EXHIBIT 10.6


SECURITIES PURCHASE AGREEMENT


This Securities Purchase
Agreement (this “Agreement”) is dated as of July 11, 2007 between  Shea Development Corp, a Nevada
corporation whose principal place of business is located at 1351 Dividend
Drive, Suite G, Marietta, GA 30067 (the “Company”), and each of the
Purchaser(s) identified on the signature pages hereto (including their
successors and assigns, the “Purchaser(s)”).


WHEREAS, subject to the
terms and conditions set forth in this Agreement and pursuant to Section 4(2)
of the Securities Act of 1933, as amended (the “Securities Act”) and
Rule 506 promulgated thereunder, the Company desires to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, desires to purchase
from the Company, securities of the Company as more fully described in this
Agreement.


NOW, THEREFORE, IN
CONSIDERATION of the mutual covenants contained in this Agreement, and for
other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and each Purchaser, severally and not jointly,
agrees as follows:


ARTICLE I.


DEFINITIONS


1.1           Definitions.  In addition to the terms
defined elsewhere in this Agreement: (a) capitalized terms that are not
otherwise defined herein have the meanings given to such terms in the Notes (as
defined herein), and (b) the following terms have the meanings indicated in
this Section 1.1:


“Acquisition
Agreements” means the  Agreements and
Plans of Merger pursuant to which the Company is acquiring all of the stock of
Riptide and Bravera.  It also means the
Agreement and Plan of Merger to be entered into with KT Consulting, Inc.
pursuant to which the Company will acquire KT Consulting, Inc.


“Acquisitions”
means the acquisition of Riptide and Bravera by the Company.


“Action” shall have the meaning ascribed to such term in Section
3.1(j).


“Agent” means CAMOFI Master LDC, in its capacity as agent of the
Purchasers for the purposes of holding the Security Documents on their behalf
as described in Section 5.19.


“Affiliate” means any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under
common control with a Person, as such terms are used in and construed under
Rule 144 under the Securities Act.  With
respect to a Purchaser, any investment fund or managed account that is managed
on a discretionary basis by the same investment manager as any Purchaser will
be deemed to be an Affiliate of such Purchaser.


“Bravera” means Bravera, Inc., a Florida corporation.


“Change of Control” means the occurrence of any of (i) an
acquisition after the date hereof by an individual or legal entity or “group”
(as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital
stock of the Company, by contract or otherwise) of in excess of 33% of the
voting



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securities
of the Company, or (ii) a replacement at one time or within a three year period
of more than one-half of the members of the Company’s board of directors which
is not approved by a majority of those individuals who are members of the board
of directors on the date hereof (or by those individuals who are serving as
members of the board of directors on any date whose nomination to the board of
directors was approved by a majority of the members of the board of directors
who are members on the date hereof), or (iii) Francis E. Wilde shall no longer
be employed by the Company as Chief Executive Officer on a full time basis, or
(iv) the execution by the Company of an agreement to which the Company is a
party or by which it is bound, providing for any of the events set forth above
in (i) or (ii).


“Closing” means the closing of the purchase and sale of the
Securities pursuant to Section 2.1.


“Closing Date” means the Trading Day when all of the Transaction
Documents have been executed and delivered by the applicable parties thereto,
and all conditions precedent to (i) the Purchasers’ respective obligations to
pay the Subscription Amount and (ii) the Company’s obligations to deliver the
Securities have been satisfied or waived.


“Commission” means the Securities and Exchange Commission.


“Common Stock” means the common stock of the Company, par value
$0.001 per share, and any securities into which such common stock shall
hereinafter have been reclassified.


“Common Stock Equivalents” means any securities of the Company
or the Subsidiaries which would entitle the holder thereof to acquire at any
time Common Stock, including without limitation, any debt, preferred stock,
rights, options, warrants or other instrument that is at any time convertible
into or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock.


“Company Counsel” means Dunnington, Bartholow & Miller LLP.


“Disclosure Schedules” shall have the meaning ascribed to such
term in Section 3.1 hereof.


“Effective Date” means the date that the initial Registration
Statement filed by the Company pursuant to the Registration Rights Agreement is
first declared effective by the Commission.


“Eligible Market” means the following markets or exchanges the
NASDAQ SmallCap Market, the American Stock Exchange, the New York Stock
Exchange, the NASDAQ National Market or the OTC Bulletin Board.


“Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.


“Exempt Issuance” means the issuance of (a) shares of Common
Stock or options to employees, officers or directors of the Company, not to
exceed 4,000,000 shares or options per year in the aggregate, pursuant to any
stock or option plan duly adopted by a majority of the non-employee members of
the Board of Directors of the Company or a majority of the members of a
committee of non-employee directors established for such purpose or (b)
securities upon the exercise of any securities issued hereunder, or convertible
securities, options or warrants issued



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and
outstanding on the date of this Agreement, provided that such securities have
not been amended since the date of this Agreement to increase the number of
such securities or to decrease the exercise, exchange or conversion price of
any such securities.


“GAAP” shall have the meaning ascribed to such term in Section
3.1(h) hereof.


“Intercreditor/Subordination Agreement” means that certain
Intercreditor/Subordination Agreement dated as of the date hereof among the
Company and certain of its debtors.


“Issued Shares” means collectively the  shares of Common Stock to be issued by the
Company and delivered to the Purchasers at the Closing in accordance with
Section 2.2(a) hereof and as set forth on Schedule 3.1(g) attached hereto.


“Liens” means a lien, charge, security interest, encumbrance,
right of first refusal, preemptive right or other restriction.


“Material Adverse Effect” shall have the meaning assigned to
such term in Section 3.1(b) hereof.


“Material Permits” shall have the meaning ascribed to such term
in Section 3.1(m).


“Notes” means the Senior Secured Notes due, subject to the terms
therein, three years from its date of issuance, issued by the Company to each
of the Purchasers hereunder, substantially in the form attached hereto as Exhibit
A.


“Person” means any individual, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other
entity of any kind.


“Proceeding” means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.


 “Registration Rights
Agreement” means the Registration Rights Agreement, dated the date hereof,
among the Company and the Purchasers, in the form of Exhibit C attached
hereto.


“Registration Statement” means a registration statement meeting
the requirements set forth in the Registration Rights Agreement and covering
the resale of the Warrant Shares by any Purchaser as provided for in the
Registration Rights Agreement.


“Required Approvals” shall have the meaning ascribed to such
term in Section 3.1(e).


“Required Minimum” means, as of any date, the maximum aggregate
number of shares of Common Stock then issued or potentially issuable in the
future pursuant to the Transaction Documents, including the Issued Shares and
any Warrant Shares issuable upon exercise in full of all Warrants and ignoring
any exercise limits set forth therein.


“Riptide” means Riptide Software, Inc., a Florida corporation.



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“Rule 144” means Rule 144 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.


“SEC Reports” shall have the meaning ascribed to such term in
Section 3.1(h) hereof.


“Securities” means the Notes, the Issued Shares, the Warrants
and the Warrant Shares.


“Securities Act” means the Securities Act of 1933, as amended.


“Security Agreement” means the Security Agreement, dated the
date hereof, between the Company, the Subsidiaries and the Agent on behalf of
the Purchasers, in the form of Exhibit D attached hereto.


“Security Documents” means the Security Agreement, the
Subsidiary Guarantee(s) and any other documents and filings required thereunder
in order to grant the Agent (on behalf of the Purchasers) a perfected security
interest in all of the assets of the Company, including all UCC-1 filing
receipts and mortgages on the real property.


“Subordinated Notes” means those notes issued by the Lenders
that are set forth on Schedule A of the Subordination Agreement.


“Subscription Amount” means, as to any Purchaser, the aggregate
amount to be paid for the Notes, the Issued Shares and Warrants purchased
hereunder as specified below such Purchaser’s name on the signature page of
this Agreement and next to the heading “Subscription Amount”, in United States
Dollars and in immediately available funds.


“Subsidiary” means any subsidiary of the Company as set forth on
Schedule 3.1(a).


“Subsidiary Guarantee(s)” means the Subsidiary Guarantee(s),
dated the date hereof, among each of the Subsidiaries and the Purchasers, in
the form of Exhibit E attached hereto.


“Trading Day” means a day on which the Common Stock is traded on
a Trading Market.


“Trading Market”
means the following markets or exchanges on which the Common Stock is listed or
quoted for trading on the date in question: the Nasdaq SmallCap Market, the
American Stock Exchange, the New York Stock Exchange, the Nasdaq National
Market or the OTC Bulletin Board.


“Transaction Documents” means this Agreement, the Notes, the
Warrants, the Security Agreement, the Subsidiary Guarantee(s), the Registration
Rights Agreement, the Subordination Agreement and any other documents or
agreements executed in connection with the transactions contemplated hereunder.


“VWAP” means, for any date, the price determined by the first of
the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the primary
Trading Market on which the Common Stock is then listed or quoted as reported
by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. New York
City Time to 4:02 p.m. New York City Time ) using the VAP function; (b) if the
Common Stock is not then listed or quoted on the Trading Market and if prices
for the Common Stock are then reported



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in
the “Pink Sheets” published by the Pink Sheets, LLC (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent bid
price per share of the Common Stock so reported; or (c) in all other cases, the
fair market value of a share of Common Stock as determined by a nationally
recognized-independent appraiser selected in good faith by Purchasers holding a
majority of the principal amount of Notes then outstanding.


