ex10_12.htm


    
      

    

    
      Exhibit
        10.12

       

      EQUITY
        DISTRIBUTION AGREEMENT

      


      THIS
        AGREEMENT dated as of the ___ day of November 2007 (the “Agreement”) between IFG
        Opportunity Fund, LLC., (the “Investor”), and EXOBOX TECHNOLOGIES CORP., a
        corporation organized and existing under the laws of the State of Nevada
        (the
“Company”).

      


      WHEREAS,
        the parties desire that, upon the terms and subject to the conditions contained
        herein, the Company shall issue and sell to the Investor, from time to time
        as
        provided herein, and the Investor shall purchase from the Company up to Ten
        Million Dollars ($10,000,000) of the Company’s common stock, par value $0.001
        per share (the “Common Stock”); and

      


      WHEREAS,
        such investments will be made in reliance upon the provisions of Regulation
        D
        (“Regulation D”) of the Securities Act of 1933, as amended, and the regulations
        promulgated thereunder (the “Securities Act”), and or upon such other exemption
        from the registration requirements of the Securities Act as may be available
        with respect to any or all of the investments to be made hereunder.

      


      NOW,
        THEREFORE, the parties hereto agree as follows:

      


      ARTICLE
        I.

      Certain
        Definitions

      


      Section
        1.1.       “Advance” shall mean the portion
        of the Commitment Amount requested by the Company in the Advance
        Notice.

      


      Section
        1.2.       “Advance Date” shall mean the
        first (1st) Trading Day after expiration of the applicable Pricing Period
        for
        each Advance.

      


      Section
        1.3.       “Advance Notice” shall mean a
        written notice in the form of Exhibit A attached hereto to the Investor executed
        by an officer of the Company and setting forth the Advance amount that the
        Company requests from the Investor.

      


      Section
        1.4.       “Advance Notice Date” shall mean
        each date the Company delivers (in accordance with Section 2.2(b) of this
        Agreement) to the Investor an Advance Notice requiring the Investor to advance
        funds to the Company, subject to the terms of this Agreement.  No
        Advance Notice Date shall be less than five (5) Trading Days after the prior
        Advance Notice Date.

      


      Section
        1.5.       “Closing” shall mean one of the
        closings of a purchase and sale of Common Stock pursuant to Section
        2.3.

      


      Section
        1.6.       “Commitment Amount” shall mean the
        aggregate amount of up to Ten Million Dollars ($10,000,000) which the Investor
        has agreed to provide to the Company in order to purchase the Company’s Common
        Stock pursuant to the terms and conditions of this Agreement.

      


      Section
        1.7.       “Commitment Period” shall mean the
        period commencing on the earlier to occur of (i) the Effective Date, or (ii)
        such earlier date as the Company and the Investor may mutually agree in writing,
        and expiring on the earliest to occur of (x) the date on which the Investor
        shall have made payment of Advances pursuant to this Agreement in the aggregate
        amount of the Commitment Amount, (y) the date this Agreement is terminated
        pursuant to Section 10.2 or (z) the date occurring thirty (30) months after
        the
        Effective Date.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      Section
        1.8.       “Common Stock” shall mean the
        Company’s common stock, par value $0.001 per share.

      


      Section
        1.9.       “Condition Satisfaction Date”
shall have the meaning set forth in Section 7.2.

      


      Section
        1.10.     “Damages” shall mean any loss, claim, damage,
        liability, costs and expenses (including, without limitation, reasonable
        attorney’s fees and disbursements and costs and expenses of expert witnesses and
        investigation).

      


      Section
        1.11.     “Effective Date” shall mean the date on which
        the SEC first declares effective a Registration Statement registering the
        resale
        of the Registrable Securities as set forth in Section 7.2(a).

      


      Section
        1.12.     “Exchange Act” shall mean the Securities
        Exchange Act of 1934, as amended, and the rules and regulations promulgated
        thereunder.

      


      Section
        1.13.     “Material Adverse Effect” shall mean any
        condition, circumstance, or situation that would prohibit or otherwise
        materially interfere with the ability of the Company to enter into and perform
        any of its obligations under this Agreement or the Registration Rights Agreement
        in any material respect.

      


      Section
        1.14.     “Market Price” shall mean the VWAP of the
        Common Stock during the Pricing Period as defined by Bloomberg.

      


      Section
        1.15.     “Maximum Advance Amount” shall be One Million
        Dollars

      ($1,000,000)
        per Advance Notice, but in no case more than Four Million Dollars ($4,000,000)
        in any thirty-day (30) calendar period.

      


      Section
        1.16.     “NASD” shall mean the National Association of
        Securities Dealers, Inc.

      


      Section
        1.17.     “Person” shall mean an individual, a
        corporation, a partnership, an association, a trust or other entity or
        organization, including a government or political subdivision or an agency
        or
        instrumentality thereof.

      


      Section
        1.18.    “Pricing Period” shall mean the five (5)
        consecutive Trading Days after the Advance Notice Date subject to any reduction
        pursuant to Section 2.2(c).

      


      Section
        1.19.     “Principal Market” shall mean the Nasdaq
        National Market, the Nasdaq Capital Market, the American Stock Exchange,
        the OTC
        Bulletin Board or the New York Stock Exchange, whichever is at the time the
        principal trading exchange or market for the Common Stock.

      


      Section
        1.20.     “Purchase Price” shall be set at ninety-eight
        percent (98%) of the Market Price during the Pricing Period.

      


      Section
        1.21.     “Registrable Securities” shall mean the
        shares of Common Stock to be issued hereunder (i) in respect of which the
        Registration Statement has not been declared effective by the SEC, (ii) which
        have not been sold under circumstances meeting all of the applicable conditions
        of Rule 144 (or any similar provision then in force) under the Securities
        Act
        (“Rule 144”) or (iii) which have not been otherwise transferred to a holder who
        may trade such shares without restriction under the Securities Act, and the
        Company has delivered a new certificate or other evidence of ownership for
        such
        securities not bearing a restrictive legend.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      Section
        1.22.     “Registration Rights Agreement” shall mean
        the Registration Rights Agreement dated the date hereof, regarding the filing
        of
        the Registration Statement for the resale of the Registrable Securities,
        entered
        into between the Company and the Investor.

      


      Section
        1.23.     “Registration Statement” shall mean a
        registration statement on Form S-1 or SB-2 (if use of such form is then
        available to the Company pursuant to the rules of the SEC and, if not, on
        such
        other form promulgated by the SEC for which the Company then qualifies and
        which
        counsel for the Company shall deem appropriate, and which form shall be
        available for the resale of the Registrable Securities to be registered
        thereunder in accordance with the provisions of this Agreement and the
        Registration Rights Agreement, and in accordance with the intended method
        of
        distribution of such securities), for the registration of the resale by the
        Investor of the Registrable Securities under the Securities Act.

      


      Section
        1.24.     “Regulation D” shall have the meaning set
        forth in the recitals of this Agreement.

      


      Section
        1.25.     “SEC” shall mean the United States Securities
        and Exchange Commission.

      


      Section
        1.26.     “Securities Act” shall have the meaning set
        forth in the recitals of this Agreement.

      


      Section
        1.27.     “SEC Documents” shall mean Annual Reports on
        Form 10-KSB, Quarterly Reports on Form 10-QSB, Current Reports on Form 8-K
        and
        Proxy Statements of the Company as supplemented to the date hereof, filed
        by the
        Company for a period of at least twelve (12) months immediately preceding
        the
        date hereof or the Advance Date, as the case may be, until such time as the
        Company no longer has an obligation to maintain the effectiveness of a
        Registration Statement as set forth in the Registration Rights
        Agreement.

      


      Section
        1.28.     “Trading Day” shall mean any day during which
        the New York Stock Exchange shall be open for business.

