Document:

Unassociated Document

     

    JOINT VENTURE
AGREEMENT

    

     

    This
Joint Venture Agreement ("Agreement") is made and entered into as of this 12 day
of July, 2010 by and between Madison Realty Advisors, LLC ("Madison") and Prime
Estates and Developments, Inc. ("Prime") with reference to the following
facts:

     

    A.           Madison
has extensive experience in the business of acquiring, financing, managing and
selling commercial real estate properties for itself and third parties. The
manager of Madison is Gary Langendoen ("Langendoen").

     

    B.           Prime
is a public company (PMLT) and intends to be in several businesses including
acquiring and operating commercial real estate.

     

    C.           Madison
and Prime desire to enter into an arrangement whereby Madison will locate,
negotiate and perform due diligence for acquiring commercial properties for
Prime. Madison will also be responsible for the financing, managing and
ultimately the disposition of the properties for Prime.

     

    Therefore,
in consideration of the foregoing premises and other good and valuable
consideration receipt of which is hereby acknowledged, the parties hereto hereby
agree as follows:

     

    1.           Services to be Provided by
Madison. Madison will actively seek commercial real estate properties for
acquisition. In connection therewith, Madison will negotiate the acquisition,
perform due diligence on the properties, arrange financing and close the
properties. Then perform property management, asset management and be
responsible for the ultimate disposition of the properties. All property
acquisitions shall be subject to the approval of Prime. Madison hereby agrees
that it will cause Langendoen and other key Madison managers to spend a majority
of their time on the business of this joint venture provided that Prime has
significant capital to invest and is active in the commercial real estate
business. The Madison managers will do the work they deem necessary to do in
order to promote the business of the joint venture. Madison will provide
reasonable reports and attend meetings to conduct the business of this joint
venture.

     

    2.           Support to be Provided by
Prime.

     

    a.           Prime
& Madison agree that all the costs of the services provided by Madison will
be determined on a property by property case. All fees and expenses will be
charged on every property that the two parties will agree to acquire, lease,
manage, sell, etc. Both parties agree that there are no fees, costs, and/or any
type of expenses that oblige the two parties with this agreement.

     

    b.           Each
property acquired will be in the form of a separate special purpose entity
jointly owned between Prime and Madison and or their
assigns.  Additional, each property will be controlled by an agreement
that comprehensively delineates each party’s responsibilities, rights and
obligations.  This agreement will address, but not be limited to
capital reserves, income deficiencies, property management, financial accounting
and the distribution of profits from net operating income and
resale.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    c.           In
terms of profit distributions, in general, Prime will receive a preferred rate
of return that will be determined on a property by property case.  The
net profit from resale will be split between the parties, with a percentage rate
that will be determined on a property by property case, after the repayment of
the equity invested by Prime.

     

    d.           Madison
will charge market rate fees for its services which can include
brokerage/acquisition commissions, financing fees, property management fees and
asset management fees. Once Prime is funded and the work load is established
then Madison and Prime agree to reevaluate the compensation and cost
reimbursements on a good faith basis. Likewise the compensation to Explicit
Growth Strategy Consultants, Inc and School Lane Capital Partners, LLC and/or
their assigns will be agreed upon by all parties.

     

    3.           Right of First
Refusal. Prime shall have the right of first refusal to acquire any
properties that Madison may locate provided the property meets Prime’s buying
parameters. Madison shall provide written notice (the "Notice") to Prime with
respect to any property that it is being considered for acquisition. The Notice
shall provide information with respect to the type, location, financial
condition and other material facts relating to the property and/or portfolio
that is the subject matter of the property to the best of Madison’s knowledge.
The Notice will also provide details as to any compensation to be paid to
Madison which will be generated by the acquisition which shall include, but not
be limited to, property management fees, asset management fees,
acquisition/disposition fees, loan placement fees and any other amounts payable
to Madison under the terms of the proposed acquisition. Madison shall provide
such other information and/or analysis as Prime may reasonably request. Prime
shall have ten (10) days after receipt of the Notice and related materials
within which to notify Madison that Prime is willing to acquire the property or
not. If Prime does not notify Madison of its willingness to purchase the
property within the Notice Period, then Madison shall be free to enter into an
agreement with another party or parties with respect to acquiring the
property.

     

    4.           Responsibilities. If
Prime elects to purchase a property that Madison recommends then Prime agrees to
come up with the required equity to purchase the property. Madison shall be
responsible to provide all on and off site supervision of the property
management and/or asset management activities and shall be responsible for the
day-to-day management of the properties that are acquired. Madison shall provide
monthly operating statements and such other financial reports and budgets as are
commonly provided for the type and size of properties covered by the property
management agreement and/or as may be specifically required under the terms of
the management agreement. All major property management, asset management and
financial reporting issues ("Major Matters") shall be subject to mutual approval
of Madison and Prime.

     

    
      
         

      

      
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    5.           Term. The term of
this Agreement shall be for a period of one (1) year, and shall be automatically
renewed annually unless terminated by either party in writing at least sixty
(60) days prior to the then scheduled expiration date of this Agreement;
provided, however, either party may terminate this agreement upon not less than
60 days prior written notice of such termination to the other party. Upon the
termination of this Agreement as provided herein, the rights and obligations of
the parties hereto shall immediately terminate.

     

    6.           Governing Law. This
Agreement shall be construed and enforced in accordance with the laws of the
State of California.

     

    7.           Attorneys'
Fees.  Should any party hereto employ an attorney for the
purpose of enforcing or construing this Agreement, or any judgment based on this
Agreement, in any legal proceeding whatsoever, including insolvency, bankruptcy,
arbitration, declaratory relief or other litigation, the prevailing party shall
be entitled to receive from the other party or parties thereto reimbursement for
all reasonable attorneys' fees and all costs, whether incurred at the trial or
appellate level, including but not limited to service of process, filing fees,
court and court reporter costs, investigative costs, expert witness fees and the
cost of any bonds, whether taxable or not, and such reimbursement shall be
included in any judgment, decree or final order issued in that
proceeding.  The “prevailing party” means the party in whose favor a
judgment, decree, or final order is rendered.

     

    8.           Entire
Agreement.  This Agreement contains the entire agreement
between the parties relating to the joint venture contemplated hereby and all
prior or contemporaneous agreements, understandings, representations and
statements, oral or written, are merged herein.

     

    9.           Modification.  No
modification, waiver, amendment, discharge or change of this Agreement shall be
valid unless the same is in writing and signed by the party against which the
enforcement of such modification, waiver, amendment, discharge or change is or
may be sought.

     

    10.           Time of
Essence.  Time is of the essence to this Agreement and to all
dates and time periods set forth herein.  However, if this Agreement
requires any act to be done on a date that is not a business day, such act or
action shall be deemed to have been validly done or taken if done or taken on
the next succeeding business day.

     

    11.           Successors and
Assigns.  All terms of this Agreement shall be binding upon,
inure to the benefit of and be enforceable by, the parties hereto and their
respective legal representatives, successors and assigns.

     

    12.           Counterparts.  This
Agreement may be executed in any number of counterparts, each of which so
executed shall be deemed an original; such counterparts shall together
constitute but one agreement.

     

    13.           No
Partnership.  Notwithstanding anything to the contrary
contained herein, this Agreement shall not be deemed or construed to make the
parties hereto partners, or to render either party liable for any of the debts
or obligations of the other.

     

    14.           Notices.  All
notices, demands or other communications given hereunder shall be in writing and
shall be deemed to have been duly delivered upon the receipt by facsimile
transmission as evidenced by a receipt transmission report, or upon the delivery
by overnight express delivery service, addressed as follows:

     

    
      
         

      

      
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                If
      to Madison:

              	      
                Madison
      Realty Advisors, LLC

              
	 	      
                301
      E. Colorado Blvd., Suite 620

              
	 	      
                Pasadena,
      California

              
	 	      
                Attention:
      Gary Langendoen

              
	 	 
	      
                If
      to Prime:

              	      
                Prime
      Estates and Development, Inc.

              
	 	      
                4709
      West Golf Road, Suite 425

              
	 	      
                Skokie,
      IL 60076

              
	 	      
                Attention:
      Spiros Sinnis

              

      

       

    

    [SIGNATURES
ON FOLLOW PAGE]

     

    
      
         

      

      
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    MADISON:

     

    MADISON
REALTY ADVISORS, LLC,

    a
California limited liability company

     

    

     

    By: /s/
Gary Langendoen, Manager

    Gary Langendoen, Manager

    

     

    PRIME:

     

    PRIME
ESTATES and DEVELOPMENT INC.,

    a Nevada
corporation

     

    

     

    By:  /s/
Spiros Sinnis, President

    Spiros Sinnis, President

     

    
      
         

      

      
        5INVESTMENT
AGREEMENT

      

    THIS INVESTMENT AGREEMENT
(hereinafter referred to as the “Agreement”), dated as of July 9, 2010 (the
“Execution Date”) by and between

     

    China
Kangtai Cactus Bio-Tech, Inc., a Nevada corporation (hereinafter referred to as
the "Company"),

    

    and

    

    Kodiak
Capital Group, LLC, a Delaware Limited Liability Company (hereinafter referred
to as the "Investor").

