      Section 12(b) or 12(g) of the 1934 Act, as applicable, and (D) comply with
      all
      filing requirements related to any registration statement filed pursuant to
      this
      Agreement. The Company will use its best efforts not to take any action or
      file
      any document (whether or not permitted by the 1933 Act or the 1934 Act or the
      rules thereunder) to terminate or suspend such registration or to terminate
      or
      suspend its reporting and filing obligations under said acts until three (3)
      years after the Third Closing Date. Until the resale of the Shares by each
      Subscriber, the Company will use its best efforts to continue the listing or
      quotation of the Common Stock on a Principal Market and will comply in all
      respects with the Company's reporting, filing and other obligations under the
      bylaws or rules of the Principal Market. The Company agrees to timely file
      a
      Form D with respect to the Securities if required under Regulation D and to
      provide a copy thereof to each Subscriber promptly after such
      filing.

     

    (d) Use
      of
      Proceeds.
      The
      proceeds of the Offering will be employed by the Company for the purposes set
      forth on Schedule
      7(d)
      hereto.
      Except as set forth on Schedule
      7(d),
      the
      Purchase Price may not and will not be used for payment of financing related
      debt, redemption of outstanding notes or equity instruments of the Company,
      litigation related expenses or settlements, brokerage fees, nor non-trade
      obligations outstanding on each Closing Date. For so long as any Notes are
      outstanding, the Company will not prepay any financing related debt
      obligations.

     

    (e) Reservation.
      Prior
      to the Initial Closing Date, the Company undertakes to reserve, pro rata,
      on
      behalf of the Subscribers from its authorized but unissued common stock, a
      number of common shares equal to 150%
      of
      the amount of Common Stock necessary to allow each Subscriber to be able to
      convert all Notes issuable pursuant to this Agreement and interest thereon.
      Failure to have sufficient shares reserved pursuant to this Section 7(e) for
      five (5) consecutive business days or fifteen (15) days in the aggregate shall
      be a material default of the Company’s obligations under this Agreement and an
      Event of Default under the Note.

     

    (f) Taxes.
      From
      the date of this Agreement and until the sooner of (i) three (3) years after
      the
      Third Closing Date, or (ii) until all the Shares have been resold or transferred
      by all the Subscribers pursuant to Rule 144, without regard to volume
      limitations, the Company will promptly pay and discharge, or cause to be paid
      and discharged, when due and payable, all lawful taxes, assessments and
      governmental charges or levies imposed upon the income, profits, property or
      business of the Company; provided, however, that any such tax, assessment,
      charge or levy need not be paid if the validity thereof shall currently be
      contested in good faith by appropriate proceedings and if the Company shall
      have
      set aside on its books adequate reserves with respect thereto, and provided,
      further, that the Company will pay all such taxes, assessments, charges or
      levies forthwith upon the commencement of proceedings to foreclose any lien
      which may have attached as security therefore.

     

    (g) Insurance.
      From
      the date of this Agreement and until the sooner of (i) three (3) years after
      the
      Third Closing Date, or (ii) until all the Shares have been resold or transferred
      by all the Subscribers pursuant to Rule 144, without regard to volume
      limitations, the Company will keep its assets which are of an insurable
      character insured by financially sound and reputable insurers against loss
      or
      damage by fire, explosion and other risks customarily insured against by
      companies in the Company’s line of business, in amounts sufficient to prevent
      the Company from becoming a co-insurer and not in any event less than one
      hundred percent (100%) of the insurable value of the property insured; and
      the
      Company will maintain, with financially sound and reputable insurers, insurance
      against other hazards and risks and liability to persons and property to the
      extent and in the manner customary for companies in similar businesses similarly
      situated and to the extent available on commercially reasonable
      terms.

     

    
      
        13

      

      
         

        
          

        

      

      
         

      

    

    (h) Books
      and Records.
      From the
      date of this Agreement and until the sooner of (i) three (3) years after the
      Third Closing Date, or (ii) until all the Shares have been resold or transferred
      by all the Subscribers pursuant to Rule 144, without regard to volume
      limitations, the Company will keep true records and books of account in which
      full, true and correct entries will be made of all dealings or transactions
      in
      relation to its business and affairs in accordance with generally accepted
      accounting principles applied on a consistent basis.

