Exhibit
10.81


 


SECURITIES
TRANSFER AGREEMENT


 


This
SECURITIES TRANSFER AGREEMENT (the “Agreement”), is entered into this 21st day of June, 2014, by
and among JAMES CASSERLY (hereinafter referred to as "Seller"), Darling Capital, LLC (hereinafter referred to as the
"Buyer") and BioNeutral Group, Inc. a Nevada corporation (“BONU" or the "Company").


 


RECITALS


 


WHEREAS,
BONU is a publicly traded corporation trading on the OTCPink:QB under the stock symbol BONU; and


 


WHEREAS,
Seller is the legal and beneficial holder of a 18% Promissory Note in the principal amount of $25,000 issued by BONU dated July
13, 2013, a true and correct copy of which is attached hereto at Exhibit 1 (hereinafter the "Debt"); and


 


WHEREAS,
Seller desires to sell and transfer to Buyer and Buyer desires to purchase in a private transaction in accordance with the terms
and conditions provided for herein, a portion of the Debt representing $25,000 of the principal balance plus accrued interest
owed on the Closing Date (the “Purchased Debt”); and


 


WHEREAS,
the Seller is concurrently entering into a Debt Purchase Agreement dated concurrently with this Agreement transferring the Purchased
Debt to Buyer in exchange for payment to Seller of $25,000; and


 


WHEREAS,
the parties hereto understand that Buyer is relying on this Agreement as material incentive to Buyer’s decision to enter
into that Debt Purchase Agreement and, but for this Agreement, would not do so


 


AGREEMENT


 


NOW,
THEREFORE, in consideration of the mutual promises and covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, agree as follows: 


 


	A.	THE
    COMPANY’S COVENANTS.



 


1.           Conversion
Privilege. The Buyer shall have the right, at its option, to convert the Purchased Debt plus accrued interest or any portion
thereof into shares of Common Stock at any time following the date hereof. The number of shares of Common Stock issuable upon
the conversion of the Purchased Debt is determined pursuant to the provisions below and shall be rounded
to the nearest whole share.


 



    	



    	 



    

 


2.           Full
or Partial Conversion Rights. Notwithstanding the convertibility of the original Promissory Note, all or any portion of the
principal and interest amount owed by the Company to Buyer reflecting the Purchased Debt may be converted into Common Stock. The
provisions of this Agreement that apply to the conversion of all of the Purchased Debt shall also apply to the conversion of a
portion of it. The Purchased Debt may not be converted, whether in whole or in part, except in accordance with this Agreement
or, at the option of the Buyer, under the terms of the original Promissory Note.


 


3.           Conversion
Procedure. Upon the Company’s receipt of a facsimile or email (or by any other means, including mail, messenger, overnight
courier, etc.) of Buyer’s duly completed and signed Notice of Conversion (a copy of which is attached hereto as Exhibit
2), the Company shall, or shall instruct its transfer agent to, issue one or more Certificates representing that number of shares
of Common Stock into which the Purchased Debt are in accordance with the provisions regarding conversion. The Company’s
transfer agent or attorney shall act as Registrar and shall maintain an appropriate ledger containing the necessary information
with respect to each Agreement. For purposes of such Notice, Buyer’s delivery shall be deemed delivered if sent to: BY MAIL
to: BioNeutral Group, Inc.; Att: Tom Cunningham; 211 Warren Street, Newark NJ, 07103: BY EMAIL: tom.c@bioneutral.com


 


4.           Conversion
Date. Such conversion shall be effectuated by surrendering to the Company, or its attorney, the Purchased Debt to be converted
together with a facsimile or email or original of the signed Notice of Conversion. If only a portion of the Purchased Debt is
to be converted, the Company shall promptly reissue a Promissory Note pursuant to identical terms of the Purchased Debt in the
amount of the unconverted portion of the principal and interest then owing on the Purchased Debt. The date on which the Notice
of Conversion is effective (“Conversion Date”) shall be deemed to be the date on which the Buyer has delivered to
the Company a facsimile or email original of the signed Notice of Conversion. Within 5 business days after the Conversion Date
or within 3 business days after receipt of the Purchased Debt to be converted, whichever is later (the “Delivery Date”),
the Company shall deliver to the Buyer, or per the Buyer’s instructions, to any third party, the shares of Common Stock
to be issued pursuant to such Notice of Conversion.


 



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5.           Common
Stock to be Issued. Upon the conversion of Purchased Debt or any part thereof and upon receipt by the Company or its attorney
of a facsimile, email or other copy or original of Buyer’s signed Notice of Conversion, Company shall instruct Company’s
transfer agent to issue common stock shares in the name of Buyer (or its nominee) and in such denominations to be specified at
conversion representing the number of shares of Common Stock issuable upon such conversion, as applicable. Company warrants that
no instructions, other than these instructions, have been given or will be given to the transfer agent and that the Common Stock
shall otherwise be freely transferable on the books and records of Company.


 


6.           Conversion
Rate. Subject to the time limitations set forth above, Buyer is entitled to convert the principal and interest owed on the
Note into Common Stock of the Company at a conversion price that is the lesser of (a) the conversion price designated in the Promissory
Note dated July 13, 2013 or (b) 40% (the multiplier) of the lowest closing bid price as reported by Bloomberg for the Company’s
Common Stock for the thirty (30) trading days immediately preceding the Conversion Date of such shares then quoted on any national
securities exchange or other quotation service (such as OTC, Pink Sheets, etc.) (the “Conversion Price”); provided
that if the Closing Bid Price for the common stock on the Clearing date (defined below) is lower than the Closing Bid Price, then
the purchase price shall be adjusted such that the Discount shall be taken from the closing bid price on the Clearing Date, and
the company shall issue additional shares to Purchaser to reflect such adjusted Purchase Price. For purposes of this Agreement,
the Clearing Date shall be the latest date on which (i) the conversion shares are transferred to and deposited into the Buyer's
brokerage account by the Company’s representatives or transfer agent and (ii) Buyer's broker has confirmed with Buyer that
the Buyer may execute trades of the conversion shares. If such events occur after 5:30 PM Eastern Standard Time, the events shall
be deemed to have occurred on the next trading day. No fractional shares or scrip representing fractions of shares will be issued
on conversion, but the number of shares issuable shall be rounded up or down, as the case may be, to the nearest whole share.


 


7.           Chilled
or Frozen Stock. A “chill” is a limitation of certain services available for a security on deposit at the Deposit
Trust Corporation (DTC). A “freeze,” formally referred to as a “global lock,” is a complete restriction
on all DTC services for a particular security on deposit at DTC. If the Company's common stock becomes chilled or frozen by the
DTC at the time that any portion of the principal and interest of the Note is converted by the Buyer,
then the Discount shall be adjusted to thirty percent (30%) for so long as the common stock is chilled or frozen.


 



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8.            Company’s
Responsibility to Issue Stock. It shall be the Company’s responsibility to take all necessary actions and bear any and
all miscellaneous expenses that may arise as a result of conversion and delivery of shares of common stock in respect of the Note,
including but are not limited to the cost of the issuance of a Rule 144 legal opinion, transfer agent fees, equity issuance and
deposit fees, etc. At Purchaser’s option, any accrued costs paid by Purchaser may be subtracted from the dollar amount of
any conversion of the Note. The person in whose name the certificate of Common Stock is to be registered shall be treated as a
shareholder of record on and after the Conversion Date.


