Filed by Automated Filing Services Inc. (604) 609-0244 - Snocone Systems Inc. - Exhibit 4.1





 SECURITIES PURCHASE AGREEMENT 


     SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of April 29, 2005, by and among Snocone Systems Inc. (Who’s Your Daddy, Inc.), a Nevada corporation, with headquarters located at 1555
East Flamingo Road, Suite 440, Las Vegas, NV 89119 (the “Company”), and each of the purchasers set forth on the signature pages hereto (the “Buyers”). 

      WHEREAS:

      A. The Company and the
  Buyers are executing and delivering this Agreement in reliance upon the exemption
  from securities registration afforded by the rules and regulations as promulgated
  by the United States Securities and Exchange Commission (the “SEC”)
  under the Securities Act of 1933, as amended (the “1933 Act”); 

      B. Buyers desire
  to purchase and the Company desires to issue and sell, upon the terms and conditions
  set forth in this Agreement (i) 8% secured convertible notes of the Company,
  in the form attached hereto as Exhibit “A”, in the aggregate
  principal amount of Three Million Seven Hundred and Fifty Thousand Dollars ($3,750,000)
  (together with any note(s) issued in replacement thereof or as a dividend thereon
  or otherwise with respect thereto in accordance with the terms thereof, the
  “Notes”), convertible into shares of common stock, par value
  $.001 per share, of the Company (the “Common Stock”),
  upon the terms and subject to the limitations and conditions set forth in such
  Notes and (ii) warrants, in the form attached hereto as Exhibit “B”,
  to purchase 2,628,505 shares of Common Stock (the “Warrants”).


      C. Each Buyer
  wishes to purchase, upon the terms and conditions stated in this Agreement,
  such principal amount of Notes and number of Warrants as is set forth immediately
  below its name on the signature pages hereto; and 

      D.     
  Contemporaneous with the execution and delivery of this Agreement, the parties
  hereto are executing and delivering a Registration Rights Agreement, in the
  form attached hereto as Exhibit “C” (the “Registration
  Rights Agreement”), pursuant to which the Company has agreed to provide
  certain registration rights under the 1933 Act and the rules and regulations
  promulgated thereunder, and applicable state securities laws. 

      NOW THEREFORE, the Company
  and each of the Buyers severally (and not jointly) hereby agree as follows:


      1. PURCHASE AND SALE OF
  NOTES AND WARRANTS. 

      a. Purchase
  of Notes and Warrants. On the Closing Date (as defined below), the Company
  shall issue and sell to each Buyer and each Buyer severally agrees to purchase
  from the Company such principal amount of Notes and number of Warrants as is
  set forth immediately below such Buyer’s name on the signature pages hereto.


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      b. Form of Payment.
  On the Closing Date (as defined below), (i) each Buyer shall pay the purchase
  price for the Notes and the Warrants to be issued and sold to it at the Closing
  (as defined below) (the “Purchase Price”) by wire transfer
  of immediately available funds to the Company, in accordance with the Company’s
  written wiring instructions, against delivery of the Notes in the principal
  amount equal to the Purchase Price and the number of Warrants as is set forth
  immediately below such Buyer’s name on the signature pages hereto, and
  (ii) the Company shall deliver such Notes and Warrants duly executed on behalf
  of the Company, to such Buyer, against delivery of such Purchase Price.


     c. Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Notes
and the Warrants pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon, Eastern Standard Time on April 29, 2005, or such other mutually agreed upon time. The closing of the transactions contemplated by this Agreement
(the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties. 


     2. BUYERS’ REPRESENTATIONS AND WARRANTIES. Each Buyer severally (and not jointly) represents and warrants to the Company solely as to such Buyer that: 

      a. Investment
  Purpose. As of the date hereof, the Buyer is purchasing the Notes and
  the shares of Common Stock issuable upon conversion of or otherwise pursuant
  to the Notes (including, without limitation, such additional shares of Common
  Stock, if any, as are issuable (i) on account of interest on the Notes, (ii)
  as a result of the events described in Sections 1.3 and 1.4(g) of the Notes
  and Section 2(c) of the Registration Rights Agreement or (iii) in payment of
  the Standard Liquidated Damages Amount (as defined in Section 2(f) below) pursuant
  to this Agreement, such shares of Common Stock being collectively referred to
  herein as the “Conversion Shares”) and the Warrants and the
  shares of Common Stock issuable upon exercise thereof (the “Warrant
  Shares” and, collectively with the Notes, Warrants and Conversion
  Shares, the “Securities”) for its own account and not with
  a present view towards the public sale or distribution thereof, except pursuant
  to sales registered or exempted from registration under the 1933 Act; provided,
  however, that by making the representations herein, the 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 under the 1933 Act.


      b. Accredited
  Investor Status. The Buyer is an “accredited investor” as
  that term is defined in Rule 501(a) of Regulation D (an “Accredited
  Investor”). 

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

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      d. Information.
  The Buyer and its advisors, if any, have been, and for so long as the Notes
  and Warrants remain outstanding will continue to be, 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
  the Buyer or its advisors. The Buyer and its advisors, if any, have been, and
  for so long as the Notes and Warrants remain outstanding will continue to be,
  afforded the opportunity to ask questions of the Company. Notwithstanding the
  foregoing, the Company has not disclosed to the Buyer any material nonpublic
  information and will not disclose such information unless such information is
  disclosed to the public prior to or promptly following such disclosure to the
  Buyer. Neither such inquiries nor any other due diligence investigation conducted
  by Buyer or any of its advisors or representatives shall modify, amend or affect
  Buyer’s right to rely on the Company’s representations and warranties
  contained in Section 3 below. The Buyer understands that its investment in the
  Securities involves a significant degree of risk. 

      e. Governmental
  Review. The Buyer understands that no United States federal or state
  agency or any other government or governmental agency has passed upon or made
  any recommendation or endorsement of the Securities. 

      f. Transfer
  or Re-sale. The Buyer understands that (i) except as provided in the
  Registration Rights Agreement, the sale or re-sale of the Securities has not
  been and is not being registered under the 1933 Act or any applicable state
  securities laws, and the Securities may not be transferred unless (a) the Securities
  are sold pursuant to an effective registration statement under the 1933 Act,
  (b) the Buyer shall have delivered to the Company an opinion of counsel that
  shall be in form, substance and scope customary for opinions of counsel in comparable
  transactions to the effect that the Securities to be sold or transferred may
  be sold or transferred pursuant to an exemption from such registration, which
  opinion shall be accepted by the Company, (c) the Securities are sold or transferred
  to an “affiliate” (as defined in Rule 144 promulgated under the
  1933 Act (or a successor rule) (“Rule 144”)) of the Buyer
  who agrees to sell or otherwise transfer the Securities only in accordance with
  this Section 2(f) and who is an Accredited Investor, (d) the Securities are
  sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation
  S under the 1933 Act (or a successor rule) (“Regulation S”),
  and the Buyer shall have delivered to the Company an opinion of counsel that
  shall be in form, substance and scope customary for opinions of counsel in corporate
  transactions, which opinion shall be accepted by the Company provided that it
  complies with the preceding requirements; (ii) any sale of such Securities made
  in reliance on Rule 144 may be made only in accordance with the terms of said
  Rule and further, if said Rule is not applicable, any re-sale of such Securities
  under circumstances in which the seller (or the person 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) neither the Company
  nor any other person is under any obligation to register such Securities under
  the 1933 Act or any state securities laws or to comply with the terms and conditions
  of any exemption thereunder (in each case, other than pursuant to the Registration
  Rights Agreement). Notwithstanding the foregoing or anything else contained
  herein to the contrary, the Securities may be pledged as collateral in connection
  with a bona fide margin account or other lending arrangement.
  In the event that the Company does not accept the opinion of counsel provided
  by the Buyer that complies with the requirements of this Section 2(f) with respect
  to the transfer of Securities pursuant to an exemption from registration, such
  as Rule 144 or Regulation S, within 

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 three (3) business days of delivery of the opinion to the
  Company, the Company shall pay to the Buyer liquidated damages of three percent
  (3%) of the outstanding amount of the Notes per month plus accrued and unpaid
  interest on the Notes, prorated for partial months, in cash or shares at the
  option of the Company (“Standard Liquidated Damages Amount”).
  If the Company elects to be pay the Standard Liquidated Damages Amount in shares
  of Common Stock, such shares shall be issued at the Conversion Price at the
  time of payment. 

      g. Legends.
  The Buyer understands that the Notes and the Warrants and, until such time as
  the Conversion Shares and Warrant Shares have been registered under the 1933
  Act as contemplated by the Registration Rights Agreement or otherwise may be
  sold pursuant to Rule 144 or Regulation S without any restriction as to the
  number of securities as of a particular date that can then be immediately sold,
  the Conversion Shares and Warrant Shares may bear a restrictive legend in substantially
  the following form (and a stop-transfer order may be placed against transfer
  of the certificates for such Securities):

	 	"The securities represented by this certificate have not been registered
      under the Securities Act of 1933, as amended. The securities may not be
      sold, transferred or assigned in the absence of an effective registration
      statement for the securities under said Act, or an opinion of counsel, in
      form, substance and scope customary for opinions of counsel in comparable
      transactions, that registration is not required under said Act or unless
      sold pursuant to Rule 144 or Regulation S under said Act."	 