    

    WHEREAS, the parties desire
that, upon the terms and subject to the conditions contained herein, the
Investor shall invest up to one million dollars ($1,000,000) to purchase the
Company's Common Stock, at $0.001 par value per share (the "Common Stock");
and

    

    WHEREAS, such investments will
be made in reliance upon the provisions of Section 4(2) under the Securities Act
of 1933, as amended (the "1933 Act"), Rule 506 of Regulation D, and the rules
and regulations promulgated thereunder, and/or upon such other exemption from
the registration requirements of the 1933 Act as may be available with respect
to any or all of the investments in Common Stock to be made hereunder;
and

    

    WHEREAS, contemporaneously
with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a Registration Rights Agreement substantially in the
form attached hereto as Exhibit A (the "Registration Rights Agreement") pursuant
to which the Company has agreed to provide certain registration rights under the
1933 Act, and the rules and regulations promulgated thereunder, and applicable
state securities laws.

    

    NOW THEREFORE, in
consideration of the foregoing recitals, which shall be considered an integral
part of this Agreement, the covenants and agreements set forth hereafter, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Company and the Investor hereby agree as
follows:

    
      
         

      

      
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    SECTION 1.
DEFINITIONS.

     

    As used
in this Agreement, the following terms shall have the following meanings
specified or indicated below, and such meanings shall be equally applicable to
the singular and plural forms of such defined terms.

    

    “1933
Act” shall mean the Securities Act of 1933, as amended.

    

    “1934
Act” shall mean the Securities Exchange Act of 1934, as
amended.

    

    “Affiliate”
shall have the meaning specified in Section 5(H), below.

     

    “Agreement”
shall mean this Investment Agreement.

    

    “Bank
Account” shall mean the account of the Company into which the Investor
will deliver the Purchase Amount and which is disclosed in the Put Settlement
Sheet.

    

    “By-laws”
shall have the meaning specified in Section 4(C).

    

    “Certificate
of Incorporation” shall have the meaning specified in Section
4(C).

    

    “Closing”
shall have the meaning specified in Section 2(G).

    

    “Closing
Date” shall mean no more than seven (7) Trading Days following the end of
the Pricing Period.

    

    “Commitment
Shares” shall mean 15,000 shares of newly-issued Company Common Stock
that the Company agrees to issue to Investor, whereby the total Commitment
Shares are payable on the Closing Date.

    

    “Common
Stock” shall have the meaning set forth in the preamble of this
Agreement.

    

    “Company’s
Knowledge” shall mean the actual knowledge, without further
investigation, of the individual(s) serving as the CEO and CFO of the Company as
of the Execution Date.

    

    “Control”
or “Controls”
shall have the meaning specified in Section 5(H).

    

    “Document
Preparation Fee” shall mean $15,000 in cash for the preparation of the
Investment Agreement and Registration Rights Agreement are payable on the
Closing Date.

    

    “Effective
Date” shall mean the date the SEC declares effective under the 1933 Act
the Registration Statement covering the Securities.

    
      
         

      

      
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    “Environmental
Laws” shall have the meaning specified in Section 4(M).

    

    “Facility
Transaction Documents” shall mean this Agreement and the Registration
Rights Agreement.

    

    “Execution
Date” shall mean the date indicated in the preamble to this
Agreement.

    

    “Indemnities”
shall have the meaning specified in Section 11.

    

    “Indemnified
Liabilities” shall have the meaning specified in Section 11.

    

    “Investor”
shall have the meaning indicated in the preamble of this Agreement.

    

    “Material
Adverse Effect” shall have the meaning specified in Section
4(A).

    

    “Material
Breach” shall mean party’s Material Default under this
Agreement.

    

     “Material
Default” shall mean a party’s failure in the performance of Sections
2(E), 7 or 8 of this Agreement.

    

    “Maximum
Common Stock Issuance” shall have the meaning specified in Section
2(H).

    

    “Minimum
Acceptable Price” shall mean $1.00 per share of Company’s common stock as
quoted on the OTCBB.

    

    “Open
Market Adjustment Amount” shall have the meaning specified in Section
2(I).

    

    “Open
Market Share Purchase” shall have the meaning specified in Section
2(I).

    

    “Open
Period” shall mean the period beginning on and including the Trading Day
immediately following the Effective Date and ending on the earlier to occur of
(i) the date which is
three-months (3) months from the Effective Date; or (ii) termination of the
Agreement in accordance with Section 9, below.

    

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

    

    “Pricing
Period” shall be 10 Trading Days which include five (5) days immediately
preceding the Put Date and five (5) days immediately following the Put
Date.

    
      
         

      

      
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    “Principal
Market” shall mean the American Stock Exchange, Inc., the National
Association of Securities Dealers, Inc. Over-the-Counter Bulletin Board, the
NASDAQ National Market System or the NASDAQ SmallCap Market, whichever is the
principal market on which the Common Stock is listed.

    

    “Prospectus”
shall mean the Prospectus, preliminary Prospectus and supplemental Prospectus
used in connection with the Registration Statement.

    

    “Purchase
Amount” shall mean the total amount being paid by the Investor on the
Closing Date to purchase the Securities.

    

    “Purchase
Price” shall mean eighty three percent (83%) of the volume-weighted
average price (VWAP) of the Common Stock during the Pricing Period.

    

    “Put ” shall have
the meaning set forth in Section 2(B) hereof.  

    

    “Put
Amount” shall have the meaning set forth in Section 2(B) hereof.
 

    

    “Put
Date” shall mean
the date of the Put Notice.

    

    “Put
Notice” shall mean a written notice sent to the Investor by the Company,
substantially in the form of Exhibit B, stating the Put Amount in U.S. dollars
the Company intends to sell to the Investor pursuant to the terms of the
Agreement and stating the current number of Shares issued and outstanding on
such date.

    

    “Put
Notice Date” shall mean the Trading Day, as set forth below, immediately
following the day on which the Investor receives a Put Notice, however a Put
Notice shall be deemed delivered on (a) the Trading Day it is
received by facsimile or otherwise by the Investor if such notice is received
prior to 9:00 am Eastern Time, or (b) the immediately succeeding
Trading Day if it is received by facsimile or otherwise after 9:00 am Eastern
Time on a Trading Day.  No Put Notice may be deemed delivered on a day that
is not a Trading Day.

    

    “Put
Settlement Sheet” shall mean a written letter to the Company by the
Investor, substantially in the form of Exhibit C, evidencing acceptance of the
Put, confirming wire transfer instructions for delivery of the Purchase Amount
and providing instructions for delivery of the Securities to the
Investor.

    

    “Put
Shares Due” shall have the meaning specified in Section
2(I).

    

    “Registration
Rights Agreement” shall have the meaning set forth in the recitals,
above.

    

    “Registration
Statement” means the registration statement of the Company filed under
the 1933 Act covering the Common Stock issuable hereunder.

    
      
         

      

      
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    “Related
Party” shall have the meaning specified in Section 5(H).

    

    “Resolution”
shall have the meaning specified in Section 8(E).

    

    “SEC”
shall mean the U.S. Securities & Exchange Commission.

    

    “SEC
Documents” shall have the meaning specified in Section 4(F).

    

    “Securities”
shall mean the shares of Common Stock issued pursuant to the terms of the
Agreement.

    

    “Shares”
shall mean the shares of the Company’s Common Stock.

    

    “Subsidiaries”
shall have the meaning specified in Section 4(A).

    

    “Trading
Day” shall mean any day on which the Principal Market for the Common
Stock is open for trading, from the hours of 9:30 am until 4:00
pm.

    
      
         

      

      
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    SECTION 2. PURCHASE AND SALE
OF COMMON STOCK.

    

    (A) PURCHASE AND SALE OF COMMON
STOCK. Subject to the terms and conditions set forth herein, the Company
shall issue and sell to the Investor, and the Investor shall purchase from the
Company, up to that number of Shares having an aggregate Purchase Price of one
million dollars ($1,000,000).

    

    (B) DELIVERY OF PUT
NOTICES. Subject to the terms and conditions of the Facility Transaction
Documents, during the Open Period, the Company may, in its sole discretion,
deliver a Put Notice to the Investor which states the dollar amount (designated
in U.S. Dollars) (the "Put Amount"), which the Company intends to sell to the
Investor on a Closing Date (the "Put"). The Put Notice shall be in the form
attached hereto as Exhibit B and incorporated herein by reference. The Put
Amount shall not exceed one million dollars ($1,000,000). The Purchase Price for
the Common Stock identified in the Put Notice shall be equal to eighty three
percent (83%) of the volume weighted average price (VWAP) of the Company’s
Common Stock during the Pricing Period.

    

    (C) COMPANY’S RIGHT TO
WITHDRAWAL. The Company shall reserve the right, but not the obligation,
to withdraw that portion of the Put that is below the Minimum Acceptable Price,
by submitting to the Investor, in writing, a notice to cancel that portion of
the Put.  Any shares above the Minimum Acceptable Price due to the Investor
shall be carried out by the Company under the terms of this
Agreement.

    

    (D) RESERVED; INTENTIONALLY
OMITTED.

    

    (E) CONDITIONS TO INVESTOR'S
OBLIGATION TO PURCHASE SHARES. Notwithstanding anything to the contrary
in this Agreement, the Company shall not be entitled to deliver a Put Notice and
the Investor shall not be obligated to purchase any Shares at the Closing (as
defined in Section 2(G)) unless each of the following conditions are
satisfied:

    

    (I) a
Registration Statement shall have been declared effective and shall remain
effective and available for the resale of all the Registrable Securities (as
defined in the Registration Rights Agreement) at all times until the Closing
with respect to the subject Put Notice;

    

    (II) at
all times during the period beginning on the Put Notice Date and ending on and
including the Closing Date, the Common Stock shall have been listed on the
Principal Market and shall not have been suspended from trading thereon for a
period of two (2) consecutive Trading Days during the Open Period and the
Company shall not have been notified of any pending or threatened proceeding or
other action to suspend the trading of the Common Stock;

    

    (III) the
Company has complied with its obligations and is otherwise not in breach of or
in default under, this Agreement, the Registration Rights Agreement or any other
agreement executed in connection herewith, the Put Notice Date;

    
      
         

      

      
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    (IV) no
injunction shall have been issued and remain in force, or action commenced by a
governmental authority which has not been stayed or abandoned, prohibiting the
purchase or the issuance of the Securities; and

    

    (V) the
issuance of the Securities will not violate any shareholder approval
requirements of the Principal Market.

