Document:

fgc_ex1028-80811.htm

    EXHIBIT
10.28

     

    SENIOR
SECURED PROMISSORY NOTE

     

    
      	Dated: August 7,
      2008	 $1,348,525

    

     

    For value
received, FIRSTGOLD CORP., a corporation organized under the laws of the State
of Delaware (the “Maker”), hereby
promises to pay to the order of LAKEWOOD GROUP LLC, with an address of 152 West
57th
Street, 54th Floor,
New York, NY 10019 (together with its successors, representatives, and assigns,
the “Holder”),
in accordance with the terms hereinafter provided, the principal amount of One
Million Three Hundred Forty-Eight Thousand Five Hundred Twenty-Five Dollars
($1,348,525) hereunder, together with interest and all other obligations
outstanding hereunder.

     

    All
payments under or pursuant to this Note shall be made in United States Dollars
in immediately available funds to the Holder at the address of the Holder first
set forth above or at such other place as the Holder may designate from time to
time in writing to the Maker or by wire transfer of funds to the Holder’s
account, instructions for which are attached hereto as Exhibit
A.  The outstanding principal balance of this Note shall be due
and payable on March 1, 2010 (the “Maturity Date”) or at
such earlier time as provided herein.

     

    ARTICLE
I

     

    Section
1.1    Purchase
Agreement.  This Note has been executed and delivered pursuant
to the Note and Warrant Purchase Agreement, bearing even date herewith (the
“Purchase Agreement”), by and between the Maker, the Holder (as a Lender) and
each other Lender party thereto.  Capitalized terms used and not
otherwise defined herein shall have the meanings set forth for such terms in the
Purchase Agreement.

     

    Section
1.2    Interest.  The
outstanding principal balance of this Note shall bear interest, in arrears, at a
rate per annum equal to four percent (4%), payable in cash on the first Business
Day of each month following the date hereof.  Interest shall be
computed on the basis of a 360-day year of twelve (12) thirty-day months, shall
compound monthly and shall accrue commencing on the date
hereof.  Furthermore, upon the occurrence of an Event of Default (as
defined in Section 2.1 hereof), the Maker will pay interest to the Holder,
payable on demand, on the outstanding principal balance of the Note and on all
unpaid interest from the date of the Event of Default at a per annum rate equal
to the lesser of eighteen percent (18%) and the maximum applicable legal rate
per annum, calculated based on a 360-day year.

     

    Section
1.3    Payment of Principal;
Prepayment.

     

    (a)    The
principal amount hereof shall be paid in full on the Maturity Date or, if
earlier, upon acceleration of this Note in accordance with the terms
hereof.  Any amount of principal repaid hereunder may not be
reborrowed.  The Maker may prepay all or any portion of the principal
amount of this Note upon not less than three (3) Business Days prior written
notice to the Holder, without penalty or premium.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)    Not later
than the fifteenth (15th) day of
each calendar month, the Maker shall make a mandatory prepayment to the Holder
equal to its Pro Rata Share of forty percent (40%) of the Maker’s Free Cash Flow
in and for the preceding calendar month; provided, however, that commencing with
the payment to be made in December, 2008 and continuing in each month
thereafter, such monthly payment be equal to the Holder’s Pro Rata Share of the
greater of (i) forty percent (40%) of the Maker’s Free Cash Flow in the
preceding calendar month, and (ii) $400,000.  Each such payment shall
be accompanied by financial calculations of such prior month’s Free Cash Flow
certified as being complete and correct by the Maker’s president or chief
financial officer, in such detail and with such supporting financial documents
as the Collateral Agent (as defined below) may require.  Each such
mandatory prepayment shall be applied first to any interest, fee or expense
obligation hereunder which is then due and unpaid and then on account of the
principal balance hereof.  Prepayments applied to principal shall be
made against the principal balance of this Note and of all other outstanding
Notes issued under the Purchase Agreement on a pro-rata basis.  For
the purposes hereof, “Free Cash Flow” shall mean the Maker’s gross revenue from
all sources less direct operating costs in the period for which such calculation
is made (all in accordance with GAAP).

     

    Section
1.4    Security
Documents.  The obligations of the Maker hereunder are secured
by a continuing security interest in substantially all of the assets of the
Maker pursuant to the terms of a Security Agreement bearing even date herewith
by and between the Maker and the Collateral Agent, a Deed or Deeds of Trust, and
other collateral documents.  For the purposes hereof, the term
“Collateral Agent” shall have the meaning given thereto in the Security
Agreement.

     

    Section
1.5    Payment on Non-Business
Days.  Whenever any payment to be made shall be due on a
Saturday, Sunday or a public holiday under the laws of the State of New York,
such payment shall be due on the next succeeding Business Day and such next
succeeding day shall be included in the calculation of the amount of accrued
interest payable on such date.

     

    Section
1.6    Transfer.  This
Note may be transferred or sold, and may also be pledged, hypothecated or
otherwise granted as security, by the Holder; provided, however, that any
transfer or sale of this Note must be in compliance with any applicable
securities laws.

     

    Section
1.7    Replacement.  Upon
receipt of a duly executed, notarized and unsecured written statement from the
Holder with respect to the loss, theft or destruction of this Note (or any
replacement hereof) and a standard indemnity, or, in the case of a mutilation of
this Note, upon surrender and cancellation of such Note, the Maker shall issue a
new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or
mutilated Note.

     

    Section
1.8    Use of
Proceeds.  The Maker shall use the proceeds of this Note as set
forth in the Purchase Agreement.

     

    ARTICLE
II

     

    EVENTS OF DEFAULT;
REMEDIES

     

    Section
2.1    Events of
Default.  The occurrence of any of the following events shall
be an “Event of
Default” under this Note:

     

    (a)    any
default in respect of any payment of the principal amount, interest or any other
monetary obligation under this Note, as and when the same shall be due and
payable (whether on the Maturity Date or by acceleration or otherwise) or within
three (3) days thereafter; or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)    the Maker
shall fail to observe or perform any other condition, covenant or agreement
contained in this Note, which failure is not cured within five (5) Business Days
after the Maker’s receipt of notice of such failure; or

     

    (c)    the
suspension from listing, without subsequent listing on any one of, or the
failure of the Common Stock to be listed on at least one of the OTC Bulletin
Board, the American Stock Exchange, the Nasdaq Capital Markets, the Nasdaq
Global Market, the Nasdaq Global Select Market or The New York Stock Exchange,
Inc. for a period of five (5) consecutive Trading Days, such a suspension to
only constitute an Event of Default if the Holder provides the Maker written
notification that it deems such suspension to be an Event of Default;
or

     

    (d)    the Maker
shall default in the performance or observance of (i) any undertaking, covenant,
condition or agreement contained in the Purchase Agreement or any other
Transaction Document and such default is not fully cured within five (5)
Business Days after the Maker’s receipt of notice of such
default;  or

     

    (e)    any
representation or warranty made by the Maker herein or in the Purchase Agreement
or any other Transaction Document shall prove to have been false or incorrect or
breached in a material respect on the date as of which made; or

     

    (f)    any
failure by Maker to cure within five (5) Business Days after the Maker’s receipt
of notice of (A) a default in any payment of any amount or amounts of principal
of or interest on any Indebtedness of the Maker (other than the Indebtedness
hereunder) the aggregate principal amount of which Indebtedness is in excess of
$50,000 or (B) a
default in the observance or performance of any other agreement or condition
relating to any Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders or beneficiary or beneficiaries of
such Indebtedness to cause with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity; or

     

    (g)    the Maker
shall (i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property or assets, (ii) make a general assignment
for the benefit of its creditors, (iii) commence a voluntary case under the
United States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic), (iv) file a petition
seeking to take advantage of any bankruptcy, insolvency, moratorium,
reorganization or other similar law affecting the enforcement of creditors’
rights generally, (v) acquiesce in writing to any petition filed against it in
an involuntary case under United States Bankruptcy Code (as now or hereafter in
effect) or under the comparable laws of any jurisdiction (foreign or domestic),
(vi) issue a notice of bankruptcy or winding down of its operations or issue a
press release regarding same, or (vii) take any action under the laws of any
jurisdiction (foreign or domestic) analogous to any of the foregoing;
or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (h)    a
proceeding or case shall be commenced in respect of the Maker, without its
application or consent, in any court of competent jurisdiction, seeking (i) the
liquidation, reorganization, moratorium, dissolution, winding up, or composition
or readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of it or of all or any substantial part of its
assets in connection with the liquidation or dissolution of the Maker or (iii)
similar relief in respect of it under any law providing for the relief of
debtors, and such proceeding or case described in clause (i), (ii) or (iii)
shall continue undismissed, or unstayed and in effect, for a period of thirty
(30) days or any order for relief shall be entered in an involuntary case under
United States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic) against the Maker or
action under the laws of any jurisdiction (foreign or domestic) analogous to any
of the foregoing shall be taken with respect to the Maker and shall continue
undismissed, or unstayed and in effect for a period of thirty (30) days;
or

     

    (i)    any
default or event of default, or event that, with the passage of time or giving
of notice or both would constitute a default or event of default, shall have
occurred under any mining lease or mining rights or claims agreement to which
Maker is now or at any time hereafter a party or any such agreement is
terminated by any of the parties thereto; or

     

    (j)    a
judgment or judgments in the aggregate amount exceeding $25,000 is/are entered
against the Maker and not dismissed or discharged within twenty (20) days
following the entry thereof; or

     

    (k)    Maker
shall cease to actively conduct its business operations for a period of five (5)
consecutive Business Days; or

     

    (l)    any
material portion of the properties or assets of the Maker is seized by any
governmental authority; or

     

    (m)    the Maker
is indicted for the commission of any criminal activity; or

     

    (n)    closing
of a purchase, tender or exchange offer made to the holders of more than fifty
percent (50%) of the outstanding shares of Common Stock in which more than fifty
percent (50%) of the outstanding shares of Common Stock were tendered and
accepted.

     

    Section
2.2    Remedies Upon An Event of
Default.  If an Event of Default shall have occurred and shall
be continuing, the Collateral Agent may at any time at its option (a) declare
the entire unpaid principal balance of this Note, together with all interest
accrued hereon, plus fees and expenses, due and payable, and thereupon, the same
shall be accelerated and so due and payable, without presentment, demand,
protest, or notice, all of which are hereby expressly unconditionally and
irrevocably waived by the Maker; provided, however, that upon the occurrence of
an Event of Default described in Sections 2.1 (g) or (h) above, the outstanding
principal balance and accrued interest hereunder, plus fees and expenses, shall
be immediately and automatically due and payable, and/or (b) exercise or
otherwise enforce any one or more of the Holder’s rights, powers, privileges,
remedies and interests as well as its own rights, powers and remedies under this
Note, the Purchase Agreement, the Security Agreement or other Transaction
Document or applicable law.  No course of delay on the part of the
Collateral Agent or the Holder shall operate as a waiver thereof or otherwise
prejudice the right of the Collateral Agent or the Holder.  No remedy
conferred hereby shall be exclusive of any other remedy referred to herein or
now or hereafter available at law, in equity, by statute or
otherwise.  Upon and after an Event of Default, this Note shall bear
interest at the default rate set forth in Section 1.2 hereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
III

     

    MISCELLANEOUS

     

    Section
3.1    Notices.  Any
notice, demand, request, waiver or other communication required or permitted to
be given hereunder shall be in writing and shall be effective (a) upon hand
delivery, telecopy or facsimile at the address or number designated in the
Purchase Agreement (if delivered on a Business Day during normal business hours
where such notice is to be received), or the first Business Day following such
delivery (if delivered other than on a Business Day during normal business hours
where such notice is to be received) or (b) on the second Business Day following
the date of mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first
occur.

     

    Section
3.2    Governing
Law.  This Note shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction.  This Note
shall not be interpreted or construed with any presumption against the party
causing this Note to be drafted.

     

    Section
3.3    Headings.  Article
and section headings in this Note are included herein for purposes of
convenience of reference only and shall not constitute a part of this Note for
any other purpose.

     

    Section
3.4    Remedies, Characterizations,
Other Obligations, Breaches and Injunctive Relief.  The
remedies provided in this Note shall be cumulative and in addition to all other
remedies available under this Note, at law or in equity (including, without
limitation, a decree of specific performance and/or other injunctive relief), no
remedy contained herein shall be deemed a waiver of compliance with the
provisions giving rise to such remedy and nothing herein shall limit a holder’s
right to pursue actual damages for any failure by the Maker to comply with the
terms of this Note.  Amounts set forth or provided for herein with
respect to payments, conversion and the like (and the computation thereof) shall
be the amounts to be received by the holder thereof and shall not, except as
expressly provided herein, be subject to any other obligation of the Maker (or
the performance thereof).  The Maker acknowledges that a breach by it
of its obligations hereunder will cause irreparable and material harm to the
Holder and that the remedy at law for any such breach may be inadequate.
Therefore the Maker agrees that, in the event of any such breach or threatened
breach, the Collateral Agent (on behalf of the Holder) shall be entitled, in
addition to all other available rights and remedies, at law or in equity, to
seek and obtain such equitable relief, including but not limited to an
injunction restraining any such breach or threatened breach, without the
necessity of showing economic loss and without any bond or other security being
required.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
3.5    Enforcement
Expenses.  The Maker agrees to pay all costs and expenses
incurred from time to time by the Holder with respect to any modification,
consent or waiver of the provisions of this Note or the Transaction Documents
and any enforcement of this Note and the Transaction Documents, including,
without limitation, reasonable attorneys’ fees and expenses.

     

    Section
3.6    Amendments.  This
Note may not be modified or amended in any manner except in writing executed by
the Maker and the Holder.