“Warrants” means the Common Stock purchase warrants, in the form
of Exhibit B delivered to each Purchaser at the Closing in accordance
with Section 2.2(a) hereof, which Warrants shall be exercisable immediately and
have a term of exercise equal to five years.


“Warrant Shares” means the shares of Common Stock issuable upon
exercise of the Warrants.


ARTICLE II.


PURCHASE
AND SALE


2.1           Closing.  On the Closing Date, upon the
terms and subject to the conditions set forth herein, concurrent with the
execution and delivery of this Agreement by the parties hereto, the Company
agrees to sell, and each of the Purchasers severally (and not jointly) agree to
purchase at ninety percent (90%), the principal amount of the Notes set forth
as the “Subscription Amount” on such Purchaser’s signature page to this
Agreement (not to exceed $7,222,222 in the aggregate principal amount), secured
by a first priority lien, more fully described in the Security Agreement, on
all assets of the Company and the Subsidiaries, the Issued Shares and the
Warrants, to be issued on a pro rata basis to each Purchaser based on such
Purchaser’s Subscription Amount.


At the Closing, each
Purchaser shall deliver to the Company via wire transfer immediately available
funds equal to its Subscription Amount and the Company shall deliver to each
Purchaser its Note, Warrants and Issued Shares as determined pursuant to
Section 2.2(a), and the other items set forth in Section 2.2 issuable at the
Closing.  Upon satisfaction of the
conditions set forth in Section 2.2, the Closing shall occur at the offices of
the Company, or such other location as the parties shall mutually agree.


2.2           Deliveries.


a)             On the Closing Date, the Company shall
deliver to each Purchaser the following:


(i)            this Agreement duly executed by the Company;


(ii)           a duly executed Note with a principal amount equal to such Purchaser’s
Subscription Amount, registered in the name of such Purchaser;


(iii)          duly executed Warrants registered in the name of each Purchaser to
purchase an aggregate number of shares of Common Stock of the Company, as set
forth on Schedule 3.1(g) attached hereto, with an exercise price per share
equal to $.01;


(iv)          the Issued Shares registered in the name of each Purchaser;


(v)           the Intercreditor/Subordination Agreement signed by all parties other
than the Purchasers;


(vi)          the Registration Rights Agreement duly executed by the Company;



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(vii)         the Security Agreement, duly executed by the Company and the
Subsidiaries, along with all the Security Documents;


(viii)        the Subsidiary Guarantee(s), duly executed by the Subsidiaries;


(ix)           lock-up agreements executed by Messrs. Wilde, Connelly, Wheeler,
Vitetta, Loeffel, Watson, Pearson and Mohan;


(x)            a use of proceeds statement, duly executed by
the chief financial officer of the Company, attesting to the use of proceeds
from the issuance of the Notes; and


(xi)           a legal opinion of Company Counsel.


b)            On the Closing Date, each Purchaser shall
deliver or cause to be delivered to the Company the following:


(i)            this Agreement duly executed by such
Purchaser;


(ii)           the Purchaser’s Subscription Amount by wire transfer to the account of
the Company;


(iii)          the Registration Rights Agreement duly executed by such Purchaser;


(iv)          the
Security Agreement, duly executed by such Purchaser; and


(v)           the Intercreditor/Subordination Agreement duly executed by such
Purchaser.


2.3           Closing Conditions.


a)             The obligations of the Company hereunder in
connection with the Closing are subject to the following conditions being met:


(i)            the
accuracy in all material respects when made and on the Closing Date of the
representations and warranties of the Purchasers contained herein;


(ii)           all obligations, covenants and agreements of each Purchaser required to
be performed at or prior to the Closing Date shall have been performed; and


(iii)          the delivery by each Purchaser of the items set forth in Section 2.2(b)
of this Agreement.


b)            The respective obligations of each Purchaser
hereunder in connection with the Closing are subject to the following
conditions being met:


(i)            the accuracy in all material respects when
made and on the Closing Date of the representations and warranties of the
Company contained herein;


(ii)           all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed;



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(iii)          such Purchaser shall be satisfied with the results of its due diligence
investigation of the Company;


(iv)          such Purchaser shall be satisfied with the Company’s current and
projected uses of cash;


(v)           such Purchaser shall be satisfied with the Acquisitions and their
respective audited financial statements;


(vi)          such Purchaser shall be satisfied with the Company’s pro forma capitalization;


(vii)         such Purchaser shall be satisfied with the quality and amount of the
collateral;


(viii)        no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction that prohibits the
consummation of any of the transactions contemplated by the Transaction
Documents;


(ix)           The Company has obtained Board approval in accordance with the rules
and regulations of its Trading Market relating to the issuance of the
Securities to the Purchasers under the Transaction Documents, ignoring any
limits on the number of shares of Common Stock that may be owned by a Purchaser
at any one time;


(x)            the delivery by the Company of the items set
forth in Section 2.2(a) of this Agreement;


(xi)           since the date of execution of this Agreement, no event or series of
events shall have occurred that reasonably could be expected to have or result
in a Material Adverse Effect with respect to the Company and its Subsidiaries;


(xii)          no banking moratorium have been declared either by the United States or
New York State authorities, no suspension of trading shall have been declared
on the New York Stock Exchange or the NASDAQ Stock Market, nor shall there have
occurred any material outbreak or escalation of hostilities or other national
or international calamity of such magnitude in its effect on, or any material
adverse change in, any financial markets which, in each case, in the reasonable
judgment of such Purchaser, makes it impracticable or inadvisable to purchase
the Notes at the Closing;


(xiii)         the Company’s pro-forma balance sheet shall contain at least $3.5
million, in cash;


(xiv)        neither the Company nor any of its Subsidiaries shall have any outstanding
indebtedness, other than (A) that in favor of the Purchasers pursuant to the
Notes, (B) indebtedness in connection with the



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Subordinated Notes; (C) capital and operating
lease obligations not to exceed $1,000,000 incurred in the ordinary course of
business in connection with the purchase of equipment, trade debt incurred in
the ordinary course of business, and (D) indebtedness set forth on Schedule
3.1(z) hereto; and


(xv)         at least $4 million of additional equity shall have been contributed to
the Company on terms satisfactory to the Purchasers.


ARTICLE III.


REPRESENTATIONS AND WARRANTIES


3.1           Representations and Warranties of the Company. 
Except as set forth in the Disclosure Schedule which shall be
deemed a part hereof, each of the Company and its Subsidiaries hereby makes the
representations and warranties set forth below to each Purchaser.  Additionally, all of the representations and
warranties contained in the Acquisition Agreements are hereby incorporated by reference
as if fully set forth herein


(a)           Subsidiaries.  All
of the direct and indirect subsidiaries of the Company are set forth in the
Disclosure Schedule.  The Company owns,
directly or indirectly, all of the capital stock or other equity interests of
each Subsidiary free and clear of any Liens, 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)           Organization and Qualification.  Each
of the Company and the Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and to
carry on its business as currently conducted. 
Neither the Company nor any Subsidiary is in violation or default of any
of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents.  Each of the Company and the Subsidiary is
duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case
may be, could not have or reasonably be expected to result in (i) a material
adverse effect on the legality, validity or enforceability of any Transaction
Document, (ii) a material adverse effect on the results of operations, assets,
business, prospects or financial condition of the Company and the Subsidiary,
taken as a whole, or (iii) a material adverse effect on the Company’s ability
to perform in any material respect on a timely basis its obligations under any
Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”)
and no Proceeding has been instituted in any such jurisdiction revoking,
limiting or curtailing or seeking to revoke, limit or curtail such power and
authority or qualification.


(c)           Authorization; Enforcement.  The
Company and each of its Subsidiaries have the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents and otherwise to carry out its respective
obligations thereunder.  The execution
and delivery of each of the Transaction Documents by the Company and each of
its Subsidiaries and the consummation by it of the transactions contemplated
thereby have been duly authorized by all action on the part of the Company and
each of its Subsidiaries and no further action is required by the Company and
each of its



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Subsidiaries in connection therewith.  Each Transaction Document has been (or upon
delivery will have been) duly executed by the Company and each of its
Subsidiaries and, when delivered in accordance with the terms hereof, will
constitute the valid and binding obligation of the Company and each of its
Subsidiaries enforceable against the Company and each of its Subsidiaries in
accordance with its terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally and (ii) as limited by
laws relating to the availability of specific performance, injunctive relief or
other equitable remedies.


(d)           No Conflicts. 
Except as set forth in Disclosure Schedule 3.1(d), the execution,
delivery and performance of the Transaction Documents by the Company and each
of its Subsidiaries and the consummation by the Company and each of its
Subsidiaries of the other transactions contemplated thereby do not and will
not: (i) conflict with or violate any provision of the Company’s or any
Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, result in the creation of any Lien upon any of the properties
or assets of the Company or any Subsidiary, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected; except
in the case of each of clauses (ii) and (iii), such as could not, individually
or in the aggregate, have or reasonably be expected to result in a Material
Adverse Effect.


(e)           Filings, Consents and Approvals. 
Except as set forth in the Disclosure Schedule 3.1(e), the Company is
not required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in connection with
the execution, delivery and performance by the Company of the Transaction
Documents.


