Document:

Exhibit 10.1

EXECUTION COPY

 

AMENDED AND RESTATED

 

SECURITIES PURCHASE
AGREEMENT

 

BY AND AMONG

 

TONTINE CAPITAL PARTNERS,
L.P.,

 

TONTINE PARTNERS, L.P.,

 

TONTINE 25 OVERSEAS MASTER
FUND, L.P.

 

AND

 

TOWER TECH HOLDINGS INC.

 

 

 

JANUARY 3, 2008

 

 

 

 

TABLE OF CONTENTS

 

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1   Definitions

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2   Purchase
  and Sale of Shares

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Purchase of Shares

  	
  4

  
	
   

  	
  2.2

  	
  Purchase Price for Shares and Form of Payment;
  Delivery

  	
  4

  
	
   

  	
  2.3

  	
  Closing Date

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3   Buyers’
  Representations and Warranties

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Organization and Qualification

  	
  4

  
	
   

  	
  3.2

  	
  Authorization; Enforcement

  	
  4

  
	
   

  	
  3.3 

  	
  Securities Matters

  	
  5

  
	
   

  	
  3.4 

  	
  Information

  	
  5

  
	
   

  	
  3.5 

  	
  Restrictions on Transfer

  	
  5

  
	
   

  	
  3.6 

  	
  Consents

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4   Representations
  and Warranties of the Company

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Organization and Qualification

  	
  6

  
	
   

  	
  4.2

  	
  Authorization; Enforcement

  	
  6

  
	
   

  	
  4.3

  	
  Capitalization; Valid Issuance of Securities

  	
  7

  
	
   

  	
  4.4

  	
  No Conflicts

  	
  7

  
	
   

  	
  4.5

  	
  SEC Documents; Financial Statements

  	
  8

  
	
   

  	
  4.6

  	
  Absence of Certain Changes

  	
  9

  
	
   

  	
  4.7

  	
  Absence of Litigation

  	
  9

  
	
   

  	
  4.8

  	
  Intellectual Property

  	
  9

  
	
   

  	
  4.9

  	
  Tax Status

  	
  9

  
	
   

  	
  4.10

  	
  Permits; Compliance

  	
  10

  
	
   

  	
  4.11

  	
  Environmental Matters

  	
  10

  
	
   

  	
  4.12

  	
  Title to Property

  	
  11

  
	
   

  	
  4.13

  	
  No Investment Company or Real Property Holding
  Company

  	
  11

  
	
   

  	
  4.14

  	
  No Brokers

  	
  11

  
	
   

  	
  4.15

  	
  Registration Rights

  	
  11

  
	
   

  	
  4.16

  	
  Exchange Act Registration

  	
  11

  
	
   

  	
  4.17

  	
  Labor Relations

  	
  11

  
	
   

  	
  4.18

  	
  Transactions with Affiliates and Employees

  	
  12

  
	
   

  	
  4.19

  	
  Insurance

  	
  12

  
	
   

  	
  4.20

  	
  Approved Acquisitions of Shares; No Anti-Takeover
  Provisions

  	
  12

  
	
   

  	
  4.21

  	
  ERISA

  	
  12

  
	
   

  	
  4.22

  	
  Disclosure

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5   Covenants

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Form D; Blue Sky Laws

  	
  13

  
	
   

  	
  5.2

  	
  Use of Proceeds

  	
  13

  
	
   

  	
  5.3

  	
  Expenses

  	
  13

  
	
   

  	
  5.4

  	
  No Integration

  	
  13

  
	
   

  	
  5.5

  	
  Board Designee(s)

  	
  13

  

 

i

 

	
   

  	
  5.6

  	
  Observation Rights

  	
  13

  
	
   

  	
  5.7

  	
  Approval of Acquisition

  	
  13

  
	
   

  	
  5.8

  	
  Participation in Future Issuances

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6   Conditions To The Company’s Obligation

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Delivery of Transaction Documents

  	
  14

  
	
   

  	
  6.2

  	
  Payment of Purchase Price

  	
  14

  
	
   

  	
  6.3

  	
  Representations and Warranties

  	
  14

  
	
   

  	
  6.4

  	
  Litigation

  	
  14

  
	
   

  	
  6.5

  	
  Acquisition of Target

  	
  14

  
	
   

  	
  6.6

  	
  No
  Prohibition

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7   Conditions to The Buyers’ Obligation

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Delivery of Transaction Documents; Issuance of
  Shares

  	
  15

  
	
   

  	
  7.2

  	
  Representations and Warranties

  	
  15

  
	
   

  	
  7.3

  	
  Consents

  	
  15

  
	
   

  	
  7.4

  	
  Litigation

  	
  15

  
	
   

  	
  7.5

  	
  Opinion

  	
  15

  
	
   

  	
  7.6

  	
  No Material Adverse Change

  	
  15

  
	
   

  	
  7.7

  	
  Acquisition of Target

  	
  15

  
	
   

  	
  7.8

  	
  No
  Prohibition

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8   Termination

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Termination Provisions

  	
  15

  
	
   

  	
  8.2

  	
  Effect of Termination

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9   Indemnification

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Indemnification by the Company

  	
  16

  
	
   

  	
  9.2

  	
  Notification

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  10   Governing Law; Miscellaneous

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
  Governing Law

  	
  17

  
	
   

  	
  10.2

  	
  Counterparts; Electronic Signatures

  	
  17

  
	
   

  	
  10.3

  	
  Headings

  	
  17

  
	
   

  	
  10.4

  	
  Severability

  	
  17

  
	
   

  	
  10.5

  	
  Entire Agreement; Amendments

  	
  17

  
	
   

  	
  10.6

  	
  Notices

  	
  18

  
	
   

  	
  10.7

  	
  Successors and Assigns

  	
  19

  
	
   

  	
  10.8

  	
  Third Party Beneficiaries

  	
  19

  
	
   

  	
  10.9

  	
  Publicity

  	
  19

  
	
   

  	
  10.10

  	
  Further Assurances

  	
  19

  
	
   

  	
  10.11

  	
  No Strict Construction

  	
  19

  
	
   

  	
  10.12

  	
  Rights Cumulative

  	
  19

  
	
   

  	
  10.13

  	
  Survival

  	
  19

  
	
   

  	
  10.14

  	
  Knowledge

  	
  19

  
	
   

  	
  10.15

  	
  Assignment to T25

  	
  19

  

 

ii

 

Amended
and Restated Securities Purchase Agreement

 

 

This
AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT, dated as of January 3,
2008, is entered into by and among TOWER TECH HOLDINGS INC., a Nevada
corporation (the “Company”), Tontine Capital
Partners, L.P. (“TCP”), Tontine Partners, L.P.
(“TP” and a “Buyer”),
and Tontine 25 Overseas Master Fund, L.P. 
(“T25,” a “Buyer,”
and collectively with TP, the “Buyers”).

 

RECITALS:

 

A.            In
connection with providing financing for the Company’s proposed acquisition of
Energy Maintenance Services, LLC (“Target”),
TCP and TP entered into a Securities Purchase Agreement with the Company, dated
as of December 28, 2007 (the “Original
Agreement”).

 

B.            The
parties to the Original Agreement desire to amend and restate the Original
Agreement to provide for T25’s assumption of TCP’s obligations under the
Original Agreement and for the increase in the number of Shares (as defined
below) to be purchased by TP.

 

C.            The
total financing being provided by the Buyers to the Company hereunder shall
consist of the purchase by the Buyers of 2,031,250  shares (the “Shares”) of common stock, $0.001 par
value per share at $8.48 per share, for a total purchase price of $17,225,000;
and

 

D.            The
Company and the Buyers are executing and delivering this Agreement in reliance
upon the exemptions from securities registration afforded by Section 4(2) of
the 1933 Act and Rule 506.

 

AGREEMENT

 

NOW
THEREFORE, the Company, TCP and the Buyers hereby agree as follows:

 

ARTICLE 1

DEFINITIONS

 

“1933 Act”  means the Securities Act of
1933, as amended.