     

    (i) Governmental
      Authorities.
      From the
      date of this Agreement and until the sooner of (i) three (3) years after the
      Third Closing Date, or (ii) until all the Shares have been resold or transferred
      by all the Subscribers pursuant to Rule 144, without regard to volume
      limitations, the Company shall duly observe and conform in all material respects
      to all valid requirements of governmental authorities relating to the conduct
      of
      its business or to its properties or assets.

     

    (j) Intellectual
      Property.
      From
      the date of this Agreement and until the sooner of (i) three (3) years after
      the
      Third Closing Date, or (ii) until all the Shares have been resold or transferred
      by all the Subscribers pursuant to Rule 144, without regard to volume
      limitations, the Company shall maintain in full force and effect its corporate
      existence, rights and franchises and all licenses and other rights to use
      intellectual property owned or possessed by it and reasonably deemed to be
      necessary to the conduct of its business, unless it is sold for
      value.

     

    (k) Properties.
      From the
      date of this Agreement and until the sooner of (i) three (3) years after the
      Third Closing Date, or (ii) until all the Shares have been resold or transferred
      by all the Subscribers pursuant to Rule 144, without regard to volume
      limitations, the Company will keep its properties in good repair, working order
      and condition, reasonable wear and tear excepted, and from time to time make
      all
      necessary and proper repairs, renewals, replacements, additions and improvements
      thereto; and the Company will at all times comply with each provision of all
      leases to which it is a party or under which it occupies property if the breach
      of such provision could reasonably be expected to have a Material Adverse
      Effect.

     

    (l) Confidentiality/Public
      Announcement.
      From the
      date of this Agreement and until the sooner of (i) three (3) years after the
      Third Closing Date, or (ii) until all the Shares have been resold or transferred
      by all the Subscribers pursuant to Rule 144, without regard to volume
      limitations, the Company agrees that except in connection with a Form 8-K or
      the
      Registration Statement or as otherwise required in any other Commission filing,
      it will not disclose publicly or privately the identity of the Subscribers
      unless expressly agreed to in writing by a Subscriber, only to the extent
      required by law and then only upon five days prior notice to Subscriber. In
      any
      event and subject to the foregoing, the Company shall make
      a
      public announcement describing the Offering not later than the first business
      day after the Closing Date. In the public announcement, the Company will
      specifically disclose the amount of common stock outstanding immediately after
      the Closing. A form of the proposed public announcement to be employed in
      connection with the Closing is annexed hereto as Exhibit
      D.

     

     

    
      
        14

      

      
         

        
          

        

      

      
         

      

    

    (m) Non-Public
      Information.
      The
      Company covenants and agrees that neither it nor any other person acting on
      its
      behalf will provide any Subscriber or its agents or counsel with any information
      that the Company believes constitutes material non-public information, unless
      prior thereto such Subscriber shall have agreed in writing to receive such
      information. The Company understands and confirms that each Subscriber shall
      be
      relying on the foregoing representations in effecting transactions in securities
      of the Company.

     

    8. Covenants
      of the Company and Subscriber Regarding Indemnification.

     

    (a) The
      Company agrees to indemnify, hold harmless, reimburse and defend the
      Subscribers, the Subscribers' officers, directors, agents, affiliates, control
      persons, and principal shareholders, against any claim, cost, expense,
      liability, obligation, loss or damage (including reasonable legal fees) of
      any
      nature, incurred by or imposed upon the Subscriber or any such person which
      results, arises out of or is based upon (i) any material misrepresentation
      by
      Company or breach of any warranty by Company in this Agreement or in any
      Exhibits or Schedules attached hereto, or other agreement delivered pursuant
      hereto; or (ii) after any applicable notice and/or cure periods, any breach
      or
      default in performance by the Company of any covenant or undertaking to be
      performed by the Company hereunder, or any other agreement entered into by
      the
      Company and Subscriber relating hereto.

     

    (b) Each
      Subscriber agrees to indemnify, hold harmless, reimburse and defend the Company
      and each of the Company’s officers, directors, agents, affiliates, control
      persons against any claim, cost, expense, liability, obligation, loss or damage
      (including reasonable legal fees) of any nature, incurred by or imposed upon
      the
      Company or any such person which results, arises out of or is based upon (i)
      any
      material misrepresentation by such Subscriber in this Agreement or in any
      Exhibits or Schedules attached hereto, or other agreement delivered pursuant
      hereto; or (ii) after any applicable notice and/or cure periods, any breach
      or
      default in performance by such Subscriber of any covenant or undertaking to
      be
      performed by such Subscriber hereunder, or any other agreement entered into
      by
      the Company and Subscribes relating hereto.

