Exhibit
      10.1

     

    SECURITIES
      PURCHASE AGREEMENT

    


    SECURITIES
      PURCHASE AGREEMENT
      (the
      "Agreement"),
      dated
      as of December 26, 2006, by and among Pure Vanilla eXchange, Inc., a Nevada
      corporation, with headquarters located at 805 Third Avenue, New York, New York
      10022 (the "Company"),
      and
      the investors listed on the Schedule of Buyers attached hereto (individually,
      a
      "Buyer"
      and
      collectively, the "Buyers").

    


    WHEREAS:

    


    A.
      The
      Company and each Buyer is executing and delivering this Agreement in reliance
      upon the exemption from securities registration afforded by Section 4(2) of
      the
      Securities Act of 1933, as amended (the "1933
      Act"),
      and
      Rule 506 of Regulation D ("Regulation D")
      as
      promulgated by the United States Securities and Exchange Commission (the
      "SEC")
      under
      the 1933 Act.

    


    B.
      The
      Company has authorized a new series of senior secured convertible notes of
      the
      Company which notes shall be convertible into the Company's common stock, par
      value $0.001 per share (the "Common
      Stock"),
      in
      accordance with the terms of the Notes (as defined below).

    


    C.
      Each
      Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
      conditions stated in this Agreement, (i) that aggregate principal amount of
      the
      Notes, in substantially the form attached hereto as Exhibit
      A
      (the
      "Notes"),
      set
      forth opposite such Buyer's name in column (3) on the Schedule of Buyers
      attached hereto (which aggregate amount for all Buyers shall be $1,500,000)
      (the
      shares of Common Stock issuable upon conversion of the Notes are, collectively,
      the "Conversion
      Shares"),
      and
      (ii) warrants, in substantially the form attached hereto as Exhibit
      B
      (the
      "Warrants"),
      to
      acquire that number of shares of Common Stock set forth opposite such Buyer's
      name in column (4) on the Schedule of Buyers (the shares of Common Stock
      issuable upon exercise of the Warrants are, collectively, the "Warrant
      Shares").

    


    D.
      The
      Notes, the Conversion Shares, the Warrants and the Warrant Shares collectively
      are referred to herein as the "Securities".

    


    E.
      The
      Notes will rank senior to all future indebtedness of the Company, subject to
      Permitted Senior Indebtedness (as defined in the Notes) and will be secured
      by a
      perfected security interest in all of the assets of the Company and each of
      the
      Company's subsidiaries, as evidenced by the security agreement attached hereto
      as Exhibit
      D
      (the
      "Security
      Agreement").
      This
      Agreement, the Notes, the Warrants, the Security Agreement, the Irrevocable
      Transfer Agent Instructions (as defined in Section
      5(b)),
      and
      each of the other agreements entered into in connection with the transactions
      contemplated by this Agreement are collectively referred to herein as the
      "Transaction
      Documents".
      

    


    NOW,
      THEREFORE,
      the
      Company and each Buyer hereby agree as follows:

    


    1. PURCHASE
      AND SALE OF NOTES AND WARRANTS.

    


    (a) Purchase
      of Notes and Warrants.


    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    (b) Subject
      to the satisfaction (or waiver) of the conditions set forth in Sections 6 and
      7
      below, the Company shall issue and sell to each Buyer, and each Buyer severally,
      but not jointly, will purchase from the Company on the Closing Date (as defined
      below), (x) a principal amount of Notes as is set forth opposite such Buyer's
      name in column (3) on the Schedule of Buyers and (y) Warrants to acquire that
      number of Warrant Shares as is set forth opposite such Buyer's name in column
      (4) on the Schedule of Buyers.

    


    (i) Closing.
       The date and time of the closing of the purchase and sale of the Notes and
      Warrants under this Agreement (the “Closing”)
      shall
      be 10:00 a.m., New York City Time, on December 22, 2006 (or such later date
      as
      is mutually agreed to by the Company and the Required Holders (as defined in
      the
      Note) (the "Closing
      Date"))
      after
      notification of satisfaction (or waiver) of the conditions to the Closing set
      forth in Sections 6 and 7 below at the offices of Gottbetter & Partners,
      LLP, 488 Madison Avenue, New York, NY 10022.

    


    (ii) Purchase
      Price.
       The aggregate purchase price for the Notes and the Warrants to be
      purchased by each Buyer at the Closing (the "Purchase
      Price")
      shall
      be the amount set forth opposite such Buyer's name in column (5) of the Schedule
      of Buyers.  Each Buyer shall pay $0.945 for each $1.00 of principal amount
      of Notes and related Warrants to be purchased by such Buyer at the
      Closing.

    


    (c) Form
      of Payment.
       At the Closing, (i) each Buyer shall pay 50% of its Purchase Price to the
      Company and place 50% of its Purchase Price into escrow with Gottbetter &
Partners, LLP (the “Escrow
      Agent”)
      as set
      forth in an Escrow Agreement, dated the date hereof (the “Escrow
      Agreement”),
      to be
      entered into between the Company, the Buyers and the Escrow Agent, for the
      Notes
      and the Warrants to be issued and sold to such Buyer at the Closing by wire
      transfer of immediately available funds in accordance with the Company's and
      the
      Escrow Agent’s written wire instructions and (ii) the Company shall deliver
      (A) the Notes (in the principal amounts as such Buyer shall have requested
      prior
      to the Closing) which such Buyer is then purchasing and (B) the Warrants (in
      the
      amounts as such Buyer shall have requested prior to the Closing) which such
      Buyer is purchasing, in each case duly executed on behalf of the Company and
      registered in the name of such Buyer or its permitted designee.

    


    2.  BUYER'S
      REPRESENTATIONS AND WARRANTIES.

    


    Each
      Buyer represents and warrants with respect to only itself that:

    


    (a) No
      Public Sale or Distribution.
       Such Buyer is (i) acquiring the Notes and the Warrants and (ii) upon
      conversion of the Notes and exercise of the Warrants will acquire the Conversion
      Shares and the Warrant Shares, respectively, for its own account and not with
      a
      view towards, or for resale in connection with, the public sale or distribution
      thereof, except pursuant to sales registered or exempt from registration under
      the 1933 Act; provided,
      however,
      that by
      making the representations herein, such Buyer does not agree to hold any of
      the
      Securities for any minimum or other specific term and reserves the right to
      dispose of the Securities at any time in accordance with or pursuant to a
      registration statement or an exemption from registration under the 1933 Act.
       Such Buyer is neither a broker dealer registered under Section 15 of the
      Securities Exchange Act of 1934, as amended (the “1934
      Act”)
      nor an
      entity engaged in any business that would require it to register as a broker
      dealer under Section 15 of the 1934 Act nor a person “associated with” a broker
      dealer within the meaning of Section 3(a)(32) of the 1934 Act and is acquiring
      the Securities hereunder in the ordinary course of its business.  Such
      Buyer does not presently have any agreement or understanding, directly or
      indirectly, with any Person to distribute any of the
      Securities.


    
      
        
        

      

      
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    (b) Accredited
      Investor Status.
       Such
      Buyer is (i) an "accredited investor" as that term is defined in Rule 501(a)
      under the 1933 Act (ii) experienced in making investments of the kind described
      in this Agreement and the other Transaction Documents; (iii) able, by reason
      of
      the business and financial experience of its officers (if an entity) and
      professional advisors (who are not affiliated with or compensated in any way
      by
      the Company or any of its affiliates or selling agents), to protect its own
      interests in connection with the transactions described in this Agreement and
      the other Transaction Documents, and to evaluate the merits and risks of an
      investment in the Securities, and (iv) able to afford the entire loss of its
      investment in the Securities.
       

    


    (c) Reliance
      on Exemptions.
       Such Buyer understands that the Securities are being offered and sold to
      it in reliance on specific exemptions from the registration requirements of
      United States federal and state securities laws and that the Company is relying
      in part upon the truth and accuracy of, and such Buyer's compliance with, the
      representations, warranties, agreements, acknowledgments and understandings
      of
      such Buyer set forth herein in order to determine the availability of such
      exemptions and the eligibility of such Buyer to acquire the
      Securities.

    


    (d) Information.
       Such Buyer and its advisors, if any, have been furnished with all
      materials relating to the business, finances and operations of the Company
      and
      materials relating to the offer and sale of the Securities which have been
      requested by such Buyer.  Such Buyer and its advisors, if any, have been
      afforded the opportunity to ask questions of the Company.  Neither such
inquiries
      nor any other due diligence investigations conducted by such Buyer or its
      advisors, if any, or its representatives shall modify, amend or affect such
      Buyer's right to rely on the Company's representations and warranties contained
      herein.  Such Buyer understands that its investment in the Securities
      involves a high degree of risk.  Such Buyer has sought such accounting,
      legal and tax advice as it has considered necessary to make an informed
      investment decision with respect to its acquisition of the
      Securities.

    


    (e) No
      Governmental Review.
       Such Buyer understands that no United States federal or state agency or
      any other government or governmental agency has passed on or made any
      recommendation or endorsement of the Securities or the fairness or suitability
      of the investment in the Securities nor have such authorities passed upon or
      endorsed the merits of the offering of the Securities.

    


    (f) Transfer
      or Resale.
       Such Buyer understands that except as provided for herein: (i) the
      Securities have not been and are not being registered under the 1933 Act or
      any
      state securities laws, and may not be offered for sale, sold, assigned or
      transferred unless (A) subsequently registered thereunder (B) such Buyer shall
      have delivered to the Company an opinion of counsel, in a form reasonably
      acceptable to counsel to the Company, to the effect that such Securities to
      be
      sold, assigned or transferred may be sold, assigned or transferred pursuant
      to
      an exemption from such registration, or (C) such Buyer provides the Company
      with
      reasonable assurance that such Securities can be sold, assigned or transferred
      pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act, as amended,
      (or a successor rule thereto) (collectively, "Rule
      144");
      (ii)
      any sale of the Securities made in reliance on Rule 144 may be made only in
      accordance with the terms of Rule 144 and further, if Rule 144 is not
      applicable, any resale of the Securities under circumstances in which the seller
      (or the Person (as defined in Section 3(s)) through whom the sale is made)
      may
      be deemed to be an underwriter (as that term is defined in the 1933 Act) may
      require compliance with some other exemption under the 1933 Act or the rules
      and
      regulations of the SEC thereunder; and (iii) except as set forth in Section
      4(w), neither the Company nor any other Person is under any obligation to
      register the Securities under the 1933 Act or any state securities laws or
      to
      comply with the terms and conditions of any exemption thereunder.  The
      Securities may be pledged in connection with a bona fide margin account or
      other
      loan or financing arrangement secured by the Securities and such pledge of
      Securities shall not be deemed to be a transfer, sale or assignment of the
      Securities hereunder, and no Buyer effecting a pledge of Securities shall be
      required to provide the Company with any notice thereof or otherwise make any
      delivery to the Company pursuant to this Agreement or any other Transaction
      Document (as defined in Section 3(b)), including, without limitation, this
      Section 2(f).


    
      
        
        

      

      
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    (g) Legends.
       Such Buyer understands that the certificates or other instruments
      representing the Notes and the Warrants and, until such time as the resale
      of
      the Conversion Shares and the Warrant Shares have been registered under the
      1933
      Act, the stock certificates representing the Conversion Shares and the Warrant
      Shares, except as set forth below, shall bear any legend as required by federal
      law and the "blue sky" laws of any state and a restrictive legend in
      substantially the following form (and a stop-transfer order may be placed
      against transfer of such stock certificates):

    


    [NEITHER
      THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
      THE
      SECURITIES INTO WHICH THESE SECURITIES ARE
      [CONVERTIBLE]
      [EXERCISABLE]
      HAVE
      BEEN]
      [THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN]
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
      SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
      TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
      STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
      OR
      (B) AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO COUNSEL TO THE
      COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.  NOTWITHSTANDING
      THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
      MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
      SECURITIES.


