Unassociated Document


     

    DRAWDOWN EQUITY FINANCING
AGREEMENT

     

    THIS AGREEMENT dated as of the
23 day of November 2009 (the “ Agreement ”) between
Sunny Isles Venture, LLC
a Florida limited liability corporation (the “ Investor ”), and
InoLife Technologies,
Inc. a corporation organized and existing under the laws of the State of
New York (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 Three
Million  Dollars ($3,000,000) 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 Drawdown
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.    “ Drawdown 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.     “ Drawdown Notice Date
” shall mean each date the Company delivers (in accordance with Section 2.2(b)
of this Agreement) to the Investor a Drawdown Notice requiring the Investor to
advance funds to the Company, subject to the terms of this
Agreement.  No Drawdown Notice Date shall be less than five (5)
Trading Days after the prior Drawdown Notice Date.

     

    Section
1.5.     “ Bid Price ” shall
mean, on any date, the closing bid price (as reported by Bloomberg L.P.) of the
Common Stock on the Principal Market or if the Common Stock is not traded on a
Principal Market, the lowest reported bid price for the Common Stock, as
furnished by the National Association of Securities Dealers, Inc.

     

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

     

    
      
        
        

      

      
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    Section
1.7.     “ Commitment Amount ”
shall mean the aggregate amount of up to Three Million Dollars ($3,000,000)
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
1.8.     “ 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-six (36)
months after the Effective Date.

     

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

     

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

     

    Section
1.11.  “ 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
1.12.  “ 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
1.13.  “ Exchange Act ” shall
mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

     

    Section 1.14.  “ Floor ” shall mean the Investor shall immediately cease
selling any shares within the Drawdown Notice if the price falls below a
predetermined level (“Floor Price”). The Floor Price is defined
as  Seventy-Five (75%) of the average closing bid price of the stock
over the preceding ten (10) trading days prior to the Drawdown Notice Date. The
“Floor” can be waived at the discretion of the
Company.

     

    Section
1.15.  “ 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
1.16.   “ Market Price ” shall
mean the lowest closing Bid Price of the Common Stock during the Pricing
Period.

     

    Section
1.17.  “ Maximum Advance
Amount ” shall not exceed Twenty-Five Thousand Dollars ($25,000) or
two hundred (200%) percent of the average daily volume based on the trailing ten
(10) days preceding the Drawdown Notice date whichever is of a larger
value.

     

    
      
        
        

      

      
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    Section
1.18.   “ NASD ” shall mean the
National Association of Securities Dealers, Inc. and shall also refer to
“FINRA”, the Financial Industry Regulatory Authority

     

    Section
1.19.   “ 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
1.20.   “ Pricing Period ”
shall mean the five (5) consecutive Trading Days after the Drawdown Notice
Date.

     

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

     

    Section
1.22.   “ Purchase Price ”
shall be set at Eighty percent (80%)  (a Twenty Percent (20%)
discount) of the lowest closing price of the common stock during the Pricing
Period.

     

    Section
1.23.  “ 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
1.24.  “ 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
1.25.   “ Registration
Statement ” shall mean a registration statement on Form
S-1  (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
1.26.   “ Regulation D ” shall
have the meaning set forth in the recitals of this Agreement.

     

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

     

    
      
        
        

      

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

     

    Section
1.29.  “ 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
1.30.   “ Trading Day ” shall
mean any day during which the New York Stock Exchange shall be open for
business.

     

    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 Drawdown 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)     
Drawdown Notice
..  At any time during the Commitment Period, the Company may request
the Investor to purchase shares of Common Stock by delivering a Drawdown 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 Drawdown 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 Drawdown Notice after the Drawdown Notice is received by the
Investor.  There shall be a minimum of five (5) Trading Days between
each Drawdown Notice Date.

     

    (b)    
Date of Delivery of
Drawdown Notice .  A Drawdown Notice shall be deemed delivered
on (i) the Trading Day it is received by email to at louposner@auctusfund.com
and als@auctusfund.com .
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 Drawdown Notice may be deemed delivered on a day
that is not a Trading Day or if positive receipt is not acknowledged by
Auctus.

     

    
      
        
        

      

      
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    Section
2.3.      Closings
..  On 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 Drawdown 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 Drawdown 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 and
disbursements of the Investor in accordance with Section 12.4, the amount of
such fees 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, through the use of a Deposit/Withdrawal
at Custodian from a Deposit Trust Company method or commonly referred to as
“DWAC/CTC” of the Investor’s choosing, 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.  Upon
receipt, Investor will perform a wire transfer on the same business day provided
that the shares have been received in sufficient time to perform such
transfer.  In the event that the Investor is no longer able, due to
time constraints beyond his control, to perform a wire on the day of receipt,
the wire will be promptly executed the following business day.

     

    (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;

     

    
      
        
        

      

      
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    (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 Drawdown Notice by wire transfer of immediately
available funds.

