Funds Escrow Agreement dated August 24, 2005 among the registrant, Loeb and
      Loeb LLP and Laurus Master Fund, Ltd.


    

       

      Exhibit
        10.7

       

      


       

      Execution
        Copy

       

      FUNDS
        ESCROW AGREEMENT

       

      This
        Agreement (“Agreement”) is dated as of the 24th day of August, 2005 among
        Magnetech Integrated Services Corp., an Indiana corporation (the "Company"),
        Laurus Master Fund, Ltd. (the "Purchaser"),
        and
        Loeb & Loeb LLP (the "Escrow
        Agent").

       

      W I T N E S S E T H:

       

      WHEREAS,
        the Purchaser has advised the Escrow Agent that (a) the Company and the
        Purchaser have entered into a Security and Purchase Agreement (the "Security
        Agreement")
        for
        the sale by the Company to the Purchaser of a secured convertible minimum
        borrowing note (the "Minimum
        Borrowing Note"),
        a
        secured revolving note (the “Revolving
        Note”)
        and
        secured convertible term note (the “Term
        Note”),
        (b)
        the Company has issued to the Purchaser a common stock purchase warrant (the
        “Warrant”)
        in
        connection with the issuance of the Term Note, Minimum Borrowing Note and
        the
        Revolving Note, (c) the Company has issued to the Purchaser shares of its
        common
        stock (the “Grant
        Shares”)
        in
        connection with the issuance of the Term Note, Minimum Borrowing Note and
        the
        Revolving Note, and (d) the Company and the Purchaser have entered into a
        Registration Rights Agreement covering the registration of the Grant Shares
        and
        the Company’s common stock underlying the Minimum Borrowing Note, the Term Note
        and the Warrant (the “Registration
        Rights Agreement”);

       

      WHEREAS,
        the Company and the Purchaser wish the Purchaser to deliver to the Escrow
        Agent
        copies of the Documents (as hereafter defined) and the Escrowed Payment (as
        hereafter defined) to be held and released by Escrow Agent in accordance
        with
        the terms and conditions of this Agreement; and

       

      WHEREAS,
        the Escrow Agent is willing to serve as escrow agent pursuant to the terms
        and
        conditions of this Agreement;

       

      NOW
        THEREFORE, the parties agree as follows:

       

      ARTICLE
        I

       

      INTERPRETATION

       

      1.1. Definitions.
        Whenever used in this Agreement, the following terms shall have the meanings
        set
        forth below.

       

      (a) "Agreement"
        means this Agreement, as amended, modified and/or supplemented from time
        to time
        by written agreement among the parties hereto.


      
        
          
          

        

        
          
            

          

        

        
          
          

        

      


       

      (b) "Closing
        Payment" means the closing payment to be paid to Laurus Capital Management,
        LLC,
        the fund manager, as set forth on Schedule
        A
        hereto.


       

      (c) “Disbursement
        Letter” means that certain letter delivered to the Escrow Agent by each of the
        Purchaser and the Company setting forth wire instructions and amounts to
        be
        funded at the Closing.

       

      (d) "Documents"
        means copies of the Disbursement Letter, the Security and Purchase Agreement,
        the Term Note, the Minimum Borrowing Note, the Revolving Note, the Warrant,
        the
        Registration Rights Agreement and the Grant Shares.

       

      (e) “Escrowed
        Payment" means $7,000,000.

       

      1.2. Entire
        Agreement.
        This
        Agreement constitutes the entire agreement among the parties hereto with
        respect
        to the matters contained herein and supersedes all prior agreements,
        understandings, negotiations and discussions of the parties, whether oral
        or
        written. There are no warranties, representations and other agreements made
        by
        the parties in connection with the subject matter hereof except as specifically
        set forth in this Agreement.

       

      1.3. Extended
        Meanings.
        In this
        Agreement words importing the singular number include the plural and vice
        versa;
        words importing the masculine gender include the feminine and neuter genders.
        The word "person" includes an individual, body corporate, partnership, trustee
        or trust or unincorporated association, executor, administrator or legal
        representative.