(f)            Issuance of the Securities.  The
Securities are duly authorized and, when issued and paid for in accordance with
the applicable Transaction Documents, will be duly and validly issued, fully
paid and nonassessable, free and clear of all Liens imposed by the Company
other than restrictions on transfer provided for in the Transaction
Documents.  The Warrant Shares, when
issued in accordance with the terms of the Transaction Documents, will be
validly issued, fully paid and non-assessable, free and clear of all Liens
imposed by the Company.  The Company has
reserved from its duly authorized capital stock a number of shares of Common
Stock for issuance of the Warrant Shares at least equal to the Required Minimum
on the date hereof.  The Company has not,
and to the knowledge of the Company, no Affiliate of the Company has sold,
offered for sale or solicited offers to buy or otherwise negotiated in respect
of any security (as defined in Section 2 of the Securities Act) that would be
integrated with the offer or sale of the Securities in a manner that would
require the registration under the Securities Act of the sale of the Securities
to the Purchaser, or that would be integrated with the offer or sale of the
Securities for purposes of the rules and regulations of any Trading Market.


(g)           Capitalization.  The
capitalization of the Company is as set forth on Schedule 3.1(g).  Other than as set forth on Schedule 3.1(g),
the Company and the Subsidiaries have no



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indebtedness. 
Except as set forth on Schedule 3.1(g), the Company has not issued any
capital stock since April 17, 2007.  No
Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. 
Except as set forth on Schedule 3.1(g), as a result of the purchase and
sale of the Securities, there are no outstanding options, warrants, script
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock, or securities or rights convertible or
exchangeable into shares of Common Stock. 
The issuance and sale of the Securities will not obligate the Company or
any Subsidiary to issue shares of Common Stock or other securities to any
Person (other than the Purchaser) and will not result in a right of any holder
of the Company’s or any of its Subsidiaries’ securities to adjust the exercise,
conversion, exchange or reset price under such securities. All of the
outstanding shares of capital stock of the Company and its Subsidiaries are
validly issued, fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and none of such outstanding shares
was issued in violation of any preemptive rights or similar rights to subscribe
for or purchase securities.  No further
approval or authorization of any stockholder, the Board of Directors of the
Company or any of its Subsidiaries or others is required for the issuance and sale
of the Securities.  There are no stockholders
agreements, voting agreements or other similar agreements with respect to the
Company’s or any of its Subsidiaries’ capital stock to which the Company or any
of its Subsidiaries is a party or, to the knowledge of the Company, between or
among any of the Company’s stockholders or any stockholder of its
Subsidiaries.  The Company has no
outstanding indebtedness except for the indebtedness described in Section
2.3(b)(xii).


(h)           SEC Reports; Financial Statements. 
Except as set forth on Schedule 3.1(h), the Company’s management has
filed all reports required to be filed by it under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, since March
2, 2007 and to the Company’s knowledge, the prior management filed all required
reports with the SEC for the two years preceding March 2, 2007 (or such shorter
period as the Company was required by law to file such material) (the foregoing
materials, including the exhibits thereto, being collectively referred to
herein as the “SEC Reports”) on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to
the expiration of any such extension.  As
of their respective dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act and the rules
and regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, 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.  Except
as set forth on Schedule 3.1(h), The financial statements of the Company and
its Subsidiaries, including those financial statements included in the Current
Report on Form 8-K filed March 8, 2007 describing the reverse merger of the
Company and Information Intellect, Inc. on March 2, 2007 including the Company’s
financial statements for the year ended December 31, 2006 as Exhibit 99.1,  comply in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing.  Such financial statements have been prepared
in accordance with United States generally accepted accounting principles
applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated subsidiaries as of and
for the dates thereof and the



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results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. 
All material agreements to which the Company or any Subsidiary is a
party or to which the property or assets of the Company or any Subsidiary are
subject are included as part of or specifically identified in the SEC Reports.


(i)            Material Changes. 
Since the date of the latest audited financial statements, (i) there has
been no event, occurrence or development that has had or that could reasonably
be expected to result in a Material Adverse Effect, (ii) each of the Company
and its Subsidiaries has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice;  (B) liabilities for payment of acquisition
consideration to Riptide and Bravera; (C) liabilities to be assumed as a result
of the acquisitions of Riptide and Bravera; (D) commitments to pay transaction
costs to brokers, bankers, accountants, lawyers and other professionals
advising the Company to all the transactions contemplated under this Agreement,
and (E) liabilities not required to be reflected in the Company’s financial
statements pursuant to GAAP or required to be disclosed in filings made with
the Commission, (iii) each of the Company and its Subsidiaries has not altered
its method of accounting, (iv) except for transactions executed under the
Series B Preferred Stock Purchase Agreement and dividends accrued and payable
pursuant to outstanding Series A Preferred Stock, each of the Company and its
Subsidiaries has not declared or made any dividend or distribution of cash or
other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock and (v) other
than as set forth on Schedule 3.1(i), each of the Company and its Subsidiaries
has not issued any equity securities to any officer, director or Affiliate,
except pursuant to existing Company stock option plans. Neither the Company nor
any of its Subsidiaries has pending before the Commission any request for
confidential treatment of information.


(j)            Litigation.  Other than as set forth in the
Disclosure Schedule under the caption “Legal Proceedings,” there is no action,
suit, inquiry, notice of violation, proceeding or investigation pending or, to
the best knowledge of the Company, threatened against or affecting the Company,
any Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii)
could, if there were an unfavorable decision, have or reasonably be expected to
result in a Material Adverse Effect. 
Neither the Company nor any Subsidiary, nor any director or officer
thereof, is or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or a claim of
breach of fiduciary duty.  There has not
been, and to the knowledge of the Company or any Subsidiary, there is not
pending or contemplated, any investigation by the Commission involving the
Company or any Subsidiary or any current or former director or officer of the
Company or any Subsidiary.  The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities Act.


(k)           Labor Relations.  No
material labor dispute exists or, to the knowledge of the Company or
Subsidiary, is imminent with respect to any of the employees of the Company or
any Subsidiary which could reasonably be expected to result in a Material
Adverse Effect.


(l)            Compliance, Material Contracts. 
Neither the Company nor any Subsidiary (i) is in default under or in
violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the Company or
any Subsidiary under), nor has the Company or any Subsidiary received notice of
a claim that it is in default



 11
 








under or that it is in violation of, any indenture,
loan or credit agreement, services, marketing or processing agreement or any
other agreement or instrument to which it is a party or by which it or any of
its properties is bound (whether or not such default or violation has been
waived), (ii) is in violation of any order of any court, arbitrator or
governmental body, or (iii) is or has been in violation of any statute, rule or
regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws applicable to its business except in
each case as could not have a Material Adverse Effect.  Schedule 3.1(l) contains a true, correct and
complete list of all contracts which are material to the operation of the
business of the Company or any Subsidiary (“Material Contracts”).  Except as set forth on Schedule 3.1(l), each
Material Contract is in full force and effect and is enforceable in accordance
with its terms, and no material defaults enforceable against the Company or any
Subsidiary exist thereunder.  Neither the
Company nor any Subsidiary has received notice from any party to any Material
Contract stating that it intends to terminate or amend such contract.


(m)          Regulatory Permits and Licenses.  The
Company and the Subsidiaries possess all certificates, authorizations,
memberships, sponsorships and permits issued by the appropriate federal, state,
local or foreign regulatory authorities or other Person necessary to conduct
their respective businesses and are in good standing under all such
certificates, authorizations, memberships, sponsorship and permits, except
where the failure to possess such permits could not have or reasonably be
expected to result in a Material Adverse Effect (“Material Permits”),
and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material Permit.


(n)           Title to Assets.  The
Company and the Subsidiaries have good and marketable title in fee simple to
all real property owned by them that is material to the business of the Company
and the Subsidiaries and good and marketable title in all personal property
owned by them that is material to the business of the Company and the
Subsidiaries, in each case free and clear of all Liens, except for Liens as do
not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company and the Subsidiaries and Liens for the payment of federal, state or
other taxes, the payment of which is neither delinquent nor subject to
penalties.  Any real property and
facilities held under lease by the Company and the Subsidiaries are held by
them under valid, subsisting and enforceable leases of which the Company and
the Subsidiaries are in compliance.


(o)           Intellectual Property.  The
Company and the Subsidiaries have, or have rights to use, all patents, patent
applications, trademarks, trademark applications, service marks, trade names,
copyrights, licenses and other similar rights necessary or material for use in
connection with their respective businesses and which the failure to so have
could have a Material Adverse Effect (collectively, the “Intellectual
Property Rights”).  Neither the
Company nor any Subsidiary has received a written notice that the Intellectual
Property Rights used by the Company or any Subsidiary violates or infringes
upon the rights of any Person. To the knowledge of the Company, all such
Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property Rights of
others.


(p)           Insurance.  The Company and the
Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which the Company and the Subsidiaries are engaged, at
least equal to the aggregate Subscription Amount.  The Company maintains a director’s and
officer’s insurance policy in the amount of $5,000,000.  To the best of the Company’s knowledge, such
insurance contracts and policies are accurate and complete.  Neither the Company nor any Subsidiary has
any reason to believe that it will not be able to renew its



 12
 








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 without a significant increase in cost.


