Document:

Unassociated Document

    

     

    

     

    

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THE SECURITIES MAY NOT BE SOLD,
      TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
      FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE
      AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS THAT
      REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE
      144
      OR REGULATION S UNDER SAID ACT.

     

    

     

    CALLABLE
      SECURED CONVERTIBLE NOTE

     

    
      	
              Houston,
                Texas

            	 
	
              September
                8, 2006

            	
              $______

            

    

     

     

    FOR
      VALUE RECEIVED,
      GLOBALNET CORPORATION,
      a
      Nevada corporation (hereinafter called the “Borrower”),
      hereby promises to pay to the order of _________________________ or registered
      assigns (the “Holder”)
      the
      sum of $______, on August 4, 2009 (the “Maturity
      Date”),
      and
      to pay interest on the unpaid principal balance hereof at the rate of six
      percent (6%) per annum from September 8, 2006 (the “Issue
      Date”)
      until
      the same becomes due and payable, whether at maturity or upon acceleration
      or by
      prepayment or otherwise. Any amount of principal or interest on this Note which
      is not paid when due shall bear interest at the rate of fifteen percent (15%)
      per annum from the due date thereof until the same is paid (“Default
      Interest”).
      Interest shall commence accruing on the issue date, shall be computed on the
      basis of a 365-day year and the actual number of days elapsed and shall be
      payable, quarterly on March 31, June 30, September 30 and December 31
      of each year beginning on September 30, 2006. All payments due hereunder (to
      the
      extent not converted into common stock, $.005 par value per share, of the
      Borrower (the “Common
      Stock”)
      in
      accordance with the terms hereof) shall be made in lawful money of the United
      States of America. All payments shall be made at such address as the Holder
      shall hereafter give to the Borrower by written notice made in accordance with
      the provisions of this Note. Whenever any amount expressed to be due by the
      terms of this Note is due on any day which is not a business day, the same
      shall
      instead be due on the next succeeding day which is a business day and, in the
      case of any interest payment date which is not the date on which this Note
      is
      paid in full, the extension of the due date thereof shall not be taken into
      account for purposes of determining the amount of interest due on such date.
      As
      used in this Note, the term “business day” shall mean any day other than a
      Saturday, Sunday or a day on which commercial banks in the city of New York,
      New
      York are authorized or required by law or executive order to remain closed.
      Each
      capitalized term used herein, and not otherwise defined, shall have the meaning
      ascribed thereto in that certain Securities Purchase Agreement, dated May 25,
      2006, pursuant to which this Note was originally issued (the “Purchase
      Agreement”).
      

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

     

    This
      Note
      is free from all taxes, liens, claims and encumbrances with respect to the
      issue
      thereof and shall not be subject to preemptive rights or other similar rights
      of
      shareholders of the Borrower and will not impose personal liability upon the
      holder thereof. The obligations of the Borrower under this Note shall be secured
      by that certain Security Agreement by and between the Borrower and the Holder
      of
      even date herewith.

     

    The
      following terms shall apply to this Note:

     

     

    ARTICLE
      I. CONVERSION
      RIGHTS

     

    1.1 Conversion
      Right.
      The
      Holder shall have the right from time to time, and at any time on or prior
      to
      the later of (i) the Maturity Date and (ii) the date of payment of the Default
      Amount (as defined in Article III) pursuant to Section 1.6(a) or Article III,
      the Optional Prepayment Amount (as defined in Section 5.1 or any payments
      pursuant to Section 1.7, each in respect of the remaining outstanding principal
      amount of this Note to convert all or any part of the outstanding and unpaid
      principal amount of this Note into fully paid and non-assessable shares of
      Common Stock, as such Common Stock exists on the Issue Date, or any shares
      of
      capital stock or other securities of the Borrower into which such Common Stock
      shall hereafter be changed or reclassified at the conversion price (the
“Conversion
      Price”)
      determined as provided herein (a “Conversion”);
      provided,
      however,
      that in
      no event shall the Holder be entitled to convert any portion of this Note in
      excess of that portion of this Note upon conversion of which the sum of (1)
      the
      number of shares of Common Stock beneficially owned by the Holder and its
      affiliates (other than shares of Common Stock which may be deemed beneficially
      owned through the ownership of the unconverted portion of the Notes or the
      unexercised or unconverted portion of any other security of the Borrower
      (including, without limitation, the warrants issued by the Borrower pursuant
      to
      the Purchase Agreement) subject to a limitation on conversion or exercise
      analogous to the limitations contained herein) and (2) the number of shares
      of
      Common Stock issuable upon the conversion of the portion of this Note with
      respect to which the determination of this proviso is being made, would result
      in beneficial ownership by the Holder and its affiliates of more than 4.9%
      of
      the outstanding shares of Common Stock. For purposes of the proviso to the
      immediately preceding sentence, beneficial ownership shall be determined in
      accordance with Section 13(d) of the Securities Exchange Act of 1934, as
      amended, and Regulations 13D-G thereunder, except as otherwise provided in
      clause (1) of such proviso. The number of shares of Common Stock to be issued
      upon each conversion of this Note shall be determined by dividing the Conversion
      Amount (as defined below) by the applicable Conversion Price then in effect
      on
      the date specified in the notice of conversion, in the form attached hereto
      as
      Exhibit A (the “Notice
      of Conversion”),
      delivered to the Borrower by the Holder in accordance with Section 1.4 below;
      provided that the Notice of Conversion is submitted by facsimile (or by other
      means resulting in, or reasonably expected to result in, notice) to the Borrower
      before 6:00 p.m., New York, New York time on such conversion date (the
“Conversion
      Date”).
      The
      term “Conversion
      Amount”
means,
      with respect to any conversion of this Note, the sum of (1) the principal amount
      of this Note to be converted in such conversion plus
      (2)
      accrued and unpaid interest, if any, on such principal amount at the interest
      rates provided in this Note to the Conversion Date plus
      (3)
      Default Interest, if any, on the amounts referred to in the immediately
      preceding clauses (1) and/or (2) plus
      (4) at
      the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.3 and
      1.4(g) hereof or pursuant to Section 2(c) of that certain Registration Rights
      Agreement, dated as of May 25, 2006, executed in connection with the initial
      issuance of this Note and the other Notes issued on the Issue Date (the
“Registration
      Rights Agreement”).

     

    
      
         

      

      
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    1.2 Conversion
      Price.

     

    (a) Calculation
      of Conversion Price.
      The
      Conversion Price shall be the lesser of (i) the Variable Conversion Price (as
      defined herein) and (ii) the Fixed Conversion Price (as defined herein)
      (subject, in each case, to equitable adjustments for stock splits, stock
      dividends or rights offerings by the Borrower relating to the Borrower’s
      securities or the securities of any subsidiary of the Borrower, combinations,
      recapitalization, reclassifications, extraordinary distributions and similar
      events). The “Variable
      Conversion Price”
shall
      mean the Applicable Percentage (as defined herein) multiplied by the Market
      Price (as defined herein). “Market
      Price”
means
      the average of the lowest three (3) Trading Prices (as defined below) for the
      Common Stock during the twenty (20) Trading Day period ending one Trading Day
      prior to the date the Conversion Notice is sent by the Holder to the Borrower
      via facsimile (the “Conversion
      Date”).
      “Trading
      Price”
means,
      for any security as of any date, the intraday trading price on the
      Over-the-Counter Bulletin Board (the “OTCBB”)
      as
      reported by a reliable reporting service mutually acceptable to and hereafter
      designated by Holders of a majority in interest of the Notes and the Borrower
      or, if the OTCBB is not the principal trading market for such security, the
      intraday trading price of such security on the principal securities exchange
      or
      trading market where such security is listed or traded or, if no intraday
      trading price of such security is available in any of the foregoing manners,
      the
      average of the intraday trading prices of any market makers for such security
      that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If
      the Trading Price cannot be calculated for such security on such date in the
      manner provided above, the Trading Price shall be the fair market value as
      mutually determined by the Borrower and the holders of a majority in interest
      of
      the Notes being converted for which the calculation of the Trading Price is
      required in order to determine the Conversion Price of such Notes. “Trading
      Day”
shall
      mean any day on which the Common Stock is traded for any period on the OTCBB,
      or
      on the principal securities exchange or other securities market on which the
      Common Stock is then being traded. “Applicable
      Percentage”
shall
      mean 20.0%. The “Fixed
      Conversion Price”
shall
      mean $.03.

     

    (b) Conversion
      Price During Major Announcements.
      Notwithstanding
      anything contained in Section 1.2(a) to the contrary, in the event the Borrower
      (i) makes a public announcement that it intends to consolidate or merge with
      any
      other corporation (other than a merger in which the Borrower is the surviving
      or
      continuing corporation and its capital stock is unchanged) or sell or transfer
      all or substantially all of the assets of the Borrower or (ii) any person,
      group
      or entity (including the Borrower) publicly announces a tender offer to purchase
      50% or more of the Borrower’s Common Stock (or any other takeover scheme) (the
      date of the announcement referred to in clause (i) or (ii) is hereinafter
      referred to as the “Announcement
      Date”),
      then
      the Conversion Price shall, effective upon the Announcement Date and continuing
      through the Adjusted Conversion Price Termination Date (as defined below),
      be
      equal to the lower of (x) the Conversion Price which would have been applicable
      for a Conversion occurring on the Announcement Date and (y) the Conversion
      Price
      that would otherwise be in effect. From and after the Adjusted Conversion Price
      Termination Date, the Conversion Price shall be determined as set forth in
      this
      Section 1.2(a). For purposes hereof, “Adjusted
      Conversion Price Termination Date”
shall
      mean, with respect to any proposed transaction or tender offer (or takeover
      scheme) for which a public announcement as contemplated by this Section 1.2(b)
      has been made, the date upon which the Borrower (in the case of clause (i)
      above) or the person, group or entity (in the case of clause (ii) above)
      consummates or publicly announces the termination or abandonment of the proposed
      transaction or tender offer (or takeover scheme) which caused this Section
      1.2(b) to become operative.

     

    
      
         

      

      
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    1.3 Authorized
      Shares.
      Subject
      to Stockholder Approval (as defined in Section 4(k) of the Purchase Agreement),
      the Borrower covenants that during the period the conversion right exists,
      the
      Borrower will reserve from its authorized and unissued Common Stock a sufficient
      number of shares, free from preemptive rights, to provide for the issuance
      of
      Common Stock upon the full conversion of this Note and the other Notes issued
      pursuant to the Purchase Agreement. Subject to Stockholder Approval (as defined
      in Section 4(k) of the Purchase Agreement), the Borrower is required at all
      times to have authorized and reserved two times the number of shares that is
      actually issuable upon full conversion of the Notes (based on the Conversion
      Price of the Notes or the Exercise Price of the Warrants in effect from time
      to
      time) (the “Reserved
      Amount”).
      The
      Reserved Amount shall be increased from time to time in accordance with the
      Borrower’s obligations pursuant to Section 4(h) of the Purchase Agreement. The
      Borrower represents that upon issuance, such shares will be duly and validly
      issued, fully paid and non-assessable. In addition, if the Borrower shall issue
      any securities or make any change to its capital structure which would change
      the number of shares of Common Stock into which the Notes shall be convertible
      at the then current Conversion Price, the Borrower shall at the same time make
      proper provision so that thereafter there shall be a sufficient number of shares
      of Common Stock authorized and reserved, free from preemptive rights, for
      conversion of the outstanding Notes. The Borrower (i) acknowledges that it
      has
      irrevocably instructed its transfer agent to issue certificates for the Common
      Stock issuable upon conversion of this Note subject to Stockholder Approval
      (as
      defined in Section 4(k) of the Purchase Agreement), and (ii) agrees that
      its issuance of this Note shall constitute full authority to its officers and
      agents who are charged with the duty of executing stock certificates to execute
      and issue the necessary certificates for shares of Common Stock in accordance
      with the terms and conditions of this Note.