      


      Section
        1.29.     “VWAP” shall mean the volume weighted average
        price of the Company’s Common Stock as quoted by Bloomberg, LP.

      


      ARTICLE
        II.

      Advances

      


      Section
        2.1.       Advances.

      


      Subject
        to the terms and conditions of this Agreement (including, without limitation,
        the provisions of Article VII hereof), the Company, at its sole and exclusive
        option, may issue and sell to the Investor, and the Investor shall purchase
        from
        the Company, shares of the Company’s Common Stock by the delivery, in the
        Company’s sole discretion, of Advance Notices.  The number of shares
        of Common Stock that the Investor shall purchase pursuant to each Advance
        shall
        be determined by dividing the amount of the Advance by the Purchase Price.
        No
        fractional shares shall be issued. Fractional shares shall be rounded to
        the
        next higher whole number of shares.  The aggregate maximum amount of
        all Advances that the Investor shall be obligated to make under this Agreement
        shall not exceed the Commitment Amount.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      Section
        2.2.       Mechanics.

      


      (a)                 Advance
        Notice.  At any time during the Commitment Period, the Company may
        require the Investor to purchase shares of Common Stock by delivering an
        Advance
        Notice to the Investor, subject to the conditions set forth in Section 7.2;
        provided, however, the amount for each Advance as designated by the Company
        in
        the applicable Advance Notice shall not be more than the Maximum Advance
        Amount
        and the aggregate amount of the Advances pursuant to this Agreement shall
        not
        exceed the Commitment Amount.  The Company acknowledges that the
        Investor may sell shares of the Company’s Common Stock corresponding with a
        particular Advance Notice after the Advance Notice is received by the
        Investor.  There shall be a minimum of five (5) Trading Days between
        each Advance Notice Date.

      


      (b)                 Date
        of Delivery of Advance Notice.  An Advance Notice shall be deemed
        delivered on (i) the Trading Day it is received by facsimile or otherwise
        by the
        Investor if such notice is received prior to 5:00 pm Eastern Time, or (ii)
        the
        immediately succeeding Trading Day if it is received by facsimile or otherwise
        after 5:00 pm Eastern Time on a Trading Day or at any time on a day which
        is not
        a Trading Day.  No Advance Notice may be deemed delivered on a day
        that is not a Trading Day.

      


      (c)                 Minimum
        Acceptable Price.  The lowest closing Bid Price of the Common Stock
        during the Pricing Period (before taking into account any discount used to
        calculate the Purchase Price) for any particular Advance shall, in connection
        with each Advance Notice delivered by the Company, be equal to seventy five
        percent (75%) of the closing Bid Price on the Trading Day immediately preceding
        the Advance Notice Date for such Advance Notice (the “Minimum Acceptable
        Price”).  Subject to the next sentence, upon the issuance by the
        Company of an Advance Notice with a Minimum Acceptable Price, if any of the
        closing Bid Prices during the Pricing Period are below the Minimum Acceptable
        Price (i) the Company shall automatically reduce the amount of the Advance
        set
        forth in such Advance Notice by twenty percent (20%) for each Trading Day
        during
        the Pricing Period that the closing Bid Price of the Common Stock is below
        the
        Minimum Acceptable Price (each such day, an “Excluded Day”), and (ii) each
        Excluded Day shall be excluded from the Pricing Period for purposes of
        determining the Market Price.  The number of shares of Common Stock to
        be delivered to the Investor at the Closing (in accordance with Section 2.3
        of
        this Agreement) shall correspond with the Advance Notice amount as reduced
        pursuant to clause (i) above.  The Company, and only the Company, may
        waive the Minimum Acceptable Price with respect to any particular Advance
        Notice
        by providing the Investor with written notice of waiver on or prior to the
        Advance Date.

      


      (d)                 Floor
        Price.  The Company at its option may select a Floor Price for any
        Put, which the Company will not put shares to Investor under that Floor
        Price.

      


      


      Section
        2.3.       Closings.  Within two
        (2) Trading Days of  each Advance Date (i) the Company shall deliver
        to the Investor such number of shares of the Common Stock registered in the
        name
        of the Investor as shall equal (x) the amount of the Advance specified in
        such
        Advance Notice pursuant to Section 2.1 herein, divided by (y) the Purchase
        Price
        and (ii) upon receipt of such shares, the Investor shall deliver to the Company
        the amount of the Advance specified in the Advance Notice by wire transfer
        of
        immediately available funds.  In addition, on or prior to the Advance
        Date, each of the Company and the Investor shall deliver to the other all
        documents, instruments and writings required to be delivered by either of
        them
        pursuant to this Agreement in order to implement and effect the transactions
        contemplated herein.  To the extent the Company has not paid the fees,
        expenses, and disbursements of the Investor in accordance with Section 12.4,
        the
        amount of such fees, expenses, and disbursements may be deducted by the Investor
        (and shall be paid to the relevant party) directly out of the proceeds of
        the
        Advance with no reduction in the amount of shares of the Company’s Common Stock
        to be delivered on such Advance Date.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      (a)         Company’s
        Obligations Upon Closing.

      


      (i)         The
        Company shall deliver to the Investor the shares of Common Stock applicable
        to
        the Advance in accordance with Section 2.3.  The certificates
        evidencing such shares shall be free of restrictive legends.

      


      (ii)         the
        Company’s Registration Statement with respect to the resale of the shares of
        Common Stock delivered in connection with the Advance shall have been declared
        effective by the SEC;

      


      (iii)                   the
        Company shall have obtained all material permits and qualifications required
        by
        any applicable state for the offer and sale of the Registrable Securities,
        or
        shall have the availability of exemptions therefrom.  The sale and
        issuance of the Registrable Securities shall be legally permitted by all
        laws
        and regulations to which the Company is subject;

      


      (iv)         the
        Company shall have filed with the SEC in a timely manner all reports, notices
        and other documents required of a “reporting company” under the Exchange Act and
        applicable Commission regulations;

      


      (v)         the
        fees as set forth in Section 12.4 below shall have been paid or can be withheld
        as provided in Section 2.3; and

      


      (vi)         the
        Company’s transfer agent shall be DWAC eligible.

      


      (b)         Investor’s
        Obligations Upon Closing.  Upon receipt of the shares referenced in
        Section 2.3(a)(i) above and provided the Company is in compliance with its
        obligations in Section 2.3, the Investor shall deliver to the Company the
        amount
        of the Advance specified in the Advance Notice by wire transfer of immediately
        available funds.

      


      ARTICLE
        III.

      Representations
        and Warranties of Investor

      


      Investor
        hereby represents and warrants to, and agrees with, the Company that the
        following are true and correct as of the date hereof and as of each Advance
        Date:

      


      Section
        3.1.       Organization and
        Authorization.  The Investor is duly incorporated or organized and
        validly existing in the jurisdiction of its incorporation or organization
        and
        has all requisite power and authority to purchase and hold the securities
        issuable hereunder.  The decision to invest and the execution and
        delivery of this Agreement by such Investor, the performance by such Investor
        of
        its obligations hereunder and the consummation by such Investor of the
        transactions contemplated hereby have been duly authorized and requires no
        other
        proceedings on the part of the Investor.  The undersigned has the
        right, power and authority to execute and deliver this Agreement and all
        other
        instruments (including, without limitations, the Registration Rights Agreement),
        on behalf of the Investor.  This Agreement has been duly executed and
        delivered by the Investor and, assuming the execution and delivery hereof
        and
        acceptance thereof by the Company, will constitute the legal, valid and binding
        obligations of the Investor, enforceable against the Investor in accordance
        with
        its terms.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      Section
        3.2.       Evaluation of
        Risks.  The Investor has such knowledge and experience in financial,
        tax and business matters as to be capable of evaluating the merits and risks
        of,
        and bearing the economic risks entailed by, an investment in the Company
        and of
        protecting its interests in connection with this transaction.  It
        recognizes that its investment in the Company involves a high degree of
        risk.