     

    Section 2.4.       Hardship
..  In the event the Investor sells shares of the Company’s Common
Stock after receipt of an Drawdown Notice and the Company fails to perform its
obligations as mandated in Section 2.3, and specifically the Company fails to
deliver to the Investor on the Advance Date the shares of Common Stock
corresponding to the applicable Advance pursuant to Section 2.3(a)(i), the
Company acknowledges that the Investor shall suffer financial hardship and
therefore shall be liable for any and all losses, commissions, fees, interest,
legal fees or any other financial hardship caused to the
Investor.

     

    The
Company understands that a delay in the delivery of the securities in the form
required pursuant to this registration statement beyond the Closing could result
in economic loss to the Investor.  After the Effective Date, as
compensation to the Investor for late issuance of such shares (delivery of
securities after the applicable closing), the Company agrees to make payments to
the Investor in accordance with the schedule below where the number of days
overdue is defined as the number of business days beyond the close with amount
due being cumulative.

     

    The
Company shall pay any payments incurred under this Section in immediately
available funds upon demand.  Nothing herein shall limit the right of
the Investor to pursue damages for the Company’s failure to comply with the
issuance and delivery of securities to the Investor.

     

    
      
        
          
            	
                    Payments for Each Number of Days Overdue

                  	
                    $10,000 Worth of Common Stock

                  
	 
      	 
      
	
                    1

                  	
                    $100

                  
	
                    2

                  	
                    $200

                  
	
                    3

                  	
                    $300

                  
	
                    4

                  	
                    $400

                  
	
                    5

                  	
                    $500

                  
	
                    6

                  	
                    $600

                  
	
                    7

                  	
                    $700

                  
	
                    8

                  	
                    $800

                  
	
                    9

                  	
                    $900

                  
	
                    10

                  	
                    $1000

                  
	
                    Over
      10

                  	
                    $1000
      + $200 for each Business Day beyond the tenth
  day

                  


          

        

      

    

     

    
      
        
        

      

      
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    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.

     

    
      
        
        

      

      
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    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; and (iii)
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).

     

    
      
        
        

      

      
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    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 and Investor will comply with any requests that the
SEC makes in connection with the Filing of the Registration Agreement to ensure
such compliance. 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, provided that the
Company acknowledges and agrees that upon receipt of an Drawdown Notice the
Investor has the right to sell the shares to be issued to the Investor pursuant
to the Drawdown Notice during the applicable Pricing Period.

     

    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, the Placement Agent 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,
the Placement Agent 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, the
Placement Agent Agreement and any related agreements have been duly executed and
delivered by the Company, (iv) this Agreement, the Registration Rights
Agreement, the Placement Agent 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.

     

    
      
        
        

      

      
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    Section
4.3.      Capitalization
..  The authorized capital stock of the Company consists of 100,000,000
shares of Common Stock, $0.001 par value per share which approximately
16,178,675 shares of Common Stock are issued and outstanding.  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 Certificate
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.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Section
4.5.     SEC Documents; Financial
Statements .  The Company is not registered under the Exchange
Act and has therefore not filed any reports, schedules, forms, statements and
other documents with the SEC under the Exchange Act.    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.     [Section Stricken]

     

    Section
4.7.    No Default
..  Except as disclosed in Exhibit 4.7, 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.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Section
4.8.      Absence of Events of
Default .  Except for matters described in Exhibit 4.8 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 Exhibit 4.12, 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.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    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. Representation by the company relating
to internal controls will be made at such time the registration filing has been
approved.

     

    Section
4.16.     No Material Adverse
Breaches, etc .  Except as set forth in Exhibit 4.16, 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.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    Section
4.17.     Absence of Litigation
..  Except as set forth in Exhibit 4.17 , 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 Exhibit 4.18, 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 Exhibit 4.19, 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 Exhibit 4.20 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 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.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    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 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

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (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 maintain the Common Stock’s
authorization for quotation on the Principal Market.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    Section
6.3      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
6.4      Corporate Existence
..  The Company will take all steps necessary to preserve and continue
the corporate existence of the Company.

     

    Section
6.5     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 Drawdown Notice during the continuation of any of the foregoing
events.

     

    Section
6.6      Restriction on Sale of
Capital Stock .  During the Commitment Period, the Company
shall not, without the prior written consent of the Investor, (i) issue or sell
any Common Stock or Preferred Stock without consideration or for a consideration
per share less than the Bid Price of the Common Stock determined immediately
prior to its issuance, (ii) issue or sell any Preferred   Stock warrant, option,
right, contract, call, or other security or instrument granting the holder
thereof the right to acquire Common Stock without consideration or for a
consideration per share less than the Bid Price of the Common Stock determined
immediately prior to its issuance, or (iii) file any registration statement on
Form S-8. Consent will not be unreasonably withheld.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    Section
6.7.     Consolidation; Merger
..  The Company shall not, at any time after the date hereof, effect
any merger or consolidation of the Company with or into, or a transfer of all or
substantially all the assets of the Company to another entity (a “ Consolidation Event
”) unless the resulting successor or acquiring entity (if not the Company)
assumes by written instrument the obligation to deliver to the Investor such
shares of stock and/or securities as the Investor is entitled to receive
pursuant to this Agreement.

