10.2  
Indirect Primary Offering Agreement
 


    Indirect
Primary Offering Agreement

    


    THIS
AGREEMENT dated as of the 4th day of
February 2010 (the “Agreement”) between Crisnic Fund, S.A., (the “Investor”),
and Marketing Worldwide Corporation, a corporation organized and existing under
the laws of the State of Delaware (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 Five Hundred Thousand Dollars ($1,500,000) of the Company’s common
stock, par value $0.001 per share (the “Common Stock”); and

    


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

    


    NOW,
THEREFORE, the parties hereto agree as follows:

    


    ARTICLE
I.

    Certain
Definitions

    


    Section
1.1.     “Advance” shall mean the portion of the
Commitment Amount requested by the Company in the Advance 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.     “Advance 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.     “Advance Notice Date” shall mean each date the
Company delivers (in accordance with Section 2.2(b) of this Agreement) to the
Investor an Advance Notice requiring the Investor to advance funds to the
Company, subject to the terms of this Agreement.  No Advance Notice
Date shall be less than five (5) Trading Days after the prior Advance Notice
Date.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


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

    


    Section
1.6.     “Commitment Amount” shall mean the aggregate
amount of up to One Million Five Hundred Thousand Dollars ($1,500,000) 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
1.7.     “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 twenty four (24) months after the
Effective Date.

    


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

    


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

    


    Section
1.10.   “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
1.11.   “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
1.12.   “Exchange Act” shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated
thereunder.

    


    Section
1.13.   “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
1.14.   “Market Price” shall mean the VWAP of the Common Stock
during the Pricing Period as defined by Bloomberg.

    


    Section
1.15.   “Maximum Advance Amount” shall be Five Hundred Thousand
Dollars ($500,000)
per Advance Notice, but in no case more than One Million Dollars ($1,000,000) in
any thirty-day (30) calendar period.

    


    Section
1.16.   “NASD” shall mean the National Association of Securities
Dealers, Inc.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    Section
1.17.   “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
1.18.   “Pricing Period” shall mean the five (5) consecutive
Trading Days after the Advance Notice Date subject to any reduction pursuant to
Section 2.2(c).

    


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

    


    Section
1.20.   “Purchase Price” shall be set at one hundred percent
(100%) of the Market Price during the Pricing Period.

    


    Section
1.21.   “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
1.22.   “Registration Rights Agreement” shall mean the
Registration Rights Agreement substantially in the form annexed hereto as
Exhibit B, regarding the filing of the Registration Statement for the resale of
the Registrable Securities, entered into between the Company and the
Investor.

    


    Section
1.23.   “Registration Statement” shall mean a registration
statement on Form S-1 or SB-2 (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
1.24.   “Regulation D” shall have the meaning set forth in the
recitals of this Agreement.

    


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

    


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


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    Section
1.27.   “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
1.28.   “Trading Day” shall mean any day during which the New
York Stock Exchange shall be open for business.

    


    Section
1.29.   “VWAP” shall mean the volume weighted average price of
the Company’s Common Stock as quoted by Bloomberg, LP.


    


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

    


    (b)         Date of Delivery of Advance
Notice.  An Advance Notice shall be deemed delivered on (i) the
Trading Day it is received by facsimile or otherwise by the Investor 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 Advance Notice may be deemed delivered on a day that is not a
Trading Day.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    (c)         Minimum Acceptable
Price.  The lowest closing Bid Price of the Common Stock during
the Pricing Period (before taking into account any discount used to calculate
the Purchase Price) for any particular Advance shall, in connection with each
Advance Notice delivered by the Company, be equal to ninety five percent (95%)
of the closing Bid Price on the Trading Day immediately preceding the Advance
Notice Date for such Advance Notice (the “Minimum Acceptable
Price”).  Subject to the next sentence, upon the issuance by the
Company of an Advance Notice with a Minimum Acceptable Price, if any of the
closing Bid Prices during the Pricing Period are below the Minimum Acceptable
Price (i) the Company shall automatically reduce the amount of the Advance set
forth in such Advance Notice by twenty percent (20%) for each Trading Day during
the Pricing Period that the closing Bid Price of the Common Stock is below the
Minimum Acceptable Price (each such day, an “Excluded Day”), and (ii) each
Excluded Day shall be excluded from the Pricing Period for purposes of
determining the Market Price.  The number of shares of Common Stock to
be delivered to the Investor at the Closing (in accordance with Section 2.3 of
this Agreement) shall correspond with the Advance Notice amount as reduced
pursuant to clause (i) above.  The Company, and only the Company, may
waive the Minimum Acceptable Price with respect to any particular Advance Notice
by providing the Investor with written notice of waiver on or prior to the
Advance Date.