      


      Section
        3.3.       No Legal Advice From the
        Company.  The Investor acknowledges that it had the opportunity to
        review this Agreement and the transactions contemplated by this Agreement
        with
        his or its own legal counsel and investment and tax advisors.  The
        Investor is relying solely on such counsel and advisors and not on any
        statements or representations of the Company or any of its representatives
        or
        agents for legal, tax or investment advice with respect to this investment,
        the
        transactions contemplated by this Agreement or the securities laws of any
        jurisdiction.

      


      Section
        3.4.       Investment Purpose. The securities
        are being purchased by the Investor for its own account, and for investment
        purposes.  The Investor agrees not to assign or in any way transfer
        the Investor’s rights to the securities or any interest therein and acknowledges
        that the Company will not recognize any purported assignment or transfer
        except
        in accordance with applicable Federal and state securities laws.  No
        other person has or will have a direct or indirect beneficial interest in
        the
        securities.  The Investor agrees not to sell, hypothecate or otherwise
        transfer the Investor’s securities unless the securities are registered under
        Federal and applicable state securities laws or unless, in the opinion of
        counsel satisfactory to the Company, an exemption from such laws is
        available.

      


      Section
        3.5.       Accredited
        Investor.  The Investor is an “Accredited Investor” as that term is
        defined in Rule 501(a)(3) of Regulation D of the Securities Act.

      


      Section
        3.6.       Information.  The
        Investor and its advisors (and its counsel), if any, have been furnished
        with
        all materials relating to the business, finances and operations of the Company
        and information it deemed material to making an informed investment
        decision.  The Investor and its advisors, if any, have been afforded
        the opportunity to ask questions of the Company and its
        management.  Neither such inquiries nor any other due diligence
        investigations conducted by such Investor or its advisors, if any, or its
        representatives shall modify, amend or affect the Investor’s right to rely on
        the Company’s representations and warranties contained in this
        Agreement.  The Investor understands that its investment involves a
        high degree of risk.  The Investor is in a position regarding the
        Company, which, based upon employment, family relationship or economic
        bargaining power, enabled and enables such Investor to obtain information
        from
        the Company in order to evaluate the merits and risks of this
        investment.  The Investor has sought such accounting, legal and tax
        advice, as it has considered necessary to make an informed investment decision
        with respect to this transaction.

      


      Section
        3.7.       Receipt of Documents. The Investor
        and its counsel have received and read in their entirety:  (i) this
        Agreement and the Exhibits annexed hereto; (ii) all due diligence and other
        information necessary to verify the accuracy and completeness of such
        representations, warranties and covenants; (iii) the Company’s Form 10-KSB for
        the year ended August  31, 2006 and Form 10-QSB for the period ended
        November 30, 2006; and (iv) answers to all questions the Investor submitted
        to
        the Company regarding an investment in the Company; and the Investor has
        relied
        on the information contained therein and has not been furnished any other
        documents, literature, memorandum or prospectus.

      


      Section
        3.8.       Registration Rights
        Agreement.  The parties have entered into the Registration Rights
        Agreement dated the date hereof.

      


      Section
        3.9.       No General
        Solicitation.  Neither the Company, nor any of its affiliates, nor any
        person acting on its or their behalf, has engaged in any form of general
        solicitation or general advertising (within the meaning of Regulation D under
        the Securities Act) in connection with the offer or sale of the shares of
        Common
        Stock offered hereby.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      Section
        3.10.     Not an Affiliate.  The Investor is
        not an officer, director or a person that directly, or indirectly through
        one or
        more intermediaries, controls or is controlled by, or is under common control
        with the Company or any “Affiliate” of the Company (as that term is defined in
        Rule 405 of the Securities Act).

      


      Section
        3.11.     Trading Activities.  The Investor’s
        trading activities with respect to the Company’s Common Stock shall be in
        compliance with all applicable federal and state securities laws, rules and
        regulations and the rules and regulations of the Principal Market on which
        the
        Company’s Common Stock is listed or traded. Neither the Investor nor its
        affiliates has an open short position in the Common Stock of the Company,
        the
        Investor agrees that it shall not, and that it will cause its affiliates
        not to,
        engage in any short sales of or hedging transactions with respect to the
        Common
        Stock.

      


      ARTICLE
        IV.

      Representations
        and Warranties of the Company

      


      Except
        as
        stated below, on the disclosure schedules attached hereto or in the SEC
        Documents (as defined herein), the Company hereby represents and warrants
        to,
        and covenants with, the Investor that the following are true and correct
        as of
        the date hereof:

      


      Section
        4.1.       Organization and
        Qualification.  The Company is duly incorporated or organized and
        validly existing in the jurisdiction of its incorporation or organization
        and
        has all requisite corporate power to own its properties and to carry on its
        business as now being conducted.  Each of the Company and its
        subsidiaries is duly qualified as a foreign corporation to do business and
        is in
        good standing in every jurisdiction in which the nature of the business
        conducted by it makes such qualification necessary, except to the extent
        that
        the failure to be so qualified or be in good standing would not have a Material
        Adverse Effect on the Company and its subsidiaries taken as a
        whole.

      


      Section
        4.2.       Authorization, Enforcement, Compliance
        with Other Instruments.  (i) The Company has the requisite corporate
        power and authority to enter into and perform this Agreement, the Registration
        Rights Agreement and any related agreements, in accordance with the terms
        hereof
        and thereof, (ii) the execution and delivery of this Agreement, the Registration
        Rights Agreement and any related agreements by the Company and the consummation
        by it of the transactions contemplated hereby and thereby, have been duly
        authorized by the Company’s Board of Directors and no further consent or
        authorization is required by the Company, its Board of Directors or its
        stockholders, (iii) this Agreement, the Registration Rights Agreement and
        any
        related agreements have been duly executed and delivered by the Company,
        (iv)
        this Agreement, the Registration Rights Agreement and assuming the execution
        and
        delivery thereof and acceptance by the Investor and any related agreements
        constitute the valid and binding obligations of the Company enforceable against
        the Company in accordance with their terms, except as such enforceability
        may be
        limited by general principles of equity or applicable bankruptcy, insolvency,
        reorganization, moratorium, liquidation or similar laws relating to, or
        affecting generally, the enforcement of creditors’ rights and
        remedies.

      


