Document:

EXHIBIT
        10.4

       

      REVOLVING
        LINE OF CREDIT AGREEMENT

       

      This
        Revolving Line of Credit Agreement (this “Agreement”)
        is
        made as of July 1, 2006 by and between CenterStaging Corp., a Delaware
        corporation (“Borrower”),
        and
        Jan Parent (“Lender”),
        with
        reference to the following facts.

       

      A. Borrower
        may be in need of funds from time to time to meet its short-term working
        capital
        requirements.

       

      B. On
        the
        terms and subject to the conditions set forth in this Agreement, Lender,
        in its
        discretion, is willing to make funds available to Borrower on a revolving
        basis
        in order to meet such working capital needs.

       

      AGREEMENT

       

      1. Advances

       

      1.1 At
        Borrower’s request, Lender, in its sole and absolute discretion, may advance
        funds to Borrower, in which event Borrower agrees to repay such advances,
        from
        time to time in accordance with the terms and conditions of this Agreement
        and
        the form of revolving promissory note attached hereto as Exhibit A (the
“Note”);
        provided, however, that at no time shall the aggregate of all advances
        outstanding under this Agreement and the Note at any time exceed
        $250,000.

       

      1.2 This
        Agreement shall expire two years after the date of this Agreement; provided,
        however, that this Agreement may be terminated sooner upon notice from Lender
        to
        Borrower at any time.

       

      2. Miscellaneous
        Provisions

       

      2.1 Notices.
        All
        notices, requests, demands and other communications given pursuant to this
        Agreement or the Note shall be in writing, and shall be delivered by personal
        service, courier, facsimile transmission or by United States first class,
        registered or certified mail, addressed to the following addresses:

      
         

        
          	 	If to Borrower:	CenterStaging Corp.
	 	 	3407 Winona Avenue
	 	 	Burbank, California 91504
	 	 	Attention: Chief Executive
                  Officer
	 	 	Facsimile: (818)
                  848-4016

        

        
           

          
            	 	If to Lender: 	Johnny Caswell
	 	 	c/o CenterStaging Corp.
	 	 	3407 Winona Avenue
	 	 	Burbank, California 91504
	 	 	Facsimile: (818)
                    848-4016

          

        

      

      
      

      Any
        such
        notice, other than a notice sent by registered or certified mail, shall be
        effective when received; a notice sent by registered or certified mail, postage
        prepaid return receipt requested, shall be effective on the earlier of when
        received or the third day following deposit in the United States mails (or
        on
        the seventh day if sent to or from an address outside the United States).
        Any
        party may from time to time change its address for further notices hereunder
        by
        giving notice to the other party in the manner prescribed in this
        Section.

       

      
        
          
          

        

        
          -
            16 -

          
            

          

        

        
          
          

        

         

      

      2.2 No
        Waivers; Remedies Cumulative.
        No
        failure or delay by a party in exercising any right, power or privilege
        hereunder shall operate as a waiver thereof, nor shall any single or partial
        exercise thereof preclude any other or further exercise thereof or the exercise
        of any other right, power or privilege. The rights and remedies provided
        herein
        shall be cumulative and not exclusive of any rights or remedies provided
        by
        law.

       

      2.3 Amendments
        and Waivers.
        Any
        provision of this Agreement may be amended or waived if, but only if, such
        amendment or waiver is in writing and is signed by Borrower and Lender and
        such
        amendment is approved by the Board of Directors of Borrower. 

       

      2.4 Successors
        and Assigns.
        Borrower may not assign its right or duties hereunder without the prior written
        consent of Lender, which consent Lender may deny, withhold or delay in its
        sole
        and absolute discretion.

       

      2.5 Governing
        Law.
        This
        Agreement has been made and entered into in the State of California and shall
        be
        construed in accordance with the laws of the State of California without
        giving
        effect to the principles of conflicts of law thereof.  

       

      2.6 Prior
        Understandings.
        This
        Agreement supersedes all prior understandings and agreements (whether written,
        oral or otherwise) pertaining to the subject matter hereof, and constitutes
        the
        entire agreement between the parties hereto relating to the subject matter
        hereof and the transactions provided for herein.

       

      2.7 Counterparts.
        This
        Agreement may be executed in any number of counterparts each of which shall
        be
        deemed an original and all of which shall constitute one and the same agreement
        with the same effect as if all parties had signed the same signature page.
        The
        parties shall accept facsimile signatures as the equivalent of original
        ones.

       

      2.8 Severability.
        If any
        provision of this Agreement or the application of such provision to any Person
        or circumstance will be held invalid, the remainder of this Agreement or
        the
        application of such provision to Persons or circumstances other than those
        to
        which it is held invalid will not be affected thereby.

       

      2.9 Additional
        Documents and Acts.
        Borrower shall execute and deliver such additional documents and instruments
        and
        shall perform such additional acts as may be necessary or appropriate to
        effectuate, carry out and perform all of the terms, provisions, and conditions
        of this Agreement and the transactions contemplated by this
        Agreement.

       

      2.10 Survival.
        All
        indemnities, rights, remedies, representations and warranties contained herein
        shall survive the expiration or termination of this Agreement, and no
        termination or expiration hereof shall relieve either party from liability
        for
        any breach of this Agreement.

       

      
        
          
          

        

        
          -
            17 -

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the parties have executed and delivered this Agreement to
        one
        another as of the date first above written.

      
         

        
          	
                  LENDER:

                	 	/s/ Jan Parent
	 	 	
                  
Jan
                  Parent
	 	 	 
	 	 	 
	 	 	 
	 	CENTERSTAGING
                  CORP.
	 
 	 
 	 
 
	
                  BORROWER:

                	By: 
                  	/s/ Roger
                  paglia
	 	
                  

                  Roger
                    Paglia, Chief Executive Officer

                
	 	 

        

      

       

      
        
          
          

        

        
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            18 -

          
            

          

        

        
          
          

        

      

      EXHIBIT
        A

      

      REVOLVING
        LINE OF CREDIT NOTE

       

      
        	
                Not
                  to Exceed $250,000 in Principal

              	 	
                July
                  1, 2006

              

      

      

      For
        value
        received, the undersigned CENTERSTAGING CORP.,
        a
        Delaware corporation (“Borrower”),
        promises to pay, in lawful money of the United States, to the order of Jan
        Parent, together with his successors and assigns (“Holder”),
        at
        such address as Holder may direct, the principal sum of Two Hundred Fifty
        Thousand Dollars ($250,000), or so much thereof as shall have been advanced
        and
        shall remain unpaid hereunder, together with interest from date of disbursement
        at a fixed annual rate equal to the “prime rate” in effect on the date of each
        such advance as published in the Wall Street Journal, Western Edition. Interest
        shall be computed on the basis of the actual number of days during which
        the
        principal balance is outstanding. Notwithstanding anything to the contrary
        expressed or implied herein, all payments made by Borrower hereunder (including,
        without limitation, any prepayments) shall be applied first to accrued but
        unpaid interest and second to the reduction of the principal due hereunder.
        

       

      This
        Note
        is delivered pursuant to, and is subject to all of the terms and conditions
        of,
        that certain Revolving Line of Credit Agreement dated as of July 1, 2006
        (as
        from time to time amended, the “Loan
        Agreement”)
        between Borrower and Jan Parent. In the event of any conflict between the
        terms
        of this Note and the terms of the Loan Agreement, the terms of the Loan
        Agreement shall govern.

       

      The
        principal amount of and all accrued but unpaid interest under this Note shall
        become due and payable upon demand of Holder at any time.

       

      This
        Note
        may be repaid in whole or in part at any time without penalty or
        premium.

       

      If
        this
        Note (or any payment due hereunder) is not paid when due, Borrower promises
        to
        pay all costs and expenses of collection and reasonable attorneys’ fees incurred
        by the Holder hereof on account of such collection, plus interest at the
        rate
        applicable to principal, whether or not suit is filed hereon. Borrower consents
        to renewals, replacements and extensions of time for payment hereof, before,
        at,
        or after maturity, consents to the acceptance, release or substitution of
        security for this Note, and waives demand and protest.

       

      IN
        WITNESS WHEREOF, Borrower has executed and delivered this Note as of the
        date
        first above written.

      
         

        
          	 	 	 
	 	CENTERSTAGING
                  CORP.
	 
 	 
 	 
 
	 	By:  	/s/ Roger
                  Paglia
	 	
                  
Roger
                  Paglia, Chief Executive Officer
	 	 

        

      

       

      
        
          
          

        

        
          -
            19 -Exhibit
        4.7

      

      SECURITIES
        PURCHASE AGREEMENT

      

      SECURITIES
        PURCHASE AGREEMENT (this "AGREEMENT"), dated as of July 14, 2006, by and
        among
        OMNI U.S.A., INC., a Nevada corporation, "COMPANY"), and the Potawatomi Business
        Development Corp., (the "BUYER").

