f8k032310ex10ii_feelgolf.htm


    Exhibit 10.2

     

    
      DRAWDOWN EQUITY FINANCING
AGREEMENT

       

      


      
        THIS AGREEMENT dated as of the
22 day of March 2010
(the “Agreement”)  between Long Side Ventures, LLC a Florida limited
liability corporation (the " Investor "),
and Feel Golf Company,
Inc  a corporation organized and existing under the laws of the
State of California (the " Company
").

         

      

      WHEREAS ,
the parties desire that, upon the terms and subject to the conditions contained
herein, the Company shall issue and sell to the Investor, from time to time as
provided herein, and the Investor shall purchase from the Company up to One
Million Dollars ($1,000,000) of the Company's common stock, par value $0.0001
per share (the " Common Stock ");
and

       

      WHEREAS ,
such investments will be made in reliance upon the provisions of Regulation D ("
Regulation D ")
of the Securities Act of 1933, as amended, and the regulations promulgated
thereunder (the " Securities Act "),
and or upon such other exemption from the registration requirements of the
Securities Act as may be available with respect to any or all of the investments
to be made hereunder.

       

      NOW , THEREFORE , the parties
hereto agree as follows:

       

      ARTICLE I.

       

      Certain
Definitions

       

      Section
1.1. " Advance
" shall mean the portion of the Commitment Amount requested by the
Company in the Drawdown Notice.

       

      Section
1.2. " Advance Date
" shall mean the first (1st) Trading Day after expiration of the
applicable Pricing Period for each Advance.

       

      Section
1.3. " Drawdown Notice
" shall mean a written notice in the form of Exhibit A attached
hereto to the Investor executed by an officer of the Company and setting forth
the Advance amount that the Company requests from the Investor.

       

      Section
1.4. " Drawdown Notice
Date " shall mean each date the Company delivers (in accordance with
Section 2.2(b) of this Agreement) to the Investor a Drawdown Notice requiring
the Investor to advance funds to the Company, subject to the terms of this
Agreement. No Drawdown Notice Date shall be less than FIFTEEN (15) Trading Days
after the prior Drawdown Notice Date.

       

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

       

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

       

       

      
        
           

        

        
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      Section
1.7. " Commitment
Amount " shall mean the aggregate amount of up to One Million Dollars
($1,000,000) which the Investor has agreed to provide to the Company in order to
purchase the Company's Common Stock pursuant to the terms and conditions of this
Agreement.

       

      Section
1.8. " Commitment
Period " shall mean the period commencing on the earlier to occur of (i)
the Effective Date, or (ii) such earlier date as the Company and the Investor
may mutually agree in writing, and expiring on the earliest to occur of (x) the
date on which the Investor shall have made payment of Advances pursuant to this
Agreement in the aggregate amount of the Commitment Amount, (y) the date this
Agreement is terminated pursuant to Section 10.2 or (z) the date occurring
thirty-six (36) months after the Effective Date.

       

      Section
1.9. " Common Stock
" shall mean the Company's common stock, par value $0.0001 per
share.

       

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

       

      Section
1.11. " Damages
" shall mean any
loss, claim, damage, liability, costs and expenses (including, without
limitation, reasonable attorney's fees and disbursements and costs and expenses
of expert witnesses and investigation).

       

      Section
1.12. " Effective Date
" shall mean the
date on which the SEC first declares effective a Registration Statement
registering the resale of the Registrable Securities as set forth in Section
7.2(a).

       

      Section
1.13. " Exchange Act
" shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

       

      Section
1.14. " Investor
" shall mean Long Side Ventures, LLC.

       

      Section
1.15. " Material
Adverse Effect " shall mean any
condition, circumstance, or situation that would prohibit or otherwise
materially interfere with the ability of the Company to enter into and perform
any of its obligations under this Agreement or the Registration Rights Agreement
in any material respect.

       

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

       

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

       

       

      


      
        
           

        

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

       

      Section
1.19. " Person
" shall mean an individual, a corporation, a partnership, an association,
a trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.

       

      Section
1.20. " Pricing Period
" shall mean the fifteen (15) consecutive Trading Days following the
Drawdown Notice Date.

       

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

       

      Section
1.22. " Purchase Price
" shall be set at Eighty percent (80%) (a Twenty Percent (20%) discount)
of the 5 lowest closing prices of the common stock during the Pricing
Period.

       

      Section
1.23. " Registrable
Securities " shall mean the shares of Common Stock to be issued hereunder
(i) in respect of which the Registration Statement has not been declared
effective by the SEC, (ii) which have not been sold under circumstances meeting
all of the applicable conditions of Rule 144 (or any similar provision then in
force) under the Securities Act (" Rule 144 ") or (iii)
which have not been otherwise transferred to a holder who may trade such shares
without restriction under the Securities Act, and the Company has delivered a
new certificate or other evidence of ownership for such securities not bearing a
restrictive legend.

       

      Section
1.24. " Registration
Rights Agreement " shall mean the Registration Rights Agreement dated the
date hereof, regarding the filing of the Registration Statement for the resale
of the Registrable Securities, entered into between the Company and the
Investor.

       

      Section
1.25. " Registration
Statement " shall mean a registration statement on Form S-1 (if use of
such form is then available to the Company pursuant to the rules of the SEC and,
if not, on such other form promulgated by the SEC for which the Company then
qualifies and which counsel for the Company shall deem appropriate, and which
form shall be available for the resale of the Registrable Securities to be
registered thereunder in accordance with the provisions of this Agreement and
the Registration Rights Agreement, and in accordance with the intended method of
distribution of such securities), for the registration of the resale by the
Investor of the Registrable Securities under the Securities Act.

       

      Section
1.26. " Regulation D
" shall have the meaning set forth in the recitals of this
Agreement.

       

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

       

       

      
        
           

        

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

       

      Section
1.29. " SEC Documents
" shall mean Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K and Proxy Statements of the Company as supplemented
to the date hereof, filed by the Company for a period of at least twelve (12)
months immediately preceding the date hereof or the Advance Date, as the case
may be, until such time as the Company no longer has an obligation to maintain
the effectiveness of a Registration Statement as set forth in the Registration
Rights Agreement.

       

      Section
1.30. " Tradirm Day
" shall mean any day during which the New York Stock Exchange shall be
open for business.

       

      ARTICLE II.

       

      Advances

       

      Section
2.1. Advances
.