      Section
        4.3.       Capitalization.  The
        authorized capital stock of the Company is described in its most recent Form
        10-QSB.  All of such outstanding shares have been validly issued and
        are fully paid and nonassessable.  Except as disclosed in the SEC
        Documents, no shares of Common Stock are subject to preemptive rights or
        any
        other similar rights or any liens or encumbrances suffered or permitted by
        the
        Company.  Except as disclosed in the SEC Documents, as of the date
        hereof, (i) there are no outstanding options, warrants, scrip, rights to
        subscribe to, calls or commitments of any character whatsoever relating to,
        or
        securities or rights convertible into, any shares of capital stock of the
        Company or any of its subsidiaries, or contracts, commitments, understandings
        or
        arrangements by which the Company or any of its subsidiaries is or may become
        bound to issue additional shares of capital stock of the Company or any of
        its
        subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
        commitments of any character whatsoever relating to, or securities or rights
        convertible into, any shares of capital stock of the Company or any of its
        subsidiaries, (ii) there are no outstanding debt securities (iii) there are
        no
        outstanding registration statements other than on Form S-8 and (iv) there
        are no
        agreements or arrangements under which the Company or any of its subsidiaries
        is
        obligated to register the sale of any of their securities under the Securities
        Act (except pursuant to the Registration Rights Agreement).  There are
        no securities or instruments containing anti-dilution or similar provisions
        that
        will be triggered by this Agreement or any related agreement or the consummation
        of the transactions described herein or therein.  The Company has
        furnished to the Investor true and correct copies of the Company’s Articles of
        Incorporation, as amended and as in effect on the date hereof (the “Certificate
        of Incorporation”), and the Company’s By-laws, as in effect on the date hereof
        (the “By-laws”), and the terms of all securities convertible into or exercisable
        for Common Stock and the material rights of the holders thereof in respect
        thereto.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Section
        4.4.       No Conflict.  The
        execution, delivery and performance of this Agreement by the Company and
        the
        consummation by the Company of the transactions contemplated hereby will
        not (i)
        result in a violation of the Certificate of Incorporation, any certificate
        of
        designations of any outstanding series of preferred stock of the Company
        or
        By-laws or (ii) conflict with or constitute a default (or an event which
        with
        notice or lapse of time or both would become a default) under, or give to
        others
        any rights of termination, amendment, acceleration or cancellation of, any
        agreement, indenture or instrument to which the Company or any of its
        subsidiaries is a party, or result in a violation of any law, rule, regulation,
        order, judgment or decree (including federal and state securities laws and
        regulations and the rules and regulations of the Principal Market on which
        the
        Common Stock is quoted) applicable to the Company or any of its subsidiaries
        or
        by which any material property or asset of the Company or any of its
        subsidiaries is bound or affected and which would cause a Material Adverse
        Effect.  Except as disclosed in the SEC Documents, neither the Company
        nor its subsidiaries is in violation of any term of or in default under its
        Articles of Incorporation or By-laws or their organizational charter or by-laws,
        respectively, or any material contract, agreement, mortgage, indebtedness,
        indenture, instrument, judgment, decree or order or any statute, rule or
        regulation applicable to the Company or its subsidiaries.  The
        business of the Company and its subsidiaries is not being conducted in violation
        of any material law, ordinance, regulation of any governmental
        entity.  Except as specifically contemplated by this Agreement and as
        required under the Securities Act and any applicable state securities laws,
        the
        Company is not required to obtain any consent, authorization or order of,
        or
        make any filing or registration with, any court or governmental agency in
        order
        for it to execute, deliver or perform any of its obligations under or
        contemplated by this Agreement or the Registration Rights Agreement in
        accordance with the terms hereof or thereof.  All consents,
        authorizations, orders, filings and registrations which the Company is required
        to obtain pursuant to the preceding sentence have been obtained or effected
        on
        or prior to the date hereof.  The Company and its subsidiaries are
        unaware of any fact or circumstance which might give rise to any of the
        foregoing.

      


      Section
        4.5.       SEC Documents; Financial
        Statements.  The Company has filed all reports, schedules, forms,
        statements and other documents required to be filed by it with the SEC under
        the
        Exchange Act since December 31, 2006.  The Company has delivered to
        the Investor or its representatives, or made available through the SEC’s website
        at http://www.sec.gov, true and complete copies of the SEC
        Documents.  As of their respective dates, the financial statements of
        the Company disclosed in the SEC Documents (the “Financial Statements”) complied
        as to form in all material respects with applicable accounting requirements
        and
        the published rules and regulations of the SEC with respect
        thereto.  Such financial statements have been prepared in accordance
        with generally accepted accounting principles, consistently applied, during
        the
        periods involved (except (i) as may be otherwise indicated in such financial
        statements or the notes thereto, or (ii) in the case of unaudited interim
        statements, to the extent they may exclude footnotes or may be condensed
        or
        summary statements) and, fairly present in all material respects the financial
        position of the Company as of the dates thereof and the results of its
        operations and cash flows for the periods then ended (subject, in the case
        of
        unaudited statements, to normal year-end audit adjustments).  No other
        information provided by or on behalf of the Company to the Investor which
        is not
        included in the SEC Documents contains any untrue statement of a material
        fact
        or omits to state any material fact necessary in order to make the statements
        therein, in the light of the circumstances under which they were made, not
        misleading.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      Section
        4.6.       10b-5.  The SEC Documents do
        not include any untrue statements of material fact, nor do they omit to state
        any material fact required to be stated therein necessary to make the statements
        made, in light of the circumstances under which they were made, not
        misleading.

      


      Section
        4.7.       No Default.  Except as
        disclosed in the SEC Documents, the Company is not in default in the performance
        or observance of any material obligation, agreement, covenant or condition
        contained in any indenture, mortgage, deed of trust or other material instrument
        or agreement to which it is a party or by which it is or its property is
        bound
        and neither the execution, nor the delivery by the Company, nor the performance
        by the Company of its obligations under this Agreement or any of the exhibits
        or
        attachments hereto will conflict with or result in the breach or violation
        of
        any of the terms or provisions of, or constitute a default or result in the
        creation or imposition of any lien or charge on any assets or properties
        of the
        Company under its Certificate of Incorporation, By-Laws, any material indenture,
        mortgage, deed of trust or other material agreement applicable to the Company
        or
        instrument to which the Company is a party or by which it is bound, or any
        statute, or any decree, judgment, order, rules or regulation of any court
        or
        governmental agency or body having jurisdiction over the Company or its
        properties, in each case which default, lien or charge is likely to cause
        a
        Material Adverse Effect on the Company’s business or financial
        condition.

      


      Section
        4.8.       Absence of Events of
        Default.  Except for matters described in the SEC Documents and/or
        this Agreement, no Event of Default, as defined in the respective agreement
        to
        which the Company is a party, and no event which, with the giving of notice
        or
        the passage of time or both, would become an Event of Default (as so defined),
        has occurred and is continuing, which would have a Material Adverse Effect
        on
        the Company’s business, properties, prospects, financial condition or results of
        operations.

      


      Section
        4.9.       Intellectual Property
        Rights.  The Company and its subsidiaries own or possess adequate
        rights or licenses to use all material trademarks, trade names, service marks,
        service mark registrations, service names, patents, patent rights, copyrights,
        inventions, licenses, approvals, governmental authorizations, trade secrets
        and
        rights necessary to conduct their respective businesses as now
        conducted.  The Company and its subsidiaries do not have any knowledge
        of any infringement by the Company or its subsidiaries of trademark, trade
        name
        rights, patents, patent rights, copyrights, inventions, licenses, service
        names,
        service marks, service mark registrations, trade secret or other similar rights
        of others, and, to the knowledge of the Company, there is no claim, action
        or
        proceeding being made or brought against, or to the Company’s knowledge, being
        threatened against, the Company or its subsidiaries regarding trademark,
        trade
        name, patents, patent rights, invention, copyright, license, service names,
        service marks, service mark registrations, trade secret or other infringement;
        and the Company and its subsidiaries are unaware of any facts or circumstances
        which might give rise to any of the foregoing.

      


      Section
        4.10.     Employee Relations.  Neither the
        Company nor any of its subsidiaries is involved in any labor dispute nor,
        to the
        knowledge of the Company or any of its subsidiaries, is any such dispute
        threatened.  None of the Company’s or its subsidiaries’ employees is a
        member of a union and the Company and its subsidiaries believe that their
        relations with their employees are good.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      Section
        4.11.     Environmental Laws.  The Company
        and its subsidiaries are (i) in compliance with any and all applicable material
        foreign, federal, state and local laws and regulations relating to the
        protection of human health and safety, the environment or hazardous or toxic
        substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii)
        have received all permits, licenses or other approvals required of them under
        applicable Environmental Laws to conduct their respective businesses and
        (iii)
        are in compliance with all terms and conditions of any such permit, license
        or
        approval.