     

    (c) In
      no
      event shall the liability of any Subscriber or permitted successor hereunder
      or
      under any other agreement delivered in connection herewith be greater in amount
      than the dollar amount of the net proceeds received by such Subscriber upon
      the
      sale of Registrable Securities (as defined herein) giving rise to such
      indemnification obligation.

     

    (d) The
      procedures set forth in Section 9.5 shall apply to the indemnifications set
      forth in Sections 8(a) and 8(b) above.

     

    9.1. Registration
      Rights.
      The
      Company hereby grants the following registration rights to holders of the
      Securities. If the Company at any time proposes to register any of its
      securities under the 1933 Act for sale to the public, whether for its own
      account or for the account of other security holders or both, except with
      respect to registration statements on Forms S-4, S-8 or another form not
      available for registering the registrable securities (“Registrable
      Securities”)
      for
      sale to the public, provided the Registrable Securities are not otherwise
      registered for resale by the Subscribers or Holder pursuant to an effective
      registration statement, each such time it will give at least 15 days' prior
      written notice to the record holder of the Registrable Securities of its
      intention so to do. Upon the written request of the holder, received by the
      Company within 10 days after the giving of any such notice by the Company,
      to
      register any of the Registrable Securities not previously registered, the
      Company will cause such Registrable Securities as to which registration shall
      have been so requested to be included with the securities to be covered by
      the
      registration statement proposed to be filed by the Company, all to the extent
      required to permit the sale or other disposition of the Registrable Securities
      so registered by the holder of such Registrable Securities (the "Seller").
      In
      the event that any registration pursuant to this Section 9.1 shall be, in whole
      or in part, an underwritten public offering of common stock of the Company,
      the
      number of shares of Registrable Securities to be included in such an
      underwriting may be reduced by the managing underwriter if and to the extent
      that the Company and the underwriter shall reasonably be of the opinion that
      such inclusion would adversely affect the marketing of the securities to be
      sold
      by the Company therein; provided, however, that the Company shall notify the
      Seller in writing of any such reduction. Notwithstanding the foregoing
      provisions, the Company may withdraw or delay or suffer a delay of any
      registration statement referred to in this Section 9.1 without thereby incurring
      any liability to the Seller.

     

    
      
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    9.2. Registration
      Procedures.
      If and
      whenever the Company is required by the provisions of Section 9.1 to effect
      the
      registration of any shares of Registrable Securities under the 1933 Act, the
      Company will, as expeditiously as possible: 

     

    (a) subject
      to the timelines provided in this Agreement, prepare and file with the
      Commission a registration statement required by Section 10, with respect to
      such
      securities and use its best efforts to cause such registration statement to
      become and remain effective for the period of the distribution contemplated
      thereby (determined as herein provided), and promptly provide to the holders
      of
      Registrable Securities copies of all filings and Commission letters of
      comment;

     

    (b) prepare
      and file with the Commission such amendments and supplements to such
      registration statement and the prospectus used in connection therewith as may
      be
      necessary to keep such registration statement effective until such registration
      statement has been effective for a period of two (2) years, and comply with
      the
      provisions of the 1933 Act with respect to the disposition of all of the
      Registrable Securities covered by such registration statement in accordance
      with
      the Seller's intended method of disposition set forth in such registration
      statement for such period; 

     

    (c) furnish
      to the Seller, at the Company’s expense, such number of copies of the
      registration statement and the prospectus included therein (including each
      preliminary prospectus) as such persons reasonably may request in order to
      facilitate the public sale or their disposition of the securities covered by
      such registration statement; 

     

    (d) use
      its
      best efforts to register or qualify the Seller's Registrable Securities covered
      by such registration statement under the securities or "blue sky" laws of such
      jurisdictions as the Seller, provided, however, that the Company shall not
      for
      any such purpose be required to qualify generally to transact business as a
      foreign corporation in any jurisdiction where it is not so qualified or to
      consent to general service of process in any such jurisdiction; 

     

    (e) if
      applicable, list the Registrable Securities covered by such registration
      statement with any securities exchange on which the Common Stock of the Company
      is then listed; 

     