 


In
the event the Common Stock is not delivered (with legends if required by applicable law and without legends if not required by
applicable law) per the written instructions of the Buyer, within eight (8) business days after the Delivery Date, then in such
event the Company shall pay to Buyer one-half percent (0.10%), in cash, of the dollar value of the Purchased Debt being converted
per each business day following the Delivery Date, up to and including the eighteenth (18th) business day following
the Delivery Date. Delays solely caused by the Buyer’s broker shall not be taken into account in this matter. In the event
the Common Stock is not delivered per the written instructions of the Buyer, within eighteen (18) business days after the Delivery
Date, then, except to the extent the delivery is delayed by operation of law, in such event the Company shall pay to Buyer one
percent (1%), in cash, of the dollar value of the Purchased Debt being converted per each business day following such eighteenth
(18th) business day after the Delivery Date. Buyer shall then be entitled to send written notice to the Company of
the default and the Buyer, and at its sole option may demand full repayment of the Purchased Debt not yet converted, including
accrued interest and liquidated damages through the date that written notice is given to the Company (the “Acceleration
Amount”). If the Company does not wire the Acceleration Amount to the Buyer within five (5) business days of the delivery
by Buyer by fax or email of the default notice, the Acceleration Amount shall accrue interest at twenty-four percent (24%) per
annum. To the extent this provision is inconsistent with the original Debt instrument and any Notes referenced therein, this provision
governs. Such notice shall not affect the Buyer’s rights to the Common Stock due under the Notice of Conversion and all
rights and remedies related to such conversion set forth herein, and shall be in addition to such rights and remedies. The Company
acknowledges that the failure to honor a Notice of Conversion shall cause definable financial hardship to the Buyer as well as
substantial monetary damages, which cannot be determined at this time, and that this damages provision represents the parties’
reasonable estimate of liquidated damages.









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If,
by the eighth (8th) business day after the Delivery Date, due to the Company’s direct or indirect actions or
its failure to act, the transfer agent fails for any reason to deliver the Common Stock (with legends if required by applicable
law and without legends if not required by applicable law) upon conversion by the Buyer and after such Delivery Date, the Buyer
purchases, in an open market transaction or otherwise, shares of Common Stock (the "Covering Shares") solely in order
to make delivery in satisfaction of a sale of Common Stock by the Buyer (the "Sold Shares"), which delivery such Buyer
anticipated to make using the Common Stock issuable upon conversion (a "Buy-In"), the Company shall pay to the Buyer,
in addition to any other amounts due to Buyer pursuant to the Purchased Debt, and not in lieu thereof, the Buy-In Adjustment Amount
(as defined below). The "Buy In Adjustment Amount" is the amount equal to the excess, if any, of (x) the Buyer's total
purchase price (including brokerage commissions, if any) for the Covering Shares over (y) the net proceeds (after brokerage commissions,
if any) received by the Buyer from the sale of the Sold Shares. The Company shall pay the Buy-In Adjustment Amount to the Buyer
in immediately available funds within eight (8) business days of written demand by the Buyer.


 


9.            Buyer’s
Right To Liquidated Damages. The Company acknowledges that its failure to deliver the Common Stock within eight (8) business
days after the Delivery Date will cause the Buyer to suffer damages in an amount that will be difficult to ascertain. Accordingly,
the parties agree that it is appropriate to include in this Agreement a provision for liquidated damages. The parties acknowledge
and agree that the liquidated damages provision set forth in this section represents the parties’ good faith effort to quantify
such damages and, as such, agree that the form and amount of such liquidated damages are reasonable and will not constitute a
penalty. The payment of liquidated damages shall not relieve the Company from its obligations to deliver the Common Stock pursuant
to the terms of this Agreement or to repay, with interest, including default interest, as applicable, the unconverted portion
of the Purchased Debt.


 


10.        Liquidated
Damages When There Are Not Sufficient Available Shares. To the extent that the failure of the Company to issue the Common
Stock due upon conversion is due to the unavailability of authorized but unissued shares of Common Stock, the provisions of this
Section shall apply.


 


a.           The
Company shall at all times reserve and have available all Common Stock necessary to meet conversion of the Purchased Debt by Buyer
of the entire amount of Purchased Debt then outstanding. If, at any time Buyer submits a Notice of Conversion and the Company
does not have sufficient authorized but unissued shares of Common Stock available to effect, in full, a conversion of the Purchased
Debt (a “Conversion Default”,  the date of such default being referred to herein as
the “Conversion Default Date”), the Company shall issue to the Buyer all of the shares of Common Stock which are available,
and the Notice of Conversion as to any Purchased Debt requested to be converted but not converted (the “Unconverted Purchased
Debt”), upon Buyer’s sole option, may be deemed null and void. The Company shall provide notice of such Conversion
Default (“Notice of Conversion Default”) to Buyer of outstanding Purchased Debt, by facsimile, within five (5) business
days of such default (with the original delivered by overnight or two day courier), and the Buyer shall give notice to the Company
by facsimile within five business days of receipt of the original Notice of Conversion Default (with the original delivered by
overnight or two day courier) of its election to either nullify or confirm the Notice of Conversion.






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b.           The
Company agrees to pay to Buyer of outstanding Purchased Debt for a Conversion Default (“Conversion Default Payments”)
in the amount of (N/365) x (.24) x the balance of the outstanding and/or tendered but not converted Purchased Debt held by each
Buyer where N = the number of days from the Conversion Default Date to the date (the “Authorization Date”) that the
Company authorizes a sufficient number of shares of Common Stock to effect conversion of all remaining Purchased Debt. The Company
shall send notice (“Authorization Notice”) to Buyer of outstanding Purchased Debt that additional shares of Common
Stock have been authorized, the Authorization Date and the amount of Buyer’s accrued Conversion Default Payments. The accrued
Conversion Default Payments shall be paid in cash or shall be into Common Stock at the Conversion Rate, at the Buyer’s option,
payable as follows: (i) in the event Buyer elects within ten (10) days of the Authorization Notice in writing to take such payment
in cash, cash payments shall be made to such Buyer by the fifth day of the following calendar month, or (ii) if the Buyer does
not so elect to receive such Conversion Default Payment in cash, such payment shall be made in Common Stock at the then current
Conversion Price within 30 days following the date of the Authorization Notice. The Company acknowledges that its failure to maintain
a sufficient number of authorized but unissued shares of Common Stock to effect in full a conversion of the Purchased Debt will
cause the Buyer to suffer damages in an amount that will be difficult to ascertain. Accordingly, the parties agree that it is
appropriate to include in this Agreement a provision for liquidated damages. The parties acknowledge and agree that the liquidated
damages provision set forth in this section represents the parties’ good faith effort to quantify such damages and, as such,
agree that the form and amount of such liquidated damages are reasonable and will not constitute a
penalty. The payment of liquidated damages shall not relieve the Company from its obligations to deliver the Common Stock pursuant
to the terms of this Agreement.


 






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c.           Maximum
Interest Rate. Nothing contained in this Agreement shall be deemed to establish or require the payment of interest to the
Buyer at a rate in excess of the maximum rate permitted by governing law. In the event that the rate of interest required to be
paid exceeds the maximum rate permitted by governing law, the rate of interest required to be paid thereunder shall be automatically
reduced to the maximum rate permitted under the governing law and such excess shall be returned with reasonable promptness by
the Buyer to the Company.


 


11.           Payment
of Taxes. The Company shall pay all documentary stamp taxes, if any, attributable to the initial issuance of the Common Stock;
provided, however, that the Company shall not be required to pay any tax or taxes which may be payable, (1) with respect to any
secondary transfer of the Purchased Debt or the Common Stock issuable upon exercise hereof or (2) as a result of the issuance
of the Common Stock to any person other than the Buyer, and the Company shall not be required to issue or deliver any certificate
for any Common Stock unless and until the person requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have produced evidence that such tax has been paid to the appropriate taxing authority.