 

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

 

“2006-2007 SEC Documents” has the
meaning set forth in Section 3.4.

 

“Acquisition”
means the proposed acquisition by the Company of the Target pursuant to that
certain Member Interest Purchase Agreement dated  December 9,
2007 among the Company, Target and the members of the Target (the “Target MIPA”).

 

“Action”  means any action, suit
claim, inquiry, notice of violation, proceeding (including any partial
proceeding such as a deposition) or investigation against or affecting the
Company, any of its Subsidiaries or any of their respective properties before
or by any court, arbitrator, governmental or administrative agency, regulatory
authority (federal, state, county, local or foreign), public board, stock
market, stock exchange or trading facility.

 

“Agreement”  means this Amended and
Restated Securities Purchase Agreement.

 

1

 

“August 2007 Securities Purchase Agreement”
means that certain Securities Purchase Agreement dated August 22, 2007, by
and among the Company, TCP, TCOMF, T25, TOF and TP.

 

“BF Registration Rights Agreement”
means that certain Registration Rights Agreement by and among the Company and
certain shareholders of Brad Foote Gear Works, Inc.

 

“Buyer”
and “Buyers” have the
meaning set forth in the preamble.

 

“Claim”
has the meaning set forth in Section
9.2.

 

“Closing” has the
meaning set forth in Section 2.3.

 

“Closing
Date” has the meaning set forth in Section 2.3.

 

“Code” has the meaning set forth in Section 4.13.

 

“Common
Stock”  means the
Company’s common stock, $0.001 par value per share.

 

“Company”
has the meaning set forth in the preamble.

 

“Consent”
means any approval, consent, ratification, waiver, or other authorization
(including any Governmental Authorization).

 

“Environmental
Laws” has the meaning set forth in Section 4.11.

 

“ERISA” has the meaning set forth in Section
4.21.

 

“GAAP” has the
meaning set forth in Section 4.5.

 

“Governmental Authorization” means any approval, consent,
license, permit, waiver, or other authorization issued, granted, given, or
otherwise made available by or under the authority of any Governmental Body or
pursuant to any Legal Requirement.

 

“Governmental Body” means any: (a) nation, state,
province, county, city, town, village, district, or other jurisdiction of any
nature; (b) federal, state, provincial, local, municipal, foreign, or
other government; (c) governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, department, official, or
entity and any court or other tribunal); (d) multi-national organization
or body; or (e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.

 

“Hazardous
Materials” has the meaning set forth in Section
4.11.

 

“Indemnified Party” has the meaning set forth in Section 9.2.

 

“Initial
Securities Purchase Agreement” means that certain Securities
Purchase Agreement dated March 1, 2007, by and among the Company, TCP and
TCOMF.

 

“Intellectual
Property”  has the meaning
set forth in Section 4.8.

 

“Investment
Company”  has the meaning
set forth in Section 4.13.

 

2

 

“Legal
Requirement” means any federal, state, local, municipal,
foreign, international, multinational or other law, rule, regulation, order,
judgment, decree, ordinance, policy or directive, including those entered,
issued, made, rendered or required by any court, administrative or other
governmental body, agency or authority, or any arbitrator that has jurisdiction
over the Company or the Buyers.

 

“Material
Adverse Effect” means any material adverse
effect on the business, operations, assets, financial condition or prospects of
the Company.

 

 “NRS” has
the meaning set forth in Section 4.20.

 

“Original Agreement” has the meaning set forth in the Recitals.

 

“Per Share Price” means $8.48 per Share.

 

“Permits” has the
meaning set forth in Section 4.10.

 

“Purchase
Price” has the meaning set forth in  Section
2.2.

 

 “Registration Rights Agreement”  means the Registration
Rights Agreement dated March 1, 2007, by and among the Company, TCP and
TCOMF, T25, TOF and TP, as amended on October 19, 2007 pursuant to which
the Company has agreed under certain circumstances to register the resale of
the Shares under the 1933 Act and the rules and regulations promulgated
thereunder, and applicable state securities laws.

 

“Rule 506” means Rule 506
of Regulation D promulgated under the 1933 Act.

 

“SEC” means the
United States Securities and Exchange Commission.

 

“SEC
Documents”  has the meaning
set forth in Section 4.5.

 

 “Shares”
has the meaning set forth in the Recitals.

 

“Subsidiaries”
means with respect to the Company, Tower Tech Systems, Inc, a
Wisconsin corporation, Brad Foote Gear Works, Inc., an Illinois
corporation, and R.B.A. Inc., a Wisconsin corporation.

 

“T25” has the meaning set forth in
the preamble.

 

 “Target” has the
meaning set forth in the Recitals.

 

“Target MIPA” has the meaning set forth in the definition
of Acquisition.

 

 “TCOMF”
means Tontine Capital Overseas Master Fund, L.P.

 

“TCP” has the meaning set forth in
the preamble.

 

“TOF” means Tontine Overseas Fund,
Ltd.

 

“TP” has the meaning set forth in the
preamble.

 

3

 

“Transaction
Documents” means this Agreement and any other documents
contemplated by this Agreement.

 

“Transfer
Instructions” has the meaning set forth in Section 2.2.

 

ARTICLE 2

PURCHASE AND SALE OF SHARES

 

2.1           Purchase of Shares.  Subject to the terms and conditions of this
Agreement, on the Closing Date, the Company shall issue and sell the Shares,
and the Buyers shall purchase the Shares. 
The number of Shares to be purchased by each Buyer  is identified in Schedule 1 attached
hereto.

 

2.2           Purchase Price for Shares and Form of
Payment; Delivery.  On the Closing Date the Buyers shall pay the Per Share Price for the
Shares, for a total price of $17,225,000 (the “Purchase Price”).  The Purchase
Price shall be paid by wire transfer of immediately available funds in
accordance with the Company’s written instructions.  At the Closing, upon payment of the Purchase
Price the Company will deliver irrevocable written instructions (“Transfer Instructions”)
to the transfer agent for the Company’s Common Stock to issue certificates
representing the Shares registered in the name of each Buyer and to deliver
such certificates to or at the direction of each Buyer.  The Company shall not have the power to
revoke or amend the Transfer Instructions without the written consent of the
Buyers.

 

2.3           Closing Date.  Subject to the terms of this agreement, the
closing of the transactions contemplated by this Agreement shall be held on or
before the later of (i) the date that is three (3) business days
after the date that the last of the conditions in Article 6 and Article 7
have been satisfied, or such other time as may be mutually agreed upon by the
parties to this Agreement; or (ii) the closing date of the Acquisition so
long as all of conditions in Article 6 and Article 7
have been satisfied (the “Closing
Date”), at the offices of Barack Ferrazzano Kirschbaum &
Nagelberg LLP, 200 West Madison Street, Suite 3900, Chicago, Illinois
60606  or
at such other location or by such other method (including exchange of signed
documents) as may be mutually agreed upon by the parties to this Agreement (“Closing”).

 

ARTICLE 3

BUYERS’ REPRESENTATIONS AND WARRANTIES

 

Each
Buyer represents and warrants to the Company that:

 

3.1           Organization and Qualification.  Each of the Buyers is an entity of the type
identified on Schedule 1 attached hereto, duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, with full power and authority to purchase the Shares and
otherwise perform its obligations under this Agreement and the other
Transaction Documents.

 

3.2           Authorization;
Enforcement.  Each Buyer
has the requisite power and authority to enter into this Agreement and
consummate the transactions contemplated hereby.  This Agreement and each of the other
Transaction Documents to be executed by the Buyers and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by, and duly executed and delivered on behalf of, such Buyer.  This Agreement and each of the other
Transaction Documents to be executed by the Buyers constitutes the valid and
binding agreement of such Buyer enforceable in accordance with its terms,
except as such enforceability may be limited by:  (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws in effect that limit creditors’
rights generally; (ii) equitable limitations on the availability of
specific remedies; and (iii) principles of equity.