      


      Section
        4.12.     Title.  Except as set forth in the
        SEC Documents, the Company has good and marketable title to its properties
        and
        material assets owned by it, free and clear of any pledge, lien, security
        interest, encumbrance, claim or equitable interest other than such as are
        not
        material to the business of the Company.  Any real property and
        facilities held under lease by the Company and its subsidiaries are held
        by them
        under valid, subsisting and enforceable leases with such exceptions as are
        not
        material and do not interfere with the use made and proposed to be made of
        such
        property and buildings by the Company and its subsidiaries.

      


      Section
        4.13.     Insurance.  The Company and each of
        its subsidiaries are insured by insurers of recognized financial responsibility
        against such losses and risks and in such amounts as management of the Company
        believes to be prudent and customary in the businesses in which the Company
        and
        its subsidiaries are engaged.  Neither the Company nor any such
        subsidiary has been refused any insurance coverage sought or applied for
        and
        neither the Company nor any such subsidiary has any reason to believe that
        it
        will not be able to renew its existing insurance coverage as and when such
        coverage expires or to obtain similar coverage from similar insurers as may
        be
        necessary to continue its business at a cost that would not materially and
        adversely affect the condition, financial or otherwise, or the earnings,
        business or operations of the Company and its subsidiaries, taken as a
        whole.

      


      Section
        4.14.     Regulatory Permits.  The Company
        and its subsidiaries possess all material certificates, authorizations and
        permits issued by the appropriate federal, state or foreign regulatory
        authorities necessary to conduct their respective businesses, and neither
        the
        Company nor any such subsidiary has received any notice of proceedings relating
        to the revocation or modification of any such certificate, authorization
        or
        permit.

      


      Section
        4.15.     Internal Accounting Controls.  The
        Company and each of its subsidiaries maintain a system of internal accounting
        controls sufficient to provide reasonable assurance that (i) transactions
        are
        executed in accordance with management’s general or specific authorizations,
        (ii) transactions are recorded as necessary to permit preparation of financial
        statements in conformity with generally accepted accounting principles and
        to
        maintain asset accountability, (iii) access to assets is permitted only in
        accordance with management’s general or specific authorization and (iv) the
        recorded accountability for assets is compared with the existing assets at
        reasonable intervals and appropriate action is taken with respect to any
        differences.

      


      Section
        4.16.     No Material Adverse Breaches,
        etc.  Except as set forth in the SEC Documents, neither the Company
        nor any of its subsidiaries is subject to any charter, corporate or other
        legal
        restriction, or any judgment, decree, order, rule or regulation which in
        the
        judgment of the Company’s officers has or is expected in the future to have a
        Material Adverse Effect on the business, properties, operations, financial
        condition, results of operations or prospects of the Company or its
        subsidiaries.  Except as set forth in the SEC Documents, neither the
        Company nor any of its subsidiaries is in breach of any contract or agreement
        which breach, in the judgment of the Company’s officers, has or is expected to
        have a Material Adverse Effect on the business, properties, operations,
        financial condition, results of operations or prospects of the Company or
        its
        subsidiaries.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      Section
        4.17.     Absence of Litigation.  Except as
        set forth in the SEC Documents, there is no action, suit, proceeding, inquiry
        or
        investigation before or by any court, public board, government agency,
        self-regulatory organization or body pending against or affecting the Company,
        the Common Stock or any of the Company’s subsidiaries, wherein an unfavorable
        decision, ruling or finding would (i) have a Material Adverse Effect on the
        transactions contemplated hereby (ii) adversely affect the validity or
        enforceability of, or the authority or ability of the Company to perform
        its
        obligations under, this Agreement or any of the documents contemplated herein,
        or (iii) except as expressly disclosed in the SEC Documents, have a Material
        Adverse Effect on the business, operations, properties, financial condition
        or
        results of operation of the Company and its subsidiaries taken as a
        whole.

      


      Section
        4.18.     Subsidiaries.  Except as disclosed
        in the SEC Documents, the Company does not presently own or control, directly
        or
        indirectly, any interest in any other corporation, partnership, association
        or
        other business entity.

      


      Section
        4.19.     Tax Status.  Except as disclosed in
        the SEC Documents, the Company and each of its subsidiaries has made or filed
        all federal and state income and all other tax returns, reports and declarations
        required by any jurisdiction to which it is subject and (unless and only
        to the
        extent that the Company and each of its subsidiaries has set aside on its
        books
        provisions reasonably adequate for the payment of all unpaid and unreported
        taxes) has paid all taxes and other governmental assessments and charges
        that
        are material in amount, shown or determined to be due on such returns, reports
        and declarations, except those being contested in good faith and has set
        aside
        on its books provision reasonably adequate for the payment of all taxes for
        periods subsequent to the periods to which such returns, reports or declarations
        apply.  There are no unpaid taxes in any material amount claimed to be
        due by the taxing authority of any jurisdiction, and the officers of the
        Company
        know of no basis for any such claim.

      


      Section
        4.20.     Certain Transactions.  Except as
        set forth in the SEC Documents none of the officers, directors, or employees
        of
        the Company is presently a party to any transaction with the Company (other
        than
        for services as employees, officers and directors), including any contract,
        agreement or other arrangement providing for the furnishing of services to
        or
        by, providing for rental of real or personal property to or from, or otherwise
        requiring payments to or from any officer, director or such employee or,
        to the
        knowledge of the Company, any corporation, partnership, trust or other entity
        in
        which any officer, director, or any such employee has a substantial interest
        or
        is an officer, director, trustee or partner.

      


      Section
        4.21.     Fees and Rights of First
        Refusal.  The Company is not obligated to offer the securities offered
        hereunder on a right of first refusal basis or otherwise to any third parties
        including, but not limited to, current or former shareholders of the Company,
        underwriters, brokers, agents or other third parties.

      


      Section
        4.22.     Use of Proceeds.  The Company shall
        use the net proceeds from this offering for general corporate purposes,
        including, without limitation, the payment of loans incurred by the
        Company.  However, in no event shall the Company use the net proceeds
        from this offering for the payment (or loan to any such person for the payment)
        of any judgment, or other liability, incurred by any executive officer, officer,
        director or employee of the Company, except for any liability owed to such
        person for services rendered or as disclosed in a SEC document, or if any
        judgment or other liability is incurred by such person originating from services
        rendered to the Company, or the Company has indemnified such person from
        liability.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      Section
        4.23.     Further Representation and Warranties of the
        Company.  For so long as any securities issuable hereunder held by the
        Investor remain outstanding, the Company acknowledges, represents, warrants
        and
        agrees that it will use its best efforts to maintain the listing of its Common
        Stock on the Principal Market.

      


      Section
        4.24.     Opinion of Counsel.  Investor shall
        receive an opinion letter from counsel to the Company on the date
        hereof.

      


      Section
        4.25.     Opinion of Counsel.  The Company
        will obtain for the Investor, at the Company’s expense, any and all opinions of
        counsel which may be reasonably required in order to sell the securities
        issuable hereunder without restriction.

      


      Section
        4.26.     Dilution.  The Company is aware and
        acknowledges that issuance of shares of the Company’s Common Stock could cause
        dilution to existing shareholders and could significantly increase the
        outstanding number of shares of Common Stock.

      


      ARTICLE
        V.

      Indemnification

      


      The
        Investor and the Company represent to the other the following with respect
        to
        itself:

      


      Section
        5.1.       Indemnification.