 


12.           Restrictions
on Transfers. The Purchased Debt has not been registered under the Securities Act of 1933, as amended, (the “Act”)
and is being issued under Section 4(2) of the Act and Rule 506 of Regulation D promulgated under the Act. The Purchased Debt and
the Common Stock issuable upon the conversion thereof may only be offered or sold pursuant to registration under or an exemption
from the Act.


 


13.           Mergers,
Etc. If the Company merges or consolidates with another corporation or sells or transfers all or substantially all of its
assets to another person and the Buyer is entitled to receive stock, securities or property in respect of or in exchange for Common
Stock, then as a condition of such merger, consolidation, sale or transfer, the Company and any such successor, purchaser or transferee
shall amend the Purchased Debt to provide that it may thereafter be converted on the terms and subject to the conditions set forth
above into the kind and amount of stock, securities or property receivable upon such merger, consolidation,
sale or transfer by Buyer of the number of shares of Common Stock into which the Purchased Debt might have been converted immediately
before such merger, consolidation, sale or transfer, subject to adjustments which shall be as nearly equivalent as may be practicable
to adjustments provided for in this Agreement.


 






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The
Company shall not consolidate or merge into, or transfer all or substantially all of its assets to, any person, unless such person
assumes in writing the obligations of the Company under the Purchased Debt and immediately after such transaction no Event of
Default exists. Any reference herein to the Company shall refer to such surviving or transferee corporation and the obligations
of the Company shall terminate upon such written assumption. 


 


	B.	BUYER’S
    REPRESENTATIONS AND WARRANTIES. Buyer represents and warrants to Seller and to the Company that:



 


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


 


2.           Non-affiliate
Status. Buyer is not, and has not for in excess of ninety (90) days been, and subsequent to the Transfer Closing Date will
not be, an “Affiliate” of the Company, as that term is defined by Rule 144 under the 1933 Act. Buyer is not acting
in concert with any other person in a manner that would require their sales of securities to be aggregated for purposes of Rule
144 or would cause Buyer to be considered an “Underwriter” as that term is defined by Section 2 of the 1933 Act.


 


3.           Company
Information. Buyer and its advisors, if any, have had access to all financial statements and disclosures made public through
the SEC’s EDGAR system. Buyer and its advisors have been afforded the opportunity to ask questions of Seller. Neither such
inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify,
amend or affect Buyer’s right to rely on Seller’s representations and warranties contained in Section 3 below. Buyer
understands that its investment in Transferred Rights, including but not limited to the relevant Transferred Note (and/or in the
Common Stock issuable thereunder), involves a significant degree of risk.


 






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4.           Governmental
Review. Buyer understands that no United States federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Transferred Rights or of the Common Stock
issuable thereunder.


 


5.           Transfer
or Resale. Buyer understands that (i) the sale or resale of the Note and the Common Stock issuable thereunder has not been
registered under the 1933 Act or any applicable state securities laws, and the Note and the Common Stock issuable thereunder may
not be transferred unless (a) such security is sold pursuant to an effective registration statement under the 1933 Act, (b) the
security is sold or transferred pursuant to an exemption from such registration, (c) the security is sold or transferred to an
“affiliate” (as defined in Rule 144 promulgated under the 1933 Act or a successor rule; “Rule 144”) of
Buyer who agrees to sell or otherwise transfer the security only in accordance with this Section and who is an Accredited Investor,
or (d) (i) the Common Stock is sold pursuant to Rule 144, if such Rule is available; (ii) any sale of such Common Stock made in
reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any
resale of such Common Stock under circumstances in which the seller (or the person through whom the sale is made) may be deemed
to be an underwriter (as that term is defined in the 1933 Act) and may require compliance with some other exemption under the
1933 Act or the rules and regulations of the SEC thereunder.


 


6.           Authorization;
Enforcement. This Agreement has been duly and validly authorized by Buyer. This Agreement has been duly executed and delivered
on behalf of Buyer, and this Agreement constitutes a valid and binding agreement of Buyer enforceable in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies or by other equitable
principles of general application.


 


7.           No
Brokers. Buyer has taken no action which would give rise to any claim by any person for brokerage commissions, finder’s
fees or similar payments relating to this Agreement or the transactions contemplated hereby.


 


	C.	SELLER’S
    REPRESENTATIONS AND WARRANTIES. Seller represents and warrants to Buyer that:



 


1.           Authorization;
Enforcement. (i) Seller has all requisite power and authority to enter into and perform this Agreement and to consummate the
transactions contemplated hereby and to sell the relevant Purchased Note in accordance with the terms hereof, (ii) the execution
and delivery of this Agreement by Seller and the consummation by it of the transactions contemplated hereby (including without
limitation, the sale of the relevant Transferred Rights to Buyer) have been duly authorized by Seller and no further consent or
authorization of Seller or its members is required, (iii) this Agreement has been duly executed and delivered by Seller, and (iv)
this Agreement constitutes a legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies
or by other equitable principles of general application.


 



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2.           Title.
Seller has good and marketable title to the relevant Purchased Note and Transferred Rights, free and clear of all liens, pledges
and encumbrances of any kind.


 


3.           No
Conflicts. The execution, delivery and performance of this Agreement by Seller and the consummation by Seller of the transactions
contemplated hereby (including, without limitation, the sale of the relevant Transferred Rights to Buyer) will not (i) violate
or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of
time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, note, bond, indenture or other instrument to which Seller is a party, or (ii) result in a violation of any
law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations
of any self-regulatory organizations to which Seller is subject) applicable to Seller or by which any property of the Seller are
bound or affected. Except as specifically contemplated by this Agreement and as required under the 1933 Act and any applicable
federal and state securities laws, neither Seller nor the Company is required to obtain any consent, authorization or order of,
or make any filing or registration with, any court, governmental agency, regulatory agency, self-regulatory organization or stock
market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement in accordance
with the terms hereof. Except for filings that may be required under applicable federal and state securities laws in connection
with the issuance and sale of the Seller’s Note, all consents, authorizations, orders, filings and registrations which Seller
is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof.


 


4.           No
Brokers. Seller has taken no action which would give rise to any claim by any person for brokerage commissions, finder’s
fees or similar payments relating to this Agreement or the transactions contemplated hereby.


 


5.           Title;
Rule 144 Matters. Seller has owned the Original Note since the Issue Date. Seller is not, and for a period of at least ninety
(90) days prior to the date hereof has not been, an “Affiliate” of the Company, as that term is defined in Rule 144
of the 1933 Act listed immediately below. Subsequent to the Transfer Closing Date, Seller will take no action which would adversely
affect the tacking for the benefit of the Buyer of Seller’s holding period under Rule 144.


 






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An
Affiliate of an issuer is a person that directly, or indirectly through one or more intermediaries, controls, or
is controlled by, or is under common control with, such issuer.


 


The
term person when used with reference to a person for whose account securities are to be sold in reliance upon this section
includes, in addition to such person, all of the following persons:


 


(i)           Any
relative or spouse of such person, or any relative of such spouse, any one of whom has the same home as such person;


 


(ii)         Any
trust or estate in which such person or any of the persons specified in paragraph (i) of this section collectively own 10 percent
or more of the total beneficial interest or of which any of such persons serve as trustee, executor or in any similar capacity;
and


 


(iii)        Any
corporation or other organization (other than the issuer) in which such person or any of the persons specified in paragraph C.5.(i)
of this section are the beneficial owners collectively of 10 percent or more of any class of equity securities or 10 percent or
more of the equity interest.