     

    Section
3.7    Compliance with Securities
Laws.  The Holder of this Note acknowledges that this Note is
being acquired solely for the Holder’s own account and not as a nominee for any
other party, and for investment, and that the Holder shall not offer, sell or
otherwise dispose of this Note except in accordance with applicable
law.

     

    Section
3.8    Consent to
Jurisdiction.  Each of the Maker and the Holder (i) hereby
irrevocably submits to the exclusive jurisdiction of the United States District
Court sitting in the Southern District of New York and the courts of the State
of New York located in New York county for the purposes of any suit, action or
proceeding arising out of or relating to this Note and (ii) hereby waives, and
agrees not to assert in any such suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper.  Each of the Maker and the
Holder consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address in effect for notices to
it under the Purchase Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof.  Nothing in
this Section 3.8 shall affect or limit any right to serve process in any other
manner permitted by law.  Each of the Maker and the Holder hereby
agree that the prevailing party in any suit, action or proceeding arising out of
or relating to this Note shall be entitled to reimbursement for reasonable legal
fees from the non-prevailing party.

     

    Section
3.9    Binding
Effect.  This Note shall be binding upon, inure to the benefit
of and be enforceable by the Maker, the Holder and their respective successors
and permitted assigns.  The Maker shall not delegate or transfer this
Note or any obligations or undertakings contained in this Note.

     

    Section
3.10    Failure or Indulgence Not
Waiver.  No failure or delay on the part of the Holder in the
exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege.

     

    Section
3.11    Maker Waivers; Dispute
Resolution.

     

    (a)    Except as
otherwise specifically provided herein, the Maker and all others that may become
liable for all or any part of the obligations evidenced by this Note, hereby
waive presentment, demand, notice of nonpayment, protest and all other demands’
and notices in connection with the delivery, acceptance, performance and
enforcement of this Note, and do hereby consent to any number of renewals of
extensions of the time or payment hereof and agree that any such renewals or
extensions may be made without notice to any such persons and without affecting
their liability herein and do further consent to the release of any person
liable hereon, all without affecting the liability of the other persons, firms
or Maker liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL BY
JURY.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)    No delay
or omission on the part of the Collateral Agent or the Holder in exercising its
rights under this Note, or course of conduct relating hereto, shall operate as a
waiver of such rights or any other right of the Collateral Agent or the Holder,
nor shall any waiver by the Collateral Agent or the Holder of any such right or
rights on any one occasion be deemed a waiver of the same right or rights on any
future occasion.

     

    (c)    THE MAKER
ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL
TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS
RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE
HOLDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.

     

    Section
3.12    Definitions.  Terms
used herein and not defined shall have the meanings set forth in the Purchase
Agreement.  For the purposes hereof, the following terms shall have
the following meanings:

     

    “Business Day”
(whether or not capitalized) shall mean any day banking transactions can be
conducted in New York City, NY, USA and does not include any day which is a
federal or state holiday in such location.

     

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

     

    “Trading Day” means
(a) a day on which the Common Stock is traded on the OTC Bulletin Board or a
registered national securities exchange, or (b) if the Common Stock is not
traded on the OTC Bulletin Board or a registered national securities exchange, a
day on which the Common Stock is quoted in the over-the-counter market as
reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding its functions of reporting prices); provided, however, that in the
event that the Common Stock is not listed or quoted as set forth in (a) or (b)
hereof, then Trading Day shall mean any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other government action
to close.

     

    “Transaction
Documents” means this Note, the Purchase Agreement, the Security
Agreement, any Deed of Trust and all other security documents or related
agreements now or hereafter entered into in connection with and/or as security
for this Note and all amendments and supplements thereto and replacements
thereof and any other Transaction Document (as that term is defined in the
Purchase Agreement).

     

    [Signature appears on following
page]

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN WITNESS WHEREOF, the Maker
has caused this Note to be duly executed by its duly authorized officer as of
the date first above indicated.

     

    

    
      
        
          	 	

                  FIRSTGOLD
      CORP.

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ S.
      C. Akerfeldt	 
	 	 	Name: S.
      C. Akerfeldt 	 
	 	 	Title: CEO	 
	 	 	 	 

        

    

    

    

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      EXHIBIT
A

      

      WIRE
INSTRUCTIONS

       

      

       

      Wire
instructions for Lakewood Group,
LLC:

       

      Capital
One Bank

       

      ABA#
021407912

       

      Account
Name: Centurion Credit Group Master Fund, LP

       

      Account
Number: 7017207363

       

    

     

     

     

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      SENIOR
SECURED PROMISSORY NOTE

       

      
        	 Dated: August
      7, 2008	 $5,394,100

      

       

      For value
received, FIRSTGOLD CORP., a corporation organized under the laws of the State
of Delaware (the “Maker”), hereby
promises to pay to the order of PLATINUM LONG TERM GROWTH, LLC, with an address
of 152 West 57th Street,
4th
Floor, New York, NY 10019 (together with its successors, representatives, and
assigns, the “Holder”), in
accordance with the terms hereinafter provided, the principal amount of Five
Million Three Hundred Ninety-Four Thousand One Hundred Dollars ($5,394,100)
hereunder, together with interest and all other obligations outstanding
hereunder.

       

      All
payments under or pursuant to this Note shall be made in United States Dollars
in immediately available funds to the Holder at the address of the Holder first
set forth above or at such other place as the Holder may designate from time to
time in writing to the Maker or by wire transfer of funds to the Holder’s
account, instructions for which are attached hereto as Exhibit
A.  The outstanding principal balance of this Note shall be due
and payable on March 1, 2010 (the “Maturity Date”) or at
such earlier time as provided herein.

       

      ARTICLE
I

       

      Section
1.1    Purchase
Agreement.  This Note has been executed and delivered pursuant
to the Note and Warrant Purchase Agreement, bearing even date herewith (the
“Purchase Agreement”), by and between the Maker, the Holder (as a Lender) and
each other Lender party thereto.  Capitalized terms used and not
otherwise defined herein shall have the meanings set forth for such terms in the
Purchase Agreement.

       

      Section
1.2    Interest.  The
outstanding principal balance of this Note shall bear interest, in arrears, at a
rate per annum equal to four percent (4%), payable in cash on the first Business
Day of each month following the date hereof.  Interest shall be
computed on the basis of a 360-day year of twelve (12) thirty-day months, shall
compound monthly and shall accrue commencing on the date
hereof.  Furthermore, upon the occurrence of an Event of Default (as
defined in Section 2.1 hereof), the Maker will pay interest to the Holder,
payable on demand, on the outstanding principal balance of the Note and on all
unpaid interest from the date of the Event of Default at a per annum rate equal
to the lesser of eighteen percent (18%) and the maximum applicable legal rate
per annum, calculated based on a 360-day year.

       

      Section
1.3    Payment of Principal;
Prepayment.

       

      (a)    The
principal amount hereof shall be paid in full on the Maturity Date or, if
earlier, upon acceleration of this Note in accordance with the terms
hereof.  Any amount of principal repaid hereunder may not be
reborrowed.  The Maker may prepay all or any portion of the principal
amount of this Note upon not less than three (3) Business Days prior written
notice to the Holder, without penalty or premium.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b)    Not later
than the fifteenth (15th) day of
each calendar month, the Maker shall make a mandatory prepayment to the Holder
equal to its Pro Rata Share of forty percent (40%) of the Maker’s Free Cash Flow
in and for the preceding calendar month; provided, however, that commencing with
the payment to be made in December, 2008 and continuing in each month
thereafter, such monthly payment be equal to the Holder’s Pro Rata Share of the
greater of (i) forty percent (40%) of the Maker’s Free Cash Flow in the
preceding calendar month, and (ii) $400,000.  Each such payment shall
be accompanied by financial calculations of such prior month’s Free Cash Flow
certified as being complete and correct by the Maker’s president or chief
financial officer, in such detail and with such supporting financial documents
as the Collateral Agent (as defined below) may require.  Each such
mandatory prepayment shall be applied first to any interest, fee or expense
obligation hereunder which is then due and unpaid and then on account of the
principal balance hereof.  Prepayments applied to principal shall be
made against the principal balance of this Note and of all other outstanding
Notes issued under the Purchase Agreement on a pro-rata basis.  For
the purposes hereof, “Free Cash Flow” shall mean (in and for each period for
which such calculation is made, all in accordance with GAAP) the Maker’s gross
revenue from its operations at the Relief Canyon Mine less direct operating
costs from such mining operations and less taxes resulting from such
revenues.

       

      Section
1.4    Security
Documents.  The obligations of the Maker hereunder are secured
by a continuing security interest in substantially all of the assets of the
Maker pursuant to the terms of a Security Agreement bearing even date herewith
by and between the Maker and the Collateral Agent, a Deed or Deeds of Trust, and
other collateral documents.  For the purposes hereof, the term
“Collateral Agent” shall have the meaning given thereto in the Security
Agreement.

       

      Section
1.5    Payment on Non-Business
Days.  Whenever any payment to be made shall be due on a
Saturday, Sunday or a public holiday under the laws of the State of New York,
such payment shall be due on the next succeeding Business Day and such next
succeeding day shall be included in the calculation of the amount of accrued
interest payable on such date.

       

      Section
1.6    Transfer.  This
Note may be transferred or sold, and may also be pledged, hypothecated or
otherwise granted as security, by the Holder; provided, however, that any
transfer or sale of this Note must be in compliance with any applicable
securities laws.

       

      Section
1.7    Replacement.  Upon
receipt of a duly executed, notarized and unsecured written statement from the
Holder with respect to the loss, theft or destruction of this Note (or any
replacement hereof) and a standard indemnity, or, in the case of a mutilation of
this Note, upon surrender and cancellation of such Note, the Maker shall issue a
new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or
mutilated Note.

       

      Section
1.8    Use of
Proceeds.  The Maker shall use the proceeds of this Note as set
forth in the Purchase Agreement.

       

      ARTICLE
II

       

      EVENTS OF DEFAULT;
REMEDIES

       

      Section
2.1    Events of
Default.  The occurrence of any of the following events shall
be an “Event of
Default” under this Note:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (a)    any
default in respect of any payment of the principal amount, interest or any other
monetary obligation under this Note, as and when the same shall be due and
payable (whether on the Maturity Date or by acceleration or otherwise) or within
three (3) days thereafter; or

       

      (b)    the Maker
shall fail to observe or perform any other condition, covenant or agreement
contained in this Note, which failure is not cured within five (5) Business Days
after the Maker’s receipt of notice of such failure; or

       

      (c)    the
suspension from listing, without subsequent listing on any one of, or the
failure of the Common Stock to be listed on at least one of the OTC Bulletin
Board, the American Stock Exchange, the Nasdaq Capital Markets, the Nasdaq
Global Market, the Nasdaq Global Select Market or The New York Stock Exchange,
Inc. for a period of five (5) consecutive Trading Days, such a suspension to
only constitute an Event of Default if the Holder provides the Maker written
notification that it deems such suspension to be an Event of Default;
or

       

      (d)    the Maker
shall default in the performance or observance of (i) any undertaking, covenant,
condition or agreement contained in the Purchase Agreement or any other
Transaction Document and such default is not fully cured within five (5)
Business Days after the Maker’s receipt of notice of such
default;  or

       

      (e)    any
representation or warranty made by the Maker herein or in the Purchase Agreement
or any other Transaction Document shall prove to have been false or incorrect or
breached in a material respect on the date as of which made; or

       

      (f)    any
failure by Maker to cure within five (5) Business Days after the Maker’s receipt
of notice of (A) a default in any payment of any amount or amounts of principal
of or interest on any Indebtedness of the Maker (other than the Indebtedness
hereunder) the aggregate principal amount of which Indebtedness is in excess of
$50,000 or (B) a
default in the observance or performance of any other agreement or condition
relating to any Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders or beneficiary or beneficiaries of
such Indebtedness to cause with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity; or

       

      (g)    the Maker
shall (i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property or assets, (ii) make a general assignment
for the benefit of its creditors, (iii) commence a voluntary case under the
United States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic), (iv) file a petition
seeking to take advantage of any bankruptcy, insolvency, moratorium,
reorganization or other similar law affecting the enforcement of creditors’
rights generally, (v) acquiesce in writing to any petition filed against it in
an involuntary case under United States Bankruptcy Code (as now or hereafter in
effect) or under the comparable laws of any jurisdiction (foreign or domestic),
(vi) issue a notice of bankruptcy or winding down of its operations or issue a
press release regarding same, or (vii) take any action under the laws of any
jurisdiction (foreign or domestic) analogous to any of the foregoing;
or

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (h)    a
proceeding or case shall be commenced in respect of the Maker, without its
application or consent, in any court of competent jurisdiction, seeking (i) the
liquidation, reorganization, moratorium, dissolution, winding up, or composition
or readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of it or of all or any substantial part of its
assets in connection with the liquidation or dissolution of the Maker or (iii)
similar relief in respect of it under any law providing for the relief of
debtors, and such proceeding or case described in clause (i), (ii) or (iii)
shall continue undismissed, or unstayed and in effect, for a period of thirty
(30) days or any order for relief shall be entered in an involuntary case under
United States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic) against the Maker or
action under the laws of any jurisdiction (foreign or domestic) analogous to any
of the foregoing shall be taken with respect to the Maker and shall continue
undismissed, or unstayed and in effect for a period of thirty (30) days;
or

       

      (i)    any
default or event of default, or event that, with the passage of time or giving
of notice or both would constitute a default or event of default, shall have
occurred under any mining lease or mining rights or claims agreement to which
Maker is now or at any time hereafter a party or any such agreement is
terminated by any of the parties thereto; or

       

      (j)    a
judgment or judgments in the aggregate amount exceeding $25,000 is/are entered
against the Maker and not dismissed or discharged within twenty (20) days
following the entry thereof; or

       

      (k)    Maker
shall cease to actively conduct its business operations for a period of five (5)
consecutive Business Days; or

       

      (l)    any
material portion of the properties or assets of the Maker is seized by any
governmental authority; or

       

      (m)    the Maker
is indicted for the commission of any criminal activity; or

       

      (n)    closing
of a purchase, tender or exchange offer made to the holders of more than fifty
percent (50%) of the outstanding shares of Common Stock in which more than fifty
percent (50%) of the outstanding shares of Common Stock were tendered and
accepted.