       

      Subject
to the terms and conditions of this Agreement (including, without limitation,
the provisions of Article VII hereof), the Company, at its sole and exclusive
option, may issue and sell to the Investor, and the Investor shall purchase from
the Company, shares of the Company's Common Stock by the delivery, in the
Company's sole discretion, of Drawdown Notices. The number of shares of Common
Stock that the Investor shall purchase pursuant to each Advance shall be
determined by dividing the amount of the Advance by the Purchase Price. No
fractional shares shall be issued. Fractional shares shall be rounded to the
next higher whole number of shares. The aggregate maximum amount of all Advances
that the Investor shall be obligated to make under this Agreement shall not
exceed the Commitment Amount.

       

      Section
2.2. Mechanics
.

       

      (a)          Drawdown Notice
. At any time
during the Commitment Period, the Company may request the Investor to purchase
shares of Common Stock by delivering a Drawdown Notice to the Investor, subject
to the conditions set forth in Section 7.2; provided, however, the amount for
each Advance as designated by the Company in the applicable Drawdown Notice
shall not be more than the Maximum Advance Amount and the aggregate amount of
the Advances pursuant to this Agreement shall not exceed the Commitment Amount.
The Company acknowledges that the Investor may sell shares of the Company's
Common Stock corresponding with a particular Drawdown Notice after the Drawdown
Notice is received by the Investor. There shall be a minimum of fifteen (15)
Trading Days between each Drawdown Notice Date.

       

      (b)          Date of Delivery of Drawdown
Notice . A Drawdown
Notice shall be deemed delivered on (i) the Trading Day it is received by email
or fax. If such notice is received prior to 5:00 pm Eastern Time, or (ii) the
immediately succeeding Trading Day if it is received by facsimile or otherwise
after 5:00 pm Eastern Time on a Trading Day or at any time on a day which is not
a Trading Day. No Drawdown Notice may be deemed delivered on a day that is not a
Trading Day or if positive receipt is not acknowledged by the
Investor.

       

       

      
        
           

        

        
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      Section
2.3. Closings
. On each Advance
Date (i) the Company shall deliver to the Investor such number of shares of the
Common Stock registered in the name of the Investor as shall equal (x) the
amount of the Advance specified in such Drawdown Notice pursuant to Section 2.1
herein, divided by (y) the Purchase Price and (ii) upon receipt of such shares,
the Investor shall deliver to the Company the amount of the Advance specified in
the Drawdown Notice by wire transfer of immediately available funds. In
addition, on or prior to the Advance Date, each of the Company and the Investor
shall deliver to the other all documents, instruments and writings required to
be delivered by either of them pursuant to this Agreement in order to implement
and effect the transactions contemplated herein. To the extent the Company has
not paid the fees and disbursements of the Investor in accordance with Section
12.4, the amount of such fees and disbursements may be deducted by the Investor
(and shall be paid to the relevant party) directly out of the proceeds of the
Advance with no reduction in the amount of shares of the Company's Common Stock
to be delivered on such Advance Date.

       

      (a) Company's Obligations Upon
Closing .

       

      (i) The
Company shall deliver to the Investor, through the use of a Deposit/Withdrawal
at Custodian from a Deposit Trust Company method or commonly referred to as
"DWAC/DTC" of the Investor's choosing, the shares of Common Stock applicable to
the Advance in accordance with Section 2.3. The certificates evidencing such
shares shall be free of restrictive legends. Upon receipt, Investor will perform
a wire transfer on the same business day provided that the shares have been
received in sufficient time to perform such transfer. In the event that the
Investor is no longer able, due to time constraints beyond his control, to
perform a wire on the day of receipt, the wire will be promptly executed the
following business day.

       

      (ii) the
Company's Registration Statement with respect to the resale of the shares of
Common Stock delivered in

       

      connection
with the Advance shall have been declared effective by the SEC;

       

      (iii) the
Company shall have obtained all material permits and qualifications required by
any applicable state for the offer and sale of the Registrable Securities, or
shall have the availability of exemptions therefrom. The sale and issuance of
the Registrable Securities shall be legally permitted by all laws and
regulations to which the Company is subject;

       

      (iv) the
Company shall have filed with the SEC in a timely manner all reports, notices
and other documents required

       

      of a
"reporting company" under the Exchange Act and applicable Commission
regulations;

       

       

      
        
           

        

        
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      (v) the fees
as set forth in Section 12.4 below shall have been paid or can be withheld as
provided in Section 2.3; and

       

      (vi) The
Company's transfer agent shall be DWAC eligible.

       

       (b)
Investor's Obligations
Upon Closine . Upon receipt of the shares referenced in Section 2.3(a)(i)
above and provided the Company is in compliance with its obligations in Section
2.3, the Investor shall deliver to the Company the amount of the Advance
specified in the Drawdown Notice by wire transfer of immediately available
funds.

       

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

       

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

       

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

       

      Payments
for Each Number of Days Overdue $10,000 Worth of Common Stock

       

      1                                                                                  $100

      2                                                                                  $200

      3                                                                                  $300

      4                                                                                  $400

      5                                                                                  $500

      6                                                                                  $600

      7                                                                                  $700

      8                                                                                  $800

      9                                                                                  $900

      10                                                                                $1000

      Over
10                                                                      $1000
+ $200 for each Business Day beyond the tenth
day

       

       

      
        
           

        

        
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      ARTICLE III.

       

      Representations and Warranties of
Investor

       

      Investor
hereby represents and warrants to, and agrees with, the Company that the
following are true and correct as of the date hereof and as of each Advance
Date:

       

      Section
3.1. Organization and
Authorization . The Investor is duly incorporated or organized and
validly existing in the jurisdiction of its incorporation or organization and
has all requisite power and authority to purchase and hold the securities
issuable hereunder. The decision to invest and the execution and delivery of
this Agreement by such Investor, the performance by such Investor of its
obligations hereunder and the consummation by such Investor of the transactions
contemplated hereby have been duly authorized and requires no other proceedings
on the part of the Investor. The undersigned has the right, power and authority
to execute and deliver this Agreement and all other instruments (including,
without limitations, the Registration Rights Agreement), on behalf of the
Investor. This Agreement has been duly executed and delivered by the Investor
and, assuming the execution and delivery hereof and acceptance thereof by the
Company, will constitute the legal, valid and binding obligations of the
Investor, enforceable against the Investor in accordance with its
terms.