     The legend set forth above shall
  be removed and the Company shall issue a certificate without such legend to
  the holder of any Security upon which it is stamped, if, unless otherwise required
  by applicable state securities laws, (a) such Security is registered for sale
  under an effective registration statement filed under the 1933 Act or otherwise
  may be sold pursuant to Rule 144 or Regulation S without any restriction as
  to the number of securities as of a particular date that can then be immediately
  sold, or (b) such holder provides the Company with an opinion of counsel, in
  form, substance and scope customary for opinions of counsel in comparable transactions,
  to the effect that a public sale or transfer of such Security may be made without
  registration under the 1933 Act, which opinion shall be accepted by the Company
  so that the sale or transfer is effected or (c) such holder provides the Company
  with reasonable assurances that such Security can be sold pursuant to Rule 144
  or Regulation S. The Buyer agrees to sell all Securities, including those represented
  by a certificate(s) from which the legend has been removed, in compliance with
  applicable prospectus delivery requirements, if any. 

      h. Authorization;
  Enforcement. This Agreement and the 

 Registration Rights Agreement have been duly and validly authorized.
  This Agreement has been duly executed and delivered on behalf of the Buyer,
  and this Agreement constitutes, and upon execution and delivery by the Buyer
  of the Registration Rights Agreement, such agreement will constitute, valid
  and binding agreements of the Buyer enforceable in accordance with their terms.


      i. Residency.
  The Buyer is a resident of the jurisdiction set forth immediately below such
  Buyer’s name on the signature pages hereto. 

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      j. Foreign Investor
  Representation. Each Buyer hereby represents that it has satisfied
  itself as to the full observance of the laws of its jurisdiction in connection
  with any invitation to subscribe for the Securities or any use of this Agreement,
  including (i) the legal requirements within its jurisdiction for the purchase
  of the Securities, (ii) any foreign exchange restrictions applicable to such
  purchase, (iii) any governmental or other consents that may need to be obtained,
  and (iv) the income tax and other tax consequences, if any, that may be relevant
  to the purchase, holding, redemption, sale or transfer of the Securities. The
  Buyer's subscription and payment for, and its continued beneficial ownership
  of the Securities, will not violate any applicable securities or other laws
  of its jurisdiction. The funds used to purchase the Securities do not violate
  the anti-money laundering provisions of the Money Laundering Control Act of
  1986 or the Bank Secrecy Act of 1970, as amended by the USA Patriot Act of 2001.


       3. REPRESENTATIONS
  AND WARRANTIES OF THE COMPANY.

  Except as set forth in the Disclosure Schedule or in the SEC Documents (as defined
  in Section 3(g) below), and from and after the effective date of the merger
  (the “Merger Effective Date”) between Snocone Systems Inc.,
  WYD Acquisition Corp. and Who’s Your Daddy, Inc. pursuant to that Agreement
  and Plan of Merger dated April 1, 2005, the Company represents and warrants
  to each Buyer that: 

      a. Organization
  and Qualification. The Company and each of its Subsidiaries (as defined
  below), if any, is a corporation duly organized, validly existing and in good
  standing under the laws of the jurisdiction in which it is incorporated, with
  full power and authority (corporate and other) to own, lease, use and operate
  its properties and to carry on its business as and where now owned, leased,
  used, operated and conducted. Schedule 3(a) sets forth a list of all
  of the Subsidiaries of the Company and the jurisdiction in which each is incorporated.
  The Company and each of its Subsidiaries is duly qualified as a foreign corporation
  to do business and is in good standing in every jurisdiction in which its ownership
  or use of property or the nature of the business conducted by it makes such
  qualification necessary except where the failure to be so qualified or in good
  standing would not have a Material Adverse Effect. “Material Adverse
  Effect” means any of (i) a material and adverse effect on the legality,
  validity or enforceability of any document executed in connection with this
  financing, (ii) a material and adverse effect on the results of operations,
  assets, prospects, business or condition (financial or otherwise) of the Company
  and the Subsidiaries, taken as a whole, or (iii) an adverse impairment to the
  Company’s ability to perform under any of the documents executed in connection
  with this financing. “Subsidiaries” means any corporation
  or other organization, whether incorporated or unincorporated, in which the
  Company owns, directly or indirectly, any equity or other ownership interest.


      b. Authorization;
  Enforcement. (i) The Company has all requisite corporate power and authority
  to enter into and perform this Agreement, the Registration Rights Agreement,
  the Notes and the Warrants and to consummate the transactions contemplated hereby
  and thereby and to issue the Securities, in accordance with the terms hereof
  and thereof, (ii) the execution and delivery of this Agreement, the Registration
  Rights Agreement, the Notes and the Warrants by the Company and the consummation
  by it of the transactions contemplated hereby and thereby (including without
  limitation, the issuance of the Notes and the Warrants and the issuance and
  reservation for issuance of the Conversion Shares and Warrant Shares issuable


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 upon conversion or exercise thereof) have been duly authorized
  by the Company’s Board of Directors and no further consent or authorization
  of the Company, its Board of Directors, or its shareholders is required, (iii)
  this Agreement has been duly executed and delivered by the Company by its authorized
  representative, and such authorized representative is the true and official
  representative with authority to sign this Agreement and the other documents
  executed in connection herewith and bind the Company accordingly, and (iv) this
  Agreement constitutes, and upon execution and delivery by the Company of the
  Registration Rights Agreement, the Notes and the Warrants, each of such instruments
  will constitute, a legal, valid and binding obligation of the Company enforceable
  against the Company in accordance with its terms except: (i) as limited by applicable
  bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or
  other laws of general application relating to or affecting the enforcement of
  creditors' rights generally; (ii) as limited by laws relating to the availability
  of specific performance, injunctive relief, or other equitable remedies; or
  (iii) to the extent the indemnification provisions contained in the Registration
  Rights Agreement may be limited by applicable federal or state securities laws.


      c. Capitalization.
  As of the date hereof, the authorized capital stock of the Company consists
  of (i) 100,000,000 shares of Common Stock, of which 11,729,949 shares are issued
  and outstanding, 0 shares are reserved for issuance pursuant to the Company’s
  stock option plans, 0 shares are reserved for issuance pursuant to securities
  (other than the Notes and the Warrants) exercisable for, or convertible into
  or exchangeable for shares of Common Stock and 15,128,505 shares are reserved
  for issuance upon conversion of the Notes and exercise of the Warrants (subject
  to (i) the Stockholder Approval (as defined in Section 4(l) and (ii) adjustment
  pursuant to the Company’s covenant set forth in Section 4(h) below); and
  (iii) 20,000,000 shares of preferred stock, of which 0 shares are issued and
  outstanding. All of such outstanding shares of capital stock are, or upon issuance
  will be, duly authorized, validly issued, fully paid and nonassessable. No shares
  of capital stock of the Company are subject to preemptive rights or any other
  similar rights of the shareholders of the Company or any liens or encumbrances
  imposed through the actions or failure to act of the Company. Except as disclosed
  in Schedule 3(c), as of the effective date of this Agreement, (i) there
  are no outstanding options, warrants, scrip, rights to subscribe for, puts,
  calls, rights of first refusal, agreements, understandings, claims or other
  commitments or rights of any character whatsoever relating to, or securities
  or rights convertible into or exchangeable for any shares of capital stock of
  the Company or any of its Subsidiaries, or arrangements by which the Company
  or any of its Subsidiaries is or may become bound to issue additional shares
  of capital stock of the Company or any of its Subsidiaries, (ii) there are no
  agreements or arrangements under which the Company or any of its Subsidiaries
  is obligated to register the sale of any of its or their securities under the
  1933 Act (except the Registration Rights Agreement) and (iii) there are no anti-dilution
  or price adjustment provisions contained in any security issued by the Company
  (or in any agreement providing rights to security holders) that will be triggered
  by the issuance of the Notes, the Warrants, the Conversion Shares or Warrant
  Shares. The Company has furnished to the Buyer true and correct copies of the
  Company’s Articles of Incorporation as in effect on the date hereof (“Articles
  of Incorporation”), the Company’s By-laws, as in effect on the
  date hereof (the “Bylaws”), and the terms of all securities
  convertible into or exercisable for Common Stock of the Company and the material
  rights of the holders thereof in respect thereto. The Company shall provide
  the Buyer with a written update of this representation signed by the Company’s
  Chief Executive or Chief Financial Officer on behalf of the Company as of the
  Closing Date. 