       

      1.4. Waivers
        and Amendments.
        This
        Agreement may be amended, modified, superseded, cancelled, renewed or extended,
        and the terms and conditions hereof may be waived, in each case only by a
        written instrument signed by all parties hereto, or, in the case of a waiver,
        by
        the party waiving compliance. Except as expressly stated herein, no delay
        on the
        part of any party in exercising any right, power or privilege hereunder shall
        operate as a waiver thereof, nor shall any waiver on the part of any party
        of
        any right, power or privilege hereunder preclude any other or future exercise
        of
        any other right, power or privilege hereunder.

       

      1.5. Headings.
        The
        division of this Agreement into articles, sections, subsections and paragraphs
        and the insertion of headings are for convenience of reference only and shall
        not affect the construction or interpretation of this Agreement.

       

      1.6. Law
        Governing this Agreement; Consent to Jurisdiction.
        THIS
        AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
        OF THE
        STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. With
        respect to any suit, action or proceeding relating to this Agreement or to
        the
        transactions contemplated hereby (“Proceedings”), each party hereto irrevocably
        submits to the exclusive jurisdiction of the courts of the County of New
        York,
        State of New York and the United States District 


      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      


       

      court
        located in the county of New York in the State of New York. Each party hereto
        hereby irrevocably and unconditionally (a) waives trial by jury in any
        Proceeding relating to this Agreement and for any related counterclaim and
        (b)
        waives any objection which it may have at any time to the laying of venue
        of any
        Proceeding brought in any such court, waives any claim that such Proceedings
        have been brought in an inconvenient forum and further waives the right to
        object, with respect to such Proceedings, that such court does not have
        jurisdiction over such party. As between the Company and the Purchaser, the
        prevailing party shall be entitled to recover from the other party its
        reasonable attorneys’ fees and costs. In the event that any provision of this
        Agreement is determined by a court of competent jurisdiction to be invalid
        or
        unenforceable, then the remainder of this Agreement shall not be affected
        and
        shall remain in full force and effect.

       

      1.7. Construction.
        Each
        party acknowledges that its legal counsel participated in the preparation
        of
        this Agreement and, therefore, stipulates that the rule of construction that
        ambiguities are to be resolved against the drafting party shall not be applied
        in the interpretation of this Agreement to favor any party against the
        other.

       

      ARTICLE
        II

       

      APPOINTMENT
        OF AND DELIVERIES TO THE ESCROW AGENT

       

      2.1. Appointment.
        The
        Company and the Purchaser hereby irrevocably designate and appoint the Escrow
        Agent as their escrow agent for the purposes set forth herein, and the Escrow
        Agent by its execution and delivery of this Agreement hereby accepts such
        appointment under the terms and conditions set forth herein.

       

      2.2. Copies
        of Documents to Escrow Agent.
        On or
        about the date hereof, the Purchaser shall deliver to the Escrow Agent copies
        of
        the Documents executed by the Company and/or Purchaser, as applicable.


       

      2.3. Delivery
        of Escrowed Payment to Escrow Agent.
        On or
        about the date hereof, the Purchaser shall deliver to the Escrow Agent the
        Escrowed Payment.

       

      2.4. 
        Intention to Create Escrow Over the Escrowed Payment.
        The
        Purchaser and the Company intend that the Escrowed Payment shall be held
        in
        escrow by the Escrow Agent and released from escrow by the Escrow Agent only
        in
        accordance with the terms and conditions of this Agreement.

       

      ARTICLE
        III

       

      RELEASE
        OF ESCROW

       

      3.1. Release
        of Escrow.
        Subject
        to the provisions of Section 4.2, the Escrow Agent shall release the Escrowed
        Payment from escrow as follows:

       

      (a) Promptly
        following receipt by the Escrow Agent of (i) copies of the fully executed
        Documents and this Agreement, (ii) the Escrowed Payment in immediately available
        funds, (iii) joint written instructions ("Joint
        Instructions")
        


      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      


       

      executed
        by the Company and the Purchaser setting forth the payment direction
        instructions with respect to the Escrowed Payment and (iv) Escrow Agent’s verbal
        instructions from David Grin and/or Eugene Grin (each of whom is a director
        of
        the Purchaser) and John Martell or Rich Mullin (each of whom is an officer
        of
        the Company) indicating that all closing conditions relating to the Documents
        have been satisfied and directing that the Escrowed Payment be disbursed
        by the
        Escrow Agent in accordance with the Joint Instructions, then the Escrowed
        Payment shall be deemed released from escrow and shall be promptly disbursed
        in
        accordance with the Joint Instructions. The Joint Instructions shall include,
        without limitation, Escrow Agent’s authorization to retain from the Escrowed
        Payment Escrow Agent’s fee for acting as Escrow Agent hereunder and the Closing
        Payment for delivery to Laurus Capital Management, LLC in accordance with
        the
        Joint Instructions.