(q)           Transactions With Affiliates and Employees.  None
of the officers or directors of the Company or any Subsidiary and, to the
knowledge of the Company or any Subsidiary, none of the employees of the
Company or any Subsidiary is presently a party to any transaction with the
Company or any Subsidiary (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 or any
Subsidiary, any entity in which any officer, director, or any such employee has
a substantial interest or is an officer, director, trustee or partner, in each
case in excess of $50,000 per year, with the exception of the lease with
Riptide in Orlando, FL other than (i) for payment of salary or consulting fees
for services rendered, (ii) reimbursement for expenses incurred on behalf of
the Company or any Subsidiary and (iii) for other employee benefits, including
stock option agreements under any stock option plan of the Company.


(r)            Sarbanes-Oxley; Internal Accounting Controls.  Each
of the Company and its Subsidiaries is in material compliance with all
provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of
the Closing Date.  The Company and the
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 GAAP 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.  Each of
the Company and its Subsidiaries has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
Company and its Subsidiaries and designed such disclosure controls and
procedures to ensure that material information relating to the Company,
including its Subsidiaries, is made known to the certifying officers by others
within those entities, particularly during the period in which the Company’s
most recently filed periodic report under the Exchange Act, as the case may be,
is being prepared.  The Company’s
certifying officers have evaluated the effectiveness of the Company’s controls
and procedures as of the date prior to the filing date of the most recently
filed periodic report under the Exchange Act (such date, the “Evaluation
Date”).  The Company presented in its
most recently filed periodic report under the Exchange Act the conclusions of
the certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been no
significant changes in the Company’s (or any Subsidiary’s) internal controls
(as such term is defined in Item 307(b) of Regulation S-K under the Exchange
Act) or, to the Company’s (or any Subsidiary’s) knowledge, in other factors
that could significantly affect the Company’s (or any Subsidiary’s) internal
controls.  Neither the Company nor any of
its Subsidiaries have knowledge (upon receipt of the proceeds of this
transaction) that the Company’s independent public accountants will issue an
audit letter containing a “going concern” opinion in connection with the
Company’s annual report on Form 10-KSB pursuant to Section 13 or 15(d) under
the Exchange Act for the fiscal year ended December 31, 2007 or otherwise.


(s)           Certain Fees. 
Except as set forth on Schedule 3.1(s), no brokerage or finder’s fees or
commissions are or will be payable by the Company to any broker, financial
advisor or



 13
 








consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by
this Agreement.  The Purchasers shall
have no obligation with respect to any fees or with respect to any claims made
by or on behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions contemplated by
this Agreement.


(t)            Private Placement. 
Assuming the accuracy of the Purchasers representations and warranties
set forth in Section 3.2, no registration under the Securities Act is required
for the offer and sale of the Securities by the Company to the Purchasers as
contemplated hereby. The issuance and sale of the Securities hereunder does not
contravene the rules and regulations of the Trading Market.


(u)           Investment Company.  The
Company is not, and is not an Affiliate of, and immediately after receipt of
payment for the Securities, will not be or be an Affiliate of, an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended.  The Company shall conduct its
business in a manner so that it will not become subject to the Investment
Company Act.


(v)           Registration Rights. 
Except as contemplated by the transactions hereunder or as set forth on
Schedule 3.1(v), no Person has any right to cause the Company to effect the
registration under the Securities Act of any securities of the Company.


(w)          Listing and Maintenance Requirements.  The
Company files Exchange Act Reports pursuant to Section 15(d) of the Securities
Act.  The Company has not, in the 12
months preceding the date hereof, received notice from any Trading Market on
which the Common Stock is or has been listed or quoted to the effect that the
Company is not in compliance with the listing or maintenance requirements of
such Trading Market. The Company is, and has no reason to believe that it will
not in the foreseeable future continue to be, in compliance with all such
listing and maintenance requirements.


(x)            Application of Takeover Protections.  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 Company’s Articles of
Incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable to the Purchasers as a result
of the Purchasers and the Company fulfilling their obligations or exercising
their rights under the Transaction Documents, including without limitation as a
result of the Company’s issuance of the Securities and the Purchasers’
ownership of the Securities.


(y)           Disclosure.  The Company confirms that
neither it nor any other Person acting on its behalf has provided any of the
Purchasers or their agents or counsel with any information that constitutes or
might constitute material, nonpublic information.  The Company understands and confirms that
each Purchaser will rely on the foregoing representations and covenants in
effecting transactions in securities of the Company.  All disclosure provided to the Purchasers
regarding the Company, its Subsidiaries, its business and the transactions
contemplated hereby, including the Disclosure Schedules to this Agreement,
furnished by or on behalf of the Company with respect to the representations
and warranties made herein are true and correct with respect to such
representations and warranties and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The Company acknowledges and



 14
 








agrees that no Purchaser makes or has made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 3.2 hereof.


(z)            No Integrated Offering. 
Assuming the accuracy of the Purchaser’s representations and warranties
set forth in Section 3.2, and except for the transactions related to the
Preferred Stock offering, neither the Company, nor any of its Subsidiaries or
Affiliates, nor 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 cause this offering of the
Securities to be integrated with prior offerings by the Company or its
Subsidiaries for purposes of the Securities Act or any applicable shareholder
approval provisions, including, without limitation, under the rules and
regulations of any exchange or automated quotation system on which any of the
securities of the Company are listed or designated.


(aa)         Solvency.  For purposes of this
representation, the term “Company” shall include all of its Subsidiaries.  Based on the financial condition of the
Company as of the Closing Date after giving effect to the receipt by the
Company of the proceeds from the sale of the Securities hereunder and the
application of the proceeds thereof, (i) the Company’s fair saleable value of
its assets exceeds the amount that will be required to be paid on or in respect
of the Company’s existing debts and other liabilities (including known
contingent liabilities) as they mature; (ii) the Company’s assets do not
constitute unreasonably small capital to carry on its business for the current
fiscal year as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of the
business conducted by the Company, and projected capital requirements and capital
availability thereof; and (iii) the current cash flow of the Company, together
with the proceeds the Company would receive, were it to liquidate all of its
assets, after taking into account all anticipated uses of the cash, would be
sufficient to pay all amounts on or in respect of its debt when such amounts
are required to be paid.  The Company
does not intend to incur debts beyond its ability to pay such debts as they
mature (taking into account the timing and amounts of cash to be payable on or
in respect of its debt).  The Company has
no knowledge of any facts or circumstances which lead it to believe that it
will file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the Closing Date.  Schedule 3.1(z) sets forth all outstanding
secured and unsecured Indebtedness of the Company, or for which the Company has
commitments.  For the purposes of this
Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed
money or amounts owed in excess of $50,000 (other than trade accounts payable
incurred in the ordinary course of business), (b) all guaranties, endorsements
and other contingent obligations in respect of Indebtedness of others, whether
or not the same are or should be reflected in the Company’s balance sheet (or
the notes thereto), except guaranties by endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of
business; and (c) the present value of any lease payments in excess of $50,000
due under leases required to be capitalized in accordance with GAAP.  Neither the Company nor any Subsidiary is in
default with respect to any Indebtedness.


(bb)         Environmental Matters.  The
Company and each its Subsidiaries (a) is in compliance with any and all
Environmental Laws (as herein defined), (b) has received all permits, licenses
or other approvals required of it under applicable Environmental Laws to
conduct its respective businesses and (c) is in compliance with all terms and conditions
of any such permit, license or approval. 
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,



 15
 








“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.


(cc)         Tax Status.  Except for matters that would
not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect, except as disclosed in Schedule 3.1(cc), the
Company and each Subsidiary has filed all necessary federal, state and foreign
income and franchise tax returns and has paid or accrued all taxes shown as due
thereon, and the Company has no knowledge of a tax deficiency which has been
asserted or threatened against the Company or any Subsidiary.


(dd)         No General Solicitation. 
Neither the Company nor any person acting on behalf of the Company has
offered or sold any of the Securities by any form of general solicitation or
general advertising.  The Company has
offered the Securities for sale only to the Purchasers and certain other “accredited
investors” within the meaning of Rule 501 under the Securities Act.


(ee)         Foreign Corrupt Practices.  For
purposes of this representation, the term “Company” shall include all of its
Subsidiaries.  Neither the Company, nor
to the knowledge of the Company, any agent or other person acting on behalf of
the Company, has (i) directly or indirectly, used any corrupt funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related
to foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (iii) failed to
disclose fully any contribution made by the Company (or made by any person
acting on its behalf of which the Company is aware) which is  in violation of law, or (iv) violated in any
material respect any provision of the Foreign Corrupt Practices Act of 1977, as
amended.


(ff)           Seniority.  As of the Closing Date, no
indebtedness, equity or other security 
of the Company is senior to, or pari passu with,
the Notes in right of payment, whether with respect to interest or upon
liquidation or dissolution, or otherwise, other than indebtedness in favor of
the Purchasers pursuant to the Notes.


(gg)         No Disagreements with Accountants and Lawyers. 
There are no disagreements of any kind presently existing, or reasonably
anticipated by the Company or any Subsidiary to arise, between the accountants
and lawyers formerly or presently employed by the Company or any Subsidiary and
the Company and each Subsidiary is current with respect to any fees owed to its
accountants and lawyers.  By making this
representation, each of the Company and its Subsidiaries does not, in any
manner, waive the attorney/client privilege or the confidentiality of the
communications between the Company and its Subsidiaries and its lawyers.