 


6.         No
Other Representations. Seller makes no representations or warranties with respect to the Company, its financial status, earnings,
assets, liabilities, corporate status or any other matter. The Seller acknowledges that Buyer is relying on Seller’s representations
as a material condition to entering into this Agreement.


 


	D.	REPRESENTATIONS
    AND WARRANTIES OF COMPANY



 


Company
represents and warrants that at the time of the execution of this Agreement and at the Closing thereof:


 


1.           MARKETABLE
TITLE: To the best knowledge and information of the Company, the Seller is conveying to Buyer good and marketable title in
and to the Purchased Debt, free and clear of any and all liens, claims, encumbrances.


 


2.           Rule
144. The Company covenants and agrees to take all reasonable steps necessary or appropriate, including providing an opinion
of counsel confirming the rights of Buyer to sell shares of Common Stock issued to Buyer on conversion of the Note pursuant to
Rule 144 as promulgated by the SEC ("Rule 144"), as such Rule may be in effect from time to time. If the Company does
not promptly provide an opinion from Company counsel, and so long as the requested sale may be made pursuant to Rule 144, the
Company agrees to accept an opinion of counsel to the Buyer which opinion will be issued at the Company's expense. 


 









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3.          VALIDITY
OF THE PURCHASED DEBT: All of the Purchased Debt being sold by Seller to Buyer under the concurrently executed Debt Purchase
Agreement is validly issued, outstanding, unpaid and assignable. The date for purposes of Rule 144 tacks back to the original
date of the Debt, July 13, 2013 or such earlier date as the law prescribes. The Purchased Debt is convertible at the rate and
in the manner of conversion prescribed by the Promissory Note dated July 13, 2013, except as prescribed by this Agreement. After
the Closing Date, all interest accruing and to be paid on account of the $50,000 principal balance of the Purchased Debt and all
other rights with respect to the Purchased Debt under the original Promissory Note inure to the benefit of Buyer, rather than
Seller. In the event of a conflict, the terms of this Agreement shall govern the terms of conversion by the Seller of the Purchased
Debt or any part of such Purchased Debt. If there is no conflict, then the terms of both agreements govern the conversion of the
Purchased Debt by Buyer. The Company has obtained an opinion of counsel that the Purchased Debt is convertible into free trading
common stock of the Company. The opinion is attached to the Debt Purchase Agreement as Exhibit 4. In order to obtain such opinion,
certain representations were made by the Company and the Seller. The Company represents that the Company is in agreement with
such representations and has no information contrary to such representations.


 


4.          TRANSFERRABILLITY
OF THE DEBT: The Company acknowledges that the Buyer intends to transfer a portion of the Purchased Debt to certain other
individuals and the Company represents that such transferees shall have the right to convert any of the Purchased Debt being transferred
to them into free trading shares pursuant to the opinion discussed immediately above. The transferees shall have the right to
rely on the Seller's representations herein.


 


5.          AUTHORITY.
(i) The Company, and the person signing on its behalf below, has all requisite power and authority to enter into and perform this
Agreement and to consummate the transactions contemplated hereby in accordance with the terms hereof, (ii) the execution and delivery
of this Agreement by the Company and the consummation by it of the transactions contemplated hereby (including without limitation,
the sale of the relevant Purchased Debt to Buyer) have been duly authorized by the Company and no further consent or authorization
of the Company or its members is required, (iii) this Agreement has been duly executed and delivered by the Company, and (iv)
this Agreement constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement of creditors' rights and remedies or by other
equitable principles of general application. 


 






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6.          Capitalization.
All of the outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and
non-assessable. No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the
shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the
effective date of this Agreement, and except as disclosed in the SEC Documents, (i) there are no outstanding options, warrants,
scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments
or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of
capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or
may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements
or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities
under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the
Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion
Shares. At its option, Buyer has had the opportunity to review true and correct copies of the Company’s Certificate of Incorporation
as in effect on the date hereof (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the
date hereof (the “Bylaws”), and the terms of all securities convertible into or exercisable for Common Stock of the
Company and the material rights of the holders thereof in respect thereto.


 


7.          NO
CONFLICTS. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company and
the Seller of the transactions contemplated hereby (including, without limitation, the sale of the relevant Purchased Debt to
Buyer) will not (i) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event
which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, note, bond, indenture or other instrument to which Company is a party, or (ii)
result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and
regulations and regulations of any self-regulatory organizations to which the Company is subject) applicable to the Company or
by which any property of the Company are bound or affected. Except as specifically contemplated by this Agreement and as required
under the 1933 Act and any applicable federal and state securities laws, neither Seller nor the Company is required to obtain
any consent, authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory agency,
self regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of its obligations
under this Agreement in accordance with the terms hereof. Except for filings that may be required under applicable federal and
state securities laws in connection with the issuance and sale of the Purchased Debt, 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.


 






    	13



    	 



    




 


8.           NO
MATERIAL ADVERSE CHANGE: Since the date of the initiation of negotiations regarding this Transaction, there has not been any
material adverse change in the business, operations, properties, prospects, assets, or condition of the Company (financial or
otherwise), and no event has occurred or circumstance exists that may result in such a material adverse change.


 


9.          DISCLOSURE:
No representation or warranty of the Company in this Agreement omits to state a known material fact necessary to make the
statements herein or therein, in light of the circumstances in which they were made, not misleading. There is no fact known to
Seller that has specific application to either Seller or the Company (other than general economic or industry conditions) and
that materially adversely affects the assets, business, prospects, financial condition, or results of operations of the Company
that has not been set forth in this Agreement.


 


10.        DEBTS:
The Company has no outstanding debts (other than the Debt), judgments, liens, encumbrances, UCC filings, notes, loans, convertible
debt instruments, or other financial obligations whatsoever, other than as disclosed in its public filings with the Securities
and Exchange Commission and in this Agreement.


 


11.        COMPANY’S
REPORTING OBLIGATIONS. The Company will mail to the Buyer hereof at its address as shown on the Register a copy of any annual,
quarterly or other report or proxy statement that it gives to its shareholders generally at the time such report or statement
is sent to shareholders, unless such report is timely filed with the United States Securities and Exchange Commission.


 


12.       CONDUCT
OF BUSINESS: The Company has and shall continue to conduct its business in the normal and ordinary course, consistent with
the present conduct of its business and previous practices, shall not make and/or declare any dividend (cash and/or stock), redemption,
stock split (reverse or forward), and/or stock and/or cash distributions.


 


13.        NO
AMENDMENT OF DEBT OR NOTES WITHOUT CONSENT OF BUYER. Company, hereafter, shall not take any action to amend the Debt instrument
or cooperate in the amendment of any of the Notes referenced in the Promissory Note dated July 13, 2013, absent express written
consent of Buyer.


 



    	14



    	 



    

 


14.        BUYBACK
GUARANTY IN EVENT OF DTC CHILL OR FREEZE. In the event that the DTC issues a chill or freeze of the Company’s common
stock after Buyer has converted some or all of its Purchased Debt, and Buyer holds such shares at that time, then Buyer shall
have the option to sell, and the Company shall have be required to purchase, for a period of six months, such shares of Common
Stock at the Conversion Price at which the stock was issued to Buyer. The purchase price shall be paid in cash concurrently upon
Buyer surrendering such shares of Common Stock to the Company. 