 

4

 

3.3           Securities Matters.  In connection with the Company’s compliance
with applicable securities laws:

 

a.             Such Buyer understands that the Shares are being offered
and sold to it in reliance upon specific exemptions from the registration
requirements of United States and state securities laws and that the Company is
relying upon the truth and accuracy of, and such Buyer’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
such Buyer set forth herein in order to determine the availability of such
exemption and the eligibility of such Buyer to acquire the Shares.

 

b.             Such Buyer is purchasing the Shares for its own account,
not as a nominee or agent, for investment purposes and not with a present view
towards resale, except pursuant to sales exempted from registration under the
1933 Act, or registered under the 1933 Act as contemplated by the Registration
Rights Agreement.

 

c.             Such Buyer is an “accredited investor” as that term is
defined in Rule 501(a) of Regulation D under the 1933 Act, and has
such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the Shares.  Such Buyer understands that its investment in
the Shares involves a significant degree of risk and that, except as set forth
in this Agreement, the Company has made no representations or assurances
concerning the present or prospective value of the Shares being purchased
hereunder.  Such 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 Shares.

 

3.4           Information.  Such Buyer
has conducted its own due diligence examination of the Company’s business,
financial condition, results of operations, and prospects.  In connection with such investigation, such
Buyer and its representatives (i) have reviewed the Company’s Form 10-KSB
for the fiscal years ended December 31, 2005 and December 31, 2006,
the Company’s quarterly report on Form 10-QSB for the three most recently
concluded interim periods and the Company’s Current Reports on Form 8-K or
Form 8-K/A filed in 2006 and 2007 (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
“2006-2007 SEC Documents”),
(ii) have participated in Board of Director meetings of the Company
pursuant to (A) its Observation Rights (as defined in the Initial Purchase
Agreement) and (B) through its nominees to the Company’s Board of
Directors appointed pursuant to the terms of the August 2007 Securities
Purchase Agreement, (iii)  have been given an opportunity to ask
questions, to the extent such Buyer considered necessary, and have received
answers from, officers of the Company concerning the business, finances and
operations of the Company and information relating to the offer and sale of the
Shares, and (iv) have received or had an opportunity to obtain such
additional information as they deem necessary to make an informed investment
decision with respect to the purchase of the Shares.

 

3.5           Restrictions on
Transfer.  Such Buyer
understands that except as provided in the Registration Rights Agreement,
the issuance of the Shares has not been and is not being registered under the
1933 Act or any applicable state securities laws. Such Buyer may be required to
hold the Shares indefinitely and the Shares may not be transferred unless (i) the
Shares are sold pursuant to an effective registration statement under the 1933
Act, or (ii) such Buyer shall have delivered to the Company an opinion of
counsel to the effect that the Shares to be sold or transferred may be sold or
transferred pursuant to an exemption from such registration, which opinion
shall be reasonably acceptable to the Company. Such Buyer understands that
until such time as the resale of the Shares has been registered under the 1933
Act as contemplated by the Registration Rights Agreement, or otherwise may be
sold 

 

5

 

pursuant to an exemption
from registration, certificates evidencing the Shares may bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of the certificates evidencing such Shares):

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”).  THE SHARES MAY NOT BE OFFERED FOR SALE,
SOLD, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF
THE CORPORATION.”

 

3.6           Consents.  Except for such Consents as Buyers may be
required to obtain prior to Closing and described in Schedule 3.6, no
Buyer will be required to obtain any Consent from any person or entity in
connection with the execution and delivery of this Agreement or the
consummation or performance of any of the transactions contemplated hereby.

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE
COMPANY

 

Except
as set forth in the Company’s Disclosure Schedule attached hereto, the Company
represents and warrants to the Buyers that:

 

4.1           Organization and Qualification.  The Company has no subsidiaries other than
the Subsidiaries.  The Company and each
of its Subsidiaries is a corporation, limited partnership, limited liability
company, or joint venture as applicable, duly organized, validly existing and
in good standing under the laws of the jurisdiction in which it is incorporated
or organized, with corporate, limited liability or limited partnership power
and authority to own, lease, use and operate its properties and to carry on its
business as now operated and conducted. 
The Company and each of its Subsidiaries is duly qualified as a foreign
corporation, limited liability company or limited partnership to do business
and is in good standing in each 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. 
Neither the Company nor any Subsidiary is in violation of any provision
of its respective certificate or articles of incorporation, partnership
agreement, bylaws or other organizational or charter documents, as the same may
have been amended.

 

4.2           Authorization;
Enforcement.  The Company
has all requisite corporate power and authority to enter into and perform this
Agreement and each of the other Transaction Documents and to consummate the
transactions contemplated hereby and thereby and to issue the Shares, in
accordance with the terms hereof and thereof. 
The execution and delivery of this Agreement and each of the other
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby (including without limitation, the
issuance of the Shares) 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. 
This Agreement and each of the other Transaction Documents have been
duly executed and delivered by the Company. 
This Agreement and each of the other Transaction Documents will
constitute upon execution and delivery by the Company, a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by:  (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws in effect that limit creditors’
rights generally; (ii) equitable limitations on the availability of
specific remedies; (iii) principles of equity (regardless of whether such
enforcement 

 

6

 

is considered in a
proceeding in law or in equity); and (iv) to the extent rights to
indemnification and contribution may be limited by federal securities laws or
the public policy underlying such laws.

 

4.3           Capitalization;
Valid Issuance of Securities .  As of the date hereof, the authorized capital
stock of the Company consists of 100,000,000 shares of Common Stock, of which
76,275,912  shares are issued and
outstanding, and no shares are held by the Company as treasury shares, and
10,000,000 shares of preferred stock, of which no shares are issued and
outstanding.  All of such outstanding
shares of Common Stock are duly authorized, validly issued, fully paid and
nonassessable.  The Shares have been duly
authorized and when issued pursuant to the terms hereof will be validly issued,
fully paid and nonassessable and will not be subject to any encumbrances,
preemptive rights or any other similar contractual rights of the stockholders
of the Company or any other person.  No
shares of capital stock of the Company are subject to preemptive rights of the
stockholders of the Company or any liens or encumbrances imposed through the
actions or failure to act of the Company. 
As of the date of this Agreement, except to the extent described in the
preceding sentence and Schedule 4.3 attached hereto, (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, (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 the BF 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 other
than the Initial Securities Purchase Agreement and August 2007 Securities
Purchase Agreement) that will be triggered by the issuance of the Shares.  Except as may be described in any documents
which have been publicly filed by any of the Company’s stockholders, to the
Company’s knowledge, there are no agreements between the Company’s stockholders
with respect to the voting or transfer of the Company’s capital stock or with
respect to any other aspect of the Company’s affairs.

 

4.4           No Conflicts.  The execution, delivery and performance of
this Agreement and each of the other Transaction Documents by the Company and
the consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the issuance of Shares) will not (i) conflict
with or result in a violation of any provision of the Articles of
Incorporation, as amended, of the Company or the Bylaws, as amended, of the
Company, (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 could become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any material 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 Legal
Requirement (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 for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect).  Except as set forth in Schedule 4.4,
neither the Company nor any of its Subsidiaries is in violation of its
certificate or articles of incorporation, bylaws 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 would result in a
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 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. 
Except with 

 

7

 

respect to any filings or
notices related to the issuance of the Shares to be filed with the OTC Bulletin
Board, if any, 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 the Transaction Documents.  All consents, authorizations, orders, filings
and registrations that the Company is required to effect or obtain pursuant to
the preceding sentence have been obtained or effected on or prior to the date
hereof.

 

4.5           SEC Documents; Financial
Statements.

 

a.     Except as set forth on Schedule 4.5,
since December 31, 2005, 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 1933 Act and the
1934 Act (all of the foregoing filed prior to the date hereof and all exhibits
included therein and financial statements and schedules thereto and documents
(other than exhibits to such documents) incorporated by reference therein,
being hereinafter referred to herein as the “SEC Documents”), or has timely filed for a valid
extension of such time of filing and has filed any such SEC Documents prior to
the expiration of any such extension.  As
of their respective dates, the SEC Documents complied in all material respects
with the requirements of the Securities Act and the Exchange 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, except as subsequently disclosed in later-filed SEC Documents.