       

      (b) Upon
        receipt by the Escrow Agent of a final and non-appealable judgment, order,
        decree or award of a court of competent jurisdiction (a "Court
        Order")
        relating to the Escrowed Payment, the Escrow Agent shall remit the Escrowed
        Payment in accordance with the Court Order. Any Court Order shall be accompanied
        by an opinion of counsel for the party presenting the Court Order to the
        Escrow
        Agent (which opinion shall be satisfactory to the Escrow Agent) to the effect
        that the court issuing the Court Order is a court of competent jurisdiction
        and
        that the Court Order is final and non-appealable.

       

      3.2. Acknowledgement
        of Company and Purchaser; Disputes.
        The
        Company and the Purchaser acknowledge that the only terms and conditions
        upon
        which the Escrowed Payment are to be released from escrow are as set forth
        in
        Sections 3 and 4 of this Agreement. The Company and the Purchaser reaffirm
        their
        agreement to abide by the terms and conditions of this Agreement with respect
        to
        the release of the Escrowed Payment. Any dispute with respect to the release
        of
        the Escrowed Payment shall be resolved pursuant to Section 4.2 or by written
        agreement between the Company and Purchaser.

       

      ARTICLE
        IV

       

      CONCERNING
        THE ESCROW AGENT

       

      4.1. Duties
        and Responsibilities of the Escrow Agent.
        The
        Escrow Agent's duties and responsibilities shall be subject to the following
        terms and conditions:

       

      (a) The
        Purchaser and the Company acknowledge and agree that the Escrow Agent (i)
        shall
        not be required to inquire into whether the Purchaser, the Company or any
        other
        party is entitled to receipt of any Document or all or any portion of the
        Escrowed Payment; (ii) shall not be called upon to construe or review any
        Document or any other document, instrument or agreement entered into in
        connection therewith; (iii) shall be obligated only for the performance of
        such
        duties as are specifically assumed by the Escrow Agent pursuant to this
        Agreement; (iv) may rely on and shall be protected in acting or refraining
        from
        acting upon any written notice, instruction, instrument, statement, request
        or
        document furnished to it hereunder and believed by the Escrow 


      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      


       

      Agent
        in
        good faith to be genuine and to have been signed or presented by the proper
        person or party, without being required to determine the authenticity or
        correctness of any fact stated therein or the propriety or validity or the
        service thereof; (v) may assume that any person purporting to give notice
        or
        make any statement or execute any document in connection with the provisions
        hereof has been duly authorized to do so; (vi) shall not be responsible for
        the
        identity, authority or rights of any person, firm or company executing or
        delivering or purporting to execute or deliver this Agreement or any Document
        or
        any funds deposited hereunder or any endorsement thereon or assignment thereof;
        (vii) shall not be under any duty to give the property held by Escrow Agent
        hereunder any greater degree of care than Escrow Agent gives its own similar
        property; and (viii) may consult counsel satisfactory to Escrow Agent
        (including, without limitation, Loeb & Loeb, LLP or such other counsel of
        Escrow Agent’s choosing), the opinion of such counsel to be full and complete
        authorization and protection in respect of any action taken, suffered or
        omitted
        by Escrow Agent hereunder in good faith and in accordance with the opinion
        of
        such counsel.