       

      Section
3.2. Evaluation of
Risks . The Investor has such knowledge and experience in financial, tax
and business matters as to be capable of evaluating the merits and risks of, and
bearing the economic risks entailed by, an investment in the Company and of
protecting its interests in connection with this transaction. It recognizes that
its investment in the Company involves a high degree of risk.

       

      Section
3.3. No Legal Advice
From the Company . The Investor acknowledges that it had the opportunity
to review this Agreement and the transactions contemplated by this Agreement
with his or its own legal counsel and investment and tax advisors. The Investor
is relying solely on such counsel and advisors and not on any statements or
representations of the Company or any of its representatives or agents for
legal, tax or investment advice with respect to this investment, the
transactions contemplated by this Agreement or the securities laws of any
jurisdiction.

       

      Section
3.4. Investment
Purpose . The securities are being purchased by the Investor for its own
account, and for investment purposes. The Investor agrees not to assign or in
any way transfer the Investor's rights to the securities or any interest therein
and acknowledges that the Company will not recognize any purported assignment or
transfer except in accordance with applicable Federal and state securities laws.
No other person has or will have a direct or indirect beneficial interest in the
securities. The Investor agrees not to sell, hypothecate or otherwise transfer
the Investor's securities unless the securities are registered under Federal and
applicable state securities laws or unless, in the opinion of counsel
satisfactory to the Company, an exemption from such laws is
available.

       

       

      
        
           

        

        
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      Section
3.5.   Accredited Investor
. The Investor is
an " Accredited
Investor " as that term is
defined in Rule 501(a)(3) of Regulation D of the
Securities Act.

       

      Section
3.6. Information
. The Investor and its advisors (and its counsel), if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and information it deemed material to making an informed
investment decision, The Investor and its advisors, if any, have been afforded
the opportunity to ask questions of the Company and its management. Neither such
inquiries nor any other due diligence investigations conducted by such Investor
or its advisors, if any, or its representatives shall modify, amend or affect
the Investor's right to rely on the Company's representations and warranties
contained in this Agreement. The Investor understands that its investment
involves a high degree of risk. The Investor is in a position regarding the
Company, which, based upon employment, family relationship or economic
bargaining power, enabled and enables such Investor to obtain information from
the Company in order to evaluate the merits and risks of this investment. The
Investor has sought such accounting, legal and tax advice, as it has considered
necessary to make an informed investment decision with respect to this
transaction.

       

      Section
3.7. Receipt of
Documents . The Investor
and its counsel have received and read in their entirety: (i) this Agreement and
the Exhibits annexed hereto; (ii) all due diligence and other information
necessary to verify the accuracy and completeness of such representations,
warranties and covenants; and (iii) answers to all questions the Investor
submitted to the Company regarding an investment in the Company; and the
Investor has relied on the information contained therein and has not been
furnished any other documents, literature, memorandum or
prospectus.

       

      Section
3.8.Registration Rights Agreement
. The parties
have entered into the Registration Rights Agreement dated the date hereof.

       

      Section
3.9. No General
Solicitation . Neither the
Company, nor any of its affiliates, nor any person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) in connection with
the offer or sale of the shares of Common Stock offered hereby.

       

      Section
3.10. Not an Affiliate
. The Investor is
not an officer, director or a person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common control
with the Company or any " Affiliate " of the
Company (as that term is defined in Rule 405 of the Securities
Act).

       

       

      
        
           

        

        
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      Section
3.11. Trading Activities. The Investor's trading activities with respect to the
Company's Common Stock shall be in compliance with all applicable federal and
state securities laws, rules and regulations and the rules and regulations of
the Principal Market on which the Company's Common Stock is listed or traded and
Investor will comply with any requests that the SEC makes in connection with the
Filing of the Registration Agreement to ensure such compliance. Neither the
Investor nor its affiliates has an open short position in the Common Stock of
the Company, the Investor agrees that it shall not, and that it will cause its
affiliates not to, engage in any short sales of or hedging transactions with
respect to the Common Stock, provided that the Company acknowledges and agrees
that upon receipt of an Drawdown Notice the Investor has the right to sell the
shares to be issued to the Investor pursuant to the Drawdown Notice during the
applicable Pricing Period.

       

      ARTICLE
IV.

       

      Representations and Warranties
of the Company

       

       

      Except as
stated below, on the disclosure schedules attached hereto or in the SEC
Documents (as defined herein), the Company hereby represents and warrants to,
and covenants with, the Investor that the following are true and correct as of
the date hereof:

       

      Section
4.1. Organization and
Qualification . The Company is duly incorporated or organized and validly
existing in the jurisdiction of its incorporation or organization and has all
requisite corporate power to own its properties and to carry on its business as
now being conducted. Each of the Company and its subsidiaries is duly qualified
as a foreign corporation to do business and is in good standing in every
jurisdiction in which the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect on the
Company and its subsidiaries taken as a whole.

       

      Section
4.2. Authorization,
Enforcement, Compliance with Other Instruments (i) The Company has the
requisite corporate power and authority to enter into and perform this
Agreement, the Registration Rights Agreement, the Placement Agent Agreement and
any related agreements, in accordance with the terms hereof and thereof, (ii)
the execution and delivery of this Agreement, the Registration Rights Agreement,
the Placement Agent Agreement and any related agreements by the Company and the
consummation by it of the transactions contemplated hereby and thereby, have
been duly authorized by the Company's Board of Directors and no further consent
or authorization is required by the Company, its Board of Directors or its
stockholders, (iii) this Agreement, the Registration Rights Agreement, the
Placement Agent Agreement and any related agreements have been duly executed and
delivered by the Company, (iv) this Agreement, the Registration Rights
Agreement, the Placement Agent Agreement and assuming the execution and delivery
thereof and acceptance by the investor and any related agreements constitute the
valid and binding obligations of the Company enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and
remedies.

