Unassociated Document


    
       

      BLUE
        HOLDINGS, INC.

       

      SERIES
        A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

       

      THIS
        SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”),
        is
        made as of November 13, 2007 (the “Effective
        Date”),
        by
        and among Blue Holdings, Inc., a Nevada corporation, (the “Company”),
        and
        each of the undersigned investors listed on the Schedule of Investors attached
        hereto as Exhibit
        A
        (individually, an “Investor,”
and
        collectively, the “Investors”).
        

       

      WHEREAS,
        the
        Company wishes to issue and sell to the Investors up to an aggregate of
        1,000,000 shares (the “Preferred
        Shares”)
        of the
        Company’s Series A Convertible Preferred Stock, par value $0.001 per share (the
“Series
        A Preferred Stock”),
        in
        exchange for the cancellation of certain indebtedness due and owing to the
        Investors on the Effective Date; and

       

      WHEREAS,
        the
        Investors, severally and not jointly, wish to purchase the Preferred Shares
        on
        the terms and subject to the conditions set forth in this
        Agreement.

       

      NOW,
        THEREFORE,
        in
        consideration of the premises, representations, warranties and the mutual
        covenants contained in this Agreement, the parties agree as
        follows:

       

      
        	
                1.

              	
                
                  AUTHORIZATION
                    AND SALE OF PREFERRED
                    SHARES

                

              


      

       

      1.1 Issuance,
        Sale and Delivery of the Preferred Shares at the Closing.
        At the
        Closing (as defined in Section 1.2 hereof), on the terms and subject to the
        conditions of this Agreement, the Company shall issue and sell to each Investor,
        and each Investor shall, severally and not jointly, purchase from the Company,
        that number of Preferred Shares set forth opposite the name of such Investor
        under the heading “Number of Preferred Shares to be Purchased” on Exhibit
        A hereto, at a price of $2.556682 per share for the aggregate purchase
        price
        set forth opposite the name of such Investor under the heading “Aggregate
        Purchase Price for Preferred Shares” on Exhibit A hereto. 

       

      1.2 Closing.
        The
        Closing shall take place at the offices of Stubbs Alderton & Markiles, LLP,
        15260 Ventura Blvd., 20th
        Floor,
        Sherman Oaks, California 91403, at such date and time as may be agreed upon
        between the Company and the Investors (such closing being called the
“Closing” and
        such
        date and time being called the “Closing
        Date”).
        At the
        Closing, the Company shall issue and deliver to each Investor a stock
        certificate or certificates in definitive form, registered in the name of
        such
        Investor, representing the Preferred Shares being purchased by it at the
        Closing. As payment in full for the Preferred Shares being purchased by it
        under
        this Agreement, and against delivery of the stock certificate or certificates
        therefor as aforesaid, on the Closing Date, each Investor shall deliver to
        the
        Company by such method as may be reasonably acceptable to the Company a
        promissory note or other evidence of indebtedness for cancellation, as
        applicable, in the amount and as set forth opposite the name of such Investor
        under the heading “Aggregate Purchase Price for Preferred Shares” on Exhibit
        A. All amounts shall be paid to the account of the Company as shall have
        been designated in writing a reasonable time in advance to the Investors
        by the
        Company.


      
        
          
          

        

        
          
             

          

          
            

          

        

        
          
          

        

      

       

      1.3 Issuance,
        Sale and Delivery of the Preferred Shares at the
        Closings.
        The
        Company has authorized the number of Preferred Shares of Series A Preferred
        Stock having the rights, preferences, privileges and restrictions set forth
        in
        the Certificate of Designations, Preferences, Rights and Limitations of Series
        A
        Convertible Preferred Stock (the “Certificate”),
        which, in the form attached hereto as Exhibit B, shall be adopted and
        filed with the Secretary of State of the State of Nevada on or before the
        Closing. 