 

b.     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 (“GAAP”), 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, year end adjustments 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,
2006, 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 taken in the aggregate would not reasonably be expected to have
a Material Adverse Effect.

 

c.     The Company has
established and maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15(e) under the 1934 Act).  Such disclosure controls and procedures:  (A) are designed to ensure that material
information relating to the Company and its Subsidiaries is made known to the
Company’s chief executive officer, president, chief operating officer and its
chief financial officer by others within those entities, particularly during
the periods in which the Company’s reports and filings under the 1934 Act are
being prepared, (B) have been evaluated for effectiveness as of the end of
the most recent annual period reported to the SEC, and (C) are effective
to perform the functions for which they were established.  Except as set forth on Schedule 4.5,
neither the auditors of the Company nor the Board of Directors of the Company
has been advised of: (x) any significant deficiencies or material
weaknesses in the design or operation of the internal controls over financial
reporting (as such 

 

8

 

term is defined in Rule 13a-15(f) under
the 1934 Act) of the Company that have materially affected the Company’s
internal control over financial reporting; or (y) any fraud, whether or
not material, that involves management or other employees who have a role in
the internal controls over financial reporting of the Company.

 

4.6           Absence of
Certain Changes.  Except with
respect to the Acquisition, transactions disclosed in the SEC Documents, and the
transactions contemplated hereby and by each of the other Transaction
Documents, since December 31, 2006, (i) the Company and each of its
Subsidiaries has conducted its business only in the ordinary course, consistent
with past practice, and since that date, no changes have occurred which would
reasonably be expected to have a Material Adverse Effect; and (ii) the
Company has not incurred any liabilities (contingent or otherwise) other than (A) trade
payables, accrued expenses and other liabilities incurred in the ordinary
course of business consistent with past practice and (B) liabilities not
required to be reflected on the Company’s financial statements pursuant to GAAP
or required to be disclosed in filings made with the SEC.

 

4.7           Absence of
Litigation.  Except as
set forth in Schedule 4.7, there is no Action pending or, to the
knowledge of the Company or any of its Subsidiaries, threatened against or
affecting the Company or any of its Subsidiaries that (i) adversely
affects or challenges the legality, validity or enforceability of this
Agreement, or (ii) would, if there were an unfavorable decision, have or
reasonably be expected to have a Material Adverse Effect.  Neither the Company nor any of its
Subsidiaries, nor any director or officer thereof (in his or her capacity as
such), is or has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim of breach of
fiduciary duty.  There has not been, and
to the knowledge of the Company, there is not pending any investigation by the
SEC involving the Company or any current or former director or officer of the
Company (in his or her capacity as such). 
The SEC has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company under the 1934
Act or the 1933 Act.

 

4.8           Intellectual
Property.  The Company
and each of its Subsidiaries owns or possesses the requisite licenses or rights
to use all patents, patent applications, patent rights, inventions, know-how,
trade secrets, copyrights, trademarks, trademark applications, service marks,
service names, trade names and copyrights (“Intellectual Property”) necessary to
enable it to conduct its business as now operated (and, to the Company’s
knowledge, as presently contemplated to be operated in the future); 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 to the Company’s knowledge, the
Company’s or its Subsidiaries’ current products and processes do not infringe
on any Intellectual Property or other rights held by any person, except where
any such infringement would not reasonably be expected to have a Material
Adverse Effect.

 

4.9           Tax Status.  The Company and each of its Subsidiaries has
made or filed all federal, state and foreign income and all other material 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.

 

9

 

 

4.10                           Permits;
Compliance.

 

a.               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, “Permits”),
and there is no Action pending or, to the knowledge of the Company, threatened
regarding suspension or cancellation of any of the Permits.  Neither the Company nor any of its
Subsidiaries is in conflict with, or in default or violation of, any of the
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.

 

b.              Since December 31,
2006, no event has occurred or, to the knowledge of the Company, circumstance
exists that (with or without notice or lapse of time): (a) would
reasonably be expected to constitute or result in a violation by the Company or
any of its Subsidiaries, or a failure on the part of the Company or its
Subsidiaries to comply with, any Legal Requirement; or (b) would
reasonably be expected to give rise to any obligation on the part of the
Company or any of its Subsidiaries to undertake, or to bear all or any portion
of the cost of, any remedial action of any nature in connection with a failure
to comply with any Legal Requirement, except in either case that would not
reasonably be expected to have a Material Adverse Effect.  Neither the Company nor any of its
Subsidiaries has received any notice or other communication from any regulatory
authority or any other person, nor does the Company have any knowledge
regarding: (x) any actual, alleged, possible or potential violation of, or
failure to comply with, any Legal Requirement, or (y) any actual, alleged,
possible or potential obligation on the part of the Company or any of its
Subsidiaries to undertake, or to bear all or any portion of the cost of, any
remedial action of any nature in connection with a failure to comply with any
Legal Requirement, except in either case that would not reasonably be expected
to have a Material Adverse Effect.

 

c.               The Company is
in compliance in all material respects with the provisions of the Sarbanes-Oxley
Act of 2002 and the rules and regulations promulgated thereunder that are
applicable to it and has taken reasonable steps such that the Company expects
to be in a position to comply with the requirements of Section 404 of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated
thereunder at such time as Section 404 becomes applicable to the Company.

 

d.              The Company is,
and has reason to believe that for the foreseeable future it will continue to
be, in compliance with all applicable rules of the OTC Bulletin
Board.  The Company has not received
notice from the OTC Bulletin Board that the Company is not in compliance with
the rules or requirements thereof. 
The issuance and sale of the Shares under this Agreement does not
contravene the rules and regulations of the OTC Bulletin Board, and no
approval of the stockholders of the Company is required for the Company to
issue the Shares as contemplated by this Agreement.

 

4.11                           Environmental
Matters.  “Environmental Laws” shall mean, collectively,
all Legal Requirements, including any federal, state, local or foreign statute,
laws, rule, regulation, ordinance, code, policy or rule of common law or
any judicial or administrative interpretation thereof, including any judicial
or administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, “Hazardous
Materials”) or to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Materials.  Except for such matters as
could not, singly or in the aggregate, reasonably be expected to result in a
Material Adverse Effect or as set forth on Schedule 4.11: (i) the
Company and its Subsidiaries have complied and are in compliance with all
applicable Environmental Laws; (ii) without 

 

10

 

limiting the generality of the foregoing, the
Company and its Subsidiaries have obtained, have complied, and are in
compliance with all Permits that are required pursuant to Environmental Laws
for the occupation of their respective facilities and the operation of their
respective businesses; (iii) none of the Company or its Subsidiaries has
received any written notice, report or other information regarding any actual
or alleged violation of Environmental Laws, or any liabilities or potential
liabilities (including fines, penalties, costs and expenses), including any investigatory,
remedial or corrective obligations, relating to any of them or their respective
facilities arising under Environmental Laws, nor, to the knowledge of the
Company is there any factual basis therefore; (iv) there are no
underground storage tanks, polychlorinated biphenyls, urea formaldehyde or
other hazardous substances (other than small quantities of hazardous substances
for use in the ordinary course of the operation of the Company’s and its
Subsidiaries’ respective businesses, which are stored and maintained in
accordance and in compliance with all applicable Environmental Laws), in, on,
over, under or at any real property owned or operated by the Company and/or its
Subsidiaries; (v) there are no conditions existing at any real property or
with respect to the Company or any of its Subsidiaries that require remedial or
corrective action, removal, monitoring or closure pursuant to the Environmental
Laws and (vi) to the knowledge of the Company, neither the Company nor any
of its Subsidiaries has contractually, by operation of law, or otherwise
amended or succeeded to any liabilities arising under any Environmental Laws of
any predecessors or any other Person.