       

       

      
        
           

        

        
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      Section
4.3. Capitalization
. The authorized
capital stock of the Company consists of 2,000,000,000 shares of Common Stock,
$0.0001 par value per share which approximately 19,406,175 shares of Common
Stock are issued and outstanding. All of such outstanding shares have been
validly issued and are fully paid and nonassessable. Except as disclosed in the
SEC Documents, no shares of Common Stock are subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by the
Company. Except as disclosed in the SEC Documents, as of the date hereof, (i)
there are no outstanding options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its subsidiaries or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its subsidiaries, (ii) there
are no outstanding debt securities ( iii) there are no outstanding registration
statements other than on Form S-8 and (iv) there are no agreements or
arrangements under which the Company or any of its subsidiaries is obligated to
register the sale of any of their securities under the Securities Act (except
pursuant to the Registration Rights Agreement). There are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by this Agreement or any related agreement or the consummation of the
transactions described herein or therein. The Company has furnished to the
Investor true and correct copies of the Company's Certificate of Incorporation,
as amended and as in effect on the date hereof (the " Certificate of Incorporation
"), and the Company's By-laws, as in effect on the date
hereof (the " By-laws
"), and the terms of all securities convertible into or exercisable for
Common Stock and the material rights of the holders thereof in respect
thereto.

       

      Section
4.4. No Conflict
. The execution,
delivery and performance of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby will not (i) result in a
violation of the Certificate of incorporation, any certificate of designations
of any outstanding series of preferred stock of the Company or By-laws or (ii)
conflict with or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its subsidiaries is a
party, or result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations and the
rules and regulations of the Principal Market on which the Common Stock is
quoted) applicable to the Company or any of its subsidiaries or by which any
material property or asset of the Company or any of its subsidiaries is bound or
affected and which would cause a Material Adverse Effect. Except as disclosed in
the SEC Documents, neither the Company nor its subsidiaries is in violation of
any term of or in default under its Articles of Incorporation or By-laws or
their organizational charter or by-laws, respectively, or any material contract,
agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or
order or any statute, rule or regulation applicable to the Company or its
subsidiaries. The business of the Company and its subsidiaries is not being
conducted in violation of any material law, ordinance, regulation of any
governmental entity. Except as specifically contemplated by this Agreement and
as required under the Securities Act and any applicable state securities laws,
the Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court or governmental agency in order
for it to execute, deliver or perform any of its obligations under or
contemplated by this Agreement or the Registration Rights Agreement in
accordance with the terms hereof or thereof. All consents, authorizations,
orders, filings and registrations which the Company is required to obtain
pursuant to the preceding sentence have been obtained or effected on or prior to
the date hereof. The Company and its subsidiaries are unaware of any fact or
circumstance which might give rise to any of the foregoing.

       

       

      
        
           

        

        
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      Section
4.5. SEC Documents;
Financial Statements . The Company is
not registered under the Exchange Act and has therefore not filed any reports,
schedules, forms, statements and other documents with the SEC under the Exchange
Act. As of their respective dates, the financial statements of the Company
disclosed in the SEC Documents (the " Financial Statements
") complied as to fonn in all material respects with applicable
accounting requirements and the published rides and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance with
generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and, fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to the Investor which is not
included in the SEC Documents contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

       

      Section
4.6.Intentionally
Omitted

       

      Section
4.7. No Default
. Except as
disclosed in Exhibit 4.7, the Company is not in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust or other material instrument
or agreement to which it is a party or by which it is or its property is bound
and neither the execution, nor the delivery by the Company, nor the performance
by the Company of its obligations under this Agreement or any of the exhibits or
attachments hereto will conflict with or result in the breach or violation of
any of the terms or provisions of, or constitute a default or result in the
creation or imposition of any lien or charge on any assets or properties of the
Company under its Certificate of Incorporation, By-Laws, any material indenture,
mortgage, deed of trust or other material agreement applicable to the Company or
instrument to which the Company is a party or by which it is bound, or any
statute, or any decree, judgment, order, rules or regulation of any court or
governmental agency or body having jurisdiction over the Company or its
properties, in each case which default, lien or charge is likely to cause a
Material Adverse Effect on the Company's business or financial
condition.

       

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      
 

       

      Section
4.8. Absence of Events
of Default . Except for
matters described in Exhibit 4.8 and/or this Agreement, no Event of Default, as
defined in the respective agreement to which the Company is a party, and no
event which, with the giving of notice or the passage of time or both, would
become an Event of Default (as
so defined), has occurred and is continuing, which would have a Material
Adverse Effect on the Company's business, properties, prospects, financial
condition or results of operations.

       

      Section
4.9. Intellectual
Property Rights . The Company and
its subsidiaries own or possess adequate rights or licenses to use all material
trademarks, trade names, service marks, service mark registrations, service
names, patents, patent rights, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and rights necessary to conduct their
respective businesses as now conducted. The Company and its subsidiaries do not
have any knowledge of any infringement by the Company or its subsidiaries of
trademark, trade name rights, patents, patent rights, copyrights, inventions,
licenses, service names, service marks, service mark registrations, trade secret
or other similar rights of others, and, to the knowledge of the Company, there
is no claim, action or proceeding being made or brought against, or to the
Company's knowledge, being threatened against, the Company or its subsidiaries
regarding trademark, trade name, patents, patent rights, invention, copyright,
license, service names, service marks, service mark registrations, trade secret
or other infringement; and the Company and its subsidiaries are unaware of any
facts or circumstances which might give rise to any of the
foregoing.

       

      Section
4.10. Employee
Relations . Neither the
Company nor any of its subsidiaries is involved in any labor dispute nor, to the
knowledge of the Company or any of its subsidiaries, is any such dispute
threatened. None of the Company's or its subsidiaries' employees is a member of
a union and the Company and its subsidiaries believe that their relations with
their employees are good.

       

      Section
4.11. Environmental
Laws . The Company and
its subsidiaries are (i) in compliance with any and all applicable material
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (" Environmental Laws
"), (ii) have received all permits, licenses or other approvals required
of them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any such
permit, license or approval.

       

      Section
4.12. Title . Except as set forth in Exhibit 4.12, the Company has good and
marketable title to its properties and material assets owned by it, free and
clear of any pledge, lien, security interest, encumbrance, claim or equitable
interest other than such as are not material to the business of the Company. Any
real property and facilities held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
subsidiaries.

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

       

      Section
4.13. Insurance
. The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as management of the Company believes to be prudent and customary in the
businesses in which the Company and its subsidiaries are engaged. Neither the
Company nor any such subsidiary has been refused any insurance coverage sought
or applied for and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not materially
and adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its subsidiaries, taken as a
whole.

       

      Section
4.14. Reculatory
Permits . The Company and its subsidiaries possess all material
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit.