       

      Section
2.2    Remedies Upon An Event of
Default.  If an Event of Default shall have occurred and shall
be continuing, the Collateral Agent may at any time at its option (a) declare
the entire unpaid principal balance of this Note, together with all interest
accrued hereon, plus fees and expenses, due and payable, and thereupon, the same
shall be accelerated and so due and payable, without presentment, demand,
protest, or notice, all of which are hereby expressly unconditionally and
irrevocably waived by the Maker; provided, however, that upon the occurrence of
an Event of Default described in Sections 2.1 (g) or (h) above, the outstanding
principal balance and accrued interest hereunder, plus fees and expenses, shall
be immediately and automatically due and payable, and/or (b) exercise or
otherwise enforce any one or more of the Holder’s rights, powers, privileges,
remedies and interests as well as its own rights, powers and remedies under this
Note, the Purchase Agreement, the Security Agreement or other Transaction
Document or applicable law.  No course of delay on the part of the
Collateral Agent or the Holder shall operate as a waiver thereof or otherwise
prejudice the right of the Collateral Agent or the Holder.  No remedy
conferred hereby shall be exclusive of any other remedy referred to herein or
now or hereafter available at law, in equity, by statute or
otherwise.  Upon and after an Event of Default, this Note shall bear
interest at the default rate set forth in Section 1.2 hereof.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ARTICLE
III

       

      MISCELLANEOUS

       

      Section
3.1    Notices.  Any
notice, demand, request, waiver or other communication required or permitted to
be given hereunder shall be in writing and shall be effective (a) upon hand
delivery, telecopy or facsimile at the address or number designated in the
Purchase Agreement (if delivered on a Business Day during normal business hours
where such notice is to be received), or the first Business Day following such
delivery (if delivered other than on a Business Day during normal business hours
where such notice is to be received) or (b) on the second Business Day following
the date of mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first
occur.

       

      Section
3.2    Governing
Law.  This Note shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction.  This Note
shall not be interpreted or construed with any presumption against the party
causing this Note to be drafted.

       

      Section
3.3    Headings.  Article
and section headings in this Note are included herein for purposes of
convenience of reference only and shall not constitute a part of this Note for
any other purpose.

       

      Section
3.4    Remedies, Characterizations,
Other Obligations, Breaches and Injunctive Relief.  The
remedies provided in this Note shall be cumulative and in addition to all other
remedies available under this Note, at law or in equity (including, without
limitation, a decree of specific performance and/or other injunctive relief), no
remedy contained herein shall be deemed a waiver of compliance with the
provisions giving rise to such remedy and nothing herein shall limit a holder’s
right to pursue actual damages for any failure by the Maker to comply with the
terms of this Note.  Amounts set forth or provided for herein with
respect to payments, conversion and the like (and the computation thereof) shall
be the amounts to be received by the holder thereof and shall not, except as
expressly provided herein, be subject to any other obligation of the Maker (or
the performance thereof).  The Maker acknowledges that a breach by it
of its obligations hereunder will cause irreparable and material harm to the
Holder and that the remedy at law for any such breach may be inadequate.
Therefore the Maker agrees that, in the event of any such breach or threatened
breach, the Collateral Agent (on behalf of the Holder) shall be entitled, in
addition to all other available rights and remedies, at law or in equity, to
seek and obtain such equitable relief, including but not limited to an
injunction restraining any such breach or threatened breach, without the
necessity of showing economic loss and without any bond or other security being
required.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Section
3.5    Enforcement
Expenses.  The Maker agrees to pay all costs and expenses
incurred from time to time by the Holder with respect to any modification,
consent or waiver of the provisions of this Note or the Transaction Documents
and any enforcement of this Note and the Transaction Documents, including,
without limitation, reasonable attorneys’ fees and expenses.

       

      Section
3.6    Amendments.  This
Note may not be modified or amended in any manner except in writing executed by
the Maker and the Holder.

       

      Section
3.7    Compliance with Securities
Laws.  The Holder of this Note acknowledges that this Note is
being acquired solely for the Holder’s own account and not as a nominee for any
other party, and for investment, and that the Holder shall not offer, sell or
otherwise dispose of this Note except in accordance with applicable
law.

       

      Section
3.8    Consent to
Jurisdiction.  Each of the Maker and the Holder (i) hereby
irrevocably submits to the exclusive jurisdiction of the United States District
Court sitting in the Southern District of New York and the courts of the State
of New York located in New York county for the purposes of any suit, action or
proceeding arising out of or relating to this Note and (ii) hereby waives, and
agrees not to assert in any such suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper.  Each of the Maker and the
Holder consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address in effect for notices to
it under the Purchase Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof.  Nothing in
this Section 3.8 shall affect or limit any right to serve process in any other
manner permitted by law.  Each of the Maker and the Holder hereby
agree that the prevailing party in any suit, action or proceeding arising out of
or relating to this Note shall be entitled to reimbursement for reasonable legal
fees from the non-prevailing party.

       

      Section
3.9    Binding
Effect.  This Note shall be binding upon, inure to the benefit
of and be enforceable by the Maker, the Holder and their respective successors
and permitted assigns.  The Maker shall not delegate or transfer this
Note or any obligations or undertakings contained in this Note.

       

      Section
3.10   Failure or Indulgence Not
Waiver.  No failure or delay on the part of the Holder in the
exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege.

       

      Section
3.11   Maker Waivers; Dispute
Resolution.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (a)    Except as
otherwise specifically provided herein, the Maker and all others that may become
liable for all or any part of the obligations evidenced by this Note, hereby
waive presentment, demand, notice of nonpayment, protest and all other demands’
and notices in connection with the delivery, acceptance, performance and
enforcement of this Note, and do hereby consent to any number of renewals of
extensions of the time or payment hereof and agree that any such renewals or
extensions may be made without notice to any such persons and without affecting
their liability herein and do further consent to the release of any person
liable hereon, all without affecting the liability of the other persons, firms
or Maker liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL BY
JURY.

       

      (b)    No delay
or omission on the part of the Collateral Agent or the Holder in exercising its
rights under this Note, or course of conduct relating hereto, shall operate as a
waiver of such rights or any other right of the Collateral Agent or the Holder,
nor shall any waiver by the Collateral Agent or the Holder of any such right or
rights on any one occasion be deemed a waiver of the same right or rights on any
future occasion.

       

      (c)    THE MAKER
ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL
TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS
RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE
HOLDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.

       

      Section
3.12   Definitions.  Terms
used herein and not defined shall have the meanings set forth in the Purchase
Agreement.  For the purposes hereof, the following terms shall have
the following meanings:

       

      “Business Day”
(whether or not capitalized) shall mean any day banking transactions can be
conducted in New York City, NY, USA and does not include any day which is a
federal or state holiday in such location.

       

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

       

      “Trading Day” means
(a) a day on which the Common Stock is traded on the OTC Bulletin Board or a
registered national securities exchange, or (b) if the Common Stock is not
traded on the OTC Bulletin Board or a registered national securities exchange, a
day on which the Common Stock is quoted in the over-the-counter market as
reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding its functions of reporting prices); provided, however, that in the
event that the Common Stock is not listed or quoted as set forth in (a) or (b)
hereof, then Trading Day shall mean any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other government action
to close.

       

      “Transaction
Documents” means this Note, the Purchase Agreement, the Security
Agreement, any Deed of Trust and all other security documents or related
agreements now or hereafter entered into in connection with and/or as security
for this Note and all amendments and supplements thereto and replacements
thereof and any other Transaction Document (as that term is defined in the
Purchase Agreement).

       

      [Signature appears on following
page]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      IN WITNESS WHEREOF, the Maker
has caused this Note to be duly executed by its duly authorized officer as of
the date first above indicated.

       

       

      
        
          
            
              
                	 	

                        FIRSTGOLD
      CORP.

                      	 
	 	 	 	 
	
                         

                      	
                        By:
      

                      	/s/ S.
      C. Akerfeldt	 
	 	 	Name: S.
      C. Akerfeldt 	 
	 	 	Title: CEO	 
	 	 	 	 

              

          

        

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        EXHIBIT
A

        

        WIRE
INSTRUCTIONS

         

        

         

        Wire instructions for
Platinum Long Term Growth, LLC:

         

        Commerce
Bank

         

        ABA#
026013673

         

        Account
Name:  Platinum Long Term Growth, LLC

         

        Account
Number:  7926319356f8k080808ex10i_ea2celsius.htm

    Exhibit
10.1

    

    SECURITIES
PURCHASE AGREEMENT

    

    THIS SECURITIES PURCHASE AGREEMENT,
dated as of August 8, 2008 (this “Agreement”),
is by and between CELSIUS HOLDINGS, INC., a Nevada corporation (the “Company”),
and CDS VENTURES OF SOUTH FLORIDA, LLC, a Florida limited liability company
(“Investor”).

    

    A.           The
Company wishes to sell to Investor, and Investor wishes to purchase from the
Company, upon the terms and subject to the conditions set forth in this
Agreement, (i) 2,000 shares of the Company’s Series A Convertible Preferred
Stock, having a stated value of $1,000 per share (the “Series A
Preferred Stock”), and (ii) a right to purchase up to an additional 1,000
shares of the Series A Preferred Stock before July 10, 2010, having a stated
value of $1,000 per share. The Series A Preferred Stock series shall be
designated pursuant to the Certificate of Designation in the form attached
hereto as Exhibit A
(the “Certificate of
Designation”).

    

    B.           The
Series A Preferred Stock shall (i) be convertible into shares of the Company’s
common stock, par value $.001 per share (“Common
Stock”), (ii) accrue dividends at a rate of 10% per annum, payable in
additional shares of Series A Preferred Stock, and (iii) mature on February 1,
2013 and be redeemed in shares of Common Stock.  The shares of Common
Stock and Series A Preferred Stock issuable hereunder or under the Certificate
of Designation, are collectively referred to herein as the “Securities”.

    

    C.           The
Company has agreed to effect the registration of the 11,184,016 shares of Common
Stock Investor previously purchased from the Company and the shares of Common
Stock issuable upon the conversion or maturity date of the 3,000 shares of
Series A Preferred Stock or otherwise issuable pursuant to this Agreement for
resale by the holders thereof under the Securities Act of 1933 (as amended, and
the rules and regulations promulgated thereunder, the “Securities
Act”), pursuant to a Registration Rights Agreement in the form attached
hereto as Exhibit B
(the “Registration
Rights Agreement”).

    

    D.           The
sale of the Securities by the Company to Investor, and any issuance of the
additional Securities, will be effected in reliance upon the exemption from
securities registration afforded by the provisions of Regulation D (“Regulation
D”), as promulgated by the Securities and Exchange Commission (the “Commission”)
under the Securities Act.

    

               In
consideration of the mutual promises made herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Investor hereby agree as follows:

    

    1.           TERMINOLOGY
AND USAGE.

    

    1.1           Definitions.  When
used herein, the terms below shall have the respective meanings
indicated:

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
 

    “Affiliate”
means, as to any Person (the “subject
Person”), any other Person (a) that directly or indirectly through
one or more intermediaries controls or is controlled by, or is under direct or
indirect common control with, the subject Person, (b) that directly or
indirectly beneficially owns or holds ten percent (10%) or more of any class of
voting equity of the subject Person, or (c) ten percent (10%) or more of
the voting equity of which is directly or indirectly beneficially owned or held
by the subject Person. For the purposes of this definition, “control”
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, through representation on such Person’s board of
directors or other management committee or group, by contract or
otherwise.

     

    “Allocation
Amount” has the meaning specified in Section
5.5 of this Agreement.

     

    “Board of
Directors” means the Company’s board of directors.

     

    “Business
Day” means any day other than a Saturday, a Sunday or a day on which the
Principal Market is closed or on which banks in the City of New York are
required or authorized by law to be closed.

     

    “Cap
Amount” means
19.99% of the aggregate number of shares of Common Stock outstanding immediately
prior to the Closing (subject to adjustment upon a stock split, stock dividend,
recapitalization, reorganization, reclassification or other event that
subdivides all of the outstanding shares of Common Stock).

     

    “Certificate of
Designation” has the meaning specified in the recitals of this
Agreement.

     

    “Closing”
and “Closing
Date” have the respective meanings specified in Section
2.1 of this Agreement.

     

    “Commission”
has the meaning specified in the recitals to this Agreement.

     

    “Common
Stock” has the meaning specified in the recitals to this
Agreement.

     

    “Company
Subsidiary” means a Subsidiary of the Company.

     

    “Debt”
means, as to any Person at any time: (a) all indebtedness, liabilities and
obligations of such Person for borrowed money; (b) all indebtedness, liabilities
and obligations of such Person to pay the deferred purchase price of Property or
services, except trade accounts payable of such Person arising in the ordinary
course of business that are not past due by more than 90 days; (c) all capital
lease obligations of such Person; (d) all Debt of others guaranteed by such
Person; (e) all indebtedness, liabilities and obligations secured by a Lien
(other than a Permitted Lien) existing on Property owned by such Person, whether
or not the indebtedness, liabilities or obligations secured thereby have been
assumed by such Person or are non-recourse to such Person; (f) all reimbursement
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, bankers’ acceptances, surety or other bonds and similar
instruments; and (g) all liabilities and obligations of such Person to redeem or
retire shares of capital stock of such Person.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

    “Disclosure
Documents” means all SEC Documents filed with the Commission at least
three (3) Business Days prior to the Execution Date and the unaudited Financial
Statements (including the notes thereon) as of and for the period ending March
31, 2008  and June 30, 2008 delivered to Investor pursuant to this
Agreement.