    (f) immediately
      notify the Seller when a prospectus relating thereto is required to be delivered
      under the 1933 Act, of the happening of any event of which the Company has
      knowledge as a result of which the prospectus contained in such registration
      statement, as then in effect, includes an untrue statement of a material fact
      or
      omits to state a material fact required to be stated therein or necessary to
      make the statements therein not misleading in light of the circumstances then
      existing; and

     

    (g) provided
      same would not be in violation of the provision of Regulation FD under the
      1934
      Act, make available for inspection by the Seller, and any attorney, accountant
      or other agent retained by the Seller or underwriter, all publicly available,
      non-confidential financial and other records, pertinent corporate documents
      and
      properties of the Company, and cause the Company's officers, directors and
      employees to supply all publicly available, non-confidential information
      reasonably requested by the seller, attorney, accountant or agent in connection
      with such registration statement.

     

    
      
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    9.3. Provision
      of Documents.
      In
      connection with each registration described in this Section 9, the Seller will
      furnish to the Company in writing such information and representation letters
      with respect to itself and the proposed distribution by it as reasonably shall
      be necessary in order to assure compliance with federal and applicable state
      securities laws. 

     

    9.4. Expenses.
      All
      expenses incurred by the Company in complying with Section 9, including, without
      limitation, all registration and filing fees, printing expenses, fees and
      disbursements of counsel and independent public accountants for the Company,
      fees and expenses (including reasonable counsel fees) incurred in connection
      with complying with state securities or "blue sky" laws, fees of the National
      Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents
      and registrars, costs of insurance and fee of one counsel for all Sellers are
      called "Registration
      Expenses".
      All
      underwriting discounts and selling commissions applicable to the sale of
      Registrable Securities, including any fees and disbursements of any additional
      counsel to the Seller, are called "Selling
      Expenses".
      The
      Company will pay all Registration Expenses in connection with the registration
      statement under Section 9. Selling Expenses in connection with each registration
      statement under Section 10 shall be borne by the Seller and may be apportioned
      among the Sellers in proportion to the number of shares sold by the Seller
      relative to the number of shares sold under such registration statement or
      as
      all Sellers thereunder may agree.

     

    9.5. Indemnification
      and Contribution.

     

    (a) In
      the
      event of a registration of any Registrable Securities under the 1933 Act
      pursuant to Section 9, the Company will, to the extent permitted by law,
      indemnify and hold harmless the Seller, each officer of the Seller, each
      director of the Seller, each underwriter of such Registrable Securities
      thereunder and each other person, if any, who controls such Seller or
      underwriter within the meaning of the 1933 Act, against any losses, claims,
      damages or liabilities, joint or several, to which the Seller, or such
      underwriter or controlling person may become subject under the 1933 Act or
      otherwise, insofar as such losses, claims, damages or liabilities (or actions
      in
      respect thereof) arise out of or are based upon any untrue statement or alleged
      untrue statement of any material fact contained in any registration statement
      under which such Registrable Securities was registered under the 1933 Act
      pursuant to Section 9, any preliminary prospectus or final prospectus contained
      therein, or any amendment or supplement thereof, or arise out of or are based
      upon the omission or alleged omission to state therein a material fact required
      to be stated therein or necessary to make the statements therein not misleading
      in light of the circumstances when made, and will subject to the provisions
      of
      Section 9.5(c) reimburse the Seller, each such underwriter and each such
      controlling person for any legal or other expenses reasonably incurred by them
      in connection with investigating or defending any such loss, claim, damage,
      liability or action; provided, however, that the Company shall not be liable
      to
      the Seller to the extent that any such damages arise out of or are based upon
      an
      untrue statement or omission made in any preliminary prospectus if (i) the
      Seller failed to send or deliver a copy of the final prospectus delivered by
      the
      Company to the Seller with or prior to the delivery of written confirmation
      of
      the sale by the Seller to the person asserting the claim from which such damages
      arise, (ii) the final prospectus would have corrected such untrue statement
      or
      alleged untrue statement or such omission or alleged omission, or (iii) to
      the
      extent that any such loss, claim, damage or liability arises out of or is based
      upon an untrue statement or alleged untrue statement or omission or alleged
      omission so made in conformity with information furnished by any such Seller,
      or
      any such controlling person in writing specifically for use in such registration
      statement or prospectus. 