 

4.12                           Title to
Property.  Except for
any lien for current taxes not yet delinquent or which are being contested in
good faith and by appropriate proceedings, the Company and its Subsidiaries
have good and marketable title to all real property and all personal property
owned by them which is material to the business of the Company and its Subsidiaries.  Any leases of real property and facilities of
the Company and its Subsidiaries are valid and effective in accordance with
their respective terms, except as would not have a Material Adverse Effect.

 

4.13                           No Investment
Company or Real Property Holding Company.  The Company is not, and upon the issuance and
sale of the Shares as contemplated by this Agreement will not be, an “investment
company” as defined under the Investment Company Act of 1940 (“Investment Company”).  The Company is not controlled by an
Investment Company.  The Company is not a
United States real property holding company, as defined under the Internal
Revenue Code of 1986, as amended (the “Code”).

 

4.14                           No Brokers.  The Company has taken no action which would
give rise to any claim by any person for brokerage commissions, transaction
fees or similar payments relating to this Agreement or the transactions
contemplated hereby.

 

4.15                           Registration
Rights.  Except pursuant to the
Registration Rights Agreement, the BF Registration Rights Agreement and as
otherwise set forth in Schedule 4.15 effective upon the Closing, neither
the Company nor any Subsidiary is currently subject to any agreement providing
any person or entity any rights (including piggyback registration rights) to
have any securities of the Company or any Subsidiary registered with the SEC or
registered or qualified with any other governmental authority.

 

4.16                           Exchange Act
Registration.  The Common
Stock is registered pursuant to Section 12(b) of the 1934 Act, and
the Company has taken no action designed to, or which, to the knowledge of the
Company, is likely to have the effect of, delisting the registration of the
Common Stock under the 1934 Act.

 

4.17                           Labor Relations.  No labor or employment dispute exists or, to
the knowledge of the Company, is imminent or threatened, with respect to any of
the employees of the Company that has, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

 

11

 

4.18                           Transactions
with Affiliates and Employees.  Except as set forth in the SEC Documents, and
Schedule 4.18, none of the officers or directors of the Company, and to
the knowledge of the Company, none of the employees of the Company, is presently
a party to any transaction or agreement with the Company (other than for
services as employees, officers and directors) exceeding $60,000, including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or
from, or otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer,
director, trustee or partner.

 

4.19                           Insurance.  The Company and its Subsidiaries have
insurance policies in full force and effect of a type, covering such risks and
in such amounts, and having such deductibles and exclusions as are customary
for conducting businesses and owning assets similar in nature and scope to
those of the Company and its Subsidiaries. 
The amounts of all such insurance policies and the risks covered thereby
are in accordance in all material respects with all material contracts and
agreements to which the Company and/or its Subsidiaries is a party and with all
applicable Legal Requirements.  With
respect to each such insurance policy:  (i) the
policy is valid, outstanding and enforceable in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws in effect that
limit creditors’ rights generally, equitable limitations on the availability of
specific remedies and principles of equity (regardless of whether such
enforcement is considered in a proceeding in law or in equity); (ii) neither
the Company nor any of its Subsidiaries is in breach or default with respect to
its obligations thereunder in any material respect; and (iii) no party to
the policy has repudiated, or given notice of an intent to repudiate, any
provision thereof.

 

4.20                           Approved
Acquisitions of Shares; No Anti-Takeover Provisions.  Except as otherwise set forth in Schedule
4.2, and subject to and contingent on the Buyer’s covenant in Section 5.7 the Company has taken all necessary action, if any,
required under the laws of the State of Nevada or otherwise to allow the Buyer
to acquire the Shares pursuant to this
Agreement.  The Company has no control share
acquisition, business combination, poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under the
Company’s Articles of Incorporation or Bylaws, each as amended (or similar
charter documents), that is or could become applicable to the Buyers as a
result of the Buyers and the Company fulfilling their obligations or exercising
their rights under this Agreement, including without limitation the Company’s
issuance of the Shares and the Buyers’ ownership
of the Shares.  In
addition, the Company has opted out of the provisions of the Nevada Revised
Statutes (“NRS”)
pertaining to the acquisition of a controlling interest (NRS 78.378 through
78.3793).  As of the date hereof, the
Company had less than 200 “stockholders of record” and is not considered a “resident
domestic corporation” for purposes of §78.411 through §78.444 of the NRS.

 

4.21                           ERISA.  Based upon the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), and the regulations and published
interpretations thereunder: (i) neither the Company nor any of its
Subsidiaries has engaged in any Prohibited Transactions (as defined in Section 406
of ERISA and Section 4975 of the Code); (ii) the Company and each of
its Subsidiaries has met all applicable minimum funding requirements under Section 302
of ERISA in respect to its plans; (iii) neither the Company nor any of its
Subsidiaries has any knowledge of any event or occurrence which would cause the
Pension Benefit Guaranty Corporation to institute proceedings under Title IV of
ERISA to terminate any employee benefit plan(s); neither the Company nor any of
its Subsidiaries has any fiduciary responsibility for investments with respect
to any plan existing for the benefit of persons other than its or such
Subsidiary’s employees; and (v) neither the Company nor any of its
Subsidiaries has withdrawn, completely or partially, from any multi-employer
pension plan so as to incur liability under the Multiemployer Pension Plan
Amendments Act of 1980.

 

12

 

4.22                           Disclosure.  The Company understands and confirms that the
Buyers will rely on the representations and covenants contained herein in
effecting the transactions contemplated by this Agreement and the other
Transaction Documents.  All
representations and warranties provided to the Buyers including the disclosures
in the Company’s disclosure schedules attached hereto furnished by or on behalf
of the Company, taken as a whole are true and correct and do not contain any
untrue statement of material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. 
No event or circumstance has occurred or information exists with respect
to the Company or its Subsidiaries or its or their businesses, properties,
prospects, operations or financial conditions, which, under applicable law, rule or
regulation, requires public disclosure or announcement by the Company but which
has not been so publicly announced or disclosed.

 

ARTICLE 5

COVENANTS

 

5.1                                 Form D;
Blue Sky Laws.  Upon
completion of the Closing, the Company shall file with the SEC a Form D
with respect to the Shares as required under Regulation D and each applicable
state securities commission and will provide a copy thereof to the Buyers
promptly after such filing.

 

5.2                                 Use of Proceeds.  The Company shall use the proceeds from the
sale of the Shares to complete the Acquisition.

 

5.3                                 Expenses.  The Company shall reimburse the Buyers for
all reasonable expenses incurred by them in connection with their due diligence
review of the Company and the Target, and the negotiation, preparation,
execution, delivery and performance of this Agreement and the other Transaction
Documents and the transactions hereunder and thereunder,  including, without limitation, reasonable
attorneys’ fees and expenses, and out-of-pocket travel costs and expenses.

 

5.4                                 No Integration.  The Company shall not make any offers or
sales of any security (other than the Shares) under circumstances that would
require registration of the Shares being offered or sold hereunder under the
1933 Act or cause the offering of the Shares to be integrated with any other
offering of securities by the Company in such a manner as would require the
Company to seek the approval of its stockholders for the issuance of the Shares
under any stockholder approval provision applicable to the Company or its
securities.

 

5.5                                 Board
Designee(s).  The parties
hereto acknowledge and affirm that the Buyers shall have  the right to appoint members of the Company’s
Board of Directors as set forth in Section 5.5 of the August 2007
Securities Purchase Agreement.

 

5.6                                 Observation
Rights.  The parties hereto acknowledge
and affirm that the Buyers shall have Observation Rights (as defined in the
Initial Securities Purchase Agreement) as set forth in Section 5.6 of the
Initial Securities Purchase Agreement.

 

5.7                                 Approval of
Acquisition.  The Company
shall not revoke its approval of the acquisition of the Shares by the
Buyers.  The Company shall use its best
efforts to ensure that the acquisition of the Shares by the Buyers shall not be
made subject to the provisions of any anti-takeover laws and regulations of any
governmental authority, including without limitation, the applicable provisions
of the Nevada Revised Statutes, and any provisions of an anti-takeover nature
adopted by the Company or any of its Subsidiaries or contained in the Company’s
Articles of Incorporation, Bylaws, or the organizational documents of any of
its Subsidiaries, each as amended.