     

    “Effective
Date” has the meaning specified in the Registration Rights
Agreement.

     

    “Embargoed
Person” has the meaning specified in Section
4.29 of this Agreement.

     

    “Environmental
Law” means any federal, state, provincial, local or foreign law, statute,
code or ordinance, principle of common law, rule or regulation, as well as any
permit, order, decree, judgment or injunction issued, promulgated, approved or
entered thereunder, relating to pollution or the protection, cleanup or
restoration of the environment or natural resources, or to the public health or
safety, or otherwise governing the generation, use, handling, collection,
treatment, storage, transportation, recovery, recycling, discharge or disposal
of hazardous materials.

     

    “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder.

     

    “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.

     

    “Execution
Date” means the date of this Agreement.

     

    “GAAP”
means generally accepted accounting principles, applied on a consistent basis,
as set forth in (i) opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants, (ii) statements of the Financial
Accounting Standards Board and (iii) interpretations of the Commission and the
staff of the Commission.  Accounting principles are applied on a
“consistent basis” when the accounting principles applied in a current period
are comparable in all material respects to those accounting principles applied
in a preceding period.

     

    “Governmental
Authority” means any nation or government, any state, provincial or
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
including, without limitation, any stock exchange, securities market or
self-regulatory organization.

     

    “Governmental
Requirement” means any law, statute, code, ordinance, order, rule,
regulation, judgment, decree, injunction, franchise, license or other directive
or requirement of any federal, state, county, municipal, parish, provincial or
other Governmental Authority or any department, commission, board, court, agency
or any other instrumentality of any of them.

     

    “Holder”
shall initially mean Investor, provided that any Person that
subsequently holds any Securities shall also be deemed a Holder.

     

    “Holder
Party” has the meaning specified in Section
5.10 of this Agreement.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

    “Intellectual
Property” means any U.S. or foreign patents, patent rights, patent
applications, trademarks, trade names, service marks, brand names, logos and
other trade designations (including unregistered names and marks), trademark and
service mark registrations and applications, copyrights and copyright
registrations and applications, inventions, invention disclosures, protected
formulae, formulations, processes, methods, trade secrets, computer software,
computer programs and source codes, manufacturing research and similar technical
information, engineering know-how, customer and supplier information, assembly
and test data drawings or royalty rights.

     

    “Issuance
Event” has the meaning specified in Section
5.7 of this Agreement.

     

    “Key
Employee” has the meaning specified in Section
4.16 of this Agreement.

     

    “Lien”
means, with respect to any Property, any mortgage, pledge, hypothecation,
assignment, deposit arrangement, security interest, tax lien, financing
statement, pledge, charge, or other lien, charge, easement, encumbrance,
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever on or with respect to such Property (including,
without limitation, any conditional sale or other title retention agreement
having substantially the same economic effect as any of the
foregoing).

     

    “Material Adverse
Effect” means an effect that is material and adverse to (i) the
consolidated business, properties, assets, operations, results of operations,
financial condition, credit worthiness or prospects of the Company and the
Company Subsidiaries taken as a whole, (ii) the ability of the Company or any
material Company Subsidiary to perform its obligations under this Agreement or
the other Transaction Documents or (iii) the rights and benefits to which a
Holder is entitled under this Agreement, the Note, the Certificate of
Designation and the other Transaction Documents.

     

    “Material
Contracts” means, as to the Company and the Company Subsidiaries, any
agreement required pursuant to Item 601 of Regulation S-B or Item 601 of
Regulation S-K, as applicable, promulgated under the Securities Act to be filed
as an exhibit to any report, schedule, registration statement or definitive
proxy statement filed or required to be filed by the Company with the Commission
under the Exchange Act or any rule or regulation promulgated thereunder, and any
and all amendments, modifications, supplements, renewals or restatements
thereof.

     

    “Note” has
the meaning specified in the recitals of this Agreement.

     

    “Pension
Plan” means an employee benefit plan (as defined in ERISA) maintained by
the Company for employees of the Company or any of its Affiliates.

     

    “Permitted
Debt” means the following:  (a) Debt disclosed on Schedule
1.1(i) hereto; (b) Debt consisting of capitalized lease obligations and
purchase money indebtedness incurred in connection with acquisition of capital
assets and obligations under sale-leaseback or similar arrangements provided in
each case that such obligations are not secured by Liens on any assets of the
Company or the Company Subsidiaries other than the assets so leased; and (c)
Debt incurred after written approval by the Investor.

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

     

    “Permitted
Liens” means each of the following:

     

    (a)           Liens
disclosed on Schedule
1.1(ii) hereto;

     

    (b)           encumbrances
consisting of easements, rights-of-way, zoning restrictions or other
restrictions on the use of real Property or imperfections to title that do not
(individually or in the aggregate) materially impair the ability of the Company
or any Company Subsidiary to use such Property in its businesses, and none of
which is violated in any material respect by existing or proposed structures or
land use;

     

    (c)           Liens
for taxes, assessments or other governmental charges (including without
limitation in connection with workers’ compensation and unemployment insurance)
that are not delinquent or which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the Property subject to such Liens, and for which adequate
reserves (as determined in accordance with GAAP) have been established;
and

     

    (d)           Liens
of mechanics, materialmen, warehousemen, carriers, landlords or other similar
statutory Liens securing obligations that are not yet due and are incurred in
the ordinary course of business or which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the Property subject to such Liens, for which adequate
reserves (as determined in accordance with GAAP) have been
established.

     

    (e)           Liens
incurred after written approval by the Investor.

     

    “Person”
means any individual, corporation, trust, association, company, partnership,
joint venture, limited liability company, joint stock company, Governmental
Authority or other entity.

     

    “Principal
Market” means the principal exchange, market or quotation system on which
the Common Stock is listed, traded or quoted.

     

    “Property”
means property and/or assets of all kinds, whether real, personal or mixed,
tangible or intangible (including, without limitation, all rights relating
thereto).

     

    “Pro Rata
Share” means, with respect to a Holder, the ratio determined by dividing
(i) the principal amount of the Registrable Securities purchased hereunder by
such Holder at the Closing by (ii) the aggregate principal amount of all
Registrable Securities purchased hereunder by all of the Holders at the
Closing.

     

    “Purchase
Price” has the meaning specified in Section
2.1.

     

    “Registrable
Securities” has the meaning specified in the Registration Rights
Agreement.

     

    “Registration
Rights Agreement” has the meaning specified in the recitals to this
Agreement.

     

    “Registration
Statement” has the meaning specified in the Registration Rights
Agreement.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     

    “Regulation
D” has the meaning specified in the recitals to this
Agreement.

     

    “Restricted
Payment” means (a) any dividend or other distribution (whether in cash,
Property or obligations), direct or indirect, on account of (or the setting
apart of money for a sinking or other analogous fund for the benefit of) any
shares of any class of capital stock of the Company or the Company Subsidiaries
now or hereafter outstanding, except a dividend payable solely in shares of that
class of stock to all of the holders of that class; (b) any redemption,
exchange, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of capital
stock of the Company or any of its Affiliates now or hereafter outstanding,
except the Securities; (c) any prepayment of principal of, premium, if any,
or interest on, or any redemption, conversion, exchange, purchase, retirement,
sinking fund or defeasance of, any Debt (whether upon acceleration of such Debt
or otherwise) other than Permitted Debt; and (d) any loan, advance or
payment to any officer, director or stockholder of the Company or any of its
Affiliates, exclusive of reasonable compensation and reimbursements paid to
officers or directors in the ordinary course of business.

     

               “Rule 144”
means Rule 144 under the Securities Act or any successor provision.

     

    “SEC
Documents” means all reports, schedules, registration statements and
definitive proxy statements filed by the Company with the
Commission.

     

    “Securities”
has the meaning specified in the recitals of this Agreement.

     

    “Securities
Act” has the meaning specified in the recitals of this
Agreement.

     

    “Security
Agreement” has the meaning specified in the recitals of this
Agreement.

     

    “Series A
Preferred Stock” has the meaning specified in the recitals of this
Agreement.

     

    “Stockholder Cap
Approval” means
the affirmative vote by the holders of a majority of the votes cast (including a
majority of the votes cast by each class entitled to vote as a separate class)
at a meeting of the Company’s stockholders, or approval by written consent in
accordance with applicable law, approving the issuance of Common Stock in excess
of the Cap Amount.

     

    “Subsidiary”
means, with respect to any Person, any corporation or other entity of which at
least a majority of the outstanding shares of stock or other ownership interests
having by the terms thereof ordinary voting power to elect a majority of the
board of directors (or Persons performing similar functions) of such corporation
or entity (regardless of whether or not at the time, in the case of a
corporation, stock of any other class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time directly or indirectly owned or controlled by such Person or one or
more of its Subsidiaries or by such Person and one or more of its
Subsidiaries.

     

    “Trading
Day” means any day on which shares of Common Stock are purchased and sold
on the Principal Market.

     

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

     

    “Transaction
Documents” means (i) this Agreement, (ii) the Securities, (iii) the
Certificate of Designation, (iv) the Registration Rights Agreement, and (v) all
other agreements, documents and other instruments executed and delivered by or
on behalf of the Company, any Company Subsidiary or any of their respective
officers on or after the Closing in connection with this Agreement.

     

    “Transfer
Agent” has the meaning specified in Section
3.5 of this Agreement.

     

    1.2           Other Definitional
Provisions.  All definitions contained in this Agreement are
equally applicable to the singular and plural forms of the terms
defined.  The words “hereof”, “herein” and “hereunder” and words of
similar import contained in this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement.

     

    

    2.           PURCHASE
AND SALE OF THE NOTE AND THE SHARES.

    

    2.1           Purchase Price;
Closing.  Upon the terms and subject to the satisfaction or
waiver of the conditions set forth in Sections 2.2
and 2.3, the
Company agrees to sell and Investor agrees to purchase the 2,000 shares and the
right to purchase up to an additional 1,000 shares of Series A Preferred Stock,
for an aggregate purchase price of $2,000,000 (two million dollars) (the “Purchase
Price”).  The closing of such purchase and sale is hereinafter
referred to as the “Closing”,
and the date on which the Closing occurs is hereinafter referred to as the
“Closing
Date”.  The Closing of the 2,000 shares will be deemed to occur
at the offices of the Company when each of the conditions to the Closing
described in Sections
2.2 and 2.3 have
been satisfied or waived as specified therein.    The
purchase of any part of the additional 1,000 shares of Series A Preferred Stock
(the “Additional Shares”) will have a consideration of $1,000 per share of
Series A Preferred Stock. The closing of the purchase and sale of any part of
the Additional Shares is also referred to as the Closing and shall occur on such
date(s) as the Investor may specify through notice in writing to the Company
which shall be not less than 10 or more than 30 days after such notice or such
later date(s) nearest to such specified date(s) when each of the condition to
such Closing described in section 2.2 and 2.3 have been satisfied or waived as
specified therein. The date on which each such Closing occurs is also a Closing
Date.

    

    2.2           Conditions to Investor’s
Obligations at the Closing.  Investor’s obligations to effect
the Closing, including, without limitation, its obligation to purchase the
Securities at the Closing, are conditioned upon the fulfillment (or waiver by
Investor in its sole and absolute discretion) of each of the following events as
of the Closing Date, and the Company shall use commercially reasonable efforts
to cause each of such conditions to be satisfied:

    

    
      	
               
      

            	
              2.2.1

            	
              the
      representations and warranties of the Company set forth in this Agreement
      and in the other Transaction Documents shall be true and correct in all
      material respects as of such date as if made on such date (except that to
      the extent that any such representation or warranty relates to a
      particular date, such representation or warranty shall be true and correct
      in all material respects as of that particular
  date);

            

    

     

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
 

    
      	
               
      

            	
              2.2.2

            	
              the
      Company shall have complied with or performed in all material respects all
      of the agreements, obligations and conditions set forth in this Agreement
      and in the other Transaction Documents that are required to be complied
      with or performed by the Company on or before the
  Closing;

            

    

    

    
      	
               
      

            	
              2.2.3

            	
              the
      Company shall have delivered to Investor a certificate, signed by the
      Secretary of the Company and each Company Subsidiary, certifying true,
      complete and accurate copies of (i) the constituent organizational
      documents of each such entity, each as amended through the Closing Date,
      and (ii) the resolutions passed by the board of directors or similar
      governing body of each such entity authorizing the execution, delivery and
      performance of the Transaction Documents to which such entity is a
      party;

            

    

    

    
      	
               
      

            	
              2.2.4

            	
              the
      Company shall have delivered to Investor copies of (i) the executed stock
      certificates representing the purchased shares of Series A Preferred
      Stock, and (ii) the executed signature pages of the Company and Company
      Subsidiaries to each of the other Transaction Documents to which they are
      a party;

            

    

    

    
      	
               
      

            	
              2.2.5

            	
              the
      Company’s counsel shall have confirmed that it has in its possession the
      originals of each of the documents specified in Section
      2.2.4, and such counsel shall have confirmed that all such
      originals will be delivered to Investor or its counsel no later than the
      Business Day immediately following the Closing
  Date;

            

    

    

    
      	
               
      

            	
              2.2.6

            	
              the
      Certificate of Designation shall have been accepted for filing by the
      Secretary of State of the State of Nevada and shall be in full force and
      effect;

            

    

    

    
      	
               
      

            	
              2.2.7

            	
              the
      Company shall have delivered to Investor a legal opinion of its outside
      counsel covering the matters set forth on Exhibit
      C hereto and such opinion shall be in form and substance reasonably
      satisfactory to Investor;

            

    

    

    
      	
               
      

            	
              2.2.8

            	
              the
      Company shall have delivered to Investor the Company’s unaudited financial
      statements for the quarter most recently ended before the Closing date,
      and such financial statements shall not be, in Investor’s reasonable
      judgment, materially different from the projections for such quarter
      previously provided by the Company to
Investor;

            

    

    

    
      	
               
      

            	
              2.2.9

            	
              Investor
      shall have satisfactorily completed its due diligence of the
      Company;

            

    

     

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
 

    
      	
               
      

            	
              2.2.10

            	
              there
      shall have occurred no material adverse change in the Company’s
      consolidated business or financial condition since the date of the
      Company’s most recent financial statements contained in the Disclosure
      Documents; and

            

    

    

    
      	
               
      

            	
              2.2.11

            	
              there
      shall be no injunction, restraining order or decree of any nature of any
      court or Governmental Authority of competent jurisdiction that is in
      effect that restrains or prohibits the consummation of the transactions
      contemplated hereby and by the other Transaction
  Documents.