     

    
      
         

      

      
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    If,
      at
      any time a Holder of this Note submits a Notice of Conversion, and the Borrower
      does not have sufficient authorized but unissued shares of Common Stock
      available to effect such conversion in accordance with the provisions of this
      Article I (a “Conversion
      Default”),
      subject to Section 4.8, the Borrower shall issue to the Holder all of the shares
      of Common Stock which are then available to effect such conversion. The portion
      of this Note which the Holder included in its Conversion Notice and which
      exceeds the amount which is then convertible into available shares of Common
      Stock (the “Excess
      Amount”)
      shall,
      notwithstanding anything to the contrary contained herein, not be convertible
      into Common Stock in accordance with the terms hereof until (and at the Holder’s
      option at any time after) the date additional shares of Common Stock are
      authorized by the Borrower to permit such conversion, at which time the
      Conversion Price in respect thereof shall be the lesser of (i) the Conversion
      Price on the Conversion Default Date (as defined below) and (ii) the Conversion
      Price on the Conversion Date thereafter elected by the Holder in respect
      thereof. In addition, the Borrower shall pay to the Holder payments
      (“Conversion
      Default Payments”)
      for a
      Conversion Default in the amount of (x) the sum
      of
      (1) the
      then outstanding principal amount of this Note plus
      (2)
      accrued and unpaid interest on the unpaid principal amount of this Note through
      the Authorization Date (as defined below) plus
      (3)
      Default Interest, if any, on the amounts referred to in clauses (1) and/or
      (2),
multiplied
      by
      (y) .24,
multiplied
      by
      (z)
      (N/365), where N = the number of days from the day the holder submits a Notice
      of Conversion giving rise to a Conversion Default (the “Conversion
      Default Date”)
      to the
      date (the “Authorization
      Date”)
      that
      the Borrower authorizes a sufficient number of shares of Common Stock to effect
      conversion of the full outstanding principal balance of this Note. The Borrower
      shall use its best efforts to authorize a sufficient number of shares of Common
      Stock as soon as practicable following the earlier of (i) such time that the
      Holder notifies the Borrower or that the Borrower otherwise becomes aware that
      there are or likely will be insufficient authorized and unissued shares to
      allow
      full conversion thereof and (ii) a Conversion Default. The Borrower shall send
      notice to the Holder of the authorization of additional shares of Common Stock,
      the Authorization Date and the amount of Holder’s accrued Conversion Default
      Payments. The accrued Conversion Default Payments for each calendar month shall
      be paid in cash or shall be convertible into Common Stock (at such time as
      there
      are sufficient authorized shares of Common Stock) at the applicable Conversion
      Price, at the Borrower’s option, as follows:

     

    (a) In
      the
      event Holder elects to take such payment in cash, cash payment shall be made
      to
      Holder by the fifth (5th)
      day of
      the month following the month in which it has accrued; and

     

    (b) In
      the
      event Holder elects to take such payment in Common Stock, the Holder may convert
      such payment amount into Common Stock at the Conversion Price (as in effect
      at
      the time of conversion) at any time after the fifth day of the month following
      the month in which it has accrued in accordance with the terms of this Article
      I
      (so long as there is then a sufficient number of authorized shares of Common
      Stock).

     

    The
      Holder’s election shall be made in writing to the Borrower at any time prior to
      6:00 p.m., New York, New York time, on the third day of the month following
      the
      month in which Conversion Default payments have accrued. If no election is
      made,
      the Holder shall be deemed to have elected to receive cash. Nothing herein
      shall
      limit the Holder’s right to pursue actual damages (to the extent in excess of
      the Conversion Default Payments) for the Borrower’s failure to maintain a
      sufficient number of authorized shares of Common Stock, and each holder shall
      have the right to pursue all remedies available at law or in equity (including
      degree of specific performance and/or injunctive relief).

     

    1.4 Method
      of Conversion.

     

    (a) Mechanics
      of Conversion.
      Subject
      to Section 1.1, this Note may be converted by the Holder in whole or in part
      at
      any time from time to time after the Issue Date, by (A) submitting to the
      Borrower a Notice of Conversion (by facsimile or other reasonable means of
      communication dispatched on the Conversion Date prior to 6:00 p.m., New York,
      New York time) and (B) subject to Section 1.4(b), surrendering this Note at
      the principal office of the Borrower. 

     

    
      
         

      

      
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    (b) Surrender
      of Note Upon Conversion.
      Notwithstanding
      anything to the contrary set forth herein, upon conversion of this Note in
      accordance with the terms hereof, the Holder shall not be required to physically
      surrender this Note to the Borrower unless the entire unpaid principal amount
      of
      this Note is so converted. The Holder and the Borrower shall maintain records
      showing the principal amount so converted and the dates of such conversions
      or
      shall use such other method, reasonably satisfactory to the Holder and the
      Borrower, so as not to require physical surrender of this Note upon each such
      conversion. In the event of any dispute or discrepancy, such records of the
      Borrower shall be controlling and determinative in the absence of manifest
      error. Notwithstanding the foregoing, if any portion of this Note is converted
      as aforesaid, the Holder may not transfer this Note unless the Holder first
      physically surrenders this Note to the Borrower, whereupon the Borrower will
      forthwith issue and deliver upon the order of the Holder a new Note of like
      tenor, registered as the Holder (upon payment by the Holder of any applicable
      transfer taxes) may request, representing in the aggregate the remaining unpaid
      principal amount of this Note. The Holder and any assignee, by acceptance of
      this Note, acknowledge and agree that, by reason of the provisions of this
      paragraph, following conversion of a portion of this Note, the unpaid and
      unconverted principal amount of this Note represented by this Note may be less
      than the amount stated on the face hereof.

     

    (c) Payment
      of Taxes.
      The
      Borrower shall not be required to pay any tax which may be payable in respect
      of
      any transfer involved in the issue and delivery of shares of Common Stock or
      other securities or property on conversion of this Note in a name other than
      that of the Holder (or in street name), and the Borrower shall not be required
      to issue or deliver any such shares or other securities or property unless
      and
      until the person or persons (other than the Holder or the custodian in whose
      street name such shares are to be held for the Holder’s account) requesting the
      issuance thereof shall have paid to the Borrower the amount of any such tax
      or
      shall have established to the satisfaction of the Borrower that such tax has
      been paid.

     

    (d) Delivery
      of Common Stock Upon Conversion.
      Subject
      to Stockholder Approval (as defined in Section 4(k) of the Purchase Agreement),
      upon receipt by the Borrower from the Holder of a facsimile transmission (or
      other reasonable means of communication) of a Notice of Conversion meeting
      the
      requirements for conversion as provided in this Section 1.4, the Borrower shall
      issue and deliver or cause to be issued and delivered to or upon the order
      of
      the Holder certificates for the Common Stock issuable upon such conversion
      within two (2) business days after such receipt (and, solely in the case of
      conversion of the entire unpaid principal amount hereof, surrender of this
      Note)
      (such second business day being hereinafter referred to as the “Deadline”)
      in
      accordance with the terms hereof and the Purchase Agreement (including, without
      limitation, in accordance with the requirements of Section 2(g) of the Purchase
      Agreement that certificates for shares of Common Stock issued on or after the
      effective date of the Registration Statement upon conversion of this Note shall
      not bear any restrictive legend).

     

    
      
         

      

      
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    (e) Obligation
      of Borrower to Deliver Common Stock.
      Upon
      receipt by the Borrower of a Notice of Conversion subject to Stockholder
      Approval (as defined in Section 4(k) of the Purchase Agreement), the Holder
      shall be deemed to be the holder of record of the Common Stock issuable upon
      such conversion, the outstanding principal amount and the amount of accrued
      and
      unpaid interest on this Note shall be reduced to reflect such conversion, and,
      unless the Borrower defaults on its obligations under this Article I, all rights
      with respect to the portion of this Note being so converted shall forthwith
      terminate except the right to receive the Common Stock or other securities,
      cash
      or other assets, as herein provided, on such conversion. If the Holder shall
      have given a Notice of Conversion as provided herein, the Borrower’s obligation
      to issue and deliver the certificates for Common Stock shall be absolute and
      unconditional, irrespective of the absence of any action by the Holder to
      enforce the same, any waiver or consent with respect to any provision thereof,
      the recovery of any judgment against any person or any action to enforce the
      same, any failure or delay in the enforcement of any other obligation of the
      Borrower to the holder of record, or any setoff, counterclaim, recoupment,
      limitation or termination, or any breach or alleged breach by the Holder of
      any
      obligation to the Borrower, and irrespective of any other circumstance which
      might otherwise limit such obligation of the Borrower to the Holder in
      connection with such conversion. The Conversion Date specified in the Notice
      of
      Conversion shall be the Conversion Date so long as the Notice of Conversion
      is
      received by the Borrower before 6:00 p.m., New York, New York time, on such
      date.

     

    (f) Delivery
      of Common Stock by Electronic Transfer.
      In
      lieu
      of delivering physical certificates representing the Common Stock issuable
      upon
      conversion, provided the Borrower’s transfer agent is participating in the
      Depository Trust Company (“DTC”)
      Fast
      Automated Securities Transfer (“FAST”)
      program, upon request of the Holder and its compliance with the provisions
      contained in Section 1.1 and in this Section 1.4, the Borrower shall use its
      best efforts to cause its transfer agent to electronically transmit the Common
      Stock issuable upon conversion to the Holder by crediting the account of
      Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission
      (“DWAC”)
      system.

     

    (g) Failure
      to Deliver Common Stock Prior to Deadline.
      Without
      in any way limiting the Holder’s right to pursue other remedies, including
      actual damages and/or equitable relief, the parties agree that if delivery
      of
      the Common Stock issuable upon conversion of this Note is more than two (2)
      days
      after the Deadline (other than a failure due to the circumstances described
      in
      Section 1.3 above, which failure shall be governed by such Section) the Borrower
      shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline
      that the Borrower fails to deliver such Common Stock. Such cash amount shall
      be
      paid to Holder by the fifth day of the month following the month in which it
      has
      accrued or, at the option of the Holder (by written notice to the Borrower
      by
      the first day of the month following the month in which it has accrued), shall
      be added to the principal amount of this Note, in which event interest shall
      accrue thereon in accordance with the terms of this Note and such additional
      principal amount shall be convertible into Common Stock in accordance with
      the
      terms of this Note.

     

    
      
         

      

      
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    1.5 Concerning
      the Shares.
      The
      shares of Common Stock issuable upon conversion of this Note may not be sold
      or
      transferred unless (i) such shares are sold pursuant to an effective
      registration statement under the Act or (ii) the Borrower or its transfer agent
      shall have been furnished with an opinion of counsel (which opinion shall be
      in
      form, substance and scope customary for opinions of counsel in comparable
      transactions) to the effect that the shares to be sold or transferred may be
      sold or transferred pursuant to an exemption from such registration or
      (iii) such shares are sold or transferred pursuant to Rule 144 under the
      Act (or a successor rule) (“Rule
      144”)
      or
      (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of
      the Borrower who agrees to sell or otherwise transfer the shares only in
      accordance with this Section 1.5 and who is an Accredited Investor (as defined
      in the Purchase Agreement). Except as otherwise provided in the Purchase
      Agreement (and subject to the removal provisions set forth below), until such
      time as the shares of Common Stock issuable upon conversion of this Note have
      been registered under the Act as contemplated by the Registration Rights
      Agreement or otherwise may be sold pursuant to Rule 144 without any restriction
      as to the number of securities as of a particular date that can then be
      immediately sold, each certificate for shares of Common Stock issuable upon
      conversion of this Note that has not been so included in an effective
      registration statement or that has not been sold pursuant to an effective
      registration statement or an exemption that permits removal of the legend,
      shall
      bear a legend substantially in the following form, as appropriate:

     

    “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED
      OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
      SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND
      SCOPE
      CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION
      IS NOT REQUIRED UNDER SAID ACT UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION
      S
      UNDER SAID ACT.”