    
      
        
        

      

      
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    The
      legend set forth above shall be removed and the Company shall issue a
      certificate without such legend to the holder of the Securities upon which
      it is
      stamped, if, unless otherwise required by federal or state securities laws,
      (i)
      such Securities are registered for resale under the 1933 Act, (ii) in connection
      with a sale, assignment or other transfer, such holder provides the Company
      with
      an opinion of counsel, in a form reasonably acceptable to counsel to the
      Company, to the effect that such sale, assignment or transfer of the Securities
      may be made without registration under the applicable requirements of the 1933
      Act, or (iii) such holder provides the Company with reasonable assurance that
      the Securities can be sold, assigned or transferred pursuant to Rule 144 or
      Rule
      144A.

    


    (h) Validity;
      Enforcement.
       The Transaction Documents (as defined below) to which such Buyer is a
      party have been duly and validly authorized, executed and delivered on behalf
      of
      such Buyer and shall constitute the legal, valid and binding obligations of
      such
      Buyer enforceable against such Buyer in accordance with their respective terms,
      except as such enforceability may be limited by general principles of equity
      or
      to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
      and other similar laws relating to, or affecting generally, the enforcement
      of
      applicable creditors' rights and remedies.

    


    (i) No
      Conflicts.
       The execution, delivery and performance by such Buyer of the Transaction
      Documents to which such Buyer is a party and the consummation by such Buyer
      of
      the transactions contemplated hereby and thereby will not (i) result in a
      violation of the organizational documents of such Buyer 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 such Buyer is a party, or (iii) result in a violation of
      any
      law, rule, regulation, order, judgment  or decree (including federal and
      state securities laws) applicable to such Buyer, except in the case of clauses
      (ii) and (iii) above, for such conflicts, defaults, rights or violations
      which would not, individually or in the aggregate, reasonably be expected to
      have a material adverse effect on the ability of such Buyer to perform its
      obligations hereunder.

    


    (j) Residency.
       Such Buyer is a resident of that jurisdiction specified below its address
      on the Schedule of Buyers.

    


    (k) Independent
      Investment Decision.
       Such Buyer has independently evaluated the merits of its decision to
      purchase the Securities pursuant to the Transaction Documents, and such Buyer
      confirms that it has not relied on the advice of any other Buyer's business,
      financial and/or legal counsel in making such decision.  

    


    (l) Certain
      Trading Activities.
       Such Buyer has not directly or indirectly, nor has any Person acting on
      behalf of or pursuant to any understanding with such Buyer, engaged in any
      transactions in the securities of the Company (including, without limitations,
      any Short Sales involving the Company's securities) since the time that such
      Buyer was first contacted by the Company regarding the transactions contemplated
      hereby.  Such Buyer covenants that neither it nor any Person acting on its
      behalf or pursuant to any understanding with it will engage in any transactions
      in the securities of the Company (including Short Sales (as defined below))
      prior to the time that the transactions contemplated by this Agreement are
      publicly disclosed.  For the purpose of this Agreement,
      "Short Sales"
      include,
      without limitation, all "short sales" as defined in Rule 200 promulgated under
      Regulation SHO under the 1934 Act and all types of direct and indirect stock
      pledges, forward sale contracts, options, puts, calls, swaps and similar
      arrangements (including on a total return basis), and sales and other
      transactions through non-US broker dealers or foreign regulated
      brokers.


    
      
        
        

      

      
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    (m) Limited
      Ownership.
       The purchase by such Buyer of the Securities issuable to it at the Closing
      will not result in such Buyer or in the aggregate with other Buyers
      (individually or together with other Persons with whom such Buyer has
      identified, or will have identified, itself as part of a "group" in a public
      filing made with the SEC involving the Company's securities) acquiring, or
      obtaining the right to acquire, in excess of 19.999% of the outstanding shares
      of Common Stock or the voting power of the Company on a post transaction basis
      that assumes that the Closing shall have occurred. Such Buyer does not presently
      intend to, alone or together with others, make a public filing with the SEC
      to
      disclose that it has (or that it together with such other Persons have)
      acquired, or obtained the right to acquire, as a result of the Closing (when
      added to any other securities of the Company that it or they then
      own
      or have the right to acquire), in excess of 19.999% of the outstanding shares
      of
      Common Stock or the voting power of the Company on a post transaction basis
      that
      assumes that the Closing shall have occurred.

    


    (n) General
      Solicitation.
       Such Buyer is not purchasing the Securities as a result of any
      advertisement, article, notice or other communication regarding the Securities
      published in any newspaper, magazine or similar media or broadcast over
      television or radio or presented at any seminar.

    


    (o) Organization;
      Authority.
       Such Buyer is an entity duly organized, validly existing and in good
      standing under the laws of the jurisdiction of its organization.

    


    (p) Authorization;
      Enforcement; Validity.
       Such Buyer has the requisite corporate, partnership or other entity power
      and authority to enter into and perform its obligations under this Agreement
      and
      the other Transaction Documents under which it has any obligations. The
      execution and delivery of this Agreement and the other Transaction Documents
      by
      such Buyer and the consummation by such Buyer of the transactions contemplated
      hereby and thereby have been duly authorized by such Buyer’s board of directors
      or general partner and such Buyer is not required.  This Agreement and the
      other Transaction Documents under which such Buyer has any obligations have
      been
      duly executed and delivered by such Buyer, and constitute the legal, valid
      and
      binding obligations of such Buyer, enforceable against such Buyer in accordance
      with their respective 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 applicable creditors' rights and
      remedies.

    


    (q) No
      Conflicts.
       The execution, delivery and performance of this Agreement and the other
      Transaction Documents under which it has any obligations by such Buyer and
      the
      consummation by such Buyer of the transactions contemplated hereby and thereby
      will not (i) result in a violation of the articles of incorporation or bylaws
      of
      such Buyer as in effect of the date hereof 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 Buyer is a party, or (iii) result in a violation of any law, rule,
      regulation, order, judgment or decree applicable to such Buyer or by which
      any
      property or asset of the Buyer is bound or affected.


    
      
        
        

      

      
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    (r) Consents.
       Such Buyer is not required to obtain any consent, authorization or order
      of, or make any filing or registration with, any court, governmental agency
      or
      any regulatory or self-regulatory agency or any other Person in order for it
      to
      execute, deliver or perform any of its obligations under or contemplated by
      the
      Transaction Documents, in each case in accordance with the terms hereof or
      thereof.  All consents, authorizations, orders, filings and registrations
      which such Buyer is required to obtain pursuant to the preceding sentence have
      been obtained or effected on or prior to the Closing Date, and such Buyer is
      unaware of any facts or circumstances which might prevent such Buyer from
      obtaining or effecting any of the registration, application or filings pursuant
      to the preceding sentence. 

    


    (s) Prohibited
      Transactions.
      Since
      the time the Buyer was first contracted by the Company regarding the
      transactions contemplated hereby, including during the last ten (10) days prior
      to the
      date
      hereof, neither such Buyer nor any Person acting on behalf of or pursuant
      to any understanding with such Buyer has, directly or indirectly, effected
      or agreed to effect any short sale, whether or not against the box, established
      any "put equivalent position" (as defined in Rule 16a-1(h) under the Exchange
      Act) with respect to the Common Stock, granted any other right (including,
      without limitation, any put or call option) with respect to the Common
      Stock or with respect to any security that includes, relates to or derived
      any significant part of its value from the Common Stock or otherwise sought
      to
      hedge its position in the Securities (but not including any actions
      to secure
      available shares to borrow in order to effect short sales or similar transactions
      in the future) (each, a "Prohibited
      Transaction").
      Prior
      to the
      termination of this Agreement such
      Buyer shall not, and shall cause
      any
      Person acting on behalf of or pursuant to any understanding with
      such Buyer
      not
      to, engage, directly or indirectly, in a Prohibited Transaction.
      Such Buyer
      acknowledges that the representations, warranties and covenants
      contained in
      this
      Section 2(p) are being made for the benefit of the Buyers as well as
      the Company.

    


    (t) Reliance.
      In
      connection with its purchase of the Securities, such Buyer has not relied on
      any
      statement or representation by the Company or any of its officers, directors
      and
      employees or any of its attorneys or agents, except as specifically set forth
      herein.

    


    3. REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY.

    


    The
      Company represents and warrants to each of the Buyers that, except as set forth
      in the Disclosure Schedule attached hereto (the “Disclosure
      Schedule”)
      or as
      disclosed in the SEC Documents:


    
      
        
        

      

      
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    (a) Organization
      and Qualification.
       The Company and its "Subsidiaries"
      (which
      for purposes of this Agreement means any joint venture or any entity in which
      the Company, directly or indirectly, owns capital stock or holds an equity
      or
      similar interest) are entities duly organized and validly existing in good
      standing under the laws of the jurisdiction in which they are formed, and have
      the requisite power and authority to own their properties and to carry on their
      business as now being conducted.  Each of the Company and its Subsidiaries
      is duly qualified as a foreign entity to do business and is in good standing
      in
      every jurisdiction in which its ownership of property or 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
      (i) a material adverse effect on the business, properties, assets, operations,
      results of operations or condition (financial or otherwise) of the Company
      and
      its Subsidiaries, taken as a whole, or (ii) on the transactions contemplated
      hereby and the other Transaction Documents or by the agreements and instruments
      to be entered into in connection herewith or therewith, or (iii) on the
      authority or ability of the Company to perform its obligations under the
      Transaction Documents (any of the matters described in clauses (i), (ii) or
      (iii) are a "Material
      Adverse Effect").
       The Company has no Subsidiaries except as set forth on Schedule
      3(a).
      The
      Company owns, directly or indirectly, all of the capital stock or other equity
      interests of each Subsidiary free and clear of any liens (except as listed
      on
      Schedule 3(a)), and all the issued and outstanding shares of capital stock
      of
      each Subsidiary are validly issued and are fully paid, non-assessable and free
      of preemptive and similar rights to subscribe for or purchase
      securities.

    


    (b) Authorization;
      Enforcement; Validity.
       The Company has the requisite power and authority to enter into and
      perform its obligations under this Agreement and the other Transaction Documents
      and to issue the Securities in accordance with the terms hereof and thereof.
       The execution and delivery of this Agreement and the other Transaction
      Documents by the
      Company
      and the consummation by the Company of the transactions contemplated hereby
      and
      thereby, including, without limitation, the issuance of the Notes and the
      Warrants, the reservation for issuance and the issuance of the Conversion
      Shares, the reservation for issuance and issuance of Warrant Shares, and the
      granting of a security interest in the Collateral (as defined in the Security
      Agreement) have been duly authorized by the Company's Board of Directors and
      (other than (i) the filing of appropriate UCC financing statements with the
      appropriate states and other authorities pursuant to the Security Agreement,
      (ii) the filing of a Form D under Regulation D of the 1933 Act and (iii)
      applicable state blue sky laws) no further filing, consent or authorization
      is
      required by the Company, its Board of Directors or its stockholders.  This
      Agreement and the other Transaction Documents of even date herewith have been
      duly executed and delivered by the Company, and constitute the legal, valid
      and
      binding obligations of the Company, enforceable against the Company in
      accordance with their respective 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 applicable creditors' rights and
      remedies.

    


    (c) Issuance
      of Securities.
       The issuance of the Notes and the Warrants are duly authorized and the
      Notes and the Warrants, when issued in accordance with the terms hereof, will
      be
      free from all taxes, liens and charges with respect to the issue thereof.
 As of the Closing, a number of shares of Common Stock shall have been duly
      authorized and reserved for issuance which equals 150% of the maximum number
      of
      shares Common Stock issuable upon conversion of the Notes and upon exercise
      of
      the Warrants.  Upon conversion in accordance with the Notes or exercise in
      accordance with the Warrants, as the case may be, the Conversion Shares and
      the
      Warrant Shares, respectively, will be validly issued, fully paid and
      nonassessable and free from all preemptive or similar rights, taxes, liens
      and
      charges with respect to the issue thereof, with the holders being entitled
      to
      all rights accorded to a holder of Common Stock.  The offer and issuance by
      the Company of the Securities is exempt from registration under the 1933
      Act.