      

      WHEREAS:

       

      A.
        The
        Company and the Buyer are executing and delivering this Agreement in reliance
        upon the exemption from securities registration afforded by Rule 506 under
        Regulation D ("REGULATION D") as promulgated by the United States Securities
        and
        Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
        (the "1933 ACT");

      

      B.
        Buyer
        desires to purchase and the Company desires to issue and sell, upon the terms
        and conditions set forth in this Agreement (i) convertible debentures of
        the
        Company, in the form attached hereto as EXHIBIT "A", in the aggregate principal
        amount (the "ORIGINAL PRINCIPAL AMOUNT") of One Million Dollars ($1,000,000.00)
        (together with any debenture(s) issued in replacement thereof or as a dividend
        thereon or otherwise with respect thereto in accordance with the terms thereof,
        the "DEBENTURES"), convertible into shares of common stock, $0.004995 par
        value
        per share, of the Company (the "COMMON STOCK"), upon the terms and subject
        to
        the limitations and conditions set forth in such Debentures and (ii) warrants
        (the WARRANTS"), in the form attached hereto as EXHIBIT "B", to purchase
        2,000,000 shares (the "WARRANT AMOUNT") of Common Stock ; and

      

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

      

      NOW
        THEREFORE, the Company and the Buyer hereby agree as follows:

      

      1.
        PURCHASE AND SALE OF DEBENTURES AND WARRANTS.

      

      (A)
        PURCHASE OF DEBENTURES AND WARRANTS. On the Closing Date (as defined below),
        the
        Company shall issue and sell to Buyer and Buyer agrees to purchase from the
        Company $1,000,000.00 in principal amount (the "Original Principal Amount")
        of
        Debentures and an accompanying number of Warrants, in the form of EXHIBIT
        "B"
        attached, to purchase a number of shares equal to the Warrant
        Amount.

      

      (B)
        FORM
        OF PAYMENT. The Buyer agrees to wire funds for the Purchase Price on the
        date
        hereof.

      

      (C)
        CLOSING DATE. Subject to the satisfaction (or waiver) of the conditions thereto
        set forth in Section 6 and Section 7 below, the date and time of the issuance
        and sale of the Debentures and the Warrants pursuant to this Agreement (the
        "CLOSING DATE") shall be 4:00 PM Eastern Standard Time on July 14, 2006 or
        such
        other mutually agreed upon time. The closing of the transactions contemplated
        by
        this Agreement (the "CLOSING") shall occur on the Closing Date at the offices
        of
        the Buyer, or at such other location as may be agreed to by the
        parties.

      

      2.
        BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and warrants to
        the
        Company solely as to such Buyer that:

      

      (A)
        INVESTMENT PURPOSE. As of the date hereof, the Buyer is purchasing the
        Debentures and the shares of Common Stock issuable upon conversion of or
        otherwise pursuant to the Debentures (such shares of Common Stock being
        collectively referred to herein as the "CONVERSION SHARES") and the Warrants
        and
        the shares of Common Stock issuable upon exercise thereof (the "WARRANT SHARES"
        and, collectively with the Debentures, Warrants and Conversion Shares, the
        "SECURITIES") for its own account and not with a present view towards the
        public
        sale or distribution thereof, except pursuant to sales registered or exempted
        from registration under the 1933 Act; PROVIDED, HOWEVER, that by making the
        representations herein, the Buyer does not agree to hold any of the Securities
        for any minimum or other specific term and reserves the right to dispose
        of the
        Securities at any time in accordance with or pursuant to a registration
        statement or an exemption under the 1933 Act and applicable state securities
        laws.

      

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      (B)
        ACCREDITED INVESTOR STATUS. The Buyer is an "accredited investor" as that
        term
        is defined in Rule 501(a) of Regulation D (an ACCREDITED INVESTOR").

      

      (C)
        RELIANCE ON EXEMPTIONS. The Buyer understands that the Securities are being
        offered and sold to it in reliance upon specific exemptions from the
        registration requirements of United States federal and state securities laws
        and
        that the Company is relying upon the truth and accuracy of, and the Buyer's
        compliance with, the representations, warranties, agreements, acknowledgments
        and understandings of the Buyer set forth herein in order to determine the
        availability of such exemptions and the eligibility of the Buyer to acquire
        the
        Securities.

      

      (D)
        INFORMATION. The Buyer and its advisors, if any, have been furnished with
        all
        materials relating to the business, finances and operations of the Company
        and
        materials relating to the offer and sale of the Securities which have been
        requested by the Buyer or its advisors. The Buyer and its advisors, if any,
        have
        been afforded the opportunity to ask questions of the Company. Neither such
        inquiries nor any other due diligence investigation conducted by Buyer or
        any of
        its advisors or representatives shall modify, amend or affect Buyer's right
        to
        rely on the Company's representations and warranties contained in Section
        3
        below. The Buyer understands that its investment in the Securities involves
        a
        significant degree of risk.

      

      (E)
        GOVERNMENTAL REVIEW. The Buyer understands that no United States federal
        or
        state agency or any other government or governmental agency has passed upon
        or
        made any recommendation or endorsement of the Securities.

      

      (F)
        TRANSFER OR RE-SALE. The Buyer understands that (i) except as provided in
        the
        Registration Rights Agreement, the sale or re-sale of the Securities has
        not
        been and is not being registered under the 1933 Act or any applicable state
        securities laws, and the Securities may not be transferred or resold unless
        (a)
        the Securities are sold pursuant to an effective registration statement under
        the 1933 Act, (b) the Buyer shall have delivered to the Company an opinion
        of
        counsel (which opinion shall be in form, substance and scope reasonably
        satisfactory to counsel to the Company) to the effect that the Securities
        to be
        sold or transferred may be sold or transferred pursuant to an exemption from
        such registration, (c) the Securities are sold or transferred to an "affiliate"
        (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule)
        ("RULE 144") of the Buyer who agrees to sell or otherwise transfer the
        Securities only in accordance with this Section 2(f) and who is an Accredited
        Investor, or (d) the Securities are sold pursuant to Rule 144; and (ii) any
        sale
        of such Securities made in reliance on Rule 144 may be made only in accordance
        with the terms of said Rule and further, if said Rule is not applicable,
        any
        re-sale of such Securities under circumstances in which the seller (or the
        person through whom the sale is made) may be deemed to be an underwriter
        (as
        that term is defined in the 1933 Act) may require compliance with some other
        exemption under the 1933 Act or the rules and regulations of the SEC thereunder.
        Notwithstanding the foregoing or anything else contained herein to the contrary,
        the Securities may be pledged as collateral in connection with a BONA FIDE
        margin account or other lending arrangement.

      

      (G)
        LEGENDS. The Buyer understands that the Debentures and the Warrants and,
        until
        such time as the Conversion Shares and Warrant Shares have been registered
        under
        the 1933 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, the
        Conversion Shares and Warrant Shares, may bear a restrictive legend in
        substantially the following form (and a stop-transfer order may be placed
        against transfer of the certificates for such Securities):

      

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      "The
        securities represented by this certificate have not been registered
        under the Securities Act of 1933, as amended, or applicable
        state securities laws. 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 reasonably satisfactory to counsel
        to the Company, that registration is not required under said Act
        or
        unless sold pursuant to Rule 144 under said Act."

      

      Upon
        the
        request of any holder and the surrender of certificates, the legend set
forth
        above shall be removed and the Company shall issue a certificate without
        such
        legend to the holder of any Security upon which it is stamped, if (a) such
        Security
        is registered for sale under an effective registration statement filed
under
        the
        1933 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, or (b) such holder provides the Company with an opinion
        of
counsel,
        in form, substance and scope reasonably satisfactory to counsel to the
Company,
        to the effect that a public sale or transfer of such Security may be
made
        without registration under the 1933 Act and such sale or transfer is
effected
        or (c) such holder provides the Company with reasonable assurances that
such
        Security can be sold pursuant to Rule 144. The Buyer agrees to sell all
Securities,
        including those represented by a certificate(s) from which the legend
        has been removed, in compliance with applicable prospectus delivery requirements,
        if any.

      

      (H)
        [INTENTIONALLY LEFT BLANK]

      

      (I)
        RESIDENCY. The Buyer is a resident of the state of Wisconsin.

      

      (J)
        KNOWLEDGE AND EXPERIENCE. Buyer has such knowledge and experience
        in financial and business matters that it is capable of evaluating the
        merits and risks of the investment in the Securities.