    

    If any of
the events described in clauses (I) through (V) above occurs during the Pricing
Period, then the Investor shall have no obligation to purchase the Put Amount of
Common Stock set forth in the Put Notice.

    

    (F) RESERVED.

    

    (G) MECHANICS OF PURCHASE OF
SHARES BY INVESTOR. Subject to the satisfaction of the conditions set
forth in Sections 2(E), 7 and 8, the closing of the purchase by the Investor of
Shares (a "Closing") shall occur on the date which is no later than seven (7)
Trading Days following the end of the Pricing Period (the "Closing Date"). On or
before the Closing Date, (I) the Investor shall deliver to the Company the
Purchase Price to be paid for such Shares, determined as set forth in Section
2(B); and (II) the Company shall deliver to the Investor pursuant to this
Agreement, certificates representing the Shares to be issued to the Investor on
such date and registered in the name of the Investor. In lieu of delivering
physical certificates representing the Securities and provided that the
Company's transfer agent then is participating in The Depository Trust Company
("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the
Investor, the Company shall use all commercially reasonable efforts to cause its
transfer agent to electronically transmit the Securities by crediting the
account of the Investor's prime broker (as specified by the Investor in advance
of the Investor's notice) with DTC through its Deposit Withdrawal Agent
Commission ("DWAC") system.

    

    The
Company understands that a delay in the issuance of Securities beyond the
Closing Date could result in economic damage to the Investor. After the
Effective Date, as compensation to the Investor for such loss, the Company
agrees to make late payments to the Investor for late issuance of Securities
(delivery of Securities after the applicable Closing Date) in accordance with
the following schedule (where "No. of Days Late" is defined as the number of
trading days beyond the Closing Date, with the Amounts being
cumulative.):

    
      
         

      

      
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                LATE
      PAYMENT FOR EACH

              	 
      
	
                NO.
      OF DAYS LATE

              	
                $10,000
      WORTH OF COMMON STOCK

              
	 
      	 
      
	
                  1

              	
                $100

              
	
                  2

              	
                $200

              
	
                  3

              	
                $300

              
	
                  4

              	
                $400

              
	
                  5

              	
                $500

              
	
                  6

              	
                $600

              
	
                  7

              	
                $700

              
	
                  8

              	
                $800

              
	
                  9

              	
                $900

              
	
                 10

              	
                 $1,000

              
	
                Over
      10

              	
                $1,000
      + $200 for each

              
	 
      	
                Business
      Day late beyond 10 days

              

      

    

     

    The
Company shall make any payments incurred under this Section in immediately
available funds upon demand by the Investor. Nothing herein shall limit the
Investor's right to pursue actual damages for the Company's failure to issue and
deliver the Securities to the Investor, except that such late payments shall
offset any such actual damages incurred by the Investor, and any Open Market
Adjustment Amount, as set forth below. Notwithstanding anything contained in
this Section 2(G) to the contrary, the Company shall not be liable for any late
payments if the late issuance of Securities (delivery of Securities after the
Closing Date) was due to the Investor’s failure deliver to the Company a Put
Settlement Sheet (as further described in Section 7(B) of this Agreement) on the
day immediately following the end of the Pricing Period.

    

     (H)
OVERALL LIMIT ON
COMMON STOCK ISSUABLE. Notwithstanding anything contained herein to the
contrary, if during the Open Period the Company becomes listed on an exchange
that limits the number of shares of Common Stock that may be issued without
shareholder approval, then the number of Shares issuable by the Company and
purchasable by the Investor, shall not exceed that number of the shares of
Common Stock that may be issuable without shareholder approval (the "Maximum
Common Stock Issuance").  If such issuance of shares of Common Stock could
cause a delisting on the Principal Market, then the Maximum Common Stock
Issuance shall first be approved by the Company's shareholders in accordance
with applicable law and the By-laws and Amended and Restated Certificate of
Incorporation of the Company, if such issuance of shares of Common Stock could
cause a delisting on the Principal Market. The parties understand and agree that
the Company's failure to seek or obtain such shareholder approval shall in no
way adversely affect the validity and due authorization of the issuance and sale
of Securities or the Investor's obligation in accordance with the terms and
conditions hereof to purchase a number of Shares in the aggregate up to the
Maximum Common Stock Issuance limitation, and that such approval pertains only
to the applicability of the Maximum Common Stock Issuance limitation provided in
this Section 2(H).

    
      
         

      

      
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    (I)
 ADDITIONAL
PENALTIES. If, by the third (3rd) business day after the Closing Date,
the Company fails to deliver any portion of the shares of the Put to the
Investor (the "Put Shares Due") and the Investor purchases, in an open market
transaction or otherwise, shares of Common Stock necessary to make delivery of
shares which would have been delivered if the full amount of the shares to be
delivered to the Investor by the Company (the "Open Market Share Purchase") ,
then the Company shall pay to the Investor, in addition to any other amounts due
to Investor pursuant to the Put, and not in lieu thereof, the Open Market
Adjustment Amount (as defined below).  The "Open Market Adjustment Amount"
is the amount equal to the excess, if any, of (x) the Investor's total purchase
price (including brokerage commissions, if any) for the Open Market Share
Purchase minus (y) the net proceeds (after brokerage commissions, if any)
received by the Investor from the sale of the Put Shares Due.  The Company
shall pay the Open Market Adjustment Amount to the Investor in immediately
available funds within five (5) business days of written demand by the Investor.
 By way of illustration and not in limitation of the foregoing, if the
Investor purchases shares of Common Stock having a total purchase price
(including brokerage commissions) of $11,000 to cover an Open Market Share
Purchase with respect to shares of Common Stock it sold for net proceeds of
$10,000, the Open Market Purchase Adjustment Amount which the Company will be
required to pay to the Investor will be $1,000. Notwithstanding anything
contained in this Section 2(I) to the contrary, the Company shall not be liable
for any late payments if the late issuance of Securities (delivery of Securities
after the Closing Date) was due to the Investor’s failure deliver to the Company
a Put Settlement Sheet (as further described in Section 7(B) of this Agreement)
on the day immediately following the end of the Pricing Period.

    

    (J)
 LIMITATION ON
AMOUNT OF OWNERSHIP. Notwithstanding anything to the contrary in this
Agreement, in no event shall the Investor be entitled to purchase that number of
Shares, which when added to the sum of the number of shares of Common Stock
beneficially owned (as such term is defined under Section 13(d) and Rule 13d-3
of the 1934 Act), by the Investor, would exceed 4.99% of the number of shares of
Common Stock outstanding on the Closing Date, as determined in accordance with
Rule 13d-1(j) of the 1934 Act.

    

    SECTION 3. INVESTOR'S
REPRESENTATIONS, WARRANTIES AND COVENANTS.

    

    The
Investor represents and warrants to the Company, and covenants,
that:

    

    (A) SOPHISTICATED
INVESTOR. The Investor has, by reason of its business and financial
experience, such knowledge, sophistication and experience in financial and
business matters and in making investment decisions of this type that it is
capable of (I) evaluating the merits and risks of an investment in the
Securities and making an informed investment decision; (II) protecting its own
interest; and (III) bearing the economic risk of such investment for an
indefinite period of time.

    

    (B) AUTHORIZATION;
ENFORCEMENT. The Facility Transaction Documents have been duly and
validly authorized, executed and delivered on behalf of the Investor and are
valid and binding agreements of the Investor enforceable against the Investor in
accordance with their terms, subject as to enforceability to general principles
of equity and to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the
enforcement of applicable creditors' rights and remedies.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (C) SECTION 9 OF THE 1934
ACT. During the term of this Agreement, the Investor will comply with the
provisions of Section 9 of the 1934 Act, and the rules promulgated thereunder,
with respect to transactions involving the Common Stock. The Investor agrees not
to sell the Company's stock short, either directly or indirectly through its
affiliates, principals or advisors, the Company's common stock during the term
of this Agreement.

    

    (D) ACCREDITED INVESTOR.
Investor is an "Accredited Investor" as that term is defined in Rule 501(a) of
Regulation D of the 1933 Act.

    

    (E) NO CONFLICTS. The
execution, delivery and performance of the Facility Transaction Documents by the
Investor and the consummation by the Investor of the transactions contemplated
hereby and thereby will not result in a violation of Limited Liability Company
Operating Agreement or other organizational documents of the
Investor.

    

    (F) OPPORTUNITY TO
DISCUSS. The Investor has received all materials relating to the
Company's business, finance and operations which it has requested. The Investor
has had an opportunity to discuss the business, management and financial affairs
of the Company with the Company's management.

    

    (G) INVESTMENT PURPOSES.
The Investor is purchasing the Securities for its own account for investment
purposes and not with a view towards distribution and agrees to resell or
otherwise dispose of the Securities solely in accordance with the registration
provisions of the 1933 Act (or pursuant to an exemption from such registration
provisions).