    


    (d)          Floor
Price.  The Company at its option may select a Floor Price for any
Put, which the Company will not put shares to Investor under that Floor
Price.

    


    Section
2.3.     Closings.  Within
two (2) Trading Days of 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 Advance
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 Advance 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,
expenses, and disbursements of the Investor in accordance with Section 12.4, the
amount of such fees, expenses, 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 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.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (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;

    


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

    


    (vi)         the
Company’s transfer agent shall be DWAC eligible.

    


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

    


    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.

    


    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; (iii) the
Company’s Form 10-Kfor the year ended December 31, 2009 9; and (iv) 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).

    


    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.
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.

    


    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.

    


    Section
4.3.     Capitalization.  The
authorized capital stock of the Company consists of 18,415,091  shares
of Common Stock and 4,692,308 shares of Preferred Stock, $0.001 par value per
share (“Preferred Stock”).  All of such outstanding shares have been
validly issued and are fully paid and non assessable.  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, and 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.

    


    Section
4.5.     SEC Documents; Financial
Statements.  The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by it with the SEC
under the Exchange Act since November 5, 2005.  The Company has
delivered to the Investor or its representatives, or made available through the
SEC’s website at http://www.sec.gov, true and complete copies of the SEC
Documents.  As of their respective dates, the financial statements of
the Company disclosed in the SEC Documents (the “Financial Statements”) complied
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect
thereto.  Such financial statements have been prepared in accordance
with generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and, fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).  No other
information provided by or on behalf of the Company to the Investor which is not
included in the SEC Documents contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

    


    Section
4.6.     10b-5.  The
SEC Documents do not include any untrue statements of material fact, nor do they
omit to state any material fact required to be stated therein necessary to make
the statements made, in light of the circumstances under which they were made,
not misleading.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    Section
4.7.     No
Default.  Except as disclosed in the SEC Documents, 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.

    


    Section
4.8.     Absence of Events of
Default.  Except for matters described in the SEC Documents
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 the SEC Documents, 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.

    


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

    


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

    


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

    


    Section
4.16.     No Material Adverse Effects,
etc.  Except as set forth in the SEC Documents, 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.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    Section
4.17.     Absence of
Litigation.  Except as set forth in the SEC Documents, 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 the SEC Documents, 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 the SEC Documents, 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 the SEC Documents 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.

    


    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, dated as of each Closing Date, substantially in the form annexed
hereto as Exhibit C.

    


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

    


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

    


    ARTICLE
V.

    Indemnification

    


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

    


    Section
5.1.     Indemnification.

    


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


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    Section
6.3.     Exchange Act
Registration.  The Company will cause its Common Stock to
continue to be registered under Section 12(g) of the Exchange Act, will file in
a timely manner all reports and other documents required of it as a reporting
company under the Exchange Act and will not take any action or file any document
(whether or not permitted by Exchange Act or the rules thereunder) to terminate
or suspend such registration or to terminate or suspend its reporting and filing
obligations under said Exchange Act.

    


    Section
6.4.    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 before each Advance
Date.

    


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

    


    Section
6.6.     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 Advance Notice during the continuation of any of the foregoing
events.

    


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


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    Section
6.8.    Review of Public
Disclosures.  All SEC filings (including, without limitation,
all filings required under the Exchange Act, which include Forms 10-Q, 10-K and
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
6.9.    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.

    


    Section
6.10   Expectations Regarding
Advance Notices.  Within ten (10) days after the commencement
of each calendar quarter occurring subsequent to the commencement of the
Commitment Period, the Company must notify the Investor, in writing, as to its
reasonable expectations as to the dollar amount it intends to raise during such
calendar quarter, if any, through the issuance of Advance
Notices.  Such notification shall constitute only the Company’s good
faith estimate and shall in no way obligate the Company to raise such amount, or
any amount, or otherwise limit its ability to deliver Advance
Notices.  The failure by the Company to comply with this provision can
be cured by the Company’s notifying the Investor, in writing, at any time as to
its reasonable expectations with respect to the current calendar
quarter.