    
      
        
        

      

      
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    (d) No
      Conflicts.
       The execution, delivery and performance of this Agreement and the other
      Transaction Documents by the Company and the consummation by the Company of
      the
      transactions contemplated hereby and thereby (including, without limitation,
      the
      issuance of the Notes and the Warrants, the granting of a security interest
      in
      the Collateral and reservation for issuance and issuance of the Conversion
      Shares and the Warrant Shares) will not (i) result in a violation of the
      Articles of Incorporation (as defined in Section 3(r)) of the Company or any
      of
      its Subsidiaries or Bylaws (as defined in Section 3(r)) of the Company or any
      of
      its Subsidiaries or (ii) except as set forth in Schedule
      3(d),
      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 (iii) 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 Over-The-Counter Bulletin Board (the
      "Principal
      Market"))
      applicable to the Company or any of its Subsidiaries or by which any property
      or
      asset of the Company or any of its Subsidiaries is bound or
      affected.

    


    (e) Consents.
       Other than as set forth in Schedule
      3(b)
      hereof
      or in Schedule
      3(e),
      the
      Company is not required to obtain any consent, authorization or order of, or
      make any filing or registration with, any court, governmental agency or any
      regulatory or self-regulatory agency or any other Person in order for it to
      execute, deliver or perform any of its obligations under or contemplated by
      the
      Transaction Documents, in each case in accordance with the terms hereof or
      thereof, other than filings pursuant to Regulation D promulgated by the
      Securities and Exchange Commission and filings necessary in order to comply
      with
      the “Blue Sky” laws of any state.  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 Closing
      Date, and the Company and its Subsidiaries are unaware of any facts or
      circumstances which might prevent the Company from obtaining or effecting any
      of
      the registration, application or filings pursuant to the preceding sentence.
       The Company is not in violation of the applicable trading requirements of
      the Principal Market and has no knowledge of any facts which would reasonably
      lead to suspension of the Common Stock from trading thereon in the foreseeable
      future. The issuance by the Company of the Securities shall not have the effect
      of suspending the Common Stock from trading on the Principal
      Market.

    


    (f) Acknowledgment
      Regarding Buyer's Purchase of Securities.
       The Company acknowledges and agrees that each Buyer is acting solely in
      the capacity of an arm's length purchaser with respect to the Transaction
      Documents and the transactions contemplated hereby and thereby and that no
      Buyer
      is (i) an officer or director of the Company, (ii) to the knowledge of the
      Company, an "affiliate" of the Company (as defined in Rule 144) or (iii) to
      the
      knowledge of the Company, a "beneficial owner" of more than 10% of the shares
      of
      Common Stock (as defined for purposes of Rule 13d-3 of the 1934 Act.  The
      Company further acknowledges that no Buyer is acting as a financial advisor
      or
      fiduciary of the Company (or in any similar capacity) with respect to this
      Agreement and the other Transaction Documents and the transactions contemplated
      hereby and thereby, and any advice given by a Buyer or any of its
      representatives or agents in connection with this Agreement and the other
      Transaction Documents and the transactions contemplated hereby and thereby
      is
      merely incidental to such Buyer's purchase of the Securities. The Company
      further represents to each Buyer that the Company’s decision to enter into the
      Transaction Documents has been based solely on the independent evaluation by
      the
      Company and its representatives. 


    
      
        
        

      

      
        9

        
          

        

      

       

    

     

    (g) No
      General Solicitation.
       Neither the Company, nor any of its Subsidiaries or Affiliates, nor, to
      the Company’s knowledge, any Person acting on its or their behalf, has engaged
      in any form of general solicitation or general advertising (within the meaning
      of Regulation D) in connection with the offer or sale of the Securities.
The
      Company shall be responsible for the payment of any placement agent’s fees,
      financial advisory fees, or brokers’ commissions (other than for persons engaged
      by any Buyer or its investment advisor) relating to or arising out of the
      transactions contemplated hereby. The Company shall pay, and hold each Buyer
      harmless against, any liability, loss or expense (including, without limitation,
      attorney’s fees and out-of-pocket expenses) arising in connection with any such
      claim (including any claim from the Placement Agent (as defined below)). The
      Company acknowledges that it has engaged Sam DelPresto, as placement agent
      (the
“Placement
      Agent”)
      in
      connection with the sale of the Securities. Other than the Placement Agent,
      the
      Company has not engaged any placement agent or other agent in connection with
      the sale of the Securities.

    


    (h) No
      Integrated Offering.
       None of the Company, its Subsidiaries, or to its knowledge any of their
      affiliates, or any Person acting on its or their behalf has, directly or
      indirectly, made any offers or sales of any security or solicited any offers
      to
      buy any security, under circumstances that would require registration of any
      of
      the Securities under the 1933 Act.
       None of the Company, its Subsidiaries, their Affiliates or any Person
      acting on its or their behalf will take any action or steps referred to in
      the
      preceding sentence that would require registration of any of the Securities
      under the 1933 Act.

    


    (i) Dilutive
      Effect.
       The Company understands and acknowledges that the number of Conversion
      Shares issuable upon conversion of the Notes and the Warrant Shares issuable
      upon exercise of the Warrants will increase in certain circumstances.  The
      Company further acknowledges that its obligation to issue Conversion Shares
      upon
      conversion of the Notes in accordance with this Agreement and the Notes and
      its
      obligation to issue the Warrant Shares upon exercise of the Warrants in
      accordance with this Agreement and the Warrant is, in each case, absolute and
      unconditional regardless of the dilutive effect that such issuance may have
      on
      the ownership interests of other stockholders of the Company.

    


    (j) Application
      of Takeover Protections; Rights Agreement.
       The Company and its board of directors have taken all necessary action, if
      any, in order to render inapplicable any control share acquisition, business
      combination, poison pill (including any distribution under a rights agreement)
      or other similar anti-takeover provision under the Articles of Incorporation
      or
      the laws of the jurisdiction of its formation which is or could become
      applicable to any Buyer as a result of the transactions contemplated by this
      Agreement, including, without limitation, the Company's issuance of the
      Securities and any Buyer's ownership of the Securities.  The Company has
      not adopted a stockholder rights plan or similar arrangement relating to
      accumulations of beneficial ownership of Common Stock or a change in control
      of
      the Company.


    
      
        
        

      

      
        10

        
          

        

      

       

    

    


    (k) SEC
      Documents; Financial Statements.
       Except as disclosed in
      Schedule 3(k),
      during
      the two (2) years prior to the date hereof, the Company has filed all reports,
      schedules, forms, statements and other documents required to be filed by it
      with
      the SEC pursuant to the reporting requirements of the 1934 Act (all of the
      foregoing filed prior to the date hereof and all exhibits included therein
      and
      financial statements, notes and schedules thereto and documents incorporated
      by
      reference therein being hereinafter referred to as the "SEC
      Documents").
       All of the SEC Documents are available on the EDGAR system.  As of
      their respective filing dates, the SEC Documents, as they may have been
      subsequently amended by filings made by the Company with the SEC prior to the
      date hereof complied in all material respects with the requirements of the
      1934
      Act and the rules and regulations of the SEC promulgated thereunder applicable
      to the SEC Documents, and none of the SEC Documents, at the time they were
      filed
      with the SEC, as they may have been subsequently amended by filings made by
      the
      Company with the SEC prior to the date hereof contained any untrue statement
      of
      a material fact or omitted to state a material fact required to be stated
      therein or necessary in order to make the statements therein, in the light
      of
      the circumstances under which they were made, not misleading.  As of their
      respective filing dates, the financial statements of the Company included in
      the
      SEC Documents 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
      Buyers in connection with the transactions contemplated hereby which is
      not
      included in the SEC Documents, including, without limitation,
      information
      referred
      to in Section 2(d) of this Agreement or in any disclosure schedules,
      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
      circumstance under which they are or were made, not misleading.

    


    (l) Absence
      of Certain Changes.
      Except
      as disclosed in
      Schedule 3(l)
      or in
      the SEC Documents, since December 31, 2005, the date of the Company’s most
      recent audited financial statements, there has been no material adverse change
      and no material adverse development in the business, assets, properties,
      operations, condition (financial or otherwise), or results of operations of
      the
      Company. Except as disclosed in
      Schedule 3(l),
      since
      December 31, 2005, neither the Company nor any of its Subsidiaries has
      (i) declared or paid any dividends on its Common Stock, (ii) except as
      disclosed in the SEC Documents, sold any assets, individually or in the
      aggregate, in excess of $100,000 outside of the ordinary course of business
      or
      (iii) except as set forth in
      Schedule 3(l)
      or in
      the SEC Documents, had capital expenditures, individually or in the aggregate,
      in excess of $100,000. Except as set forth in Schedule
      3(l),
      neither
      the Company nor any of its Subsidiaries has any intention or has taken any
      steps
      to seek protection pursuant to any bankruptcy law nor does the Company have
      any
      knowledge or reason to believe that its creditors intend to initiate involuntary
      bankruptcy proceedings or any actual knowledge of any fact which would
      reasonably lead a creditor to do so. 


    
      
        
        

      

      
        11

        
          

        

      

       

    

    


    (m) No
      Undisclosed Events, Liabilities, Developments or Circumstances.
       Except as disclosed in the Disclosure Schedule, no event, liability,
      development or circumstance has occurred or exists, or is contemplated to occur
      with respect to the Company, its Subsidiaries or their respective business,
      properties, prospects, operations or financial condition, that would be required
      to be disclosed by the Company under the 1934 Act or the Securities Act of
      1933
      and which has not been so disclosed.

    


    (n) Conduct
      of Business; Regulatory Permits.
       Neither the Company nor any of its Subsidiaries is in violation of any
      term of or in default under its Articles of Incorporation or Bylaws or their
      organizational charter or certificate of incorporation or bylaws, respectively.
       Neither the Company nor any of its Subsidiaries is in violation of any
      judgment, decree or order or any law, statute, ordinance, rule or regulation
      applicable to the Company or its Subsidiaries, and neither the Company nor
      any
      of its Subsidiaries will conduct its business in violation of any of the
      foregoing, except for possible violations which would not, individually or
      in
      the aggregate, have a Material Adverse Effect.  Without limiting the
      generality of the foregoing, the Company is not in violation of any of the
      rules, regulations or requirements of the Principal Market and has no knowledge
      of any facts or circumstances which would reasonably lead to suspension of
      the
      Common Stock from trading by the Principal Market in the foreseeable future.
      Except as set forth in Schedule
      3(n),
      since
      December 15, 2006 (i) the Common Stock has been designated for quotation on
      the
      Principal Market, (ii) trading
      in the Common Stock has not been suspended by the SEC or the Principal Market
      and (iii) the Company has received no communication, written or oral, from
      the
      SEC or the Principal Market regarding the suspension of the Common Stock from
      trading on the Principal Market.  The Company and its Subsidiaries possess
      all certificates, authorizations and permits issued by the appropriate
      regulatory authorities necessary to conduct their respective businesses, except
      where the failure to possess such certificates, authorizations or permits would
      not have, individually or in the aggregate, a Material Adverse Effect, 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.

    


    (o) Foreign
      Corrupt Practices.
       Neither the Company, nor any of its Subsidiaries, nor, to their knowledge,
      any director, officer, agent, employee or other Person acting on behalf of
      the
      Company or any of its Subsidiaries has, in the course of its actions for, or
      on
      behalf of, the Company or any of its Subsidiaries (i) used any corporate funds
      for any unlawful contribution, gift, entertainment or other unlawful expenses
      relating to political activity; (ii) made any direct or indirect unlawful
      payment to any foreign or domestic government official or employee from
      corporate funds; (iii) violated or is in violation of any provision of the
      U.S.
      Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful
      bribe, rebate, payoff, influence payment, kickback or other unlawful payment
      to
      any foreign or domestic government official or employee.

    


    (p) Sarbanes-Oxley
      Act.
       The Company is in compliance with any and all applicable requirements of
      the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and
      any
      and all applicable rules and regulations promulgated by the SEC thereunder
      that
      are effective as of the date hereof.


    
      
        
        

      

      
        12

        
          

        

      

       

    

    


    (q)  Transactions
      With Affiliates.
       Except as set forth in the SEC Documents filed at least two days prior to
      the date hereof and other than the grant of stock options disclosed
      on
      Schedule 3(q),
      none of
      the officers, directors or employees of the Company or any of its Subsidiaries
      is presently a party to any transaction with the Company or any of its
      Subsidiaries (other than for ordinary course services as employees, officers
      or
      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 such
      officer, director or employee or, to the knowledge of the Company or any of
      its
      Subsidiaries, any corporation, partnership, trust or other entity in which
      any
      such officer, director, or employee has a substantial interest or is an officer,
      director, trustee or partner.