    

    (H) NO REGISTRATION AS A
DEALER. The Investor is not and will not be required to be registered as
a "dealer" under the 1934 Act, either as a result of its execution and
performance of its obligations under this Agreement or otherwise.

    

    (I)
 GOOD
STANDING.  The Investor is a Limited Liability Company, duly
organized, validly existing and in good standing in the State of
Delaware.

    

    (J)
 TAX
LIABILITIES.  The Investor understands that it is liable for its own
tax liabilities.

    

    (K) REGULATION M.
 The Investor will comply with Regulation M under the 1934 Act, if
applicable.  

    

    (L) ACKNOWLEDGEMENT OF
TERMS.  The Investor hereby represents and warrants to the Company
that: (i) it is voluntarily entering into this Agreement of its own freewill,
(ii) it is not entering this Agreement under economic duress, (iii) the terms of
this Agreement are reasonable and fair to the Investor, and (iv) the Investor
has had independent legal counsel of its own choosing review this Agreement,
advise the Investor with respect to this Agreement, and represent the Investor
in connection with this Agreement.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    SECTION 4. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.

    

    Except as
set forth in the Schedules attached hereto, or as disclosed on the Company's SEC
Documents, the Company represents and warrants to the Investor
that:

    

    (A) ORGANIZATION AND
QUALIFICATION. The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Nevada, USA and has the
requisite corporate power and authorization to own its properties and to carry
on its business as now being conducted. Both the Company and the companies it
owns or controls (“Subsidiaries”) are duly qualified to do business and are in
good standing in every jurisdiction in which its ownership of property or the
nature of the business conducted by it makes such qualification necessary,
except to the extent that the failure to be so qualified or be in good standing
would not have a Material Adverse Effect. As used in this Agreement, "Material
Adverse Effect" means any material adverse effect on the business, properties,
assets, operations, results of operations, financial condition or prospects of
the Company and its Subsidiaries, if any, taken as a whole, or on the
transactions contemplated hereby or by the agreements and instruments to be
entered into in connection herewith, or on the authority or ability of the
Company to perform its obligations under the Facility Transaction Documents (as
defined in Section 1 and 4(B), below).  

    

    (B) AUTHORIZATION; ENFORCEMENT;
COMPLIANCE WITH OTHER INSTRUMENTS.

    

    (I) The
Company has the requisite corporate power and authority to enter into and
perform this Investment Agreement and the Registration Rights Agreement
(collectively, the "Facility Transaction Documents"), and to issue the
Securities in accordance with the terms hereof and thereof.

    

    (II) The
execution and delivery of the Facility Transaction Documents by the Company and
the consummation by it of the transactions contemplated hereby and thereby,
including without limitation the reservation for issuance and the issuance of
the Securities pursuant to this Agreement, have been duly and validly authorized
by the Company's Board of Directors and no further consent or authorization is
required by the Company, its Board of Directors, or its
shareholders.

    

    (III) The
Facility Transaction Documents have been duly and validly executed and delivered
by the Company.

    

    (IV) The
Facility Transaction Documents constitute the valid and binding obligations of
the Company enforceable against the Company in accordance with their terms,
except as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of creditors'
rights and remedies.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    (C) CAPITALIZATION.

    

    Except as
disclosed in the Company's publicly available filings with the SEC and Schedule
4(C) attached hereto:

    

    (I) No
shares of the Company's capital stock are subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by the
Company;

    

    (II)
There are no outstanding debt securities;

    

    (III)
There are no outstanding shares of capital stock, options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of the Company or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the
Company or any of its Subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries;

    

    (IV)
There are no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of their securities under
the 1933 Act (except the Registration Rights Agreement);

    

    (V) There
are no outstanding securities of the Company or any of its Subsidiaries which
contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any
of its Subsidiaries;

    

    (VI)
There are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the Securities as described
in this Agreement;

    

    (VII) The
Company does not have any stock appreciation rights or "phantom stock" plans or
agreements or any similar plan or agreement; and

    

    (VIII) To
the Company’s Knowledge, there is no dispute as to the classification of any
shares of the Company's capital stock.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    (IX) The
Company has furnished to the Investor, or the Investor has had access through
EDGAR to, true and correct copies of the Company's Amended and Restated
Certificate of Incorporation, as in effect on the date hereof (the "Certificate
of Incorporation"), and the Company's By-laws, as in effect on the date hereof
(the "By-laws"), and the terms of all securities convertible into or exercisable
for Common Stock and the material rights of the holders thereof in respect
thereto.

    

    (D) ISSUANCE OF SHARES.
The Company has reserved 1,000,000 Shares for issuance pursuant to this
Agreement, which have been duly authorized and reserved those Shares for
issuance (subject to adjustment pursuant to the Company's covenant set forth in
Section 5(F) below) pursuant to this Agreement. Upon issuance in accordance with
this Agreement, the Securities will be validly issued, fully paid for and
non-assessable and free from all taxes, liens and charges with respect to the
issue thereof. In the event the Company cannot register a sufficient number of
Shares for issuance pursuant to this Agreement, the Company will use its best
efforts to authorize and reserve for issuance the number of Shares required for
the Company to perform its obligations hereunder as soon as reasonably
practicable.

     

    (E) NO CONFLICTS. The
execution, delivery and performance of the Facility Transaction Documents by the
Company and the consummation by the Company of the transactions contemplated
hereby and thereby will not: (I) result in a violation of the Certificate of
Incorporation, any Certificate of Designations, Preferences and Rights of any
outstanding series of preferred stock of the Company or the By-laws; or (II)
conflict with, or constitute a Material Default (or an event which with notice
or lapse of time or both would become a material default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any material agreement, contract, indenture mortgage, indebtedness or instrument
to which the Company or any of its Subsidiaries is a party, or to the Company's
Knowledge result in a violation of any law, rule, regulation, order, judgment or
decree (including United States federal and state securities laws and
regulations and the rules and regulations of the Principal Market or principal
securities exchange or trading market on which the Common Stock is traded or
listed) applicable to the Company or any of its Subsidiaries or by which any
property or asset of the Company or any of its Subsidiaries is bound or
affected. Except as disclosed in Schedule 4(e), neither the Company nor its
Subsidiaries is in violation of any term of, or in default under, the
Certificate of Incorporation, any Certificate of Designations, Preferences and
Rights of any outstanding series of preferred stock of the Company or the
By-laws or their organizational charter or by-laws, respectively, or any
contract, agreement, mortgage, indebtedness, indenture, instrument, judgment,
decree or order or any statute, rule or regulation applicable to the Company or
its Subsidiaries, except for possible conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations that would not
individually or in the aggregate have or constitute a Material Adverse Effect.
To the Company’s Knowledge, the business of the Company and its Subsidiaries is
not being conducted, and shall not be conducted, in violation of any law,
statute, ordinance, rule, order or regulation of any governmental authority or
agency, regulatory or self-regulatory agency, or court, except for possible
violations the sanctions for which either individually or in the aggregate would
not have a Material Adverse Effect. Except as specifically contemplated by this
Agreement and as required under the 1933 Act or any securities laws of any
states, to the Company's Knowledge, the Company is not required to obtain any
consent, authorization, permit or order of, or make any filing or registration
(except the filing of a registration statement as outlined in the Registration
Rights Agreement between the Parties) with, any court, governmental authority or
agency, regulatory or self-regulatory agency or other third party in order for
it to execute, deliver or perform any of its obligations under, or contemplated
by, the Facility Transaction Documents in accordance with the terms hereof or
thereof. All consents, authorizations, permits, 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 and are
in full force and effect as of the date hereof. To the Company’s Knowledge,
there are no facts or circumstances which might give rise to any of the
foregoing. To the Company’s Knowledge, the Company is not, and does not intend
to be will not be, in violation of the listing requirements of the Principal
Market as in effect on the date hereof and on each of the Closing Dates and is
not aware of any facts which would reasonably lead to delisting of the Common
Stock by the Principal Market in the foreseeable future.  

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    (F) SEC DOCUMENTS; FINANCIAL
STATEMENTS. As of the date hereof, the Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the 1934 Act (all of the
foregoing filed prior to the date hereof and all exhibits included therein and
financial statements and schedules thereto and documents incorporated by
reference therein being hereinafter referred to as the "SEC Documents"). The
Company has delivered to the Investor or its representatives, or they have had
access through EDGAR to, true and complete copies of the SEC Documents. As of
their respective filing dates, the SEC Documents complied in all material
respects with the requirements of the 1934 Act and the rules and regulations of
the SEC promulgated thereunder applicable to the SEC Documents, and none of the
SEC Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. As of their respective
dates, the financial statements of the Company included in the SEC Documents
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto. Such financial statements have been prepared in accordance with
generally accepted accounting principles, by a firm that is a member of the
Public Companies Accounting Oversight Board ("PCAOB") consistently applied,
during the periods involved (except (I) as may be otherwise indicated in such
financial statements or the notes thereto, or (II) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). No other written
information provided by or on behalf of the Company to the Investor which is not
included in the SEC Documents, including, without limitation, information
referred to in Section 4(D) of this Agreement, contains any untrue statement of
a material fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstance under which they are or
were made, not misleading. To the Company’s Knowledge, neither the Company nor
any of its Subsidiaries or any of their officers, directors, employees or agents
have provided the Investor with any material, nonpublic information which was
not publicly disclosed prior to the date hereof and any material, nonpublic
information provided to the Investor by the Company or its Subsidiaries or any
of their officers, directors, employees or agents prior to the Closing Date
shall be publicly disclosed by the Company prior to the Closing
Date.