      

      3.
        REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
        warrants to Buyer that, except as set forth on the Company's disclosure
        schedules or any update thereto prior to the Closing Date:

      

      (A)
        ORGANIZATION AND QUALIFICATION. The Company and each of its Subsidiaries
        (as
        defined below), if any, is a corporation duly organized, validly existing
        and in
        good standing under the laws of the jurisdiction in which it is incorporated,
        with full power and authority (corporate and other) to own, lease, use and
        operate its properties and to carry on its business as and where now owned,
        leased, used, operated and conducted. SCHEDULE 3(A) sets forth a list of
        all of
        the Subsidiaries of the Company and the jurisdiction in which each is
        incorporated. The Company and each of its Subsidiaries is duly qualified
        as a
        foreign corporation to do business and is in good standing in every jurisdiction
        in which its ownership or use of property or the nature of the business
        conducted by it makes such qualification necessary except where the failure
        to
        be so qualified or in good standing would not have a Material Adverse Effect.
        "MATERIAL ADVERSE EFFECT" means any material adverse effect on (i) the
        Securities, (ii) the business, operations, assets, financial condition or
        prospects of the Company and its Subsidiaries, if any, taken as a whole,
        (iii)
        on the transactions contemplated hereby or by the agreements or instruments
        to
        be entered into in connection herewith or (iv) the authority or the ability
        of
        the Company to perform its obligation under this Agreement, the Registration
        Rights Agreement, the Debentures or the Warrants. "SUBSIDIARIES" means any
        corporation or other organization, whether incorporated or unincorporated,
        in
        which the Company owns, directly or indirectly, any equity or other ownership
        interest.

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      (B)
        AUTHORIZATION; ENFORCEMENT. (i) The Company has all requisite corporate power
        and authority to enter into and perform this Agreement, the Registration
        Rights
        Agreement, the Debentures and the Warrants and to consummate the transactions
        contemplated hereby and thereby and to issue the Securities, in accordance
        with
        the terms hereof and thereof, (ii) except as otherwise set forth in SCHEDULE
        3(B), the execution and delivery of this Agreement, the Registration Rights
        Agreement, the Debentures and the Warrants by the Company and the consummation
        by it of the transactions contemplated hereby and thereby (including without
        limitation, the issuance of the Debentures and the Warrants and the issuance
        and
        reservation for issuance of the Conversion Shares issuable upon conversion
        of or
        otherwise pursuant to the Debentures and the Warrant Shares issuable upon
        exercise of or otherwise pursuant to the Warrants) have been duly authorized
        by
        the Company's Board of Directors and no further consent or authorization
        of the
        Company, its Board of Directors, or its stockholders is required, (iii) this
        Agreement has been duly executed and delivered by the Company, and (iv) this
        Agreement constitutes, and upon execution and delivery by the Company of
        the
        Registration Rights Agreement, the Debentures and the Warrants, each of such
        agreements and instruments will constitute, a legal, valid and binding
        obligation of the Company enforceable against the Company in accordance with
        its
        terms.

      

      (C)
        CAPITALIZATION. As of the date hereof, the authorized capital stock of the
        Company is as set forth on SCHEDULE 3(C). All of such outstanding shares
        of
        capital stock set forth in SCHEDULE 3(C) are, or upon issuance will be, duly
        authorized, validly issued, fully paid and nonassessable.

      

      No
        shares
        of capital stock of the Company are subject to preemptive rights or any other
        similar rights of the stockholders of the Company or any liens or encumbrances
        imposed through the actions or failure to act of the Company. Except as
        disclosed in SCHEDULE 3(C), as of the effective date of this Agreement, (i)
        there are no outstanding options, warrants, scrip, rights to subscribe for,
        puts, calls, rights of first refusal, agreements, understandings, claims
        or
        other commitments or rights of any character whatsoever relating to, or
        securities or rights convertible into or exchangeable for any shares of capital
        stock of the Company or any of its Subsidiaries, or arrangements by which
        the
        Company or any of its Subsidiaries is or may become bound to issue additional
        shares of capital stock of the Company or any of its Subsidiaries, (ii) there
        are no agreements or arrangements under which the Company or any of its
        Subsidiaries is obligated to register the sale of any of its or their securities
        under the 1933 Act (except the Registration Rights Agreement) and (iii) there
        are no anti-dilution or price adjustment provisions contained in any security
        issued by the Company (or in any agreement providing rights to security holders)
        that will be triggered by the issuance of the Debentures, the Warrants, the
        Conversion Shares or Warrant Shares. The Company has furnished to the Buyer
        true
        and correct copies of the Company's Certificate of Incorporation as in effect
        on
        the date hereof ("CERTIFICATE OF INCORPORATION"), the Company's By-laws,
        as in
        effect on the date hereof (the "BY-LAWS"), and the terms of all securities
        convertible into or exercisable for Common Stock of the Company and the material
        rights of the holders thereof in respect thereto. In the event that the date
        of
        execution of this Agreement is not the Closing Date, the Company shall provide
        the Buyer with a written update of this representation signed by the Company's
        President and Chief Executive or Chief Financial Officer on behalf of the
        Company as of the Closing Date.

      

      (D)
        ISSUANCE OF SHARES. Upon issuance upon conversion of the Debentures and upon
        exercise of the Warrants in accordance with their respective terms, the
        Conversion Shares and Warrant Shares will be validly issued, fully paid and
        non-assessable, and free from all taxes, liens, claims and encumbrances and
        shall not be subject to preemptive rights or other similar rights of
        stockholders of the Company and will not impose personal liability upon the
        holder thereof.

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      (E)
        ACKNOWLEDGMENT OF DILUTION. The Company understands and acknowledges the
        potentially dilutive effect to the Common Stock upon the issuance of the
        Conversion Shares upon conversion of or otherwise pursuant to the Debentures
        or
        upon issuance of the Warrant Shares upon exercise of or otherwise pursuant
        to
        the Warrants. The Company's directors and executive officers have studied
        and
        fully understand the nature of the Securities being sold hereunder. The Company
        further acknowledges that its obligation to issue Conversion Shares upon
        conversion of or otherwise pursuant to the Debentures and to issue Warrant
        Shares upon exercise of or otherwise pursuant to the Warrants in accordance
        with
        this Agreement, the Debentures and the Warrants is absolute and unconditional
        regardless of the dilutive effect that such issuance may have on the ownership
        interests of other stockholders of the Company. Taking the foregoing into
        account, the Company's Board of Directors has determined, in its good faith
        business judgment, that the issuance of the Securities hereunder and under
        the
        Debentures and the Warrants and the consummation of the transactions
        contemplated hereby and thereby are in the best interest of the Company and
        its
        stockholders.

      