    


    (r) Equity
      Capitalization.
       As of immediately prior to Closing, the authorized capital stock of the
      Company consists of 500,000,000 shares of Common Stock, of which as of the
      date
      hereof, 54,080,031
      are
      issued and outstanding, 32,567,584 shares have been reserved for issuance to
      stockholders of Nimble Group, Inc. (“Nimble”)
      and
      holders of securities convertible into or exercisable for shares of Nimble
      common stock pursuant to the Agreement and Plan of Merger dated as of December
      15, 2006 (the “Merger
      Agreement”)
      by and
      between the Company, PVNX Acquisition Corp. and Nimble, up to 7,500,000 shares
      are reserved for issuance pursuant to the Company's 2006 Stock Option Plan
      (the
“2006
      Option Plan”),
      902,625
      shares
      are reserved for issuance pursuant to warrants (other than the Warrants and
      the
      options granted under the 2006 Option Plan) exercisable for shares of Common
      Stock, 1,287,000 shares of Common Stock issuable upon conversion of outstanding
      convertible debt, 3,000,000
      shares are reserved for issuance pursuant to an employment agreement that the
      Company contemplates entering into with Paul Corvino.
       All of such outstanding shares have been, or upon issuance will be,
      validly issued and are fully paid and nonassessable.  Except as disclosed
      herein or in the SEC Documents or as disclosed in Schedule
      3(r):
      (i)
      none of the Company's capital stock is subject to preemptive rights or any
      other
      similar rights or any liens or encumbrances suffered or permitted by the
      Company; (ii) 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, or exercisable or exchangeable for,
      any
      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 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, or exercisable or exchangeable for,
      any
      capital stock of the Company or any of its Subsidiaries; (iii) there are no
      outstanding debt securities, notes, credit or loan agreements, credit facilities
      or other agreements, documents or instruments evidencing Indebtedness (as
      defined below) of the Company or any of its Subsidiaries or by which the Company
      or any of its Subsidiaries is or may become bound; (iv) there are no financing
      statements securing obligations in any material amounts, either singly or in
      the
      aggregate, filed in connection with the Company or any of its Subsidiaries;
      (v)
      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 1933 Act; (vi) there are no outstanding securities or instruments of the
      Company or any of its Subsidiaries which contain any redemption or similar
      provisions, and there are no contracts, commitments, understandings or
      arrangements by which the Company or any of its Subsidiaries is or may become
      bound to purchase, repurchase, retire or redeem a security of the Company or
      any
      of its Subsidiaries; (vii) there are no securities or instruments containing
      anti-dilution or similar provisions that will be triggered by the issuance
      of
      the Securities; (viii) the Company does not have any stock appreciation rights
      or "phantom stock" plans or agreements or any similar plan or agreement; and
      (ix) the Company and its Subsidiaries have no liabilities or obligations
      required to be disclosed in the SEC Documents but not so disclosed in the SEC
      Documents, other than those which, individually or in the aggregate, do not
      or
      would not have a Material Adverse Effect.  The Company has furnished to the
      Buyer true, correct and complete copies of the Company's Articles of
      Incorporation, as amended and as in effect on the date hereof (the "Articles
      of Incorporation"),
      and
      the Company's Bylaws, as amended and as in effect on the date hereof (the
      "Bylaws"),
      and
      the terms of all securities convertible into, or exercisable or exchangeable
      for, shares of Common Stock and the material rights of the holders thereof
      in
      respect thereto are disclosed in the SEC Filings.


    
      
        
        

      

      
        13

        
          

        

      

       

    

     

    (s) Indebtedness
      and Other Contracts.
       Except as disclosed in Schedule
      3(s)
      or in
      the SEC Documents, neither the Company nor any of its Subsidiaries (i) has
      any
      outstanding Indebtedness (as defined below), (ii) is a party to any contract,
      agreement or instrument, the violation of which, or default under which, by
      the
      other party(ies) to such contract, agreement or instrument would result in
      a
      Material Adverse Effect, (iii) is in violation of any term of or in default
      under any contract, agreement or instrument relating to any Indebtedness, except
      where such violations and defaults would not result, individually or in the
      aggregate, in a Material Adverse Effect, or (iv) is a party to any contract,
      agreement or instrument relating to any Indebtedness, the performance of which,
      in the judgment of the Company's officers, has or is expected to have a Material
      Adverse Effect. Schedule
      3(s)
      provides
      a detailed description of the material terms of any such outstanding
      Indebtedness.  For purposes of this Agreement:  (x) "Indebtedness"
      of
      any
      Person
      means, without duplication (A) all indebtedness for borrowed money, (B) all
      obligations issued, undertaken or assumed as the deferred purchase price of
      property or services including (without limitation) “Capital Leases” in
      accordance with generally accepted accounting principles (other than trade
      payables entered into in the ordinary course of business), (C) all reimbursement
      or payment obligations with respect to letters of credit, surety bonds and
      other
      similar instruments, (D) all obligations evidenced by notes, bonds, debentures
      or similar instruments, including obligations so evidenced incurred in
      connection with the acquisition of property, assets or businesses, (E) all
      indebtedness created or arising under any conditional sale or other title
      retention agreement, or incurred as financing, in either case with respect
      to
      any property or assets acquired with the proceeds of such indebtedness (even
      though the rights and remedies of the seller or bank under such agreement in
      the
      event of default are limited to repossession or sale of such property), (F)
      all
      monetary obligations under any leasing or similar arrangement which, in
      connection with generally accepted accounting principles, consistently applied
      for the periods covered thereby, is classified as a capital lease, (G) all
      indebtedness referred to in clauses (A) through (F) above secured by (or for
      which the holder of such Indebtedness has an existing right, contingent or
      otherwise, to be secured by) any mortgage, lien, pledge, charge, security
      interest or other encumbrance upon or in any property or assets (including
      accounts and contract rights) owned by any Person, even though the Person which
      owns such assets or property has not assumed or become liable for the payment
      of
      such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
      or obligations of others of the kinds referred to in clauses (A) through (G)
      above; (y) "Contingent
      Obligation"
      means,
      as to any Person, any direct or indirect liability, contingent or otherwise,
      of
      that Person with respect to any indebtedness, lease, dividend or other
      obligation of another Person if the primary purpose or intent of the Person
      incurring such liability, or the primary effect thereof, is to provide assurance
      to the obligee of such liability that such liability will be paid or discharged,
      or that any agreements relating thereto will be complied with, or that the
      holders of such liability will be protected (in whole or in part) against loss
      with respect thereto; and (z) "Person"
      means
      an individual, a limited liability company, a partnership, a joint venture,
      a
      corporation, a trust, an unincorporated organization and a government or any
      department or agency thereof.


    
      
        
        

      

      
        14

        
          

        

      

       

    

    


    (t) Absence
      of Litigation.
       There is no action, suit, proceeding, inquiry or investigation before or
      by the Principal Market, any court, public board, government agency,
      self-regulatory organization or body pending or, to the knowledge of the
      Company, threatened against or affecting the Company or any of its Subsidiaries,
      the Common Stock or any of the Company's Subsidiaries or any of the Company's
      or
      its Subsidiaries' officers or directors, except as set forth in Schedule
      3(t).

    


    (u) 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 have a Material Adverse Effect.

    


    (v) Employee
      Relations.

    


    (i)
       Neither the Company nor any of its Subsidiaries is a party to any
      collective bargaining agreement or employs any member of a union.  The
      Company and its Subsidiaries believe that their relations with their employees
      are good.  Except as disclosed in Schedule 3(v), no executive officer of
      the Company or any of its Subsidiaries (as defined in Rule 501(f) of the 1933
      Act) has notified the Company or any such Subsidiary that such officer intends
      to leave the Company or any such Subsidiary or otherwise terminate such
      officer's employment with the Company or any such Subsidiary.  No executive
      officer of the Company or any of its Subsidiaries, to the knowledge of the
      Company or any such Subsidiary, is, or is now expected to be, in violation
      of
      any material term of any employment contract, confidentiality, disclosure or
      proprietary information agreement, non-competition agreement, or any other
      contract or agreement or any restrictive covenant, and, to the Company’s
      knowledge, the continued employment of each such executive officer does not,
      in
      any material respect, subject the Company or any of its Subsidiaries to any
      liability with respect to any of the foregoing matters.

    


    (ii)
      The
      Company and its Subsidiaries are in compliance with all federal, state, local
      and foreign laws and regulations respecting labor, employment and employment
      practices and benefits, terms and conditions of employment and wages and hours,
      except where failure to be in compliance would not, either individually or
      in
      the aggregate, reasonably be expected to result in a Material Adverse
      Effect.


    
      
        
        

      

      
        15

        
          

        

      

       

    

    


    (w) Title.
       The Company and its Subsidiaries have good and marketable title in fee
      simple to all real property and good and marketable title to all personal
      property owned by them which is material to the business of the Company and
      its
      Subsidiaries, in each case, except as disclosed in Schedule
      3(w),
      free
      and clear of all liens, encumbrances and defects except such as do not
      materially affect the value of such property and do not interfere with the
      use
      made and proposed to be made of such property by the Company and any of its
      Subsidiaries.   Any real property and facilities held under lease by
      the Company and any of 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
      facilities by the Company and its Subsidiaries.

    


    (x) Intellectual
      Property Rights.
       The Company and its Subsidiaries own or possess adequate rights or
      licenses to use all trademarks, trade names, service marks, service mark
      registrations, service names, patents, patent rights, copyrights, inventions,
      licenses, approvals, governmental authorizations, trade secrets and other
      intellectual property rights necessary to conduct their respective businesses
      as
      now conducted ("Intellectual
      Property Rights").
       Except as set forth in Schedule
      3(x),
      none of
      the Company's Intellectual Property Rights have expired or terminated, or are
      expected to expire or terminate, within three years from the date of this
      Agreement. The Company does not have any knowledge of any infringement by the
      Company or its Subsidiaries of Intellectual Property Rights of others.
 There is no claim, action or proceeding being made or brought, or to the
      knowledge of the Company, being threatened, against the Company or any of its
      Subsidiaries regarding its Intellectual Property Rights.  The Company is
      unaware of any facts or circumstances which might give rise to any of the
      foregoing infringements or claims, actions or proceedings. The Company and
      its
      Subsidiaries have taken reasonable security measures to protect the secrecy,
      confidentiality and value of all of their Intellectual Property
      Rights.

    


    (y) Environmental
      Laws.
       The Company and its Subsidiaries (i) are in compliance with any and all
      Environmental Laws (as hereinafter defined), (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 where, in each
      of
      the foregoing clauses (i), (ii) and (iii), the failure to so comply could be
      reasonably expected to have, individually or in the aggregate, a Material
      Adverse Effect.  The term "Environmental
      Laws"
      means
      all federal, state, local or foreign laws relating to pollution or protection
      of
      human health or the environment (including, without limitation, ambient air,
      surface water, groundwater, land surface or subsurface strata), including,
      without limitation, laws relating to emissions, discharges, releases or
      threatened releases of chemicals, pollutants, contaminants, or toxic or
      hazardous substances or wastes (collectively, "Hazardous
      Materials")
      into
      the environment, or otherwise relating to the manufacture, processing,
      distribution, use, treatment, storage, disposal, transport or handling of
      Hazardous Materials, as well as all authorizations, codes, decrees, demands
      or
      demand letters, injunctions, judgments, licenses, notices or notice letters,
      orders, permits, plans or regulations issued, entered, promulgated or approved
      thereunder.


    
      
        
        

      

      
        16

        
          

        

      

       

    

    


    (z) Subsidiary
      Rights.
       The Company or one of its Subsidiaries has the unrestricted right to vote,
      and (subject to limitations imposed by applicable law) to receive dividends
      and
      distributions on, all capital securities of its Subsidiaries as owned by the
      Company or such Subsidiary.

    


    (aa) Investment
      Company.
       The Company is not, and is not an affiliate of, an "investment company"
      within the meaning of the Investment Company Act of 1940, as
      amended.