(hh)         Acknowledgment Regarding Purchaser’s Purchase
of Securities.  The Company acknowledges and agrees that each
of the Purchasers is acting solely in the capacity of an arm’s length purchaser
with respect to the Transaction Documents and the transactions contemplated
hereby.  The Company further acknowledges
that no Purchaser 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 advice given by any Purchaser or any of their
respective representatives or agents in connection with this Agreement and the
transactions contemplated hereby is merely incidental to the Purchaser’s
purchase of the Securities.  The Company
further represents to the Purchasers that the Company’s decision to enter into
this



 16
 








Agreement has been based solely on the independent
evaluation of the transactions contemplated hereby by the Company and its
representatives.  The Company further
acknowledges that in addition to purchasing Securities, the Purchasers or their
affiliates may directly or indirectly own Common Stock and Preferred Stock in
the Company and that such parties, exercising their rights hereunder may
adversely impact their other holdings as well as the other equity holders in
the Company.


(ii)           Accountants.  The
Company’s accountants are set forth on Schedule 3.1(ii) of the Disclosure
Schedule.  To the knowledge of the
Company, such accountants, who the Company expects will express their opinion
with respect to the financial statements to be included in the Company’s Annual
Report on Form 10-KSB for the year ended December 31, 2007, are a registered
public accounting firm as required by the Securities Act.


(jj)           Acknowledgement Regarding Purchasers’ Trading
Activity.  Anything in this Agreement or elsewhere
herein to the contrary notwithstanding (except for Section 4.15 below), it is
understood and acknowledged by the Company (i) that none of the Purchasers have
been asked to agree, nor has any Purchaser agreed, to desist from purchasing or
selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold the Securities
for any specified term; (ii) that past or future open market or other
transactions by any Purchaser, including Short Sales, and specifically
including, without limitation, Short Sales or “derivative” transactions, before
or after the closing of this or future private placement transactions, may
negatively impact the market price of the Company’s publicly-traded securities;
(iii) that any Purchaser, and counter-parties in “derivative” transactions to
which any such Purchaser is a party, directly or indirectly, presently may have
a “short” position in the Common Stock, and (iv) that each Purchaser shall not
be deemed to have any affiliation with or control over any arm’s length
counter-party in any “derivative” transaction. 
The Company further understands and acknowledges that (a) one or more
Purchasers may engage in hedging activities at various times during the period
that the Securities are outstanding, including, without limitation, during the
periods that the value of the Warrant Shares deliverable with respect to
Securities are being determined and (b) such hedging activities (if any) could
reduce the value of the existing stockholders’ equity interests in the Company
at and after the time that the hedging activities are being conducted.  The Company acknowledges that such
aforementioned hedging activities do not constitute a breach of any of the
Transaction Documents.


(kk)         Manipulation of Price.  The
Company has 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 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) sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the
securities of the Company or (iii) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company, other than, in the case of clauses (ii) and (iii), compensation paid
to the Company’s placement agent in connection with the placement of the
Securities.


3.2           Representations and Warranties of the
Purchasers.  Each Purchaser hereby, for itself and for no
other Purchaser, represents and warrants as of the date hereof and as of the
Closing Date to the Company as follows:


(a)           Organization; Authority.  Such
Purchaser is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with full right,
corporate or partnership power and authority to enter into and to consummate
the transactions



 17
 








contemplated by the Transaction Documents and
otherwise to carry out its obligations thereunder. The execution, delivery and
performance by such Purchaser of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate or similar
action on the part of the Purchaser. 
Each Transaction Document to which it is a party has been duly executed
by such Purchaser, and when delivered by such Purchaser in accordance with the
terms hereof, will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms, except (i) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may
be limited by applicable law.


(b)           Purchaser Representation.  Such
Purchaser understands that the Securities are “restricted securities” and have
not been registered under the Securities Act or any applicable state securities
law and is acquiring the Securities as principal for its own account and not
with a view to or for distributing or reselling such Securities or any part
thereof, has no present intention of distributing any of such Securities in
violation of the Securities Act or any applicable securities laws and has no
arrangement or understanding with any other persons regarding the distribution
of such Securities (this representation and warranty not limiting the Purchaser’s
right to sell the Securities pursuant to the Registration Statement or
otherwise in compliance with applicable federal and state securities
laws).  Nothing contained herein shall be
deemed a representation or warranty by such Purchaser to hold Securities for
any period of time.


(c)           Purchaser Status.  At
the time such Purchaser was offered the Securities, it was, and at the date
hereof it is, and on each date on which it exercises any Warrants it will be
either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2),
(a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified
institutional buyer” as defined in Rule 144A(a) under the Securities Act.


(d)           Experience of the Purchaser.  Such
Purchaser, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters so
as to be capable of evaluating the merits and risks of the prospective
investment in the Securities, and has so evaluated the merits and risks of such
investment.  Such Purchaser is able to
bear the economic risk of an investment in the Securities and, at the present
time, is able to afford a complete loss of such investment.


(e)           General Solicitation.  Such
Purchaser 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 or any other general solicitation or general
advertisement.


The
Company acknowledges and agrees that the Purchasers do not make or have not
made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section
3.2.



 18














ARTICLE IV.


OTHER
AGREEMENTS OF THE PARTIES


4.1           Transfer
Restrictions.


(a)           The Securities may only be disposed of in compliance with
state and federal securities laws.  In
connection with any transfer of Securities other than pursuant to an effective
registration statement or Rule 144, to the Company or to an affiliate of a
Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the
Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor and reasonably acceptable to the Company,
the form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of such
transferred Securities under the Securities Act.  As a condition of transfer, any such
transferee shall agree in writing to be bound by the terms of this Agreement
and shall have the rights of a Purchaser under this Agreement and the
Registration Rights Agreement.


(b)           The Purchasers agree to the imprinting, so long as is
required by this Section 4.1(b), of a legend on any of the Securities in the
following form:


THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.  THESE SECURITIES AND
THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
SECURITIES.


The
Company acknowledges and agrees that a Purchaser may from time to time pledge
pursuant to a bona fide margin agreement with a registered broker-dealer or
grant a security interest in some or all of the Securities to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under
the Securities Act and who agrees to be bound by the provisions of this
Agreement and the Registration Rights Agreement and, if required under the
terms of such arrangement, the Purchasers may transfer pledged or secured
Securities to the pledgees or secured parties. 
Such a pledge or transfer would not be subject to approval of the
Company and no legal opinion of legal counsel of the pledgee, secured party or
pledgor shall be required in connection therewith.  Further, no notice shall be required of such
pledge.  At the appropriate Purchaser’s
expense, the Company will execute and deliver such reasonable documentation as
a pledgee or secured party of Securities may reasonably request in connection
with a pledge or transfer of the Securities, including, if the Securities are
subject to registration pursuant to the Registration Rights Agreement, the
preparation and filing of any required prospectus supplement under Rule
424(b)(3) under the Securities Act or other applicable provision of the
Securities Act to appropriately amend the list of Selling Stockholders
thereunder.


(c)           Certificates evidencing the Issued Shares and Warrant
Shares shall not contain any legend (including the legend set forth in Section
4.1(b) hereof): (i) while a registration statement (including the Registration
Statement) covering the resale of such security is effective



 19
 








under the Securities Act, or (ii) following any sale
of such Issued Shares or Warrant Shares pursuant to Rule 144, or (iii) if such
Issued Shares or Warrant Shares are eligible for sale under Rule 144(k), or
(iv) if such legend is not required under applicable requirements of the Securities
Act (including judicial interpretations and pronouncements issued by the staff
of the Commission). The Company shall cause its counsel to issue a legal
opinion to the Company’s transfer agent promptly after the Effective Date if
required by the Company’s transfer agent to effect the removal of the legend
hereunder.  If all or any portion of a
Warrant is exercised at a time when there is an effective registration
statement to cover the resale of the Warrant Shares, or if such Warrant Shares
may be sold under Rule 144(k) or if such legend is not otherwise required under
applicable requirements of the Securities Act (including judicial
interpretations thereof) then such Warrant Shares shall be issued free of all
legends.  The Company agrees that following
the Effective Date or at such time as such legend is no longer required under
this Section 4.1(c), it will, no later than three Trading Days following the
delivery by a Purchaser to the Company or the Company’s transfer agent of a
certificate representing Issued Shares or Warrant Shares, as applicable, issued
with a restrictive legend (such third Trading Day, the “Legend Removal Date”),
deliver or cause to be delivered to such Purchaser a certificate representing
such shares that is free from all restrictive and other legends.  The Company may not make any notation on its
records or give instructions to any transfer agent of the Company that enlarge
the restrictions on transfer set forth in this Section.  Certificates for Warrant Shares or Issued
Shares subject to the legend removal hereunder shall be transmitted by the
transfer agent of the Company to the Purchasers by crediting the account of the
Purchaser’s prime broker with the Depository Trust Company.


(d)           In addition to the Purchasers’ other available remedies,
the Company shall pay to each Purchaser, in cash, as partial liquidated damages
and not as a penalty, for each $1,000 of Warrant Shares or Issued Shares (based
on the VWAP of the Common Stock on the date such Securities are submitted to the
Company’s transfer agent) delivered for removal of the restrictive legend and
subject to this Section 4.1(d), $10 per Trading Day (increasing to $20 per
Trading Day 5 Trading Days after such damages have begun to accrue) for each
Trading Day after the Legend Removal Date until such certificate is delivered
without a legend.  Nothing herein shall
limit each Purchaser’s right to pursue actual damages for the Company’s failure
to deliver certificates representing any Securities as required by the
Transaction Documents, and each Purchaser 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.