       

      1.4 Conversion
        Shares.
        Shares
        of Common Stock issuable upon conversion of the Preferred Shares are referred
        to
        herein as the “Conversion
        Shares.”
Each
        share of Series A Preferred Stock shall be convertible, at the option of
        the
        Investor, at any time after the date of issuance of such share, into such
        number
        of shares of Common Stock as is determined by dividing (i) the purchase price
        per share of Series A Preferred Stock, plus all accrued but unpaid Dividends
        (as
        defined in the Certificate) on each such share, by (ii) the Conversion Price
        in
        effect on the date the certificate is surrendered for conversion. The initial
        “Conversion
        Price”
per
        share for the Series A Preferred Stock shall be $0.7347 and shall be subject
        to
        adjustment as set forth in the Certificate. For the avoidance of doubt, the
        Conversion Price represents the average closing price of a share of the Common
        Stock, as quoted on the NASDAQ
        Capital
        Market, over the twenty (20) trading days immediately preceding the Closing
        Date.

       

      
        	
                2.

              	
                
                  REPRESENTATIONS
                    AND WARRANTIES OF THE
                    COMPANY

                

              


      

       

      The
        Company represents and warrants to each Investor that:

       

      2.1 Organization
        and Standing; Qualifications.
        The
        Company is a corporation validly existing and in good standing under the
        laws of
        the State of Nevada. The Company has all requisite power and authority to
        own
        and operate its properties and assets, and to carry on its business as conducted
        and as proposed to be conducted. The Company is duly qualified to transact
        business and is in good standing in each jurisdiction in which the failure
        to so
        qualify could, singly or in the aggregate, have a material adverse effect
        on the
        business, assets, liabilities, financial condition or results of operations
        of
        the Company as presently conducted or proposed to be conducted.

       

      2.2 Corporate
        Power.
        The
        Company has all requisite power and authority to execute and deliver this
        Agreement, to sell and issue the Preferred Shares hereunder, to issue the
        Conversion Shares and to carry out and perform its obligations under the
        terms
        of this Agreement.

       

      2.3 Authorization.

       

      2.3.1 All
        corporate action on the part of the Company, its officers, directors and
        stockholders, necessary for (i) the authorization, execution and delivery
        of the
        Agreement by the Company, (ii) the authorization, sale, issuance and delivery
        of
        the Preferred Shares and the Conversion Shares, (iii) the filing of the
        Certificate, and (iv) the performance of all of the Company’s obligations under
        the Agreement has been taken. The Agreement has been duly and validly executed
        and delivered by the Company and constitutes the valid and binding obligation
        of
        the Company, enforceable in accordance with its terms, except as limited
        by
        applicable bankruptcy, insolvency, reorganization, moratorium, and other
        laws of
        general application affecting enforcement of creditors’ rights
        generally.


      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      2.3.2 The
        Preferred Shares, when sold, issued and delivered in compliance with the
        provisions of this Agreement, will be duly and validly issued, fully paid
        and
        nonassessable and shall have the rights, preferences, privileges and
        restrictions described in the Certificate, and shall be free of any liens,
        preemptive or similar rights, encumbrances or restrictions on transfer;
        provided, however, that the Preferred Shares may be subject to restrictions
        on
        transfer under state and/or federal securities laws. The Conversion Shares
        have
        been duly and validly reserved for issuance and, upon issuance in accordance
        with the terms of the Certificate, will be duly and validly issued, fully
        paid,
        and nonassessable and shall be free of any liens, preemptive or similar rights,
        encumbrances or restrictions on transfer; provided, however, that the Conversion
        Shares may be subject to restrictions on transfer under state and/or federal
        securities laws.

       

      
        	
                3.

              	
                
                  REPRESENTATIONS
                    AND WARRANTIES OF THE
                    INVESTORS

                

              


      

       

      Each
        Investor hereby represents and warrants to the Company with respect to the
        purchase of the Preferred Shares to be purchased by it as follows:

       

      3.1 Experience.
        Such Investor acknowledges that it is able to bear the economic risk of its
        investment, and has such knowledge and experience in financial or business
        matters that it is capable of evaluating the merits and risks of the investment
        in the Preferred Shares and the Conversion Shares and is able to bear the
        economic risk of its investment in the Preferred Shares and Conversion Shares
        for an indefinite period of time. 

       

      3.2 Disclosure
        of Information. Such Investor further represents that it has had an
        opportunity to ask questions of and receive answers from the Company regarding
        the terms and conditions of the offering of the Preferred Shares and the
        business, prospects, properties and financial condition of the
        Company.