    


    (bb) Tax
      Status.
       Except
      as
      disclosed on Schedule
      3(bb),
      the
      Company and each of its Subsidiaries (i) has made or filed all foreign, federal
      and state income and all other tax returns, reports and declarations required
      by
      any jurisdiction to which it is subject, (ii) 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 (iii) 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.  Except as
      disclosed on Schedule
      3(bb),
      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. Except as disclosed on Schedule
      3(bb),
      no
      liens
      have been filed and no claims are being asserted by or against the Company
      or
      any of its Subsidiaries with respect to any taxes (other than liens for taxes
      not yet due and payable). Neither the Company nor it Subsidiaries has received
      notice of assessment or proposed assessment of any taxes of a material amount
      claimed to be owed by it or any other Person on its behalf. Except as disclosed
      on Schedule
      3(bb),
      neither
      the Company nor any Subsidiary is a party to any tax sharing or tax indemnity
      agreement or any other agreement of a similar nature that remains in effect.
      Except
      as
      disclosed on Schedule
      3(bb),
      each
      of
      the Company and its Subsidiaries has complied in all material respects with
      all
      applicable legal requirements relating to the payment and withholding of taxes
      and, within the time and in the manner prescribed by law, has withheld from
      wages, fees and other payments and paid over to the proper governmental or
      regulatory authorities all amounts required.

    


    (cc) Internal
      Accounting and Disclosure 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 and liability accountability, (iii)
      access to assets or incurrence of liabilities is permitted only in accordance
      with management's general or specific authorization and (iv) the recorded
      accountability for assets and liabilities is compared with the existing assets
      and liabilities at reasonable intervals and appropriate
      action is taken with respect to any difference (the "Internal
      Accounting Controls").
       The Company maintains disclosure controls and procedures (as such term is
      defined in Rule 13a-14 under the 1934 Act) that are effective in ensuring that
      information required to be disclosed by the Company in the reports that it
      files
      or submits under the 1934 Act is recorded, processed, summarized and reported,
      within the time periods specified in the rules and forms of the SEC, including,
      without limitation, controls and procedures designed in to ensure that
      information required to be disclosed by the Company in the reports that it
      files
      or submits under the 1934 Act is accumulated and communicated to the Company's
      management, including its principal executive officer and its principal
      financial officer, as appropriate, to allow timely decisions regarding required
      disclosure.


    
      
        
        

      

      
        17

        
          

        

      

       

    

    


    (dd) Off
      Balance Sheet Arrangements.
       There is no transaction, arrangement, or other relationship between the
      Company or any of its Subsidiaries and an unconsolidated or other off balance
      sheet entity that is required to be disclosed by the Company in its Exchange
      Act
      filings and is not so disclosed or that otherwise would be reasonably likely
      to
      have a Material Adverse Effect.

    


    (ee) Ranking
      of Notes.
       Except as set forth on
      Schedule (ee),
      no
      Indebtedness of the Company is senior to or ranks
      pari
      passu
      with the
      Notes in right of payment, whether with respect of payment of redemptions,
      interest, damages or upon liquidation or dissolution or otherwise.

    


    (ff) Transfer
      Taxes.
       On the Closing Date, all stock transfer or other taxes (other than income
      or similar taxes) which are required to be paid in connection with the sale
      and
      transfer of the Securities to be sold to each Buyer hereunder will be, or will
      have been, fully paid or provided for by the Company, and all material laws
      imposing such taxes will be or will have been complied with.

    


    (gg) Manipulation
      of Price.
       The Company and its Subsidiaries have not, and to its knowledge no one
      acting on its behalf has, (i) taken, directly or indirectly, any action designed
      to cause or to result or that could reasonably be expected to cause or result
      in
      the stabilization or manipulation of the price of any security of the Company
      to
      facilitate the sale or resale of any of the Securities, (ii) other than the
      Placement Agent, sold, bid for, purchased, or paid any compensation for
      soliciting purchases of, any of the Securities, or (iii) other than the
      Placement Agent, paid or agreed to pay to any person any compensation for
      soliciting another to purchase any other securities of the Company.

    


    (hh) U.S.
      Real Property Holding Corporation.
       The Company is not, nor has ever been, a U.S. real property holding
      corporation within the meaning of Section 897 of the Internal Revenue Code
      of
      1986, as amended, and the Company shall so certify upon Buyer's
      request.

    


    (ii) Disclosure.
       The Company confirms that neither it nor any other Person acting on its
      behalf has provided any of the Buyers or their agents or counsel with any
      information that constitutes or could reasonably be expected to constitute
      material, nonpublic information other than the existence of the transactions
      contemplated by this Agreement or the other Transaction Documents.  The
      Company understands and confirms that each of the Buyers will rely on the
      foregoing representations in effecting transactions in the Securities.  All
      disclosure provided to the Buyers regarding the Company, its business and the
      transactions contemplated by this Agreement and the other Transaction Documents,
      including the Schedules and Exhibits hereto and thereto, furnished by or on
      behalf of the Company is true and correct and does not contain any untrue
      statement of a material fact or omit to state any material fact necessary in
      order to make the statements made herein or herein, in the light of the
      circumstances under which they were made, not misleading.  Each press
      release issued by the Company or its Subsidiaries during the twelve (12) months
      preceding the date of this Agreement did not at the time of release contain
      any
      untrue statement of a material fact or omit to state a material fact required
      to
      be stated therein or necessary in order to make the statements therein, in
      the
      light of the circumstances under which they were made, not misleading.  No
      event or circumstance has occurred or information exists with respect to the
      Company or any of its Subsidiaries or its or their business, assets,
      liabilities, properties, prospects, operations or financial conditions
      (financial or otherwise), which, under applicable law, rule or regulation,
      requires public disclosure or announcement by the Company but which has not
      been
      so publicly announced or disclosed.


    
      
        
        

      

      
        18

        
          

        

      

       

    

    


    (jj) Lien
      Searches.
      Within
      6 Business Days prior to the date hereof, the Company shall have delivered
      or
      caused to be delivered to each Buyer certified copies of UCC financing statement
      search results listing any and all effective financing statements filed within
      five years prior to such date in any applicable jurisdiction that name the
      Company or any of its Subsidiaries as a debtor to perfect an interest in any
      of
      the assets thereof, together with copies of such financing statements, none
      of
      which financing statements, except for any financing statements filed with
      respect to the Senior Indebtedness and as otherwise agreed to in writing by
      the
      Buyers, shall cover any of the “Collateral” (as defined in the Security
      Agreement), and the results of searches for any effective tax liens and judgment
      liens filed against any such Person or its property in any applicable
      jurisdiction, which results, except as otherwise agreed to in writing by the
      Buyers, shall not show any such effective tax liens and judgment
      liens.

    


    4. COVENANTS.

    


    (a) Commercially
      Reasonable Efforts.
       Each party shall use commercially reasonable efforts timely to satisfy
      each of the conditions to be satisfied by it as provided in Sections 6 and
      7 of
      this Agreement.

    


    (b) Form
      D
      and Blue Sky.
       The Company agrees to file a Form D with respect to the Securities as
      required under Regulation D and to provide a copy thereof to each Buyer promptly
      after such filing.  The Company shall, on or before the Closing Date, take
      such action as the Company shall reasonably determine is necessary in order
      to
      obtain an exemption for or to qualify the Securities for sale to the Buyers
      at
      the Closing pursuant to this Agreement under applicable securities or "Blue
      Sky"
      laws of the states of the United States (or to obtain an exemption from such
      qualification), and shall provide evidence of any such action so taken to the
      Buyers on or prior to the Closing Date.  The Company shall make all filings
      and reports relating to the offer and sale of the Securities required under
      applicable securities or "Blue Sky" laws of the states of the United States
      following the Closing Date.  

    


    (c) Reporting
      Status.
       Until the date on which the Buyers first cease to beneficially own at
      least 50% of the Conversion Shares and Warrant Shares (the "Reporting
      Period"),
      the
      Company shall file all reports required to be filed with the SEC pursuant to
      the
      1934 Act, and the Company shall not terminate its status as an issuer required
      to file reports under the 1934 Act even if the 1934 Act or the rules and
      regulations thereunder would otherwise permit such termination.


    
      
        
        

      

      
        19

        
          

        

      

       

    

     

    (d) Use
      of
      Proceeds.
       The Company will use the proceeds from the sale of the Securities as set
      forth on Schedule
      4(d).

    


    (e) Financial
      Information.
       The Company agrees to send the following to the Buyer during the Reporting
      Period copies of any notices and other information made available or given
      to
      the stockholders of the Company generally, contemporaneously with the making
      available or giving thereof to the stockholders. 

    


    (f) Listing.
      Upon
      the filing of a registration statement pursuant to Section 4(w), the Company
      shall promptly secure the listing of all of the Piggyback Securities (as defined
      herein) upon each national securities exchange and automated quotation system,
      if any, upon which the Common Stock is then listed (subject to official notice
      of issuance) and shall maintain such listing of all Piggyback Securities from
      time to time issuable under the terms of the Transaction Documents.  The
      Company shall maintain the Common Stock’s authorization for
      quotation on the Principal Market.  Neither the Company nor any of its
      Subsidiaries shall take any action which would be reasonably expected to result
      in the delisting or suspension of the Common Stock on the Principal Market.
       The Company shall pay all fees and expenses in connection with satisfying
      its obligations under this Section 4(f).

    


    (g) Fees.
       The Company shall (i) pay Gottbetter & Partners, LLP (“G&P”)
      $40,000 in legal fees plus reasonable expenses and (ii) shall pay Gottbetter
      Capital Master, Ltd. (a Buyer) ("GCM")
      or its
      designee(s) $10,000 for due diligence and all reasonable expenses incurred
      in
      connection with the transactions contemplated by the Transaction Documents
      (including all reasonable legal fees and disbursements in connection therewith,
      documentation and implementation of the transactions contemplated by the
      Transaction Documents and due diligence in connection therewith), which amounts
      shall be withheld by such Buyer from its Purchase Price at the Closing. GCM
      and
      G&P acknowledge receipt of $20,000 delivered prior to the date hereof as an
      advance against GCM and G&P fees. The Company shall be responsible for the
      payment of any placement agent's fees, financial advisory fees, or broker's
      commissions (other than for Persons engaged by any Buyer) relating to or arising
      out of the transactions contemplated by the Transaction Documents including,
      without limitation, any fees or commission payable to the Placement Agent.
      The
      Company shall pay, and hold each Buyer harmless against, any liability, loss or
      expense (including, without limitation, reasonable attorney's fees and
      out-of-pocket expenses) arising in connection with any claim against a Buyer
      relating to any such payment.  Except as otherwise set forth in the
      Transaction Documents, each party to this Agreement shall bear its own expenses
      in connection with the sale of the Securities to the Buyers.

    


    (h) Pledge
      of Securities.
       The Company acknowledges and agrees that the Securities may be pledged by
      a Buyer in connection with a bona fide margin agreement or other loan or
      financing arrangement that is secured by the Securities.  The pledge of
      Securities shall not be deemed to be a transfer, sale or assignment of the
      Securities hereunder, and no Investor effecting a pledge of Securities shall
      be
      required to provide the Company with any notice thereof or otherwise make any
      delivery to the Company pursuant to this Agreement or any other Transaction
      Document, including, without limitation, Section 2(f) hereof; provided that
      an
      Investor and its pledgee shall be required to comply with the provisions of
      Section 2(f) hereof in order to effect a sale, transfer or assignment of
      Securities to such pledgee.  The Company hereby agrees to execute and
      deliver such documentation as a pledgee of the Securities may reasonably request
      in connection with a pledge of the Securities to such pledgee by an
      Investor.