(e)           Each Purchaser, severally and not jointly with the other
Purchasers, agrees that the removal of the restrictive legend from certificates
representing Securities as set forth in this Section 4.1 is predicated upon the
Company’s reliance that such Purchaser will sell any Securities pursuant to
either the registration requirements of the Securities Act, including any
applicable prospectus delivery requirements, or an exemption therefrom.


4.2           Acknowledgment
of Dilution.  The Company
acknowledges that the issuance of the Securities may result in dilution of the
outstanding shares of Common Stock, which dilution may be substantial under
certain market conditions.  The Company
further acknowledges that its obligations under the Transaction Documents,
including without limitation its obligation to issue the Warrant Shares
pursuant to the Transaction Documents, are unconditional and absolute and not
subject to any right of set off, counterclaim, delay or reduction, regardless
of the effect of any such dilution or any claim the Company may have against
any Purchaser and regardless of the dilutive effect that such issuance may have
on the ownership of the other stockholders of the Company.



 20
 








4.3           Furnishing
of Information.  Except for the
Preferred Stock offering, as long as any Purchaser owns Securities, the Company
covenants to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act.  As long as any Purchaser owns Securities, if
the Company is not required to file reports pursuant to the Exchange Act, it
will prepare and furnish to such Purchaser and make publicly available in
accordance with Rule 144(c) such information as is required for such Purchaser
to sell the Securities under Rule 144. 
The Company further covenants that it will take such further action as
any holder of Securities may reasonably request, all to the extent required
from time to time to enable such Person to sell such Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144.


4.4           Integration.  Except for the Preferred Stock offering, the
Company shall not, and shall use its best efforts to ensure that no Affiliate
of the Company shall, sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in Section 2 of the
Securities Act) that would be integrated with the offer or sale of the
Securities in a manner that would require the registration under the Securities
Act of the sale of the Securities to the Purchasers or that would be integrated
with the offer or sale of the Securities for purposes of the rules and
regulations of any Trading Market.


4.5           Exercise
Procedures.  The form of Notice of
Exercise included in the Warrants sets forth the totality of the procedures
required of the Purchasers in order to exercise the Warrants.  No additional legal opinion or other
information or instructions shall be required of the Purchasers to exercise
their Warrants.  The Company shall honor
exercises of the Warrants and shall deliver Warrant Shares in accordance with
the terms, conditions and time periods set forth in the Transaction Documents.


4.6           Securities
Laws Disclosure; Publicity.  The
Company shall, by 8:30 AM New York City Time no later than the fourth Trading
Day following the date hereof, issue a Current Report on Form 8-K disclosing
the material terms of the transactions contemplated hereby, and shall attach
the Transaction Documents thereto, except that Disclosure Schedules are not to
be filed as part of the Form 8-K.  The
Company and the Purchasers shall consult with each other in issuing any other
press releases with respect to the transactions contemplated hereby, and neither
the Company nor the Purchasers shall issue any such press release or otherwise
make any such public statement without the prior consent of the Company, with
respect to any press release of the Purchasers, or without the prior consent of
the Purchaser, with respect to any press release of the Company, which consent
shall not unreasonably be withheld, except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or communication.  Notwithstanding the foregoing, the Company
shall not publicly disclose the name of any Purchaser, or include the name of
any Purchaser in any filing with the Commission or any regulatory agency or
Trading Market, without the prior written consent of such Purchaser, except (i)
as required by federal securities law and (ii) to the extent such disclosure is
required by law or Trading Market regulations, in which case the Company shall
provide such Purchaser with prior notice of such disclosure permitted under
subclause (i) or (ii).


4.7           Shareholder
Rights Plan.  No claim will be made
or enforced by the Company or, to the knowledge of the Company, any other
Person that any Purchaser is an “Acquiring Person” under any shareholder rights
plan or similar plan or arrangement in effect or hereafter adopted by the
Company, or that any Purchaser could be deemed to trigger the provisions of any
such plan or arrangement, by virtue of receiving Securities under the
Transaction Documents or under any other agreement between the Company and any
Purchaser. The Company shall conduct its business in a manner so that it will
not become subject to the Investment Company Act.


4.8           Non-Public
Information.  The Company covenants
and agrees that neither it nor any other Person acting on its behalf will
provide any Purchaser or its agents or counsel with any information that



 21
 








the Company believes
constitutes material non-public information, unless prior thereto such
Purchaser shall have executed a written agreement regarding the confidentiality
and use of such information.  The Company
understands and confirms that such Purchaser shall be relying on the foregoing
representations in effecting transactions in securities of the Company.


4.9           Use
of Proceeds.  The Company shall use
the net proceeds from the sale of the Securities hereunder for the Acquisitions
and fees and expenses relating to the Acquisitions.


4.10         Reimbursement.  If any Purchaser becomes involved in any
capacity in any Proceeding by or against any Person who is a stockholder of the
Company (except as a result of sales, pledges, margin sales and similar
transactions by the Purchasers to or with any current stockholder), solely as a
result of such  Purchaser’s acquisition
of the Securities under this Agreement, the Company will reimburse such Purchaser
for its reasonable legal and other expenses (including the cost of any
investigation preparation and travel in connection therewith) incurred in
connection therewith, as such expenses are incurred.  The reimbursement obligations of the Company
under this paragraph shall be in addition to any liability which the Company
may otherwise have, shall extend upon the same terms and conditions to any
Affiliates of such Purchaser who are actually named in such action, proceeding
or investigation, and partners, directors, agents, employees and controlling
persons (if any), as the case may be, of such Purchaser and any such Affiliate,
and shall be binding upon and inure to the benefit of any successors, assigns,
heirs and personal representatives of the Company, such Purchaser and any such
Affiliate and any such Person.  The
Company also agrees that neither such Purchaser nor any such Affiliates,
partners, directors, agents, employees or controlling persons shall have any liability
to the Company or any Person asserting claims on behalf of or in right of the
Company solely as a result of acquiring the Securities under this Agreement.


4.11         Indemnification
of Purchasers.  Subject to the
provisions of this Section 4.11, the Company will indemnify, defend and hold each
Purchaser and its directors, officers, shareholders, partners, employees and
agents (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title),
each Person who controls such Purchaser (within the meaning of Section 15 of
the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, shareholders, agents, members, partners or employees (and any other
Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling
person (each, a “Purchaser Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and
reasonable attorneys’ fees and costs of investigation that any Purchaser Party
may suffer or incur as a result of, arising from, or relating to (a) any breach
of any of the representations, warranties, covenants or agreements made by the
Company in this Agreement or in the other Transaction Documents (or any
allegation by a third-party that, if true would constitute such a breach) or
(b) any action instituted against a Purchaser, or any of them or their
respective Affiliates, by any stockholder of the Company who is not an
Affiliate of such Purchaser, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is based upon a
breach of such Purchaser’s representation, warranties or covenants under the
Transaction Documents or any agreements or understandings any Purchasers may
have with any such stockholder or any violations by such Purchaser of state or
federal securities laws or any conduct by such Purchaser which constitutes
fraud, gross negligence or  willful
misconduct).  If any action shall be
brought against any Purchaser Party in respect of which indemnity may be sought
pursuant to this Agreement, the Purchaser Party shall promptly notify the Company
in writing, and the Company shall have the right to assume the defense thereof
with counsel of its own choosing.  Any
Purchaser Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the Purchaser Party except to the
extent that (i) the employment thereof has been specifically authorized by the
Company in writing, (ii) the Company has failed after a



 22
 








reasonable period of time to
assume such defense and to employ counsel or (iii) in such action there is, in
the reasonable opinion of such separate counsel, a material conflict on any
material issue between the position of the Company and the position of the
Purchaser Party.  The Company will not be
liable to any Purchaser Party under this Agreement (i) for any settlement by a
Purchaser Party effected without the Company’s prior written consent, which
shall not be unreasonably withheld or delayed; or (ii) to the extent, but only
to the extent that a loss, claim, damage or liability is attributable to any
Purchaser Party’s breach of any of the representations, warranties, covenants
or agreements made by the Purchasers in this Agreement or in the other
Transaction Documents.


4.12         Reservation and Listing of Securities.


(a)           The Company shall maintain a reserve from its duly
authorized shares of Common Stock for issuance pursuant to the Transaction
Documents in such amount as may be required to fulfill its obligations in full
under the Transaction Documents.


(b)           If, on any date, the number of authorized but unissued
(and otherwise unreserved) shares of Common Stock is less than the Required
Minimum on such date, then the Board of Directors of the Company shall use
commercially reasonable efforts to amend the Company’s certificate or articles
of incorporation to increase the number of authorized but unissued shares of
Common Stock to at least the Required Minimum at such time, as soon as possible
and in any event not later than the 75th day after such date.


(c)           The Company shall, if applicable: (i) in the time and
manner required by the Trading Market, prepare and file with such Trading
Market an additional shares listing application covering a number of shares of
Common Stock at least equal to the Required Minimum on the date of such
application, (ii) take all steps necessary to cause such shares of Common Stock
to be approved for listing on the Trading Market as soon as possible
thereafter, (iii) provide to the Purchasers evidence of such listing, and (iv)
maintain the listing of such Common Stock on any date at least equal to the
Required Minimum on such date on such Trading Market or another Trading Market.