    
      
         

      

      
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    (G) ABSENCE OF CERTAIN
CHANGES. Except as otherwise set forth in the SEC Documents, the Company
does not intend to change the business operations of the Company in any material
way. The Company has not taken any steps, and does not currently expect to take
any steps, to seek protection pursuant to any bankruptcy law nor does the
Company or its Subsidiaries have any knowledge or reason to believe that its
creditors intend to initiate involuntary bankruptcy proceedings.

     

    (H) ABSENCE OF LITIGATION AND/OR
REGULATORY PROCEEDINGS. Except as set forth in the SEC Documents, there
is no action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending
or, to the Company’s Knowledge, threatened against or affecting the Company, the
Common Stock or any of the Company's Subsidiaries or any of the Company's or the
Company's Subsidiaries' officers or directors in their capacities as such, in
which an adverse decision could have a Material Adverse Effect.

    

    (I) ACKNOWLEDGMENT REGARDING
INVESTOR'S PURCHASE OF SHARES. The Company acknowledges and agrees that
the Investor is acting solely in the capacity of an arm's length purchaser with
respect to the Facility Transaction Documents and the transactions contemplated
hereby and thereby. The Company further acknowledges that the Investor is not
acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to the Facility Transaction Documents and the
transactions contemplated hereby and thereby and any advice given by the
Investor or any of its respective representatives or agents in connection with
the Facility Transaction Documents and the transactions contemplated hereby and
thereby is merely incidental to the Investor's purchase of the Securities, and
is not being relied on by the Company. The Company further represents to the
Investor that the Company's decision to enter into the Facility Transaction
Documents has been based solely on the independent evaluation by the Company and
its representatives.

    

    (J) NO UNDISCLOSED EVENTS,
LIABILITIES, DEVELOPMENTS OR CIRCUMSTANCES. Except as set forth in the
SEC Documents, as of the date hereof, no event, liability, development or
circumstance has occurred or exists, or to the Company's Knowledge is
contemplated to occur, with respect to the Company or its Subsidiaries or their
respective business, properties, assets, prospects, operations or financial
condition, that would be required to be disclosed by the Company under
applicable securities laws on a registration statement filed with the SEC
relating to an issuance and sale by the Company of its Common Stock and which
has not been publicly announced.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    (K) EMPLOYEE RELATIONS.
Neither the Company nor any of its Subsidiaries is involved in any union labor
dispute nor, to the Company’s Knowledge or any of its Subsidiaries, is any such
dispute threatened. Neither the Company nor any of its Subsidiaries is a party
to a collective bargaining agreement, and the Company and its Subsidiaries
believe that relations with their employees are good. No executive officer (as
defined in Rule 501(f) of the 1933 Act) has notified the Company that such
officer intends to leave the Company's employ or otherwise terminate such
officer's employment with the Company.  

    

    (L) INTELLECTUAL PROPERTY
RIGHTS. The Company and its Subsidiaries own or possess adequate rights
or licenses to use all trademarks, trade names, service marks, service mark
registrations, service names, patents, patent rights, copyrights, inventions,
licenses, approvals, governmental authorizations, trade secrets and rights
necessary to conduct their respective businesses as now conducted. Except as set
forth in the SEC Documents, none of the Company's trademarks, trade names,
service marks, service mark registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, government authorizations,
trade secrets or other intellectual property rights necessary to conduct its
business as now or as proposed to be conducted have expired or terminated, or
are expected to expire or terminate within two (2) years from the date of this
Agreement. To the Company’s Knowledge, neither the Company nor its Subsidiaries
are infringing upon the trademark, trade name rights, patents, patent rights,
copyrights, inventions, licenses, service names, service marks, service mark
registrations, trade secret or other similar rights of others, or of any such
development of similar or identical trade secrets or technical information by
others and, except as set forth in the SEC Documents, there is no claim, action
or proceeding being made or brought against, or to the Company's Knowledge,
being threatened against, the Company or its Subsidiaries regarding trademark,
trade name, patents, patent rights, invention, copyright, license, service
names, service marks, service mark registrations, trade secret or other
infringement; and the Company and its Subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing. The Company and its
Subsidiaries have taken commercially reasonable security measures to protect the
secrecy, confidentiality and value of all of their intellectual
properties.

    

    (M) ENVIRONMENTAL LAWS.
To the Company’s Knowledge, the Company and its Subsidiaries (I) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"); (II) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses; and (III) are in compliance with all terms and
conditions of any such permit, license or approval where, in each of the three
(3) foregoing cases, the failure to so comply would have, individually or in the
aggregate, a Material Adverse Effect.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    (N) TITLE. The Company
and its Subsidiaries have good and marketable title to all personal property
owned by them which is material to the business of the Company and its
Subsidiaries, in each case free and clear of all liens, encumbrances and defects
except such as are described in the SEC Documents or such as do not materially
affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company or any of its Subsidiaries.
Any real property and facilities held under lease by the Company or any of its
Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
Subsidiaries. 

    

    (O) INSURANCE. Each of
the Company's Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as management
of the Company reasonably believes to be prudent and customary in the businesses
in which the Company and its Subsidiaries are engaged. Neither the Company nor
any of its Subsidiaries has been refused any insurance coverage sought or
applied for and neither the Company nor its Subsidiaries has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a
Material Adverse Effect.

    

    (P) REGULATORY PERMITS.
The Company and its Subsidiaries have in full force and effect all certificates,
approvals, authorizations and permits from the appropriate federal, state, local
or foreign regulatory authorities and comparable foreign regulatory agencies,
necessary to own, lease or operate their respective properties and assets and
conduct their respective businesses, and neither the Company nor any such
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such certificate, approval, authorization or permit, except
for such certificates, approvals, authorizations or permits which if not
obtained, or such revocations or modifications which, would not have a Material
Adverse Effect.

    

    (Q) INTERNAL ACCOUNTING
CONTROLS. The Company and each of its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (I)
transactions are executed in accordance with management's general or specific
authorizations; (II) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles by a firm with membership to the PCAOB and to maintain
asset accountability; (III) access to assets is permitted only in accordance
with management's general or specific authorization; and (IV) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.

    

    (R) NO MATERIALLY ADVERSE
CONTRACTS, ETC. Neither the Company nor any of its Subsidiaries is
subject to any charter, corporate or other legal restriction, or any judgment,
decree, order, rule or regulation which in the judgment of the Company's
officers has or is expected in the future to have a Material Adverse Effect.
Neither the Company nor any of its Subsidiaries is a party to any contract or
agreement which in the judgment of the Company's officers has or is expected to
have a Material Adverse Effect.  

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

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

    

    (T) CERTAIN TRANSACTIONS.
Except as set forth in the SEC Documents filed at least ten (10) days prior to
the date hereof and except for arm's length transactions pursuant to which the
Company makes payments in the ordinary course of business upon terms no less
favorable than the Company could obtain from disinterested third parties and
other than the grant of stock options disclosed in the SEC Documents, none of
the officers, directors, or employees of the Company is presently a party to any
transaction with the Company or any of its Subsidiaries (other than for services
as employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge
of the Company, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.

    

    (U) DILUTIVE EFFECT. The
Company understands and acknowledges that the number of shares of Common Stock
issuable upon purchases pursuant to this Agreement will increase in certain
circumstances including, but not necessarily limited to, the circumstance
wherein the trading price of the Common Stock declines during the period between
the Effective Date and the end of the Open Period. 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 on the shareholders of the Company. The Board of
Directors of the Company has concluded, in its good faith business judgment, and
with full understanding of the implications, that such issuance is in the best
interests of the Company. The Company specifically acknowledges that, subject to
such limitations as are expressly set forth in the Facility Transaction
Documents, its obligation to issue shares of Common Stock upon purchases
pursuant to this Agreement is absolute and unconditional regardless of the
dilutive effect that such issuance may have on the ownership interests of other
shareholders of the Company.

     

    (V) LOCK-UP. The Company
shall cause its officers, insiders, directors, and affiliates or other related
parties under control of the Company, to refrain from buying and/or selling
Common Stock during each Pricing Period.

    
      
         

      

      
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    (W) NO GENERAL
SOLICITATION. Neither the Company, nor any of its affiliates, nor any
person acting on its behalf, has engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with the
offer or sale of the Common Stock to be offered as set forth in this
Agreement.

    

    (X) NO BROKERS, FINDERS OR
FINANCIAL ADVISORY FEES OR COMMISSIONS.  No brokers, finders or
financial advisory fees or commissions will be payable by the Company, its
agents or Subsidiaries, with respect to the transactions contemplated by this
Agreement, except as otherwise disclosed in this Agreement except as set forth
in Schedule 4(X).

    

    SECTION 5. COVENANTS OF THE
COMPANY

    

    (A) BEST EFFORTS. The
Company shall use all commercially reasonable efforts to timely satisfy each of
the conditions set forth in Section 7 of this Agreement.

    

    (B) BLUE SKY. The Company
shall, at its sole cost and expense, on or before the Closing Date, take such
action as the Company shall reasonably determine is necessary to qualify the
Securities for, or obtain exemption for the Securities for, sale to the Investor
at the Closing pursuant to this Agreement under applicable securities or "Blue
Sky" laws of such states of the United States, as reasonably specified by the
Investor, and shall provide evidence of any such action so taken to the Investor
on or prior to the Closing Date.