    
      
        
        

      

      
        20

        
          

        

      

       

    

    


    (i) Disclosure
      of Transactions and Other Material Information.
       On or before 5:00 p.m., New York Time, on the first Business Day (as
      defined below) following the date of this Agreement, the Company shall file
      a
      Current Report on Form 8-K describing the terms of the transactions contemplated
      by the Transaction Documents in the form required by the 1934 Act and attaching
      the material Transaction Documents (including, without limitation, this
      Agreement, the form of each of the Notes, the form of Warrant, and the Security
      Agreement) as exhibits to such filing (the "8-K
      Filing").
       As used herein “Business Day” means any other day other than a Saturday,
      Sunday, or other day on which commercial banks in The City of New York are
      authorized or required by law to remain closed. The
      Company shall not, and shall not cause any of its Subsidiaries and its and
      each
      of their respective officers, directors, employees and agents, not to, provide
      any Buyer with any material, nonpublic information regarding the Company or
      any
      of its Subsidiaries from and after the filing of the 8-K Filing with the SEC
      without the express written consent of such Buyer. In
      the
      event of a breach of the foregoing covenant by the Company, any of their
      Subsidiaries, or any of their respective officers, directors, employees and
      agents, in addition to any other remedy provided herein or in the Transaction
      Documents, a Buyer shall have the right to make a public disclosure, in the
      form
      of a press release, public advertisement or otherwise, of such
      material, nonpublic information without
      the prior approval by the Company, their Subsidiaries, or any of their
      respective officers, directors, employees or agents.
      No Buyer
      shall have any liability to the Company, its Subsidiaries, or any of its or
      their respective officers, directors, employees, stockholders or agents for
      any
      such disclosure.  Subject to the foregoing, none of the Company, its
      Subsidiaries or any Buyer shall issue any press releases or any other public
      statements with respect to the transactions contemplated hereby without the
      approval of all of the Buyers; provided,
      however,
      that
      the Company shall be entitled, without the prior approval of any Buyer, to
      make
      any press release or other public disclosure with respect to such transactions
      (i) in substantial conformity with the 8-K Filing and contemporaneously
      therewith or (ii) as is required by applicable law and regulations (provided
      that in the case of clause (i) the Required Holders shall be consulted by the
      Company in connection with any such press release or other public disclosure
      prior to its release).  Without the prior written consent of any applicable
      Buyer, the Company shall not disclose the name of any Buyer in any filing,
      announcement, release or otherwise.  

    


    (j) Restriction
      on Redemption and Cash Dividends.
       So long as any Notes are outstanding, the Company shall not, directly or
      indirectly, redeem, or declare or pay any cash dividend or distribution on,
      the
      Common Stock without the prior express written consent of the Required Holders
      (as defined in the Notes).

    


    (k) Additional
      Notes; Variable Securities; Dilutive Issuances.
       So long as any Buyer beneficially owns any Securities, the Company will
      not issue any Notes (other than to the Buyers as contemplated hereby) and the
      Company shall not issue any other securities that would cause a breach or
      default under the Notes.  For long as any Notes or Warrants remain
      outstanding, the Company shall not, in any manner, issue or sell any rights,
      warrants or options to subscribe for or purchase Common Stock or other
      securities directly or indirectly convertible into or exchangeable or
      exercisable for Common Stock at a price which varies or may vary with the market
      price of the Common Stock, including by way of one or more reset(s) to any
      fixed
      price unless the conversion, exchange or exercise price of any such security
      cannot be less than the then applicable Conversion Price (as defined in the
      Notes) with respect to the Common Stock into which any Note is convertible
      or
      the then applicable Exercise Price (as defined in the Warrants) with respect
      to
      the Common Stock into which any Warrant is exercisable.  For long as any
      Notes or Warrants remain outstanding, the Company shall not, in any manner,
      enter into or affect any Dilutive Issuance (as defined in the Notes) if the
      effect of such Dilutive Issuance is to cause the Company to be required to
      issue
      upon conversion of any Note or exercise of any Warrant any shares of Common
      Stock in excess of that number of shares of Common Stock which the Company
      has
      authorized and reserved for purposes of such conversions or exercises or which
      the Company may issue upon conversion of the Notes and exercise of the Warrants
      without breaching the Company's obligations under the rules or regulations
      of
      the Principal Market.


    
      
        
        

      

      
        21

        
          

        

      

       

    

    


    (l) Corporate
      Existence.
       So long as any Buyer beneficially owns any Securities, the Company shall
      not be party to any Fundamental Transaction (as defined in the Notes) unless
      the
      Company is in compliance with the applicable provisions governing Fundamental
      Transactions set forth in the Notes and the Warrants.

    


    (m) Reservation
      of Shares.
       So long as any Buyer owns any Securities, the Company shall take all
      action necessary to at all times have authorized, and reserved for the purpose
      of issuance, no less than 150% of the number of shares of Common Stock issuable
      upon conversion of all of the Notes and issuable upon exercise of the Warrants
      then outstanding (without taking into account any limitations on the conversion
      of the Notes or exercise of the Warrants set forth in the Notes and Warrants,
      respectively).

    


    (n) Conduct
      of Business.
       The business of the Company and its Subsidiaries shall not be conducted in
      violation of any law, ordinance or regulation of any government, or any
      department or agency thereof or governmental entity, except where such
      violations would not result, either individually or in the aggregate, in a
      Material Adverse Effect.

    


    (o) [Intentionally
      Omitted].

     

    (p) No
      Short Position.
      Each of
      the Buyers and any of its Affiliates do not have an open short position in
      the
      Common Stock. 

    


    (q) Transactions
      With Affiliates.
      So long
      as any Note or Warrant is outstanding, the Company shall not, and shall cause
      each of its Subsidiaries not to, enter into, amend, modify or supplement, or
      permit any Subsidiary to enter into, amend, modify or supplement any agreement,
      transaction, commitment, or arrangement with any of its or any Subsidiary’s
      officers, directors, person who were officers or directors at any time during
      the previous two (2) years, stockholders who beneficially own five percent
      (5%)
      or more of the Common Stock, or Affiliates (as defined below) or with any
      individual related by blood, marriage, or adoption to any such individual or
      with any entity in which any such entity or individual owns a five percent
      (5%)
      or more beneficial interest (each a “Related
      Party”),
      except for (a) customary employment arrangements and benefit programs on
      reasonable terms, (b) any investment in an Affiliate of the Company, (c) any
      agreement, transaction, commitment, or arrangement on an arms-length basis
      on
      terms no less favorable than terms which would have been obtainable from a
      person other than such Related Party, (d) any agreement transaction, commitment,
      or arrangement which is approved by a majority of the disinterested directors
      of
      the Company or e) any transaction, or series of transaction with any Related
      Party, in which the amount involved does not exceed $30,000. For purposes
      hereof, any director who is also an officer of the Company or any subsidiary
      of
      the Company shall not be a disinterested director with respect to any such
      agreement, transaction, commitment, or arrangement. “Affiliate” for purposes
      hereof means, with respect to any person or entity, another person or entity
      that, directly or indirectly, (i) has a ten percent (10%) or more equity
      interest in that person or entity, (ii) has ten percent (10%) or more common
      ownership with that person or entity, (iii) controls that person or entity,
      or
      (iv) shares common control with that person or entity. “Control” or
“controls” for purposes hereof means that a person or entity has the power,
      direct or indirect, to conduct or govern the policies of another person or
      entity.

     

    
      
        
        

      

      
        22

        
          

        

      

       

    

     

    (t) Restriction
      on Issuance of the Capital Stock. Except for Excluded Securities (as defined
      in
      the Convertible Debentures), the Company shall not, without the prior written
      consent of the Buyer, (i) issue or sell shares of Common Stock or preferred
      stock without consideration or for a consideration per share less than the
      greater of the Closing Bid Price (as defined below) of the Common Stock
      determined immediately prior to its issuance or $.001, if the Common Stock
      is
      not traded or quoted on the Principal Market or any national exchange, (ii)
      issue any warrant, option, right, contract, call, or other security instrument
      granting the holder thereof, the right to acquire Common Stock without
      consideration or for a consideration less than the greater of such Common
      Stock’s Closing Bid Price value determined immediately prior to its issuance or
      $.001, if the Common Stock is not traded on the Principal Market or any national
      exchange, (iii) enter into any security instrument granting the holder a
      security interest in any and all assets of the Company. or (iv) file
      any
      registration statement on Form S-8
      for
      shares that are issued without consideration or for a consideration less than
      the greater of the Common Stock’s Closing Bid Price on the date of issuance or
      $.001, if the Common Stock is not traded or quoted on the Principal Market
      or
      any national exchange (the
      “Minimum Consideration”); provided that the Corporation may file a registration
      statement on Form S-8 with respect to shares representing in the aggregate
      not
      more than five percent (5%) of the fully diluted number of outstanding
and
      reserved shares
      of
      the Corporation as set forth in Section 3(r) hereof for less than the Minimum
      Consideration to (x) employees of the Corporation in connection with the
      rendering by them of services to the Corporation and (y) persons other than
      employees who render services to the Corporation that are substantially similar
      to the services rendered by employees of the Corporation in the ordinary course
      of their employment with the Corporation..
      “Closing Bid Price” on any day shall be the closing bid price for a share of
      Common Stock on such date on the Principal Market (or such other exchange,
      market, or other system that the Common Stock is then traded on), as reported
      on
      Bloomberg, L.P. (or similar organization or agency succeeding to its functions
      of reporting prices).

     

    (u) Removal
      of Legend.
      In
      addition to the Buyer’s other available remedies, the Company shall pay to the
      Buyer, in cash, as partial liquidated damages and not as a penalty, for each
      $1,000 of Warrant Shares and/or Conversion Shares (based on the closing price
      of
      the Common Stock on the date such Warrant Shares and/or Conversion Shares are
      submitted to the Company’s transfer agent), $3 per trading day (increasing to $7
      per trading day five (5) trading days after such damages have begun to accrue)
      for each trading day after the third (3rd)
      trading
      day following delivery by a Buyer to the Company or the Company’s transfer agent
      of a certificate representing Warrant Shares and/or Conversion Shares issued
      with a restrictive legend, until such certificate is delivered to the Buyer
      with
      such legend removed. Nothing herein shall limit the Buyer’s right to pursue
      actual damages for the failure of the Company and its transfer agent to deliver
      certificates representing any securities as required hereby or by the
      Irrevocable Transfer Agent Instructions, and the Buyer shall have the right
      to
      pursue all remedies available to it at law or in equity, including, without
      limitation, a decree of specific performance and/or injunctive
      relief.


    
      
        
        

      

      
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    (v) Conduct
      of Business.
      Neither
      the Company nor its Subsidiaries will conduct its business in material violation
      of any term of or in default under its Certificate or Articles of Incorporation
      or Bylaws. Neither the Company nor any of its Subsidiaries will conduct its
      business in material violation of any judgment, decree or order or any statute,
      ordinance, rule or regulation applicable to the Company or its Subsidiaries,
      except for possible violations which would not, individually or in the
      aggregate, have a Material Adverse Effect.

    


    (w) Piggyback
      Registration.
      If the
      Company shall determine to register any of its Common Stock, for its own account
      or for the account of others, other than (i) a registration relating solely
      to
      employee benefit plans or securities issued or issuable to employees or
      consultants (to the extent the securities owned or to be owned by such
      consultants could be registered on Form S-8) or (ii) a registration relating
      solely to a Commission Rule 145 transaction, a registration on Form S-4 in
      connection with a merger, acquisition, divestiture, reorganization, or similar
      event, the Company shall promptly give to the Buyers written notice thereof
      (and
      in no event shall such notice be given less than 20 calendar days prior to
      the
      filing of such registration statement), and shall, include as a Piggyback
      Registration all of Piggyback Securities, specified in a written request
      delivered by the Buyer within 10 calendar days after receipt of such written
      notice from the Company. However, the Company may, without the consent of the
      Buyers, withdraw such registration statement prior to its becoming effective
      if
      the Company or such other stockholders have elected to abandon the proposal
      to
      register the securities proposed to be registered thereby. “Piggyback
      Securities”
means
      (i) 175% of the Conversion Shares issued or issuable upon conversion of the
      Notes, (ii) 175% of the Warrant Shares issued or issuable upon exercise of
      the Warrants and (iii) any capital stock of the Company issued or issuable
      with
      respect to the Conversion Shares, the Notes, the Warrant Shares or the Warrants
      as a result of any stock split, stock dividend, recapitalization, exchange
      or
      similar event or otherwise, without regard to any limitations on conversions
      of
      the Notes or exercises of the Warrants.