     

    (b) In
      the
      event of a registration of any of the Registrable Securities under the 1933
      Act
      pursuant to Section 9, each Seller severally but not jointly will, to the extent
      permitted by law, indemnify and hold harmless the Company, and each person,
      if
      any, who controls the Company within the meaning of the 1933 Act, each officer
      of the Company who signs the registration statement, each director of the
      Company, each underwriter and each person who controls any underwriter within
      the meaning of the 1933 Act, against all losses, claims, damages or liabilities,
      joint or several, to which the Company or such officer, director, underwriter
      or
      controlling person may become subject under the 1933 Act or otherwise, insofar
      as such losses, claims, damages or liabilities (or actions in respect thereof)
      arise out of or are based upon any untrue statement or alleged untrue statement
      of any material fact contained in the registration statement under which such
      Registrable Securities were registered under the 1933 Act pursuant to Section
      9,
      any preliminary prospectus or final prospectus contained therein, or any
      amendment or supplement thereof, or arise out of or are based upon the omission
      or alleged omission to state therein a material fact required to be stated
      therein or necessary to make the statements therein not misleading, and will
      reimburse the Company and each such officer, director, underwriter and
      controlling person for any legal or other expenses reasonably incurred by them
      in connection with investigating or defending any such loss, claim, damage,
      liability or action, provided, however, that the Seller will be liable hereunder
      in any such case if and only to the extent that any such loss, claim, damage
      or
      liability arises out of or is based upon an untrue statement or alleged untrue
      statement or omission or alleged omission made in reliance upon and in
      conformity with information pertaining to such Seller, as such, furnished in
      writing to the Company by such Seller specifically for use in such registration
      statement or prospectus, and provided, further, however, that the liability
      of
      the Seller hereunder shall be limited to the gross proceeds received by the
      Seller from the sale of Registrable Securities covered by such registration
      statement.

     

    
      
        17

      

      
         

        
          

        

      

      
         

      

    

    (c) Promptly
      after receipt by an indemnified party hereunder of notice of the commencement
      of
      any action, such indemnified party shall, if a claim in respect thereof is
      to be
      made against the indemnifying party hereunder, notify the indemnifying party
      in
      writing thereof, but the omission so to notify the indemnifying party shall
      not
      relieve it from any liability which it may have to such indemnified party other
      than under this Section 9.5(c) and shall only relieve it from any liability
      which it may have to such indemnified party under this Section 9.5(c), except
      and only if and to the extent the indemnifying party is prejudiced by such
      omission. In case any such action shall be brought against any indemnified
      party
      and it shall notify the indemnifying party of the commencement thereof, the
      indemnifying party shall be entitled to participate in and, to the extent it
      shall wish, to assume and undertake the defense thereof with counsel
      satisfactory to such indemnified party, and, after notice from the indemnifying
      party to such indemnified party of its election so to assume and undertake
      the
      defense thereof, the indemnifying party shall not be liable to such indemnified
      party under this Section 9.5(c) for any legal expenses subsequently incurred
      by
      such indemnified party in connection with the defense thereof other than
      reasonable costs of investigation and of liaison with counsel so selected,
      provided, however, that, if the defendants in any such action include both
      the
      indemnified party and the indemnifying party and the indemnified party shall
      have reasonably concluded that there may be reasonable defenses available to
      it
      which are different from or additional to those available to the indemnifying
      party or if the interests of the indemnified party reasonably may be deemed
      to
      conflict with the interests of the indemnifying party, the indemnified parties,
      as a group, shall have the right to select one separate counsel and to assume
      such legal defenses and otherwise to participate in the defense of such action,
      with the reasonable expenses and fees of such separate counsel and other
      expenses related to such participation to be reimbursed by the indemnifying
      party as incurred. 

     