       

      (b) The
        Purchaser and the Company acknowledge that the Escrow Agent is acting solely
        as
        a stakeholder at their request and that the Escrow Agent shall not be liable
        for
        any action taken by Escrow Agent in good faith and believed by Escrow Agent
        to
        be authorized or within the rights or powers conferred upon Escrow Agent
        by this
        Agreement. The Purchaser and the Company hereby, jointly and severally,
        indemnify and hold harmless the Escrow Agent and any of Escrow Agent's partners,
        employees, agents and representatives from and against any and all actions
        taken
        or omitted to be taken by Escrow Agent or any of them hereunder and any and
        all
        claims, losses, liabilities, costs, damages and expenses suffered and/or
        incurred by the Escrow Agent arising in any manner whatsoever out of the
        transactions contemplated by this Agreement and/or any transaction related
        in
        any way hereto, including the fees of outside counsel and other costs and
        expenses of defending itself against any claims, losses, liabilities, costs,
        damages and expenses arising in any manner whatsoever out the transactions
        contemplated by this Agreement and/or any transaction related in any way
        hereto,
        except for such claims, losses, liabilities, costs, damages and expenses
        incurred by reason of the Escrow Agent’s gross negligence or willful misconduct.
        The Escrow Agent shall owe a duty only to the Purchaser and the Company under
        this Agreement and to no other person. 

       

      (c) The
        Purchaser and the Company shall jointly and severally pay the Escrow Agent
        a fee
        of $2,500 as complete compensation, subject to Section 4.1(b), for the
        performance of its duties and responsibilities hereunder. 

       

      (d) The
        Escrow Agent may at any time resign as Escrow Agent hereunder by giving five
        (5)
        business days prior written notice of resignation to the Purchaser and the
        Company. Prior to the effective date of resignation as specified in such
        notice,
        the Purchaser and Company will issue to the Escrow Agent a Joint Instruction
        authorizing delivery of the Documents and the Escrowed Payment to a substitute
        Escrow Agent selected by the Purchaser and the Company. If no successor Escrow
        Agent is named by the Purchaser and the Company, the Escrow Agent may apply
        to a
        court of 


      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      


       

      competent
        jurisdiction in the State of New York for appointment of a successor Escrow
        Agent, and deposit the Documents and the Escrowed Payment with the clerk
        of any
        such court and/or otherwise commence an interpleader or similar action for
        a
        determination of where to deposit the same.

       

      (e) The
        Escrow Agent does not have and will not have any interest in the Documents
        and
        the Escrowed Payment, but is serving only as escrow agent, having only
        possession thereof. 

       

      (f) The
        Escrow Agent shall not be liable for any action taken or omitted by it in
        good
        faith and reasonably believed by it to be authorized hereby or within the
        rights
        or powers conferred upon it hereunder, nor for action taken or omitted by
        it in
        good faith, and in accordance with advice of counsel (which counsel may be
        Loeb
& Loeb, LLP or such other counsel of the Escrow Agent’s choosing), and shall
        not be liable for any mistake of fact or error of judgment or for any acts
        or
        omissions of any kind except to the extent any such liability arose from
        its own
        willful misconduct or gross negligence.

       

      (g) This
        Agreement sets forth exclusively the duties of the Escrow Agent with respect
        to
        any and all matters pertinent thereto and no implied duties or obligations
        shall
        be read into this Agreement.

       

      (h) The
        Escrow Agent shall be permitted to act as counsel for the Purchaser or the
        Company, as the case may be, in any dispute as to the disposition of the
        Documents and the Escrowed Payment, in any other dispute between the Purchaser
        and the Company, whether or not the Escrow Agent is then holding the Documents
        and/or the Escrowed Payment and continues to act as the Escrow Agent hereunder.
        

       

      (i) The
        provisions of this Section 4.1 shall survive the resignation of the Escrow
        Agent
        or the termination of this Agreement.

       

      4.2. Dispute
        Resolution; Judgments.
        Resolution of disputes arising under this Agreement shall be subject to the
        following terms and conditions:

       

      (a) If
        any
        dispute shall arise with respect to the delivery, ownership, right of possession
        or disposition of the Documents and/or the Escrowed Payment, or if the Escrow
        Agent shall in good faith be uncertain as to its duties or rights hereunder,
        the
        Escrow Agent shall be authorized, without liability to anyone, to (i) refrain
        from taking any action other than to continue to hold the Documents and the
        Escrowed Payment pending receipt of a Joint Instruction from the Purchaser
        and
        the Company, (ii) commence an interpleader or similar action, suit or proceeding
        for the resolution of any such dispute; and/or (iii) deposit the Documents
        and
        the Escrowed Payment with any court of competent jurisdiction in the State
        of
        New York, in which event the Escrow Agent shall give written notice thereof
        to
        the Purchaser and the Company and shall thereupon be relieved and discharged
        from all further obligations pursuant to this Agreement. The Escrow Agent
        may,
        but shall be under no duty to, institute or defend any legal proceedings
        which
        relate to the Documents and the Escrowed Payment. The 


      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      


       

      Escrow
        Agent shall have the right to retain counsel if it becomes involved in any
        disagreement, dispute or litigation on account of this Agreement or otherwise
        determines that it is necessary to consult counsel which such counsel may
        be
        Loeb & Loeb LLP
        or
such
        other counsel of the Escrow Agent’s choosing.