            

    

    

    
      	
               
      

            	
              2.2.12

            	
              One
      individual, selected by Investor shall have been appointed to the board of
      directors of the Company. Jan Norelid and Stephen Haley, both directors of
      the Company, agree to propose to the board of directors to appoint and to
      vote for the election of one additional individual, selected by CD, to
      immediately join the board of directors of the
  Company.

            

    

    

    

    
      	
               
      

            	
              2.2.13

            	
              Stephen
      C. Haley shall have executed a shareholder agreement with Lucille Santini
      to allow the combined voting of Haley and Investor to represent 50.1% of
      all voting shares of the Company
outstanding.

            

    

    

    
      	
               
      

            	
              2.2.14

            	
              The
      Company will use the received funds to expand and market the Celsius and
      other brands that the Company launches.  As a condition of
      closing, the Company and Investor will jointly approve a growth plan for
      the Company. (Schedule 2.2.14)

            

    

    

    2.3           Conditions to Company’s
Obligations at the Closing.  The Company’s obligations to
effect the Closing with Investor are conditioned upon the fulfillment (or waiver
by the Company in its sole and absolute discretion) of each of the following
events as of the Closing Date:

    

    
      	
               
      

            	
              2.3.1

            	
              the
      representations and warranties of Investor set forth in this Agreement and
      in the other Transaction Documents to which it is a party shall be true
      and correct in all material respects as of such date as if made on such
      date (except that to the extent that any such representation or warranty
      relates to a particular date, such representation or warranty shall be
      true and correct in all material respects as of that
  date);

            

    

    

    
      	
               
      

            	
              2.3.2

            	
              Investor
      shall have complied with or performed all of the agreements, obligations
      and conditions set forth in this Agreement that are required to be
      complied with or performed by Investor on or before the
      Closing;

            

    

     

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
 

    
      	
               
      

            	
              2.3.3

            	
              there
      shall be no injunction, restraining order or decree of any nature of any
      court or Governmental Authority of competent jurisdiction that is in
      effect that restrains or prohibits the consummation of the transactions
      contemplated hereby and by the other Transaction
  Documents;

            

    

    

    
      	
               
      

            	
              2.3.4

            	
              Investor shall have executed each Transaction
      Document to which it is a party and shall have delivered the same to the
      Company; and

            

    

     

    
      	
               
      

            	
              2.3.5

            	
              Investor shall have wire transferred to the
      Company’s account, in immediately available funds, an amount equal to
      $1,500,000 plus cancellation of two $250,000 notes (and the Company shall
      have paid all interest thereon), or $1,000 for each Additional Share
      purchased, paid at the Closing of each such
    purchase.

            

    

     

    3.           REPRESENTATIONS
AND WARRANTIES OF INVESTOR.

    

    Investor hereby represents and warrants
to the Company and agrees with the Company that, as of the Execution
Date:

    

    3.1           Authorization;
Enforceability.  Investor is duly and validly organized,
validly existing and in good standing under the laws of the State of Florida
with the requisite corporate power and authority to purchase the Securities to
be purchased by it hereunder and to execute and deliver this Agreement and the
other Transaction Documents to which it is a party.  This Agreement
constitutes, and upon execution and delivery thereof, each other Transaction
Document to which Investor is a party will constitute, Investor’s valid and
legally binding obligation, enforceable in accordance with its terms, subject to
(i) applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws of general application relating to or affecting
the enforcement of creditors’ rights generally and (ii) general principles of
equity.

    

    3.2           Accredited
Investor.  Investor (i) is an “accredited investor” as that
term is defined in Rule 501 of Regulation D, (ii) was not formed or organized
for the specific purpose of making an investment in the Company, and (iii) is
acquiring the Securities solely for its own account and not with a present view
to the public resale or distribution of all or any part thereof, except pursuant
to sales that are registered under, or exempt from the registration requirements
of, the Securities Act and/or sales registered under the Securities Act; provided, however, that in
making such representation, Investor does not agree to hold the Securities for
any minimum or specific term and reserves the right to sell, transfer or
otherwise dispose of the Securities at any time in accordance with the
provisions of this Agreement and with federal and state securities laws
applicable to such sale, transfer or disposition. Investor can
bear the economic risk of a total loss of its investment in the Securities and
has such knowledge and experience in business and financial matters so as to
enable it to understand the risks of and form an investment decision with
respect to its investment in the Securities.

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
 

    3.3           Information.  The
Company has, prior to the Execution Date, provided Investor with information
regarding the business, operations and financial condition of the Company and has, prior to the Execution Date,
granted to Investor the opportunity to ask questions of and receive answers from
representatives of the Company, its officers, directors, employees and agents
concerning the Company in order for Investor to make an informed decision with
respect to its investment in the Securities. Neither such information nor any
other investigation conducted by Investor or any of its representatives shall
modify, amend or otherwise affect Investor’s right to rely on the Company’s
representations and warranties contained in this Agreement.

    

    3.4           Limitations on
Disposition.  Investor acknowledges that, except as provided in
the Registration Rights Agreement, the Securities have not been and are not
being registered under the Securities Act and may not be transferred or resold
without registration under the Securities Act or unless pursuant to an exemption
therefrom.

     

    3.5           Legend.  Investor
understands that the certificates representing the Common Stock and Series A
Preferred Stock may bear at issuance a restrictive legend in substantially the
following form:

    

    “The
securities represented by this certificate have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”), or any state
securities laws, and may not be offered for sale or sold unless a registration
statement under the Securities Act and applicable state securities laws shall
have become effective with respect thereto, or an exemption from registration
under the Securities Act and applicable state securities laws is available in
connection with such offer or sale.  These securities [and the
securities issuable hereunder] (i) may be pledged or hypothecated in connection
with a bona fide margin account or other financing secured by such securities or
(ii) may be transferred or assigned to an affiliate of the holder hereof without
the necessity of an opinion of counsel or the consent of the issuer
hereof.”

    

    Notwithstanding
the foregoing, it is agreed that, as long as (A) the resale or transfer
(including, without limitation, a pledge) of any of the Securities is registered
pursuant to an effective registration statement, (B) such Securities have been
sold pursuant to Rule 144, subject to receipt by the Company of customary
documentation reasonably acceptable to the Company in connection therewith, or
(C) such Securities are eligible for resale without limitation as to amount
under Rule 144 or any successor provision, such Securities shall be issued
without any legend or other restrictive language and, with respect to Securities
upon which such legend is stamped, the Company shall issue new certificates
without such legend to the holder upon request.  The Company shall
execute and deliver written instructions to the transfer agent for its Common
Stock (the “Transfer
Agent”) as may be necessary to satisfy any request by a Holder for
removal of such legends no later than the close of business on the third (3rd)
Business Day following the receipt of the request from a Holder to the extent
such legends may be removed in accordance with this Section
3.5.

    

    3.6           Reliance on
Exemptions.  Investor understands that the Securities are being
offered and sold to it in reliance upon specific exemptions from the
registration requirements of U.S. federal and state securities laws and that the
Company is relying upon the truth and accuracy of the representations and
warranties of Investor set forth in this Section 3
in order to determine the availability of such exemptions and the eligibility of
Investor to acquire the Securities.  

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

       

      Investor
acknowledges that it did not purchase the Securities based upon any
advertisement in any publication of general circulation.  Investor is
relying on the representations, acknowledgements and agreements made by the
Company in Section 4
and elsewhere in this Agreement in making investing, trading and/or other
decisions concerning the Company’s securities.

    

     

    3.7           Fees.  Investor
has not agreed to pay any compensation or other fee, cost or related expenditure
to any underwriter, broker, agent or other representative in connection with the
transactions contemplated hereby.

     

    3.8           No Conflicts.  The execution and performance of this
Agreement and the other Transaction Documents to which Investor is a party do not conflict in any material respect with
any agreement to which Investor is a party
or is bound, any court order or judgment applicable to Investor, or the constituent documents of Investor.

     

    3.9           No Governmental
Review.  Investor understands that no U.S. federal or state agency or any
other Governmental Authority has passed on or made any recommendation or
endorsement of the Securities or the fairness or suitability of an investment in
the Securities nor have such authorities passed upon the accuracy of any
information provided to Investor or made any findings or determinations as to
the merits of the offering of the Securities. 

    

    4.           REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.  The Company hereby represents
and warrants to each Holder and agrees with such Holder that, as of the
Execution Date:

    

    4.1           Organization, Good Standing
and Qualification.  Each of the Company and Company
Subsidiaries is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and has all requisite power and authority to carry
on its business as now conducted.  Each of the Company and Company
Subsidiaries is duly qualified to transact business and is in good standing in
each jurisdiction in which it conducts business except where the failure so to
qualify has not had or would not reasonably be expected to have a Material
Adverse Effect.

    

    4.2           Authorization;
Consents.  The Company has the requisite corporate power and
authority to enter into and perform its obligations under the Transaction
Documents, including, without limitation, the issuance and sale of the
Securities to Investor in accordance with the terms hereof and
thereof.  All corporate action on the part of the Company necessary
for the authorization, execution and delivery of, and the performance by the
Company of its obligations under, the Transaction Documents to which the Company
is a party has been taken, and no further consent or authorization of any Person
(including, without limitation, any of the Company’s directors or shareholders
or any Governmental Authority (other than such approval as may be required under
the Securities Act and applicable state laws in respect of the Registration
Rights Agreement) is required under any organizational document, Material
Contract, Governmental Requirement or otherwise.  The Board of
Directors has determined that the sale and issuance of the Securities, and the
consummation of the transactions contemplated hereby and by the other
Transaction Documents, are in the best interests of the Company.

     

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
 

    4.3                      Enforcement.  This
Agreement has been and, at or prior to the Closing, each other Transaction
Document required to be delivered by the Company at the Closing will be, duly
executed and delivered by the Company.  This Agreement constitutes
and, upon the execution and delivery thereof by the Company, each other
Transaction Documents will constitute, the valid and legally binding obligation
of the Company, enforceable against the Company in accordance with their
respective terms, subject to (i) applicable bankruptcy, insolvency, fraudulent
transfer, moratorium, reorganization or other similar laws of general
application relating to or affecting the enforcement of creditors’ rights
generally and (ii) general principles of equity.

    

    4.4           Disclosure Documents;
Agreements; Financial Statements; Other Information.  The
Company is subject to the reporting requirements of the Exchange Act and, except
as described on Schedule
4.4, the Company has filed with the Commission all SEC Documents that the
Company was required to file with the Commission on or after December 31,
2006.  The Company is not aware of any event occurring or expected to
occur on or prior to the Closing Date (other than the transactions effected
hereby) that would require the filing of, or with respect to which the Company
intends to file, a Form 8-K after the Closing.  Each SEC Document
filed on or after December 31, 2006, as of the date of the filing thereof with
the Commission (or if amended or superseded by a filing prior to the Execution
Date, then on the date of such amending or superseding filing), complied in all
material respects with the requirements of the Securities Act or Exchange Act,
as applicable, and, as of the date of such filing (or if amended or superseded
by a filing prior to the Execution Date, then on the date of such filing), such
SEC Document (including all exhibits and schedules thereto and documents
incorporated by reference therein) did not contain an untrue statement of
material fact or omit 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.  All documents required to be
filed as exhibits to the SEC Documents filed on or after December 31, 2006 have
been filed as required.  Except as set forth in the Disclosure
Documents, the Company has no liabilities, contingent or otherwise, other than
liabilities incurred in the ordinary course of business which, individually or
in the aggregate, are not material to the consolidated business or financial
condition of the Company and the Company Subsidiaries. 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 Commission with
respect thereto.  Such financial statements have been prepared in
accordance with GAAP consistently applied at the times and 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 adjustments).  The Company will prepare the financial
statements to be included in any reports, schedules, registration statements and
definitive proxy statements that the Company is required to file or files with
the Commission after the date hereof in accordance with GAAP (except in the case
of unaudited interim statements, to the extent they may exclude footnotes or may
be condensed or summary statements).

    

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    4.5           Capitalization; Subsidiaries; Outstanding
Debt.

    

    (a)           The
capitalization of the Company, including its authorized capital stock, the
number of shares issued and outstanding, the number of shares issuable and
reserved for issuance pursuant to the Company’s stock option plans and
agreements, the number of shares issuable and reserved for issuance pursuant to
securities (other than the Securities) payable in, exercisable for, or
convertible into or exchangeable for any shares of Common Stock is set forth on
Schedule
4.5(a).  All outstanding shares of capital stock of the Company
have been, or upon issuance will be, validly issued, fully paid and
non-assessable.