    

    (C) REPORTING STATUS.
Until one of the following occurs, the Company shall file all reports required
to be filed with the SEC pursuant to the 1934 Act, and the Company shall not
terminate its status, or take an action or fail to take any action, which would
terminate its status as a reporting company under the 1934 Act: (i) this
Agreement terminates pursuant to Section 9 and the Investor has the right to
sell all of the Securities without restrictions pursuant to Rule 144(k)
promulgated under the 1933 Act, or such other exemption (ii) the date on which
the Investor has sold all the Securities and this Agreement has been terminated
pursuant to Section 9.

    

    (D) USE OF PROCEEDS. The
Company will use the proceeds from the sale of the Shares (excluding amounts
paid by the Company for fees as set forth in the Facility Transaction Documents)
for general corporate and working capital purposes and acquisitions or assets,
businesses or operations or for other purposes that the Board of Directors, in
its good faith deem to be in the best interest of the Company.
 

    

    (E) FINANCIAL
INFORMATION. During the Open Period, the Company agrees to make available
to the Investor via EDGAR or other electronic means the following documents and
information on the forms set forth: (I) within five (5) Trading Days after the
filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, its
Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K and any
Registration Statements or amendments filed pursuant to the 1933 Act; (II)
copies of any notices and other information made available or given to the
shareholders of the Company generally, contemporaneously with the making
available or giving thereof to the shareholders; and (III) within two (2)
calendar days of filing or delivery thereof, copies of all documents filed with,
and all correspondence sent to, the Principal Market, any securities exchange or
market, or the National Association of Securities Dealers, Inc., unless such
information is material nonpublic information.

    
      
         

      

      
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    (F) RESERVATION OF
SHARES. The Company shall take all action necessary to at all times have
authorized, and reserved for the purpose of issuance, a sufficient number of
shares of Common Stock to provide for the issuance of the Securities to the
Investor as required hereunder. In the event that the Company determines that it
does not have a sufficient number of authorized shares of Common Stock to
reserve and keep available for issuance as described in this Section 5(F), the
Company shall use all commercially reasonable efforts to increase the number of
authorized shares of Common Stock by seeking shareholder approval for the
authorization of such additional shares.

    

    (G) LISTING. The Company
shall use all commercially reasonable efforts to promptly secure and maintain
the listing of all of the Registrable Securities (as defined in the Registration
Rights Agreement) on the Principal Market and each other national securities
exchange and automated quotation system, if any, upon which shares of Common
Stock are then listed (subject to official notice of issuance) and shall
maintain, such listing of all Registrable Securities from time to time issuable
under the terms of the Facility Transaction Documents. Neither the Company nor
any of its Subsidiaries shall take any action which would be reasonably expected
to result in the delisting or suspension of the Common Stock on the Principal
Market (excluding suspensions of not more than one (1) trading day resulting
from business announcements by the Company). The Company shall use all
commercially reasonable efforts promptly provide to the Investor copies of any
notices it receives from the Principal Market regarding the continued
eligibility of the Common Stock for listing on such automated quotation system
or securities exchange. The Company shall pay all fees and expenses in
connection with satisfying its obligations under this Section 5(G).

    

    (H) TRANSACTIONS WITH
AFFILIATES. The Company shall not, and shall cause each of its
Subsidiaries not to, enter into, amend, modify or supplement, or permit any
Subsidiary to enter into, amend, modify or supplement, any agreement,
transaction, commitment or arrangement with any of its or any Subsidiary's
officers, directors, persons who were officers or directors at any time during
the previous two (2) years, shareholders who beneficially own 5% or more of the
Common Stock, or Affiliates or with any individual related by blood, marriage or
adoption to any such individual or with any entity in which any such entity or
individual owns a 5% or more beneficial interest (each a "Related Party"),
except for (I) customary employment arrangements and benefit programs on
reasonable terms, (II) any agreement, transaction, commitment or arrangement on
an arms-length basis on terms no less favorable than terms which would have been
obtainable from a disinterested third party other than such Related Party, or
(III) any agreement, transaction, commitment or arrangement which is approved by
a majority of the disinterested directors of the Company. For purposes hereof,
any director who is also an officer of the Company or any Subsidiary of the
Company shall not be a disinterested director with respect to any such
agreement, transaction, commitment or arrangement. "Affiliate" for purposes
hereof means, with respect to any person or entity, another person or entity
that, directly or indirectly, (I) has a 5% or more equity interest in that
person or entity, (II) has 5% or more common ownership with that person or
entity, (III) controls that person or entity, or (IV) is under common control
with that person or entity. "Control" or "Controls" for purposes hereof means
that a person or entity has the power, directly or indirectly, to conduct or
govern the policies of another person or entity.

    
      
         

      

      
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    (I) FILING OF FORM 8-K.
On or before the date which is four (4) Trading Days after the Execution Date,
the Company shall file a Current Report on Form 8-K with the SEC describing the
terms of the transaction contemplated by the Facility Transaction Documents in
the form required by the 1934 Act, if such filing is required.

    

    (J) CORPORATE EXISTENCE.
The Company shall use all commercially reasonable efforts to preserve and
continue the corporate existence of the Company.

    

    (K) NOTICE OF CERTAIN EVENTS
AFFECTING REGISTRATION; SUSPENSION OF RIGHT TO MAKE A PUT. The Company
shall promptly notify the Investor upon the occurrence of any of the following
events in respect of a Registration Statement or related Prospectus in respect
of an offering of the Securities: (I) receipt of any request for additional
information by the SEC or any other federal or state governmental authority
during the period of effectiveness of the Registration Statement for amendments
or supplements to the Registration Statement or related Prospectus; (II) the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of any Registration Statement or the
initiation of any proceedings for that purpose;  (III) receipt of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Securities for sale in any jurisdiction or the
initiation or notice of any proceeding for such purpose; (IV) the happening of
any event that makes any statement made in such Registration Statement or
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the making
of any changes in the Registration Statement, related Prospectus or documents so
that, in the case of a Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the related Prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (V) the Company's
reasonable determination that a post-effective amendment to the Registration
Statement would be appropriate, and the Company shall promptly make available to
Investor any such supplement or amendment to the related Prospectus. The Company
shall not deliver to Investor any Put Notice during the continuation of any of
the foregoing events in this Section 5(K).  

    
      
         

      

      
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    (L)
 REIMBURSEMENT.
 If (I) the Investor becomes involved in any capacity in any action,
proceeding or investigation brought by any shareholder of the Company, in
connection with or as a result of the consummation of the transactions
contemplated by the Facility Transaction Documents, or if the Investor is
impleaded in any such action, proceeding or investigation by any person (other
than as a result of a breach of the Investor’s representations and warranties
set forth in this Agreement); or (II) the Investor becomes involved in any
capacity in any action, proceeding or investigation brought by the SEC against
or involving the Company or in connection with or as a result of the
consummation of the transactions contemplated by the Facility Transaction
Documents (other than as a result of a breach of the Investor’s representations
and warranties set forth in this Agreement), then in any such case, the Company
will reimburse the Investor for its reasonable legal and other expenses
(including the cost of any investigation and preparation) incurred in connection
therewith, as such expenses are incurred. In addition, other than with respect
to any matter in which the Investor is a named party, the Company will pay to
the Investor the charges, as reasonably determined by the Investor, for the time
of any officers or employees of the Investor devoted to appearing and preparing
to appear as witnesses, assisting in preparation for hearings, trials or
pretrial matters, or otherwise with respect to inquiries, hearing, trials, and
other proceedings relating to the subject matter of this Agreement. The
reimbursement obligations of the Company under this section shall be in addition
to any liability which the Company may otherwise have, shall extend upon the
same terms and conditions to any affiliates of the Investor that are actually
named in such action, proceeding or investigation, and partners, directors,
agents, employees, attorneys, accountants, auditors and controlling persons (if
any), as the case may be, of Investor and any such affiliate, and shall be
binding upon and inure to the benefit of any successors of the Company, the
Investor and any such affiliate and any such person.

    

    (M) TRANSFER AGENT.
 Upon effectiveness of the Registration Statement, and for so long as the
Registration Statement is effective,  the Company shall deliver
instructions to its transfer agent to issue Shares to the Investor that are
covered for resale by the Registration Statement free of restrictive
legends.

    

    (N) ACKNOWLEDGEMENT OF
TERMS.  The Company hereby represents and warrants to the Investor
that: (i) it is voluntarily entering into this Agreement of its own freewill,
(ii) it is not entering this Agreement under economic duress, (iii) the terms of
this Agreement are reasonable and fair to the Company, and (iv) the Company has
had independent legal counsel of its own choosing review this Agreement, advise
the Company with respect to this Agreement, and represent the Company in
connection with this Agreement.

    
      
         

      

      
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    SECTION 6. RESERVED;
INTENTIONALLY OMITTED

    

    SECTION 7. CONDITIONS OF THE
COMPANY'S OBLIGATION TO SELL.

    

    The
obligation hereunder of the Company to issue and sell the Securities to the
Investor is further subject to the satisfaction, on or before the Closing Date,
of each of the following conditions set forth below.

    

    (A) The
Investor shall have executed this Agreement and the Registration Rights
Agreement and delivered the same to the Company.

    

    (B) On
the day immediately following the end of the Pricing Period, the Investor shall
have delivered to the Company a Put Settlement Sheet (hereto attached as Exhibit
C), which shall evidence acceptance of the Put, confirm wire transfer
instructions for delivery of the Purchase Amount and provide instructions for
delivery of the Securities to the Investor.