      (F)
        NO
        CONFLICTS. The execution, delivery and performance of this Agreement, the
        Registration Rights Agreement, the Debentures and the Warrants by the Company
        and the consummation by the Company of the transactions contemplated hereby
        and
        thereby (including, without limitation, the issuance and reservation for
        issuance of the Conversion Shares and Warrant Shares) will not (i) except
        as
        otherwise set forth in SCHEDULE 3(F), conflict with or result in a violation
        of
        any provision of the Certificate of Incorporation or By-laws or (ii) violate
        or
        conflict with, or result in a breach of any provision of, or constitute a
        default (or an event which with notice or lapse of time or both would become
        a
        default) under, or give to others any rights of termination, amendment,
        acceleration or cancellation of, any agreement, indenture, patent, patent
        license or instrument to which the Company or any of its Subsidiaries is
        a
        party, or (iii) result in a violation of any law, rule, regulation, order,
        judgment or decree (including federal and state securities laws and regulations
        and regulations of any self-regulatory organizations to which the Company
        or its
        securities are subject) applicable to the Company or any of its Subsidiaries
        or
        by which any property or asset of the Company or any of its Subsidiaries
        is
        bound or affected (except, in the case of clauses (i), (ii) and (iii) above,
        for
        such conflicts, defaults, terminations, amendments, accelerations, cancellations
        and violations as would not, individually or in the aggregate, have a Material
        Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation
        of its Certificate of Incorporation, By-laws or other organizational documents
        and neither the Company nor any of its Subsidiaries is in default (and no
        event
        has occurred which with notice or lapse of time or both could put the Company
        or
        any of its Subsidiaries in default) under, and neither the Company nor any
        of
        its Subsidiaries has taken any action or failed to take any action that would
        give to others any rights of termination, amendment, acceleration or
        cancellation of, any agreement, indenture or instrument to which the Company
        or
        any of its Subsidiaries is a party or by which any property or assets of
        the
        Company or any of its Subsidiaries is bound or affected, except for possible
        defaults as would not, individually or in the aggregate, have a Material
        Adverse
        Effect. The businesses of the Company and its Subsidiaries, if any, are not
        being conducted, and shall not be conducted so long as a Buyer owns any of
        the
        Securities, in violation of any law, ordinance or regulation of any governmental
        entity the violation of which would have a Material Adverse Effect. Except
        as
        disclosed in SCHEDULE 3(F) and as specifically contemplated by this Agreement
        and as required under the 1933 Act and any applicable state securities laws,
        the
        Company is not required to obtain any consent, authorization or order of,
        or
        make any filing or registration with, any court, governmental agency, regulatory
        agency, self regulatory organization or stock market or any third party in
        order
        for it to execute, deliver or perform any of its obligations under this
        Agreement, the Registration Rights Agreement, the Debentures or the Warrants
        in
        accordance with the terms hereof or thereof or to issue and sell the Debentures
        and Warrants in accordance with the terms hereof and to issue the Conversion
        Shares upon conversion of or otherwise pursuant to the Debentures and the
        Warrant Shares upon exercise of or otherwise pursuant to the Warrants. Except
        as
        disclosed in SCHEDULE 3(F), all consents, authorizations, orders, filings
        and
        registrations which the Company is required to obtain pursuant to the preceding
        sentence have been obtained or effected on or prior to the date hereof. The
        Company is not in violation of the listing requirements of the OTC-BB and
        does
        not reasonably anticipate that the Common Stock will be delisted by the OTC-BB
        in the foreseeable future. The Company and its Subsidiaries are unaware of
        any
        facts or circumstances which might give rise to any of the
        foregoing.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      (G)
        SEC
        DOCUMENTS; FINANCIAL STATEMENTS. Since at least January 1, 2006, the Company
        has
        timely filed all reports, schedules, forms, statements and other documents
        required to be filed by it with the SEC pursuant to the reporting requirements
        of the Securities Exchange Act of 1934, as amended (the "1934 ACT") (all
        of the
        foregoing filed prior to the date hereof and since at least January 1, 2006
        and
        all exhibits included therein and financial statements and schedules thereto
        and
        documents (other than exhibits to such documents) incorporated by reference
        therein, being hereinafter referred to herein as the "SEC DOCUMENTS"). The
        Company has delivered to Buyer true and complete copies of the SEC Documents,
        except for such exhibits and incorporated documents. As of their respective
        dates, the SEC Documents complied in all material respects with the requirements
        of the 1934 Act and the rules and regulations of the SEC promulgated thereunder
        applicable to the SEC Documents, and none of the SEC Documents, at the time
        they
        were filed with the SEC, contained any untrue statement of a material fact
        or
        omitted to state a material fact required to be stated therein or necessary
        in
        order to make the statements therein, in light of the circumstances under
        which
        they were made, not misleading. None of the statements made in any such SEC
        Documents is, or has been, required to be amended or updated under applicable
        law (except for such statements as have been amended or updated in subsequent
        filings prior to the date hereof). As of their respective dates, the financial
        statements of the Company included in the SEC Documents complied as to form
        in
        all material respects with applicable accounting requirements and the published
        rules and regulations of the SEC with respect thereto. Such financial statements
        have been prepared in accordance with United States generally accepted
        accounting principles, consistently applied, during the periods involved
        (except
        (i) as may be otherwise indicated in such financial statements or the notes
        thereto, or (ii) in the case of unaudited interim statements, to the extent
        they
        may not include footnotes or may be condensed or summary statements) and
        fairly
        present in all material respects the consolidated financial position of the
        Company and its consolidated Subsidiaries as of the dates thereof and the
        consolidated results of their operations and cash flows for the periods then
        ended (subject, in the case of unaudited statements, to normal year-end audit
        adjustments). Except as set forth in the financial statements of the Company
        included in the SEC Documents, the Company has no liabilities, contingent
        or
        otherwise, other than (i) liabilities incurred in the ordinary course of
        business subsequent to December 31, 2005 and (ii) obligations under contracts
        and commitments incurred in the ordinary course of business and not required
        under generally accepted accounting principles to be reflected in such financial
        statements, which, individually or in the aggregate, are not material to
        the
        financial condition or operating results of the Company.

       

      (H)
        ABSENCE OF CERTAIN CHANGES. Except for losses incurred in the ordinary course
        of
        business that have been publicly disclosed prior to the date hereof or as
        set
        forth on SCHEDULE 3(H) hereof, since January 1, 2006, there has been no material
        adverse change and no material adverse development in the assets, liabilities,
        business, properties, operations, financial condition, results of operations
        or
        prospects of the Company or any of its Subsidiaries. For purposes of this
        Section 3(h), the terms "material adverse change" and "material adverse
        development" shall exclude continuing losses that are consistent with the
        Company's historical losses.

      

      (I)
        ABSENCE OF LITIGATION. Except as disclosed in SCHEDULE 3(I)(A), to the knowledge
        of the Company or any of its subsidiaries, there is no action, suit, claim,
        proceeding, inquiry or investigation before or by any court, public board,
        government agency, self-regulatory organization or body pending or, to the
        knowledge of the Company or any of its Subsidiaries, threatened against or
        affecting the Company or any of its Subsidiaries, or their officers or directors
        in their capacity as such, that would have a Material Adverse Effect. SCHEDULE
        3(I)(B) contains a complete list and summary description of any known, pending,
        or threatened proceeding against or affecting the Company or any of its
        Subsidiaries, without regard to whether it, if adversely decided, would have
        a
        Material Adverse Effect. The Company and its Subsidiaries are unaware of
        any
        facts or circumstances which might give rise to any of the
        foregoing.

      

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      (J)
        PATENTS, COPYRIGHTS, ETC. All of the Company's material patents, patent
        applications, patent rights, inventions, know-how, trade secrets, trademarks,
        trademark applications, service marks, service names, trade names and copyrights
        ("INTELLECTUAL PROPERTY") are set forth in Schedule A to the Debenture. The
        Company and each of its Subsidiaries owns or possesses the requisite licenses
        or
        rights to use all Intellectual Property necessary to enable it to conduct
        its
        business as now operated, including but not limited to the intellectual property
        set forth in Schedule A to the Debenture (and, except as otherwise set forth
        in
        SCHEDULE 3(J) hereof, to the best of the Company's knowledge, as presently
        contemplated to be operated in the future), except for such licenses or rights
        the failure of which to own or possess would not, individually or in the
        aggregate, have a Material Adverse Effect; there is no claim or action by
        any
        person pertaining to, or proceeding pending, or to the Company's knowledge
        threatened, which challenges the right of the Company or of a Subsidiary
        with
        respect to any Intellectual Property necessary to enable it to conduct its
        business as now operated (and, except as otherwise set forth in SCHEDULE
        3(J)
        hereof, to the best of the Company's knowledge, as presently contemplated
        to be
        operated in the future), except for actions or claims which, if adversely
        decided, would not have a Material Adverse Effect; to the best of the Company's
        knowledge, the Company's or its Subsidiaries' current and intended products,
        services and processes do not infringe on any Intellectual Property or other
        rights held by any person, and the Company is unaware of any facts or
        circumstances which might give rise to any of the foregoing. The Company
        and
        each of its Subsidiaries have taken reasonable security measures to protect
        the
        secrecy, confidentiality and value of their Intellectual Property. The Company
        has no liens on its Intellectual Property.

      

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

      

      (L)
        TAX
        STATUS. Except as set forth on SCHEDULE 3(L), the Company and each of its
        Subsidiaries has made or filed all federal, state and foreign income and
        all
        other tax returns, reports and declarations required by any jurisdiction
        to
        which it is subject (unless and only to the extent that the Company and each
        of
        its Subsidiaries has set aside on its books provisions reasonably adequate
        for
        the payment of all unpaid and unreported taxes) and has paid all taxes and
        other
        governmental assessments and charges that are material in amount, shown or
        determined to be due on such returns, reports and declarations, except those
        being contested in good faith and has set aside on its books provisions
        reasonably adequate for the payment of all taxes for periods subsequent to
        the
        periods to which such returns, reports or declarations apply. There are no
        unpaid taxes in any material amount claimed to be due by the taxing authority
        of
        any jurisdiction, and the officers of the Company know of no basis for any
        such
        claim. The Company has not executed a waiver with respect to the statute
        of
        limitations relating to the assessment or collection of any foreign, federal,
        state or local tax. Except as set forth on SCHEDULE 3(L), none of the Company's
        tax returns are presently being audited by any taxing authority.

      

      (M)
        CERTAIN TRANSACTIONS. Except as set forth on SCHEDULE 3(M) and except for
        arm's
        length transactions pursuant to which the Company or any of its Subsidiaries
        makes payments in the ordinary course of business upon terms no less favorable
        than the Company or any of its Subsidiaries could obtain from third parties
        and
        other than the grant of stock options disclosed on SCHEDULE 3(C), none of
        the
        officers, directors, or employees of the Company is presently a party to
        any
        transaction with the Company or any of its Subsidiaries (other than for services
        as employees, officers and directors), including any contract, agreement
        or
        other arrangement providing for the furnishing of services to or by, providing
        for rental of real or personal property to or from, or otherwise requiring
        payments to or from any officer, director or such employee or, to the knowledge
        of the Company, any corporation, partnership, trust or other entity in which
        any
        officer, director, or any such employee has a substantial interest or is
        an
        officer, director, trustee or partner.