    (d) In
      order
      to provide for just and equitable contribution in the event of joint liability
      under the 1933 Act in any case in which either (i) a Seller, or any controlling
      person of a Seller, makes a claim for indemnification pursuant to this Section
      9.5 but it is judicially determined (by the entry of a final judgment or decree
      by a court of competent jurisdiction and the expiration of time to appeal or
      the
      denial of the last right of appeal) that such indemnification may not be
      enforced in such case notwithstanding the fact that this Section 9.5 provides
      for indemnification in such case, or (ii) contribution under the 1933 Act may
      be
      required on the part of the Seller or controlling person of the Seller in
      circumstances for which indemnification is not provided under this Section
      9.5;
      then, and in each such case, the Company and the Seller will contribute to
      the
      aggregate losses, claims, damages or liabilities to which they may be subject
      (after contribution from others) in such proportion so that the Seller is
      responsible only for the portion represented by the percentage that the public
      offering price of its securities offered by the registration statement bears
      to
      the public offering price of all securities offered by such registration
      statement, provided, however, that, in any such case, (y) the Seller will not
      be
      required to contribute any amount in excess of the public offering price of
      all
      such securities offered by it pursuant to such registration statement; and
      (z)
      no person or entity guilty of fraudulent misrepresentation (within the meaning
      of Section 10(f) of the 1933 Act) will be entitled to contribution from any
      person or entity who was not guilty of such fraudulent
      misrepresentation.

     

    
      
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    9.6. Delivery
      of Unlegended Shares.
      

     

    (a) Within
      three (3) business days (such third business day, the “Unlegended
      Shares Delivery Date”)
      after
      the business day on which the Company has received (i) a notice that Registrable
      Securities have been sold either pursuant to the Registration Statement or
      Rule
      144 under the 1933 Act, (ii) a representation that the prospectus delivery
      requirements, or the requirements of Rule 144, as applicable, have been
      satisfied, and (iii) the original share certificates representing the shares
      of
      Common Stock that have been sold, the Company at its expense, (y) shall deliver,
      and shall cause legal counsel selected by the Company to deliver, to its
      transfer agent (with copies to Subscriber) an appropriate instruction and
      opinion of such counsel, for the delivery of shares of Common Stock without
      any
      legends including the legends set forth in Sections 2(e) and 2(g) above,
      issuable pursuant to any effective and current registration statement described
      in Section 9 of this Agreement or pursuant to Rule 144 under the 1933 Act (the
      “Unlegended
      Shares”);
      and
      (z) cause the transmission of the certificates representing the Unlegended
      Shares together with a legended certificate representing the balance of the
      unsold shares of Common Stock, if any, to the Subscriber at the address
      specified in the notice of sale, via express courier, by electronic transfer
      or
      otherwise on or before the Unlegended Shares Delivery Date.

     

    (b) In
      lieu
      of delivering physical certificates representing the Unlegended Shares, if
      the
      Company’s transfer agent is participating in the Depository Trust Company
      (“DTC”)
      Fast
      Automated Securities Transfer program, upon request of a Subscriber, so long
      as
      the certificates therefore do not bear a legend and the Subscriber is not
      obligated to return such certificate for the placement of a legend thereon,
      the
      Company shall cause its transfer agent to electronically transmit the Unlegended
      Shares by crediting the account of Subscriber’s prime Broker with DTC through
      its Deposit Withdrawal Agent Commission system. Such delivery must be made
      on or
      before the Unlegended Shares Delivery Date.

     

    (c) The
      Company understands that a delay in the delivery of the Unlegended Shares
      pursuant to Section 9 hereof beyond the Unlegended Shares Delivery Date could
      result in economic loss to a Subscriber. As compensation to a Subscriber for
      such loss, the Company agrees to pay late payment fees (as liquidated damages
      and not as a penalty) to the Subscriber for late delivery of Unlegended Shares
      in the amount of $100 per business day after the Delivery Date for each $10,000
      of purchase price of the Unlegended Shares subject to the delivery default.
      If
      during any 360 day period, the Company fails to deliver Unlegended Shares as
      required by this Section 9.6 for an aggregate of thirty (30) days, then each
      Subscriber or assignee holding Securities subject to such default may, at its
      option, require the Company to purchase all or any portion of the Shares and
      Restricted
      Shares
      subject to such default at a price per share equal to 130% of the Purchase
      Price
      of such Shares and Restricted
      Shares.
      The Company shall pay any payments incurred under this Section in immediately
      available funds upon demand. 