       

      3.3 Investment.
        Such Investor is acquiring the Preferred Shares and the Conversion Shares
        for
        investment for its own account, not as a nominee or agent, and not with the
        view
        to, or for resale in connection with, any distribution thereof. It understands
        that the Preferred Shares have not been, and the Conversion Shares will not
        be,
        (except for specific registration rights granted to the Investors), registered
        under the Securities Act by reason of a specific exemption from the registration
        provisions of the Securities Act, the availability of which depends upon,
        among
        other things, the bona fide nature of the investment intent and the accuracy
        of
        such Investor’s representations as expressed herein.

       

      3.4 Accredited
        Investors. Such Investor is an “accredited investor” as defined in
        Rule 501(a) of Regulation D promulgated under the Securities Act.

       

      3.5 Legends.
        It is understood that the certificates evidencing the Preferred Shares and
        the
        Conversion Shares may bear one or all of the following legends:


      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      “THESE
        SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
        AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
        IN THE
        ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
        UNDER SUCH ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
        THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS SOLD PURSUANT TO RULE 144
        OF
        SUCH ACT.” 

       

      Any
        other
        legend required by the securities laws of the State of California.

       

      3.6 Authorization.
        The
        execution, delivery and performance by such Investor of the Agreements have
        been
        duly authorized by all requisite action of such Investor. The Agreements,
        when
        executed and delivered by such Investor, shall constitute valid and legally
        binding obligations of such Investor, enforceable in accordance with their
        terms
        except as limited by applicable bankruptcy, insolvency, reorganization,
        moratorium and other laws of general application affecting enforcement of
        creditors’ rights generally.

       

      
        	
                4.

              	
                
                  INVESTORS’
                    CONDITIONS TO EACH
                    CLOSING

                

              


      

       

      Each
        Investor’s obligation to purchase the Preferred Shares at the Closing is, at the
        option of such Investor, subject to the fulfillment of the following conditions
        on or before the Closing:

       

      4.1 Representations
        and Warranties True and Correct. The representations and warranties
        made by the Company in Section 2 hereof shall be true and correct as of
        the Closing, with the same effect as if made as of the Closing.

       

      4.2 Covenants.
        All covenants, agreements and conditions contained in this Agreement to be
        performed by the Company on or prior to the Closing shall have been performed
        or
        complied with.

       

      4.3 Certificate.
        Prior to the Closing, the Company shall have prepared and executed the
        Certificate in the form set forth in Exhibit B. The Certificate shall
        have been filed with and accepted by the Secretary of State of the State
        of
        Nevada and shall have become effective.

       

      
        	
                5.

              	
                
                  COMPANY’S
                    CONDITIONS TO EACH
                    CLOSING

                

              


      

       

      The
        Company’s obligation to sell and issue any Preferred Shares at the Closing to
        each Investor is, at the option of the Company, subject to the fulfillment
        of
        the following conditions as of the Closing:

       

      5.1 Representations
        and Warranties True and Correct.
        The
        representations and warranties made by such Investor in Section 3 hereof
        shall be true and correct when made, and shall be true and correct at the
        Closing. 

       

      5.2 Covenants.
        All covenants, agreements and conditions contained in this Agreement to be
        performed by such Investor on or prior to the Closing shall have been performed
        or complied with. 


      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      5.3 Certificate.
        The Secretary of State of the State of Nevada shall have accepted the
        Certificate for filing. 

       

      5.4 Purchase
        Price Paid.
        Such
        Investor shall have delivered to the Company the purchase price for the
        Preferred Shares set forth in Exhibit A hereto.

       

      
        	
                6.

              	
                
                  COVENANTS

                

              


      

       

      6.1 Reserve
        for Conversion Shares. The Company shall at all times reserve and
        keep available out of its authorized but unissued shares of Common Stock,
        for
        the purpose of effecting the conversion of the Preferred Shares and otherwise
        complying with the terms of this Agreement, such number of its duly authorized
        shares of Common Stock as shall be sufficient to effect the conversion of
        the
        Preferred Shares from time to time outstanding or otherwise to comply with
        the
        terms of this Agreement. If at any time the number of authorized but unissued
        shares of Common Stock shall not be sufficient to effect the conversion of
        the
        Preferred Shares or otherwise to comply with the terms of this Agreement,
        the
        Company will forthwith take such corporate action as may be necessary to
        increase its authorized but unissued shares of Common Stock to such number
        of
        shares as shall be sufficient for such purposes. The Company will obtain
        any
        authorization, consent, approval or other action by or make any filing with
        any
        court or governmental authority that may be required under applicable state
        securities laws in connection with the issuance of shares of Common Stock
        upon
        conversion of the Preferred Shares.