    


    5. REGISTER;
      TRANSFER AGENT INSTRUCTIONS.

    


    (a) Register.
       The Company shall maintain at its principal executive offices (or such
      other office or agency of the Company as it may designate by notice to each
      holder of Securities), a register for the Notes and the Warrants in which the
      Company shall record the name and address of the Person in whose name the Notes
      and the Warrants have been issued (including the name and address of each
      transferee), the principal amount of Notes held by such Person, the number
      of
      Conversion Shares issuable upon conversion of the Notes and the number of
      Warrant Shares issuable upon exercise of the Warrants held by such Person.
       The Company shall keep the register open and available at all times during
      business hours for inspection of any Buyer or its legal representatives
      following reasonable written notice of not less than two Business
      Days.


    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    (b) Transfer
      Agent Instructions.
       The Company shall issue irrevocable instructions to its transfer agent,
      and any subsequent transfer agent, to issue certificates or credit shares to
      the
      applicable balance accounts at The Depository Trust Company ("DTC"),
      registered in the name of each Buyer or its respective nominee(s), for the
      Conversion Shares and the Warrant Shares issued at the Closing or upon
      conversion of the Notes or exercise of the Warrants in such amounts as specified
      from time to time by each Buyer to the Company upon conversion of the Notes
      or
      exercise of the Warrants in the form of Exhibit
      E
      attached
      hereto (the "Irrevocable
      Transfer Agent Instructions").
      The
      Company warrants that no instruction other than the Irrevocable Transfer Agent
      Instructions referred to in this Section 5(b), and stop transfer instructions
      to
      give effect to Section 2(g) hereof, will be given by the Company to its transfer
      agent, and that the Securities shall otherwise be freely transferable on the
      books and records of the Company as and to the extent provided in this Agreement
      and the other Transaction Documents.  If a Buyer effects a sale, assignment
      or transfer of the Securities in accordance with Section 2(f), the Company
      shall
      permit the transfer and shall promptly instruct its transfer agent to issue
      one
      or more certificates or credit shares to the applicable balance accounts at
      DTC
      in such name and in such denominations as specified by such Buyer to effect
      such
      sale, transfer or assignment.  In the event that such sale, assignment or
      transfer involves Conversion Shares or Warrant Shares sold, assigned or
      transferred pursuant to an effective registration statement or pursuant to
      Rule
      144, the transfer agent shall issue such Securities to the Buyer, assignee
      or
      transferee, as the case may be, without any restrictive legend.  The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to a Buyer.  Accordingly, the Company acknowledges that
      the remedy at law for a breach of its obligations under this Section 5(b) will
      be inadequate and agrees, in the event of a breach or threatened breach by
      the
      Company of the provisions of this Section 5(b), that a Buyer shall be entitled,
      in addition to all other available remedies, to an order and/or injunction
      restraining any breach and requiring immediate issuance and transfer, without
      the necessity of showing economic loss and without any bond or other security
      being required.

    


    6. CONDITIONS
      TO THE COMPANY'S OBLIGATION TO SELL.

    


    Closing
      Date.
       The obligation of the Company hereunder to issue and sell the Notes and
      the related Warrants to each Buyer at the Closing is subject to the
      satisfaction, at or before the Closing Date, of each of the following
      conditions, provided that these conditions are for the Company's sole benefit
      and may be waived by the Company at any time in its sole discretion by providing
      each Buyer with prior written notice thereof:

    


    (i) Such
      Buyer shall have executed each of the Transaction Documents to which it is
      a
      party and delivered the same to the Company.


    
      
        
        

      

      
        25

        
          

        

      

       

    

    


    (ii) Such
      Buyer and each other Buyer shall have delivered to the Company or the Escrow
      Agent (as set forth in the Escrow Agreement) the Purchase Price as set forth
      in
      Section 1(c) (less, in the case of GCM, the amounts withheld pursuant to Section
      4(g)) for the Notes and the related Warrants being purchased by such
      Buyer at the Closing by wire transfer of immediately available funds pursuant
      to
      the wire instructions provided by the Company.

    


    (iii) The
      representations and warranties of such Buyer shall be true and correct in all
      material respects as of the date when made and as of the Closing Date as though
      made at that time (except for representations and warranties that speak as
      of a
      specific date), and such Buyer shall have performed, satisfied and complied
      in
      all material respects with the covenants, agreements and conditions required
      by
      this Agreement to be performed, satisfied or complied with by such Buyer at
      or
      prior to the Closing Date.

    


    7. CONDITIONS
      TO EACH BUYER'S OBLIGATION TO PURCHASE.

    


    Closing
      Date.
       The obligation of each Buyer hereunder to purchase the Notes and the
      related Warrants at the Closing is subject to the satisfaction, at or before
      the
      Closing Date, of each of the following conditions, provided that these
      conditions are for each Buyer's sole benefit and may be waived by such Buyer
      at
      any time in its sole discretion by providing the Company with prior written
      notice thereof:

    


    (i) The
      Company shall have executed and delivered to such Buyer or the Escrow Agent
      (A) each of the Transaction Documents, (B) the Notes (in such principal
      amounts as such Buyer shall request) being purchased by such Buyer at the
      Closing pursuant to this Agreement, and (C) the Warrants (in such amounts
      as such Buyer shall request) being purchased by such Buyer at the Closing
      pursuant to this Agreement.

    


    (ii) Such
      Buyer shall have received the opinion of Boylan, Brown, Code, Vigdor &
Wilson, LLP, the Company's outside counsel, dated as of the Closing Date, in
      substantially the form of Exhibit F
      attached
      hereto and a letter stating that the Company is in good standing with its
      attorneys.

    


    (iii) The
      Company shall have delivered to such Buyer a true copy of the Irrevocable
      Transfer Agent Instructions, in the form of Exhibit E
      attached
      hereto, which instructions shall have been delivered to and acknowledged in
      writing by the Company's transfer agent.

    


    (iv) The
      Company shall have delivered to such Buyer a certificate, executed by the Chief
      Executive Officer of the Company and dated as of the Closing Date, as to (i)
      the
      resolutions consistent with Section 3(b) as adopted by the Company's Board
      of
      Directors in a form reasonably acceptable to such Buyer, (ii) the Article of
      Incorporation and (iii) the Bylaws, each as in effect at the Closing, in the
      form attached hereto as Exhibit G
      .

    


    (v) The
      representations and warranties of the Company shall be true and correct in
      all
      material respects (other than representations and warranties that are already
      qualified by materiality or Material Adverse Effect which shall be true and
      correct in all respects) as of the date when made and as of the Closing Date
      as
      though made at that time (except for representations and warranties that speak
      as of a specific date) and the Company shall have performed, satisfied and
      complied in all material respects with the covenants, agreements and conditions
      required by the Transaction Documents to be performed, satisfied or complied
      with by the Company at or prior to the Closing Date.  Such Buyer shall have
      received a certificate, executed by the Chief Executive Officer of the Company,
      dated as of the Closing Date, to the foregoing effect and as to such other
      matters as may be reasonably requested by such Buyer in the form attached hereto
      as
      Exhibit H
      .


    
      
        
        

      

      
        26

        
          

        

      

       

    

    


    (vi) The
      Company shall have delivered to such Buyer a letter from the Company's transfer
      agent certifying the number of shares of Common Stock outstanding as of a date
      within five days of the Closing Date.

    


    (vii) The
      Common Stock (I) shall be designated for quotation on the Principal Market
      and
      (II) shall not have been suspended, as of the Closing Date, by the SEC or the
      Principal Market from trading on the Principal Market nor shall suspension
      by
      the SEC or the Principal Market have been threatened, as of the Closing Date,
      either (A) in writing by the SEC or the Principal Market.

    


    (viii) The
      Company shall have obtained all governmental, regulatory or third party consents
      and approvals, if any, necessary for the sale of the Securities.

    


    (ix) Within
      six (6) Business Days prior to the Closing, the Company shall have delivered
      or
      caused to be delivered to each Buyer true copies of UCC search results, listing
      all effective financing statements which name as debtor the Company or any
      of
      its Subsidiaries filed in the prior five years to perfect an interest in any
      assets thereof, together with copies of such financing statements, none of
      which, except as otherwise agreed in writing by the Buyers, shall cover any
      of
      the Collateral (as defined in the Security Agreement) and the results of
      searches for any tax lien and judgment lien filed against such Person or its
      property, which results, except as otherwise agreed to in writing by the Buyers
      shall not show any such Liens (as defined in the Security
      Agreement).

    


    (xii)  The
      Company shall have delivered to such Buyer such other documents relating to
      the
      transactions contemplated by this Agreement as such Buyer or its counsel may
      reasonably request.

    


    8. TERMINATION.
       In the event that the Closing shall not have occurred with respect to a
      Buyer on or before five (5) Business Days from the date hereof due to the
      Company's or such Buyer's failure to satisfy the conditions set forth in
      Sections 6 and 7 above (and the nonbreaching party's failure to waive such
      unsatisfied condition(s)), the nonbreaching party shall have the option to
      terminate this Agreement with respect to such breaching party at the close
      of
      business on such date without liability of any party to any other party;
provided,
      however,
      that if
      this Agreement is terminated pursuant to this Section 8 by the Company, then
      the
      Company shall remain obligated to reimburse the non-breaching Buyers for the
      expenses described in Section 4(g) above.


    
      
        
        

      

      
        27

        
          

        

      

       

    

    


    9. MISCELLANEOUS.

    


    (a) Governing
      Law; Jurisdiction; Jury Trial.
       All questions concerning the construction, validity, enforcement and
      interpretation of this Agreement shall be governed by the internal laws of
      the
      State of New York, without giving effect to any choice of law or conflict of
      law
      provision or rule (whether of the State of New York or any other jurisdictions)
      that would cause the application of the laws of any jurisdictions other than
      the
      State of New York.  Each party hereby irrevocably submits to the exclusive
      jurisdiction of the state and federal courts sitting in The City of New York,
      Borough of Manhattan, for the adjudication of any dispute hereunder or in
      connection herewith or with any transaction contemplated hereby or discussed
      herein, and hereby irrevocably waives, and agrees not to assert in any suit,
      action or proceeding, any claim that it is not personally subject to the
      jurisdiction of any such court, that such suit, action or proceeding is brought
      in an inconvenient forum or that the venue of such suit, action or proceeding
      is
      improper.  Each party hereby irrevocably waives personal service of process
      and consents to process being served in any such suit, action or proceeding
      by
      mailing a copy thereof to such party at the address for such notices to it
      under
      this Agreement and agrees that such service shall constitute good and sufficient
      service of process and notice thereof.  Nothing contained herein shall be
      deemed to limit in any way any right to serve process in any manner permitted
      by
      law.  
      EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT
      TO
      REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
      CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
      HEREBY.

    


    (b) 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; provided that a facsimile signature shall be considered due
      execution and shall be binding upon the signatory thereto with the same force
      and effect as if the signature were an original, not a facsimile
      signature.

    


    (c) Headings.
       The headings of this Agreement are for convenience of reference and shall
      not form part of, or affect the interpretation of, this Agreement.

    


    (d) Severability.
       If any provision of this Agreement shall be invalid or unenforceable in
      any jurisdiction, such invalidity or unenforceability shall not affect the
      validity or enforceability of the remainder of this Agreement in that
      jurisdiction or the validity or enforceability of any provision of this
      Agreement in any other jurisdiction.

    


    (e) Entire
      Agreement; Amendments.
       This Agreement and the other Transaction Documents supersede all other
      prior oral or written agreements between the Buyers, the Company, their
      Affiliates and Persons acting on their behalf with respect to the matters
      discussed herein, and this Agreement, the other Transaction Documents and the
      instruments referenced herein and therein 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 any Buyer
      makes any representation, warranty, covenant or undertaking with respect to
      such
      matters.  No provision of this Agreement may be amended other than by an
      instrument in writing signed by the Company and the Required Holders, and any
      amendment to this Agreement made in conformity with the provisions of this
      Section 9(e) shall be binding on all Buyers and holders of Securities, as
      applicable.  No provision hereof may be waived other than by an instrument
      in writing signed by the party against whom enforcement is sought.  No such
      amendment shall be effective to the extent that it applies to less than all
      of
      the holders of the applicable Securities then outstanding.  No
      consideration shall be offered or paid to any Person to amend or consent to
      a
      waiver or modification of any provision of any of the Transaction Documents
      unless the same consideration also is offered to all of the parties to the
      Transaction Documents, holders of Notes or holders of the Warrants, as the
      case
      may be.  The Company has not, directly or indirectly, made any agreements
      with any Buyers relating to the terms or conditions of the transactions
      contemplated by the Transaction Documents except as set forth in the Transaction
      Documents.