      

      (N)
        DISCLOSURE. All information relating to or concerning the Company or any
        of its
        Subsidiaries set forth in this Agreement and provided to the Buyer pursuant
        to
        Section 2(d) hereof and otherwise in connection with the transactions
        contemplated hereby is true and correct in all material respects and the
        Company
        has not omitted to state any material fact necessary in order to make the
        statements made herein or therein, in light of the circumstances under which
        they were made, not misleading. No event or circumstance has occurred or
        exists
        with respect to the Company or any of its Subsidiaries or its or their business,
        properties, prospects, operations or financial conditions, which has not
        been
        publicly announced or disclosed but under applicable law, rule or regulation,
        requires public disclosure or announcement by the Company (assuming for this
        purpose that the Company's reports filed under the 1934 Act are being
        incorporated into an effective registration statement filed by the Company
        under
        the 1933 Act).

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      (O)
        ACKNOWLEDGMENT REGARDING BUYER'S PURCHASE OF SECURITIES. The Company
        acknowledges and agrees that the Buyer is acting solely in the capacity of
        arm's
        length purchaser with respect to this Agreement and the transactions
        contemplated hereby. The Company further acknowledges that Buyer is not acting
        as a financial advisor or fiduciary of the Company (or in any similar capacity)
        with respect to this Agreement and the transactions contemplated hereby and
        that
        any statement made by Buyer or any of its respective representatives or agents
        in connection with this Agreement and the transactions contemplated hereby
        is
        not advice or a recommendation and is merely incidental to the Buyer's purchase
        of the Securities and has not been relied upon by the Company, its officers
        or
        directors in any way. The Company further represents to Buyer that the Company's
        decision to enter into this Agreement has been based solely on the independent
        evaluation of the Company and its representatives.

      

      (P)
        NO
        INTEGRATED OFFERING. Neither the Company, nor any of its affiliates, nor
        any
        person acting on its or their behalf, has directly or indirectly made any
        offers
        or sales of any security or solicited any offers to buy any security under
        circumstances that would require registration under the 1933 Act of the issuance
        of the Securities to the Buyer. The issuance of the Securities to the Buyer
        will
        not be integrated with any other issuance of the Company's securities (past,
        current or future) for purposes of any stockholder approval provisions
        applicable to the Company or its securities.

      

      (Q)
        NO
        BROKERS. The Company has taken no action which would give rise to any claim
        by
        any person for brokerage commissions, finder's fees or similar payments relating
        to this Agreement or the transactions contemplated hereby.

      

      (R)
        PERMITS; COMPLIANCE. The Company and each of its Subsidiaries is in possession
        of all franchises, grants, authorizations, licenses, permits, easements,
        variances, exemptions, consents, certificates, approvals and orders necessary
        to
        own, lease and operate its properties and to carry on its business as it
        is now
        being conducted (collectively, the "COMPANY PERMITS"), except where the failure
        to so possess any such Company Permits would not have a Material adverse
        Effect,
        and there is no action pending or, to the knowledge of the Company, threatened
        regarding suspension or cancellation of any of the Company Permits. To the
        best
        of the Company's knowledge, neither the Company nor any of its Subsidiaries
        is
        in conflict with, or in default or violation of, any of the Company Permits,
        except for any such conflicts, defaults or violations which, individually
        or in
        the aggregate, would not reasonably be expected to have a Material Adverse
        Effect. Since December 31, 2005, neither the Company nor any of its Subsidiaries
        has received any notification with respect to possible conflicts, defaults
        or
        violations of applicable laws, except for notices relating to possible
        conflicts, defaults or violations, which conflicts, defaults or violations
        would
        not have a Material Adverse Effect.

      

      (S)
        ENVIRONMENTAL MATTERS.

      

      (i)
        Except as set forth in SCHEDULE 3(S), there are, to the Company's knowledge,
        with respect to the Company or any of its Subsidiaries or any predecessor
        of the
        Company, no past or present violations of Environmental Laws (as defined
        below),
        releases of any material into the environment, actions, activities,
        circumstances, conditions, events, incidents, or contractual obligations
        which
        may give rise to any common law environmental liability or any liability
        under
        the Comprehensive Environmental Response, Compensation and Liability Act
        of 1980
        or similar federal, state, local or foreign laws and neither the Company
        nor any
        of its Subsidiaries has received any notice with respect to any of the
        foregoing, nor is any action pending or, to the Company's knowledge, threatened
        in connection with any of the foregoing. The term "ENVIRONMENTAL LAWS" means
        all
        federal, state, local or foreign laws relating to pollution or protection
        of
        human health or the environment (including, without limitation, ambient air,
        surface water, groundwater, land surface or subsurface strata), including,
        without limitation, laws relating to emissions, discharges, releases or
        threatened releases of chemicals, pollutants contaminants, or toxic or hazardous
        substances or wastes (collectively, "HAZARDOUS MATERIALS") into the environment,
        or otherwise relating to the manufacture, processing, distribution, use,
        treatment, storage, disposal, transport or handling of Hazardous Materials,
        as
        well as all authorizations, codes, decrees, demands or demand letters,
        injunctions, judgments, licenses, notices or notice letters, orders, permits,
        plans or regulations issued, entered, promulgated or approved
        thereunder.

      

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      (ii)
        Other than those that are or were stored, used or disposed of in compliance
        with
        applicable law, no Hazardous Materials are contained on or about any real
        property currently owned, leased or used by the Company or any of its
        Subsidiaries, and no Hazardous Materials were released on or about any real
        property previously owned, leased or used by the Company or any of its
        Subsidiaries during the period the property was owned, leased or used by
        the
        Company or any of its Subsidiaries, except in the normal course of the Company's
        or any of its Subsidiaries' business.

      

      (iii)
        Except as set forth in SCHEDULE 3(S), there are no underground storage tanks
        on
        or under any real property owned, leased or used by the Company or any of
        its
        Subsidiaries that are not in compliance with applicable law.

      

      (T)
        TITLE
        TO PROPERTY. The Company and its Subsidiaries have good and marketable title
        in
        fee simple to all real property and good and marketable title to all personal
        property owned by them which is material to the business of the Company and
        its
        Subsidiaries, in each case free and clear of all liens, encumbrances and
        defects
        except such as are described in SCHEDULE 3(T) or such as would not have a
        Material Adverse Effect. Any real property and facilities held under lease
        by
        the Company and its Subsidiaries are held by them under valid, subsisting
        and
        enforceable leases with such exceptions as would not have a Material Adverse
        Effect.

      

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

      

      (V)
        INTERNAL ACCOUNTING CONTROLS. The Company and each of its Subsidiaries maintain
        a system of internal accounting controls sufficient, in the judgment of the
        Company's board of directors, to provide reasonable assurance that (i)
        transactions are executed in accordance with management's general or specific
        authorizations, (ii) transactions are recorded as necessary to permit
        preparation of financial statements in conformity with generally accepted
        accounting principles and to maintain asset accountability, (iii) access
        to
        assets is permitted only in accordance with management's general or specific
        authorization and (iv) the recorded accountability for assets is compared
        with
        the existing assets at reasonable intervals and appropriate action is taken
        with
        respect to any differences.

      

      (W)
        FOREIGN CORRUPT PRACTICES. Neither the Company, nor any of its Subsidiaries,
        nor
        any director, officer, agent, employee or other person acting on behalf of
        the
        Company or any Subsidiary has, in the course of his actions for, or on behalf
        of, the Company, used any corporate funds for any unlawful contribution,
        gift,
        entertainment or other unlawful expenses relating to political activity;
        made
        any direct or indirect unlawful payment to any foreign or domestic government
        official or employee from corporate funds; violated or is in violation of
        any
        provision of the U.S. Foreign Corrupt Practices Act of 1977; or made any
        bribe,
        rebate, payoff, influence payment, kickback or other unlawful payment to
        any
        foreign or domestic government official or employee.

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      (X)
        SOLVENCY. The Company (both before and after giving effect to the transactions
        contemplated by this Agreement) is solvent (I.E., its assets have a fair
        market
        value in excess of the amount required to pay its probable liabilities on
        its
        existing debts as they become absolute and matured) and currently the Company
        has no information that would lead it to reasonably conclude that the Company
        would not have the ability to, nor does it intend to take any action that
        would
        impair its ability to, pay its debts from time to time incurred in connection
        therewith as such debts mature. Except as disclosed in SCHEDULE 3(X), the
        Company did not receive a qualified opinion from its auditors with respect
        to
        its most recent fiscal year end and does not anticipate or know of any basis
        upon which its auditors might issue a qualified opinion in respect of its
        current fiscal year.

      

      (Y)
        NO
        INVESTMENT COMPANY. The Company is not, and upon the issuance and sale of
        the
        Securities as contemplated by this Agreement will not be an "investment company"
        required to be registered under the Investment Company Act of 1940 (an
        "INVESTMENT COMPANY"). The Company is not controlled by an Investment
        Company.