    

    (b)           All
of the Company Subsidiaries are disclosed on Schedule
4.5(b).  Each of the Company Subsidiaries that is indicated as
being “active” on Schedule
4.5(b) operates the business set forth opposite its name on Schedule
4.5(b).  None of the Company Subsidiaries that is indicated as
being “inactive”
on Schedule
4.5(b) has any assets or operations of any kind.  Except as
disclosed on Schedule
4.5(b), the Company or a wholly-owned Company Subsidiary owns all of the
capital stock of each Company Subsidiary, which capital stock is validly issued,
fully paid and non-assessable, and no shares of the capital stock of the Company
or any Company Subsidiary are subject to preemptive rights or any other similar
rights of the shareholders of the Company or any such Company Subsidiary or any
Liens created by or through the Company or any such Company
Subsidiary.

    

    (c)           Except
as disclosed on Schedule
4.5(c) or as contemplated herein, there are no outstanding options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into or exercisable
or exchangeable for, any shares of capital stock of the Company or any Company
Subsidiary, or arrangements by which the Company or any Company Subsidiary is or
may become bound to issue additional shares of capital stock of the Company or
any Company Subsidiary (whether pursuant to anti-dilution, “reset” or other
similar provisions).

     

    (d)           Schedule
4.5(d) identifies each individual item of Debt of the Company and/or any
Company Subsidiary currently outstanding in excess of $25,000 as of the date
hereof.

    

    4.6           Due Authorization; Valid
Issuance.  The Securities are duly authorized and, when issued,
sold and delivered in accordance with the terms of this Agreement, will be duly
and validly issued, free and clear of any Liens imposed by or through the
Company.  Assuming the accuracy of Investor’s representations
contained herein, the issuance and sale of the Securities under this Agreement
will be effected in compliance with all applicable federal and state securities
laws.

    

    4.7           Form
S-1.  The Company is eligible to register the Registrable
Securities for resale by each Holder on a registration statement on Form S-1
under the Securities Act.   As of the date hereof and as of the
Closing Date, there exist no facts or circumstances (including, without
limitation, any required approvals or waivers of any circumstances that may
delay or prevent the obtaining of accountant’s consents) that could reasonably
be expected to prohibit or delay the preparation, filing or effectiveness of
such registration statement on Form S-1.

     

     

    
      
        
        

      

      
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    4.8           No
Conflict.  Neither the Company nor any Company Subsidiary is in
violation of any provisions of its certificate or articles of incorporation,
bylaws or any other organizational document.  Neither the Company nor
any Company Subsidiary is in violation of or in default (and no event has
occurred which, with notice or lapse of time or both, would constitute a
default) under any provision of any instrument or contract to which it is a
party or by which it or any of its Property is bound, or in violation of any
provision of any Governmental Requirement applicable to the Company or any
Company Subsidiary, except for any violation or default that has not had or
would not reasonably be expected to have a Material Adverse
Effect.  The (i) execution, delivery and performance of this Agreement
and the other Transaction Documents and (ii) consummation of the transactions
contemplated hereby and thereby will not result in any violation of any
provisions of the Company’s certificate of incorporation, bylaws or any other
organizational document or in a default under any provision of any material
instrument or contract to which the Company or any Company Subsidiary is a party
or by which it or any of its Property is bound, or in violation of any provision
of any Governmental Requirement applicable to the Company or be in conflict with
or constitute, with or without the passage of time and giving of notice, a
default under any such instrument or contract or the triggering of any
preemptive or anti-dilution rights (including, without limitation, pursuant to
any “reset” or similar provisions) or rights of first refusal or first offer, or
any other rights that would allow or permit the holders of the Company’s
securities or any other Person to purchase shares of Common Stock or other
securities of the Company or any Company Subsidiary (whether pursuant to a
shareholder rights plan provision or otherwise).

    

    4.9           Financial Condition; Taxes;
Litigation.

    

    4.9.1                      The
financial condition of each of the Company and Company Subsidiaries is, in all
material respects, as described in the Disclosure Documents, except for changes
in the ordinary course of business and normal year-end adjustments that are not,
in the aggregate, materially adverse to the consolidated business or financial
condition of the Company and the Company Subsidiaries.  There has been
no (i) material adverse change to the business, operations, properties,
financial condition, prospects or results of operations of the Company and any
Company Subsidiary since the date of the Company’s most recent financial
statements contained in the Disclosure Documents or (ii) change by the Company in its
accounting principles, policies and methods except as required by changes in
GAAP.

     

    4.9.2                      Each
of the Company and Company Subsidiaries has prepared in good faith and duly and
timely filed all tax returns required to be filed by it and such returns are
complete and accurate in all material respects, except for tax returns that
would not reasonably be expected to have a Material Adverse Effect; and each of
the Company and Company Subsidiaries has paid all taxes required to have been
paid by it, except for taxes which it reasonably disputes in good faith or the
failure of which to pay has not had or would not reasonably be expected to have
a Material Adverse Effect.  Neither the Company nor any Company
Subsidiary has any liability with respect to taxes that accrued on or before the
date of the most recent balance sheet of the Company included in the Disclosure
Documents in excess of the amounts accrued with respect thereto that are
reflected on such balance sheet.

    

    4.9.3                      Neither
the Company nor any Company Subsidiary is the subject of any pending or, to the
Company’s knowledge, threatened inquiry, investigation or administrative or
legal proceeding by any Governmental Authority.

     

     

    
      
        
        

      

      
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    4.9.4                      There
is no material claim, litigation or administrative proceeding pending, or, to
the Company’s knowledge, threatened or contemplated, against the Company or any
Company Subsidiary, or against any officer, director or employee of the Company
or any such Company Subsidiary in connection with such Person’s employment
therewith, except for Schedule
4.9.4.  Neither the Company nor any Company Subsidiary is a
party to or subject to the provisions of, any order, writ, injunction, judgment
or decree of any court or Governmental Authority which has had or would
reasonably be expected to have a Material Adverse Effect.

    

    4.10           Manipulation of
Price.  The Company has not, and to its knowledge no one acting
on its behalf has, taken, directly or indirectly, any action designed to cause
or to result in the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of any of the
Securities.

    

    4.11           Intellectual
Property.

    

    (a)           Each
of the Company and Company Subsidiaries owns, free and clear of claims or rights
of any other Person, with full right to use, sell, license, sublicense, dispose
of, and bring actions for infringement of, or, to the knowledge of the Company,
has acquired licenses or other rights to use, all Intellectual Property
necessary for the conduct of its business as presently conducted (other than
with respect to software which is generally commercially available and not used
or incorporated into the Company’s or such Company Subsidiary’s products and
open source software which may be subject to one or more “general public”
licenses).  All works that are used or incorporated into the Company’s
or any Company Subsidiary’s services, products or services or products actively
under development and which is proprietary to the Company or such Company
Subsidiary was developed by or for the Company or a Company Subsidiary by the
current or former employees, consultants or independent contractors of the
Company or a Company Subsidiary or purchased or licensed by the Company or a
Company Subsidiary.

    

    (b)           The
business of each of the Company and Company Subsidiaries as presently conducted
and the production, marketing, licensing, use and servicing of any products or
services of each of the Company and Company Subsidiaries do not, to the
knowledge of the Company, infringe or conflict with any patent, trademark,
copyright, or trade secret rights of any third parties or any other Intellectual
Property of any third parties in any material respect.  Neither the
Company nor any Company Subsidiary has received written notice from any third
party asserting that any Intellectual Property owned or licensed by the Company
or a Company Subsidiary, or which the Company or any Company Subsidiary
otherwise has the right to use, is invalid or unenforceable by the Company or
such Company Subsidiary and, to the Company’s knowledge, there is no valid basis
for any such claim (whether or not pending or threatened).

    

    (c)           No
claim is pending or, to the Company’s knowledge, threatened against the Company
or any Company Subsidiary nor has the Company or any Company Subsidiary received
any written notice or other written claim from any Person asserting that the
Company’s or any Company Subsidiary’s present or contemplated activities
infringe or may infringe in any material respect any Intellectual Property of
such Person, and the Company is not aware of any infringement by any other
Person of any material rights of the Company or any Company under any
Intellectual Property Rights.

     

     

     

    
      
        
        

      

      
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    (d)           All
licenses or other agreements under which the Company or any Company Subsidiary
is granted Intellectual Property (excluding licenses to use software utilized in
the Company’s or such Company Subsidiary’s internal operations and which is
generally commercially available) are in full force and effect and, to the
Company’s knowledge, there is no material default by any party
thereto.  The Company has no reason to believe that the licensors
under such licenses and other agreements do not have and did not have all
requisite power and authority to grant the rights to the Intellectual Property
purported to be granted thereby.

    

    (e)           All
licenses or other agreements under which the Company or any Company Subsidiary
has granted rights to Intellectual Property to others (including all end-user
agreements) are in full force and effect, there has been no material default by
the Company or any Company Subsidiary thereunder and, to the Company’s
knowledge, there is no material default of any provision thereof relating to
Intellectual Property by any other party thereto.

    

    (f)           Each
of the Company and Company Subsidiaries has taken all steps required in
accordance with commercially reasonable business practice to establish and
preserve their ownership in their owned Intellectual Property and to keep
confidential all material technical information developed by or belonging to the
Company or such Company which has not been patented or
copyrighted.  To the Company’s knowledge, neither the Company nor any
Company Subsidiary is making any unlawful use of any Intellectual Property of
any other Person, including, without limitation, any former employer of any past
or present employees of the Company or any Company Subsidiary.  To the
Company’s knowledge, neither the Company, any Company Subsidiary nor any of
their respective employees has any agreements or arrangements with former
employers of such employees relating to any Intellectual Property of such
employers, which materially interfere or conflict with the performance of such
employee’s duties for the Company or any Company Subsidiary or result in any
former employers of such employees having any rights in, or claims on, the
Company’s or any Company Subsidiary’s Intellectual Property.  Each
current employee of each of the Company and Company Subsidiaries who has access
to material Intellectual Property has executed agreements regarding
confidentiality, proprietary information and assignment of inventions and
copyrights to the Company or such Company Subsidiary, as the case may be, each
independent contractor or consultant of each of the Company and Company
Subsidiaries who has access to material Intellectual Property has executed
agreements regarding confidentiality and proprietary information, and neither
the Company nor any Company Subsidiary has received written notice that any
employee, consultant or independent contractor is in violation of any agreement
or in breach of any agreement or arrangement with former or present employers
relating to proprietary information or assignment of
inventions.  Without limiting the foregoing: (i) each of the Company
and Company Subsidiaries has taken reasonable security measures to guard against
unauthorized disclosure or use of any of its Intellectual Property that is
confidential or proprietary; and (ii) the Company has no reason to believe that
any Person (including, without limitation, any former employee or consultant of
the Company or any Company Subsidiary) has unauthorized possession of any of its
Intellectual Property, or any part thereof, or that any Person has obtained
unauthorized access to any of its Intellectual Property.  Each of the
Company and Company Subsidiaries has complied in all material respects with its
respective obligations pursuant to all agreements relating to Intellectual
Property rights that are the subject of licenses granted by third parties,
except for any non-compliance that has not had or would not reasonably be
expected to have a Material Adverse Effect.

     

     

    
      
        
        

      

      
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    4.12           Registration Rights; Rights
of Participation.  Except as set forth on Schedule
4.12, the Company has not granted or agreed to grant to any Person any
rights (including “piggy-back” registration rights) to have any securities of
the Company registered with the Commission or any other Governmental Authority
which has not been satisfied in full or waived on or prior to the date hereof
and no Person, including, but not limited to, current or former shareholders of
the Company, underwriters, brokers, agents or other third parties, has any right
of first refusal, preemptive right, right of participation, anti-dilutive right
or any similar right to participate in, or to receive securities or other assets
of the Company solely as a result of the transactions contemplated by this
Agreement or the other Transaction Documents.

    

    4.13           Solicitation; Other
Issuances of Securities.  In the preceding twelve months,
neither the Company nor any of its Affiliates, nor any Person acting on its or
their behalf, (i) 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 Securities, or (ii) has, directly or indirectly, made any offers or
sales of any security or the right to purchase any security, or solicited any
offers to buy any security or any such right, under circumstances that would
require registration of the Securities under the Securities Act.

    

    4.14           Fees.  Except
as set forth on Schedule
4.14, the Company is not obligated to pay any brokers, finders or
financial advisory fees or commissions to any underwriter, broker, agent or
other representative in connection with the transactions contemplated
hereby.  The Company will indemnify and hold harmless each Holder from
and against any claim by any Person alleging that such Holder is obligated to
pay any such compensation, fee, cost or related expenditure in connection with
the transactions contemplated hereby.

    

    4.15           Foreign Corrupt
Practices.  Neither the Company, any Company Subsidiary nor, to
the knowledge of the Company, any director, officer, agent, employee or other
Person acting on behalf of the Company or any Company Subsidiary, has (i) used
any corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity, (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee, or (iii) violated any provision of the Foreign Corrupt Practices Act
of 1977, as amended, or made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government
official or employee.

    

    4.16           Key Employees. The
“executive officers” (as defined in Rule 501(f) of the Securities Act) of the
Company (each, a “Key
Employee”) is currently serving in the capacity described in the
Disclosure Documents.  The Company has no knowledge of any fact or
circumstance (including, without limitation, (i) the terms of any agreement to
which such person is a party or any litigation in which such person is or may
become involved and (ii) any illness or medical condition that could reasonably
be expected to result in the disability or incapacity of such person) that would
limit or prevent any such person from serving in such capacity on a full-time
basis in the reasonably foreseeable future, or of any intention on the part of
any such person to limit or terminate his or her employment with the Company or
any Company Subsidiary.  No Key Employee has borrowed money pursuant
to a currently outstanding loan that is secured by Common Stock or any right or
option to receive Common Stock.