       

      Section
4.15. Internal
Accounting Controls . The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Representation by the company relating
to internal controls will be made at such time the registration filing has been
approved.

       

      Section
4.16. No Material
Adverse Breaches, etc . Except as set forth in Exhibit 4.16, neither the
Company nor any of its subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation
which in the judgment of the Company's officers has or is expected in the future
to have a Material Adverse Effect on the business, properties, operations,
financial condition, results of operations or prospects of the Company or its
subsidiaries. Except as set forth in the SEC Documents, neither the Company nor
any of its subsidiaries is in breach of any contract or agreement which breach,
in the judgment of the Company's officers, has or is expected to have a Material
Adverse Effect on the business, properties, operations, financial condition,
results of operations or prospects of the Company or its
subsidiaries.

       

       

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

       

      Section
4.17. Absence of
Litigation . Except as set forth in Exhibit 4.17 , there is no action,
suit, proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending against or
affecting the Company, the Common Stock or any of the Company's subsidiaries,
wherein an unfavorable decision, ruling or finding would (i) have a Material
Adverse Effect on the transactions contemplated hereby (ii) adversely affect the
validity or enforceability of, or the authority or ability of the Company to
perform its obligations under, this Agreement or any of the documents
contemplated herein, or (iii) except as expressly disclosed in the SEC
Documents, have a Material Adverse Effect on the business, operations,
properties, financial condition or results of operation of the Company and its
subsidiaries taken as a whole.

       

      Section
4.18. Subsidiaries
. Except as disclosed in Exhibit 4.18, the Company does not presently own
or control, directly or indirectly, any interest in any other corporation,
partnership, association or other business entity.

       

      Section
4.19. Tax Status
. Except as disclosed in Exhibit 4.19, the Company and each of its
subsidiaries has made or filed all federal and state income and all other tax
returns, reports and declarations required by any jurisdiction to which it is
subject and (unless and only to the extent that the Company and each of its
subsidiaries has set aside on its books provisions reasonably adequate for the
payment of all unpaid and unreported taxes) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and has set aside on its books provision
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company know of no basis for any such
claim.

       

      Section
4.20. Certain
Transactions . Except as set forth in Exhibit 4.20 none of the officers,
directors, or employees of the Company is presently a party to any transaction
with the Company (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.

       

      Section
4.21. Fees and Rights
of First Refusal . The Company is not obligated to offer the securities
offered hereunder on a right of first refusal basis or otherwise to any third
parties including, but not limited to, current or former shareholders of the
Company, underwriters, brokers, agents or other third parties.

       

      Section
4.22. Use of Proceeds
. The Company shall use the net proceeds from this offering for general
corporate purposes, including, without limitation, the payment of loans incurred
by the Company. However, in no event shall the Company use the net proceeds from
this offering for the payment (or loan to any such person for the payment) of
any judgment, or other liability, incurred by any executive officer, officer,
director or employee of the Company, except for any liability owed to such
person for services rendered, or if any judgment or other liability is incurred
by such person originating from services rendered to the Company, or the Company
has indemnified such person from liability.

       

       

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

       

       

      Section
4.23. Further
Representation and Warranties of the Company . For so long as any
securities issuable hereunder held by the Investor remain outstanding, the
Company acknowledges, represents, warrants and agrees that it will maintain the
listing of its Common Stock on the Principal Market.

       

      Section
4.24. Opinion of
Counsel . Investor shall receive an opinion letter from counsel to the
Company on the date hereof.

       

      Section
4.25. Opinion of
Counsel . The Company will obtain for the Investor, at the Company's
expense, any and all opinions of counsel which may be reasonably required in
order to sell the securities issuable hereunder without
restriction.

       

      Section
4.26. Dilution
. The Company is aware and acknowledges that issuance of shares of the
Company's Common Stock could cause dilution to existing shareholders and could
significantly increase the outstanding number of shares of Common
Stock.

       

      ARTICLE
V.

       

      Indemnification

       

      The
Investor and the Company represent to the other the following with respect to
itself: Section 

       

      5.1.
Indemnification
.

       

      (a) In
consideration of the Investor's execution and delivery of this Agreement, and in
addition to all of the Company's other obligations under this Agreement, the
Company shall defend, protect, indemnify and hold harmless the Investor, and all
of its officers, directors, partners, employees and agents (including, without
limitation, those retained in connection with the transactions contemplated by
this Agreement) (collectively, the " Investor Indemnitees
") from and against any and all actions, causes of action, suits, claims,
losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Investor Indemnitee is a
party to the action for which indemnification hereunder is sought), and
including reasonable attorneys' fees and disbursements (the " Indemnified Liabilities "),
incurred by the Investor Indemnitees or any of them as a result of, or arising
out of, or relating to (a) any misrepresentation or breach of any representation
or warranty made by the Company in this Agreement or the Registration Rights
Agreement or any other certificate, instniment or document contemplated hereby
or thereby, (b) any breach of any covenant, agreement or obligation of the
Company contained in this Agreement or the Registration Rights Agreement or any
other certificate, instrument or document contemplated hereby or thereby,
or

       

       

       

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      


       

      (c) any
cause of action, suit or claim brought or made against such Investor Indemnitee
not arising out of any action or inaction of an Investor Indemnitee, and arising
out of or resulting from the execution, delivery, performance or enforcement of
this Agreement or any other instrument, document or agreement executed pursuant
hereto by any of the Investor Indemnitees. To the extent that the foregoing
undertaking by the Company may be unenforceable for any reason, the Company
shall make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities, which is permissible under applicable
law.

       

      (b) In
consideration of the Company's execution and delivery of this Agreement, and in
addition to all of the Investor's other obligations under this Agreement, the
Investor shall defend, protect, indemnify and hold harmless the Company and all
of its officers, directors, shareholders, employees and agents (including,
without limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the " Company Indemnitees
") from and against any and all Indemnified Liabilities incurred by the
Company Indemnitees or any of them as a result of, or arising out of, or
relating to (a) any misrepresentation or breach of any representation or
warranty made by the Investor in this Agreement, the Registration Rights
Agreement, or any instrument or document contemplated hereby or thereby executed
by the Investor, (b) any breach of any covenant, agreement or obligation of the
Investor(s) contained in this Agreement, the Registration Rights Agreement or
any other certificate, instrument or document contemplated hereby or thereby
executed by the Investor, or (c) any cause of action, suit or claim brought or
made against such Company Indemnitee based on misrepresentations or due to a
breach by the Investor and arising out of or resulting from the execution,
delivery, performance or enforcement of this Agreement or any other instrument,
document or agreement executed pursuant hereto by any of the Company
Indemnitees. To the extent that the foregoing undertaking by the Investor may be
unenforceable for any reason, the Investor shall make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities, which is
permissible under applicable law.