 


	E.	DEFAULTS
    AND REMEDIES.



 


1.           EVENTS
OF DEFAULT. An “Event of Default” occurs if (i) the Company does not make the payment of the principal
or interest due under the Purchased Debt when the same becomes due and payable at maturity, upon demand or otherwise, (ii) the
Company does not make a payment, other than a payment of principal or interest, for a period of five (5) business days after its
due date, (iii) any of the Company’s representations or warranties contained in the Promissory Note dated July 13, 2013
were false when made or the Company fails to comply with any of its other obligations in that agreement, including the delivery
of Common Stock upon conversion before the Delivery Date; (iv) a DTC “chill” or “freeze” is placed on
the stock of the Company; (v) the Common Stock becomes ineligible for listing or quotation for trading on its current trading
market and shall not be eligible to resume listing or quotation on its current trading market within ten trading days; (vi) the
Company pursuant to or within the meaning of any Bankruptcy Law (as hereinafter defined): (1) commences a voluntary petition under
Bankruptcy Law; (2) consents to the entry of an order for relief against it in an involuntary bankruptcy petition; (3) consents
to the appointment of a Custodian (as hereinafter defined) of it or for all or substantially all of its property or (4) makes
a general assignment for the benefit of its creditors or (5) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that: (A) is for relief against the Company in an involuntary bankruptcy petition; (B) appoints a Custodian
of the Company or for all or substantially all of its property or (C) orders the liquidation of the Company, and the order or
decree remains unstayed and in effect for 60 days, or (vi) the Company is in default of any debt, note or Agreement with an outstanding
balance equal to or exceeding $25,000 individually or $50,000 in the aggregate, or (vii) the Company is in default of any provisions
of this Agreement; or (viii) the Company’s representations and warranties contained in this Agreement were not true on the
date that this Agreement is signed. As used in this Section 1, the term “Bankruptcy Law” means Title 11 of the United
States Code or any similar federal or state law for the relief of debtors. The term “Custodian” means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.


 



    	15



    	 



    




 


2.           REMEDIES
UPON DEFAULT. If any Event of Default occurs, the outstanding principal amount of the Purchased Debt, plus liquidated damages
and other amounts owing in respect thereof through the date of acceleration, shall become, at the Buyer’s election, immediately
due and payable in cash. Commencing 5 days after the occurrence of any Event of Default that results in the eventual acceleration
of the Purchased Debt, the interest rate on the Purchased Debt shall accrue at an interest rate equal
to the lesser of 18% per annum or the maximum rate permitted under applicable law. Upon the payment in full, the Buyer shall promptly
surrender the Note to or as directed by the Company. In connection with such acceleration described herein, the Buyer need not
provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Buyer may immediately
and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available
to it under applicable law. Such acceleration may be rescinded and annulled by Buyer at any time prior to payment hereunder and
the Buyer shall have all rights as a Buyer of the Agreement until such time, if any, as the Buyer receives full payment pursuant
to this Section 2. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent
thereon.


 


		F.	DILUTION.
                                                                                                                                 The
                                                                                                                                 number
                                                                                                                                 of
                                                                                                                                 shares
                                                                                                                                 of
                                                                                                                                 Common
                                                                                                                                 Stock
                                                                                                                                 issuable
                                                                                                                                 upon
                                                                                                                                 conversion
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 Purchased
                                                                                                                                 Debt
                                                                                                                                 may
                                                                                                                                 increase
                                                                                                                                 substantially
                                                                                                                                 in
                                                                                                                                 certain
                                                                                                                                 circumstances.
                                                                                                                                 The
                                                                                                                                 Company’s
                                                                                                                                 executive
                                                                                                                                 officers
                                                                                                                                 and
                                                                                                                                 directors
                                                                                                                                 have
                                                                                                                                 studied
                                                                                                                                 and
                                                                                                                                 fully
                                                                                                                                 understand
                                                                                                                                 the
                                                                                                                                 nature
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 transactions
                                                                                                                                 contemplated
                                                                                                                                 by
                                                                                                                                 this
                                                                                                                                 Agreement
                                                                                                                                 and
                                                                                                                                 recognize
                                                                                                                                 that
                                                                                                                                 they
                                                                                                                                 have
                                                                                                                                 a
                                                                                                                                 potential
                                                                                                                                 dilutive
                                                                                                                                 effect.
                                                                                                                                 The
                                                                                                                                 board
                                                                                                                                 of
                                                                                                                                 directors
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 Company
                                                                                                                                 has
                                                                                                                                 concluded,
                                                                                                                                 in
                                                                                                                                 its
                                                                                                                                 good
                                                                                                                                 faith
                                                                                                                                 business
                                                                                                                                 judgment,
                                                                                                                                 that
                                                                                                                                 such
                                                                                                                                 issuance
                                                                                                                                 is
                                                                                                                                 in
                                                                                                                                 the
                                                                                                                                 best
                                                                                                                                 interests
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 Company.
                                                                                                                                 The
                                                                                                                                 Company
                                                                                                                                 specifically
                                                                                                                                 acknowledges
                                                                                                                                 that
                                                                                                                                 its
                                                                                                                                 obligation
                                                                                                                                 to
                                                                                                                                 issue
                                                                                                                                 additional
                                                                                                                                 shares
                                                                                                                                 of
                                                                                                                                 Common
                                                                                                                                 Stock
                                                                                                                                 is
                                                                                                                                 binding
                                                                                                                                 upon
                                                                                                                                 the
                                                                                                                                 Company
                                                                                                                                 and
                                                                                                                                 enforceable
                                                                                                                                 regardless
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 dilution
                                                                                                                                 such
                                                                                                                                 issuance
                                                                                                                                 may
                                                                                                                                 have
                                                                                                                                 on
                                                                                                                                 the
                                                                                                                                 ownership
                                                                                                                                 interests
                                                                                                                                 of
                                                                                                                                 other
                                                                                                                                 shareholders
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 Company.



 