       

      6.2 Further
        Assurances. The Company shall cure promptly any defects in the
        creation and issuance of the Preferred Shares and the Conversion Shares,
        and in
        the execution and delivery of the Agreements. The Company, at its expense,
        shall
        execute and deliver promptly to the Investor upon request all such other
        and
        further documents, agreements and instruments as may be reasonably necessary
        to
        permit the Company to comply with its covenants and agreements herein, and
        shall
        make any recordings, file any notices and obtain any consents as may be
        necessary or appropriate in connection therewith.

       

      6.3 Regulation
        D Filings. The Company shall file on a timely basis all notices of
        sale required to be filed with the Securities and Exchange Commission pursuant
        to Regulation D under the Securities Act of 1933, as amended (the “Securities
        Act”),
        with
        respect to the transactions contemplated by this Agreement.

       

      6.4 Piggyback
        Registrations.

       

      6.4.1 Right
        to Include Conversion Shares.
        Each
        time that the Company proposes for any reason to register any of its Common
        Stock under the Securities Act, either for its own account or for the account
        of
        a stockholder or stockholders, other than Registration Statements on Forms
        S-4
        or S-8 (or similar or successor forms) (a “Proposed
        Registration”),
        the
        Company shall promptly give written notice of such Proposed Registration
        to all
        of the Investors (which notice shall be given in no event less than ten (10)
        days prior to the expected filing date of the Proposed Registration) and
        shall
        offer such Investors the right to request inclusion of any of such Investor’s
        Conversion Shares in the Proposed Registration. The rights to piggyback
        registration may be exercised on an unlimited number of
        occasions.


      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      6.4.2 Piggyback
        Procedure.
        Each
        Investor shall have twenty (20) days from the date of receipt of the Company’s
        notice referred to in Section 6.4.1 above to deliver to the Company a written
        request specifying the number of Conversion Shares such Investor intends
        to sell
        and such Investor’s intended method of disposition. Any Investor shall have the
        right to withdraw such Investor’s request for inclusion of such Investor’s
        Conversion Shares in any Proposed Registration pursuant to this Section 6.4
        by
        giving written notice to the Company of such withdrawal; provided,
        however,
        that
        the Company may ignore a notice of withdrawal made within less than one full
        business day prior to the date the Proposed Registration is scheduled to
        become
        effective. Subject to Section 6.4.4 below, the Company shall use its reasonable
        best efforts to include
        in such Proposed Registration all such Conversion Shares so requested to
        be
        included therein; provided,
        however,
        that
        the Company may at any time withdraw or cease proceeding with any such Proposed
        Registration if it shall at the same time withdraw or cease proceeding with
        the
        registration of all other shares of Common Stock originally proposed to be
        registered.

       

      6.4.3 Selection
        of Underwriters.
        The
        managing underwriter for any Proposed Registration that involves an underwritten
        public offering shall be one or more reputable nationally recognized investment
        banks selected by the Company.

       

      6.4.4 Priority
        for Piggyback Registration.
        

       

      6.4.4.1 Notwithstanding
        any other provision of this Section 6.4, if the managing underwriter of an
        underwritten public offering determines and advises the Company and the
        Investors in writing that the inclusion of all Conversion Shares proposed
        to be
        included by the Investors in the underwritten public offering would materially
        and adversely interfere with the successful marketing of the Company’s
        securities in the Proposed Registration, then the Investors shall not be
        permitted to include any Conversion Shares in excess of the amount, if any,
        of
        Conversion Shares which the managing underwriter of such underwritten public
        offering shall reasonably and in good faith agree in writing to include in
        such
        public offering in addition to the amount of securities to be registered
        for the
        Company. The Company will be obligated to include in such Proposed Registration,
        as to each Investor, only a portion of the Conversion Shares such Investor
        has
        requested be registered equal to the ratio which such Investor’s requested
        Conversion Shares bears to the total number of Conversion Shares requested
        to be
        included in such Proposed Registration by all Investors who have requested
        that
        their Conversion Shares be included in such Registration Statement, and no
        party, other than the Company and the Investors, shall be permitted to include
        their Conversion Shares in any such Proposed Registration unless such shares
        are
        also limited on a pro rata basis equal to the ratio which such party’s requested
        Conversion Shares bear to the total number of Conversion Shares requested
        to be
        included in such Proposed Registration by all Investors who have requested
        that
        their Conversion Shares be included in such Proposed Registration. The
        securities to be included in a Proposed Registration initiated by the Company
        shall be allocated:
        first,
        to the Company; second, pari
        passu
        to the
        Investors, and third, to any others requesting registration of securities
        of the
        Company.