     

    Section
6.12  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
6.13   Issuance of the Company’s
Common Stock.  The sale of the shares of Common Stock shall be
made in accordance with the provisions and requirements of Regulation D and any
applicable state securities law.

    


    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 Advance Notice.  The right
of the Company to deliver an Advance Notice is subject to the fulfillment by the
Company, on such Advance Notice (a “Condition Satisfaction Date”), of each of
the following conditions:

    


    (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 Advance 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 therefrom.  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).

     

    (g)        Not
used

    


    (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 Advance
Notice.  The Investor shall have received the Advance Notice
executed by an officer of the Company and the representations contained in such
Advance 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 Due Diligence
Review.  Prior to the filing of the Registration Statement the
Company shall make available for inspection and review by the Investor, advisors
to and representatives of the Investor, any underwriter participating in any
disposition of the Registrable Securities on behalf of the Investor pursuant to
the Registration Statement, any such registration statement or amendment or
supplement thereto or any blue sky, NASD or other filing, all financial and
other records, all SEC Documents and other filings with the SEC, and all other
corporate documents and properties of the Company as may be reasonably necessary
for the purpose of such review, and cause the Company’s officers, directors and
employees to supply all such information reasonably requested by the Investor or
any such representative, advisor or underwriter in connection with such
Registration Statement (including, without limitation, in response to all
questions and other inquiries reasonably made or submitted by any of them),
prior to and from time to time after the filing and effectiveness of the
Registration Statement for the sole purpose of enabling the Investor and such
representatives, advisors and underwriters and their respective accountants and
attorneys to conduct initial and ongoing due diligence with respect to the
Company and the accuracy of the Registration Statement.

    


    Section
8.2.     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.

    


    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 Michigan without regard to the
principles of conflict of laws.  The parties further agree that any
action between them shall be heard in Michigan, and expressly consent to the
jurisdiction and venue of the Superior Court of County, sitting in Michigan, and
the United States District Court of County, sitting in, Michigan, for the
adjudication of any civil action asserted pursuant to this
paragraph.

    


    ARTICLE
X.

    Assignement;
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 (30) 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.

    


    (c)      The
Company may terminate this Agreement by providing the Investor thirty (30) days
(the “Notice Period”) advance written notice.   The Investor
shall not be obligated to accept any Advance Notices during the Notice
Period.   Upon termination of this Agreement the Company shall
have no further obligations to the Investor under this Agreement or the
Registration Rights Agreement, provided however the Company shall remain
obligated to Comply with its obligations under Section 3 of the Registration
Rights Agreement and any and all related obligations during such time as the
Investor has sold all of the Registrable Securities, as this term is defined in
the Registration Rights Agreement.

    


    ARTICLE
XI.

    Notices

    


    Section
11.1.    Notices.  Any notices, consents, waivers,
or other communications required or permitted to be given under the terms of
this Agreement must be in writing and will be deemed to have been delivered (i)
upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile, provided a copy is mailed by U.S. certified mail, return receipt
requested; (iii) three (3) days after being sent by U.S. certified mail, return
receipt requested, or (iv) one (1) day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same.  The addresses and facsimile numbers for
such communications shall be:

    


    If to the
Company, to:

    Marketing
Worldwide Corporation

    2112
Grand Commerce Drive

    Howell,
MI 48855

    Attention:     Jim
Davis

    Telephone:   517-540-0045

    Facsimile:


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    With a
copy to:

    Weed
& Co. LLP

    4695
MacArthur Court, STE 1430

    Newport
Beach, CA 92660-1869

    Attention:
Rick Weed

    Telephone:
949.475.9086

    Facsimile:  949.475.9087

    


    If to the
Investor(s):

    Crisnic
Fund, S.A C/O

    Lexperts
Abogados Con Hotel Office Center

    San Jose,
Costa Rica

    Attention:  Anthony
Gentile

    Portfolio
Manager

    Telephone:  (506)
8875-1726

    Facsimile:   (506)
2291-4952

    


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

    Sommer
& Schneider LLP

    595
Stewart Avenue, Suite 710

    Garden
City, New York 11530

    Attention:
Herbert H. Sommer

    Telephone:  (516)
228-8181 Ext 21

    Facsimile    (516)
908-4000

    


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

    


    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.    Placement Agent. The
Company agrees to retain a registered broker-dealer prior to the filing of the
registration statement as required pursuant to the Transaction Documents and
agrees to pay all fees of such broker-dealer in connection with the registration
of the common stock hereunder. Investor shall have no obligation with respect to
any fees or with respect to any claims made by or on behalf of other persons or
entities for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by the Transaction Documents. The
Company shall indemnify and hold harmless the Investor, their employees,
officers, directors, agents, and partners, and their respective affiliates, from
and against all claims, losses, damages, costs (including the costs of
preparation and attorney's fees) and expenses incurred in respect of any such
claimed or existing fees, as such fees and expenses are incurred.