     

    
      
        19

      

      
         

        
          

        

      

      
         

      

    

    (d) In
      addition to any other rights available to a Subscriber, if the Company fails
      to
      deliver to a Subscriber Unlegended Shares within ten (10) calendar days after
      the Unlegended Shares Delivery Date and the Subscriber purchases (in an open
      market transaction or otherwise) shares of common stock to deliver in
      satisfaction of a sale by such Subscriber of the shares of Common Stock which
      the Subscriber anticipated receiving from the Company (a "Buy-In"),
      then
      the Company shall pay in cash to the Subscriber (in addition to any remedies
      available to or elected by the Subscriber) the amount by which (A) the
      Subscriber's total purchase price (including brokerage commissions, if any)
      for
      the shares of common stock so purchased exceeds (B) the aggregate purchase
      price
      of the shares of Common Stock delivered to the Company for reissuance as
      Unlegended Shares, together with interest thereon at a rate of 15% per annum,
      accruing until such amount and any accrued interest thereon is paid in full
      (which amount shall be paid as liquidated damages and not as a penalty). For
      example, if a Subscriber purchases shares of Common Stock having a total
      purchase price of $11,000 to cover a Buy-In with respect to $10,000 of purchase
      price of shares of Common Stock delivered to the Company for reissuance as
      Unlegended Shares, the Company shall be required to pay the Subscriber $1,000,
      plus interest. The Subscriber shall provide the Company written notice
      indicating the amounts payable to the Subscriber in respect of the
      Buy-In.

     

    (e) In
      the
      event a Subscriber shall request delivery of Unlegended Shares as described
      in
      Section 9.6 and the Company is required to deliver such Unlegended Shares
      pursuant to Section 9.6, the Company may not refuse to deliver Unlegended Shares
      based on any claim that such Subscriber or any one associated or affiliated
      with
      such Subscriber has been engaged in any violation of law, or for any other
      reason, unless, an injunction or temporary restraining order from a court,
      on
      notice, restraining and or enjoining delivery of such Unlegended Shares or
      exercise of all or part of said Warrant shall have been sought and
      obtained
      and the
      Company has posted a surety bond for the benefit of such Subscriber in the
      amount of 120% of the amount of the aggregate purchase price of the Common
      Stock
      which are subject to the injunction or temporary restraining order, which bond
      shall remain in effect until the completion of arbitration/litigation of the
      dispute and the proceeds of which shall be payable to such Subscriber to the
      extent Subscriber obtains judgment in Subscriber’s favor.

     

    
      10. 
(a) Option
        Plan Restrictions.
        The
        only officer, director, employee and consultant stock option or stock incentive
        plan currently in effect or contemplated by the Company has been submitted
        to
        the Subscribers or is described with Reports. No other plan will be adopted
        nor
        may any options or equity not included in such plan be issued until after
        the
        Exclusion Period.

    

     

    (b) Paid
      In Kind.
      The
      Subscriber may demand that some or all of the sums payable to the Subscriber
      pursuant to Sections 5.1(c), 5.2, 5.5, and 9.6 that are not paid within ten
      business days of the required payment date be paid in shares of Common Stock
      valued at the Conversion Price in effect at the time Subscriber makes such
      demand or, at the Subscriber’s election, at such other valuation described in
      the Transaction Documents. In addition to any other rights granted to the
      Subscriber herein, the Subscriber is also granted the registration rights set
      forth in Section 9.1 hereof in relation to such shares of Common Stock and
      the
      Common Stock issuable pursuant to this Section 10(b). For purposes only of
      determining any liquidated damages pursuant to the Transaction Documents, the
      entire Purchase Price shall be allocated to the Notes and none to the Warrants;
      and the Warrant Shares shall be valued at the actual exercise price
      thereof.

     

    (c) Maximum
      Exercise of Rights.
      In the
      event the exercise of the rights described in Section 10(b) would
      result in the issuance of an amount of common stock of the Company that would
      exceed the maximum amount that may be issued to a Subscriber calculated in
      the
      manner described in Section 7.3 of this Agreement, then the issuance of such
      additional shares of common stock of the Company to such Subscriber will be
      deferred in whole or in part until such time as such Subscriber is able to
      beneficially own such common stock without exceeding the maximum amount set
      forth calculated in the manner described in Section 7.3 of this Agreement.
      The
      determination of when such common stock may be issued shall be made by each
      Subscriber as to only such Subscriber.

     

    
      
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    11. Miscellaneous.