      

      4.
        COVENANTS.

      

      (A)
        BEST
        EFFORTS. The parties shall use their best efforts to satisfy timely each
        of the
        conditions described in Section 6 and 7 of this Agreement.

      

      (B)
        FORM
        D; BLUE SKY LAWS. The Company agrees to file a Form D with respect to the
        Securities as required under Regulation D and to provide a copy thereof to
        Buyer
        promptly after such filing. The Company shall, on or before the Closing Date,
        take such action as the Company shall reasonably determine is necessary to
        qualify the Securities for sale to the Buyer at the Closing pursuant to this
        Agreement under applicable securities or "blue sky" laws of the states of
        the
        United States (or to obtain an exemption from such qualification), and shall
        provide evidence of any such action so taken to Buyer on or prior to the
        Closing
        Date.

      

      (C)
        REPORTING STATUS; ELIGIBILITY TO USE FORM SB-2. The Company's Common Stock
        is
        registered under Section 12(g) of the 1934 Act. So long as any Buyer
        beneficially owns any of the Securities, the Company shall timely file all
        reports required to be filed with the SEC pursuant to the 1934 Act, and the
        Company shall not terminate its status as an issuer required to file reports
        under the 1934 Act even if the 1934 Act or the rules and regulations thereunder
        would permit such termination. The Company currently meets, and will take
        all
        necessary action to continue to meet, the "registrant eligibility" requirements
        set forth in the general instructions to Form SB-2 for registration of the
        resale of the securities purchased hereunder.

      

      (D)
        USE
        OF PROCEEDS. The Company shall use the proceeds from the sale of the Debentures
        and the Warrants in the manner set forth in SCHEDULE 4(D) attached hereto
        and
        made a part hereof and shall not use such proceeds in a manner inconsistent
        with
        the provisions of Article II of the Debentures.

      

      (E)
        [INTENTIONALLY LEFT BLANK].

      

      (F)
        [INTENTIONALLY LEFT BLANK].

      

      (G)
        FINANCIAL INFORMATION. The Company agrees to send the following reports to
        Buyer
        until Buyer transfers, assigns, or sells all of the Securities: (i) within
        ten
        (10) days after the filing with the SEC, a copy of its Annual Report on Form
        10-K, its Quarterly Reports on Form 10-Q and any Current Reports on Form
        8-K;
        (ii) within one (1) day after release, copies of all press releases issued
        by
        the Company or any of its Subsidiaries; and (iii) contemporaneously with
        the
        making available or giving to the stockholders of the Company, copies of
        any
        notices or other information the Company makes available or gives to such
        stockholders.

      

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      (H)
        RESERVATION OF SHARES. The Company covenants that it will initially reserve
        (the
        "INITIAL SHARE RESERVATION") from its authorized and unissued Common Stock
        a
        number of shares of Common Stock equal to at least one hundred (100%) of
        the
        Original Principal Amount of the Debenture, divided by the Conversion Price
        in
        effect on the date of the Initial Share Reservation, free from preemptive
        rights, to provide for the issuance of Common Stock upon the conversion of
        the
        Debenture and shall initially reserve an additional number of shares equal
        to
        the Warrant Amount, free from preemptive rights, to provide for the issuance
        of
        Common Stock upon the exercise of the Warrants. The Company further covenants
        that, beginning on the date of the Initial Share Reservation (the "CONVERSION
        BEGINNING DATE"), and continuing throughout the period the conversion right
        exists, the Company shall at all times have authorized, and reserved (the
        "ONGOING SHARE RESERVATION REQUIREMENT") for the purpose of issuance, a
        sufficient number of shares of Common Stock to provide for the full conversion
        or exercise of the outstanding Debentures and Warrants and issuance of the
        Conversion Shares and Warrant Shares in connection therewith (based on the
        Conversion Price (as defined in the Debentures) in effect from time to time
        and
        the Exercise Price of the Warrants in effect from time to time). The Company
        shall not reduce the number of shares of Common Stock reserved for issuance
        upon
        conversion of or otherwise pursuant to the Debentures and exercise of or
        otherwise pursuant to the Warrants without the consent of Buyer. The Company
        shall use its best efforts at all times to maintain the number of shares
        of
        Common Stock so reserved for issuance at no less than one hundred percent
        (100%)
        the number that is then actually issuable upon full conversion of the Debentures
        (based on the Conversion Price (as defined in the Debentures) in effect from
        time to time) and full exercise of the Warrants (based on the Exercise Price
        of
        the Warrants in effect from time to time). If at any time the number of shares
        of Common Stock authorized and reserved for issuance is below the number
        of
        Conversion Shares issued and issuable upon conversion of or otherwise pursuant
        to the Debentures (based on the Conversion Price (as defined in the Debentures)
        in effect from time to time) and Warrant Shares issued or issuable upon exercise
        of or otherwise pursuant to the Warrants (based on the Exercise Price of
        the
        Warrants in effect from time to time), the Company will promptly take all
        corporate action necessary to authorize and reserve a sufficient number of
        shares, including, without limitation, calling a special meeting of stockholders
        to authorize additional shares to meet the Company's obligations under this
        Section 4(h), in the case of an insufficient number of authorized shares,
        and
        using its best efforts to obtain stockholder approval of an increase in such
        authorized number of shares.

      

      (I)
        LISTING. The Company shall use its best efforts to promptly secure the listing
        of the Conversion Shares and Warrant Shares upon each national securities
        exchange or automated quotation system, if any, upon which shares of Common
        Stock are then listed (subject to official notice of issuance) and, so long
        as
        any Buyer owns any of the Securities, shall maintain, so long as any other
        shares of Common Stock shall be so listed, such listing of all Conversion
        Shares
        from time to time issuable upon conversion of or otherwise pursuant to the
        Debentures and all Warrant Shares from time to time issuable upon exercise
        of or
        otherwise pursuant to the Warrants. The Company will use its best efforts
        to
        obtain and, so long as any Buyer owns any of the Securities, maintain the
        listing and trading of its Common Stock on the OTC-BB, the Nasdaq National
        Market (the "NNM"), the Nasdaq SmallCap Market (the "NASDAQ SMALLCAP"), the
        New
        York Stock Exchange ("NYSE"), or the American Stock Exchange ("AMEX") and
        will
        comply in all respects with the Company's reporting, filing and other
        obligations under the bylaws or rules of the National Association of Securities
        Dealers ("NASD") and such exchanges, as applicable. The Company shall promptly
        provide to Buyer copies of any notices it receives from the OTC-BB and any
        other
        exchanges or quotation systems on which the Common Stock is then listed
        regarding the continued eligibility of the Common Stock for listing on such
        exchanges and quotation systems.

      

      (J)
        CORPORATE EXISTENCE. So long as a Buyer beneficially owns any Debentures
        or
        Warrants, the Company shall maintain its corporate existence and shall not
        merge, consolidate or sell all or substantially all of the Company's assets,
        except in the event of a merger or consolidation or sale of all or substantially
        all of the Company's assets, where the (i) the successor or acquiring entity
        and, if an entity different from the successor or acquiring entity, the entity
        whose securities into which the Debentures shall become convertible pursuant
        to
        Section 1.5(b) of the Debentures, in such transaction assumes the Company's
        obligations hereunder and under the agreements and instruments entered into
        in
        connection herewith (including the Debentures and the Warrants) and (ii)
        the
        entity whose securities into which the Debentures shall become convertible
        pursuant to Section 1.5(b) of the Debentures is a publicly traded corporation
        whose Common Stock is listed for trading on the NNM, NASDAQ SmallCap, NYSE
        or
        AMEX.

      

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      (K)
        NO
        INTEGRATION. The Company shall not make any offers or sales of any security
        (other than the Securities) under circumstances that would require registration
        of the Securities being offered or sold hereunder under the 1933 Act or cause
        the offering of the Securities to be integrated with any other offering of
        securities by the Company for the purpose of any stockholder approval provision
        applicable to the Company or its securities.

      

      (L)
        IRREVOCBLE TRANSFER AGENT INSTRUCTIONS. Within ten (10) business days after
        the
        Closing Date, the Company agrees to deliver to Buyer the Irrevocable Transfer
        Agent Instructions (as defined below), in form and substance satisfactory
        to the
        Buyer, which instructions shall be acknowledged in writing by the Company's
        Transfer Agent.