      


      (a)                 In
        consideration of the Investor’s execution and delivery of this Agreement, and in
        addition to all of the Company’s other obligations under this Agreement, the
        Company shall defend, protect, indemnify and hold harmless the Investor,
        and all
        of its officers, directors, partners, employees and agents (including, without
        limitation, those retained in connection with the transactions contemplated
        by
        this Agreement) (collectively, the “Investor Indemnitees”) from and against any
        and all actions, causes of action, suits, claims, losses, costs, penalties,
        fees, liabilities and damages, and expenses in connection therewith
        (irrespective of whether any such Investor Indemnitee is a party to the action
        for which indemnification hereunder is sought), and including reasonable
        attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by
        the Investor Indemnitees or any of them as a result of, or arising out of,
        or
        relating to (a) any misrepresentation or breach of any representation or
        warranty made by the Company in this Agreement or the Registration Rights
        Agreement or any other certificate, instrument or document contemplated hereby
        or thereby, (b) any breach of any covenant, agreement or obligation of the
        Company contained in this Agreement or the Registration Rights Agreement
        or any
        other certificate, instrument or document contemplated  hereby or
        thereby, or (c) any cause of action, suit or claim brought or made against
        such
        Investor Indemnitee not arising out of any action or inaction of an Investor
        Indemnitee, and arising out of or resulting from the execution, delivery,
        performance or enforcement of this Agreement or any other instrument, document
        or agreement executed pursuant hereto by any of the Investor
        Indemnitees.  To the extent that the foregoing undertaking by the
        Company may be unenforceable for any reason, the Company shall make the maximum
        contribution to the payment and satisfaction of each of the Indemnified
        Liabilities, which is permissible under applicable law.

      


      (b)                 In
        consideration of the Company’s execution and delivery of this Agreement, and in
        addition to all of the Investor’s other obligations under this Agreement, the
        Investor shall defend, protect, indemnify and hold harmless the Company and
        all
        of its officers, directors, shareholders, employees and agents (including,
        without limitation, those retained in connection with the transactions
        contemplated by this Agreement) (collectively, the “Company Indemnitees”) from
        and against any and all Indemnified Liabilities incurred by the Company
        Indemnitees or any of them as a result of, or arising out of, or relating
        to (a)
        any misrepresentation or breach of any representation or warranty made by
        the
        Investor in this Agreement, the Registration Rights Agreement, or any instrument
        or document contemplated hereby or thereby executed by the Investor, (b)
        any
        breach of any covenant, agreement or obligation of the Investor(s) contained
        in
        this Agreement,  the Registration Rights Agreement or any other
        certificate, instrument or document contemplated hereby or thereby executed
        by
        the Investor, or (c) any cause of action, suit or claim brought or made against
        such Company Indemnitee based on  misrepresentations or due to
        a  breach by the Investor and arising out of or resulting from the
        execution, delivery, performance or enforcement of this Agreement or any
        other
        instrument, document or agreement executed pursuant hereto by any of the
        Company
        Indemnitees.  To the extent that the foregoing undertaking by the
        Investor may be unenforceable for any reason, the Investor shall make the
        maximum contribution to the payment and satisfaction of each of the Indemnified
        Liabilities, which is permissible under applicable law.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (c)                 The
        obligations of the parties to indemnify or make contribution under this Section
        5.1 shall survive termination.

      


      ARTICLE
        VI.

      Covenants
        of the Company

      


      Section
        6.1.       Registration
        Rights.  The Company shall cause the Registration Rights Agreement to
        remain in full force and effect and the Company shall comply in all material
        respects with the terms thereof.

      


      Section
        6.2.       Listing of Common
        Stock.  The Company shall use its best efforts to maintain the Common
        Stock’s authorization for quotation on the Principal Market.

      


      Section
        6.3.       Exchange Act
        Registration.  The Company will cause its Common Stock to continue to
        be registered under Section 12(g) of the Exchange Act, will file in a timely
        manner all reports and other documents required of it as a reporting company
        under the Exchange Act and will not take any action or file any document
        (whether or not permitted by Exchange Act or the rules thereunder) to terminate
        or suspend such registration or to terminate or suspend its reporting and
        filing
        obligations under said Exchange Act.

      


      Section
        6.4.       Transfer Agent
        Instructions.  Upon effectiveness of the Registration Statement the
        Company shall deliver instructions to its transfer agent to issue shares
        of
        Common Stock to the Investor free of restrictive legends on or before each
        Advance Date.

      


      Section
        6.5.       Corporate
        Existence.  The Company will take all steps necessary to preserve and
        continue the corporate existence of the Company.

      


      Section
        6.6.       Notice of Certain Events Affecting
        Registration; Suspension of Right to Make an Advance.  The Company
        will immediately notify the Investor upon its becoming aware of the occurrence
        of any of the following events in respect of a registration statement or
        related
        prospectus relating to an offering of Registrable Securities: (i) receipt
        of any
        request for additional information by the SEC or any other Federal or state
        governmental authority during the period of effectiveness of the Registration
        Statement for amendments or supplements to the registration statement or
        related
        prospectus; (ii) the issuance by the SEC or any other Federal or state
        governmental authority of  any stop order suspending the effectiveness
        of the Registration Statement or the initiation of any proceedings for that
        purpose; (iii) receipt of any notification with respect to the suspension
        of the
        qualification or exemption from qualification of any of the Registrable
        Securities for sale in any jurisdiction or the initiation or threatening
        of any
        proceeding for such purpose; (iv) the happening of any event that makes any
        statement made in the Registration Statement or related prospectus of any
        document incorporated or deemed to be incorporated therein by reference untrue
        in any material respect or that requires the making of any changes in the
        Registration Statement, related prospectus or documents so that, in the case
        of
        the Registration Statement, it will not contain any untrue statement of a
        material fact or omit to state any material fact required to be stated therein
        or necessary to make the statements therein not misleading, and that in the
        case
        of the related prospectus, it will not contain any untrue statement of a
        material fact or omit to state any material fact required to be stated therein
        or necessary to make the statements therein, in the light of the circumstances
        under which they were made, not misleading; and (v) the Company’s reasonable
        determination that a post-effective amendment to the Registration Statement
        would be appropriate; and the Company will promptly make available to the
        Investor any such supplement or amendment to the related
        prospectus.  The Company shall not deliver to the Investor any Advance
        Notice during the continuation of any of the foregoing events.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      Section
        6.7.       Issuance of the Company’s Common
        Stock.  The sale of the shares of Common Stock shall be made in
        accordance with the provisions and requirements of Regulation D and any
        applicable state securities law.

      


      Section
        6.8.       Review of Public
        Disclosures.  All SEC filings (including, without limitation, all
        filings required under the Exchange Act, which include Forms 10-Q and 10-QSB,
        10-K and 10K-SB, 8-K, etc) and other public disclosures made by the Company,
        including, without limitation, all press releases, investor relations materials,
        and scripts of analysts meetings and calls, shall be reviewed and approved
        for
        release by the Company’s attorneys and, if containing financial information, the
        Company’s independent certified public accountants.

      


      Section
        6.9.       Market Activities.  The
        Company will not, directly or indirectly, take any action designed to cause
        or
        result in, or that constitutes or might reasonably be expected to constitute,
        the stabilization or manipulation of the price of any security of the Company
        to
        facilitate the sale or resale of the Common Stock.

      


      ARTICLE
        VII.

      Conditions
        for Advance and Conditions to Closing

      


      Section
        7.1.       Conditions Precedent to the
        Obligations of the Company.  The obligation hereunder of the Company
        to issue and sell the shares of Common Stock to the Investor incident to
        each
        Closing is subject to the satisfaction, or waiver by the Company, at or before
        each such Closing, of each of the conditions set forth below.

      


      (a)                 Accuracy
        of the Investor’s Representations and Warranties.  The representations
        and warranties of the Investor shall be true and correct in all material
        respects.

      


      (b)                 Performance
        by the Investor.  The Investor shall have performed, satisfied and
        complied in all respects with all covenants, agreements and conditions required
        by this Agreement and the Registration Rights Agreement to be performed,
        satisfied or complied with by the Investor at or prior to such
        Closing.