       

      
        (c)  The
obligations of the parties to indemnify or make contribution under this Section
5.1 shall survive termination. 

         

        ARTICLE VI.

         

        Covenants of the Company

      

       

      Section
6.1.  Registration Rights .
The Company shall cause the Registration Rights Agreement to remain in full
force and effect and the
Company shall comply in all material respects with the terms
thereof.

       

      Section
6.2.    Listing of Common Stock
. The Company shall maintain the Common Stock's authorization for
quotation on the Principal
Market.

       

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

       

       

      Section
6.3    Transfer Agent Instructions
. Upon
effectiveness of the Registration Statement the Company shall deliver
instructions to its
transfer agent to issue shares of Common Stock to the Investor free of
restrictive legends on or before each Advance Date.

       

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

       

      Section
6.5 Notice of Certain
Events Affecting Registration; Suspension of
Right to Make an Advance . The Company
will immediately notify the Investor upon its becoming aware of the occurrence
of any of the following events in respect of a registration statement or related
prospectus relating to an offering of Registrable Securities: (i) receipt of any
request for additional information by the SEC or any other Federal or state
governmental authority during the period of effectiveness of the Registration
Statement for amendments or supplements to the registration statement or related
prospectus; (ii) the issuance by the SEC or any other Federal or state
governmental authority of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose;
(iii) receipt of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; (iv) the happening of any event that makes any
statement made in the Registration Statement or related prospectus of any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect
or that requires the making of any changes in the Registration Statement,
related prospectus or documents so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and that in the case of the related
prospectus, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; and (v) the Company's reasonable determination that a
post-effective amendment to the Registration Statement would be appropriate; and
the Company will promptly make available to the Investor any such supplement or
amendment to the related prospectus. The Company shall not deliver to the
Investor any Drawdown Notice during the continuation of any of the foregoing
events.

       

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

       

       

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

       

       

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

       

      Section
6.8.  Issuance of the Company's
Common Stock. The sale of the shares of Common Stock shalt be made in
accordance with the
provisions and requirements of Regulation D and any applicable state securities
law.

       

       Section
6.9. Review of Public
Disclosures . All SEC filings (including, without limitation, all filings
required under the Exchange Act, which include Forms 10-Q and l0-Q, 10-K, 8-K,
etc) and other public disclosures made by the Company, including, without
limitation, all press releases, investor relations materials, and scripts of
analysts meetings and calls, shall be reviewed and approved for release by the
Company's attorneys and, if containing financial information, the Company's
independent certified public accountants.

       

       Section
6.10. Market
Activities .The Company will not, directly or indirectly, (i) take any
action designed to cause or result in, or that constitutes or might reasonably
be expected to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Common Stock or
(ii) sell, bid for or purchase the Common Stock, or pay anyone any compensation
for soliciting purchases of the Common Stock.

       

      ARTICLE VII.

       

      Conditions for Advance and Conditions to
Closing

       

       Section
7.1. Conditions
Precedent to the Obligations of the Company. The obligation hereunder of
the Company to issue and sell the shares of Common Stock to the Investor
incident to each Closing is subject to the satisfaction, or waiver by the
Company, at or before each such Closing, of each of the conditions set forth
below.

       

      (a)          Accuracy of the Investor's
Representations and Warranties The representations and warranties of the
Investor shall be true and correct in all material respects.

       

      (b)          Performance by the Investor
. The Investor shall have performed, satisfied and complied in all
respects with all covenants, agreements and conditions required by this
Agreement and the Registration Rights Agreement to be performed, satisfied or
complied with by the Investor at or prior to such Closing.

       

       Section
7.2. Conditions
Precedent to the Right of the Company to Deliver an Drawdown Notice . The
right of the Company to deliver an Drawdown Notice is subject to the fulfillment
by the Company, on such Drawdown Notice (a " Condition Satisfaction Date
"), of each of the following conditions:

       

       

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

       

       

      (a)          Registration of the Common
Stock with the SEC . The Company shall have filed with the SEC a
Registration Statement with respect to the resale of the Registrable Securities
in accordance with the terms of the Registration Rights Agreement. As set forth
in the Registration Rights Agreement, the Registration Statement shall have
previously become effective and shall remain effective on each Condition
Satisfaction Date and (i) neither the Company nor the Investor shall have
received notice that the SEC has issued or intends to issue a stop order with
respect to the Registration Statement or that the SEC otherwise has suspended or
withdrawn the effectiveness of the Registration Statement, either temporarily or
permanently, or intends or has threatened to do so (unless the SEC's concerns
have been addressed and the Investor is reasonably satisfied that the SEC no
longer is considering or intends to take such action), and (ii) no other
suspension of the use or withdrawal of the effectiveness of the Registration
Statement or related prospectus shall exist. The Registration Statement must
have been declared effective by the SEC prior to the first Drawdown Notice
Date.

       

      (b)           Authority . The
Company shall have obtained all permits and qualifications required by any
applicable state in accordance with the Registration Rights Agreement for the
offer and sale of the shares of Common Stock, or shall have the availability of
exemptions there from. The sale and issuance of the shares of Common Stock shall
be legally permitted by all laws and regulations to which the Company is
subject.

       

      (c)          Fundamental Changes .
There shall not exist any fundamental changes to the information set forth in
the Registration Statement which would require the Company to file a
post-effective amendment to the Registration Statement.

       

      (d)          Performance by the Company
. The Company shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by this
Agreement and the Registration Rights Agreement to be performed, satisfied or
complied with by the Company at or prior to each Condition Satisfaction
Date.

       

      (e)          No Injunction . No
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction that prohibits or directly and adversely
affects any of the transactions contemplated by this Agreement, and no
proceeding shall have been commenced that may have the effect of prohibiting or
adversely affecting any of the transactions contemplated by this
Agreement.