4.13         Subsequent Equity Sales.  In
addition to the limitations set forth herein, from the date hereof until such
time as no Purchaser holds any of the Securities, the Company shall be
prohibited from effecting or entering into an agreement to effect any
Subsequent Financing involving a “Variable Rate Transaction” or an “MFN
Transaction” (each as defined below). 
The term “Variable Rate Transaction” shall mean a transaction in
which the Company issues or sells (i) any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the right to
receive additional shares of Common Stock either (A) at a conversion, exercise
or exchange rate or other price that is based upon and/or varies with the
trading prices of or quotations for the shares of Common Stock at any time
after the initial issuance of such debt or equity securities, or (B) with a
conversion, exercise or exchange price that is subject to being reset at some
future date after the initial issuance of such debt or equity security or upon
the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Common Stock or (ii)
enters into any agreements, including but not limited to an equity line of
credit, whereby the Company may sell securities at a future determined price
tied to the market price of the Common Stock. 
The term “MFN Transaction” shall mean a transaction in which the
Company issues or sells any securities in a capital raising transaction or
series of related transactions which grants to an investor the right to receive
additional shares based upon future transactions of the Company on terms more
favorable than those granted to such investor in such offering.  Any Purchaser shall be entitled to obtain
injunctive relief against the Company to preclude any such issuance, which remedy
shall be in addition to any right to collect damages. Notwithstanding the



 23
 








foregoing, this Section 4.13
shall not apply in respect of an Exempt Issuance, except that no Variable Rate
Transaction or MFN Transaction shall be an Exempt Issuance.


4.14         Equal Treatment of Purchasers.  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 is also offered
to all of the parties to the Transaction Documents. Further, the Company shall
not make any payment of principal or interest on the Notes in amounts which are
disproportionate to the respective principal amounts outstanding on the Notes
at any applicable time.  For
clarification purposes, this provision constitutes a separate right granted to
each Purchaser by the Company and negotiated separately by each Purchaser, and
is intended for the Company to treat the Purchasers as a class and shall not in
any way be construed as the Purchasers acting in concert or as a group with
respect to the purchase, disposition or voting of Securities or otherwise.


4.15         Investor Relations.  Promptly after Closing, the Company agrees to
hire an investor relations firm satisfactory to the Purchasers.


4.16         Form D; Blue Sky Filings.  The Company agrees to timely file a Form D
with respect to the Securities as required under Regulation D and to provide a
copy thereof, promptly upon request of any Purchaser. The Company shall 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
Purchasers at the Closing under applicable securities or “Blue Sky” laws of the
states of the United States, and shall provide evidence of such actions
promptly upon request of any Purchaser.


4.17         Most Favored Nation Provision.  Any time the Company effects a subsequent
financing, each Purchaser may elect, in its sole discretion, to exchange all or
some of its Notes and Warrants (treated for this purpose only as a unit) then
held by it for the securities issued in a subsequent financing based on the
then outstanding principal amount of the Note plus any other fees then owed by
the Company to the Purchaser, and the effective price at which such securities
are sold in such subsequent financing.


4.18         Additional
Participation Right.  During the term
of the Notes, each Purchaser shall have the right to participate in any debt or
equity financing (up to 100% of the original principal amount of the Note) of
the Company on the same terms as those offered to such third party providing
the financing.  The Company shall give
the Purchasers at least ten (10) Business Days advance notice of such debt or
equity financing, which notice shall set forth all of the material terms.  The Purchasers shall have at least five (5)
Business Days to inform the Company of their intention to participate.


ARTICLE V.


MISCELLANEOUS


5.1           Termination.  This Agreement may be terminated by any
Purchaser, as to such Purchaser’s obligation hereunder only and without any
effect whatsoever on the obligations between the Company and the other
Purchasers, by written notice to the other parties, if the Closing has not been
consummated on or before July 29, 2007; provided that no such termination will
affect the right of any party to sue for any breach by the other party (or
parties).


5.2           Fees.  At the Closing, the Company has agreed to (i)
reimburse Centrecourt Asset Management LLC (“Centrecourt”) $30,000, for
its legal fees and expenses of counsel, (ii) pay Centrecourt $25,000 for its
due diligence investigation of the Company (all of which has been previously
paid); and (iii) pay Centrecourt $227,500 as a structuring fee.  Except as expressly set forth in the
Transaction Documents to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to



 24
 








the negotiation,
preparation, execution, delivery and performance of this Agreement.  The Company shall pay all transfer agent
fees, stamp taxes and other taxes and duties levied in connection with the
issuance of any Securities.


5.3           Entire
Agreement.  The Transaction
Documents, together with the exhibits and schedules thereto, contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with
respect to such matters, which the parties acknowledge have been merged into
such documents, exhibits and schedules.


5.4           Notices.  Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of (a) the date
of transmission, if such notice or communication is delivered via facsimile at
the facsimile number set forth on the signature pages attached hereto prior to
5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature pages attached
hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York
City time) on any Trading Day, (c) the second Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or
(d) upon actual receipt by the party to whom such notice is required to be
given.  The address for such notices and
communications shall be as set forth on the signature pages attached hereto.


5.5           Amendments;
Waivers.  No provision of this
Agreement may be waived or amended except in a written instrument signed, in
the case of amendments, by the Company and Purchasers holding 75% of the
principal amount of Notes then outstanding, or, in the case of a waiver, by the
party against whom enforcement of any such waiver is sought.  No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.


5.6           Construction.  The headings herein are for convenience only,
do not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.  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.


5.7           Successors
and Assigns.  This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns.  The Company may not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of Purchasers holding 75% of the principal amount of Notes then
outstanding.  Any Purchaser may assign
any or all of its rights under this Agreement to any Person to whom such
Purchaser assigns or transfers any Securities, provided such transferee agrees
in writing to be bound, with respect to the transferred Securities, by the
provisions hereof that apply to such “Purchaser.”


5.8           No
Third-Party Beneficiaries.  This
Agreement is intended for the benefit of the parties hereto and their
respective successors and permitted assigns and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person, except as otherwise
set forth in Section 4.11.


5.9           Governing
Law.  All questions concerning the
construction, validity, enforcement and interpretation of the Transaction
Documents shall be governed by and construed and enforced in accordance with
the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof.  Each party
agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other
Transaction Documents



 25
 








(whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City 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
(including with respect to the enforcement of any of the Transaction
Documents), 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
improper or inconvenient venue for such proceeding.  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 via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address
in effect for 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.  The parties hereby waive
all rights to a trial by jury.  If either
party shall commence an action or proceeding to enforce any provisions of the
Transaction Documents, then the prevailing party in such action or proceeding
shall be reimbursed by the other party for its attorneys’ fees and other costs
and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding.


5.10         Survival.  The representations and warranties contained
herein shall survive the Closing, the delivery of the Securities and exercise
of the Warrants, as applicable for the applicable statute of limitations.


5.11         Execution.  This Agreement may be executed in two or more
counterparts, all of which when taken together 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, it being understood that both
parties need not sign the same counterpart. 
In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create
a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile
signature page or data file were an original thereof.


5.12         Severability.  If any provision of this Agreement is held to
be invalid or unenforceable in any respect, the validity and enforceability of
the remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.


5.13         Rescission
and Withdrawal Right. 
Notwithstanding anything to the contrary contained in (and without
limiting any similar provisions of) the Transaction Documents, whenever any
Purchaser 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 Purchaser 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; provided, however, in the case of
a rescission of an exercise of a Warrant, the Purchasers shall be required to
return any shares of Common Stock subject to any such rescinded exercise
notice.


5.14         Replacement
of Securities.  If any certificate(s)
or instrument(s) evidencing any Securities is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation thereof, or in lieu of and substitution
therefor, new certificate(s) or instrument(s), but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable indemnity, if requested.  The applicants



 26
 








for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party
costs associated with the issuance of such replacement Securities.


5.15         Remedies.  In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, each
of the Purchasers and the Company will be entitled to specific performance
under the Transaction Documents.  The
parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance of
any such obligation the defense that a remedy at law would be adequate.


5.16         Payment
Set Aside.  To the extent that the
Company makes a payment or payments to any Purchaser pursuant to any
Transaction Document or a Purchaser enforces or exercises its rights
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, 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.


5.17         Usury.  To the extent it may lawfully do so, the
Company hereby agrees not to insist upon or plead or in any manner whatsoever
claim, and will resist any and all efforts to be compelled to take the benefit
or advantage of, usury laws wherever enacted, now or at any time hereafter in
force, in connection with any claim, action or proceeding that may be brought by any Purchaser in order to
enforce any right or remedy under any Transaction Document.  Notwithstanding any provision to the contrary
contained in any Transaction Document, it is expressly agreed and provided that
the total liability of the Company under the Transaction Documents for payments
in the nature of interest shall not exceed the maximum lawful rate authorized
under applicable law (the “Maximum Rate”), and, without limiting the
foregoing, in no event shall any rate of interest or default interest, or both
of them, when aggregated with any other sums in the nature of interest that the
Company may be obligated to pay under the Transaction Documents exceed such
Maximum Rate.  It is agreed that if the
maximum contract rate of interest allowed by law and applicable to the
Transaction Documents is increased or decreased by statute or any official
governmental action subsequent to the date hereof, the new maximum contract
rate of interest allowed by law will be the Maximum Rate applicable to the
Transaction Documents from the effective date forward, unless such application
is precluded by applicable law.  If under
any circumstances whatsoever, interest in excess of the Maximum Rate is paid by
the Company to any Purchaser with respect to indebtedness evidenced by the
Transaction Documents, such excess shall be applied by the Purchasers to the
unpaid principal balance of any such indebtedness or be refunded to the
Company, the manner of handling such excess to be at the Purchasers’ election.