      

      5.
        TRANSFER AGENT INSTRUCTIONS. The Company shall issue irrevocable instructions
        to
        its transfer agent to issue certificates, registered in the name of Buyer
        or its
        nominee, for the Conversion Shares and Warrant Shares in such amounts as
        specified from time to time by Buyer to the Company upon conversion of the
        Debentures or exercise of the Warrants in accordance with the terms thereof
        (the
        "IRREVOCABLE TRANSFER AGENT INSTRUCTIONS"). Prior to registration of the
        Conversion Shares and Warrant Shares under the 1933 Act or the date on which
        the
        Conversion Shares and Warrant Shares 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, all such certificates shall bear the restrictive
        legend specified in Section 2(g) of this Agreement. The Company warrants
        that no
        instruction other than the Irrevocable Transfer Agent Instructions referred
        to
        in this Section 5, and stop transfer instructions to give effect to Section
        2(f)
        hereof (in the case of the Conversion Shares and Warrant Shares, prior to
        registration of the Conversion Shares and Warrant Shares under the 1933 Act
        or
        the date on which the Conversion Shares and Warrant Shares 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), will be given by the
        Company
        to its transfer agent and that the Securities shall otherwise be freely
        transferable on the books and records of the Company as and to the extent
        provided in this Agreement and the Registration Rights Agreement. Nothing
        in
        this Section shall affect in any way the Buyer's obligations and agreement
        set
        forth in Section 2(g) hereof to comply with all applicable prospectus delivery
        requirements, if any, upon re-sale of the Securities. If a Buyer provides
        the
        Company with (i) an opinion of counsel in form, substance and scope customary
        for opinions in comparable transactions, to the effect that a public sale
        or
        transfer of such Securities may be made without registration under the 1933
        Act
        and such sale or transfer is effected or (ii) the Buyer provides reasonable
        assurances that the Securities can be sold pursuant to Rule 144, the Company
        shall permit the transfer, and, in the case of the Conversion Shares and
        Warrant
        Shares, promptly instruct its transfer agent to issue one or more certificates,
        free from any restrictive legend, in such name and in such denominations
        as
        specified by such Buyer.

      

      6.
        CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL. The obligation of the Company
        hereunder to issue and sell the Debentures and Warrants to a Buyer at the
        Closing is subject to the satisfaction, at or before the Closing Date, of
        each
        of the following conditions thereto, provided that these conditions are for
        the
        Company's sole benefit and may be waived by the Company at any time in its
        sole
        discretion:

      

      (a)
        The
        Buyer shall have executed this Agreement and the Registration Rights Agreement,
        and delivered the same to the Company.

      

      (b)
        The
        Buyer shall have delivered the Purchase Price in accordance with Section
        1(b)
        above.

      

      (c)
        The
        representations and warranties of the Buyer shall be true and correct in
        all
        material respects as of the date when made and as of the Closing Date as
        though
        made at that time (except for representations and warranties that speak as
        of a
        specific date, which representations and warranties shall be true and correct
        as
        of such date), and the Buyer shall have performed, satisfied and complied
        in all
        material respects with the covenants, agreements and conditions required
        by this
        Agreement to be performed, satisfied or complied with by the Buyer at or
        prior
        to the Closing Date.

      

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      (d)
        No
        litigation, statute, rule, regulation, executive order, decree, ruling or
        injunction shall have been enacted, entered, promulgated or endorsed by or
        in
        any court or governmental authority of competent jurisdiction or any
        self-regulatory organization having authority over the matters contemplated
        hereby which prohibits the consummation of any of the transactions contemplated
        by this Agreement.

      

      7.
        CONDITIONS TO BUYER'S OBLIGATION TO PURCHASE. The obligation of Buyer hereunder
        to purchase the Debentures and Warrants at the Closing is subject to the
        satisfaction, at or before the Closing Date, of each of the following
        conditions, provided that these conditions are for such Buyer's sole benefit
        and
        may be waived by such Buyer at any time in its sole discretion:

      

      (a)
        The
        Company shall have executed this Agreement and the Registration Rights
        Agreement, and delivered the same to the Buyer.

      

      (b)
        The
        Company shall have delivered to such Buyer duly executed Debentures (in such
        denominations as the Buyer shall request) and Warrants in accordance with
        Section 1(b) above.

      

      (c)
        [Intentionally Left Blank].

      

      (d)
        The
        representations and warranties of the Company contained in this Agreement,
        as
        modified by the Exhibits and Schedules hereto, shall be true and correct
        in all
        material respects as of the date when made and as of the Closing Date as
        though
        made at such time (except for representations and warranties that speak as
        of a
        specific date, which representations and warranties shall be true and correct
        as
        of such date) and the Company shall have performed, satisfied and complied
        in
        all material respects with the covenants, agreements and conditions required
        by
        this Agreement to be performed, satisfied or complied with by the Company
        at or
        prior to the Closing Date. The Buyer shall have received a certificate or
        certificates, executed by the President and Chief Executive Officer of the
        Company, dated as of the Closing Date, to the foregoing effect and as to
        such
        other matters as may be reasonably requested by such Buyer including, but
        not
        limited to certificates with respect to the Company's Certificate of
        Incorporation, By-laws and Board of Directors' resolutions relating to the
        transactions contemplated hereby.

      

      (e)
        No
        litigation, statute, rule, regulation, executive order, decree, ruling or
        injunction shall have been enacted, entered, promulgated or endorsed by or
        in
        any court or governmental authority of competent jurisdiction or any
        self-regulatory organization having authority over the matters contemplated
        hereby which prohibits the consummation of any of the transactions contemplated
        by this Agreement.

      

      (f)
        Trading in the Common Stock on the OTC-BB shall not have been suspended by
        the
        SEC or the Nasdaq and, within two (2) business days of the Closing, the Company
        will make application to the OTC-BB, if legally required by Nasdaq, to have
        the
        Conversion Shares and the Warrant Shares authorized for quotation.

      

      (g)
        The
        Buyer shall have received an opinion of the Company's counsel, dated as of
        the
        Closing Date, in form, scope and substance reasonably satisfactory to the
        Buyer
        and in substantially the same form as EXHIBIT "D" attached hereto.

      

      (h)
        The
        Buyer shall have received an officer's certificate described in Section 3(c)
        above, dated as of the Closing Date.

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      

      8.
        GOVERNING LAW; MISCELLANEOUS.

      

      (A)
        GOVERNING LAW; ARBITRATION. This Agreement shall be governed by and construed
        in
        accordance with the internal laws of the State of California. Any controversy
        or
        claim arising out of or related to this Debenture or the breach thereof,
        shall
        be settled by binding arbitration in San Diego, CA in accordance with the
        Expedited Procedures (Rules 53-57) of the Commercial Arbitration Rules of
        the
        American Arbitration Association ("AAA"). A proceeding shall be commenced
        upon
        written demand by the Company or Buyer to the other. The arbitrator(s) shall
        enter a judgment by default against any party, which fails or refuses to
        appear
        in any properly noticed arbitration proceeding. The proceeding shall be
        conducted by one (1) arbitrator, unless the amount alleged to be in dispute
        exceeds two hundred fifty thousand dollars ($250,000), in which case three
        (3)
        arbitrators shall preside. The arbitrator(s) will be chosen by the parties
        from
        a list provided by the AAA, and if the parties are unable to agree within
        ten
        (10) days, the AAA shall select the arbitrator(s). The arbitrators must be
        experts in securities law and financial transactions. The arbitrators shall
        assess costs and expenses of the arbitration, including all attorneys' and
        experts' fees, as the arbitrators believe is appropriate in light of the
        merits
        of the parties' respective positions in the issues in dispute. Each party
        submits irrevocably to the jurisdiction of any state court sitting in San
        Diego,
        CA or to the United States District Court sitting in San Diego, CA for purposes
        of enforcement of any discovery order, judgment or award in connection with
        such
        arbitration. The award of the arbitrator(s) shall be final and binding upon
        the
        parties and may be enforced in any court having jurisdiction. The arbitration
        shall be held in such place as set by the arbitrator(s) in accordance with
        Rule
        55. With respect to any arbitration proceeding in accordance with this section,
        the prevailing party's reasonable attorney's fees and expenses shall be borne
        by
        the non-prevailing party.

      

      Although
        the parties, as expressed above, agree that all claims, including claims
        that
        are equitable in nature, for example specific performance, shall initially
        be
        prosecuted in the binding arbitration procedure outlined above, if the
        arbitration panel dismisses or otherwise fails to entertain any or all of the
        equitable claims asserted by reason of the fact that it lacks jurisdiction,
        power and/or authority to consider such claims and/or direct the remedy
        requested, then, in only that event, will the parties have the right to initiate
        litigation respecting such equitable claims or remedies. The forum for such
        equitable relief shall be in either a state or federal court sitting in San
        Diego, CA. Each party waives any right to a trial by jury, assuming such
        right
        exists in an equitable proceeding, and irrevocably submits to the jurisdiction
        of said San Diego, CA court. California law shall govern both the proceeding
        as
        well as the interpretation and construction of this Agreement and the
        transaction as a whole.

      

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

      

      (C)
        HEADINGS. The headings of this Agreement are for convenience of reference
        and
        shall not form part of, or affect the interpretation of, this
        Agreement.