     

     

    
      
        
        

      

      
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    4.17           Labor
Matters.  There is no strike, labor dispute or union
organization activities pending or, to the knowledge of the Company, threatened
between the Company or any Company Subsidiary and their respective
employees.  No employees of the Company or any Company Subsidiary
belong to any union or collective bargaining unit.  Each of the
Company and Company Subsidiaries has complied in all material respects with all
applicable federal and state equal opportunity and other laws related to
employment.

    

    4.18           Environment.  Neither
the Company nor any Company Subsidiary has any liabilities under any
Environmental Law, nor, to the Company's knowledge, do any factors exist that
are reasonably likely to give rise to any such liability, affecting any of the
properties owned or leased by the Company or any Company Subsidiary, in each
case other than liabilities that have not had and would not reasonably be
expected to have a Material Adverse Effect.  Neither the Company nor
any Company Subsidiary has violated any Environmental Law applicable to it now
or previously in effect, other than any violation that has not had and would not
reasonably be expected to have a Material Adverse Effect.

     

    4.19           ERISA.  Neither
the Company nor any Company Subsidiary maintains or contributes to, or has any
obligation under, any Pension Plan, except for 401K plan that ADP TotalSource
and Oasis Outsourcing maintains for Company employees as part of its payroll
services.  Each of the Company and Company Subsidiaries is in
compliance in all material respects with the presently applicable provisions of
ERISA and the United States Internal Revenue Code of 1986, as amended, with
respect to each Pension Plan except in any such case for any such matters that,
individually or in the aggregate, have not had, and would not reasonably be
expected to have, a Material Adverse Effect.

    

    4.20           Insurance.  The
Company maintains insurance for itself and each Company Subsidiary in such
amounts and covering such losses and risks as are reasonably sufficient and
customary in the businesses in which the Company and each such Company
Subsidiary are engaged.  As of the date hereof and as of the Closing
Date, no notice of cancellation has been received for any of such policies and
the Company is in compliance in all material respects with all of the terms and
conditions thereof.  The Company has no 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 to conduct its business as currently conducted without a significant
increase in cost.  Without limiting the generality of the foregoing,
the Company maintains Director’s and Officer’s insurance in an amount not less
than $5 million for each covered occurrence.

    

    4.21           Property.  Each
of the Company and Company Subsidiaries has good and marketable title to all
real and personal Property owned by it, in each case free and clear of all
Liens, other than the Permitted Liens.  Any Property held under lease
by the Company or a Company Subsidiary is held by it under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made or proposed to be made of such Property by the Company or such
Company Subsidiary.

    

    4.22           Regulatory
Permits.  Each of the Company and Company Subsidiaries possess
all certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct its business,
except where the failure to have any such certificate, authorization or permit
would not have a Material Adverse Effect, and neither the Company nor any
Company Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit.

     

     

    
      
        
        

      

      
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    4.23           Investment
Company.  Neither the Company nor any Company Subsidiary is
and, after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof, will become an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for an
investment company, within the meaning of the Investment Company Act of 1940, as
amended.

    

    4.24           U.S. Real Property Holding
Corporation.  The Company is not, nor has ever been, a U.S.
real property holding corporation within the meaning of Section 897 of the
Internal Revenue Code of 1986, as amended.

    

    4.25           Off Balance Sheet
Arrangements.  There is no transaction, arrangement, or other
relationship between the Company and an unconsolidated or other off balance
sheet entity that is required to be disclosed by the Company in its Exchange Act
filings and is not so disclosed or that otherwise would be reasonably likely to
have a Material Adverse Effect.

    

    4.26           Money
Laundering.  The operations of the Company and the Company
Subsidiaries are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, applicable money
laundering statutes and applicable rules and regulations thereunder, and no
action, suit or proceeding by or before any Governmental Authority involving the
Company or any of the Company Subsidiaries with respect to such Governmental
Requirements is pending or, to the knowledge of the Company,
threatened.

    

    4.27           Transfer Taxes. No
stock transfer or other taxes (other than income taxes) are required to be paid
in connection with the issuance and sale of any of the Securities, other than
such taxes for which the Company has established appropriate reserves and
intends to pay in full on or before the Closing.

    

    4.28           Sarbanes-Oxley Act; Internal
Controls and Procedures.  To the Company’s knowledge, the
Company is in material compliance with any and all applicable requirements of
the Sarbanes-Oxley Act of 2002, as amended, and any and all applicable rules and
regulations promulgated by the Commission thereunder that are effective as of
the date hereof.  The Company maintains internal accounting controls,
policies and procedures, and such books and records as are reasonably designed
to provide reasonable assurance that (i) all transactions to which the Company or any Company
Subsidiary is a party or by which its properties are bound are effected by a
duly authorized employee or agent of the Company, supervised by and acting
within the scope of the authority granted by the Company’s senior management;
(ii)
the recorded accounting of the Company’s consolidated assets is compared with
existing assets at regular intervals; and (iii) all
transactions to which the Company or any Company Subsidiary is a party, or by
which its properties are bound, are recorded (and such records maintained) in
accordance with all Governmental Requirements and as may be necessary or
appropriate to ensure that the financial statements of the Company are prepared
in accordance with GAAP.

     

     

    
      
        
        

      

      
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    4.29           Embargoed
Person.  None of the funds or other assets of the Company or
any Company Subsidiary shall constitute property of, or shall be beneficially
owned, directly or indirectly, by any Person subject to trade restrictions under
United States law, including, but not limited to, the International Emergency
Economic Powers Act, 50 U.S.C. § 1701 et seq., the Trading
with the Enemy Act, 50 U.S.C. App. 1 et seq., and any
Executive Orders or regulations promulgated under any such United States laws
(each, an “Embargoed
Person”), with the result that the investments evidenced by the
Securities are or would be in violation of any Governmental
Requirements.  No Embargoed Person shall have any interest of any
nature whatsoever in the Company or any Company Subsidiary with the result that
the investments evidenced by the Securities are or would be in violation of any
Governmental Requirements.  None of the funds or other assets of the
Company or any Company Subsidiary shall be derived from any unlawful activity
with the result that the investments evidenced by the Securities are or would be
in violation of any Governmental Requirements.

    

    4.30           Transactions with Interested
Persons.  Except as provided in the Transaction Documents
and/or Disclosure Documents, no officer, director or employee of the Company or
any Company Subsidiary is or has made any arrangements with the Company or any
Company Subsidiary to become a party to any transaction with the Company or any
Company Subsidiary (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 entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.

    

    4.31           Customers and
Suppliers.  The relationships of each of the Company and
Company Subsidiaries with its customers and suppliers are maintained on
commercially reasonable terms.  To the Company’s knowledge, no
customer or supplier of the Company or a Company Subsidiary has any plan or
intention to terminate its agreement with the Company or such Company
Subsidiary, which termination would reasonably be expected to have a Material
Adverse Effect.

    

    4.32           Accountants.  The
Company’s accountants, who the Company expects will render their opinion with
respect to the financial statements to be included in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2008, are, to the Company’s
knowledge, independent accountants as required by the Securities
Act.

    

    4.33           Bankruptcy.  The
Company has no knowledge of any facts or circumstances which lead it to believe
that it will be required to file for reorganization or liquidation under
bankruptcy or reorganization laws of any jurisdiction, and has no present
intention to so file.

    

    4.34           Disclosure.  The
representations, warranties and written statements contained in this Agreement
and the other Transaction Documents and in the certificates, exhibits and
schedules delivered by the Company to Investor pursuant to this Agreement and
the other Transaction Documents and in connection with Investor’s due diligence
investigation of the Company, do not contain any untrue statement of a material
fact, and do not omit to state a material fact required to be stated therein or
necessary in order to make such representations, warranties or statements not
misleading in light of the circumstances under which they were
made.  

     

     

    
      
        
        

      

      
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      Neither
the Company nor any Person acting on its behalf or at its direction has provided
Investor with material non-public information other than the terms of the
transactions contemplated hereby.  Following the issuance of a press
release in accordance with Section 5.1(c), to the Company’s knowledge, Investor
will not possess any material non-public information concerning the Company that
was provided to Investor by the Company or its agents or
representatives.  The Company acknowledges that Investor is relying on
the representations, acknowledgments and agreements made by the Company in this
Section 4.34 and elsewhere in this Agreement in making trading and other
decisions concerning the Company’s securities.

    

    

    5.           COVENANTS
AND AGREEMENTS.

    

    5.1           Filings and Public
Disclosure by the Company.  The Company shall:

     

    (a)           file
a Form D with respect to the Securities issued at the Closing as and when
required under Regulation D and provide a copy thereof to Investor promptly
after such filing;

     

    (b)           at
or prior to the Closing, take such action as the Company reasonably determines
upon the advice of counsel is necessary to qualify the Securities for sale under
applicable state or “blue-sky” laws or obtain an exemption therefrom, and shall
promptly provide evidence of any such action to Investor at Investor’s request;
and

     

    (c)           (i)
on or prior to 8:30 a.m. (eastern time) on the Business Day following the
Execution Date, issue a press release disclosing the material terms of this
Agreement and the other Transaction Documents and the transactions contemplated
hereby and thereby, and (ii) on or prior to 5:00 p.m. (eastern time) on the
Business Day following the Execution Date, file with the Commission a Current
Report on Form 8-K disclosing the material terms of and including as exhibits
this Agreement and the other Transaction Documents and the transactions
contemplated hereby and thereby; provided, however, that
Investor shall have a reasonable opportunity to review and comment on any such
press release or Form 8-K prior to the issuance or filing thereof; and provided, further, that if
the Company fails to issue a press release disclosing the material terms of this
Agreement and the other Transaction Documents within the time frames described
herein, any Holder may issue a press release disclosing such information without
any notice to or consent by the Company.  Thereafter, the Company
shall timely file any filings and notices required by the Commission or
applicable law with respect to the transactions contemplated
hereby.

    

    5.2           Use of
Proceeds.  The Company shall use the proceeds from the sale of
the Securities for marketing and growth purposes.

     

    5.3           Certain Affirmative
Covenants of the Company.  The Company agrees that, unless an
exception is permitted by the prior written approved of Holders of a majority of
the outstanding Securities, the Company shall, and shall cause each Company
Subsidiary to:

     

    (a)           maintain
its corporate existence in good standing;

    

    (b)           comply
with all Governmental Requirements applicable to the operation of its business,
except for instances of noncompliance that would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect;

     

     

     

    
      
        
        

      

      
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    (c)           comply
with all agreements, documents and instruments binding on it or affecting its
Properties or business, including, without limitation, all Material Contracts,
except for instances of noncompliance that would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect;

    

    (d)           provide
each Holder with copies of all materials sent to its shareholders at the same
time as such materials are delivered to such shareholders;

     

    (e)           timely
file with the Commission all reports required to be filed pursuant to the
Exchange Act and refrain from terminating its status as an issuer required by
the Exchange Act to file reports thereunder even if the Exchange Act or the
rules or regulations thereunder would permit such termination (and otherwise
make and keep public information available, as those terms are understood and
defined in Rule 144);

     

    (f)           ensure
that the Common Stock is at all times listed or quoted on the Nasdaq
over-the-counter bulletin board market, Nasdaq Global Market, the New York Stock
Exchange, the American Stock Exchange, or such other exchange or quotation
service reasonably satisfactory to the Holder (or if there is more than one
Holder, the Holders holding a majority of the Series A Preferred Stock held by
all Holders); and

    

    (g)           maintain
commercially reasonable insurance coverage (including D&O insurance) for
each of the Company and Company Subsidiaries.

     

    5.4           Certain Negative Covenants
of the Company.  The Company agrees that, without the prior
written approval of Holders of a majority of the outstanding Securities the
Company shall not, and shall cause each Company Subsidiary not to:

    

    (a)           enter
into any transaction or arrangement with any Affiliate, employee, officer,
director or shareholder of the Company or Company Subsidiary, unless such
transaction is effectuated on an arms’ length basis and approved by the
independent directors of the Company or such Company Subsidiary, as the case may
be;

    

    (b)           incur
(or permit to exist) any Debt (other than Permitted Debt);

    

    (c)           grant,
establish or maintain any Lien on any of its Property other than Permitted
Liens;

    

    (d)           make
any Restricted Payments other than Restricted Payments made by a Company
Subsidiary to the Company;

    

    (e)           make
any offers or sales of any security or solicit any offers to buy any security,
which will be integrated with the sale of the Securities in a manner which would
require the registration of any of the Securities under the Securities Act or
require stockholder approval under the rules and regulations of the Principal
Market;

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    
 

    (f)           issue
any shares of its Series A Preferred Stock;

    

    (g)           dispose
of all or any part of its Property unless (i) such disposition is in the
ordinary course of business and for fair market value, and (ii) such Property is
not material to the Company’s or any Company Subsidiary’s business, operations
or financial condition or performance;

    

    (h)           consent
to or implement any termination, amendment, modification, supplement or waiver
of the certificate or articles of incorporation, articles of organization,
bylaws, regulations or other constituent documents of the Company or any Company
Subsidiary which would reasonably be expected to adversely affect the rights of
any Holder under the Transaction Documents; or

    

    (i)           issue
any shares of its Common Stock or warrants/options, or any other right to
purchase Common Stock, except Common Stock issued as conversion of Permitted
Debt, options issued from the Company Incentive Stock Plan or Common Stock
issued through exercise of warrants and options outstanding as of this
date.