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      d. Issuance
  of Shares. Subject to Stockholder Approval (as defined in Section 4(n)),
  the Conversion Shares and Warrant Shares are duly authorized and reserved for
  issuance and, upon conversion of the Notes and exercise of the Warrants in accordance
  with their respective terms, will be validly issued, fully paid and non-assessable,
  and free from all taxes, liens, claims and encumbrances with respect to the
  issue thereof and shall not be subject to preemptive rights or other similar
  rights of shareholders of the Company and will not impose personal liability
  upon the holder thereof. 

      e. Acknowledgment
  of Dilution. The Company understands and acknowledges the potentially
  dilutive effect to the Common Stock upon the issuance of the Conversion Shares
  and Warrant Shares upon conversion of the Note or exercise of the Warrants.
  The Company further acknowledges that its obligation to issue Conversion Shares
  and Warrant Shares upon conversion of the Notes or exercise of the Warrants
  in accordance with this Agreement, the Notes and the Warrants is absolute and
  unconditional regardless of the dilutive effect that such issuance may have
  on the ownership interests of other shareholders of the Company. 

      f. No Conflicts.
  Subject to Stockholder Approval, the execution, delivery and performance of
  this Agreement, the Registration Rights Agreement, the Notes and the Warrants
  by the Company and the consummation by the Company of the transactions contemplated
  hereby and thereby (including, without limitation, the issuance and reservation
  for issuance of the Conversion Shares and Warrant Shares) will not (i) conflict
  with or result in a violation of any provision of the Articles of Incorporation
  or By-laws or (ii) violate or conflict with, or result in a breach of any provision
  of, or constitute a default (or an event which with notice or lapse of time
  or both could become a default) under, or give to others any rights of termination,
  amendment, acceleration or cancellation of, any agreement, indenture, patent,
  patent license 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 regulations of any self-regulatory organizations to which the Company or
  its securities are subject) 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 (except for such conflicts, defaults, terminations, amendments,
  accelerations, cancellations and violations as would not, individually or in
  the aggregate, have a Material Adverse Effect). Neither the Company nor any
  of its Subsidiaries is in violation of its Articles of Incorporation, By-laws
  or other organizational documents and neither the Company nor any of its Subsidiaries
  is in default (and no event has occurred which with notice or lapse of time
  or both could put the Company or any of its Subsidiaries in default) under,
  and neither the Company nor any of its Subsidiaries has taken any action or
  failed to take any action that would 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 by which any property
  or assets of the Company or any of its Subsidiaries is bound or affected, except
  for possible defaults as would not, individually or in the aggregate, have a
  Material Adverse Effect. The businesses of the Company and its Subsidiaries,
  if any, are not being conducted, and shall not be conducted so long as a Buyer
  owns any of the Securities, in violation of any law, ordinance or regulation
  of any governmental entity. Except as specifically contemplated by this Agreement
  and as required under the 1933 Act and any applicable state securities laws,
  the Company is not required to obtain any consent, authorization or order of,
  or make any filing or registration with, 

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 any court, governmental agency, regulatory agency, self regulatory
  organization or stock market or any third party in order for it to execute,
  deliver or perform any of its obligations under this Agreement, the Registration
  Rights Agreement, the Notes or the Warrants in accordance with the terms hereof
  or thereof or to issue and sell the Notes and Warrants in accordance with the
  terms hereof and to issue the Conversion Shares upon conversion of the Notes
  and the Warrant Shares upon exercise of the Warrants. Except as disclosed in
  Schedule 3(f), all consents, authorizations, orders, filings and registrations
  which the Company is required to obtain pursuant to the preceding sentence have
  been obtained or effected on or prior to the date hereof. The Company is not
  in violation of the listing requirements of the Over-the-Counter Bulletin Board
  (the “OTCBB”) and does not reasonably anticipate that the
  Common Stock will be delisted by the OTCBB in the foreseeable future. The Company
  and its Subsidiaries are unaware of any facts or circumstances which might give
  rise to any of the foregoing.

      g. SEC Documents;
  Financial Statements. Except as disclosed in Schedule 3(g), the
  Company has timely 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 Securities Exchange Act of 1934, as amended (the “1934
  Act”) (all of the foregoing filed prior to the date hereof and all
  exhibits included therein and financial statements and schedules thereto and
  documents (other than exhibits to such documents) incorporated by reference
  therein, being hereinafter referred to herein as the “SEC Documents”).
  As of the Merger Effective Date, the Company had reasonable belief that, as
  of their respective dates, the SEC Documents 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, 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 light of the
  circumstances under which they were made, not misleading. As of the Merger Effective,
  the Company is not aware that any of the statements made in any such SEC Documents
  is, or has been, required to be amended or updated under applicable law (except
  for such statements as have been amended or updated in subsequent filings prior
  the date hereof). As of the Merger Effective Date, the Company had reasonable
  belief that, as of their respective 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 United States 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 not include footnotes or may be condensed
  or summary statements) and fairly present in all material respects the consolidated
  financial position of the Company and its consolidated Subsidiaries as of the
  dates thereof and the consolidated results of their operations and cash flows
  for the periods then ended (subject, in the case of unaudited statements, to
  normal year-end audit adjustments). Except as set forth in the financial statements
  of the Company included in the SEC Documents, the Company has no liabilities,
  contingent or otherwise, other than (i) liabilities incurred in the ordinary
  course of business subsequent to December 31, 2003 and (ii) obligations under
  contracts and commitments incurred in the ordinary course of business and not
  required under generally accepted accounting principles to be reflected in such
  financial statements, which, individually or in the aggregate, are not material
  to the financial condition or operating results of the Company. 

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      h. Absence
  of Certain Changes. Since the Merger Effective Date, there has been
  no material adverse change and no material adverse development in the assets,
  liabilities, business, properties, operations, financial condition, results
  of operations or prospects of the Company or any of its Subsidiaries. 

      i. Absence
  of Litigation. There is no action, suit, claim, proceeding, inquiry
  or investigation before or by any court, public board, government agency, self-regulatory
  organization or body pending or, to the knowledge of the Company or any of its
  Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries,
  or their officers or directors in their capacity as such, that could have a
  Material Adverse Effect. Schedule 3(i) contains a complete list and summary
  description of any pending or threatened proceeding against or affecting the
  Company or any of its Subsidiaries, without regard to whether it would have
  a Material Adverse Effect. The Company and its Subsidiaries are unaware of any
  facts or circumstances which might give rise to any of the foregoing. 

      j. Patents,
  Copyrights, etc.