    


    (a) Notices.
      All
      notices, demands, requests, consents, approvals, and other communications
      required or permitted hereunder shall be in writing and, unless otherwise
      specified herein, shall be (i) personally served, (ii) deposited in the mail,
      registered or certified, return receipt requested, postage prepaid, (iii)
      delivered by reputable air courier service with charges prepaid, or (iv)
      transmitted by hand delivery, telegram, or facsimile, addressed as set forth
      below or to such other address as such party shall have specified most recently
      by written notice. Any notice or other communication required or permitted
      to be
      given hereunder shall be deemed effective (a) upon hand delivery or delivery
      by
      facsimile, with accurate confirmation generated by the transmitting facsimile
      machine, at the address or number designated below (if delivered on a business
      day during normal business hours where such notice is to be received), or the
      first business day following such delivery (if delivered other than on a
      business day during normal business hours where such notice is to be received)
      or (b) on the second business day following the date of mailing by express
      courier service, fully prepaid, addressed to such address, or upon actual
      receipt of such mailing, whichever shall first occur. The addresses for such
      communications shall be: (i) if to the Company, to: Kaire
      Holdings Incorporated, 552
      Sespe
      Avenue, Suite D, Fillmore, CA 93015, telecopier number: (805) 524-2344, with
      a
      copy by telecopier only to: Owen M. Naccarato, Esq., Naccarato & Associates,
      18301 Von Karman Avenue, Suite 430, Irvine, CA 92612, telecopier: (949)
      851-9262, and (ii) if to the Subscriber, to: the address and telecopier number
      indicated on the signature page hereto, with a copy by telecopier only to:
      Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York
      10176, telecopier number: (212) 697-3575.

     

    (b) Closing.
      The
      consummation of the transactions contemplated herein (“Closing”)
      shall
      take place at the offices of Grushko & Mittman, P.C., 551 Fifth Avenue,
      Suite 1601, New York, New York 10176, upon the satisfaction of all conditions
      to
      Closing set forth in this Agreement.

     

    (c) Entire
      Agreement; Assignment.
      This
      Agreement and other documents delivered in connection herewith represent the
      entire agreement between the parties hereto with respect to the subject matter
      hereof and may be amended only by a writing executed by both parties. Neither
      the Company nor the Subscribers have relied on any representations not contained
      or referred to in this Agreement and the documents delivered herewith. No right
      or obligation of either party shall be assigned by that party without prior
      notice to and the written consent of the other party. 

     

    (d) Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed to be an original and, all of which taken together
      shall constitute one and the same Agreement. In the event that any signature
      is
      delivered by facsimile transmission, such signature shall create a valid binding
      obligation of the party executing (or on whose behalf such signature is
      executed) the same with the same force and effect as if such facsimile signature
      were the original thereof.

     

    (e) Law
      Governing this Agreement.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York without regard to principles of conflicts of laws. Any action
      brought by either party against the other concerning the transactions
      contemplated by this Agreement shall be brought only in the state courts of
      New
      York or in the federal courts located in the state of New York. The parties
      and
      the individuals executing this Agreement and other agreements referred to herein
      or delivered in connection herewith on behalf of the Company agree to submit
      to
      the jurisdiction of such courts and waive trial by jury. The prevailing party
      shall be entitled to recover from the other party its reasonable attorney's
      fees
      and costs. In the event that any provision of this Agreement or any other
      agreement delivered in connection herewith is invalid or unenforceable under
      any
      applicable statute or rule of law, then such provision shall be deemed
      inoperative to the extent that it may conflict therewith and shall be deemed
      modified to conform with such statute or rule of law. Any such provision which
      may prove invalid or unenforceable under any law shall not affect the validity
      or enforceability of any other provision of any agreement.

     

    
      
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    (f) Specific
      Enforcement, Consent to Jurisdiction.
      The
      Company and Subscriber acknowledge and agree that irreparable damage would
      occur
      in the event that any of the provisions of this Agreement were not performed
      in
      accordance with their specific terms or were otherwise breached. It is
      accordingly agreed that the parties shall be entitled to an injunction or
      injunctions to prevent or cure breaches of the provisions of this Agreement
      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. Each of the Company and Subscriber hereby waives, and agrees not to
      assert in any such suit, action or proceeding, any claim that it is not
      personally subject to the jurisdiction of such court, that the suit, action
      or
      proceeding is brought in an inconvenient forum or that the venue of the suit,
      action or proceeding is improper. Nothing in this Section shall affect or limit
      any right to serve process in any other manner permitted by
      law.


    
      
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    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT (A)

     

    


     

    Please
      acknowledge your acceptance of the foregoing Subscription Agreement by signing
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    LIST
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    Exhibit
      A  Form
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      Note

     

    Exhibit
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