    
      
        
        

      

      
        28

        
          

        

      

       

    

    


    (f) 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 confirmation of transmission
      is
      mechanically or electronically generated and kept on file by the sending party);
      or (iii) one Business Day after deposit with an overnight courier 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:

            	 	
               

              Pure
                Vanilla eXchange, Inc. 
                805
                  Third Avenue 
                  New
                    York, NY 10022
                    
                    Telephone: 212-972-1600

                    Facsimile: 212-972-1666

                    Attention: Steven
                      Yevoli, Chairman

                  

                

              

            
	 	 
	 	
              Copy
                to (for informational purposes only):

            
	 	 
	 	 	 	
              Boylan,
                Brown, Code, Vigdor Wilson, LLP

              2400
                Chase Square

              Rochester,
                NY 14604

              Telephone: (585)
                232-5300

              Facsimile: (585)
                232-3528

              Attention: Robert
                F. Mechur, Esq.

            
	 	 	 	 
	 	If to the Transfer
              Agent:	 	American Stock Transfer Company
              59
                Maiden Lane

              New
                York, NY 10038

              Telephone: 718-921-8319

              Facsimile: 718-765-8729
                fax

            


    

     

    
      
        
        

      

      
        29

        
          

        

      

       

    


    If
      to a
      Buyer, to its address and facsimile number set forth on the Schedule of Buyers,
      with copies to such Buyer's representatives as set forth on the Schedule of
      Buyers, with a copy (for informational purposes only) to:

    
       

      
        	 	 	 	
                Gottbetter
                  & Partners, LLP

                488
                  Madison Avenue, 12th
                  Floor

                New
                  York, New York 10022

                Telephone: (212)
                  400-6900

                Facsimile: (212)
                  400-6901

                Attention: Jason
                  M. Rimland, Esq.

              


      

       

    

    or
      to
      such other address and/or facsimile number and/or to the attention of such
      other
      Person as the recipient party has specified by written notice given to each
      other party five (5) days prior to the effectiveness of such change.
 Written confirmation of receipt (A) given by the recipient of such notice,
      consent, waiver or other communication, (B) mechanically or electronically
      generated by the sender's facsimile machine containing the time, date, recipient
      facsimile number and an image of the first page of such transmission or
(C)
      provided by an overnight courier service shall be rebuttable evidence of
      personal service, receipt by facsimile or receipt from an overnight courier
      service in accordance with clause (i), (ii) or (iii) above,
      respectively.

    


    (g) Successors
      and Assigns.
       This Agreement shall be binding upon and inure to the benefit of the
      parties and their respective successors and assigns, including any purchasers
      of
      the Notes or the Warrants.  The Company shall not assign this Agreement or
      any rights or obligations hereunder without the prior written consent of the
      Required Holders (unless the Company is in compliance with the applicable
      provisions governing Fundamental Transactions set forth in the Notes and the
      Warrants).  A Buyer may assign some or all of its rights hereunder without
      the consent of the Company, in which event such assignee shall be deemed to
      be a
      Buyer hereunder with respect to such assigned rights; provided that such
      assignee agrees in writing to be bound by all of the provisions contained
      herein.

    


    (h) No
      Third Party Beneficiaries.
       This Agreement is intended for the benefit of the parties hereto and their
      respective permitted successors and assigns, and is not for the benefit of,
      nor
      may any provision hereof be enforced by, any other Person.

    


    (i) Survival.
       Unless this Agreement is terminated under Section 8, the representations
      and warranties of the Company and the Buyers contained in Sections 2 and 3
      and
      the agreements and covenants set forth in Sections 4, 5 and 9 shall survive
      the
      Closing.  Each Buyer shall be responsible only for its own representations,
      warranties, agreements and covenants hereunder.


    
      
        
        

      

      
        30

        
          

        

      

       

    

    


    (j) Further
      Assurances.
       Each party shall do and perform, or cause to be done and performed, all
      such further acts and things, and shall execute and deliver all such other
      agreements, certificates, instruments and documents, as any other party may
      reasonably request in order to carry out the intent and accomplish the purposes
      of this Agreement and the consummation of the transactions contemplated
      hereby.

    


    (k) Indemnification.
       In consideration of each Buyer's execution and delivery of the Transaction
      Documents and acquiring the Securities thereunder and in addition to all of
      the
      Company's other obligations under the Transaction Documents, the Company shall
      defend, protect, indemnify and hold harmless each Buyer and each other holder
      of
      the Securities and all of their stockholders, partners, members, officers,
      directors, employees and direct or indirect investors and any of the foregoing
      Persons' agents or other representatives (including, without limitation, those
      retained in connection with the transactions contemplated by this Agreement)
      (collectively, the "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 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 any Indemnitee 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 the Transaction Documents
      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 the Transaction Documents or any other certificate, instrument or document
      contemplated hereby or thereby or (c) any cause of action, suit or claim brought
      or made against such Indemnitee by a third party (including for these purposes
      a
      derivative action brought on behalf of the Company) and arising out of or
      resulting from (i) the execution, delivery, performance or enforcement of the
      Transaction Documents or any other certificate, instrument or document
      contemplated hereby or thereby, (ii) any transaction financed or to be financed
      in whole or in part, directly or indirectly, with the proceeds of the issuance
      of the Securities, (iii) any disclosure made by such Buyer pursuant to Section
      4(i), or (iv) the status of such Buyer or holder of the Securities as an
      investor in the Company pursuant to the transactions contemplated by the
      Transaction Documents.  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.  

    


    (l) No
      Strict Construction.
       The language used in this Agreement will be deemed to be the language
      chosen by the parties to express their mutual intent, and no rules of strict
      construction will be applied against any party.

    


    (m) Remedies.
       Each Buyer and each holder of the Securities shall have all rights and
      remedies set forth in the Transaction Documents and all rights and remedies
      which such holders have been granted at any time under any other agreement
      or
      contract and all of the rights which such holders have under any law.  Any
      Person having any rights under any provision of this Agreement shall be entitled
      to enforce such rights specifically (without posting a bond or other security),
      to recover damages by reason of any breach of any provision of this Agreement
      and to exercise all other rights granted by law.  Furthermore, the Company
      recognizes that in the event that it fails to perform, observe, or discharge
      any
      or all of its obligations under the Transaction Documents, any remedy at law
      may
      prove to be inadequate relief to the Buyers.  The Company therefore agrees
      that the Buyers shall be entitled to seek temporary and permanent injunctive
      relief in any such case without the necessity of proving actual damages and
      without posting a bond or other security.


    
      
        
        

      

      
        31

        
          

        

      

       

    

    


    (n) Rescission
      and Withdrawal Right.
      Notwithstanding anything to the contrary contained in (and without limiting
      any
      similar provisions of) the Transaction Documents, whenever any Buyer exercises
      a
      right, election, demand or option under a Transaction Document and the Company
      does not timely perform its related obligations within the periods therein
      provided, then such Buyer may rescind or withdraw, in its sole discretion from
      time to time upon written notice to the Company, any relevant notice, demand
      or
      election in whole or in part without prejudice to its future actions and
      rights.

    


    (o) Payment
      Set Aside.
       To the extent that the Company makes a payment or payments to the Buyers
      hereunder or pursuant to any of the other Transaction Documents or the Buyers
      enforce or exercise their rights hereunder or thereunder, and such payment
      or
      payments or the proceeds of such enforcement or exercise or any part thereof
      are
      subsequently invalidated, declared to be fraudulent or preferential, set aside,
      recovered from, disgorged by or are required to be refunded, repaid or otherwise
      restored to the Company, a trustee, receiver or any other Person under any
      law
      (including, without limitation, any bankruptcy law, foreign, state or federal
      law, common law or equitable cause of action), then to the extent of any such
      restoration the obligation or part thereof originally
      intended to be satisfied shall be revived and continued in full force and effect
      as if such payment had not been made or such enforcement or setoff had not
      occurred.

    


    [Signature
      Page Follows]


    
      
        
        

      

      
        32

        
          

        

      

       

    


    IN
      WITNESS WHEREOF,
      each
      Buyer and the Company have caused their respective signature page to this
      Securities Purchase Agreement to be duly executed as of the date first written
      above.

    


    
      	 	 	 
	 	
              COMPANY:

              PURE
                VANILLA EXCHANGE, INC.

            
	 
 	 
 	 
 
	
            	By:  	/s/
              Steven Yevoli
	 	
              

              Name: Steven
                Yevoli

            
	 	
              Title:
                 Chairman

            


    

     

    
      
        
        

      

      
        33

        
          

        

      

       

    


    IN
      WITNESS WHEREOF,
      each
      Buyer and the Company have caused their respective signature page to this
      Securities Purchase Agreement to be duly executed as of the date first written
      above.

    


    
      	 	 	 
	 	
              BUYERS:

              GOTTBETTER
                CAPITAL MASTER, LTD.

            
	 
 	 
 	 
 
	
            	By:  	/s/
              Adam
              S.
              Gottbetter
	 	
              

              Name: Adam
                S. Gottbetter 

            
	 	
              Title:
                 Director

            


    

     

    
      
        
        

      

      
        34

        
          

        

      

       

    

     

    SCHEDULE
      OF BUYERS

     

    
      	
              (1)

            	
               

            	
              (2)

            	
               

            	
              (3)

            	
               

            	
              (4)

            	
               

            	
              (5)

            	
               

            	
              (6)

            
	
              Buyer

            	
               

            	
              Address
                and Facsimile Number

            	
               

            	
              Aggregate
                Principal of Note

            	
               

            	
              Aggregate
                Number of Warrant Shares

            	
               

            	
              Purchase
                Price

            	
               

            	
              Legal
                Representative’s Address and Facsimile Number

            
	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            
	
              Gottbetter
                Capital Master, Ltd.

            	 	
              488
                Madison Avenue

              12th
                Floor

              New
                York, NY 10022

              Facsimile:
                212.400.6999

            	 	
              1,500,000

            	 	
              450,000

            	 	
              $1,417,500

            	 	
              Jason
                M. Rimland, Esq.

              Gottbetter
                & Partners, LLP

              488
                Madison Avenue

              12th
                Floor

              New
                York, NY 10022

              Facsimile:
                212.400.6901

            


    

     

    
      
        
        

      

      
        35

        
          

        

      

       

    

    


    EXHIBITS

    Exhibit
      A Form
      of
      Notes

    Exhibit
      B Form
      of
      Warrants

    Exhibit
      C [Intentionally
      left blank]

    Exhibit
      D Form
      of
      Security Agreement

    Exhibit
      E Irrevocable
      Transfer Agent Instructions

    Exhibit
      F Form
      of
      Opinion Letter

    Exhibit
      G Form
      of
      Resolutions, Articles of Incorporation and By-Laws

    Exhibit
      H Form
      of
      Officer’s Certificate

     

    SCHEDULES

    Schedule
      3(a) Subsidiaries

    Schedule
      3(b) Authorization,
      Enforcement, Validity

    Schedule
      3(d) No
      Conflicts

    Schedule
      3(e) Consents

    Schedule
      3(k) SEC
      Documents; Financial Statements

    Schedule
      3(l) Absence
      of Certain Changes

    Schedule
      3(q) Transactions
      with Affiliates

    Schedule
      3(r) Equity
      Capitalization

    Schedule
      3(s) Indebtedness
      and Other Contracts

    Schedule
      3(t) Litigation

    Schedule
      3(v) Employee
      Relations

    Schedule
      3(w) Title

    Schedule
      3(x) Intellectual
      Property Rights

    Schedule
      3(z) Subsidiary
      Rights

    Schedule
      3(bb) Tax
      Status

    Schedule
      3(ee) Ranking
      of Notes

    Schedule
      4(d) Use
      of
      Proceeds

    Schedule
      4(p) Additional
      Registered Securities

    


    
      
        
        

      

      
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