      (i) The Company
  and each of its Subsidiaries owns or possesses the requisite licenses or rights
  to use all patents, patent applications, patent rights, inventions, know-how,
  trade secrets, trademarks, trademark applications, service marks, service names,
  trade names and copyrights (“Intellectual Property”) necessary
  to enable it to conduct its business as now operated (and, except as set forth
  in Schedule 3(j) hereof, to the Company’s knowledge, as presently
  contemplated to be operated in the future); there is no claim or action by any
  person pertaining to, or proceeding pending, or to the Company’s knowledge
  threatened, which challenges the right of the Company or of a Subsidiary with
  respect to any Intellectual Property necessary to enable it to conduct its business
  as now operated (and, except as set forth in Schedule 3(j) hereof, to
  the Company’s knowledge, as presently contemplated to be operated in the
  future); to the Company’s knowledge, the Company’s or its Subsidiaries’
  current and intended products, services and processes do not infringe on any
  Intellectual Property or other rights held by any person; and the Company is
  unaware of any facts or circumstances which might give rise to any of the foregoing.
  The Company and each of its Subsidiaries have taken reasonable security measures
  to protect the secrecy, confidentiality and value of their Intellectual Property.


      k. No Materially
  Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries
  is subject to any charter, corporate or other legal restriction, or any judgment,
  decree, order, rule or regulation which in the judgment of the Company’s
  officers has or is expected in the future to have a Material Adverse Effect.
  Neither the Company nor any of its Subsidiaries is a party to any contract or
  agreement which in the judgment of the Company’s officers has or is expected
  to have a Material Adverse Effect. 

      l. Tax Status.
  Except as set forth on Schedule 3(l), the Company and each of its Subsidiaries
  has made or filed all federal, state and foreign income and all other tax returns,
  reports and declarations required by any jurisdiction to which it is subject
  (unless and only to the extent that the Company and each of its Subsidiaries
  has set aside on its books provisions reasonably adequate for the payment of
  all unpaid and unreported taxes) and has paid all taxes and other governmental
  assessments and charges that are material in amount, shown or 

 9 








 determined to be due on such returns, reports and declarations,
  except those being contested in good faith and has set aside on its books provisions
  reasonably adequate for the payment of all taxes for periods subsequent to the
  periods to which such returns, reports or declarations apply. There are no unpaid
  taxes in any material amount claimed to be due by the taxing authority of any
  jurisdiction, and the officers of the Company know of no basis for any such
  claim. The Company has not executed a waiver with respect to the statute of
  limitations relating to the assessment or collection of any foreign, federal,
  state or local tax. Except as set forth on Schedule 3(l), none of the
  Company’s tax returns is presently being audited by any taxing authority.


      m. Certain
  Transactions. Except as set forth on Schedule 3(m) and except
  for arm’s length transactions pursuant to which the Company or any of
  its Subsidiaries makes payments in the ordinary course of business upon terms
  no less favorable than the Company or any of its Subsidiaries could obtain from
  third parties and other than the grant of stock options disclosed on Schedule
  3(c), none of the officers, directors, or employees of the Company is presently
  a party to any transaction with the Company or any of its Subsidiaries (other
  than for services as employees, officers and directors), including any contract,
  agreement or other arrangement providing for the furnishing of services to or
  by, providing for rental of real or personal property to or from, or otherwise
  requiring payments to or from any officer, director or such employee or, to
  the knowledge of the Company, any corporation, partnership, trust or other entity
  in which any officer, director, or any such employee has a substantial interest
  or is an officer, director, trustee or partner. 

      n. Disclosure.
  All information relating to or concerning the Company or any of its Subsidiaries
  set forth in this Agreement and provided to the Buyers pursuant to Section 2(d)
  hereof and otherwise in connection with the transactions contemplated hereby
  is true and correct in all material respects and the Company has not omitted
  to state any material fact necessary in order to make the statements made herein
  or therein, in light of the circumstances under which they were made, not misleading.
  No event or circumstance has occurred or exists with respect to the Company
  or any of its Subsidiaries or its or their business, properties, prospects,
  operations or financial conditions, 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 (assuming for this purpose that the
  Company’s reports filed under the 1934 Act are being incorporated into
  an effective registration statement filed by the Company under the 1933 Act).


      o. Acknowledgment
  Regarding Buyers’ Purchase of Securities. The Company acknowledges
  and agrees that the Buyers are acting solely in the capacity of arm’s
  length purchasers with respect to this Agreement and the transactions contemplated
  hereby. 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 transactions contemplated hereby and any statement
  made by any Buyer or any of their respective representatives or agents in connection
  with this Agreement and the transactions contemplated hereby is not advice or
  a recommendation and is merely incidental to the Buyers’ purchase of the
  Securities. The Company further represents to each Buyer that the Company’s
  decision to enter into this Agreement has been based solely on the independent
  evaluation of the Company and its representatives. 

 10 








      p. No Integrated
  Offering. Neither the Company, nor any of its affiliates, nor any person
  acting on its or their behalf, has directly or indirectly made any offers or
  sales in any security or solicited any offers to buy any security under circumstances
  that would require registration under the 1933 Act of the issuance of the Securities
  to the Buyers. The issuance of the Securities to the Buyers will not be integrated
  with any other issuance of the Company’s securities (past, current or
  future) for purposes of any shareholder approval provisions applicable to the
  Company or its securities. 

      q. No Brokers.
  Except as set forth in Schedule 3(q), the Company has taken no action
  which would give rise to any claim by any person for brokerage commissions,
  transaction fees or similar payments relating to this Agreement or the transactions
  contemplated hereby.

      r. Permits;
  Compliance. The Company and each of its Subsidiaries is in possession
  of all franchises, grants, authorizations, licenses, permits, easements, variances,
  exemptions, consents, certificates, approvals and orders necessary to own, lease
  and operate its properties and to carry on its business as it is now being conducted
  (collectively, the “Company Permits”), and there is no action
  pending or, to the knowledge of the Company, threatened regarding suspension
  or cancellation of any of the Company Permits. Neither the Company nor any of
  its Subsidiaries is in conflict with, or in default or violation of, any of
  the Company Permits, except for any such conflicts, defaults or violations which,
  individually or in the aggregate, would not reasonably be expected to have a
  Material Adverse Effect. Since the Merger Effective Date, neither the Company
  nor any of its Subsidiaries has received any notification with respect to possible
  conflicts, defaults or violations of applicable laws, except for notices relating
  to possible conflicts, defaults or violations, which conflicts, defaults or
  violations would not have a Material Adverse Effect. 

      s. Environmental
  Matters. 

      (i) Except as
  set forth in Schedule 3(s), there are, to the Company’s knowledge,
  with respect to the Company or any of its Subsidiaries or any predecessor of
  the Company, no past or present violations of Environmental Laws (as defined
  below), releases of any material into the environment, actions, activities,
  circumstances, conditions, events, incidents, or contractual obligations which
  may give rise to any common law environmental liability or any liability under
  the Comprehensive Environmental Response, Compensation and Liability Act of
  1980 or similar federal, state, local or foreign laws and neither the Company
  nor any of its Subsidiaries has received any notice with respect to any of the
  foregoing, nor is any action pending or, to the Company’s knowledge, threatened
  in connection with any of the foregoing. 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, 

 11 








 injunctions, judgments, licenses, notices or notice letters,
  orders, permits, plans or regulations issued, entered, promulgated or approved
  thereunder. 

      (ii) Other than
  those that are or were stored, used or disposed of in compliance with applicable
  law, no Hazardous Materials are contained on or about any real property currently
  owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous
  Materials were released on or about any real property previously owned, leased
  or used by the Company or any of its Subsidiaries during the period the property
  was owned, leased or used by the Company or any of its Subsidiaries, except
  in the normal course of the Company’s or any of its Subsidiaries’
  business. 

      (iii) Except as
  set forth in Schedule 3(s), there are no underground storage tanks on
  or under any real property owned, leased or used by the Company or any of its
  Subsidiaries that are not in compliance with applicable law.

      t. Title
  to Property. 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 free and clear of all liens, encumbrances
  and defects except such as are described in Schedule 3(t) or such as
  would not have a Material Adverse Effect. Any real property and facilities held
  under lease by the Company and its Subsidiaries are held by them under valid,
  subsisting and enforceable leases with such exceptions as would not have a Material
  Adverse Effect. 

      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 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. The Company has provided
  to Buyer true and correct copies of all policies relating to directors’
  and officers’ liability coverage, errors and omissions coverage, and commercial
  general liability coverage. 