     

    The
      legend set forth above shall be removed and the Borrower shall issue to the
      Holder a new certificate therefor free of any transfer legend if (i) the
      Borrower or its transfer agent shall have received an opinion of counsel, in
      form, substance and scope customary for opinions of counsel in comparable
      transactions, to the effect that a public sale or transfer of such Common Stock
      may be made without registration under the Act and the shares are so sold or
      transferred, (ii) such Holder provides the Borrower or its transfer agent with
      reasonable assurances that the Common Stock issuable upon conversion of this
      Note (to the extent such securities are deemed to have been acquired on the
      same
      date) can be sold pursuant to Rule 144 or (iii) in the case of the Common Stock
      issuable upon conversion of this Note, such security is registered for sale
      by
      the Holder under an effective registration statement filed under the Act or
      otherwise may be sold pursuant to Rule 144 without any restriction as to the
      number of securities as of a particular date that can then be immediately sold.
      Nothing in this Note shall (i) limit the Borrower’s obligation under the
      Registration Rights Agreement or (ii) affect in any way the Holder’s obligations
      to comply with applicable prospectus delivery requirements upon the resale
      of
      the securities referred to herein.

     

    1.6 Effect
      of Certain Events.

     

    (a) Effect
      of Merger, Consolidation, Etc.
      At the
      option of the Holder, the sale, conveyance or disposition of all or
      substantially all of the assets of the Borrower, the effectuation by the
      Borrower of a transaction or series of related transactions in which more than
      50% of the voting power of the Borrower is disposed of, or the consolidation,
      merger or other business combination of the Borrower with or into any other
      Person (as defined below) or Persons when the Borrower is not the survivor
      shall
      either: (i) be deemed to be an Event of Default (as defined in Article III)
      pursuant to which the Borrower shall be required to pay to the Holder upon
      the
      consummation of and as a condition to such transaction an amount equal to the
      Default Amount (as defined in Article III) or (ii) be treated pursuant to
      Section 1.6(b) hereof. “Person”
shall
      mean any individual, corporation, limited liability company, partnership,
      association, trust or other entity or organization.

     

    
      
         

      

      
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    (b) Adjustment
      Due to Merger, Consolidation, Etc.
      If,
      at
      any time when this Note is issued and outstanding and prior to conversion of
      all
      of the Notes, there shall be any merger, consolidation, exchange of shares,
      recapitalization, reorganization, or other similar event, as a result of which
      shares of Common Stock of the Borrower shall be changed into the same or a
      different number of shares of another class or classes of stock or securities
      of
      the Borrower or another entity, or in case of any sale or conveyance of all
      or
      substantially all of the assets of the Borrower other than in connection with
      a
      plan of complete liquidation of the Borrower, then the Holder of this Note
      shall
      thereafter have the right to receive upon conversion of this Note, upon the
      basis and upon the terms and conditions specified herein and in lieu of the
      shares of Common Stock immediately theretofore issuable upon conversion, such
      stock, securities or assets which the Holder would have been entitled to receive
      in such transaction had this Note been converted in full immediately prior
      to
      such transaction (without regard to any limitations on conversion set forth
      herein), and in any such case appropriate provisions shall be made with respect
      to the rights and interests of the Holder of this Note to the end that the
      provisions hereof (including, without limitation, provisions for adjustment
      of
      the Conversion Price and of the number of shares issuable upon conversion of
      the
      Note) shall thereafter be applicable, as nearly as may be practicable in
      relation to any securities or assets thereafter deliverable upon the conversion
      hereof. The Borrower shall not effect any transaction described in this Section
      1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days
      prior written notice (but in any event at least fifteen (15) days prior written
      notice) of the record date of the special meeting of shareholders to approve,
      or
      if there is no such record date, the consummation of, such merger,
      consolidation, exchange of shares, recapitalization, reorganization or other
      similar event or sale of assets (during which time the Holder shall be entitled
      to convert this Note) and (b) the resulting successor or acquiring entity (if
      not the Borrower) assumes by written instrument the obligations of this Section
      1.6(b). The above provisions shall similarly apply to successive consolidations,
      mergers, sales, transfers or share exchanges.

     

    (c) Adjustment
      Due to Distribution.
      If
      the
      Borrower shall declare or make any distribution of its assets (or rights to
      acquire its assets) to holders of Common Stock as a dividend, stock repurchase,
      by way of return of capital or otherwise (including any dividend or distribution
      to the Borrower’s shareholders in cash or shares (or rights to acquire shares)
      of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”),
      then
      the Holder of this Note shall be entitled, upon any conversion of this Note
      after the date of record for determining shareholders entitled to such
      Distribution, to receive the amount of such assets which would have been payable
      to the Holder with respect to the shares of Common Stock issuable upon such
      conversion had such Holder been the holder of such shares of Common Stock on
      the
      record date for the determination of shareholders entitled to such
      Distribution.

     

    
      
         

      

      
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    (d) Adjustment
      Due to Dilutive Issuance.
      If, at
      any time when any Notes are issued and outstanding, the Borrower issues or
      sells, or in accordance with this Section 1.6(d) hereof is deemed to have issued
      or sold, any shares of Common Stock for no consideration or for a consideration
      per share (before deduction of reasonable expenses or commissions or
      underwriting discounts or allowances in connection therewith) less than the
      Fixed Conversion Price in effect on the date of such issuance (or deemed
      issuance) of such shares of Common Stock (a “Dilutive
      Issuance”),
      then
      immediately upon the Dilutive Issuance, the Fixed Conversion Price will be
      reduced to the amount of the consideration per share received by the Borrower
      in
      such Dilutive Issuance; provided
      that
      only one adjustment will be made for each Dilutive Issuance.

     

    The
      Borrower shall be deemed to have issued or sold shares of Common Stock if the
      Borrower in any manner issues or grants any warrants, rights or options, whether
      or not immediately exercisable, to subscribe for or to purchase Common Stock
      or
      other securities convertible into or exchangeable for Common Stock
      (“Convertible
      Securities”)
      (such
      warrants, rights and options to purchase Common Stock or Convertible Securities
      are hereinafter referred to as “Options”)
      and
      the price per share for which Common Stock is issuable upon the exercise of
      such
      Options is less than the Fixed Conversion Price then in effect, then the Fixed
      Conversion Price shall be equal to such price per share. For purposes of the
      preceding sentence, the “price per share for which Common Stock is issuable upon
      the exercise of such Options” is determined by dividing (i) the total amount, if
      any, received or receivable by the Borrower as consideration for the issuance
      or
      granting of all such Options, plus the minimum aggregate amount of additional
      consideration, if any, payable to the Borrower upon the exercise of all such
      Options, plus, in the case of Convertible Securities issuable upon the exercise
      of such Options, the minimum aggregate amount of additional consideration
      payable upon the conversion or exchange thereof at the time such Convertible
      Securities first become convertible or exchangeable, by (ii) the maximum total
      number of shares of Common Stock issuable upon the exercise of all such Options
      (assuming full conversion of Convertible Securities, if applicable). No further
      adjustment to the Conversion Price will be made upon the actual issuance of
      such
      Common Stock upon the exercise of such Options or upon the conversion or
      exchange of Convertible Securities issuable upon exercise of such
      Options.

     

    Additionally,
      the Borrower shall be deemed to have issued or sold shares of Common Stock
      if
      the Borrower in any manner issues or sells any Convertible Securities, whether
      or not immediately convertible (other than where the same are issuable upon
      the
      exercise of Options), and the price per share for which Common Stock is issuable
      upon such conversion or exchange is less than the Fixed Conversion Price then
      in
      effect, then the Fixed Conversion Price shall be equal to such price per share.
      For the purposes of the preceding sentence, the “price per share for which
      Common Stock is issuable upon such conversion or exchange” is determined by
      dividing (i) the total amount, if any, received or receivable by the Borrower
      as
      consideration for the issuance or sale of all such Convertible Securities,
      plus
      the minimum aggregate amount of additional consideration, if any, payable to
      the
      Borrower upon the conversion or exchange thereof at the time such Convertible
      Securities first become convertible or exchangeable, by (ii) the maximum total
      number of shares of Common Stock issuable upon the conversion or exchange of
      all
      such Convertible Securities. No further adjustment to the Fixed Conversion
      Price
      will be made upon the actual issuance of such Common Stock upon conversion
      or
      exchange of such Convertible Securities.

     

    
      
         

      

      
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    (e) Purchase
      Rights.
      If,
      at
      any time when any Notes are issued and outstanding, the Borrower issues any
      convertible securities or rights to purchase stock, warrants, securities or
      other property (the “Purchase
      Rights”)
      pro
      rata to the record holders of any class of Common Stock, then the Holder of
      this
      Note will be entitled to acquire, upon the terms applicable to such Purchase
      Rights, the aggregate Purchase Rights which such Holder could have acquired
      if
      such Holder had held the number of shares of Common Stock acquirable upon
      complete conversion of this Note (without regard to any limitations on
      conversion contained herein) immediately before the date on which a record
      is
      taken for the grant, issuance or sale of such Purchase Rights or, if no such
      record is taken, the date as of which the record holders of Common Stock are
      to
      be determined for the grant, issue or sale of such Purchase Rights.

     

    (f) Notice
      of Adjustments.
      Upon
      the
      occurrence of each adjustment or readjustment of the Conversion Price as a
      result of the events described in this Section 1.6, the Borrower, at its
      expense, shall promptly compute such adjustment or readjustment and prepare
      and
      furnish to the Holder of a certificate setting forth such adjustment or
      readjustment and showing in detail the facts upon which such adjustment or
      readjustment is based. The Borrower shall, upon the written request at any
      time
      of the Holder, furnish to such Holder a like certificate setting forth (i)
      such
      adjustment or readjustment, (ii) the Conversion Price at the time in effect
      and
      (iii) the number of shares of Common Stock and the amount, if any, of other
      securities or property which at the time would be received upon conversion
      of
      the Note.

     

    1.7 Trading
      Market Limitations.
      Unless
      permitted by the applicable rules and regulations of the principal securities
      market on which the Common Stock is then listed or traded, in no event shall
      the
      Borrower issue upon conversion of or otherwise pursuant to this Note and the
      other Notes issued pursuant to the Purchase Agreement more than the maximum
      number of shares of Common Stock that the Borrower can issue pursuant to any
      rule of the principal United States securities market on which the Common Stock
      is then traded (the “Maximum
      Share Amount”),
      which
      shall be 19.99% of the total shares outstanding on the Closing Date (as defined
      in the Purchase Agreement), subject to equitable adjustment from time to time
      for stock splits, stock dividends, combinations, capital reorganizations and
      similar events relating to the Common Stock occurring after the date hereof.
      Once the Maximum Share Amount has been issued (the date of which is hereinafter
      referred to as the “Maximum
      Conversion Date”),
      if
      the Borrower fails to eliminate any prohibitions under applicable law or the
      rules or regulations of any stock exchange, interdealer quotation system or
      other self-regulatory organization with jurisdiction over the Borrower or any
      of
      its securities on the Borrower’s ability to issue shares of Common Stock in
      excess of the Maximum Share Amount (a “Trading
      Market Prepayment Event”),
      in
      lieu of any further right to convert this Note, and in full satisfaction of
      the
      Borrower’s obligations under this Note, the Borrower shall pay to the Holder,
      within fifteen (15) business days of the Maximum Conversion Date (the
“Trading
      Market Prepayment Date”),
      an
      amount equal to 130% times
      the
sum
      of (a)
      the then outstanding principal amount of this Note immediately following the
      Maximum Conversion Date, plus
      (b)
      accrued and unpaid interest on the unpaid principal amount of this Note to
      the
      Trading Market Prepayment Date, plus
      (c)
      Default Interest, if any, on the amounts referred to in clause (a) and/or (b)
      above, plus
      (d) any
      optional amounts that may be added thereto at the Maximum Conversion Date by
      the
      Holder in accordance with the terms hereof (the then outstanding principal
      amount of this Note immediately following the Maximum Conversion Date,
plus
      the
      amounts referred to in clauses (b), (c) and (d) above shall collectively be
      referred to as the “Remaining
      Convertible Amount”).
      With
      respect to each Holder of Notes, the Maximum Share Amount shall refer to such
      Holder’s pro rata
      share
      thereof determined in accordance with Section 4.8 below. In the event that
      the
      sum of (x) the aggregate number of shares of Common Stock issued upon conversion
      of this Note and the other Notes issued pursuant to the Purchase Agreement
      plus
      (y) the
      aggregate number of shares of Common Stock that remain issuable upon conversion
      of this Note and the other Notes issued pursuant to the Purchase Agreement,
      represents at least one hundred percent (100%) of the Maximum Share Amount
      (the
“Triggering
      Event”),
      the
      Borrower will use its best efforts to seek and obtain Shareholder Approval
      (or
      obtain such other relief as will allow conversions hereunder in excess of the
      Maximum Share Amount) as soon as practicable following the Triggering Event
      and
      before the Maximum Conversion Date. As used herein, “Shareholder
      Approval”
means
      approval by the shareholders of the Borrower to authorize the issuance of the
      full number of shares of Common Stock which would be issuable upon full
      conversion of the then outstanding Notes but for the Maximum Share
      Amount.