      


      Section
        7.2.       Conditions Precedent to the Right
        of the Company to Deliver an Advance Notice.  The right of the Company
        to deliver an Advance Notice is subject to the fulfillment by the Company,
        on
        such Advance Notice (a “Condition Satisfaction Date”), of each of the following
        conditions:

      


      (a)                 Registration
        of the Common Stock with the SEC.  The Company shall have filed with
        the SEC a Registration Statement with respect to the resale of the Registrable
        Securities in accordance with the terms of the Registration Rights
        Agreement.  As set forth in the Registration Rights Agreement, the
        Registration Statement shall have previously become effective and shall remain
        effective on each Condition Satisfaction Date and (i) neither the Company
        nor
        the Investor shall have received notice that the SEC has issued or intends
        to
        issue a stop order with respect to the Registration Statement or that the
        SEC
        otherwise has suspended or withdrawn the effectiveness of the Registration
        Statement, either temporarily or permanently, or intends or has threatened
        to do
        so (unless the SEC’s concerns have been addressed and the Investor is reasonably
        satisfied that the SEC no longer is considering or intends to take such action),
        and (ii) no other suspension of the use or withdrawal of the effectiveness
        of
        the Registration Statement or related prospectus shall exist.  The
        Registration Statement must have been declared effective by the SEC prior
        to the
        first Advance Notice Date.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      (b)                 Authority.  The
        Company shall have obtained all permits and qualifications required by any
        applicable state in accordance with the Registration Rights Agreement for
        the
        offer and sale of the shares of Common Stock, or shall have the availability
        of
        exemptions therefrom.  The sale and issuance of the shares of Common
        Stock shall be legally permitted by all laws and regulations to which the
        Company is subject.

      


      (c)                 Fundamental
        Changes. There shall not exist any fundamental changes to the information
        set
        forth in the Registration Statement which would require the Company to file
        a
        post-effective amendment to the Registration Statement.

      


      (d)                 Performance
        by the Company.  The Company shall have performed, satisfied and
        complied in all material respects with all covenants, agreements and conditions
        required by this Agreement and the Registration Rights Agreement to be
        performed, satisfied or complied with by the Company at or prior to each
        Condition Satisfaction Date.

      


      (e)                 No
        Injunction.  No statute, rule, regulation, executive order, decree,
        ruling or injunction shall have been enacted, entered, promulgated or endorsed
        by any court or governmental authority of competent jurisdiction that prohibits
        or directly and adversely affects any of the transactions contemplated by
        this
        Agreement, and no proceeding shall have been commenced that may have the
        effect
        of prohibiting or adversely affecting any of the transactions contemplated
        by
        this Agreement.

      


      (f)                 No
        Suspension of Trading in or Delisting of Common Stock.  The trading of
        the Common Stock is not suspended by the SEC or the Principal Market (if
        the
        Common Stock is traded on a Principal Market).  The issuance of shares
        of Common Stock with respect to the applicable Closing, if any, shall not
        violate the shareholder approval requirements of the Principal Market (if
        the
        Common Stock is traded on a Principal Market).  The Company shall not
        have received any notice threatening the continued listing of the Common
        Stock
        on the Principal Market (if the Common Stock is traded on a Principal
        Market).

      


      (g)                 Not
        used

      


      (h)                 No
        Knowledge.  The Company has no knowledge of any event which would be
        more likely than not to have the effect of causing such Registration Statement
        to be suspended or otherwise ineffective.

      


      (i)                 Executed
        Advance Notice.  The Investor shall have received the Advance Notice
        executed by an officer of the Company and the representations contained in
        such
        Advance Notice shall be true and correct as of each Condition Satisfaction
        Date.

      

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      
         

        ARTICLE
          VIII.

        Due
          Diligence Review; Non-Disclosure of Non-Public
          Information



      Section
        8.1.       Non-Disclosure of Non-Public
        Information.

      


      (a)                 The
        Company covenants and agrees that it shall refrain from disclosing, and shall
        cause its officers, directors, employees and agents to refrain from disclosing,
        any material non-public information to the Investor without also disseminating
        such information to the public, unless prior to disclosure of such information
        the Company identifies such information as being material non-public information
        and provides the Investor with the opportunity to accept or refuse to accept
        such material non-public information for review.

      


      (b)                 Nothing
        herein shall require the Company to disclose non-public information to the
        Investor or its advisors or representatives, and the Company represents that
        it
        does not disseminate non-public information to any investors who purchase
        stock
        in the Company in a public offering, to money managers or to securities
        analysts, provided, however, that notwithstanding anything herein to the
        contrary, the Company will, as hereinabove provided, immediately notify the
        advisors and representatives of the Investor and, if any, underwriters, of
        any
        event or the existence of any circumstance (without any obligation to disclose
        the specific event or circumstance) of which it becomes aware, constituting
        non-public information (whether or not requested of the Company specifically
        or
        generally during the course of due diligence by such persons or entities),
        which, if not disclosed in the prospectus included in the Registration Statement
        would cause such prospectus to include a material misstatement or to omit
        a
        material fact required to be stated therein in order to make the statements,
        therein, in light of the circumstances in which they were made, not
        misleading.  Nothing contained in this Section 8.2 shall be construed
        to mean that such persons or entities other than the Investor (without the
        written consent of the Investor prior to disclosure of such information)
        may not
        obtain non-public information in the course of conducting due diligence in
        accordance with the terms of this Agreement and nothing herein shall prevent
        any
        such persons or entities from notifying the Company of their opinion that
        based
        on such due diligence by such persons or entities, that the Registration
        Statement contains an untrue statement of material fact or omits a material
        fact
        required to be stated in the Registration Statement or necessary to make
        the
        statements contained therein, in light of the circumstances in which they
        were
        made, not misleading.

      


      ARTICLE
        IX.

      Choice
        of
        Law/Jurisdiction

      


      Section
        9.1.       Governing Law.  This
        Agreement shall be governed by and interpreted in accordance with the laws
        of
        the State of Texas without regard to the principles of conflict of
        laws.  The parties further agree that any action between them shall be
        heard in Houston, Texas, and expressly consent to the jurisdiction and venue
        of
        the federal or state courts in Harris County, Texas, for the adjudication
        of any
        civil action asserted pursuant to this paragraph.

      


      ARTICLE
        X.

      Assignment;
        Termination

      


      Section
        10.1.     Assignment.  Neither this Agreement
        nor any rights of the Company hereunder may be assigned to any other
        Person.

      


      Section
        10.2.     Termination.

      


      (a)                 The
        obligations of the Investor to make Advances under Article II hereof shall
        terminate thirty (30) months after the Effective Date.

      


      (b)                 The
        obligation of the Investor to make an Advance to the Company pursuant to
        this
        Agreement shall terminate permanently (including with respect to an Advance
        Date
        that has not yet occurred) in the event that (i) there shall occur any stop
        order or suspension of the effectiveness of the Registration Statement for
        an
        aggregate of fifty (50) Trading Days, other than due to the acts of the
        Investor, during the Commitment Period, or (ii) the Company shall at any
        time
        fail materially to comply with the requirements of Article VI and such failure
        is not cured within thirty (30) days after receipt of written notice from
        the
        Investor, provided, however, that this termination provision shall not apply
        to
        any period commencing upon the filing of a post-effective amendment to such
        Registration Statement and ending upon the date on which such post effective
        amendment is declared effective by the SEC.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      (c)                 The
        Company may terminate this Agreement by providing the Investor thirty (30)
        days
        (the “Notice Period”) advance written notice.  The Investor shall not
        be obligated to accept any Advance Notices during the Notice
        Period.  Upon termination of this Agreement the Company shall have no
        further obligations to the Investor under this Agreement or the Registration
        Rights Agreement, provided however the Company shall remain obligated to
        Comply
        with its obligations under Section 3 of the Registration Rights Agreement
        and
        any and all related obligations during such time as the Investor has sold
        all of
        the Registrable Securities, as this term is defined in the Registration Rights
        Agreement.