		G.	TIME
                                                                                                                                 IS
                                                                                                                                 OF
                                                                                                                                 THE
                                                                                                                                 ESSENCE.
                                                                                                                                 Where
                                                                                                                                 this
                                                                                                                                 Agreement
                                                                                                                                 or
                                                                                                                                 the
                                                                                                                                 Promissory
                                                                                                                                 Note
                                                                                                                                 dated
                                                                                                                                 July
                                                                                                                                 13,
                                                                                                                                 2013
                                                                                                                                 authorizes
                                                                                                                                 or
                                                                                                                                 requires
                                                                                                                                 the
                                                                                                                                 payment
                                                                                                                                 of
                                                                                                                                 money
                                                                                                                                 or
                                                                                                                                 the
                                                                                                                                 performance
                                                                                                                                 of
                                                                                                                                 a
                                                                                                                                 condition
                                                                                                                                 or
                                                                                                                                 obligation
                                                                                                                                 on
                                                                                                                                 a
                                                                                                                                 Saturday
                                                                                                                                 or
                                                                                                                                 Sunday
                                                                                                                                 or
                                                                                                                                 a
                                                                                                                                 public
                                                                                                                                 holiday,
                                                                                                                                 or
                                                                                                                                 authorizes
                                                                                                                                 or
                                                                                                                                 requires
                                                                                                                                 the
                                                                                                                                 payment
                                                                                                                                 of
                                                                                                                                 money
                                                                                                                                 or
                                                                                                                                 the
                                                                                                                                 performance
                                                                                                                                 of
                                                                                                                                 a
                                                                                                                                 condition
                                                                                                                                 or
                                                                                                                                 obligation
                                                                                                                                 within,
                                                                                                                                 before
                                                                                                                                 or
                                                                                                                                 after
                                                                                                                                 a
                                                                                                                                 period
                                                                                                                                 of
                                                                                                                                 time
                                                                                                                                 computed
                                                                                                                                 from
                                                                                                                                 a
                                                                                                                                 certain
                                                                                                                                 date,
                                                                                                                                 and
                                                                                                                                 such
                                                                                                                                 period
                                                                                                                                 of
                                                                                                                                 time
                                                                                                                                 ends
                                                                                                                                 on
                                                                                                                                 a
                                                                                                                                 Saturday
                                                                                                                                 or
                                                                                                                                 a
                                                                                                                                 Sunday
                                                                                                                                 or
                                                                                                                                 a
                                                                                                                                 public
                                                                                                                                 holiday,
                                                                                                                                 such
                                                                                                                                 payment
                                                                                                                                 may
                                                                                                                                 be
                                                                                                                                 made
                                                                                                                                 or
                                                                                                                                 condition
                                                                                                                                 or
                                                                                                                                 obligation
                                                                                                                                 performed
                                                                                                                                 on
                                                                                                                                 the
                                                                                                                                 next
                                                                                                                                 succeeding
                                                                                                                                 business
                                                                                                                                 day,
                                                                                                                                 and
                                                                                                                                 if
                                                                                                                                 the
                                                                                                                                 period
                                                                                                                                 ends
                                                                                                                                 at
                                                                                                                                 a
                                                                                                                                 specified
                                                                                                                                 hour,
                                                                                                                                 such
                                                                                                                                 payment
                                                                                                                                 may
                                                                                                                                 be
                                                                                                                                 made
                                                                                                                                 or
                                                                                                                                 condition
                                                                                                                                 performed,
                                                                                                                                 at
                                                                                                                                 or
                                                                                                                                 before
                                                                                                                                 the
                                                                                                                                 same
                                                                                                                                 hour
                                                                                                                                 of
                                                                                                                                 such
                                                                                                                                 next
                                                                                                                                 succeeding
                                                                                                                                 business
                                                                                                                                 day,
                                                                                                                                 with
                                                                                                                                 the
                                                                                                                                 same
                                                                                                                                 force
                                                                                                                                 and
                                                                                                                                 effect
                                                                                                                                 as
                                                                                                                                 if
                                                                                                                                 made
                                                                                                                                 or
                                                                                                                                 performed
                                                                                                                                 in
                                                                                                                                 accordance
                                                                                                                                 with
                                                                                                                                 the
                                                                                                                                 terms
                                                                                                                                 of
                                                                                                                                 this
                                                                                                                                 Agreement.
                                                                                                                                 A
                                                                                                                                 “business
                                                                                                                                 day”
                                                                                                                                 shall
                                                                                                                                 mean
                                                                                                                                 a
                                                                                                                                 day
                                                                                                                                 on
                                                                                                                                 which
                                                                                                                                 the
                                                                                                                                 banks
                                                                                                                                 in
                                                                                                                                 New
                                                                                                                                 York
                                                                                                                                 are
                                                                                                                                 not
                                                                                                                                 required
                                                                                                                                 or
                                                                                                                                 allowed
                                                                                                                                 to
                                                                                                                                 be
                                                                                                                                 closed.
                                                                                                                                 Time
                                                                                                                                 is
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 essence
                                                                                                                                 in
                                                                                                                                 the
                                                                                                                                 performance
                                                                                                                                 of
                                                                                                                                 all
                                                                                                                                 obligations
                                                                                                                                 under
                                                                                                                                 this
                                                                                                                                 Agreement
                                                                                                                                 and
                                                                                                                                 under
                                                                                                                                 the
                                                                                                                                 Promissory
                                                                                                                                 Note
                                                                                                                                 dated
                                                                                                                                 July
                                                                                                                                 13,
                                                                                                                                 2013.



 


		H.	WAIVERS.
                                                                                                                                 Any
                                                                                                                                 waiver
                                                                                                                                 by
                                                                                                                                 the
                                                                                                                                 Company
                                                                                                                                 or
                                                                                                                                 the
                                                                                                                                 Buyer
                                                                                                                                 of
                                                                                                                                 a
                                                                                                                                 breach
                                                                                                                                 of
                                                                                                                                 any
                                                                                                                                 provision
                                                                                                                                 of
                                                                                                                                 this
                                                                                                                                 Agreement
                                                                                                                                 shall
                                                                                                                                 not
                                                                                                                                 operate
                                                                                                                                 as
                                                                                                                                 or
                                                                                                                                 be
                                                                                                                                 construed
                                                                                                                                 to
                                                                                                                                 be
                                                                                                                                 a
                                                                                                                                 waiver
                                                                                                                                 of
                                                                                                                                 any
                                                                                                                                 other
                                                                                                                                 breach
                                                                                                                                 of
                                                                                                                                 such
                                                                                                                                 provision
                                                                                                                                 or
                                                                                                                                 of
                                                                                                                                 any
                                                                                                                                 breach
                                                                                                                                 of
                                                                                                                                 any
                                                                                                                                 other
                                                                                                                                 provision
                                                                                                                                 of
                                                                                                                                 this
                                                                                                                                 Agreement.
                                                                                                                                 The
                                                                                                                                 failure
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 Company
                                                                                                                                 or
                                                                                                                                 the
                                                                                                                                 Buyer
                                                                                                                                 to
                                                                                                                                 insist
                                                                                                                                 upon
                                                                                                                                 strict
                                                                                                                                 adherence
                                                                                                                                 to
                                                                                                                                 any
                                                                                                                                 term
                                                                                                                                 of
                                                                                                                                 this
                                                                                                                                 Agreement
                                                                                                                                 on
                                                                                                                                 one
                                                                                                                                 or
                                                                                                                                 more
                                                                                                                                 occasions
                                                                                                                                 shall
                                                                                                                                 not
                                                                                                                                 be
                                                                                                                                 considered
                                                                                                                                 a
                                                                                                                                 waiver
                                                                                                                                 or
                                                                                                                                 deprive
                                                                                                                                 that
                                                                                                                                 party
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 right
                                                                                                                                 thereafter
                                                                                                                                 to
                                                                                                                                 insist
                                                                                                                                 upon
                                                                                                                                 strict
                                                                                                                                 adherence
                                                                                                                                 to
                                                                                                                                 that
                                                                                                                                 term
                                                                                                                                 or
                                                                                                                                 any
                                                                                                                                 other
                                                                                                                                 term
                                                                                                                                 of
                                                                                                                                 this
                                                                                                                                 Agreement
                                                                                                                                 on
                                                                                                                                 any
                                                                                                                                 other
                                                                                                                                 occasion.
                                                                                                                                 Any
                                                                                                                                 waiver
                                                                                                                                 by
                                                                                                                                 the
                                                                                                                                 Company
                                                                                                                                 or
                                                                                                                                 the
                                                                                                                                 Buyer
                                                                                                                                 must
                                                                                                                                 be
                                                                                                                                 in
                                                                                                                                 writing.