     

    
      
         

      

      
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    1.8 Status
      as Shareholder.
      Upon
      submission of a Notice of Conversion by a Holder, (i) the shares covered thereby
      (other than the shares, if any, which cannot be issued because their issuance
      would exceed such Holder’s allocated portion of the Reserved Amount or Maximum
      Share Amount) shall be deemed converted into shares of Common Stock and (ii)
      the
      Holder’s rights as a Holder of such converted portion of this Note shall cease
      and terminate, excepting only the right to receive certificates for such shares
      of Common Stock and to any remedies provided herein or otherwise available
      at
      law or in equity to such Holder because of a failure by the Borrower to comply
      with the terms of this Note. Notwithstanding the foregoing, if a Holder has
      not
      received certificates for all shares of Common Stock prior to the tenth (10th)
      business day after the expiration of the Deadline with respect to a conversion
      of any portion of this Note for any reason, then (unless the Holder otherwise
      elects to retain its status as a holder of Common Stock by so notifying the
      Borrower) the Holder shall regain the rights of a Holder of this Note with
      respect to such unconverted portions of this Note and the Borrower shall, as
      soon as practicable, return such unconverted Note to the Holder or, if the
      Note
      has not been surrendered, adjust its records to reflect that such portion of
      this Note has not been converted. In all cases, the Holder shall retain all
      of
      its rights and remedies (including, without limitation, (i) the right to receive
      Conversion Default Payments pursuant to Section 1.3 to the extent required
      thereby for such Conversion Default and any subsequent Conversion Default and
      (ii) the right to have the Conversion Price with respect to subsequent
      conversions determined in accordance with Section 1.3) for the Borrower’s
      failure to convert this Note.

     

    
      
         

      

      
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    ARTICLE
      II. CERTAIN
      COVENANTS

     

    2.1 Distributions
      on Capital Stock.
      So long
      as the Borrower shall have any obligation under this Note, the Borrower shall
      not without the Holder’s written consent (a) pay, declare or set apart for such
      payment, any dividend or other distribution (whether in cash, property or other
      securities) on shares of capital stock other than dividends on shares of Common
      Stock solely in the form of additional shares of Common Stock or (b) directly
      or
      indirectly or through any subsidiary make any other payment or distribution
      in
      respect of its capital stock except for distributions pursuant to any
      shareholders’ rights plan which is approved by a majority of the Borrower’s
      disinterested directors.

     

    2.2 Restriction
      on Stock Repurchases.
      So long
      as the Borrower shall have any obligation under this Note, the Borrower shall
      not without the Holder’s written consent redeem, repurchase or otherwise acquire
      (whether for cash or in exchange for property or other securities or otherwise)
      in any one transaction or series of related transactions any shares of capital
      stock of the Borrower or any warrants, rights or options to purchase or acquire
      any such shares.

     

    2.3 Borrowings.
      So long
      as the Borrower shall have any obligation under this Note, the Borrower shall
      not, without the Holder’s written consent, create, incur, assume or suffer to
      exist any liability for borrowed money, except (a) borrowings in existence
      or
      committed on the date hereof and of which the Borrower has informed Holder
      in
      writing prior to the date hereof, (b) indebtedness to trade creditors or
      financial institutions incurred in the ordinary course of business or (c)
      borrowings, the proceeds of which shall be used to repay this Note.

     

    2.4 Sale
      of Assets.
      So long
      as the Borrower shall have any obligation under this Note, the Borrower shall
      not, without the Holder’s written consent, sell, lease or otherwise dispose of
      any significant portion of its assets outside the ordinary course of business.
      Any consent to the disposition of any assets may be conditioned on a specified
      use of the proceeds of disposition.

     

    2.5 Advances
      and Loans.
      So long
      as the Borrower shall have any obligation under this Note, the Borrower shall
      not, without the Holder’s written consent, lend money, give credit or make
      advances to any person, firm, joint venture or corporation, including, without
      limitation, officers, directors, employees, subsidiaries and affiliates of
      the
      Borrower, except loans, credits or advances (a) in existence or committed on
      the
      date hereof and which the Borrower has informed Holder in writing prior to
      the
      date hereof, (b) made in the ordinary course of business or (c) not in excess
      of
      $50,000.

     

    2.6 Contingent
      Liabilities.
      So long
      as the Borrower shall have any obligation under this Note, the Borrower shall
      not, without the Holder’s written consent, assume, guarantee, endorse,
      contingently agree to purchase or otherwise become liable upon the obligation
      of
      any person, firm, partnership, joint venture or corporation, except by the
      endorsement of negotiable instruments for deposit or collection and except
      assumptions, guarantees, endorsements and contingencies (a) in existence or
      committed on the date hereof and which the Borrower has informed Holder in
      writing prior to the date hereof, and (b) similar transactions in the ordinary
      course of business. 

     

    
      
         

      

      
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    ARTICLE
      III. EVENTS
      OF DEFAULT

     

    If
      any of
      the following events of default (each, an “Event
      of Default”)
      shall
      occur:

     

    3.1 Failure
      to Pay Principal or Interest.
      The
      Borrower fails to pay the principal hereof or interest thereon when due on
      this
      Note, whether at maturity, upon a Trading Market Prepayment Event pursuant
      to
      Section 1.7, upon acceleration or otherwise;

     

    3.2 Conversion
      and the Shares.
      The
      Borrower fails to issue shares of Common Stock to the Holder (or announces
      or
      threatens that it will not honor its obligation to do so) upon exercise by
      the
      Holder of the conversion rights of the Holder in accordance with the terms
      of
      this Note (for a period of at least sixty (60) days, if such failure is solely
      as a result of the circumstances governed by Section 1.3 and the Borrower is
      using its best efforts to authorize a sufficient number of shares of Common
      Stock as soon as practicable), fails to transfer or cause its transfer agent
      to
      transfer (electronically or in certificated form) any certificate for shares
      of
      Common Stock issued to the Holder upon conversion of or otherwise pursuant
      to
      this Note as and when required by this Note or the Registration Rights
      Agreement, or fails to remove any restrictive legend (or to withdraw any stop
      transfer instructions in respect thereof) on any certificate for any shares
      of
      Common Stock issued to the Holder upon conversion of or otherwise pursuant
      to
      this Note as and when required by this Note or the Registration Rights Agreement
      (or makes any announcement, statement or threat that it does not intend to
      honor
      the obligations described in this paragraph) and any such failure shall continue
      uncured (or any announcement, statement or threat not to honor its obligations
      shall not be rescinded in writing) for ten (10) days after the Borrower shall
      have been notified thereof in writing by the Holder;

     

    3.3 Failure
      to Timely File Registration or Effect Registration.
      The
      Borrower fails to file the Registration Statement within thirty (30) days
      following an Investor Demand (as set forth in the Registration Rights Agreement)
      or obtain effectiveness with the Securities and Exchange Commission of the
      Registration Statement within one hundred twenty (60) days following the
      Investor Demand (as defined in the Registration Rights Agreement) or such
      Registration Statement lapses in effect (or sales cannot otherwise be made
      thereunder effective, whether by reason of the Borrower’s failure to amend or
      supplement the prospectus included therein in accordance with the Registration
      Rights Agreement or otherwise) for more than twenty (20) consecutive days or
      forty (40) days in any twelve month period after the Registration Statement
      becomes effective;;

     

    3.4 Breach
      of Covenants.
      The
      Borrower breaches any material covenant or other material term or condition
      contained in Sections 1.3, 1.6 or 1.7 of this Note, or Sections 4(c), 4(e),
      4(h), 4(i), 4(j) or 5 of the Purchase Agreement and such breach continues for
      a
      period of ten (10) days after written notice thereof to the Borrower from the
      Holder;

     

    3.5 Breach
      of Representations and Warranties.
      Any
      representation or warranty of the Borrower made herein or in any agreement,
      statement or certificate given in writing pursuant hereto or in connection
      herewith (including, without limitation, the Purchase Agreement and the
      Registration Rights Agreement), shall be false or misleading in any material
      respect when made and the breach of which has (or with the passage of time
      will
      have) a material adverse effect on the rights of the Holder with respect to
      this
      Note, the Purchase Agreement or the Registration Rights Agreement;

     

    
      
         

      

      
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    3.6 Receiver
      or Trustee.
      The
      Borrower or any subsidiary of the Borrower shall make an assignment for the
      benefit of creditors, or apply for or consent to the appointment of a receiver
      or trustee for it or for a substantial part of its property or business, or
      such
      a receiver or trustee shall otherwise be appointed;

     

    3.7 Judgments.
      Any
      money judgment, writ or similar process shall be entered or filed against the
      Borrower or any subsidiary of the Borrower or any of its property or other
      assets for more than $50,000, and shall remain unvacated, unbonded or unstayed
      for a period of twenty (20) days unless otherwise consented to by the Holder,
      which consent will not be unreasonably withheld;

     

    3.8 Bankruptcy.
      Bankruptcy, insolvency, reorganization or liquidation proceedings or other
      proceedings for relief under any bankruptcy law or any law for the relief of
      debtors shall be instituted by or against the Borrower or any subsidiary of
      the
      Borrower;

     

    3.9 Delisting
      of Common Stock.
      The
      Borrower shall fail to maintain the listing of the Common Stock on at least
      one
      of the OTCBB or an equivalent replacement exchange, the Nasdaq National Market,
      the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock
      Exchange or the Pinksheets; or

     

    3.10 Default
      Under Other Notes.
      An Event
      of Default has occurred and is continuing under any of the other Notes issued
      pursuant to the Purchase Agreement,

     

    then,
      upon the occurrence and during the continuation of any Event of Default
      specified in Section 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 3.9, or 3.10, at the option
      of the Holders of a majority of the aggregate principal amount of the
      outstanding Notes issued pursuant to the Purchase Agreement exercisable through
      the delivery of written notice to the Borrower by such Holders (the
“Default
      Notice”),
      and
      upon the occurrence of an Event of Default specified in Section 3.6 or 3.8,
      the
      Notes shall become immediately due and payable and the Borrower shall pay to
      the
      Holder, in full satisfaction of its obligations hereunder, an amount equal
      to
      the greater of (i) 130% times
      the
sum
      of (w)
      the then outstanding principal amount of this Note plus
      (x)
      accrued and unpaid interest on the unpaid principal amount of this Note to
      the
      date of payment (the “Mandatory
      Prepayment Date”)
      plus
      (y)
      Default Interest, if any, on the amounts referred to in clauses (w) and/or
      (x)
plus
      (z) any
      amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof or
      pursuant to Section 2(c) of the Registration Rights Agreement (the then
      outstanding principal amount of this Note to the date of payment plus
      the
      amounts referred to in clauses (x), (y) and (z) shall collectively be known
      as
      the “Default
      Sum”)
      or
      (ii) the “parity value” of the Default Sum to be prepaid, where parity value
      means (a) the highest number of shares of Common Stock issuable upon conversion
      of or otherwise pursuant to such Default Sum in accordance with Article I,
      treating the Trading Day immediately preceding the Mandatory Prepayment Date
      as
      the “Conversion Date” for purposes of determining the lowest applicable
      Conversion Price, unless the Default Event arises as a result of a breach in
      respect of a specific Conversion Date in which case such Conversion Date shall
      be the Conversion Date), multiplied
      by
      (b) the
      highest Closing Price for the Common Stock during the period beginning on the
      date of first occurrence of the Event of Default and ending one day prior to
      the
      Mandatory Prepayment Date (the “Default
      Amount”)
      and
      all other amounts payable hereunder shall immediately become due and payable,
      all without demand, presentment or notice, all of which hereby are expressly
      waived, together with all costs, including, without limitation, legal fees
      and
      expenses, of collection, and the Holder shall be entitled to exercise all other
      rights and remedies available at law or in equity. If the Borrower fails to
      pay
      the Default Amount within five (5) business days of written notice that such
      amount is due and payable, then the Holder shall have the right at any time,
      so
      long as the Borrower remains in default (and so long and to the extent that
      there are sufficient authorized shares), to require the Borrower, upon written
      notice, to immediately issue, in lieu of the Default Amount, the number of
      shares of Common Stock of the Borrower equal to the Default Amount divided
      by
      the Conversion Price then in effect.