    

    (C) 
Upon receipt of the Securities from the Company, the Investor shall
instantaneously cause the Purchase Amount to be automatically delivered to the
Company’s Bank Account via wire transfer of immediately available
funds.

    

    (D) The
representations and warranties of the Investor shall be true and correct as of
the date when made and as of the Closing Date as though made at that time and
the Investor shall have performed, satisfied and complied with the covenants,
agreements and conditions required by the Facility Transaction Documents to be
performed, satisfied or complied with by the Investor on or before the Closing
Date.

    

    (E) No
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the consummation of any of
the transactions contemplated by this Agreement.

    

    SECTION 8. FURTHER
CONDITIONS OF THE INVESTOR'S OBLIGATION TO PURCHASE.

    

    The
obligation of the Investor hereunder to purchase Shares is subject to the
satisfaction, on or before the Closing Date, of each of the following conditions
set forth below.

    

    (A) The
Company shall have executed the Facility Transaction Documents and delivered the
same to the Investor.

    

    (B) The
Common Stock shall be authorized for quotation on the Principal Market and
trading in the Common Stock shall not have been suspended by the Principal
Market or the SEC, at any time beginning on the date hereof and through and
including the Closing Date (excluding suspensions of not more than one (1)
Trading Day resulting from business announcements by the Company, provided that
such suspensions occur prior to the Company's delivery of the Put Notice related
to the Closing).

    
      
         

      

      
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    (C) The
representations and warranties of the Company shall be true and correct as of
the date when made and as of the Closing Date as though made at that time and
the Company shall have performed, satisfied and complied with the covenants,
agreements and conditions required by the Facility Transaction Documents to be
performed, satisfied or complied with by the Company on or before the Closing
Date. The Investor may request an update as of the Closing Date regarding the
representation contained in Section 4(C) above.

    

    (D)
Reserved

    

    (E) The
Board of Directors of the Company shall have adopted resolutions consistent with
Section 4(B)(II) above (the "Resolutions") and such Resolutions shall not have
been amended or rescinded prior to the Closing Date.

    

    (F)
Reserved

    

    (G) No
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the consummation of any of
the transactions contemplated by this Agreement.

    

    (H) The
Registration Statement shall be effective on the Closing Date and no stop order
suspending the effectiveness of the Registration statement shall be in effect or
to the Company's knowledge shall be pending or threatened. Furthermore, on the
Closing Date (I) neither the Company nor the Investor shall have received notice
that the SEC has issued or intends to issue a stop order with respect to such
Registration Statement or that the SEC otherwise has suspended or withdrawn the
effectiveness of such Registration Statement, either temporarily or permanently,
or intends or has threatened to do so (unless the SEC's concerns have been
addressed and Investor is reasonably satisfied that the SEC no longer is
considering or intends to take such action), and (II) no other suspension of the
use or withdrawal of the effectiveness of such Registration Statement or related
Prospectus shall exist.  

    

    (I) At
the time of the Closing, the Registration Statement (including information or
documents incorporated by reference therein) and any amendments or supplements
thereto shall not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading or which would require public disclosure or an
update supplement to the Prospectus.

    

    (J) If
applicable, the shareholders of the Company shall have approved the issuance of
any Shares in excess of the Maximum Common Stock Issuance in accordance with
Section 2(H) or the Company shall have obtained appropriate approval pursuant to
the requirements of Nevada law and the Company’s Articles of Incorporation and
By-laws.

    

    (K) The
conditions to the Closing set forth in Section 2(E) shall have been satisfied on
or before the Closing Date.

    
      
         

      

      
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    (L)
 The Company shall have certified to the Investor the number of Shares of
Common Stock outstanding when a Put Notice is given to the Investor.  The
Company's delivery of a Put Notice to the Investor constitutes the Company's
certification of the existence of the necessary number of shares of Common Stock
reserved for issuance.

    

    SECTION
9. TERMINATION.

    

    (A) This
Agreement shall terminate upon any of the following events without penalty or
further obligations from either parties other than provisions listed in Section
9(C) below:

    

    (I) when
the Investor has purchased an aggregate of one million dollars ($1,000,000) in
the Common Stock of the Company pursuant to this Agreement; or,

     

    (II) upon
written notice of the Company to the Investor. Penalties or amounts, if any, due
under this Agreement shall be immediately payable and due upon termination of
the facility.

    

    (B) This
Agreement may terminate upon any of the following events:

    

    (I) Termination for
Default. In the event that either party commits a Material Breach of its
obligations hereunder, the non-defaulting party may, at its option, terminate
this Agreement by written notice of termination specifying such Material Breach;
provided, however, that if such default is subject to cure, then such notice
shall be subject to a twenty (20) day cure period from the date thereof,
and if the defaulting party cures such default prior to expiration of such
period, termination shall not take place.

    

    (II)
Termination for
Insolvency. Either party hereto may, at its option, upon five
(5) days written notice, terminate this Agreement should the other party
hereto (i) admit in writing its inability to pay its debts generally as
they become due; (ii) make a general assignment for the benefit of
creditors; (iii) institute proceedings to be adjudicated a voluntary
bankrupt, or consent to the filing of a petition of bankruptcy against it;
(iv) be adjudicated by a court of competent jurisdiction as being bankrupt
or insolvent; (v) seek reorganization under any bankruptcy act, or consent
to the filing of a petition seeking such reorganization, or (vi) have a
decree entered against it by a court of competent jurisdiction appointing a
receiver, liquidator, trustee or assignee in bankruptcy or in insolvency
covering all or substantially all of such party’s property or providing for the
liquidation of such party’s property or business affairs.

    

    (C) Survival of
Termination. The obligations of the parties under this Agreement that by
their nature would continue beyond expiration, termination or cancellation of
this Agreement (including, without limitation, the warranties, indemnification
obligations, confidentiality requirements and ownership and property rights)
shall survive any such expiration, termination or cancellation.

    
      
         

      

      
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    SECTION 10.
 SUSPENSION

    

    (A) This
Agreement shall be suspended upon any of the following events, and shall remain
suspended until such event is rectified:

    

    (I)
 the trading of the Common Stock is suspended by the SEC, the Principal
Market or the NASD for a period of two (2) consecutive Trading Days during the
Open Period; or,

    

    (II) The
Common Stock ceases to be registered under the 1934 Act or listed or traded on
the Principal Market.  Immediately upon the occurrence of one of the
above-described events, the Company shall send written notice of such event to
the Investor.

    

    SECTION
11. INDEMNIFICATION.

    

    In
consideration of the parties mutual obligations set forth in the Facility
Transaction Documents, each of the parties (in such capacity, an "Indemnitor")
shall defend, protect, indemnify and hold harmless the other and all of the
other party's shareholders, officers, directors, employees, counsel, and direct
or indirect investors and any of the foregoing person's agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
"Indemnitees") from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and reasonable
expenses in connection therewith (irrespective of whether any such Indemnitee is
a party to the action for which indemnification hereunder is sought), and
including reasonable attorneys' fees and disbursements (the "Indemnified
Liabilities"), incurred by any Indemnitee as a result of, or arising out of, or
relating to (I) any misrepresentation or breach of any representation or
warranty made by the Indemnitor or any other certificate, instrument or document
contemplated hereby or thereby; (II) any breach of any covenant, agreement or
obligation of the Indemnitor contained in the Facility Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby; or
(III) any cause of action, suit or claim brought or made against such Indemnitee
by a third party and arising out of or resulting from the execution, delivery,
performance or enforcement of the Facility Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, except
insofar as any such misrepresentation, breach or any untrue statement, alleged
untrue statement, omission or alleged omission is made in reliance upon and in
conformity with information furnished to Indemnitor which is specifically
intended for use in the preparation of any such Registration Statement,
preliminary Prospectus, Prospectus or amendments to the Prospectus. To the
extent that the foregoing undertaking by the Indemnitor may be unenforceable for
any reason, the Indemnitor shall make the maximum contribution to the payment
and satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law. The indemnity provisions contained herein shall be in
addition to any cause of action or similar rights Indemnitor may have, and any
liabilities the Indemnitor or the Indemnitees may be subject
to.

    
      
         

      

      
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    SECTION
12. GOVERNING LAW; DISPUTES SUBMITTED TO ARBITRATION.

    

    (A) ARBITRATION CLAUSE.
All disputes arising under this agreement shall be governed by and interpreted
in accordance with the laws of New York, without regard to principles of
conflict of laws.  The parties to this agreement will submit all disputes
arising under this agreement to arbitration in New York City, New York before a
single arbitrator of the American Arbitration Association (“AAA”).  The
arbitrator shall be selected by application of the rules of the AAA, or by
mutual agreement of the parties, except that such arbitrator shall be an
attorney admitted to practice law New York.  No party to this agreement
will challenge the jurisdiction or venue provisions as provided in this section.
 No party to this agreement will challenge the jurisdiction or venue
provisions as provided in this section.  Nothing contained herein shall
prevent either party from obtaining an injunction. 

    

    (B) LEGAL FEES; AND
MISCELLANEOUS FEES. Except as otherwise set forth in the Facility
Transaction Documents, each party shall pay the fees and expenses of its
advisers, counsel, the accountants and other experts, if any, and all other
expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement. Any attorneys' fees and
expenses incurred by either the Company or the Investor in connection with the
preparation, negotiation, execution and delivery of any amendments to this
Agreement or relating to the enforcement of the rights of any party, after the
occurrence of any breach of the terms of this Agreement by another party or any
default by another party in respect of the transactions contemplated hereunder,
shall be paid on demand by the party which breached the Agreement and/or
defaulted, as the case may be. The Company shall pay all stamp and other taxes
and duties levied in connection with the issuance of any
Securities.