      


      ARTICLE
        XI.

      Notices

      


      Section
        11.1.     Notices.  Any notices, consents,
        waivers, or other communications required or permitted to be given under
        the
        terms of this Agreement must be in writing and will be deemed to have been
        delivered (i) upon receipt, when delivered personally; (ii) upon receipt,
        when
        sent by facsimile, provided a copy is mailed by U.S. certified mail, return
        receipt requested; (iii) three (3) days after being sent by U.S. certified
        mail,
        return receipt requested, or (iv) one (1) day after deposit with a nationally
        recognized overnight delivery service, in each case properly addressed to
        the
        party to receive the same.  The addresses and facsimile numbers for
        such communications shall be:

      


      If
        to the
        Company, to:

      Exobox
        Technologies Corp.

      5810
        Tanglewood Park
        Street

      Houston,
        Texas 77057

      Attention:     Robert
        Dillon

      Telephone:   (713)
        781-6173

      Facsimile:    (713)
        781-6175

      


      If
        to the
        Investor(s):

      IFG
        Opportunity Fund, LLC

      PO
        Box 1142

      Roswell,
        GA 30077

      Attention:  Anthony
        Gentile

      Portfolio
        Manager

      Telephone:  (770)
        587-5969

      Facsimile:     (770)
        518-7432

      
 

      Each
        party shall provide five (5) days’ prior written notice to the other party of
        any change in address or facsimile number.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        XII.

      Miscellaneous

      


      Section
        12.1.     Counterparts.  This Agreement may
        be executed in two or more identical counterparts, all of which shall be
        considered one and the same agreement and shall become effective when
        counterparts have been signed by each party and delivered to the other
        party.  In the event any signature page is delivered by facsimile
        transmission, the party using such means of delivery shall cause four (4)
        additional original executed signature pages to be physically delivered to
        the
        other party within five (5) days of the execution and delivery hereof, though
        failure to deliver such copies shall not affect the validity of this
        Agreement.

      


      Section
        12.2.     Entire Agreement; Amendments.  This
        Agreement supersedes all other prior oral or written agreements between the
        Investor, the Company, their affiliates and persons acting on their behalf
        with
        respect to the matters discussed herein, and this Agreement and the instruments
        referenced herein contain the entire understanding of the parties with respect
        to the matters covered herein and therein and, except as specifically set
        forth
        herein or therein, neither the Company nor the Investor makes any
        representation, warranty, covenant or undertaking with respect to such
        matters.  No provision of this Agreement may be waived or amended
        other than by an instrument in writing signed by the party to be charged
        with
        enforcement.

      


      Section
        12.3.     RESERVED.

      


      Section
        12.3.     Reporting Entity for the Common
        Stock.  The reporting entity relied upon for the determination of the
        trading price or trading volume of the Common Stock on any given Trading
        Day for
        the purposes of this Agreement shall be Bloomberg, L.P. or any successor
        thereto.  The written mutual consent of the Investor and the Company
        shall be required to employ any other reporting entity.

      


      Section
        12.4.     Fees and Expenses.  The Company
        hereby agrees to pay the following fees:

      


      (a)                 Expense
        Reimbursement Fee.  Each of the parties shall pay its own fees and
        expenses (including the fees of any attorneys, accountants, appraisers or
        others
        engaged by such party) in connection with this Agreement and the transactions
        contemplated hereby, except that the Company shall pay an Expense Reimbursement
        Fee of Ten Thousand Dollars ($10,000) to the Investor.

      


      (b)                 Company
        shall issue to Investor 300,000 shares of Common Stock on the day of closing.
        Common stock referenced herein shall have piggyback registration
        rights.

      


      (c)                 Commitment
        Fees.  On each Advance Date the Company shall pay to the Investor,
        directly out of the gross proceeds of each Advance, an amount equal to three
        percent (3%) of the amount of each Advance.  The Company hereby agrees
        that if such payment, as is described above, is not made by the Company on
        the
        Advance Date, such payment shall be made as outlined and mandated by Section
        2.3
        of this Agreement.

      


      Section
        12.5.     Confidentiality.  If for any reason
        the transactions contemplated by this Agreement are not consummated, each
        of the
        parties hereto shall keep confidential any information obtained from any
        other
        party (except information publicly available or in such party’s domain prior to
        the date hereof, and except as required by court order) and shall promptly
        return to the other parties all schedules, documents, instruments, work papers
        or other written information without retaining copies thereof, previously
        furnished by it as a result of this Agreement or in connection
        herein.

      


      


      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK]


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the parties hereto have caused this Standby Equity Distribution
        Agreement to be executed by the undersigned, thereunto duly authorized, as
        of
        the date first set forth above.

      


      
        	
                COMPANY:

              	 
	
                Exobox
                  Technologies Corp. 

              
	 	 	 	 	 
	
                By:

              	
                 

              	 	 	 
	 	 	 	 	 
	
                Name:

              	
                
                  Robert
                    Dillon

                

              	
                 

              	 	 
	
                Title:

              	
                
                  CEO

                

              	
                 

              	 	 
	 	 	 	 	 
	
                INVESTOR:  IFG
                  Opportunity Fund, LLC

              	 
	 	 	 	 	 
	
                By:

              	
                 

              	 	 	 
	 	 	 	 	 
	
                Name:

              	
                
                  Anthony
                    Gentile

                

              	
                 

              	 	 
	
                Title:

              	
                
                  Portfolio
                    Manager

                

              	
                 

              	 	 


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      EXHIBIT
        A

      ADVANCE
        NOTICE

      EXOBOX
        TECHNOLOGIES CORP.

      


      


      The
        undersigned, _______________________ hereby certifies, with respect to the
        sale
        of shares of Common Stock of EXOBOX TECHNOLOGIES CORP. (the “Company”) issuable
        in connection with this Advance Notice, delivered pursuant to the Standby
        Equity
        Distribution Agreement (the “Agreement”), as follows:

      


      1.      The
        undersigned is the duly elected ______________ of the Company.

      


      2.      There
        are no fundamental changes to the information set forth in the Registration
        Statement which would require the Company to file a post effective amendment
        to
        the Registration Statement.

      


      3.      The
        Company has performed in all material respects all covenants and agreements
        to
        be performed by the Company and has complied in all material respects with
        all
        obligations and conditions contained in the Agreement on or prior to the
        Advance
        Notice Date, and shall continue to perform in all material respects all
        covenants and agreements to be performed by the Company through the applicable
        Advance Date.  All conditions to the delivery of this Advance Notice
        are satisfied as of the date hereof.

      


      4.      The
        undersigned hereby represents, warrants and covenants that it has made all
        filings (“SEC Filings”) required to be made by it pursuant to applicable
        securities laws (including, without limitation, all filings required under
        the
        Securities Exchange Act of 1934, which include Forms 10-Q or 10-QSB, 10-K
        or
        10-KSB, 8-K, etc.).  All SEC Filings and other public disclosures made
        by the Company, including, without limitation, all press releases, analysts
        meetings and calls, etc. (collectively, the “Public Disclosures”), have been
        reviewed and approved for release by the Company’s attorneys and, if containing
        financial information, the Company’s independent certified public
        accountants.  None of the Company’s Public Disclosures contain any
        untrue statement of a material fact or omit to state any material fact required
        to be stated therein or necessary to make the statements therein, in the
        light
        of the circumstances under which they were made, not misleading.

      


      5.      The
        Advance requested is _____________________.

      


      The
        undersigned has executed this Certificate this ____ day
        of  _________________.

      


      EXOBOX
        TECHNOLOGIES CORP.

      


      


      By:

      


      Name:

      


      Title:

      


      If
        Returning This Advance Notice via Facsimile Please Send To:  (___)
        ___-____

      


      If
        by
        Mail, via Federal Express To:

      


      ______________________________________