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

      w. Foreign
  Corrupt Practices. Neither the Company, nor any of its Subsidiaries,
  nor any director, officer, agent, employee or other person acting on behalf
  of the 

 12 








 Company or any Subsidiary has, in the course of his actions
  for, or on behalf of, the Company, used any corporate funds for any unlawful
  contribution, gift, entertainment or other unlawful expenses relating to political
  activity; made any direct or indirect unlawful payment to any foreign or domestic
  government official or employee from corporate funds; violated or is in violation
  of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended,
  or made any bribe, rebate, payoff, influence payment, kickback or other unlawful
  payment to any foreign or domestic government official or employee. 

      x. Solvency.
  The Company (after giving effect to the transactions contemplated by this Agreement)
  is solvent (i.e., its assets have a fair market value in excess of the
  amount required to pay its probable liabilities on its existing debts as they
  become absolute and matured) and currently the Company has no information that
  would lead it to reasonably conclude that the Company would not, after giving
  effect to the transaction contemplated by this Agreement, have the ability to,
  nor does it intend to take any action that would impair its ability to, pay
  its debts from time to time incurred in connection therewith as such debts mature.

      y. No Investment
  Company. The Company is not, and upon the issuance and sale of the Securities
  as contemplated by this Agreement will not be an “investment company”
  required to be registered under the Investment Company Act of 1940 (an “Investment
  Company”). The Company is not controlled by an Investment Company.


      z. Certain
  Registration Matters. Assuming the accuracy of the Buyers' representations
  and warranties set forth in Section 3, no registration under the Securities
  Act is required for the offer and sale of the Conversion Shares and Warrant
  Shares by the Company to the Buyers under the transaction documents. Except
  as specified in Schedule 3(z), the Company has not granted or agreed
  to grant to any Person any rights (including "piggy-back" registration rights)
  to have any securities of the Company registered with the Commission or any
  other governmental authority that have not been satisfied. 

      aa. Breach
  of Representations and Warranties by the Company. If the Company breaches
  any of the representations or warranties set forth in this Section 3, and in
  addition to any other remedies available to the Buyers pursuant to this Agreement,
  the Company shall pay to the Buyer the Standard Liquidated Damages Amount in
  cash or in shares of Common Stock at the option of the Company, until such breach
  is cured; provided, however, that the Company shall be entitled to update the
  representations and warranties set forth in Section3 for each closing of the
  subsequent investments as set forth in Section 4(l) and such updates shall not
  be considered breaches of the representations and warranties hereunder. If the
  Company elects to pay the Standard Liquidated Damages Amounts in shares of Common
  Stock, such shares shall be issued at the Conversion Price at the time of payment.


       4. COVENANTS.


      a. Best
  Efforts. The parties shall use their best efforts to satisfy timely
  each of the conditions described in Section 6 and 7 of this Agreement.

      b. Form
  D; Blue Sky Laws. 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 

 13 








 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 to qualify the Securities for sale to the Buyers at the
  applicable 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 each Buyer on or prior to the Closing Date unless such filings
  may be appropriately made after the Closing Date, and such filings shall be
  effected within the requisite time periods 

      c. Reporting
  Status; Eligibility to Use Form S-3, SB-2 or Form S-1. The Company’s
  Common Stock is registered under Section 12(g) of the 1934 Act. The Company
  represents and warrants that it meets the requirements for the use of Form S-3
  (or if the Company is not eligible for the use of Form S-3 as of the Filing
  Date (as defined in the Registration Rights Agreement), the Company may use
  the form of registration for which it is eligible at that time) for registration
  of the sale by the Buyer of the Registrable Securities (as defined in the Registration
  Rights Agreement). So long as the Buyer beneficially owns any of the Securities,
  the Company shall timely 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 permit such termination. The Company
  further agrees to file all reports required to be filed by the Company with
  the SEC in a timely manner so as to become eligible, and thereafter to maintain
  its eligibility, for the use of Form S-3. The Company shall issue a press release
  describing the material terms of the transaction contemplated hereby as soon
  as practicable following the Closing Date but in no event more than two (2)
  business days of the Closing Date, which press release shall be subject to prior
  review by the Buyers. The Company agrees that such press release shall not disclose
  the name of the Buyers unless expressly consented to in writing by the Buyers
  or unless required by applicable law or regulation, and then only to the extent
  of such requirement. 

      d. Use of
  Proceeds. The Company shall use the net proceeds from the sale of the
  Notes and the Warrants in the manner set forth in Schedule 4(d) attached
  hereto and made a part hereof and shall not, directly or indirectly, use such
  proceeds for (i) any loan to or investment in any other corporation, partnership,
  enterprise or other person (except in connection with its currently existing
  direct or indirect Subsidiaries); (ii) the satisfaction of any portion of the
  Company’s debt (other than payment of trade payables and accrued expenses
  in the ordinary course of the Company’s business and consistent with prior
  past practices), or (iii) the redemption of any Common Stock. 

      e. Future
  Offerings. Subject to the exceptions described below, the Company will
  not, without the prior written consent of a majority-in-interest of the Buyers,
  negotiate or contract with any party to obtain additional equity financing (including
  debt financing with an equity component) that involves (A) the issuance of Common
  Stock at a discount to the market price of the Common Stock on the date of issuance
  (taking into account the value of any warrants or options to acquire Common
  Stock issued in connection therewith) or (B) the issuance of convertible securities
  that are convertible into an indeterminate number of shares of Common Stock
  or (C) the issuance of warrants during the period (the “Lock-up Period”)
  beginning on the Closing Date and ending on the later of (i) two hundred seventy
  (270) days from the Closing Date and (ii) one hundred eighty (180) days from
  the date the Registration 

 14 








 Statement (as defined in the Registration Rights Agreement)
  is declared effective (plus any days in which sales cannot be made thereunder).
  In addition, subject to the exceptions described below, the Company will not
  conduct any equity financing (including debt with an equity component) (“Future
  Offerings”) during the period beginning on the Closing Date and ending
  two (2) years after the end of the Lock-up Period unless it shall have first
  delivered to each Buyer, at least twenty (20) business days prior to the closing
  of such Future Offering, written notice describing the proposed Future Offering,
  including the terms and conditions thereof and proposed definitive documentation
  to be entered into in connection therewith, and providing each Buyer an option
  during the fifteen (15) day period following delivery of such notice to purchase
  its pro rata share (based on the ratio that the aggregate principal amount of
  Notes purchased by it hereunder bears to the aggregate principal amount of Notes
  purchased hereunder) of the securities being offered in the Future Offering
  on the same terms as contemplated by such Future Offering (the limitations referred
  to in this sentence and the preceding sentence are collectively referred to
  as the “Capital Raising Limitations”).  In the event
  the terms and conditions of a proposed Future Offering are amended in any respect
  after delivery of the notice to the Buyers concerning the proposed Future Offering,
  the Company shall deliver a new notice to each Buyer describing the amended
  terms and conditions of the proposed Future Offering and each Buyer thereafter
  shall have an option during the fifteen (15) day period following delivery of
  such new notice to purchase its pro rata share of the securities being offered
  on the same terms as contemplated by such proposed Future Offering, as amended.
  The foregoing sentence shall apply to successive amendments to the terms and
  conditions of any proposed Future Offering. The Capital Raising Limitations
  shall not apply to any transaction involving (i) issuances of securities in
  a firm commitment underwritten public offering (excluding a continuous offering
  pursuant to Rule 415 under the 1933 Act, an equity line of credit or similar
  financing arrangement) resulting in net proceeds to the Company of in excess
  of $1,500,000, or (ii) issuances of securities as consideration for a merger,
  consolidation or purchase of assets, or in connection with any strategic partnership
  or joint venture (the primary purpose of which is not to raise equity capital),
  or in connection with the disposition or acquisition of a business, product
  or license by the Company. The Capital Raising Limitations also shall not apply
  to the issuance of securities upon exercise or conversion of the Company’s
  options, warrants or other convertible securities outstanding as of the date
  hereof or to the grant of additional options or warrants, or the issuance of
  additional securities, under any Company stock option or restricted stock plan
  approved by the shareholders of the Company.

      f. Expenses.
  At the Closing, the Company shall reimburse Buyers for expenses incurred by
  them in connection with the negotiation, preparation, execution, delivery and
  performance of this Agreement and the other agreements to be executed in connection
  herewith (“Documents”), including, without limitation, attorneys’
  and consultants’ fees and expenses, transfer agent fees, fees for stock
  quotation services, fees relating to any amendments or modifications of the
  Documents or any consents or waivers of provisions in the Documents, fees for
  the preparation of opinions of counsel, escrow fees, and costs of restructuring
  the transactions contemplated by the Documents. When possible, the Company must
  pay these fees directly, otherwise the Company must make immediate payment for
  reimbursement to the Buyers for all fees and expenses immediately upon written
  notice by the Buyer or the submission of an invoice by the Buyer If the Company
  fails to reimburse the Buyer in full within three (3) business days of the written
  notice or submission of invoice by the Buyer, 

 15 








 the Company shall pay interest on the total amount of fees
  to be reimbursed at a rate of 15% per annum. 