     

    
      
         

      

      
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    ARTICLE
      IV. MISCELLANEOUS

     

    4.1 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 privileges. All rights
      and remedies existing hereunder are cumulative to, and not exclusive of, any
      rights or remedies otherwise available.

     

    4.2 Notices.
      Any
      notice herein required or permitted to be given shall be in writing and may
      be
      personally served or delivered by courier or sent by United States mail and
      shall be deemed to have been given upon receipt if personally served (which
      shall include telephone line facsimile transmission) or sent by courier or
      three
      (3) days after being deposited in the United States mail, certified, with
      postage pre-paid and properly addressed, if sent by mail. For the purposes
      hereof, the address of the Holder shall be as shown on the records of the
      Borrower; and the address of the Borrower shall be 2616 South Loop West, Suite
      660, Houston, Texas 77054, facsimile number: . Both the Holder and the Borrower
      may change the address for service by service of written notice to the other
      as
      herein provided.

     

    4.3 Amendments.
      This
      Note and any provision hereof may only be amended by an instrument in writing
      signed by the Borrower and the Holder. The term “Note” and all reference
      thereto, as used throughout this instrument, shall mean this instrument (and
      the
      other Notes issued pursuant to the Purchase Agreement) as originally executed,
      or if later amended or supplemented, then as so amended or
      supplemented.

     

    4.4 Assignability.
      This
      Note shall be binding upon the Borrower and its successors and assigns, and
      shall inure to be the benefit of the Holder and its successors and assigns.
      Each
      transferee of this Note must be an “accredited investor” (as defined in Rule
      501(a) of the 1933 Act). Notwithstanding anything in this Note to the contrary,
      this Note may be pledged as collateral in connection with a bona fide
      margin
      account or other lending arrangement.

     

    4.5 Cost
      of Collection.
      If
      default is made in the payment of this Note, the Borrower shall pay the Holder
      hereof costs of collection, including reasonable attorneys’ fees.

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    

     

    4.6 Governing
      Law.
      THIS
      NOTE SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
      OF
      THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
      WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE
      BORROWER HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES
      FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT TO ANY DISPUTE ARISING
      UNDER THIS NOTE, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE
      TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE
      THE
      DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING.
      BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST
      CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON
      THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER
      PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH
      PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR
      PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
      SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT
      PREVAIL IN ANY DISPUTE ARISING UNDER THIS NOTE SHALL BE RESPONSIBLE FOR ALL
      FEES
      AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN
      CONNECTION WITH SUCH DISPUTE.

     

    4.7 Certain
      Amounts.
      Whenever
      pursuant to this Note the Borrower is required to pay an amount in excess of
      the
      outstanding principal amount (or the portion thereof required to be paid at
      that
      time) plus accrued and unpaid interest plus Default Interest on such interest,
      the Borrower and the Holder agree that the actual damages to the Holder from
      the
      receipt of cash payment on this Note may be difficult to determine and the
      amount to be so paid by the Borrower represents stipulated damages and not
      a
      penalty and is intended to compensate the Holder in part for loss of the
      opportunity to convert this Note and to earn a return from the sale of shares
      of
      Common Stock acquired upon conversion of this Note at a price in excess of
      the
      price paid for such shares pursuant to this Note. The Borrower and the Holder
      hereby agree that such amount of stipulated damages is not plainly
      disproportionate to the possible loss to the Holder from the receipt of a cash
      payment without the opportunity to convert this Note into shares of Common
      Stock.

     

    4.8 Allocations
      of Maximum Share Amount and Reserved Amount.
      The
      Maximum Share Amount and Reserved Amount shall be allocated pro rata among
      the
      Holders of Notes based on the principal amount of such Notes issued to each
      Holder. Each increase to the Maximum Share Amount and Reserved Amount shall
      be
      allocated pro rata among the Holders of Notes based on the principal amount
      of
      such Notes held by each Holder at the time of the increase in the Maximum Share
      Amount or Reserved Amount. In the event a Holder shall sell or otherwise
      transfer any of such Holder’s Notes, each transferee shall be allocated a pro
      rata portion of such transferor’s Maximum Share Amount and Reserved Amount. Any
      portion of the Maximum Share Amount or Reserved Amount which remains allocated
      to any person or entity which does not hold any Notes shall be allocated to
      the
      remaining Holders of Notes, pro rata based on the principal amount of such
      Notes
      then held by such Holders.

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    

     

    4.9 Damages
      Shares.
      The
      shares of Common Stock that may be issuable to the Holder pursuant to Sections
      1.3 and 1.4(g) hereof and pursuant to Section 2(c) of the Registration Rights
      Agreement (“Damages
      Shares”)
      shall
      be treated as Common Stock issuable upon conversion of this Note for all
      purposes hereof and shall be subject to all of the limitations and afforded
      all
      of the rights of the other shares of Common Stock issuable hereunder, including
      without limitation, the right to be included in the Registration Statement
      filed
      pursuant to the Registration Rights Agreement. For purposes of calculating
      interest payable on the outstanding principal amount hereof, except as otherwise
      provided herein, amounts convertible into Damages Shares (“Damages
      Amounts”)
      shall
      not bear interest but must be converted prior to the conversion of any
      outstanding principal amount hereof, until the outstanding Damages Amounts
      is
      zero.

     

    4.10 Denominations.
      At the
      request of the Holder, upon surrender of this Note, the Borrower shall promptly
      issue new Notes in the aggregate outstanding principal amount hereof, in the
      form hereof, in such denominations of at least $50,000 as the Holder shall
      request.

     

    4.11 Purchase
      Agreement.
      By its
      acceptance of this Note, each Holder agrees to be bound by the applicable terms
      of the Purchase Agreement.

     

    4.12 Notice
      of Corporate Events.
      Except
      as otherwise provided below, the Holder of this Note shall have no rights as
      a
      Holder of Common Stock unless and only to the extent that it converts this
      Note
      into Common Stock. The Borrower shall provide the Holder with prior notification
      of any meeting of the Borrower’s shareholders (and copies of proxy materials and
      other information sent to shareholders). In the event of any taking by the
      Borrower of a record of its shareholders for the purpose of determining
      shareholders who are entitled to receive payment of any dividend or other
      distribution, any right to subscribe for, purchase or otherwise acquire
      (including by way of merger, consolidation, reclassification or
      recapitalization) any share of any class or any other securities or property,
      or
      to receive any other right, or for the purpose of determining shareholders
      who
      are entitled to vote in connection with any proposed sale, lease or conveyance
      of all or substantially all of the assets of the Borrower or any proposed
      liquidation, dissolution or winding up of the Borrower, the Borrower shall
      mail
      a notice to the Holder, at least twenty (20) days prior to the record date
      specified therein (or thirty (30) days prior to the consummation of the
      transaction or event, whichever is earlier), of the date on which any such
      record is to be taken for the purpose of such dividend, distribution, right
      or
      other event, and a brief statement regarding the amount and character of such
      dividend, distribution, right or other event to the extent known at such time.
      The Borrower shall make a public announcement of any event requiring
      notification to the Holder hereunder substantially simultaneously with the
      notification to the Holder in accordance with the terms of this Section
      4.6.

     

    4.13 Remedies.
      The
      Borrower acknowledges that a breach by it of its obligations hereunder will
      cause irreparable harm to the Holder, by vitiating the intent and purpose of
      the
      transaction contemplated hereby. Accordingly, the Borrower acknowledges that
      the
      remedy at law for a breach of its obligations under this Note will be inadequate
      and agrees, in the event of a breach or threatened breach by the Borrower of
      the
      provisions of this Note, that the Holder shall be entitled, in addition to
      all
      other available remedies at law or in equity, and in addition to the penalties
      assessable herein, to an injunction or injunctions restraining, preventing
      or
      curing any breach of this Note and to enforce specifically the terms and
      provisions thereof, without the necessity of showing economic loss and without
      any bond or other security being required 

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    

     

     

    ARTICLE
      V. CALL
      OPTION

     

    5.1 Call
      Option.
      Notwithstanding anything to the contrary contained in this Article V, so long
      as
(i) no
      Event of Default or Trading Market Prepayment Event shall have occurred and
      be
      continuing, (ii) the
      Borrower has a sufficient number of authorized shares of Common Stock reserved
      for issuance upon full conversion of the Notes, then at any time after the
      Issue
      Date, and (iii) the
      Common Stock is trading at or below $.10 per share, the Borrower shall have
      the
      right, exercisable on not less than ten (10) Trading Days prior written notice
      to the Holders of the Notes (which notice may not be sent to the Holders of
      the
      Notes until the Borrower is permitted to prepay the Notes pursuant to this
      Section 5.1), to prepay all of the outstanding Notes in accordance with this
      Section 5.1. Any notice of prepayment hereunder (an “Optional
      Prepayment”)
      shall
      be delivered to the Holders of the Notes at their registered addresses appearing
      on the books and records of the Borrower and shall state (1) that the Borrower
      is exercising its right to prepay all of the Notes issued on the Issue Date
      and
      (2) the date of prepayment (the “Optional
      Prepayment Notice”).
      On
      the date fixed for prepayment (the “Optional
      Prepayment Date”),
      the
      Borrower shall make payment of the Optional Prepayment Amount (as defined below)
      to or upon the order of the Holders as specified by the Holders in writing
      to
      the Borrower at least one (1) business day prior to the Optional Prepayment
      Date. If the Borrower exercises its right to prepay the Notes, the Borrower
      shall make payment to the holders of an amount in cash (the “Optional
      Prepayment Amount”)
      equal
      to either (i) 60% (for prepayments occurring within sixty (60) days of the
      Issue Date), (ii) 130% for prepayments occurring between sixty-one (61) and
      one hundred twenty (60) days of the Issue Date, or (iii) 140% (for prepayments
      occurring after the one hundred twentieth (60th)
      day
      following the Issue Date), multiplied by the sum of (w) the then outstanding
      principal amount of this Note plus
      (x) accrued and unpaid interest on the unpaid principal amount of this Note
      to the Optional Prepayment Date plus
      (y)
      Default Interest, if any, on the amounts referred to in clauses (w) and (x)
      plus
      (z) any
      amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof or
      pursuant to Section 2(c) of the Registration Rights Agreement (the then
      outstanding principal amount of this Note to the date of payment plus
      the
      amounts referred to in clauses (x), (y) and (z) shall collectively be known
      as
      the “Optional
      Prepayment Sum”).
      Notwithstanding notice of an Optional Prepayment, the Holders shall at all
      times
      prior to the Optional Prepayment Date maintain the right to convert all or
      any
      portion of the Notes in accordance with Article I and any portion of Notes
      so
      converted after receipt of an Optional Prepayment Notice and prior to the
      Optional Prepayment Date set forth in such notice and payment of the aggregate
      Optional Prepayment Amount shall be deducted from the principal amount of Notes
      which are otherwise subject to prepayment pursuant to such notice. If the
      Borrower delivers an Optional Prepayment Notice and fails to pay the Optional
      Prepayment Amount due to the Holders of the Notes within two (2) business days
      following the Optional Prepayment Date, the Borrower shall forever forfeit
      its
      right to redeem the Notes pursuant to this Section 5.1.

     

    

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    

     

    

     

    

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF,
      Borrower has caused this Note to be signed in its name by its duly authorized
      officer this 8th
      day of
      September, 2006.