 






    	16



    	 



    

 





		I.	RULES
                                                                                                                                 OF
                                                                                                                                 CONSTRUCTION.
                                                                                                                                 In
                                                                                                                                 this
                                                                                                                                 Agreement,
                                                                                                                                 unless
                                                                                                                                 the
                                                                                                                                 context
                                                                                                                                 otherwise
                                                                                                                                 requires,
                                                                                                                                 words
                                                                                                                                 in
                                                                                                                                 the
                                                                                                                                 singular
                                                                                                                                 number
                                                                                                                                 include
                                                                                                                                 the
                                                                                                                                 plural,
                                                                                                                                 and
                                                                                                                                 in
                                                                                                                                 the
                                                                                                                                 plural
                                                                                                                                 include
                                                                                                                                 the
                                                                                                                                 singular,
                                                                                                                                 and
                                                                                                                                 words
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 masculine
                                                                                                                                 gender
                                                                                                                                 include
                                                                                                                                 the
                                                                                                                                 feminine
                                                                                                                                 and
                                                                                                                                 the
                                                                                                                                 neuter,
                                                                                                                                 and
                                                                                                                                 when
                                                                                                                                 the
                                                                                                                                 sense
                                                                                                                                 so
                                                                                                                                 indicates,
                                                                                                                                 words
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 neuter
                                                                                                                                 gender
                                                                                                                                 may
                                                                                                                                 refer
                                                                                                                                 to
                                                                                                                                 any
                                                                                                                                 gender.
                                                                                                                                 The
                                                                                                                                 numbers
                                                                                                                                 and
                                                                                                                                 titles
                                                                                                                                 of
                                                                                                                                 sections
                                                                                                                                 contained
                                                                                                                                 in
                                                                                                                                 the
                                                                                                                                 Agreement
                                                                                                                                 are
                                                                                                                                 inserted
                                                                                                                                 for
                                                                                                                                 convenience
                                                                                                                                 of
                                                                                                                                 reference
                                                                                                                                 only,
                                                                                                                                 and
                                                                                                                                 they
                                                                                                                                 neither
                                                                                                                                 form
                                                                                                                                 a
                                                                                                                                 part
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 Agreement
                                                                                                                                 nor
                                                                                                                                 are
                                                                                                                                 they
                                                                                                                                 to
                                                                                                                                 be
                                                                                                                                 used
                                                                                                                                 in
                                                                                                                                 the
                                                                                                                                 construction
                                                                                                                                 or
                                                                                                                                 interpretation
                                                                                                                                 hereof.
                                                                                                                                 Wherever,
                                                                                                                                 in
                                                                                                                                 this
                                                                                                                                 Agreement,
                                                                                                                                 a
                                                                                                                                 determination
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 Company
                                                                                                                                 is
                                                                                                                                 required
                                                                                                                                 or
                                                                                                                                 allowed,
                                                                                                                                 such
                                                                                                                                 determination
                                                                                                                                 shall
                                                                                                                                 be
                                                                                                                                 made
                                                                                                                                 by
                                                                                                                                 a
                                                                                                                                 majority
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 Board
                                                                                                                                 of
                                                                                                                                 Directors
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 Company
                                                                                                                                 and
                                                                                                                                 if
                                                                                                                                 it
                                                                                                                                 is
                                                                                                                                 made
                                                                                                                                 in
                                                                                                                                 good
                                                                                                                                 faith,
                                                                                                                                 it
                                                                                                                                 shall
                                                                                                                                 be
                                                                                                                                 conclusive
                                                                                                                                 and
                                                                                                                                 binding
                                                                                                                                 upon
                                                                                                                                 the
                                                                                                                                 Company
                                                                                                                                 and
                                                                                                                                 the
                                                                                                                                 Buyer
                                                                                                                                 of
                                                                                                                                 this
                                                                                                                                 Agreement.



 


		J.	ABSOLUTE
                                                                                                                                 OBLIGATION.
                                                                                                                                 Except
                                                                                                                                 as
                                                                                                                                 expressly
                                                                                                                                 provided
                                                                                                                                 herein,
                                                                                                                                 no
                                                                                                                                 provision
                                                                                                                                 of
                                                                                                                                 this
                                                                                                                                 Agreement
                                                                                                                                 shall
                                                                                                                                 alter
                                                                                                                                 or
                                                                                                                                 impair
                                                                                                                                 the
                                                                                                                                 obligation
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 Company,
                                                                                                                                 which
                                                                                                                                 is
                                                                                                                                 absolute
                                                                                                                                 and
                                                                                                                                 unconditional,
                                                                                                                                 to
                                                                                                                                 pay
                                                                                                                                 the
                                                                                                                                 principal
                                                                                                                                 of
                                                                                                                                 and
                                                                                                                                 liquidated
                                                                                                                                 damages,
                                                                                                                                 as
                                                                                                                                 applicable
                                                                                                                                 on
                                                                                                                                 this
                                                                                                                                 Agreement
                                                                                                                                 at
                                                                                                                                 the
                                                                                                                                 time,
                                                                                                                                 place,
                                                                                                                                 and
                                                                                                                                 rate,
                                                                                                                                 and
                                                                                                                                 in
                                                                                                                                 the
                                                                                                                                 coin
                                                                                                                                 or
                                                                                                                                 currency,
                                                                                                                                 herein
                                                                                                                                 prescribed.
                                                                                                                                 This
                                                                                                                                 Agreement
                                                                                                                                 is
                                                                                                                                 a
                                                                                                                                 direct
                                                                                                                                 debt
                                                                                                                                 obligation
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 Company.
                                                                                                                                 This
                                                                                                                                 Agreement
                                                                                                                                 ranks
                                                                                                                                 pari
                                                                                                                                 passu
                                                                                                                                 with
                                                                                                                                 all
                                                                                                                                 other
                                                                                                                                 Debt
                                                                                                                                 holders
                                                                                                                                 now
                                                                                                                                 or
                                                                                                                                 hereafter
                                                                                                                                 issued
                                                                                                                                 under
                                                                                                                                 the
                                                                                                                                 terms
                                                                                                                                 set
                                                                                                                                 forth
                                                                                                                                 herein.



 


		K.	GOVERNING
                                                                                                                                 LAW
                                                                                                                                 AND
                                                                                                                                 VENUE:
                                                                                                                                 This
                                                                                                                                 Agreement
                                                                                                                                 shall
                                                                                                                                 be
                                                                                                                                 governed
                                                                                                                                 and
                                                                                                                                 interpreted
                                                                                                                                 solely
                                                                                                                                 in
                                                                                                                                 accordance
                                                                                                                                 with
                                                                                                                                 the
                                                                                                                                 laws
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 State
                                                                                                                                 of
                                                                                                                                 New
                                                                                                                                 York,
                                                                                                                                 and
                                                                                                                                 applicable
                                                                                                                                 U.S.
                                                                                                                                 federal
                                                                                                                                 law,
                                                                                                                                 if
                                                                                                                                 any,
                                                                                                                                 and
                                                                                                                                 in
                                                                                                                                 each
                                                                                                                                 case
                                                                                                                                 without
                                                                                                                                 regard
                                                                                                                                 to
                                                                                                                                 their
                                                                                                                                 choice
                                                                                                                                 of
                                                                                                                                 laws
                                                                                                                                 principles.
                                                                                                                                 In
                                                                                                                                 the
                                                                                                                                 event
                                                                                                                                 of
                                                                                                                                 a
                                                                                                                                 dispute
                                                                                                                                 between
                                                                                                                                 the
                                                                                                                                 parties,
                                                                                                                                 the
                                                                                                                                 parties
                                                                                                                                 agree
                                                                                                                                 to
                                                                                                                                 the
                                                                                                                                 exclusive
                                                                                                                                 jurisdiction
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 federal
                                                                                                                                 and
                                                                                                                                 state
                                                                                                                                 courts
                                                                                                                                 of
                                                                                                                                 New
                                                                                                                                 York
                                                                                                                                 located
                                                                                                                                 in
                                                                                                                                 the
                                                                                                                                 City
                                                                                                                                 of
                                                                                                                                 New
                                                                                                                                 York
                                                                                                                                 and
                                                                                                                                 agree
                                                                                                                                 not
                                                                                                                                 to
                                                                                                                                 challenge
                                                                                                                                 the
                                                                                                                                 venue
                                                                                                                                 of
                                                                                                                                 such
                                                                                                                                 action
                                                                                                                                 based
                                                                                                                                 on
                                                                                                                                 forum
                                                                                                                                 non
                                                                                                                                 conveniens
                                                                                                                                 or
                                                                                                                                 on
                                                                                                                                 any
                                                                                                                                 similar
                                                                                                                                 theory.