     

    Section
6.8.      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
6.9.     Review of Public
Disclosures .  All SEC filings (including, without limitation,
all filings required under the Exchange Act, which include Forms 10-Q and 10-Q,
10-K,  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
6.10.   Market Activities
..The Company will not, directly or indirectly, (i) 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 or (ii) sell,
bid for or purchase the Common Stock, or pay anyone any compensation for
soliciting purchases 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 Drawdown Notice .  The right
of the Company to deliver an Drawdown Notice is subject to the fulfillment by
the Company, on such Drawdown Notice (a “ Condition Satisfaction
Date ”), of each of the following conditions:

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (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 Drawdown 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 there from.  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).

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (g)     
Maximum Advance
Amount .  The amount of an Advance requested by the Company
shall not exceed the Maximum Advance Amount.  In addition, in no event
shall the number of shares issuable to the Investor pursuant to an Advance cause
the aggregate number of shares of Common Stock beneficially owned by the
Investor and its affiliates to exceed nine and 9/10 percent (9.9%) of the then
outstanding Common Stock of the Company.  For the purposes of this
section beneficial ownership shall be calculated in accordance with Section
13(d) of the Exchange Act.

     

    (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 Drawdown
Notice .  The Investor shall have received the Drawdown Notice
executed by an officer of the Company and the representations contained in such
Drawdown 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.

     

    
      
        
        

      

      
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    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 Massachusetts without regard to the principles of
conflict of laws.  The parties further agree that any action between
them shall be heard in Boston, MA. 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-six (36) 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.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    ARTICLE
XI.

     

    Notices

     

    a.
   Section 11.0.0.1.    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:

                                      	
                                        

                                                
                                            InoLife
      Technologies, Inc.

                                          

                                        

                                      
	 
      	
                                        

                                          8601
      SIX FORKS ROAD, SUITE 400

                                        

                                      
	 
      	
                                        RALEIGH,
      NC 27615  

                                      
	 
      	
                                        Attention:
      Gary
      Berthold, CEO

                                      
	 
      	
                                        Telephone:
      (919)
      341-9024

                                      
	 
      	 
      
	
                                        If
      to the Investor, to:

                                      	
                                        

                                          Sunny
      Isles Venture LLC

                                        

                                        
                                          1800
      S. Ocean Dr., PH2

                                          
                                            Hallandale
      Beach, FL 33009
ATTN:
      Ben
      Kaplan
      
                                            Telephone:
      (954)
      691-0333

                                          

                                        

                                      
	 
      	 
      
	
                                        With
      a copy to:

                                      	 
      


                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    


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

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    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.    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)     
Fees
..  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.

     

    (b)    
Origination Fee
.. Company is obligated to pay the Investor a non-refundable origination fee
equal to Ten Thousand Dollars ($10,000) in cash. The Company agrees to pay to
the Investor Ten Thousand Dollars ($10,000) in cash upon closing of the first
Drawdown. Specifically, the Company agrees to  pay this amount to the
Investor in four equal installments of $2,500 each out of the first four
drawdowns undertaken by the Company or at such earlier time as the Company,in
its discretion, has the available resources to make such payment.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    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]

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

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

     

    
      
        
          
            
              
                
                  	 
      	
                          COMPANY:

                        
	 
      	
                          InoLife
      Technologies, Inc.

                        
	 
      	 
      
	 
      	
                          By:

                        	
                          /s/
      Gary Berthold

                        
	 
      	
                          Name:

                        	
                          Gary
      Berthold

                        
	 
      	
                          Title:
      CEO

                        
	 
      	 
      
	 
      	
                          INVESTOR:

                        
	 
      	
                          Sunny
      Isles Venture LLC

                        
	 
      	 
      
	 
      	
                          By:

                        	
                          /s/ Ben Kaplan

                        
	 
      	
                          Name:

                        	
                          Ben
      Kaplan

                        
	 
      	
                          Title:
      Principal

                        


                

              

            

          

        

      

    

     

    
      
         


      

      
        25

        
          

        

      

      
         


      

    


    EXHIBIT
A

    


    DRAWDOWN
NOTICE

     

    
      InoLife
Technologies, Inc.

    

     

    The
undersigned, _______________________ hereby certifies, with respect to the sale
of shares of Common Stock of InoLife Technologies, Inc. (the “ Company ”) issuable
in connection with this Drawdown Notice, delivered pursuant to the Drawdown
Equity Financing 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
Drawdown 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 Drawdown 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, 10-K , 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
_________________.

     

    
      
        
          
            
              
                
                  	 
      	
                          InoLife
      Technologies, Inc.

                        
	 
      	 
      
	 
      	
                          By:

                        	 
      
	 
      	
                          Name:
      Gary Berthold

                        
	 
      	
                          Title:
      CEO

                        


                

              

            

          

        

      

    

     

    
      
         


      

      
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