      g. Financial
  Information. The Company agrees to send the following reports to each
  Buyer until such Buyer transfers, assigns, or sells all of the Securities: (i)
  within ten (10) days after the filing with the SEC, a copy of its Annual Report
  on Form 10-KSB its Quarterly Reports on Form 10-QSB and any Current Reports
  on Form 8-K; (ii) within one (1) day after release, copies of all press releases
  issued by the Company or any of its Subsidiaries; and (iii) contemporaneously
  with the making available or giving to the shareholders of the Company, copies
  of any notices or other information the Company makes available or gives to
  such shareholders. 

      h. Authorization
  and Reservation of Shares. Subject to Stockholder Approval, the Company
  shall at all times have authorized, and reserved for the purpose of issuance,
  a sufficient number of shares of Common Stock to provide for the full conversion
  or exercise of the outstanding Notes and Warrants and issuance of the Conversion
  Shares and Warrant Shares in connection therewith (based on the Conversion Price
  of the Notes or Exercise Price of the Warrants in effect from time to time)
  and as otherwise required by the Notes. The Company shall not reduce the number
  of shares of Common Stock reserved for issuance upon conversion of Notes and
  exercise of the Warrants without the consent of each Buyer. The Company shall
  at all times maintain the number of shares of Common Stock so reserved for issuance
  at an amount (“Reserved Amount”) equal to no less than two
  (2) times the number that is then actually issuable upon full conversion of
  the Notes and Additional Notes and upon exercise of the Warrants and the Additional
  Warrants (based on the Conversion Price of the Notes or the Exercise Price of
  the Warrants in effect from time to time). If at any time the number of shares
  of Common Stock authorized and reserved for issuance (“Authorized and
  Reserved Shares”) is below the Reserved Amount, the Company will promptly
  take all corporate action necessary to authorize and reserve a sufficient number
  of shares, including, without limitation, calling a special meeting of shareholders
  to authorize additional shares to meet the Company’s obligations under
  this Section 4(h), in the case of an insufficient number of authorized shares,
  obtain shareholder approval of an increase in such authorized number of shares,
  and voting the management shares of the Company in favor of an increase in the
  authorized shares of the Company to ensure that the number of authorized shares
  is sufficient to meet the Reserved Amount. If the Company fails to obtain such
  shareholder approval within thirty (30) days following the date on which the
  number of Reserved Amount exceeds the Authorized and Reserved Shares, the Company
  shall pay to the Borrower the Standard Liquidated Damages Amount, in cash or
  in shares of Common Stock at the option of the Buyer. If the Buyer elects to
  be paid the Standard Liquidated Damages Amount in shares of Common Stock, such
  shares shall be issued at the Conversion Price at the time of payment. In order
  to ensure that the Company has authorized a sufficient amount of shares to meet
  the Reserved Amount at all times, the Company must deliver to the Buyer at the
  end of every month (beginning the end of the month after Closing) a list detailing
  (1) the current amount of shares authorized by the Company and reserved for
  the Buyer; and (2) amount of shares issuable upon conversion of the Notes and
  upon exercise of the Warrants and as payment of interest accrued on the Notes
  for one year. If the Company fails to provide such list within five (5) business
  days of the end of each month, the Company shall pay the Standard Liquidated
  Damages Amount, in cash or in shares of Common Stock at the option of the Buyer,
  until the list is delivered. If the 

 16 








 Buyer elects to be paid the Standard Liquidated Damages Amount
  in shares of Common Stock, such shares shall be issued at the Conversion Price
  at the time of payment. 

      i. Listing.
  The Company shall promptly secure the listing of the Conversion Shares and Warrant
  Shares upon each national securities exchange or automated quotation system,
  if any, upon which shares of Common Stock are then listed (subject to official
  notice of issuance) and, so long as any Buyer owns any of the Securities, shall
  maintain, so long as any other shares of Common Stock shall be so listed, such
  listing of all Conversion Shares and Warrant Shares from time to time issuable
  upon conversion of the Notes or exercise of the Warrants. The Company will obtain
  and, so long as any Buyer owns any of the Securities, maintain the listing and
  trading of its Common Stock on the OTCBB or any equivalent replacement exchange,
  the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap
  Market (“Nasdaq SmallCap”), the New York Stock Exchange (“NYSE”),
  or the American Stock Exchange (“AMEX”) and will comply in
  all respects with the Company’s reporting, filing and other obligations
  under the bylaws or rules of the National Association of Securities Dealers
  (“NASD”) and such exchanges, as applicable. The Company shall
  promptly provide to each Buyer copies of any notices it receives from the OTCBB
  and any other exchanges or quotation systems on which the Common Stock is then
  listed regarding the continued eligibility of the Common Stock for listing on
  such exchanges and quotation systems. 

      j. Corporate
  Existence. So long as a Buyer beneficially owns any Notes or Warrants,
  the Company shall maintain its corporate existence and shall not sell all or
  substantially all of the Company’s assets, except in the event of a merger
  or consolidation or sale of all or substantially all of the Company’s
  assets, where the surviving or successor entity in such transaction (i) assumes
  the Company’s obligations hereunder and under the agreements and instruments
  entered into in connection herewith and (ii) is a publicly traded corporation
  whose Common Stock is listed for trading on the OTCBB, Nasdaq, Nasdaq SmallCap,
  NYSE or AMEX. 

      k. No Integration.
  The Company shall not make any offers or sales of any security (other than the
  Securities) under circumstances that would require registration of the Securities
  being offered or sold hereunder under the 1933 Act or cause the offering of
  the Securities to be integrated with any other offering of securities by the
  Company for the purpose of any stockholder approval provision applicable to
  the Company or its securities. 

      l. Subsequent
  Investment. The Company and the Buyers agree that, upon the filing by
  the Company of the Registration Statement to be filed pursuant to the Registration
  Rights Agreement (the “Filing Date”), the Buyers shall purchase
  additional Notes (the “Filing Notes”) in the aggregate principal
  amount of One Million Two Hundred and Fifty Thousand Dollars ($1,250,000)
  and additional warrants (the “Filing Warrants”) to purchase
  an aggregate of 876,168 shares of Common Stock, for an aggregate purchase price
  of One Million Two Hundred and Fifty Thousand Dollars ($1,250,000), with
  the closing of such purchase to occur within five (5) days of the Filing Date;
  provided, however, that the obligation of each Buyer to purchase
  the Filing Notes and the Filing Warrants is subject to the satisfaction, at
  or before the closing of such purchase and sale, of the conditions set forth
  in Section 7. The Company and the Buyers further agree that, upon the declaration
  of effectiveness of the Registration Statement to be filed pursuant to the Registration
  Rights Agreement (the “Effective 

 17 








 Date”), the Buyers shall purchase additional
  notes (the “Effectiveness Notes” and, collectively with the
  Filing Notes, the “Additional Notes”) in the aggregate principal
  amount of One Million Two Hundred and Fifty Thousand Dollars ($1,250,000)
  and additional warrants (the “Effectiveness Warrants” and,
  collectively with the Filing Warrants, the “Additional Warrants”)
  to purchase an aggregate of 876,168 shares of Common Stock, for an aggregate
  purchase price of One Million Two Hundred and Fifty Thousand Dollars ($1,250,000),
  with the closing of such purchase to occur within five (5) days of the Effective
  Date; provided, however, that the obligation of each Buyer to
  purchase the Additional Notes and the Additional Warrants is subject to the
  satisfaction, at or before the closing of such purchase and sale, of the conditions
  set forth in Section 7; and, provided, further, that there shall
  not have been a Material Adverse Effect as of such effective date. The terms
  of the Additional Notes and the Additional Warrants shall be identical to the
  terms of the Notes and Warrants, as the case may be, to be issued on the Closing
  Date. The Common Stock underlying the Additional Notes and the Additional Warrants
  shall be Registrable Securities (as defined in the Registration Rights Agreement)
  and shall be included in the Registration Statement to be filed pursuant to
  the Registration Rights Agreement. 

      m. Key Man
  Insurance. The Company shall use its best efforts to obtain,
  on or before ten (10) business days from the date hereof, key man life insurance
  on all of the Company’s key executive officers. 