 


		L.	LEGAL
                                                                                                                                 FORM:
                                                                                                                                 The
                                                                                                                                 parties
                                                                                                                                 hereto
                                                                                                                                 agree
                                                                                                                                 that
                                                                                                                                 they
                                                                                                                                 have
                                                                                                                                 been
                                                                                                                                 represented
                                                                                                                                 by
                                                                                                                                 counsel
                                                                                                                                 during
                                                                                                                                 the
                                                                                                                                 negotiation
                                                                                                                                 and
                                                                                                                                 execution
                                                                                                                                 of
                                                                                                                                 this
                                                                                                                                 Agreement;
                                                                                                                                 that
                                                                                                                                 this
                                                                                                                                 Agreement
                                                                                                                                 and
                                                                                                                                 all
                                                                                                                                 exhibits
                                                                                                                                 hereto
                                                                                                                                 have
                                                                                                                                 been
                                                                                                                                 jointly
                                                                                                                                 drafted
                                                                                                                                 and
                                                                                                                                 that
                                                                                                                                 any
                                                                                                                                 ambiguity
                                                                                                                                 in
                                                                                                                                 the
                                                                                                                                 terms
                                                                                                                                 of
                                                                                                                                 such
                                                                                                                                 agreements
                                                                                                                                 shall
                                                                                                                                 not
                                                                                                                                 be
                                                                                                                                 construed
                                                                                                                                 against
                                                                                                                                 either
                                                                                                                                 party
                                                                                                                                 based
                                                                                                                                 on
                                                                                                                                 the
                                                                                                                                 author
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 language
                                                                                                                                 that
                                                                                                                                 is
                                                                                                                                 deemed
                                                                                                                                 to
                                                                                                                                 be
                                                                                                                                 ambiguous.



 


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



 


		N.	ATTORNEYS’
                                                                                                                                 FEES
                                                                                                                                 AND
                                                                                                                                 COSTS
                                                                                                                                 TO
                                                                                                                                 PREVAILING
                                                                                                                                 PARTY.
                                                                                                                                 In
                                                                                                                                 the
                                                                                                                                 event
                                                                                                                                 that
                                                                                                                                 litigation
                                                                                                                                 or
                                                                                                                                 arbitration
                                                                                                                                 arises
                                                                                                                                 between
                                                                                                                                 the
                                                                                                                                 parties
                                                                                                                                 to
                                                                                                                                 this
                                                                                                                                 Agreement
                                                                                                                                 pertaining
                                                                                                                                 to
                                                                                                                                 this
                                                                                                                                 Agreement,
                                                                                                                                 including,
                                                                                                                                 but
                                                                                                                                 not
                                                                                                                                 limited
                                                                                                                                 to,
                                                                                                                                 the
                                                                                                                                 interpretation
                                                                                                                                 or
                                                                                                                                 enforcement
                                                                                                                                 of
                                                                                                                                 its
                                                                                                                                 terms,
                                                                                                                                 the
                                                                                                                                 prevailing
                                                                                                                                 party
                                                                                                                                 in
                                                                                                                                 such
                                                                                                                                 litigation
                                                                                                                                 shall
                                                                                                                                 be
                                                                                                                                 entitled
                                                                                                                                 to
                                                                                                                                 an
                                                                                                                                 award
                                                                                                                                 of
                                                                                                                                 its
                                                                                                                                 reasonable
                                                                                                                                 attorneys’
                                                                                                                                 fees
                                                                                                                                 and
                                                                                                                                 costs
                                                                                                                                 incurred
                                                                                                                                 in
                                                                                                                                 connection
                                                                                                                                 with
                                                                                                                                 such
                                                                                                                                 action
                                                                                                                                 or
                                                                                                                                 proceeding.



 



    	17



    	 



    

 





		O.	ENTIRE
                                                                                                                                 AGREEMENT:
                                                                                                                                 This
                                                                                                                                 Agreement,
                                                                                                                                 the
                                                                                                                                 Debt
                                                                                                                                 Purchase
                                                                                                                                 Agreement,
                                                                                                                                 the
                                                                                                                                 Exhibits
                                                                                                                                 to
                                                                                                                                 such
                                                                                                                                 documents,
                                                                                                                                 and
                                                                                                                                 the
                                                                                                                                 public
                                                                                                                                 filings
                                                                                                                                 referenced
                                                                                                                                 herein
                                                                                                                                 embody
                                                                                                                                 the
                                                                                                                                 entire
                                                                                                                                 agreement
                                                                                                                                 between
                                                                                                                                 the
                                                                                                                                 parties
                                                                                                                                 hereto
                                                                                                                                 with
                                                                                                                                 respect
                                                                                                                                 to
                                                                                                                                 the
                                                                                                                                 subject
                                                                                                                                 matter
                                                                                                                                 hereof,
                                                                                                                                 and
                                                                                                                                 supersedes
                                                                                                                                 all
                                                                                                                                 prior,
                                                                                                                                 and
                                                                                                                                 contemporaneous,
                                                                                                                                 negotiations,
                                                                                                                                 agreements,
                                                                                                                                 and
                                                                                                                                 understandings,
                                                                                                                                 whether
                                                                                                                                 written
                                                                                                                                 or
                                                                                                                                 oral.
                                                                                                                                 This
                                                                                                                                 Agreement,
                                                                                                                                 or
                                                                                                                                 any
                                                                                                                                 provision
                                                                                                                                 herein,
                                                                                                                                 may
                                                                                                                                 not
                                                                                                                                 be
                                                                                                                                 changed,
                                                                                                                                 waived,
                                                                                                                                 discharged,
                                                                                                                                 or
                                                                                                                                 terminated,
                                                                                                                                 except
                                                                                                                                 by
                                                                                                                                 an
                                                                                                                                 express
                                                                                                                                 written
                                                                                                                                 instrument
                                                                                                                                 signed
                                                                                                                                 by
                                                                                                                                 the
                                                                                                                                 party
                                                                                                                                 against
                                                                                                                                 whom
                                                                                                                                 enforcement
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 change,
                                                                                                                                 waiver,
                                                                                                                                 discharge
                                                                                                                                 or
                                                                                                                                 termination
                                                                                                                                 is
                                                                                                                                 sought.



 


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



 


Rest
of page intentionally left Blank


 






    	18



    	 



    




 


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


 


	 	BIONEUTRAL
    GROUP, INC.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	Facsimile
    No. for delivery of Notices:
	 	 
	 	 
	 	BUYER:
	 	 
	 	By:	/s/
    Yehuda Marrus
	 	 	Yehuda Marrus,
    Managing Member Darling Capital,
	 	 	 
	 	SELLER:
	 	 	 
	 	By:	/s/
    JAMES CASSERLY
	 	 	JAMES
CASSERLY



 


 


19