       

      6.4.4.2 Notwithstanding
        any portion of the foregoing to the contrary, in no event shall the shares
        to be
        sold by the Investors be reduced below twenty percent (20%) of the total
        amount
        of securities included in the Proposed Registration. No stockholder of the
        Company shall be granted piggyback registration rights which would reduce
        the
        number of shares to be included by the Investors in such registration without
        the consent of the Investors of at least a majority of the Conversion
        Shares.


      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      6.4.4.3 If
        as a
        result of the provisions of this Section 6.4, any Investor shall not be entitled
        to include more than 50% of its Conversion Shares in a registration that
        such
        Investor has requested to be so included, such Investor may withdraw such
        Investor’s request to include Conversion Shares in such Proposed
        Registration.

       

      6.4.5 Underwritten
        Offering.
        In the
        event that the Proposed Registration by the Company is, in whole or in part,
        an
        underwritten public offering of securities of the Company, any request under
        this Section 6.4 shall specify that the Conversion Shares be included in
        the
        underwriting on the same terms and conditions as the shares, if any, otherwise
        being sold through the underwriters under such registration.

       

      6.4.6 Transfer.
        The
        foregoing registration rights may be transferred to any transferee that acquires
        all of the Series A Preferred Stock.

       

      
        	
                7.

              	
                
                  MISCELLANEOUS

                

              


      

       

      7.1 Closing.
        Each
        Investor hereto expressly acknowledges and agrees that immediately following
        an
        applicable Closing, such Investor shall have deemed such Investor’s conditions
        to closing identified in Section 4 hereof to have been satisfied or
        waived.

       

      7.2 Governing
        Law. This Agreement shall be governed in all respects by the
        internal laws of the State of California, without giving effect to principles
        of
        conflicts of law, as applied to agreements entered into among California
        State
        residents to be performed entirely within California. Each party hereto
        irrevocably and unconditionally (i) agrees that any action, suit or claim
        brought hereunder must be brought in the courts of the United States in the
        State of California or the state courts of the State of California which
        shall
        serve as the exclusive jurisdiction and venue for any and all disputes arising
        out of and/or relating to this Agreement; (ii) consents to the jurisdiction
        of
        any such court in any such suit, action or proceeding; and (iii) waives any
        objection which such party may have to the laying of venue of any such suit,
        action or proceeding in any such court.

       

      7.3 Successors
        and Assigns. Except as otherwise provided herein, the provisions of
        this Agreement shall inure to the benefit of, and be binding upon, the
        successors, assigns, heirs, executors and administrators of the parties hereto
        (including to any transferee of any Preferred Shares or Conversion Shares
        that
        is an affiliate of the Investor). Nothing in this Agreement, express or implied,
        is intended to confer upon any party other than the parties hereto or their
        respective successors and assigns any rights, remedies, obligations or
        liabilities under or by reason of this Agreement, except as expressly provided
        in this Agreement.

       

      7.4 Amendment.
        Any provision of this Agreement may be amended, waived, modified, discharged
        or
        terminated only with the written consent of the Company and the holders of
        a
        majority of the Preferred Shares, voting together as a single class. Any
        amendment or waiver affected in accordance with this Section 7.4 shall be
        binding upon the Company and each holder of any securities subject to this
        Agreement (including securities into which such securities are convertible)
        and
        future holders of all such securities. Each Investor may waive his, her or
        its
        rights or the Company’s obligations with respect to its Preferred Shares
        hereunder without obtaining the consent of any other natural person or
        Person.