      n. Stockholder
  Approval. The Company shall file a proxy or information statement with
  the SEC no later than June 1, 2005 and use its best efforts to obtain, on or
  before August 30, 2005, such approvals of the Company’s stockholders as
  may be required to issue all of the shares of Common Stock issuable upon conversion
  or exercise of, or otherwise with respect to, the Notes and the Warrants in
  accordance with Nevada law and any applicable rules or regulations of the OTCBB
  and Nasdaq, either through a reverse stock split of the Common Stock or an increase
  in authorized capital (the “Stockholder Approval”). The Company
  shall furnish to each Buyer and its legal counsel promptly (but in no event
  less than two (2) business days) before the same is filed with the SEC, one
  copy of the proxy or information statement and any amendment thereto, and shall
  deliver to each Buyer promptly each letter written by or on behalf of the Company
  to the SEC or the staff of the SEC, and each item of correspondence from the
  SEC or the staff of the SEC, in each case relating to such proxy or information
  statement (other than any portion thereof which contains information for which
  the Company has sought confidential treatment). The Company will promptly (but
  in no event more than three (3) business days) respond to any and all comments
  received from the SEC (which comments shall promptly be made available to each
  Buyer). The Company shall comply with the filing and disclosure requirements
  of Section 14 under the 1934 Act in connection with the Stockholder Approval.
  The Company represents and warrants that its Board of Directors has approved
  the proposal contemplated by this Section 4(l) and shall indicate such approval
  in the proxy or information statement used in connection with the Stockholder
  Approval. 

      o. Restriction
  on Short Sales. The Buyers agree that, so long as any of the Notes remain
  outstanding, but in no event less than two (2) years from the date hereof, the
  Buyers will not enter into or effect any “short sales” (as such
  term is defined in Rule 3b-3 of the 1934 Act) of the Common Stock or hedging
  transaction which establishes a net short position with respect to the Common
  Stock. 

 18 








      p. Breach
  of Covenants. If the Company breaches any of the covenants set
  forth in this Section 4, and in addition to any other remedies available to
  the Buyers pursuant to this Agreement, the Company shall pay to the Buyers the
  Standard Liquidated Damages Amount, in cash or in shares of Common Stock at
  the option of the Company, until such breach is cured. If the Company elects
  to pay the Standard Liquidated Damages Amount in shares, such shares shall be
  issued at the Conversion Price at the time of payment. 

      5. TRANSFER
  AGENT INSTRUCTIONS. The Company shall issue irrevocable instructions
  to its transfer agent to issue certificates, registered in the name of each
  Buyer or its nominee, for the Conversion Shares and Warrant Shares 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 accordance with the terms thereof
  (the “Irrevocable Transfer Agent Instructions”). Prior to
  registration of the Conversion Shares and Warrant Shares under the 1933 Act
  or the date on which the Conversion Shares and Warrant Shares may be sold pursuant
  to Rule 144 without any restriction as to the number of Securities as of a particular
  date that can then be immediately sold, all such certificates shall bear the
  restrictive legend specified in Section 2(g) of this Agreement. The Company
  warrants that no instruction other than the Irrevocable Transfer Agent Instructions
  referred to in this Section 5, and stop transfer instructions to give effect
  to Section 2(f) hereof (in the case of the Conversion Shares and Warrant Shares,
  prior to registration of the Conversion Shares and Warrant Shares under the
  1933 Act or the date on which the Conversion Shares and Warrant Shares may be
  sold pursuant to Rule 144 without any restriction as to the number of Securities
  as of a particular date that can then be immediately sold), 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 Registration Rights Agreement. Nothing in
  this Section shall affect in any way the Buyer’s obligations and agreement
  set forth in Section 2(g) hereof to comply with all applicable prospectus delivery
  requirements, if any, upon re-sale of the Securities. If a Buyer provides the
  Company with (i) an opinion of counsel in form, substance and scope customary
  for opinions in comparable transactions, to the effect that a public sale or
  transfer of such Securities may be made without registration under the 1933
  Act and such sale or transfer is effected or (ii) the Buyer provides reasonable
  assurances that the Securities can be sold pursuant to Rule 144, the Company
  shall permit the transfer, and, in the case of the Conversion Shares and Warrant
  Shares, promptly instruct its transfer agent to issue one or more certificates,
  free from restrictive legend, in such name and in such denominations as specified
  by such Buyer. The Company acknowledges that a breach by it of its obligations
  hereunder will cause irreparable harm to the Buyers, by vitiating the intent
  and purpose of the transactions contemplated hereby. Accordingly, the Company
  acknowledges that the remedy at law for a breach of its obligations under this
  Section 5 may be inadequate and agrees, in the event of a breach or threatened
  breach by the Company of the provisions of this Section, that the Buyers shall
  be entitled, in addition to all other available remedies, to an injunction restraining
  any breach and requiring immediate transfer, without the necessity of showing
  economic loss and without any bond or other security being required. 

 19 





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

 The obligation of the Company hereunder to issue and sell
  the Notes and Warrants to a Buyer at the Closing is subject to the satisfaction,
  at or before the Closing Date of each of the following conditions thereto, 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: 

      a. The applicable
  Buyer shall have executed this Agreement and the Registration Rights Agreement,
  and delivered the same to the Company. 

      b. The applicable
  Buyer shall have delivered the Purchase Price in accordance with Section 1(b)
  above. 

      c. The representations
  and warranties of the applicable 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 the applicable 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 the applicable
  Buyer at or prior to the Closing Date.

      d. No litigation,
  statute, rule, regulation, executive order, decree, ruling or injunction shall
  have been enacted, entered, promulgated or endorsed by or in any court or governmental
  authority of competent jurisdiction or any self-regulatory organization having
  authority over the matters contemplated hereby which prohibits the consummation
  of any of the transactions contemplated by this Agreement. 

 7. CONDITIONS TO EACH BUYER’S OBLIGATION
  TO PURCHASE. The obligation of each Buyer hereunder to
  purchase the Notes and 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 such Buyer’s sole benefit and may be waived
  by such Buyer at any time in its sole discretion: 

      a. The Company
  shall have executed this Agreement and the Registration Rights Agreement, and
  delivered the same to the Buyer. 

      b. The Company
  shall have delivered to such Buyer duly executed Notes (in such denominations
  as the Buyer shall request) and Warrants in accordance with Section 1(b) above.


      c. The Irrevocable
  Transfer Agent Instructions, in form and substance satisfactory to a majority-in-interest
  of the Buyers, shall have been delivered to and acknowledged in writing by the
  Company’s Transfer Agent. 

      d. The representations
  and warranties of the Company 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 such time
  (except for representations and warranties that speak as of a specific date),
  provided that the Company may update its Disclosure Schedule for each Closing
  pursuant to Section 4(l), and the Company shall have performed, satisfied and
  complied in all material respects with the covenants, agreements and conditions
  required by this Agreement to be 

 20 








 performed, satisfied or complied with by the Company at or
  prior to the Closing Date. The Buyer shall have received a certificate or certificates,
  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 including, but not limited to certificates with respect
  to the Company’s Articles of Incorporation, By-laws and Board of Directors’
  resolutions relating to the transactions contemplated hereby. 

      e. No litigation,
  statute, rule, regulation, executive order, decree, ruling or injunction shall
  have been enacted, entered, promulgated or endorsed by or in any court or governmental
  authority of competent jurisdiction or any self-regulatory organization having
  authority over the matters contemplated hereby which prohibits the consummation
  of any of the transactions contemplated by this Agreement. 

      f. No event shall
  have occurred which could reasonably be expected to have a Material Adverse
  Effect on the Company. 

      g. The Conversion
  Shares and Warrant Shares shall have been authorized for quotation on the OTCBB
  and trading in the Common Stock on the OTCBB shall not have been suspended by
  the SEC or the OTCBB. 

      h. The Buyer shall
  have received an opinion of the Company’s counsel, dated as of the Closing
  Date, in form, scope and substance reasonably satisfactory to the Buyer and
  in substantially the same form as Exhibit “D” attached hereto.


      i. The Buyer shall
  have received an officer’s certificate described in Section 3(c) above,
  dated as of the Closing Date. 

      8. GOVERNING
  LAW; MISCELLANEOUS.

      a. Governing
  Law. THIS AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN
  ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
  AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
  OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION
  OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT
  TO ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN
  CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH
  PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
  OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS
  UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
  SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN
  SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
  PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN
  ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
  JURISDICTIONS BY SUIT ON 

 21 








 SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH
  DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER THIS AGREEMENT SHALL BE RESPONSIBLE
  FOR ALL FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE
  PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE. 

      b. Counterparts;
  Signatures by Facsimile. This Agreement may be executed in one or more
  counterparts, each of which shall be deemed an original but all of which shall
  constitute one and the same agreement and shall become effective when counterparts
  have been signed by each party and delivered to the other party. This Agreement,
  once executed by a party, may be delivered to the other party hereto by facsimile
  transmission of a copy of this Agreement bearing the signature of the party
  so delivering this Agreement. 