      

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

      

      (E)
        ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the instruments referenced
        herein contain the entire understanding of the parties with respect to the
        matters covered herein and therein and, except as specifically set forth
        herein
        or therein, neither the Company nor the Buyer makes any representation,
        warranty, covenant or undertaking with respect to such matters. No provision
        of
        this Agreement may be waived or amended other than by an instrument in writing
        signed by the party to be charged with enforcement.

      

      (F)
        NOTICES. Any notices required or permitted to be given under the terms of
        this
        Agreement shall be sent by certified or registered mail (return receipt
        requested) or delivered personally or by courier (including a recognized
        overnight delivery service) or by facsimile and shall be effective five days
        after being placed in the mail, if mailed by regular United States mail,
        or upon
        receipt, if delivered personally or by courier (including a recognized overnight
        delivery service) or by facsimile, in each case addressed to a party. The
        addresses for such communications shall be:

      

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      If
        to the
        Company: To the address set forth immediately below such Company's
        name on the signature pages hereto.

      

      With
        copy
        to:

      

      David
        Ficksman, Esq.

      TROY
        & GOULD PC

      1801
        Century Park East, Suite 1600 

      Los
        Angeles, CA 90067-2367

      Tel
        (310)
        553-4441

      Fax
        (310)
        201-4746

      

      If
        to a
        Buyer: To the address set forth immediately below such Buyer's name
        on
        the signature pages hereto.

      

      Each
        party shall provide notice to the other party of any change in
        address.

      

      (G)
        SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to
        the
        benefit of the parties and their successors and assigns. Neither the Company
        nor
        any Buyer shall assign this Agreement or any rights or obligations hereunder
        without the prior written consent of the other. Notwithstanding the foregoing,
        subject to Section 2(f), Buyer may assign its rights hereunder to any person
        that purchases Securities in a private transaction from a Buyer or to any
        of its
        "affiliates," as that term is defined under the 1934 Act, without the consent
        of
        the Company; PROVIDED, HOWEVER, that prior to any assignment of its rights
        hereunder to a person (other than an affiliate) that purchases any Debentures
        or
        Warrants from such Buyer in a private transaction such Buyer shall provide
        the
        Company with written notice of its intention to sell some or all of the
        Debentures or Warrants, which notice shall disclose the proposed purchase
        price
        for such Debentures or Warrants, and the Company shall have the option, during
        the ten (10) business day period following such notice, to purchase all,
        but not
        less than all, of such Debentures and/or Warrants at the proposed purchase
        price, after which period the Buyer shall be free to sell the Debentures
        and/or
        Warrants to a third party at such proposed purchase price.

      

      (H)
        THIRD
        PARTY BENEFICIARIES. This Agreement is intended for the benefit of the parties
        hereto and their respective permitted successors and assigns, and is not
        for the
        benefit of, nor may any provision hereof be enforced by, any other
        person.

      

      (I)
        SURVIVAL. The covenants, agreements, representations and warranties of the
        parties hereto contained in this Agreement shall survive the closing hereunder
        for a period of two (2) years notwithstanding any due diligence investigation
        conducted by or on behalf of the Buyer.

      

      (J)
        INDEMNIFICATION. The Company (the "INDEMNIFYING PARTY") agrees to indemnify
        and
        hold harmless the Buyer and all its officers, directors, employees, agents,
        members and managers (the "INDEMNIFIED PARTY") for loss or damage arising
        as a
        result of or related to any breach or alleged breach by the Company of any
        of
        its representations, warranties and covenants set forth in Sections 3 and
        4
        hereof or any of its covenants and obligations under this Agreement or the
        Registration Rights Agreement, including advancement of expenses as they
        are
        incurred with respect to claims by third parties.

      

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      Promptly
        after receipt of notice of the commencement of any action against an Indemnified
        Party, such Indemnified Party shall notify the Indemnifying Party in writing
        of
        the commencement thereof and the basis hereunder upon which a claim for
        indemnification is asserted, but the failure to do so shall not relieve the
        Indemnifying Party of its obligations hereunder except to the extent the
        Indemnifying Party is materially prejudiced by such failure. In the event
        of the
        commencement of any such action, the Indemnifying Party shall be entitled
        to
        participate therein and to assume the defense thereof with counsel satisfactory
        to the Indemnified Party, and, after notice from the Indemnifying Party to
        the
        Indemnified Party of its election so to assume the defense thereof, the
        Indemnifying Party shall not be liable to the Indemnified Party hereunder
        for
        any legal expenses (including attorneys' fees) subsequently incurred by such
        Indemnified Party in connection with the defense thereof other than reasonable
        costs of investigation and of liaison with counsel so selected, provided,
        however, that, if the defendants in any such action include both the Indemnified
        Party and the Indemnifying Party and the Indemnified Party shall have reasonably
        concluded that there may be reasonable defenses available to it which are
        different from or additional to those available to the Indemnifying Party
        or if
        the interests of the Indemnified Party reasonably may be deemed to conflict
        with
        the interests of the Indemnifying Party, the Indemnified Party shall have
        the
        right to select one separate counsel and to assume such legal defenses and
        otherwise to participate in the defense of such action, with the reasonable
        expenses and fees of such separate counsel and other expenses related to
        such
        participation to be reimbursed by the Indemnifying Party as
        incurred.

      

      As
        to
        cases in which the Indemnifying Party has assumed and is providing the defense
        for the Indemnified Party, the control of such defense shall be vested in
        the
        Indemnifying Party; provided that the consent of the Indemnified Party shall
        be
        required prior to any settlement of such case or action, which consent shall
        not
        be unreasonably withheld. As to any action, the party which is controlling
        such
        action shall provide to the other party reasonable information (including
        reasonable advance notice of all proceedings and depositions in respect thereto)
        regarding the conduct of the action and the right to attend all proceedings
        and
        depositions in respect thereto through its agents and attorneys, and the
        right
        to discuss the action with counsel for the party controlling such
        action.

      

      (K)
        PUBLICITY. The Company and the Buyer shall have the right to review for a
        reasonable period of time before issuance of any press releases, filings
        with
        the SEC, NASD or any stock exchange or interdealer quotation system, or any
        other public statements with respect to the transactions contemplated hereby;
        PROVIDED, HOWEVER, that the Company shall be entitled, without the prior
        approval of the Buyer, to make any press release or public filings with respect
        to such transactions as is required by applicable law and regulations (although
        the Buyer shall be consulted by the Company in connection with any such press
        release prior to its release and shall be provided with a copy thereof and
        be
        given an opportunity to comment thereon).

      

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

      

      (M)
        NO
        STRICT CONSTRUCTION. The language used in this Agreement will be deemed to
        be
        the language chosen by the parties to express their mutual intent, and no
        rules
        of strict construction will be applied against any party.

      

      (N)
        REMEDIES. The Company acknowledges that a breach by it of its obligations
        hereunder will cause irreparable harm to Buyer, by vitiating the intent and
        purpose of the transactions contemplated hereby. Accordingly, the Company
        acknowledges that the remedy at law for a breach of its obligations under
        this
        Agreement will be inadequate and agrees, in the event of a breach or threatened
        breach by the Company of the provisions of this Agreement, that Buyer shall
        be
        entitled, in addition to all other available remedies in law or in equity,
        to an
        injunction or injunctions to prevent or cure any breaches of the provisions
        of
        this Agreement and to enforce specifically the terms and provisions of this
        Agreement, without the necessity of showing economic loss and without any
        bond
        or other security being required.

      

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      (O)
        NO
        ORAL AMENDMENTS. There shall be no oral modifications or amendments to this
        Agreement. This Agreement may be modified or amended only in
        writing.

      

      IN
        WITNESS WHEREOF, the undersigned Buyer and the Company have caused this
        Agreement to be duly executed as of the 14th day of July 2006.

      
 

      
        	OMNI U.S.A.,
                INC., the
                Company	Potawatomi
                Business
                Development Corp., the Buyer
	 	 
	 	 
	
                By:
                  /S/ LOWELL W.
                  GIFFHORN            
                  

              	
                By:
                  /S/ CAROL
                  LEESE                      
                  

              
	
                Lowell
                  W. Giffhorn, CFO

              	
                Carol
                  Leese, CEO

              
	 	 
	
                ADDRESS:

              	
                ADDRESS:

              
	
                2236
                  Rutherford Rd., Suite 107

              	
                320
                  E. Buffalo St., Suite 607

              
	
                Carlsbad,
                  CA 92008

              	
                Milwaukee,
                  WI 53202

              
	
                Telephone:
                  (760) 929-7500 Ext 210

              	
                Telephone:
                  262-785-8140

              
	
                Facsimile:
                  (760) 929-7504

              	
                Facsimile:
                  262-785-8141

              

      

    

     

     

    
      
        
        

      

      
        17

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