       

      (f)          No Suspension of Trading in
or Delisting of Common Stock . The trading of the Common Stock is not
suspended by the SEC or the Principal Market (if the Common Stock is traded on a
Principal Market). The issuance of shares of Common Stock with respect to the
applicable Closing, if any, shall not violate the shareholder approval
requirements of the Principal Market (if the Common Stock is traded on a
Principal Market). The Company shall not have received any notice threatening
the continued listing of the Common Stock on the Principal Market (if the Common
Stock is traded on a Principal Market).

       

       

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

       

       

      (g)          Maximum Advance Amount
. The amount of an Advance requested by the Company shall not exceed the
Maximum Advance Amount. In addition, in no event shall the number of shares
issuable to the Investor pursuant to an Advance cause the aggregate number of
shares of Common Stock beneficially owned by the Investor and its affiliates to
exceed four and 9/10 percent (4.9%) of the then outstanding Common Stock of the
Company. For the purposes of this section beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act.

       

      (h)          No Knowledge . The
Company has no knowledge of any event which would be more likely than not to
have the effect of
causing such Registration Statement to be suspended or otherwise
ineffective.

       

      (i)          
Executed Drawdown
Notice . The Investor shall have received the Drawdown Notice executed by
an officer of the Company
and the representations contained in such Drawdown Notice shall be true and
correct as of each Condition Satisfaction Date.

       

      ARTICLE
VIII.

       

      Due
Diligence Review; Non-Disclosure of Non-Public Information

       

      Section
8.1.Non-Disclosure of
Non-Public Information .

       

      (a) The
Company covenants and agrees that it shall refrain from disclosing, and shall
cause its officers, directors, employees and agents to refrain from disclosing,
any material non-public information to the Investor without also disseminating
such information to the public, unless prior to disclosure of such information
the Company identifies such information as being material non-public information
and provides the Investor with the opportunity to accept or refuse to accept
such material non-public information for review.

       

      (b) Nothing
herein shall require the Company to disclose non-public information to the
Investor or its advisors or representatives, and the Company represents that it
does not disseminate non-public information to any investors who purchase stock
in the Company in a public offering, to money managers or to securities
analysts, provided, however, that notwithstanding anything herein to the
contrary, the Company will, as hereinabove provided, immediately notify the
advisors and representatives of the Investor and, if any, underwriters, of any
event or the existence of any circumstance (without any obligation to disclose
the specific event or circumstance) of which it becomes aware, constituting
non-public information (whether or not requested of the Company specifically or
generally during the course of due diligence by such persons or entities),
which, if not disclosed in the prospectus included in the Registration Statement
would cause such prospectus to include a material misstatement or to omit a
material fact required to be stated therein in order to make the statements,
therein, in light of the circumstances in which they were made, not misleading.
Nothing contained in this Section 8.2 shall be construed to mean that such
persons or entities other than the Investor (without the written consent of the
Investor prior to disclosure of such information) may not obtain non-public
information in the course of conducting due diligence in accordance with the
terms of this Agreement and nothing herein shall prevent any such persons or
entities from notifying the Company of their opinion that based on such due
diligence by such persons or entities, that the Registration Statement contains
an untrue statement of material fact or omits a material fact required to be
stated in the Registration Statement or necessary to make the statements
contained therein, in light of the circumstances in which they were made, not
misleading.

       

       

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

       

       

      ARTICLE
IX.

       

      Choice
of Law/Jurisdiction

       

      Section
9.1. Governing Law
. This Agreement
shall be governed by and interpreted in accordance with the laws of the State of
Florida without regard to the principles of conflict of laws. The parties
further agree that any action between them shall be brought in the Courts of the
State of Florida located in froward County, Florida or in the Federal District
Court for the Southern District of Florida for the adjudication of any civil
action asserted pursuant to this paragraph.

       

      ARTICLE
X.

       

      Assignment;
Termination

       

      Section
10.1.  Assignment . Neither this
Agreement nor any rights of the Company hereunder may be assigned to any other
Person.

       

      Section
10.2.    Termination
.

       

      (a) The
obligations of the Investor to make Advances under Article II hereof shall
terminate thirty-six (36) months after the Effective Date.

       

      (b) The
obligation of the Investor to make an Advance to the Company pursuant to this
Agreement shall terminate permanently (including with respect to an Advance Date
that has not yet occurred) in the event that (i) there shall occur any stop
order or suspension of the effectiveness of the Registration Statement for an
aggregate of fifty (50) Trading Days, other than due to the acts of the
Investor, during the Commitment Period, or (ii) the Company shall at any time
fail materially to comply with the requirements of Article VI and such failure
is not cured within thirty (30) days after receipt of written notice from the
Investor, provided
, however
, that this termination provision shall not apply to any period
commencing upon the filing of a post-effective amendment to such Registration
Statement and ending upon the date on which such post effective amendment is
declared effective by the SEC.

       

       

       

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

       

       

      ARTICLE
XI.

       

      Notices

       

      a.
Section 11.0.0.1. Notices . Any
notices, consents, waivers, or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile, provided a copy is mailed by U.S. certified
mail, return receipt requested; (iii) three (3) days after being sent by U.S.
certified mail, return receipt requested, or (iv) one (I) day after deposit with
a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:

       

      
        	
                If
      to the Company, to:

              	
                Feel
      Golf Company Inc.

                1354-T
      Dayton St. 

                Salinas,
      CA 93901 

                Attention:
      Lee Miller 

                Telephone:
      831-422-9300

                Facsimile:
      831-422-9301

              
	 	 
	With
      a copy to: 	      
                Anslow
      & Jaclin 

                Attn:
      Gregg Jaclin 

                195
      Route 9 South 

                2nd
      Floor

                Manalapan,
      NJ 07726 

                Tel:
      (732) 409-1212 

                Fax:
      (732) 577-1188

              
	 	 
	      
                If
      to the Investor, to:

              	      
                Long
      Side Ventures LLC 

                1800
      S. Ocean Dr. PH2

                Hallandale
      Beach, FL 33009 

                ATTN:
      Ben Kaplan

                Telephone:

                Facsimile:

              
	 	 
	With
      a copy to: 	      
                Jonathan
      D. Leinwand, P.A.

                17501
      Biscayne Blvd., Suite 430 

                Aventura,
      FL 33160

                Fax:
      954-252-4265

              


      

       

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

       

       

      
        
           

        

        
          22

          
            

          

        

        
           

        

      

       

       

      ARTICLE
XII.