     

    

    
      	 	
              GLOBALNET
                CORPORATION

            
	 	 
	 	 
	 	 
	 	
              By:
                ______________________________

            
	 	
              Thomas
                P. Dunn

            
	 	
              Chief
                Financial Officer

            

    

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    EXHIBIT
      A

     

    NOTICE
      OF CONVERSION

     

    (To
      be
      Executed by the Registered Holder

     

    in
      order
      to Convert the Notes)

     

    The
      undersigned hereby irrevocably elects to convert $__________ principal amount
      of
      the Note (defined below) into shares of common stock, par value $.005 per share
      (“Common
      Stock”),
      of
      GlobalNet Corporation, a Nevada corporation (the “Borrower”)
      according to the conditions of the convertible Notes of the Borrower dated
      as of
      September 8, 2006 (the “Notes”), as of the date written below. If securities are
      to be issued in the name of a person other than the undersigned, the undersigned
      will pay all transfer taxes payable with respect thereto and is delivering
      herewith such certificates. No fee will be charged to the Holder for any
      conversion, except for transfer taxes, if any. A copy of each Note is attached
      hereto (or evidence of loss, theft or destruction thereof).

     

    The
      Borrower shall electronically transmit the Common Stock issuable pursuant to
      this Notice of Conversion to the account of the undersigned or its nominee
      with
      DTC through its Deposit Withdrawal Agent Commission system (“DWAC
      Transfer”).

     

    Name
      of
      DTC Prime Broker:___________________________________________

    Account
      Number:__________________________________________________

     

    In
      lieu
      of receiving shares of Common Stock issuable pursuant to this Notice of
      Conversion by way of a DWAC Transfer, the undersigned hereby requests that
      the
      Borrower issue a certificate or certificates for the number of shares of Common
      Stock set forth below (which numbers are based on the Holder’s calculation
      attached hereto) in the name(s) specified immediately below or, if additional
      space is necessary, on an attachment hereto:

     

    Name:_____________________________________________

    Address:___________________________________________

     

    The
      undersigned represents and warrants that all offers and sales by the undersigned
      of the securities issuable to the undersigned upon conversion of the Notes
      shall
      be made pursuant to registration of the securities under the Securities Act
      of
      1933, as amended (the “Act”),
      or
      pursuant to an exemption from registration under the Act.

     

    Date
      of
      Conversion:___________________________

    Applicable
      Conversion Price:____________________

    Number
      of
      Shares of Common Stock to be Issued Pursuant to

    Conversion
      of the Notes:______________

    Signature:___________________________________

    Name:______________________________________

    Address:____________________________________

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    The
      Borrower shall issue and deliver shares of Common Stock to an overnight courier
      not later than three business days following receipt of the original Note(s)
      to
      be converted, and shall make payments pursuant to the Notes for the number
      of
      business days such issuance and delivery is late.

     

    
      
         

      

      
        23Unassociated Document

    STOCK
      PURCHASE AGREEMENT

    

    This
      Stock Purchase Agreement (this “Agreement”) is made and entered into as of
      August 24, 2006 by and among the persons listed under the heading “Sellers” on
      the signature page hereto (collectively, the “Sellers”) and Messrs. Yun Wang,
      Shibin Jiang and Bin Feng,
      all of
      whom are residents of the People’s Republic of China (collectively
      “Purchasers ” and individually, a “Purchaser”).

    

    WHEREAS,
      Sellers are the sole record and beneficial owners of Twenty-Four Million Eight
      Hundred and Sixty-Five Thousand Seven Hundred and Forty-Four (24,865,744) shares
      of $.0001 par value per share common stock of USIP.COM, Inc., a Nevada
      corporation (the “Company”) and wish to sell all of those shares (the “Stock”);
      and

    

    WHEREAS,
      Purchasers wish to purchase Stock from Sellers in a private sale that is not
      part of a distribution or public offering;

    

    NOW,
      THEREFORE, in the parties hereto agree as follows:

     

    
      	1.  	
              Agreement
                to Purchase and Sell the Stock.
                Sellers will sell to Purchasers and Purchasers agree to purchase
                the Stock
                for a purchase price of Five Hundred and Seventy Thousand Five Dollars
                ($575,000) (the “Purchase Price”) in a private sale exempt from
                registration under Section 4(1) of the Securities Act of 1933, as
                amended
                (the "Act").

            

    

    

    
      	2.  	
              Closing
                And Payment.
                Subject to the terms and conditions hereof, and in reliance upon
                the
                written representations and warranties of Purchasers, Sellers will
                sell
                and, subject to the terms and conditions hereof, and in reliance
                upon the
                written representations and warranties of Sellers, Purchasers will
                purchase, at a single closing, the Stock. The closing shall be held
                on or
                before September 7, 2006, or such other date as the Parties may agree
                (the
                “Closing Date”), at the offices of Guzov Ofsink, LLC, 600 Madison Avenue,
                14th
                Floor, New York, new York 10022 (the “Closing”). At the Closing, Sellers
                will deliver to Purchasers’ attorneys, Guzov Ofsink, LLC, (“Purchasers’
                Attorney”) original stock certificates evidencing the Stock to be
                purchased hereunder, along with stock powers executed in blank. The
                Purchasers’ Attorney shall hold the said stock certificates and stock
                powers in escrow and shall only release them to the Purchasers upon
                the
                reasonably satisfactory completion of due diligence on the Company
                pursuant to Section 7.2 below, at the sole and absolute discretion
                of the
                Purchasers’ Attorney and the Purchasers (“Due Diligence Completion Date”).
                Only on or as soon as reasonably practicable after the Due Diligence
                Completion Date shall the Purchasers deliver or cause to deliver
                to Joseph
                Passalaqua, as agent for all Sellers, the Purchase Price, by wire
                transfer, cashier’s check, or by such other means as the parties may agree
                upon in writing. In the event that the Sellers fail to deliver the
                required due diligence materials, Purchasers’ Attorney shall return the
                stock certificates and stock powers delivered to it to
                Sellers.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	3.  	
              Representations
                and Warranties of Sellers.
                Sellers hereby represent and warrant to Purchasers that the statements
                in
                the following paragraphs of this Section 3 are all true and complete
                as of
                the date hereof: 

            

    

     

    
      	 	3.1  	
              Authority;
                Due Authorization.
                This Agreement has been duly and validly executed and delivered by
                Sellers, and upon the execution and delivery by Purchasers of this
                Agreement and the performance by Purchasers of their obligations
                herein,
                will constitute, a legal, valid and binding obligation of Sellers
                enforceable against Sellers in accordance with its terms, except
                as such
                enforcement may be limited by bankruptcy or insolvency laws or other
                laws
                affecting enforcement of creditors’ rights or by general principles of
                equity. 

            

      	 	 	 

      	 	
              3.2

            	
              No
                Conflicts.
                The execution and delivery by Sellers of this Agreement does not,
                and the
                performance by Sellers of their obligations under this Agreement
                and the
                consummation of the transactions contemplated hereby will not, conflict
                with or result in a violation or breach of any of the terms, conditions
                or
                provisions of any other agreement to which Sellers are a
                party.

            

    

    

    
      	 	
              3.3

            	
              Title
                to Securities.
                Sellers are the sole record and beneficial owner of the Stock and
                have
                sole managerial and dispositive authority with respect to the Stock.
                Sellers have not granted any person a proxy with respect to the Stock
                that
                has not expired or been validly withdrawn. The sale and delivery
                of the
                Stock to Purchasers pursuant to this Agreement will vest in Purchasers
                legal and valid title to the Stock, free and clear of all liens,
                security
                interests, adverse claims or other encumbrances of any character
                whatsoever (“Encumbrances”) (other than Encumbrances created by Purchasers
                and restrictions on resales of the Shares under applicable securities
                laws).

            

    

    

    
      	 	
              3.4
                

            	
              Valid
                Issuance.
                The Common Stock being purchased by the Purchasers hereunder is,
                and shall
                be at the Closing, duly and validly issued, fully paid, and non-assessable
                and in each instance have been issued in accordance with the registration
                requirements of applicable securities laws, including, without limitation,
                the Securities Act of 1933, as amended (the “Act”), or valid exemptions
                therefrom.

            

    

    

    
      	 	
              3.5
                

            	
              Corporate
                Documents.
                Copies of the Company’s current certificate of incorporation, all
                amendments thereto, and bylaws, as of the date hereof have been filed
                as
                exhibits to the Company’s reports (the “Filings”) with the Securities and
                Exchange Commission (“SEC”).

            

    

    

    
      	
            	3.6	
              The
                Company.
                 The
                Company, and its subsidiaries, are corporations duly incorporated,
                validly
                existing and in good standing under the laws of its jurisdiction
                of
                incorporation. 

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
            	3.7	
              Capitalization
                of the Company.
                 Immediately
                prior to the Closing, the authorized capital stock of the Company
                shall
                consist of a total of 100,000,000 (one hundred million) shares of
                Common
                Stock, $.0001 par value (the “Common Stock”), and 10,000,000 (ten million)
                shares of Preferred Stock, $.0001 par value. Immediately prior to
                the
                Closing there will be no shares of preferred stock outstanding and
                no more
                than 49,632,222 shares
                of Common Stock outstanding. There are no commitments to issue, and
                there
                are no outstanding warrants, options, convertible securities or debt,
                preferred stock, or any other securities. In addition, there are
                no
                conversion or exchange privileges, preemptive rights, or other rights
                or
                agreements to purchase or otherwise acquire or issue any securities
                of the
                Company, and there is no agreement or understanding between any persons
                and/or entities, which affects or relates to the voting or giving
                of
                written consents with respect to any security of the Company or any
                instrument or security exercisable or exchangeable for, or convertible
                into any security of the Company.

            

    

    

    
      	
            	3.8	
              Subsidiaries.
                 Other
                than as set forth in the Filings, the Company does not own, directly
                or
                indirectly, any capital stock or other equity securities of any other
                corporation, partnership, limited liability company, association
                or other
                business entity other than as set forth in the Filings. The Company
                is not
                a participant in any joint venture, partnership or similar
                arrangement.

            

    

    

    
      	 	
              3.9

            	
              Financial
                Statements.
                The Company’s financial statements contained in its Filings (the
                “Financial Statements”) have been prepared in accordance with U.S. GAAP
                applied on a consistent basis throughout the periods indicated and
                with
                each other, except that the unaudited Financial Statements do not
                contain
                all footnotes required by U.S. GAAP. The Financial Statements fairly
                present the financial condition and operating results of the Company
                as of
                the dates, and for the periods, indicated therein, subject to normal
                year-end audit adjustments. Except as set forth in the Financial
                Statements, the Company has no material liabilities (contingent or
                otherwise). The Company is not a guarantor or indemnitor of any
                indebtedness of any other person, firm or corporation. The Company
                maintains and will continue to maintain a standard system of accounting
                established and administered in accordance with U.S. GAAP until Closing.
                

            

    

    

    
      	
            	3.10	
              No
                Conflicts.
                 Neither
                the Company, nor any subsidiary, is in violation of, in conflict
                with, in
                breach of or in default under any term or provision of, and no right
                of
                any party to accelerate, terminate, modify or cancel has come into
                existence under, (i) its Certificate of Incorporation or By-laws
                (each as
                may have been amended, supplemented or restated), (ii) any provision
                of
                any judgment, writ, injunction, decree or order to which the any
                of them
                is a party; or (iii) any law, statute, rule or regulation applicable
                to
                any of them.

            

    

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      	
            	
              3.11

            	
              Litigation.
                 There
                is no action, suit, proceeding or investigation pending or, to the
                best
                knowledge of Sellers, currently threatened against the Company or
                any
                subsidiary that may affect the validity of this Agreement or the
                right of
                the Sellers to enter into this Agreement or to consummate the transactions
                contemplated hereby. There is no action, suit, proceeding or investigation
                pending or, to the best knowledge of Sellers, currently threatened
                against
                the Company or its subsidiaries, before any court or by or before
                any
                governmental body or any arbitration board or tribunal, nor is there
                any
                judgment, decree, injunction or order of any court, governmental
                department, commission, agency, instrumentality or arbitrator against
                the
                Company or any of its subsidiaries. The Company and its subsidiaries
                are
                not a party or subject to the provisions of any order, writ, injunction,
                judgment or decree of any court or government agency or instrumentality.
                There is no action, suit, proceeding or investigation by the Company
                or
                any subsidiary currently pending or which the Company intends to
                initiate.
                When any reference to the “knowledge” or “best knowledge” of the Company
                or Sellers is made in this Agreement, such terms shall mean the knowledge
                that would be gained from due inquiry into the matters
                referenced.