5.18         Liquidated
Damages.  The Company’s obligations
to pay any partial liquidated damages or other amounts owing under the
Transaction Documents is a continuing obligation of the Company and shall not
terminate until all unpaid partial liquidated damages and other amounts have
been paid notwithstanding the fact that the instrument or security pursuant to
which such partial liquidated damages or other amounts are due and payable
shall have been canceled.


5.19         Agent


(a) Authorization of Action.  Each Purchaser hereby appoints and authorizes
CAMOFI Master LDC (the “Agent”) to be its agent in its name and on its behalf
and to exercise such rights or powers granted to the Agent or the Purchasers
(i) under the Security Documents to the extent



 27
 








specifically provided
therein and on the terms thereof, together with such rights, powers and
discretions as are reasonably incidental thereto.  As to any matters not expressly provided for
by the Security Documents, the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Purchasers, and any action so taken or not so
taken by the Agent shall be binding upon all Purchasers; provided, however,
that the Agent shall not be required to take any action which exposes the Agent
to liability in such capacity, which could result in the Agent incurring any
costs and expenses or which is contrary to this Agreement or applicable law.


(b) Indemnification.  Each Purchaser hereby agrees to indemnify and
hold harmless the Agent from and against any and all liabilities, obligations,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Agent (in its capacity as agent for the Purchasers) in any
way relating to or arising out of the Security Documents or any action taken or
admitted by the Agent under or in respect of the Security Documents; provided
that no Purchaser shall be liable for any portion of such liabilities,
obligations, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent’s gross negligence or willful
misconduct.  Without limiting the
generality of the foregoing, each Purchaser agrees to reimburse the Agent
promptly upon demand on a pro rata basis in accordance with the then
outstanding indebtedness, liabilities and obligations owing to such Purchaser
by the Company in respect of any out-of-pocket expenses (including counsel
fees) incurred by the Agent in connection with the preservation of any rights
of the Agent or the Purchasers under, the enforcement of, or legal advice in
respect of the rights or responsibilities under, the Security Documents, to the
extent that the Agent is not reimbursed for such expenses by the Company or its
Subsidiaries.


(c) Successor Agent.  The Agent may, as hereinafter provided,
resign at any time by giving not less than 30 days’ written notice thereof to
the Purchasers and the Company. Upon any such resignation, the Purchasers shall
have the right to appoint a successor Agent (the “Successor Agent”), which
shall be a Purchaser and which shall be acceptable to the Company, acting
reasonably.  Upon the acceptance of any
appointment as Agent hereunder by a Successor Agent, such Successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent and the retiring Agent shall thereupon be
discharged from its further duties and obligations as Agent under the Security
Documents. After any retiring Agent’s resignation hereunder as Agent, the
provisions of this Section 5.19 shall continue to inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under the
Security Documents.   Absent such a resignation
by the Agent, the Agent’s appointment shall continue until revoked in writing
by Purchasers holding 75% of the outstanding principal amount of the Notes, at
which time such Purchasers shall appoint a new Agent.


(d) Taking and Enforcement of Remedies.


(1)           Each
of the Purchasers hereby acknowledges that, to the extent permitted by
applicable law, the remedies provided under the Security Documents to the
Purchasers are for the benefit of the Purchasers collectively and acting
together and not severally and further acknowledges that its rights under the
Security Documents are to be exercised not severally, but collectively by the
Agent upon the decision of the Purchasers; accordingly, notwithstanding any of
the provisions contained in any of the Transaction Documents, each of the
Purchasers hereby covenants and agrees that it shall not be entitled to take
any action with respect to the Security Documents, including, without
limitation, any acceleration of the indebtedness, liabilities or obligations of
the Company or any of its Subsidiaries, but that any such action shall be taken
only



 28
 








by the Agent with the prior
written agreement of the Purchasers, provided that, notwithstanding the
foregoing:


(2)           in
the absence of instructions from the Purchasers and where in the sole opinion
of the Agent the exigencies of the situation warrant such action, the Agent may
without notice to or consent of the Purchasers take such action on behalf of
the Purchasers as it deems appropriate or desirable in the interest of the
Purchasers; and


(3)           the
commencement of litigation before any court shall be made in the name of each
Purchaser individually unless the laws of the jurisdiction of such court permit
such litigation to be commenced in the name of the Agent on behalf of the
Purchasers (whether pursuant to a specific power of attorney in favor of the
Agent or otherwise) and the Agent agrees to commence such litigation in its
name; provided, however, that no litigation shall be commenced in the name of
any Purchaser without the prior written consent of such Purchaser;


(4)           each
of the Purchasers hereby further covenants and agrees that upon any such
written consent being given by the Purchasers, they shall co-operate fully with
the Agent to the extent requested by the Agent in the collective realization,
including, without limitation, the appointment of a receiver and manager to act
for their collective benefit; and each Purchaser covenants and agrees to do all
acts and things to make, execute and deliver all agreements and other
instruments, including, without limitation, any instruments necessary to effect
any registrations, so as to fully carry out the intent and purpose of this
Section 5.19; and each of the Purchasers hereby covenants and agrees that it
has not heretofore and shall not seek, take, accept or receive any security for
any of the obligations and liabilities of the Company under the Transaction
Documents or under any other document, instrument, writing or agreement
ancillary thereto other than such security as is provided hereunder and shall
not enter into any agreement with the Company or any of its Subsidiaries
relating in any manner whatsoever to the transactions contemplated hereunder,
unless all of the Purchasers shall at the same time obtain the benefit of any
such security or agreement, as the case may be.


(5)           Notwithstanding
any other provision contained in the Transaction Documents, no Purchaser shall
be required to be joined as a party to any litigation commenced against the
Company or any of its Subsidiaries by the Agent under the Transaction Documents
(unless otherwise required by any court of competent jurisdiction) if it elects
not to be so joined in which event any such litigation shall not include claims
in respect of the rights of such Purchaser against the Company or any of its
Subsidiaries under the Transaction Documents until such time as such Purchaser
does elect to be so joined; provided that if at the time of such subsequent
election it is not possible or practicable for such Purchaser to be so joined,
then such Purchaser may commence proceedings in its own name in respect of its
rights against the Company or any of its Subsidiaries.


5.20         Independent Nature of Purchasers’
Obligations and Rights.  The
obligations of each Purchaser under any Transaction Document are several and
not joint with the obligations of any other Purchaser, and no Purchaser shall
be responsible in any way for the performance or non-performance of the
obligations of any other Purchaser under any Transaction Document.  Nothing contained herein or in any other
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents.  Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other



 29
 








Purchaser to be joined as an additional party in any proceeding for
such purpose.  Each Purchaser has been
represented by its own separate legal counsel in their review and negotiation
of the Transaction Documents.  The
Company has elected to provide all Purchasers with the same terms and
Transaction Documents for the convenience of the Company and not because it was
required or requested to do so by the Purchasers.


(Signature Pages Follow)



 30
 








IN WITNESS WHEREOF, the
parties hereto have caused this Securities Purchase Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.


	
  SHEA DEVELOPMENT CORP.

  	
   

  	
  Address for Notice:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1351 Dividend Drive

  
	
   

  	
   

  	
  Suite G

  Marietta,

  
	
   

  	
   

  	
  GA 30067

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  Telephone: 770-919-2209

  
	
  Name: Francis E. Wilde

  	
   

  	
  Facsimile: 770-919-7277

  
	
  Title: Chairman and CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  With a copy to (which shall not constitute notice):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dunnington, Bartholow & Miller LLP

  	
   

  	
   

  
	
  477 Madison Avenue – 12th Floor

  	
   

  	
   

  
	
  New York, NY 10022

  	
   

  	
   

  
	
  Telephone: 212-682-8811

  	
   

  	
   

  
	
  Facsimile: 212-661-7769

  	
   

  	
   

  
	
  Attn: R.T. Lincoln

  	
   

  	
   

  
						



 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE PAGE FOR PURCHASER
FOLLOWS]



 31
 








[PURCHASER SIGNATURE PAGES
TO SHEA SECURITIES PURCHASE AGREEMENT]


IN WITNESS WHEREOF, the
undersigned have caused this Securities Purchase Agreement to be duly executed
by their respective authorized signatories as of the date first indicated
above.


	
  Name of Investing Entity:

  	
   

  	
   

  
	
  Signature
  of Authorized Signatory of Investing Entity:

  	
   

  	
   

  
	
  Name of
  Authorized Signatory:

  	
   

  	
   

  
	
  Title of
  Authorized Signatory:

  	
   

  	
   

  
	
  Email Address of
  Authorized Entity:

  	
   

  	
   

  
							



 


Address for Notice of Investing Entity:


Address for Delivery of Securities for Investing Entity (if not same as
above):


Subscription
Amount:


Warrant
Shares:


Issued
Shares:


EIN Number:  [PROVIDE THIS UNDER SEPARATE COVER]


[SIGNATURE PAGES CONTINUE]



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