       

      (b) The
        Escrow Agent is hereby expressly authorized to comply with and obey any Court
        Order. In case the Escrow Agent obeys or complies with a Court Order, the
        Escrow
        Agent shall not be liable to the Purchaser and the Company or to any other
        person, firm, company or entity by reason of such compliance.

       

      ARTICLE
        V

       

      GENERAL
        MATTERS

       

      5.1. Termination.
        This
        escrow shall terminate upon disbursement of the Escrowed Payment in accordance
        with the terms of this Agreement or earlier upon the agreement in writing
        of the
        Purchaser and the Company or resignation of the Escrow Agent in accordance
        with
        the terms hereof.

       

      5.2. Notices.
        All
        notices, requests, demands and other communications required or permitted
        hereunder shall be in writing and shall be deemed to have been duly given
        one
        (1) day after being sent by telecopy (with copy delivered by overnight courier,
        regular or certified mail):

      


      
        	 	
                (a)

              	
                If
                  to the Company, to: 

              	 	
                Magnetech
                  Integrated Services Corp.

              
	 	 	 	 	
                1125
                  S. Walnut Street

              
	 	 	 	 	
                South
                  Bend, Indiana 46619 

              
	 	 	 	 	
                Facsimile:
                  574-232-7648

              
	 	 	 	 	
                Attention:
                  Chief Financial Officer

              
	 	 	 	 	 
	 	 	
                With
                  a copy to:

              	 	
                Barnes
                  & Thornburg, LLP

              
	 	 	 	 	
                600
                  1st
                  Source Center

              
	 	 	 	 	
                100
                  North Michigan

              
	 	 	 	 	
                South
                  Bend, Indiana 46601

              
	 	 	 	 	
                Facsimile:
                  574-237-1125

              
	 	 	 	 	
                Attention:
                  Richard L. Mintz, Esq.

              
	 	 	 	 	 
	 	
                (b)

              	
                If
                  to the Purchaser, to: 

              	 	
                Laurus
                  Master Fund, Ltd.

              
	 	 	 	 	
                M&C
                  Corporate Services Limited

              
	 	 	 	 	
                P.O.
                  Box 309 GT, Ugland House,

              
	 	 	 	 	
                South
                  Church Street, George Town,

              
	 	 	 	 	
                Grand
                  Cayman, Cayman Islands

              
	 	 	 	 	
                Facsimile:
                  345-949-8080

              
	 	 	 	 	 
	 	
                (c)

              	
                If
                  to the Escrow Agent, to:

              	 	
                Loeb
                  & Loeb LLP

              
	 	 	 	 	
                345
                  Park Avenue

              
	 	 	 	 	
                New
                  York, New York 10154

              
	 	 	 	 	
                Fax:
                  (212) 407-4990

              
	 	 	 	 	
                Attention:
                  Scott J. Giordano, Esq.

              


      

       

      



      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      


       

      or
        to
        such other address as any of them shall give to the others by notice made
        pursuant to this Section 5.2.

       

      5.3. Interest.
        The
        Escrowed Payment shall not be held in an interest bearing account nor will
        interest be payable in connection therewith.

       

      5.4. Assignment;
        Binding Agreement.
        Neither
        this Agreement nor any right or obligation hereunder shall be assignable
        by any
        party without the prior written consent of the other parties hereto. This
        Agreement shall inure to the benefit of and be binding upon the parties hereto
        and their respective legal representatives, successors and assigns.

       

      5.5. Invalidity.
        In the
        event that any one or more of the provisions contained herein, or the
        application thereof in any circumstance, is held invalid, illegal, or
        unenforceable in any respect for any reason, the validity, legality and
        enforceability of any such provision in every other respect and of the remaining
        provisions contained herein shall not be in any way impaired thereby, it
        being
        intended that all of the rights and privileges of the parties hereto shall
        be
        enforceable to the fullest extent permitted by law.