     

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

    


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

    


    
      	
               
      

            	
              (a)

            	
              Expense
      Fee.  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, except that the Company shall pay an Due
      Diligence Expense Fee of Five Thousand Dollars ($5,000) in cash and issue
      90,000 Common Shares under a compensation plan that is registered pursuant
      to Form S-8 to Sommer & Schneider LLP, Investor’s
    counsel.

            


    

    


    
      	
               
      

            	
              (b)

            	
              Shares. Company
      shall issue to Investor 600,000 (Six Hundred Thousand) shares of
      Restricted Common Stock, of which 200,000 will be released to the Investor
      within three business days after the execution of this Agreement and the
      balance will be placed in escrow with Sommer & Schneider, LLP with
      instructions to release the balance to investor in four weekly
      installments of 100,000 on each Monday commencing one week after the
      initial 200,000 shares are released.  The shares of Common Stock
      issued

            


    

    


    
      	
               
      

            	
              (c)

            	
              Commitment
      Fees. On each Advance Date the Company shall pay to the Investor,
      directly out of the gross proceeds of each Advance, an amount equal to one
      percent (1%) of the amount of each Advance.  The Company hereby
      agrees that if such payment, as is described above, is not made by the
      Company on the Advance Date, such payment shall be made as outlined and
      mandated by Section 2.3 of this
Agreement.

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    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.

    


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

    


    
      
        
          
            
              
                	 
      	
                        COMPANY:

                      
	 
      	
                        Marketing
      Worldwide Corporation

                      
	 
      	 
      	 
      
	 
      	
                        By:

                      	 
      
	 
      	 
      	
                        /s/
      James Davis

                      
	 
      	 
      	 
      
	 
      	
                        Name: 

                      	
                        James
      Davis

                      
	 
      	
                        Title:

                      	
                        CFO

                      
	 
      	 
      	 
      
	 
      	
                        INVESTOR:  Crisnic
      Fund, S.A.

                      
	 
      	 
      	 
      
	 
      	
                        By:

                      	 
      
	 
      	 
      	 
      
	
                        /s/
      Anthony Gentile

                      
	 
      	 
      	 
      
	 
      	
                        Name:

                      	
                        Anthony
      Gentile

                      
	 
      	
                        Title:

                      	
                        Portfolio
      Manager

                      


              

            

          

        

      

    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    EXHIBIT
A

    ADVANCE
NOTICE

    Marketing
Worldwide Corporation

    


    The
undersigned, James Davis, hereby certifies, with respect to the sale of shares
of Common Stock of Marketing Worldwide Corporation (the “Company”) issuable in
connection with this Advance Notice, delivered pursuant to the Indirect Primary
Offering Agreement (the “Agreement”), as follows:

    


    1.         The
undersigned is the duly elected Chief Financial Officer of the
Company.

    


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

    


    3.         The
Company has performed in all material respects all covenants and agreements to
be performed by the Company and has complied in all material respects with all
obligations and conditions contained in the Agreement on or prior to the Advance
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 Advance 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 or 10-QSB, 10-K or
10-KSB, 8-K, etc.).  All SEC Filings and other public disclosures made
by the Company, including, without limitation, all press releases, analysts
meetings and calls, etc. (collectively, the “Public Disclosures”), have been
reviewed and approved for release by the Company’s attorneys and, if containing
financial information, the Company’s independent certified public
accountants.  None of the Company’s Public Disclosures contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.

    


    5.         The
Advance requested is _____________________.

    


    The
undersigned has executed this Certificate this ____ day
of  _________________.

    


    Marketing
Worldwide Corporation

    


    
      
        	
                By:

              
	 
      
	
                Name:

              
	 
      
	
                Title:

              


      

    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    If
Returning This Advance Notice via Facsimile Please Send To:  (___)
___-____

    


    If by
Mail, via Federal Express
To:  ______________________________________