    

    (C) COUNTERPARTS. This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original signature.

    

    (D) HEADINGS;
SINGULAR/PLURAL. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement. Whenever required by the context of this Agreement, the singular
shall include the plural and masculine shall include the feminine.

    

    (E) SEVERABILITY. If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.

    
      
         

      

      
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    (F) ENTIRE AGREEMENT;
AMENDMENTS. This Agreement is the FINAL AGREEMENT between the Company and
the Investor with respect to the terms and conditions set forth herein, and, the
terms of this Agreement may not be contradicted by evidence of prior,
contemporaneous, or subsequent oral agreements of the Parties.  No
provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and the Investor, and no provision hereof may be
waived other than by an instrument in writing signed by the party against whom
enforcement is sought. The execution and delivery of the Facility Transaction
Documents shall not alter the force and effect of any other agreements between
the Parties, and the obligations under those agreements. 

    

    (G) NOTICES. Any notices
or other communications required or permitted to be given under the terms of
this Agreement must be in writing and will be deemed to have been delivered (I)
upon receipt, when delivered personally; (II) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or (III) one
(1) day after deposit with a nationally recognized overnight delivery service,
in each case properly addressed to the party to receive the same. The addresses
and facsimile numbers for such communications shall be:

    

    If
to the Company:

    

    China
Kangtai Cactus, Bio-Tech, Inc.

    Attention:
Chief Executive Officer

    99 Taibei
Road

    Limin
Economic and Technological Development Zone

    Harbin,
Heilongjiang Province, People’s Republic of China

    Phone:
86.451.5735.1189

    Facsimile:
86.451.5735.1551

    

    With
a Copy to:

    

    The Crone
Law Group

    Attention:
Matthew Chang

    101
Montgomery Street, Suite 1950,

    San
Francisco, CA 94104

    Phone:
415.955.8900

    Facsimile:
415.955.8910

    

    If
to the Investor:

    

    One
Columbus Place

    25th
Floor

    New York,
NY 10019

    212.262.2600
Phone

    212.262.2601
Facsimile

     

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

    
      
         

      

      
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    (H) NO ASSIGNMENT. This
Agreement may not be assigned.

    

    (I) NO THIRD PARTY
BENEFICIARIES. This Agreement is intended for the benefit of the parties
hereto and is not for the benefit of, nor may any provision hereof be enforced
by, any other person, except that the Company acknowledges that the rights of
the Investor may be enforced by its general partner.

    

    (J) SURVIVAL. The
representations and warranties of the Company and the Investor contained in
Sections 2 and 3, the agreements and covenants set forth in Sections 4 and 5,
and the indemnification provisions set forth in Section 11, shall survive each
of the Closings and the termination of this Agreement.  

    

     (K)
PUBLICITY. The
Company and the Investor shall consult with each other in issuing any press
releases or otherwise making public statements with respect to the transactions
contemplated hereby and no party shall issue any such press release or otherwise
make any such public statement without the prior consent of the other party,
which consent shall not be unreasonably withheld or delayed, except that no
prior consent shall be required if such disclosure is required by law, in which
such case the disclosing party shall provide the other party with prior notice
of such public statement. Notwithstanding the foregoing, the Company shall not
publicly disclose the name of the Investor without the prior consent of the
Investor, except to the extent required by law. The Investor acknowledges that
this Agreement and all or part of the Facility Transaction Documents may be
deemed to be "material contracts" as that term is defined by Item 601(b)(10) of
Regulation S-K, and that the Company may therefore be required to file such
documents as exhibits to reports or registration statements filed under the 1933
Act or the 1934 Act.  The Investor further agrees that the status of such
documents and materials as material contracts shall be determined solely by the
Company, in consultation with its counsel.

    

    (L) FURTHER ASSURANCES.
Each party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated
hereby.

    

    (M) COMMITMENT FEES; OTHER FEES
RELATED TO THE TRANSACTION. In addition to the shares to be issued
pursuant to the facility, the Company agrees to pay to Investor a Document
Preparation Fee of $15,000 in cash and 15,000 shares of newly-issued Company
Common Stock, whereby the total fees are payable on the Closing Date.  If
the Closing does not occur prior to the termination of this Agreement, the
Company shall have no obligation to pay the Investor a Document Preparation Fee
and to issue the Commitment Shares.  The Company shall be solely
responsible for all commissions, fees, and / or transaction costs associated and
/ or related to, in any way, with the transaction and / or transactions herein
contemplated and or agreed to under this Agreement.

    
      
         

      

      
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    (N) NO STRICT
CONSTRUCTION. The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent, and no rules
of strict construction will be applied against any party, as the parties
mutually agree that each has had a full and fair opportunity to review this
Agreement and seek the advice of counsel on it.  The normal rule that
ambiguities shall be interpreted against the drafting party shall not apply in
the instant case.

    

    (O) REMEDIES. The
Investor shall have all rights and remedies set forth in this Agreement and the
Registration Rights Agreement and all rights and remedies which such holders
have been granted at any time under any other agreement or contract and all of
the rights which the Investor has by law. Any Person having any rights under any
provision of this Agreement shall be entitled to enforce such rights
specifically (without posting a bond or other security), to recover damages by
reason of any default or breach of any provision of this Agreement, including
the recovery of reasonable attorneys fees and costs, and to exercise all other
rights granted by law.

    

    (P) PAYMENT SET ASIDE. To
the extent that the Company makes a payment or payments to the Investor
hereunder or under the Registration Rights Agreement or the Investor enforces or
exercises its rights hereunder or thereunder, and such payment or payments or
the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

    

    (Q) PRICING OF COMMON
STOCK. For purposes of this Agreement, the bid price of the Common Stock
shall be as reported on Bloomberg.

     

    SECTION 13. NON-DISCLOSURE
OF NON-PUBLIC INFORMATION.

    

    (A) The
Company shall not disclose non-public information to the Investor, its advisors,
or its representatives.

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    (B)
Nothing herein shall require the Company to disclose non-public information to
the Investor or its advisors or representatives, and the Company represents that
it does not disseminate non-public information to any investors who purchase
stock in the Company in a public offering, to money managers or to securities
analysts, provided, however, that notwithstanding anything herein to the
contrary, the Company will, as hereinabove provided, immediately notify the
advisors and representatives of the Investor and, if any, underwriters, of any
event or the existence of any circumstance (without any obligation to disclose
the specific event or circumstance) of which it becomes aware, constituting
non-public information (whether or not requested of the Company specifically or
generally during the course of due diligence by such persons or entities),
which, if not disclosed in the Prospectus included in the Registration Statement
would cause such Prospectus to include a material misstatement or to omit a
material fact required to be stated therein in order to make the statements,
therein, in light of the circumstances in which they were made, not misleading.
Nothing contained in this Section 13 shall be construed to mean that such
persons or entities other than the Investor (without the written consent of the
Investor prior to disclosure of such information) may not obtain non-public
information in the course of conducting due diligence in accordance with the
terms of this Agreement and nothing herein shall prevent any such persons or
entities from notifying the Company of their opinion that based on such due
diligence by such persons or entities, that the Registration Statement contains
an untrue statement of material fact or omits a material fact required to be
stated in the Registration Statement or necessary to make the statements
contained therein, in light of the circumstances in which they were made, not
misleading.  

    

    ARTICLE 14 ACKNOWLEDGEMENTS
OF THE PARTIES.

    

    (A)
Notwithstanding anything in this Agreement to the contrary, the parties hereto
hereby acknowledge and agree to the following:

    

    (I) the
Investor makes no representations or covenants that it will not engage in
trading in the securities of the Company, other than the Investor will not sell
short the Company's common stock at any time during this Agreement and the
Investor will comply with the provisions of Section 9 of the 1934 Act, and the
rules promulgated thereunder, with respect to transactions involving the Common
Stock during the term of this Agreement;

    

    (II) the
Company shall, on or before the date which is four (4) Trading Days after the
Execution Date, file a current report on Form 8-K disclosing the material terms
of the transactions contemplated by the Facility Transaction
Documents;

    

    (III) the
Company has not and shall not provide material non-public information to the
Investor unless prior thereto the Investor shall have executed a written
agreement regarding the confidentiality and use of such information;
and

    

    (IV) the
Company understands and confirms that the Investor will be relying on the
acknowledgements set forth in clauses (i) through (iii) above if the Investor
effects any transactions in the securities of the Company.
 

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

     

    SIGNATURE PAGE OF INVESTMENT
AGREEMENT

     

    Your
signature on this Signature Page evidences your agreement to be bound by the
terms and conditions of the Investment Agreement and the Registration Rights
Agreement as of the date first written above.

     

    The
undersigned signatory hereby certifies that he has read and understands the
Investment Agreement, and the representations made by the undersigned in this
Investment Agreement are true and accurate, and agrees to be bound by its
terms.

    

    
      
        	
                THE
      INVESTOR

              
	 
      
	
                By:

              	
                /S/ Ryan Hodson

              
	 
      	 
      
	
                Title:  

              	
                Managing Director

              
	 
      
	
                CHINA
      KANGTAI CACTUS BIO-TECH, INC.

              
	 
      
	
                By:

              	
                /S/ Jinjiang Wang

              
	 
      	 
      
	
                Title:

              	
                President and
CEO

              

      

    

    
      
         

      

      
        32

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