            

    

    

    
      	
            	3.12	
              Brokers’
                Fees and Commissions.
                 Neither
                the Company nor any of its officers, directors, employees, stockholders,
                agents or representatives, nor Seller have employed any investment
                banker,
                broker, or finder in connection with the transactions contemplated
                by this
                Agreement and no such person or entity is entitled to a fee with
                respect
                to the transactions contemplated by this
                Agreement.

            

    

    

    
      	
            	3.13	
              Securities
                Laws.
                 The
                Company has complied in all respects with applicable federal and
                state
                securities laws, rules and regulations, including the Sarbanes Oxley
                Act
                of 2002, as such laws, rules and regulations apply to the Company
                and its
                securities; and all shares of capital stock of the Company have been
                issued in accordance with applicable federal and state securities
                laws,
                rules and regulations. There are no stop orders in effect with respect
                to
                any of the Company’s securities. 

            

    

    

    
      	 	
              3.14

            	
              Books
                and Financial Records.
                All the accounts, books, registers, ledgers, Board minutes and financial
                and other material records of whatsoever kind of each of the Company
                and
                its subsidiaries have been fully properly and accurately kept and
                completed; there are no material inaccuracies or discrepancies of
                any kind
                contained or reflected therein; and they give and reflect a true
                and fair
                view of the financial, contractual and legal position of each
                company.

            

    

    

    
      	 	
              3.15
                

            	
              Employee
                Benefit Plans.
                The Company does not have any “Employee Benefit Plan” as defined in the
                U.S. Employee Retirement Income Security Act of 1974 or similar plans
                under applicable laws.

            

    

    

    
      	
            	3.16	
              Tax
                Returns, Payments and Elections. Each
                of the Company and its subsidiaries has timely filed all Tax (as
                defined
                below) returns, statements, reports, declarations and other forms
                and
                documents (including, without limitation, estimated Tax returns and
                reports and material information returns and reports) (“Tax Returns”)
                required pursuant to applicable law to be filed with any Tax Authority
                (as
                defined below), all such Tax Returns are accurate, complete and correct
                in
                all material respects, and each Group Company has timely paid all
                Taxes
                due. Each of the Company and its subsidiaries has withheld or collected
                from each payment made to each of its employees, the amount of all
                Taxes
                (including, but not limited to, United States income taxes and other
                foreign taxes) required to be withheld or collected therefrom, and
                has
                paid the same to the proper Tax Authority. For purposes of this Agreement,
                the following terms have the following meanings: “Tax” (and, with
                correlative meaning, “Taxes” and “Taxable”) means any and all taxes
                including, without limitation, (i) any net income, alternative or
                add-on
                minimum tax, gross income, gross receipts, sales, use, ad valorem,
                transfer, franchise, profits, value added, net worth, license,
                withholding, payroll, employment, excise, severance, stamp, occupation,
                premium, property, environmental or windfall profit tax, custom,
                duty or
                other tax, governmental fee or other like assessment or charge of
                any kind
                whatsoever, together with any interest or any penalty, addition to
                tax or
                additional amount imposed by any United States, local or foreign
                governmental authority or regulatory body responsible for the imposition
                of any such tax (domestic or foreign) (a “Tax Authority”), (ii) any
                liability for the payment of any amounts of the type described in
                (i) as a
                result of being a member of an affiliated, consolidated, combined
                or
                unitary group for any taxable period or as the result of being a
                transferee or successor thereof and (iii) any liability for the payment
                of
                any amounts of the type described in (i) or (ii) as a result of any
                express or implied obligation to indemnify any other person.
                

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      	 	
              3.17
                

            	
              Minute
                Books.
                The minute books of each of the Company and its subsidiaries contain
                a
                complete summary of all meetings of directors and stockholders since
                the
                time of incorporation of such company and reflect all transactions
                referred to in such minutes accurately in all material
                respects.

            

    

    

    
      	 	
              3.18
                

            	
              Labor
                Agreements and Actions; Employee Compensation.
                Neither the Company, nor any of its subsidiaries is bound by or subject
                to
                (and none of its assets or properties is bound by or subject to)
                any
                written or oral, express or implied, contract, commitment or arrangement
                with any labor union, and no labor union has requested or has sought
                to
                represent any of the employees, representatives or agents of any
                such
                company.

            

    

    

    
      	 	
              3.19
                

            	
              Investment
                Company.
                The Company is not an “investment company” or a company “controlled” by an
                “investment company,” within the meaning of the Investment Company Act of
                1940, as amended.

            

    

    

    
      	 	
              3.20
                

            	
              ’34
                Act Reports.
                To
                the best knowledge of the Sellers, none of the Company’s Flings, contains
                any untrue statement of a material fact or omits to state a material
                fact
                necessary to make the statements therein not misleading, in light
                of the
                circumstances in which they were made.

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
 

    
      	
            	3.21	
              Material
                Agreements.
                The Company is not a party to or bound by any contracts, including,
                but
                not limited to:

            

    

    

    3.21.1
       employment,
      advisory or consulting contract;

    

    3.21.2
       plan
      providing for employee benefits of any nature;

    

    3.21.3
       lease
      with respect to any property or equipment;

    

    3.21.4 contract,
      agreement, understanding or commitment for any future  expenditure
      in excess of $1,000 in the aggregate;

    

    3.21.5 contract
      or commitment pursuant to which it has assumed, guaranteed, endorsed, or
      otherwise become liable for any obligation of any other person, entity or
      organization;

    

    3.21.6 agreement
      with any person relating to the dividend, purchase or sale of securities, that
      has not been settled by the delivery or payment of securities when due, and
      which remains unsettled upon the date of the Agreement.

    

    
      	 	
              3.22

            	
               No
                Disagreements with Accountants and Lawyers.
                There are no disagreements of any kind presently existing, or reasonably
                anticipated by the Company to arise, between the accountants and
                lawyers
                formerly or presently employed by the Company. The Company is current
                with
                respect to fees owed to its accountants and
                lawyers.

            

    

    

    
      	 	
              3.23

            	
              Reverse
                Split and Issuance of Convertible Notes.
                Based on the Company’s present Articles of Incorporation, Bye-laws and
                other constituent documents and applicable laws and regulations,
                the
                Purchasers would be able to (i) accomplish a reverse split of the
                Company’s shares and (ii) issue certain convertible notes which will
                automatically convert into shares of common stock of the Company
                upon the
                reverse split provided the requisite directors’ and/or shareholders’
                resolutions are obtained and the relevant documents drafted and
                executed.

            

    

    

    
      	4.  	
              Representations
                and Warranties of Purchasers.
                Purchasers hereby represent and warrant to Sellers that the statements
                in
                the following paragraphs of this Section 4 are all true and complete
                as of
                the date hereof: 

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
 

    
      
        	
              	4.1	
                Exempt
                  Transaction.
                  Purchasers
                  understand that the offering and sale of the Stock is intended
                  to be
                  exempt from registration under the Act and exempt from registration
                  or
                  qualification under any state
                  law.

              

      

    

    

    
      
        	
              	4.2	
                Authorization.
                  Purchasers represent that it has full power and authority to enter
                  into
                  this Agreement. This Agreement has been duly and validly executed
                  and
                  delivered by Purchasers , and upon the execution and delivery by
                  Sellers
                  of this Agreement and the performance by Sellers of their obligations
                  herein, will constitute, a legal, valid and binding obligation
                  of
                  Purchasers enforceable against Purchasers in accordance with its
                  terms,
                  except as such enforcement may be limited by bankruptcy or insolvency
                  laws
                  or other laws affecting enforcement of creditors’ rights or by general
                  principles of equity.

              

      

      	 	 

      
        	
              	4.2	
                Purchase for Own Account. The
                  Stock to be purchased by Purchasers hereunder will be acquired
                  for
                  investment for Purchasers’ own account, not as a nominee or agent, and not
                  with a view to the public resale or distribution thereof, and Purchasers
                  have no present intention of selling, granting any participation
                  in, or
                  otherwise distributing the
                  same. 

              

      

       

    

    
      
        	
              	
                4.3

              	
                Investment
                  Experience.
                  The Purchasers understand that the purchase of the Stock involves
                  substantial risk.

              

      

    

    

    
      	5.  	
               Conditions
                to Purchasers’ Obligations at the Closing.

            

    

    

    
      
        	
              	5.1	
                Conditions
                  to Each Closing.
                  Subject to the terms hereof, the obligation of the Purchasers to
                  purchase
                  the Stock at the Closing is subject to the fulfillment, prior to
                  the
                  Closing to the satisfaction of the Purchasers, of the following
                  conditions, the waiver of which shall not be effective against
                  Purchasers
                  without written consent
                  thereto:

              

      

    

    

    
      
        	
              	5.1.1	
                Representations
                  and Warranties True and Correct.
                  The representations and warranties made by Sellers in Section 3
                  hereof
                  shall be true and correct and complete as of the date hereof, and
                  shall be
                  true and correct and complete as of the date of the Closing with
                  the same
                  force and effect as if they had been made on and as of such
                  date.

              

      

    

    

    
      
        	
              	5.1.2	
                Performance
                  of Obligations.
                  The Sellers shall have performed and complied with all agreements,
                  obligations and conditions contained in this Agreement that are
                  required
                  to be performed or complied with by it on or before the
                  Closing.

              

      

    

    

    
      
        	
              	5.1.3	
                Securities
                  Laws.
                  The offer and sale of the Stock to the Purchasers pursuant to this
                  Agreement shall be exempt from the registration and/or qualification
                  requirements of all applicable securities
                  laws.

              

      

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
 

    
      
        	
              	5.1.4	
                Change
                  in Board of Directors.
                  The Sellers shall cause the current members of the Board of Directors
                  to
                  appoint Purchasers to the Board and to resign their positions on
                  the
                  Company’s Board.

              

      

    

    

    
      
        	
              	5.1.5	
                Assumption
                  of Liabilities.
                  Sellers
                  shall cause all subsidiaries of the Company or third party (the
“Assuming
                  Party”) to assume all liabilities of the Company, and with respect to
                  any
                  liability as of the Closing Date, whether contingent or otherwise,
                  which
                  was not assumed or paid by the Assuming Party (collectively
                  “Liabilities”), the Sellers hereby agree to indemnify, defend and hold
                  harmless Purchasers and the Company from and against any and all
                  claims,
                  expenses and/or losses which may be incurred by the Company or
                  Purchasers
                  in connection with a
                  Liability.

              

      

    

    

    
      
        	
              	5.1.6	
                Spinoff.
                  Sellers
                  shall cause the Company and its Board of Directors to pass such
                  resolutions as may be necessary to set a record date for a spinoff
                  of the
                  Assuming Party which shall be no later than October 15, 2006 and
                  to
                  authorize a spinoff of the Assuming Party to the shareholders of
                  the
                  Company in accordance with SEC Staff Legal Bulletin No. 4 dated
                  September
                  16, 1997 and such other laws and regulations as may be applicable
                  to such
                  transaction (the “Spinoff”). 

              

      

    

    

    
      	6.  	
               Conditions
                to Sellers’ Obligations at the Closing.

            

    

    

    
      
        	
              	6.1	
                The
                  obligations of the Sellers under this Agreement with respect to
                  the
                  Purchasers are subject to the fulfillment at or before the Closing
                  of the
                  following conditions:

              

      

    

    

    
      
        	
              	6.1.1	
                Representations
                  and Warranties.
                  The representations and warranties of the Purchasers contained
                  in Section
                  4 hereof shall be true and correct as of such
                  Closing.

              

      

    

    

    

    
      	7.  	
               Sellers’
                Covenants and Conditions Subsequent to Closing.
                

            

    

    

    
      
        	
              	7.1	
                Spinoff.
                  By
                  November 15, 2006, Sellers shall have taken all steps necessary
                  to effect
                  the Spinoff and Sellers hereby agree to pay all expenses necessary
                  to
                  effect the Spinoff, including, but not limited to, attorney’s fees,
                  transfer agent fees and filing fees and expenses. Purchasers agree
                  to
                  cause the Company to provide any assistance reasonably necessary
                  to effect
                  the Spinoff which cannot be performed by the Assuming Party or
                  Sellers;
                  provided, however, that neither Purchasers nor the Company shall
                  have any
                  obligation to pay any monies to accomplish the
                  Spinoff.