       

      5.6. Counterparts/Execution.
        This
        Agreement may be executed in any number of counterparts and by different
        signatories hereto on separate counterparts, each of which, when so executed,
        shall be deemed an original, but all such counterparts shall constitute but
        one
        and the same agreement. This Agreement may be executed by facsimile
        transmission.


      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      


       

      IN
        WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
        date
        and year first above written.

       

      


      
        	 	
                COMPANY:

              
	 	 
	 	
                MAGNETECH
                  INTEGRATED SERVICES CORP.

              
	 	 	 
	 	
                By:

              	 /s/
                John A. Martell
	 	
                Name:

              	John
                A. Martell
	 	
                Title:

              	President 
	 	 
	 	 
	 	
                PURCHASER:

              
	 	 
	 	
                LAURUS
                  MASTER FUND, LTD.

              
	 	 	 
	 	
                By:
                  

              	 /s/
                David Grin
	 	
                Name:

              	 David
                Grin
	 	
                Title:

              	 Director
	 	 
	 	 
	 	
                ESCROW
                  AGENT:

              
	 	 
	 	
                LOEB
                  & LOEB LLP

              
	 	 	 
	 	
                By:
                  

              	 /s/
                Scott J. Giordano
	 	
                Name:

              	 Scott
                J. Giordano
	 	
                Title:

              	 Partner


      

      



      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      


       

      SCHEDULE
        A TO FUNDS ESCROW AGREEMENT

       

      


      
        	
                PURCHASER

              	
                PRINCIPAL
                  NOTE AMOUNT

              
	
                LAURUS
                  MASTER FUND, LTD., 

                M&C
                  Corporate Services Limited, P.O. Box 309 GT, Ugland House, South
                  Church
                  Street, George Town, Grand Cayman, Cayman Islands, Fax:
                  345-949-8080

              	
                Term
                  Note in an aggregate principal amount of $3,000,000

                 

                Minimum
                  Borrowing Note in an aggregate principal amount of $4,000,000;
                  and

                 

                Revolving
                  Note in an aggregate principal amount of
                  $7,000,000

              


      

       

      


      
        	
                FUND
                  MANAGER

              	
                CLOSING
                  PAYMENT

              
	
                LAURUS
                  CAPITAL MANAGEMENT, L.L.C.

                825
                  Third Avenue, 14th
                  Floor

                New
                  York, New York 10022

                Fax:
                  212-541-4434

              	
                Closing
                  payment payable in connection with investment by Laurus Master
                  Fund, Ltd.
                  for which Laurus Capital Management, L.L.C. is the
                  Manager.

              
	
                TOTAL

              	
                $360,000

              


      

       

      


       

      WARRANTS:

       

      


      
        	
                WARRANT
                  RECIPIENT

              	
                WARRANTS
                  IN CONNECTION WITH OFFERING

              
	
                LAURUS
                  MASTER FUND, LTD. 

                M&C
                  Corporate Services Limited, P.O. Box 309 GT, Ugland House, South
                  Church
                  Street, George Town, Grand Cayman, Cayman Islands, Fax:
                  345-949-8080

              	
                Warrant
                  execisable into 7,352,941 shares of common stock of the Company
                  issuable
                  in connection with the Minimum Borrowing Note, Term Note and the
                  Revolving
                  Note.

              
	
                TOTAL

              	
                Warrants
                  exercisable into 7,352,941 shares of common stock of the
                  Company

              


      

       

       

       

      
 

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      GRANT
        SHARES:

       

      


      
        	
                SHARE
                  RECIPIENT

              	
                SHARES
                  IN CONNECTION WITH OFFERING

              
	
                LAURUS
                  MASTER FUND, LTD. 

                M&C
                  Corporate Services Limited, P.O. Box 309 GT, Ugland House, South
                  Church
                  Street, George Town, Grand Cayman, Cayman Islands, Fax:
                  345-949-8080

              	
                6,163,588
                  shares of common stock of the Company issuable in connection with
                  the
                  Minimum Borrowing Note, Term Note and the Revolving
                  Note.

              
	
                TOTAL

              	
                6,163,588
                  shares of common stock of the
                  Company

              


      

       

      


      


      11