       

      Miscellaneous

       

      Section
12.1. Counterparts
. This Agreement may be executed in two or more identical counterparts,
all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party. In the event any signature page is delivered by facsimile
transmission, the party using such means of delivery shall cause four (4)
additional original executed signature pages to be physically delivered to the
other party within five (5) days of the execution and delivery hereof, though
failure to deliver such copies shall not affect the validity of this
Agreement.

       

      Section
12.2. Entire
Agreement; Amendments . This Agreement supersedes all other prior oral or
written agreements between the Investor, the Company, their affiliates and
persons acting on their behalf with respect to the matters discussed herein, and
this Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor the Investor makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be
waived or amended other than by an instrument in writing signed by the party to
be charged with enforcement.

       

      Section
12.3. Reportinn Entity
for the Common Stock . The reporting entity relied upon for the
determination of the trading price or trading volume of the Common Stock on any
given Trading Day for the purposes of this Agreement shall be Bloomberg, L.P.,
the reports of the Principal Market or any successor thereto. The written mutual
consent of the Investor and the Company shall be required to employ any other
reporting entity.

       

      Section
12.4. Fees and
Expenses . The Company hereby agrees to pay the following
fees:

       

      (a) Fees .
Each of the parties shall pay its own fees and expenses (including the fees of
any attorneys, accountants, appraisers
or others engaged by such party) in connection with this Agreement and the
transactions contemplated hereby.

       

      (b)  Origination Fee
. Company is
obligated to pay the Investor a non-refundable origination fee equal to Fifteen
Thousand Dollars ($15,000) in cash. The Company agrees to pay to the Investor
Fifteen Thousand Dollars ($15,000) in cash upon closing of the first
Drawdown.

       

       

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

       

       

      Section
12.5. Confidentiality
. If for any
reason the transactions contemplated by this Agreement are not consummated, each
of the parties hereto shall keep confidential any information obtained from any
other party (except information publicly available or in such party's domain
prior to the date hereof, and except as required by court order) and shall
promptly return to the other parties all schedules, documents, instruments, work
papers or other written information without retaining copies thereof, previously
furnished by it as a result of this Agreement or in connection
herein.

       

       

      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

       

       

      
        
           

        

        
          24

          
            

          

        

        
           

        

      

       

       

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

       

      COMPANY:

      FEEL
GOLF COMPANY, INC.

       

      By: /s/
Lee Miller

      Name: Lee
Miller

      Title:
CEO

       

      INVESTOR:

      LONG
SIDE VENTURES LLC

       

      By:

      Name: Ben
Kaplan

      Title:
Managing Member

       

       

      
        
           

        

        
          25

          
            

          

        

        
           

        

      

       

      
        EXHIBIT
A

         

        DRAWDOWN
NOTICE

         

        Feel
Golf Company, Inc.

      

       

       

       

      The undersigned,  Lee Miller hereby
certifies, with respect to the sale of shares of Common Stock of Feel Golf
Company,
Inc. (the " Company
") issuable in connection with this Drawdown Notice, delivered pursuant
to the Drawdown Equity Financing Agreement (the " Agreement "), as
follows:

       

      1. The
undersigned is the duly elected CEO of the
Company.

       

      2. There are
no fundamental changes to the information set forth in the Registration
Statement that would require the Company to file a post effective amendment to
the Registration Statement.

       

      3. The
Company has performed in all material respects all covenants and agreements to
be performed by the Company and has complied in all material respects with all
obligations and conditions contained in the Agreement on or prior to the
Drawdown Notice Date, and shall continue to perform in all material respects all
covenants and agreements to be performed by the Company through the applicable
Advance Date. All conditions to the delivery of this Drawdown Notice are
satisfied as of the date hereof.

       

      4. The
undersigned hereby represents, warrants and covenants that it has made all
filings (" SEC Filings
") required to be made by it pursuant to applicable securities laws
(including, without limitation, all filings required under the Securities
Exchange Act of 1934, which include Forms 10-Q, 10-K , 8-K, etc.). All SEC
Filings and other public disclosures made by the Company, including, without
limitation, all press releases, analysts meetings and calls, etc. (collectively,
the " Public
Disclosures "), have been reviewed and approved for release by the
Company's attorneys and, if containing financial information, the Company's
independent certified public accountants. None of the Company's Public
Disclosures contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

       

      5. The
Advance requested is TBD                                                

                            

      The
undersigned has executed this Certificate this 22 day of  March 2010

       

      Feel
Golf Company, Inc.

       

      By:     
N/A                   


      Name:


      Title:
CEO

       

       

       

      
        
           

        

        
          26

          
            

          

        

        
           

        

      

       

      
        	
                
                

              


      

      
        	
                Exhibit 4.7

              
	 
	 


      

      
        	
                None

              


      

      
        	
                 

              


      

       

       

       

      
        
           

        

        
          27

          
            

          

        

        
           

        

      

       

      
 

      
        	
                
                

              


      

      
        	
                Exhibit 4.8

              
	 
	 


      

      
        	
                None

              


      

      
        	
                 

              


      

       

       

       

       

      
        
           

        

        
          28

          
            

          

        

        
           

        

      

      
 

      
        	
                
                

              


      

      
        	
                Exhibit 4.12

              
	 
	 


      

      
        	
                None

              


      

      
        	
                 

              


      

       

       

       

      
        
           

        

        
          29

          
            

          

        

        
           

        

      

      
 

      
        	
                
                

              


      

      
        	
                Exhibit 4.16

              
	 
	 


      

      
        	
                None

              


      

      
        	
                 

              


      

       

       

       

       

      
        
           

        

        
          30

          
            

          

        

        
           

        

      

       

      
 

      
        	
                Exhibit 4.17 

                Litigation

              


      

      
        	
                 

              


      

       

       

       

       

      
        
           

        

        
          31

          
            

          

        

        
           

        

      

       

      
 

      
        	
                Exhibit 4.18

                Subsidiaries

              


      

      
        	
                 

              


      

       

       

       

       

      
        
           

        

        
          32

          
            

          

        

        
           

        

      

      
 

      
        	
                
                

              


      

      
        	
                Exhibit 4.19

              
	 
	 


      

      
        	
                None

              


      

      
        	
                 

              


      

       

       

      
        
           

        

        
          33

          
            

          

        

        
           

        

      

       

       

      
 

      
        	
                Exhibit 4.20

                 

                 

                None

                 

              


      

      
 

       

       

       

       34