    

    5.5           Limitation on Issuance of
Common Stock.  Each Holder acknowledges and agrees that the
aggregate number of shares of Common Stock that may be issued by the Company
pursuant to this Agreement and the Securities may not at any time exceed the Cap
Amount without the Stockholder Cap Approval and that the Company shall have no
obligation to issue shares of Common Stock pursuant to this Agreement or the
Securities in excess of the Cap Amount unless either (x) the Stockholder Cap
Approval has been obtained or (y) the Company has obtained a written opinion
from outside counsel that such approval is not required, which opinion shall be
reasonably satisfactory to the Holders holding a majority of the shares of
Series A Preferred Stock held by all Holders.  In furtherance of the
limitation set forth in the immediately preceding sentence, at any time
following the Closing Date, the aggregate number of shares of Common Stock that
such Holder may receive upon the conversion of such Holder’s shares of Series A
Preferred Stock may not exceed the product of (A) the Cap Amount and (B) such
Holder’s Pro Rata Share (the “Allocation
Amount”).  In the event that a Holder shall sell or otherwise
transfer any of such Holder’s shares of Series A Preferred Stock, each
transferee shall be allocated a pro rata portion of such
transferor’s Allocation Amount.  Any portion of the Allocation Amount
allocated to any Holder or other Person which no longer holds any shares of
Series A Preferred Stock shall be reallocated to the remaining Holders pro rata based on the number
of the Registrable Securities held by such Holders at such time.  In
the event that, as a result of this Section
5.5, the Company is prohibited from issuing any shares of Common Stock to
a Holder electing to convert its shares of Series A Preferred Stock, the Company
shall, upon such Holder’s request, pay such Holder not later than two Business
Days after such request an amount of cash equal to the product of (1) the number
of shares of Common Stock that the Company is prohibited from issuing multiplied by (2) the VWAP
(as defined in the Certificate of Designation) as of the Trading Day immediately
preceding the date on which such Holder delivered the applicable conversion
notice, and upon timely payment of the foregoing amount, the Company shall be
deemed relieved of its obligation under the Certificate of Designation to
deliver such shares of Common Stock.

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    5.6           Stockholder Cap
Approval.  The Company shall obtain the Stockholder Cap
Approval as promptly as practicable after the date a shareholders’ meeting
approval is required under exchange rules or applicable law hereof but in no
event later than 60 days after the Closing Date.

     

    5.7           Intentionally
left blank.

    

    5.8           Use of Holder’s
Name.  Except as may be required by applicable law and/or this
Agreement, the Company shall not use, directly or indirectly, any Holder’s name
or the name of any of its Affiliates in any advertisement, announcement, press
release or other similar communication unless it has received the prior written
consent of such Holder for the specific use contemplated or as otherwise
required by applicable law or regulation.  Notwithstanding the
foregoing, it is agreed by the parties that a Form 8K filing disclosing this
Agreement and the Transaction Documents shall not require the Holder’s prior
written consent.

    

    5.9           Disclosure of Non-Public
Information. The Company agrees that it will not at any time following
the Execution Date disclose material non-public information to any Holder
without first obtaining such Holder’s prior written consent confirming that such
Holder is willing to receive material non-public information at such
time.

    

    5.10           Indemnification of
Holders.   The Company will indemnify and hold each Holder
and its directors, managers, officers, shareholders, members, partners,
employees and agents (each, a “Holder
Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Holder Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or by
the Company or any Company Subsidiary in the other Transaction Documents or (b)
any action instituted against a Holder, or any of its Affiliates, by any
shareholder of the Company who is not an Affiliate of such Holder, with respect
to any of the transactions contemplated by the Transaction Documents (unless
such action is based upon a breach of such Holder’s representation, warranties
or covenants under the Transaction Documents or any agreements or understandings
such Holder may have with any such shareholder or any violations by such Holder
or any such Affiliate of state or federal securities laws or any conduct by such
Holder or any such Affiliate which constitutes fraud, gross negligence, willful
misconduct or malfeasance).  If any action shall be brought against
any Holder Party in respect of which indemnity may be sought pursuant to this
Agreement, such Holder Party shall promptly notify the Company in writing, and
the Company shall have the right to assume the defense thereof with counsel of
its own choosing.  Any Holder Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Holder
Party except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a
reasonable period of time following such Holder Party’s written request that it
do so, to assume such defense and to employ counsel or (iii) in such action
there is, in the reasonable opinion of such separate counsel, a material
conflict on any material issue between the position of the Company and the
position of such Holder Party.  The Company will not be liable to any
Holder Party under this Agreement (i) for any settlement by a Holder Party
effected without the Company’s prior written consent, which shall not be
unreasonably withheld or delayed; or (ii) to the extent, but only to the extent,
that a loss, claim, damage or liability is attributable to such Holder Party’s
wrongful actions or omissions, or gross negligence or to such Holder Party’s
breach of any of the representations, warranties, covenants or agreements made
by such Holder Party in this Agreement or in the other Transaction
Documents.

     

     

    
      
        
        

      

      
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    5.11           Limitations on Disposition
by Holder.  No Holder shall sell, transfer, assign or dispose
of any Securities or any right hereunder to acquire any Securities,
unless:

     

    (a)           there
is then in effect an effective registration statement under the Securities Act
covering such proposed disposition and such disposition is made in accordance
with such registration statement; or

    

     (b)           such
Holder has notified the Company in writing of any such disposition, and
furnished the Company with an opinion of counsel, reasonably satisfactory to the
Company, that such disposition will not require registration of such Securities
or rights, as the case may be, under the Securities Act; provided, however, that no
such opinion of counsel will be required (A) if the sale, transfer,
assignment or disposition is made to an Affiliate of such Holder, (B) if the
sale, transfer, assignment or disposition is made pursuant to Rule 144 and
such Holder provides the Company with evidence reasonably satisfactory to the
Company that the proposed transaction satisfies the requirements of Rule 144,
(C) if such Securities are eligible for resale without limitation so to amount
under Rule 144 or any successor provision or (D) if in connection with a
bona fide pledge or
hypothecation of any Securities under a margin arrangement with a broker-dealer
or other financial institution or the sale of any such Securities by such
broker-dealer or other financial institution following such Holder’s default
under such margin arrangement.

    

      6.       
MISCELLANEOUS.

    

     

    
    

    6.1           Survival;
Severability.  The representations, warranties, covenants and
indemnities made by the parties herein and in the other Transaction Documents
shall survive the Closing notwithstanding any due diligence investigation made
by or on behalf of the party seeking to rely thereon. In the event that any
provision of this Agreement becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this Agreement shall continue
in full force and effect without said provision; provided that in such case
the parties shall negotiate in good faith to replace such provision with a new
provision which is not illegal, unenforceable or void, as long as such new
provision does not materially change the economic benefits of this Agreement to
the parties.

    

    6.2           Successors and
Assigns.  The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
permitted assigns of the parties.  Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and permitted assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.  

     

     

    
      
        
        

      

      
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    A Holder
may assign its rights and obligations hereunder in connection with any private
sale or transfer of all or any part of the Securities or right hereunder to
acquire all or any part of the Securities that is permitted hereunder, as long
as, as a condition precedent to such transfer, the transferee executes an
acknowledgment agreeing to be bound by the applicable provisions of this
Agreement, in which case the term “Holder” shall be deemed to refer to such
transferee as though such transferee were an original signatory hereto, and such
assignment complies with applicable Governmental Requirements.  The
Company may not assign its rights or obligations under this
Agreement.

    

    6.3           No
Reliance.  Each party acknowledges that (i) it has such
knowledge in business and financial matters as to be fully capable of evaluating
this Agreement, the other Transaction Documents and the transactions
contemplated hereby and thereby, (ii) it is not relying on any advice or
representation of any other party in connection with entering into this
Agreement, the other Transaction Documents or such transactions (other than the
representations made in this Agreement or the other Transaction Documents),
(iii) it has not received from any other party any assurance or guarantee as to
the merits (whether legal, regulatory, tax, financial or otherwise) of entering
into this Agreement or the other Transaction Documents or the performance of its
obligations hereunder and thereunder, and (iv) it has consulted with its own
legal, regulatory, tax, business, investment, financial and accounting advisors
to the extent that it has deemed necessary, and has entered into this Agreement
and the other Transaction Documents based on its own independent judgment and,
if applicable, on the advice of such advisors, and not on any view (whether
written or oral) expressed by any other party.

    

    6.4           Independent Nature of
Holders’ Obligations and Rights.  The obligations of each
Holder hereunder are several and not joint with the obligations of the other
Holders hereunder, and no Holder shall be responsible in any way for the
performance of the obligations of any other Holder hereunder. The Company
acknowledges and agrees that nothing contained herein or in any other
Transaction Document, and no action taken by any Holder pursuant hereto or
thereto, shall be deemed to constitute the Holders as a partnership, an
association, a joint venture or any other kind of entity, or a “group” as
described in Section 13(d) of the Exchange Act, or create a presumption that the
Holders are in any way acting in concert with respect to such obligations or the
transactions contemplated by this Agreement.  Each Holder has been
represented by its own separate counsel in connection with the transactions
contemplated hereby, shall be entitled to protect and enforce its rights,
including, without limitation, rights arising out of this Agreement or the other
Transaction Documents, individually, and shall not be required to join any other
Holder as an additional party in any proceeding for such purpose.

    

    6.5           Injunctive
Relief.  The Company acknowledges and agrees that a breach by
it of its obligations hereunder will cause irreparable harm to each Holder and
that the remedy or remedies at law for any such breach will be inadequate and
agrees, in the event of any such breach, in addition to all other available
remedies, such Holder shall be entitled to an injunction restraining any breach
and requiring immediate and specific performance of such obligations without the
necessity of showing economic loss or the posting of any bond.

    

    6.6           Governing Law; Jurisdiction;
Waiver of Jury Trial.

     

     

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    
 

    (a)           This
Agreement shall be governed by and construed under the laws of the State of
Florida applicable to contracts made and to be performed entirely within the
State of Florida.  Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the City and
County of Palm Beach for the adjudication of any dispute hereunder or any other
Transaction Document or in connection herewith or therewith or with any
transaction contemplated hereby or thereby, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper.  Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.

    

    (b)           EACH
PARTY TO THIS AGREEMENT ACKNOWLEDGES AND AGREES THAT ANY DISPUTE OR CONTROVERSY
THAT MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY
TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS
AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT
(I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH SUCH PARTY HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION
6.6(b).

    

    6.7           Counterparts;
Facsimile.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.  Any executed
signature page delivered by facsimile or e-mail transmission shall be binding to
the same extent as an original executed signature page, with regard to any
agreement subject to the terms hereof or any amendment thereto.

    

    6.8           Headings.  The
headings used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.

    

    6.9           Governing Law, Jurisdiction
and Attorneys Fees.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida applicable to
contracts made and to be performed entirely within the State of
Florida.  

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

       

       

      Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in Palm Beach County, Florida, for the adjudication of
any dispute hereunder or under the other Transaction Documents or in connection
herewith or therewith, or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper, and, in furtherance of such agreement, each party hereby agrees and
consents that without limiting other methods of obtaining jurisdiction, personal
jurisdiction over it in any such action or proceeding may be obtained within or
without the jurisdiction of such court and that any process or notice of motion
or other application to any such court in connection with any such action or
proceeding may be served upon such party by registered mail to or by personal
service at the address of such party provided in accordance with Section 6.10
hereof. The prevailing party in any action arising under this Agreement or the
Transaction Documents shall be entitled to be reimbursed for its reasonable
attorneys fees and costs incurred in such action and through all
appeals.

    

    

    

    6.10     Notices. Any notice,
demand or request required or permitted to be given by the Company or the Holder
pursuant to the terms of this Agreement shall be in writing and shall be deemed
delivered (i) when delivered personally or by verifiable facsimile transmission,
unless such delivery is made on a day that is not a Business Day, in which case
such delivery will be deemed to be made on the next succeeding Business Day,
(ii) on the next Business Day after timely delivery to an overnight courier and
(iii) on the Business Day actually received if deposited in the U.S. mail
(certified or registered mail, return receipt requested, postage prepaid),
addressed as follows:

    

    If to the
Company:

    Celsius
Holdings, Inc

    140 NE
4th
Ave, Suite C

    Delray
Beach, FL 33483

    Attn:
Chief Executive Officer

    Tel:
(561) 276-2239

    Fax:
(561) 276-2268

    

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

    

    Baritz
Colman LLP

    1075
Broken Sound Parkway, NW

    Suite
102

    Boca
Raton, Florida 33487

    Attn:
Roger Shaffer

    Tel:
(561) 862-5535

    Fax:
(561) 864-5101

    

    and if to
any Holder, to such address for such Holder as shall appear on such Holder’s
signature page hereto, or as shall be designated by such Holder in writing to
the Company in accordance with this Section
6.10.

    

    

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    6.11           Entire Agreement;
Amendments.  This Agreement and the other Transaction Documents
constitute the entire agreement between the parties with regard to the subject
matter hereof and thereof, superseding all prior agreements or understandings,
whether written or oral, between or among the parties.  Except as
expressly provided herein, neither this Agreement nor any term hereof may be
amended except pursuant to a written instrument executed by the Company and (i)
while the Note is outstanding, by the Holders holding a majority of the
outstanding principal of the Note, and (ii) if the Note is no longer
outstanding, by the Holders holding a majority of the shares of Series A
Preferred Stock held by all Holders.  Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

    

     

     

     

     

     

    [Signature
Pages to Follow]

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

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

    

    CELSIUS
HOLDINGS, INC.

    

    

    By:           ____/s/ Stephen C.
Haley__________

               Name:
Stephen C. Haley

               Title:                      Chief
Executive Officer

    

    

    CDS
VENTURES OF SOUTH FLORIDA, LLC

    

    

    By:           ____/s/ William H. Milmoe                                                                                     

               Name:
William H. Milmoe

               Title:  Manager

    

    

    ADDRESS:

    

    3299 NW
Second Avenue

    Boca
Raton, Florida 33431

    

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

    

    Muller
& Lebensburger

    7385
Galloway Road

    Suite
200

    Miami,
Florida 33173

    Attention:  Charles
Muller, Esq.

    

    
31

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