      
        
          
          

        

        
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      7.5 Notices.
        All notices required or permitted hereunder shall be in writing and shall
        be
        deemed effectively given (a) upon personal delivery to the party to be notified,
        (b) five (5) days after deposit in the United States mail, by registered
        or
        certified mail, postage prepaid and properly addressed to the party to be
        notified as set forth in the Company records, or (c) when received if
        transmitted by telecopy (to be followed by U.S. mail), electronic or digital
        transmission method. In each case notice shall be sent to the addresses set
        forth on the Company’s records or at such other address as a party may designate
        by ten (10) days’ advance written notice to the other parties
        hereto.

       

      7.6 Counterparts.
        This Agreement may be executed in any number of counterparts, each of which
        shall be enforceable against the parties actually executing such counterparts,
        and all of which together shall constitute one and the same
        instrument.

       

      7.7 Severability.
        In the event that any provision of this Agreement becomes or is declared
        by a
        court of competent jurisdiction to be illegal, unenforceable or void, this
        Agreement shall continue in full force and effect without said
        provision.

       

      7.8 Titles
        and Subtitles. The titles and subtitles used in this Agreement are
        used for convenience only and are not to be considered in construing or
        interpreting this Agreement.

       

      7.9 Survival
        of Agreement
        All
        covenants and agreements made in this Agreement shall survive the execution
        and
        delivery hereof and the issuance, sale and delivery of the Preferred Shares,
        and
        the issuance and delivery of the Conversion Shares. For the avoidance of
        doubt,
        the representations and warranties made in this Agreement shall not survive
        the
        execution and delivery hereof.

       

      7.11 Attorneys'
        Fees.
        If any
        action at law or in equity (including arbitration) is necessary to enforce
        or
        interpret the terms of any of the Agreements, the prevailing party shall
        be
        entitled to reasonable attorney’s fees, costs and necessary disbursements in
        addition to any other relief to which such party may be entitled.

       

      7.12 Facsimile
        Signatures.
        This
        Agreement may be executed and delivered by facsimile and, upon such delivery,
        the facsimile will be deemed to have the same effect as if the original
        signature had been delivered to the other party. Each Investor agrees to
        deliver
        to the Company the original signature copy by express overnight delivery.
        The
        failure to deliver the original signature copy and/or the nonreceipt of the
        original signature copy shall have no effect upon the binding and enforceable
        nature of this Agreement.

       

      7.13 Entire
        Agreement. This Agreement, together with the Exhibits hereto, the
        certificates, documents, instruments and writings that are delivered pursuant
        hereto and each of the other Agreements, constitutes the entire agreement
        and
        understanding of the parties hereto in respect of its subject matters and
        supersedes all prior understandings, agreements, or representations by or
        among
        the parties hereto, written or oral, to the extent they relate in any way
        to the
        subject matter hereof or the transactions contemplated hereby.

       

      [Signature
        Pages Follow]

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      


       

      Company
        Signature Page to Series A Convertible Preferred Stock Purchase
        Agreement

      


       

      IN
        WITNESS WHEREOF,
        the
        parties have executed this Series A Convertible Preferred Stock Purchase
        Agreement on the day and year first set forth above.

       

      
        
          	Blue
                  Holding, Inc
	 
	 
	 
	 /s/
                  Glenn Palmer
	
                  By:

                	
                  Glenn
                    Palmer

                


        

        
          	
                  Title:

                	
                   Chief
                    Executive Officer

                


        

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Investors
        Signature Page to Series A Convertible Preferred Stock Purchase
        Agreement


      

        
          	
                  INVESTOR:

                
	 
	 
	 
	
                  /s/
                    Paul Guez

                
	
                  By:
                    Paul Guez

                
	 


        

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A

       

      Schedule
        of Investors


      


      
        	
                Closing

              
	
                Investor

              	
                Number
                  of Preferred Shares

                To
                  Be Purchased

              	
                Aggregate
                  Purchase Price

                For
                  Preferred Shares

              
	
                Paul
                  Guez*

              	
                1,000,000

              	
                $2,556,682**

              
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 


      

      


      *   
           Investor
        may be Paul Guez or any accredited investor designee thereof that executes
        a
        joinder hereto.

      **  
Represents
        the cancellation of that certain Promissory Note, in the aggregate principal
        and
        interest amount of $2,556,682, issued by the Company to Paul
        Guez.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        B

       

      Certificate
        of Designations, Preferences, Rights and Limitations

      of
        Series A Convertible Preferred Stock