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

      d. Severability.
  In the event that any provision of this Agreement is invalid or unenforceable
  under any applicable statute or rule of law, then such provision shall be deemed
  inoperative to the extent that it may conflict therewith and shall be deemed
  modified to conform with such statute or rule of law. Any provision hereof which
  may prove invalid or unenforceable under any law shall not affect the validity
  or enforceability of any other provision hereof. 

      e. Entire
  Agreement; Amendments. This Agreement and the instruments referenced
  herein contain the entire understanding of the parties with respect to the matters
  covered herein and therein and, except as specifically set forth herein or therein,
  neither the Company nor the Buyer makes any representation, warranty, covenant
  or undertaking with respect to such matters. Except as otherwise expressly provided,
  any term of this Agreement may be amended or waived (either generally or in
  a particular instance and either retroactively or prospectively) only with the
  written consent of the Company and majority-in-interest of the Buyers. Any amendment
  or waiver effected in accordance with this Section 8(e) shall be binding upon
  each Buyer and each transferee of the Securities (prior to conversion into Common
  Stock of the Company), and the Company. 

      f. Notices.
  Any notices required or permitted to be given under the terms of this Agreement
  shall be sent by certified or registered mail (return receipt requested) or
  delivered personally or by courier (including a recognized overnight delivery
  service) or by facsimile and shall be effective five days after being placed
  in the mail, if mailed by regular United States mail, or upon receipt, if delivered
  personally or by courier (including a recognized overnight delivery service)
  or by facsimile, in each case addressed to a party. The addresses for such communications
  shall be: 

 22






	 	If to the Company: 

       Snocone Systems Inc. 

        3131 Camino del Rio, N, Suite 1650

        San Diego, CA 92108

        Attention: Chief Executive Officer

        Telephone: (619) 284-4807 

        Facsimile: (619) 284-4344

       With a copy to: 

       Fish & Richardson, P.C. 

        12390 El Camino Real 

        San Diego, CA 92130 

        Attention: Edith A. Bauer, Esq. 

        Telephone: 858-678-5070 

        Facsimile: 858-678-5099 




     If to a Buyer: To the address set forth immediately
  below such Buyer’s name on the signature pages hereto.

	 	With copy to: 
	 	 


	 	Ballard Spahr Andrews & Ingersoll, LLP 

      1735 Market Street 

      51st Floor 

      Philadelphia, Pennsylvania 19103 

      Attention: Gerald J. Guarcini, Esq. 

      Telephone: 215-864-8625 

      Facsimile: 215-864-8999 


     Each party shall provide notice
  to the other party of any change in address. 

      g. Successors
  and Assigns. This Agreement shall be binding upon and inure to the benefit
  of the parties and their successors and assigns. Neither the Company nor any
  Buyer shall assign this Agreement or any rights or obligations hereunder without
  the prior written consent of the other. Notwithstanding the foregoing, subject
  to Section 2(f), any Buyer may assign its rights hereunder to any person that
  purchases Securities in a private transaction from a Buyer or to any of its
  “affiliates,” as that term is defined under the 1934 Act, without
  the consent of the Company. 

      h. 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. 

 23 








      i. Survival.
  The representations and warranties of the Company and the agreements and covenants
  set forth in Sections 3, 4, 5 and 8 shall survive the closing hereunder notwithstanding
  any due diligence investigation conducted by or on behalf of the Buyers. The
  Company agrees to indemnify and hold harmless each of the Buyers and all their
  officers, directors, employees and agents for loss or damage arising as a result
  of or related to any breach or alleged breach by the Company of any of its representations,
  warranties and covenants set forth in Sections 3 and 4 hereof or any of its
  covenants and obligations under this Agreement or the Registration Rights Agreement,
  including advancement of expenses as they are incurred. 

      j. Publicity.
  The Company and each of the Buyers shall have the right to review a reasonable
  period of time before issuance of any press releases, SEC, OTCBB or NASD filings,
  or any other public statements with respect to the transactions contemplated
  hereby; provided, however, that the Company shall be entitled,
  without the prior approval of each of the Buyers, to make any press release
  or SEC, OTCBB (or other applicable trading market) or NASD filings with respect
  to such transactions as is required by applicable law and regulations (although
  each of the Buyers shall be consulted by the Company in connection with any
  such press release prior to its release and shall be provided with a copy thereof
  and be given an opportunity to comment thereon). 

      k. 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 the 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. 

      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.
  The Company acknowledges that a breach by it of its obligations hereunder will
  cause irreparable harm to the Buyers by vitiating the intent and purpose of
  the transaction contemplated hereby. Accordingly, the Company acknowledges that
  the remedy at law for a breach of its obligations under this Agreement will
  be inadequate and agrees, in the event of a breach or threatened breach by the
  Company of the provisions of this Agreement, that the Buyers shall be entitled,
  in addition to all other available remedies at law or in equity, and in addition
  to the penalties assessable herein, to an injunction or injunctions restraining,
  preventing or curing any breach of this Agreement and to enforce specifically
  the terms and provisions hereof, without the necessity of showing economic loss
  and without any bond or other security being required. 

 24 









     IN WITNESS WHEREOF, the undersigned Buyers and the Company have caused this Agreement to be duly executed as of the date first above written. 


SNOCONE SYSTEMS INC. 

   /s/ Edon Moyal                                                         

  Edon Moyal 

  Chief Executive Officer

 AJW PARTNERS, LLC 

  By: SMS Group, LLC 

   /s/ Corey S. Ribotsky                                               

  Corey S. Ribotsky 

  Manager 


RESIDENCE: Delaware 

	 ADDRESS:  	 1044 Northern Boulevard  
	  	 Suite 302  
	  	 Roslyn, New York 11576  
	  	 Facsimile:  (516) 739-7115
	  	 Telephone:  (516) 739-7110



AGGREGATE SUBSCRIPTION AMOUNT: 

	 	 Aggregate Principal Amount of Notes:  	 $_________
	 	 Number of Warrants:  	_________ 
	 	 Aggregate Purchase Price:  	 $ _________ 


 25 




 

	
AJW OFFSHORE, LTD. 
	
	 By: First Street Manager II, LLC
	 

	
	 

	
	   /s/ Corey S. Ribotsky                                                     
	
Corey S. Ribotsky 
	
	
Manager 
	



	 RESIDENCE: Cayman Islands  




	
ADDRESS: 
		
AJW Offshore, Ltd. 
	
	 

		
P.O. Box 32021 SMB 
	
	 

		
Grand Cayman, Cayman Island, B.W.I. 
	



AGGREGATE SUBSCRIPTION AMOUNT: 

	 	 Aggregate Principal Amount of Notes:  	 $ _______ 
	 	 Number of Warrants:  	_______ 
	 	 Aggregate Purchase Price:  	 $ _______ 


 26 





 AJW QUALIFIED PARTNERS, LLC 

  By: AJW Manager, LLC 

   /s/ Corey S. Ribotsky                                               

  Corey S. Ribotsky 

  Manager 


RESIDENCE: New York 

	 ADDRESS:  	 1044 Northern Boulevard  
	  	 Suite 302  
	  	 Roslyn, New York 11576  
	  	 Facsimile:  (516 )  739-7115  
	  	 Telephone:  (516 )  739-7110  



AGGREGATE SUBSCRIPTION AMOUNT: 

	
Aggregate Principal Amount of Notes: 
		 $________ 
	
Number of Warrants: 
		________ 
	
Aggregate Purchase Price: 
		 $________ 


 27 





 NEW MILLENNIUM CAPITAL PARTNERS II, LLC

  By: First Street Manager II, LLP 

    /s/ Corey S. Ribotsky                                 

  Corey S. Ribotsky

  Manager 

	 RESIDENCE:  New York  




	 ADDRESS:  	 1044 Northern Boulevard  
	  	 Suite 302  
	  	 Roslyn, New York 11576  
	  	 Facsimile:  (516 )  739-7115  
	  	 Telephone:  (516 )  739-7110  



AGGREGATE SUBSCRIPTION AMOUNT: 

	
Aggregate Principal Amount of Notes: 
		 $______ 
	
Number of Warrants: 
		______ 
	
Aggregate Purchase Price: 
		 $______ 


 28