 

13

 

5.8                                 Participation
in Future Issuances.  The parties
hereto acknowledge and affirm that the Buyers shall continue to have the right
to participate in Future Issuances (as defined in the Initial Securities
Purchase Agreement) set forth in Section 5.7 of the Initial Securities
Purchase Agreement.

 

ARTICLE 6

CONDITIONS TO THE COMPANY’S OBLIGATION

 

The
obligation of the Company hereunder to issue and sell the Shares to the Buyers
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:

 

6.1                                 Delivery of
Transaction Documents.  The
Buyers shall have executed and delivered the Transaction Documents to which
they are a party to the Company.

 

6.2                                 Payment of
Purchase Price.  The Buyers
shall have delivered the Purchase Price in accordance with Section 2.2 above.

 

6.3                                 Representations
and Warranties.  The
representations and warranties of the Buyers shall be true and correct in all
material respects (provided, however, that such qualification shall only apply
to representations or warranties not otherwise qualified by materiality) 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),
and the applicable 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 applicable
Buyer at or prior to the Closing Date.

 

6.4                                 Litigation.  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.

 

6.5                                 Acquisition of
Target.  All of the conditions
necessary for the Acquisition to be consummated shall have been satisfied and
the Company and the parties to the Target MIPA are proceeding to closing
thereunder, subject to the purchase of the Shares under this Agreement.

 

6.6                                 No Prohibition.  Neither the consummation nor
the performance of the acquisition of the Shares hereunder will materially
contravene, or conflict with, or result in a material violation of (a) any
applicable Legal Requirement, or (b) any Legal Requirement that has been
published, introduced, or otherwise proposed by or before any Governmental
Body.

 

ARTICLE 7

CONDITIONS TO THE BUYERS’ OBLIGATION

 

The
obligation of the Buyers hereunder to purchase the Shares 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 the Buyers’ sole
benefit and may be waived by the Buyers at any time in its sole discretion:

 

14

 

7.1                                 Delivery of
Transaction Documents; Issuance of Shares.  The Company shall have executed and delivered
the Transaction Documents to the Buyers and shall deliver the Transfer
Instructions to the transfer agent for the Company’s Common Stock to issue
certificates in the name of each Buyer representing the Shares being purchased
by such Buyer.  The Company shall deliver
a copy of the Transfer Instructions to the Buyers at the Closing.

 

7.2                                 Representations
and Warranties.  The
representations and warranties of the Company shall be true and correct in all
material respects (provided, however, that such qualification shall only apply
to representations or warranties not otherwise qualified by materiality) 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)
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.

 

7.3                                 Consents.  Any consents or
approvals required to be secured by the Company for the consummation of the
transactions contemplated by the Transaction Documents shall have been obtained
and shall be reasonably satisfactory to the Buyers.

 

7.4                                 Litigation.  No Action 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.

 

7.5                                 Opinion.  The Buyers 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 Buyers with respect to the matters set
forth in Exhibit A attached hereto.

 

7.6                                 No Material
Adverse Change.  There shall
have been no material adverse change in the assets, liabilities (contingent or
otherwise), affairs, business, operations, prospects or condition (financial or
otherwise) of the Company prior to the Closing Date.

 

7.7                                 Acquisition of
Target.  All of the conditions
necessary for the Acquisition to be consummated shall have been satisfied and
the Company and the parties to the Target MIPA are proceeding to closing
thereunder, subject to the purchase of the Shares under this Agreement.

 

7.8                                 No Prohibition.  Neither the consummation nor
the performance of the acquisition of the Shares hereunder will materially
contravene, or conflict with, or result in a material violation of (a) any
applicable Legal Requirement, or (b) any Legal Requirement that has been
published, introduced, or otherwise proposed by or before any Governmental
Body.

 

ARTICLE 8

TERMINATION

 

8.1                                 Termination Provisions.  This Agreement may be terminated at any time
before the Closing Date:

 

a.               By mutual consent of the Company and the Buyers;

 

b.              By either the Company or the Buyers as applicable, in the event that any of
the conditions precedent to their respective obligations to consummate the
transactions contemplated hereby 

 

15

 

as set
forth in Article 6 or Article 7, through no fault of
the terminating party, have not been met and satisfied and have become
impossible of fulfillment;

 

c.               By either the Company or the Buyers if the Closing Date does not occur
within one hundred twenty (120) days after the date hereof, or such later date
as the parties may mutually agree upon (provided that the terminating party is
not then in material breach of any representation, warranty, covenant or other
agreement contained herein);

 

d.              By the Buyers if there has been any material breach of any representation,
warranty, agreement or covenant in this Agreement by the Company, which breach
cannot be or has not been cured within thirty (30) days after giving written
notice thereof to the Company; and

 

e.               By the Company if there has been any material breach of any representation,
warranty, agreement or covenant in this Agreement by the Buyers, which breach
cannot be or has not been cured within thirty (30)  days after giving written notice thereof to
the Buyers.

 

8.2                                 Effect of Termination.  Upon the termination of this Agreement
pursuant to the terms hereof, this Agreement will be void and neither party
will have any further liability obligations with respect hereof, except as
otherwise provided in this Agreement or except and to the extent termination
results from the intentional breach by a party of any of its representations,
warranties or covenants hereunder.

 

ARTICLE 9

INDEMNIFICATION

 

9.1                                 Indemnification
by the Company.   The
Company agrees to indemnify each Buyer and its affiliates and hold each Buyer
and its affiliates harmless from and against any and all liabilities, losses,
damages, costs and expenses of any kind (including, without limitation, the
reasonable fees and disbursements of such Buyer’s counsel in connection with
any investigative, administrative or judicial proceeding), which may be
incurred by such Buyer or such affiliates as a result of any claims made
against such Buyer or such affiliates by any person that relate to or arise out
of (i) any breach by the Company of any of its representations, warranties
or covenants contained in this Agreement or in the Transaction Documents (other
than the Registration Rights Agreement, which contains separate indemnification
provisions), or (ii) any litigation, investigation or proceeding
instituted by any person with respect to this Agreement or the Shares
(excluding, however, any such litigation, investigation or proceeding which
arises solely from the acts or omissions of such Buyer or its affiliates).

 

9.2                                 Notification.  Any person entitled to
indemnification hereunder (“Indemnified Party”) will (i) give prompt notice to
the Company, of any third party claim, action or suit with respect to which it
seeks indemnification (the “Claim”) (but omission of such notice shall not relieve
the Company from liability hereunder except to the extent it is actually
prejudiced by such failure to give notice), specifying in reasonable detail the
factual basis for the Claim, the amount thereof, estimated in good faith, and
the method of computation of the Claim, all with reasonable particularity and
containing a reference to the provisions of this Agreement in respect of which
such indemnification is sought with respect to the Claim, and (ii) unless
in such Indemnified Party’s reasonable judgment a conflict of interest may
exist between such Indemnified Party and the Company with respect to such
claim, permit the Company to assume the defense of the Claim with counsel
reasonably satisfactory to the Indemnified Party.  The Indemnified Party shall cooperate fully
with the Company with respect to the defense of the Claim and, if the Company
elects to assume control of the defense of the Claim, the Indemnified Party
shall have the right to participate in the defense of the Claim at its own
expense.  If the Company does not elect
to 

 

16

 

assume control or otherwise
participate in the defense of the Claim, then the Indemnified Party may defend
through counsel of its own choosing.  If
such defense is not assumed by the Company, the Company will not be subject to
any liability under this Agreement or otherwise for any settlement made without
its consent (but such consent will not be unreasonably withheld or delayed). If
the Company elects not to or is not entitled to assume the defense of a Claim,
it will not be obligated to pay the fees and expenses of more than one counsel for
all Indemnified Parties with respect to the Claim, unless an actual conflict of
interest exists between such Indemnified Party and any other of such
Indemnified Parties with respect to the Claim, in which event the Company will
be obligated to pay the fees and expenses of such additional counsel or
counsels.