              

      

    

    

    
      	 	
              7.2

            	
              Due
                Diligence.
                Sellers shall deliver or shall cause to deliver to Purchasers or
                the
                Purchasers’ Attorney, on or before September 13, 2006, the Company’s
                constating documents, minute books, financial statements, tax returns
                and
                such other necessary and relevant documents pertaining to the Company
                as
                Purchasers’ Attorney may so reasonably request in order for Purchaser’s
                Attorney to complete its due diligence on the Company.
                

            

    

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    
      	8.  	
               Indemnification.

            

    

     

    
      
        	
              	8.1	
                Sellers
                  shall indemnify and hold Purchasers, the Company and their affiliates,
                  officers, directors, employees, agents, successors and assigns
                  harmless
                  from and against any claim, action, suit, proceeding, loss, liability,
                  damage or expense (including, without limitation, reasonable attorneys’
                  fees), directly or indirectly arising from or related to any breach
                  by
                  Sellers of this Agreement, including, but not limited to, Sellers’
                  representations, warranties or covenants hereunder. Each Seller’s
                  liability pursuant to this indemnification provision shall be apportioned
                  based on the number of Shares sold to Purchasers as compared to
                  the total
                  number of Shares sold to
                  Purchasers.

              

      

    

    

    
      
        	
              	8.2	
                Purchasers
                  shall indemnify and hold Sellers harmless from and against any
                  claim,
                  action, suit, proceeding, loss, liability, damage or expense (including,
                  without limitation, reasonable attorneys' fees) directly or indirectly
                  arising from or related to any breach by Purchasers of this Agreement,
                  including, but not limited to, Purchasers’ representations, warranties or
                  covenants hereunder.

              

      

    

     

    
      	9.  	
               Registration
                Rights.
                

            

    

     

    
      	
               

               

               

            	
              9.1
                

            	
              Whenever
                the Company shall propose to file a registration statement under
                the 1933
                Act relating to the public offering of Common Stock for sale for
                cash for
                its own account, or a re-sale registration statement for the sale
                of stock
                held by other shareholders who are not employees or consultants to
                the
                Company (a “Registration Statement”), the Purchasers shall cause the
                Company to give written notice to Joseph C. Passalaqua (the “Registration
                Rights Holder”) at least fifteen (15) business days prior to the
                anticipated filing thereof, specifying the approximate date on which
                the
                Company proposes to file such Registration Statement and the intended
                method of distribution in connection therewith, and advising the
                Registration Rights Holder of his right to have any or all of the
                Registrable Securities, as defined below, then held by Registration
                Rights
                Holder included among the securities to be covered by such Registration
                Statement (the “Piggy-Back Rights”) and the Registration Rights Holder’s
                right, to have any or all of the Registrable Securities then held
                by the
                Registration Rights Holder included among the securities to be covered
                by
                such Registration Statement. For the purposes of this Section 9,
                “Registrable Securities” shall mean all shares of common stock of the
                Company currently held by the Registration Rights
                Holder.

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
 

    
      	 	
              9.2
                

            	
              Subject
                to Section 9.4 and Section 9.5 hereof, in the event that the Registration
                Rights Holder has and shall elect to utilize his registration rights,
                the
                Company shall include in the Registration Statement the Registrable
                Securities identified by the Registration Rights Holders in a written
                request (the “Piggy-Back Request”) given to the Company not later than ten
                (10) business days prior to the proposed filing date of the Registration
                Statement. The Registrable Securities identified in the Piggy-Back
                Request
                shall be included in the Registration Statement on the same terms
                and
                conditions as the other shares of Common Stock included in the
                Registration Statement.

            

    

    

    
      	 	
              9.3
                

            	
              Notwithstanding
                anything in this Agreement to the contrary, the Registration Rights
                Holder
                shall not have registration rights with respect to (i) a registration
                statement on Form S-4 or Form S-8 or Form S-3 (with respect to dividend
                reinvestment plans and similar plans) or any successor forms thereto,
                (ii)
                a registration statement filed in connection with an exchange offer
                or an
                offering of securities solely to existing stockholders or employees
                of the
                Company, (iii) a registration statement filed in connection with
                an
                offering by the Company of securities convertible into or exchangeable
                for
                shares of common stock of the Company, and (iv) a registration statement
                filed in connection with private placement of securities of the Company
                in
                connection with an acquisition by the Company or one of its
                subsidiaries.

            

    

    

    
      	 	
              9.4
                

            	
              If
                the lead managing underwriter selected by the Company for an underwritten
                offering for which registration rights are requested determines that
                marketing or other factors require a limitation on the number of
                shares of
                common stock to be offered and sold in such offering, then (i) such
                underwriter shall provide written notice thereof to each of the Company
                and the Registration Rights Holder, and (ii) there shall be included
                in
                the offering, first, all shares of common stock proposed by the Company
                to
                be sold for its account (or such lesser amount as shall equal the
                maximum
                number determined by the lead managing underwriter as aforesaid)
                and,
                second, only that number of Registrable Securities requested to be
                included in such Registration Statement by the Registration Rights
                Holder
                that such lead managing underwriter reasonably and in good faith
                believes
                will not substantially interfere with (including, without limitation,
                adversely affect the pricing of) the offering of all the shares of
                common
                    stock that the Company desires to sell for its own
                account.

            

    

    

    
      	 	
              9.5
                

            	
              The
                parties agree that nothing contained in this Section 9 shall create
                any
                liability on the part of the Company to the Registration Rights Holder
                if
                the Company for any reason should decide not to file a Registration
                Statement for which registration rights are available or to withdraw
                such
                Registration Statement subsequent to its filing, regardless of any
                action
                whatsoever that the Registration Rights Holder may have taken, whether
                as
                a result of the issuance by the Company of any notice hereunder or
                otherwise.

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      
        	10.  	
                 General
                  Provisions.

              

      

       

    

    
      	 	
              10.1

            	
              Successors
                and Assigns.
                The terms and conditions of this Agreement shall inure to the benefit
                of
                and be binding upon the respective successors and assigns of the
                parties.

            

    

    

    
      	
            	10.2	
              Governing
                Law; Jurisdiction. Any
                dispute, disagreement, conflict of interpretation or claim arising
                out of
                or relating to this Agreement, or its enforcement, shall be governed
                by
                the laws of the State of New York. Sellers and Purchasers hereby
                irrevocably and unconditionally submit, for themselves and their
                property,
                to the nonexclusive jurisdiction of the Supreme Court of the State
                of New
                York sitting in New York County and of the United States District
                Court of
                the Southern District of New York, and any appellate court from any
                thereof, in any action or proceeding arising out of or relating to
                this
                Agreement, or for recognition or enforcement of any judgment, and
                each of
                the parties hereto hereby irrevocably and unconditionally agrees
                that all
                claims in respect of any such action or proceeding may be heard and
                determined in such New York State or, to the extent permitted by
                law, in
                such Federal court. Each of the parties hereto agrees that a final
                judgment in any such action or proceeding shall be conclusive and
                may be
                enforced in other jurisdictions by suit on the judgment or in any
                other
                manner provided by law. Each party hereby irrevocably and unconditionally
                waives, to the fullest extent it may legally and effectively do so,
                any
                objection which it may now or hereafter have to the laying of venue
                of any
                suit, action or proceeding arising out of or relating to this Agreement
                in
                any court referred to above. Each of the parties hereto hereby irrevocably
                waives, to the fullest extent permitted by law, the defense of an
                inconvenient forum to the maintenance of such action or proceeding
                in any
                such court. Each party to this Agreement irrevocably consents to
                service
                of process in the manner provided for notices below. Nothing in this
                Agreement will affect the right of any party to this Agreement to
                serve
                process in any other manner permitted by law. EACH PARTY HERETO HEREBY
                WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
                IT
                MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
                ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
                CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
                THEORY).
                EACH PARTY HERETO (A) CERTIFIES THAT 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 AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
                HERETO
                HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
                THE
                MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
                SECTION.

            

    

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              10.3

            	
              Counterparts. This
                Agreement may be executed in two or more counterparts, each of which
                shall
                be deemed an original, but all of which together shall constitute
                one and
                the same agreement. A
                telefaxed copy of this Agreement shall be deemed an
                original.

            

    

    

    
      	 	
              10.4

            	
              Headings.
                The headings and captions used in this Agreement are used for convenience
                only and are not to be considered in construing or interpreting this
                Agreement. All references in this Agreement to sections, paragraphs,
                exhibits and schedules shall, unless otherwise provided, refer to
                sections
                and paragraphs hereof and exhibits and schedules attached hereto,
                all of
                which exhibits and schedules are incorporated herein by this
                reference.

            

    

    

    
      	 	
              10.5

            	
              Costs,
                Expenses.
                Each party hereto shall bear its own costs in connection with the
                preparation, execution and delivery of this
                Agreement.

            

    

     

    
      	 	
              10.6

            	
              Amendments
                and Waivers.
                Any term of this Agreement may be amended and the observance of any
                term
                of this Agreement may be waived (either generally or in a particular
                instance and either retroactively or prospectively), only with the
                written
                consent of Sellers and the Purchasers. No delay or omission to exercise
                any right, power, or remedy accruing to Purchasers, upon any breach,
                default or noncompliance of Sellers under this Agreement shall impair
                any
                such right, power, or remedy, nor shall it be construed to be a waiver
                of
                any such breach, default or noncompliance, or any acquiescence therein,
                or
                of any similar breach, default or noncompliance thereafter occurring.
                All
                remedies, either under this Agreement, by law, or otherwise afforded
                to
                Purchasers, shall be cumulative and not
                alternative.

            

    

     

    
      	 	
              10.7

            	
              Severability.
                If one or more provisions of this Agreement are held to be unenforceable
                under applicable law, such provision(s) shall be excluded from this
                Agreement and the balance of the Agreement shall be interpreted as
                if such
                provision(s) were so excluded and shall be enforceable in accordance
                with
                its terms.

            

    

    

    
      	 	
              10.8

            	
              Entire
                Agreement.
                This Agreement, together with all exhibits and schedules hereto,
                constitutes the entire agreement and understanding of the parties
                with
                respect to the subject matter hereof and supersedes any and all prior
                negotiations, correspondence, agreements, understandings duties or
                obligations between the parties with respect to the subject matter
                hereof.

            

    

    

    
      	 	
              10.9

            	
              Further
                Assurances.
                From and after the date of this Agreement, upon the request of the
                Purchasers or Sellers, Purchasers and Sellers shall execute and deliver
                such instruments, documents or other writings as may be reasonably
                necessary or desirable to confirm and carry out and to effectuate
                fully
                the intent and purposes of this
                Agreement.

            

    

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    In
      Witness Whereof,
      the
      parties hereto have executed this Agreement as of the date first written
      above.

    
 

    Sellers:

    

    
      	 	 	 	 
	/s/ Joseph
              C.
              Passalaqua	 	 	/s/ Joseph
              C.
              Passalaqua
	
              
Name: Joseph
              J. Passalaqua	 	 	
              
Name:
              Greenwich Holdings,
              Inc.

    

    
      	 	 	 	 
	 	 	 	 
	
              
Name:	 	 	
              
                
Name:

            
	 	 	 	 

    

    
      
        	 	 	 	 
	
                
Name:	 	 	
                
                  
Name:

              
	 	 	 	 

      

      
        
          	 	 	 	 
	
                  
Name:	 	 	
                  
                    
Name:

                

        

         

         

        Purchasers:

      

    

     

    
      
        	/s/ Yun Wang	 	 	 
	
                
Yun
                Wang	 	 	
                 

              
	 	 	 	 
	 	 	 	 
	/s/ Shibin Jiang	 	 	 
	
                
                  
Shibin
                  Jiang

              	 	 	 

      

      
        	 	 	 	 
	 	 	 	 
	/s/ Bin Feng	 	 	 
	
                
                  
Bin
                  Feng

              

 

       

      
        
          
          

        

        
          13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}]]