 

ARTICLE 10

GOVERNING LAW; MISCELLANEOUS

 

10.1                           Governing Law.  This Agreement shall be enforced, governed by
and construed in accordance with the laws of the State of Wisconsin applicable
to agreements made and to be performed entirely within such state, without
regard to the principles of conflict of laws. 
The parties hereto hereby submit to the exclusive jurisdiction of the
United States Federal Courts located in the State of Wisconsin  with respect to any dispute arising under
this Agreement, the agreements entered into in connection herewith or the
transactions contemplated hereby or thereby. 
All parties irrevocably waive the defense of an inconvenient forum to
the maintenance of such suit or proceeding. 
All parties further agree that service of process upon a party mailed by
first class mail shall be deemed in every respect effective service of process
upon the party in any such suit or proceeding. 
Nothing herein shall affect any party’s right to serve process in any
other manner permitted by law. All parties agree that a final non-appealable
judgment in any such suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on such judgment or in any other lawful manner.  The party which does not prevail in any
dispute arising under this Agreement shall be responsible for all reasonable
fees and expenses, including reasonable attorneys’ fees, incurred by the
prevailing party in connection with such dispute.

 

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

 

10.3                           Headings.  The headings of this Agreement are for
convenience of reference only and shall not form part of, or affect the
interpretation of, this Agreement.

 

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

 

10.5                           Entire
Agreement; Amendments.  This
Agreement amends and restates in its entirety the Original Agreement and
together with the instruments referenced herein contains the entire
understanding of the parties with respect to the matters covered herein and
therein and supersedes all previous understandings or agreements between the
parties with respect to such matters, including but not limited to Original
Agreement.  No provision of this
Agreement may be waived other than by an instrument in 

 

17

 

writing signed by the party
to be charged with enforcement.  The
provisions of this Agreement may be amended only by a written instrument signed
by the Company and the Buyers.

 

10.6                           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:

 

If to the Company:

 

Tower Tech Holdings, Inc.

100 Maritime Drive, Suite 3C

Manitowoc, Wisconsin 54220

Telephone: (920) 684-5531

Facsimile:  (920) 684-5579

Attention:  J. Cameron Drecoll

 

With copy to:

 

Fredrikson & Byron,
P.A.

4000 U.S. Bank Plaza

200 South Sixth Street

Minneapolis, MN  55402-1425

Telephone: (612) 492-7000

Facsimile:  (612) 492-7077

Attention:  Daniel A. Yarano

 

If to the Buyers:

 

Tontine Partners, L.P.

55 Railroad Avenue, 1st
Floor

Greenwich, Connecticut 06830

Attention: Mr. Jeffrey
L. Gendell

Telephone: (203) 769-2000

Facsimile:
(203) 769-2010

 

With copy to:

 

Barack Ferrazzano Kirschbaum &
Nagelberg LLP

200 W. Madison Street, Suite 3900

Chicago, Illinois  60606

Attention: Sarah M.
Bernstein, Esq.

Telephone:                                    (312) 984-3100

Facsimile:                                            (312) 984-3150

 

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

 

18

 

10.7                           Successors and
Assigns.  This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
assigns.  The Company shall not assign
this Agreement or any rights or obligations hereunder without the prior written
consent of the Buyers.

 

10.8                           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.

 

10.9                           Publicity.  The Company and the Buyers shall have the
right to review a reasonable period of time before issuing any press releases
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 Buyers, to make any press release with respect to such
transactions as is required by applicable law and regulations (although the
Buyers 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). 
Notwithstanding the foregoing, the Company shall file with the SEC a Form 8-K
disclosing the transactions herein within four (4) business days of the
Closing Date and attach the relevant agreements and instruments thereto, and
the Buyers may make such filings as may be required under Section 13 and Section 16
of the 1934 Act.

 

10.10                     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.

 

10.11                     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.

 

10.12                     Rights
Cumulative.  Each and
all of the various rights, powers and remedies of the parties shall be
considered cumulative with and in addition to any other rights, powers and
remedies which or the Transaction Documents such parties may have at law or in
equity in the event of the breach of any of the terms of this Agreement.  The exercise or partial exercise of any
right, power or remedy shall neither constitute the exclusive election thereof
nor the waiver of any other right, power or remedy available to such party.

 

10.13                     Survival.  Any covenant or agreement in this Agreement
required to be performed following the Closing Date, shall survive the Closing
Date. Without limitation of the foregoing, the respective representations and
warranties given by the parties hereto shall survive the Closing Date and the
consummation of the transactions contemplated herein, but only for a period of
the earlier of (i) three (3) years following the Closing Date and (ii) the
applicable statute of limitations with respect to each representation and
warranty, and thereafter shall expire and have no further force and effect..

 

10.14                     Knowledge.  The term “knowledge of the Company” or any
similar formulation of knowledge shall mean, the actual knowledge after due
inquiry of an executive officer of the Company.

 

10.15                     Assignment to
T25.  By execution of this
Agreement, each of the undersigned hereby confirms its agreement that TCP shall
not be entitled to the rights and privileges and shall not be bound by the
obligations of a “Buyer,” or otherwise, under this Agreement and TCP does
hereby assign to T25 any and all of its rights and obligations under the
Original Agreement and T25 does hereby assume and agrees to discharge any and
all of TCP’s obligations under Original Agreement.

 

19

 

                IN WITNESS WHEREOF, the undersigned have caused this
Agreement to be duly executed as of the date first above written.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  TOWER TECH HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Steven A. Huntington

  	
   

  
	
   

  	
  Name:

  	
  Steven A. Huntington

  	
   

  
	
   

  	
  Title: 

  	
  CFO

  	
   

  
	
   

  	
   

  
	
   

  	
  TCP:

  
	
   

  	
   

  
	
   

  	
  TONTINE CAPITAL PARTNERS,
  L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Tontine Capital
  Management, L.L.C, its general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey L. Gendell

  	
   

  
	
   

  	
   

  	
  Jeffrey L. Gendell, as
  managing member

  
	
   

  	
   

  
	
   

  	
  BUYERS:

  
	
   

  	
   

  
	
   

  	
  TONTINE 25 OVERSEAS MASTER
  FUND, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Tontine Capital Management,
  L.L.C, its general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey L. Gendell

  	
   

  
	
   

  	
   

  	
  Jeffrey L. Gendell, as
  managing member

  
	
   

  	
   

  
	
   

  	
  TONTINE PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Tontine Management,
  L.L.C., its general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey L. Gendell

  	
   

  
	
   

  	
   

  	
  Jeffrey L. Gendell, as managing
  member

  
							

 

 

S-1

 

SCHEDULE 1

 

	
  NAME

  	
   

  	
  JURISDICTION OF ORGANIZATION
  AND

  FORM OF ENTITY

  	
   

  	
  NUMBER OF

  SHARES

  	
   

  	
  PURCHASE 

  PRICE

  
	
  Tontine Partners, L.P.

  	
   

  	
  Delaware Limited Partnership

  	
   

  	
  1,531,250

  	
   

  	
  $

  	
  12,985,000

  
	
  Tontine 25 Overseas Master Fund, L.P.

  	
   

  	
  Cayman Islands Limited Partnership

  	
   

  	
  500,000

  	
   

  	
  $

  	
  4,240,000

  

 

 

 

EXHIBIT A

 

FORM OF LEGAL OPINION

 

                1.  The Company
and each of its Subsidiaries is a corporation, validly existing and in good
standing under the laws of the state of the jurisdiction in which it is
incorporated.  The Company and each of
its Subsidiaries are duly qualified as a foreign corporation to do business and
are in good standing in the States of Wisconsin or Illinois.

 

                2.  The Company
has all necessary corporate power and authority to execute, deliver and perform
its obligations under each of the Transaction Documents. The execution,
delivery and performance of each of the Transaction Documents have been duly
authorized by all necessary corporate action on the part of the Company.

 

                3.  The Company
has all requisite corporate power and authority to own and operate its property
and to conduct the business in which it is currently engaged.

 

                4.  Each
of the Transaction Documents has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.

 

                5.  Except as set forth in Section [    ]
of the Disclosure Schedules, the issuance, sale and delivery of the Shares and
the execution, delivery and performance by the Company of the Transaction
Documents and the consummation by the Company of the transactions contemplated
thereby do not violate or result in a breach of or default under the Articles
of Incorporation, as amended, or the Bylaws or any requirement of law that to
our knowledge, is applicable to the performance by the Company of the
transactions contemplated by the Transaction Documents.

 

                6.  To our knowledge, there are no legal actions,
suits, proceedings, or disputes pending or threatened against, or affecting,
the Company, at law, in equity, in arbitration or before any governmental
authority that contest the execution, validity or performance of the
Transaction Documents.

 

                7.  Except for filings, authorizations or
approvals contemplated by the Agreement, to our knowledge no authorizations or
approvals of, and no filings with, any governmental authority are necessary or
required for the execution, delivery or performance by, or enforcement against,
the Company of any of the Transaction Documents.

 

                8.  The Shares are duly authorized and, when
issued and sold to the Buyers after payment therefor in accordance with the
terms of the Transaction Documents, will be validly issued, fully paid and
non-assessable.

 

                9.  To our knowledge, there are no contractual
preemptive rights, rights of first refusal or similar rights with respect to
the issuance and sale of the Shares.

 

                10.  Assuming that the representations made by the
Buyers in the Agreement are true and correct and that any required filings are
made pursuant to Rule 503 of Regulation D as promulgated under the
Securities Act of 1933, the offering, sale and issuance of the Shares pursuant
to the Agreement do not require registration under the Securities Act of 1933,
as amended and the rules promulgated thereunder as they currently exist or
registration or qualification under any state securities laws.

 

 

A-1ex41.htm

    EXHIBIT
      4

    

    RAVEN
      MOON ENTERTAINMENT, INC.

    

    2008
      EQUITY COMPENSATION PLAN

     

    January
      4, 2008

    

        Raven
      Moon
      Entertainment, Inc., a Florida corporation (the "Company"), as of the Effective
      Date below, adopts this “Plan” Under the Plan, the Company may issue shares of
      the Company's common stock or grant options to acquire the Company's common
      stock (the "Stock" or “Shares”), from time to time to employees, officers,
      consultants or advisors of the Company or any of the Company's subsidiaries,
      all
      on the terms and conditions set forth herein.

     

        In
      addition, at
      the discretion of the Board of Directors, Shares may from time to time be
      granted under this Plan to individuals, including consultants or advisors,
      who
      contribute to the success of the Company or any of its subsidiaries, provided
      that bona fide services shall be rendered by consultants and advisors, and
      such
      services shall not be in connection with the offer or sale of securities in
      a
      capital-raising transaction or to directly or indirectly promote or maintain
      a
      market for the Company securities. Grants of incentive or non-qualified stock
      options and stock awards, or any combination of the foregoing, may be made
      under
      the Plan.

    

    1.
      Purpose
      of the Plan.

     

    The
      Plan is intended to compensate
      individuals (natural persons) for bona fide services to assist the Company
      or
      who contribute to the success of the Company or any of the Company's
      subsidiaries.

    

    2.
      Administration of this Plan.

    

    Administration
      of this Plan shall be
      determined by the Company's Board of Directors (the "Board"). Subject to
      compliance with applicable provisions of the governing law, the Board may
      delegate administration of this Plan or specific administrative duties with
      respect to this Plan on such terms and to such committees of the Board or any
      officer as it deems proper (hereinafter the Board or its authorized committee
      or
      officer delegate shall be referred to as "Plan Administrators" but if no others
      are ever named, it is the Board that is the Plan Administrator(s)). The
      interpretation and construction of the terms of this Plan by the Plan
      Administrators thereof shall be final and binding on all participants in this
      Plan absent a showing of demonstrable error. No member of the Plan
      Administrators shall be liable for any action taken or determination made in
      good faith with respect to this Plan. Any shares approved by a majority vote
      of
      those Plan Administrators attending a duly and properly held meeting shall
      be
      valid. Any shares approved by the Plan Administrators shall be approved as
      specified by the Board at the time of delegation.

    

    3.
      Shares of
      Stock Subject to this Plan.

     

    The
      total number of shares issued or
      issuable pursuant to this Plan shall not exceed the authorized unissued common
      stock of the Company, and it is contemplated the Plan is for a total set forth
      herein, on the last page.

     

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

    
       

    

    4.
      Reservation of Stock on Granting of Rights.

     

    At
      the time any right is granted under
      the terms of this Plan, the Company will reserve for issuance the number of
      shares of Stock subject to such right until that right is exercised or expires.
      The Company may reserve either authorized but unissued shares or issued shares
      reacquired by the Company.

    

    5.
      Eligibility.

     

    The
      Plan Administrators may grant shares
      or grant options to acquire shares of the Company's common stock to employees,
      officers, advisors or consultants of the Company or its subsidiaries, and others
      as lawfully permitted, provided that such individuals are compensated for bona
      fide services to the Company  or any of its subsidiaries and such services
      are not rendered in connection with services for which the Plan cannot
      compensate in reliance upon laws and regulations. In any case, the Plan
      Administrators shall determine, based on the foregoing limitations  and the
      Company's best interests, which consultants and advisors and others are eligible
      to  participate in this Plan. Shares shall be in the amounts, and shall
      have the rights and be subject to the restrictions, as may be determined by
      the
      Plan Administrators, all as may be within the provisions of this Plan.

     

    6.
      Terms of
      Grants and Certain Limitations on Right to Exercise.

     

        a.
      Each right to
      shares may have its terms established by the Plan Administrators at the
      time the right is granted.

    

        b.
      The terms of
      the right, once it is granted, may be reduced only as provided for in this
      Plan and under the express written provisions of the grant.

     

    c.
      Unless otherwise specifically provided by the written provisions of the
      grant or required by applicable disclosure or other legal
      requirements promulgated by the U.S. Securities and Exchange Commission
      ("SEC"), no participant of this Plan or his or her legal representative,
      legatee, or distribute will be, or shall be deemed to be, a holder of any
      shares subject to any right (as in the case of a stock option) unless and
      until such participant exercises his or her right to  acquire all or a
      portion of the Stock subject to the right and delivers any
      required consideration to the Company in accordance with the terms of this
      Plan and then only as to the number of shares of Stock acquired. Except as
      specifically provided in this Plan or as otherwise specifically provided by
      the written provisions of any grant, no adjustment to the exercise price or
      the number of shares of Stock subject to the grant shall be made for
      dividends or other rights for which the record date is prior to the date on
      which the Stock subject to the grant is acquired by the holder.

    d.
      Rights shall vest and become exercisable at such time or times and on such
      terms
      as the Plan Administrators may determine at the time of the grant of the
      right.

     

    e.
      Grants may contain such other provisions, including further
      lawful restrictions on the vesting and exercise of the grant as the Plan
      Administrators may deem advisable. 

     

        f.
      In no event
      may a grant be exercised after the expiration of its term.

    

        g.
      Grants shall
      be non-transferable, except by the laws of descent and distribution.

    

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    7.
      Exercise
      Price.

     

    The
      Plan Administrators shall establish
      the exercise price payable to the Company for shares to be obtained pursuant
      to
      any consulting or services stock options which exercise price may be amended
      from time to time as the Plan Administrators shall determine.

    

    8.
      Payment
      of Exercise Price.

     

    The
      exercise of any option shall be
      contingent on receipt by the Company of the exercise price paid in either cash,
      certified or personal check or other legal consideration, payable to the
      Company.

     

    9.
      Dilution
      or Other Adjustment.

     

    The
      shares of Common Stock subject to
      this Plan and the exercise price of outstanding options are subject to
      proportionate adjustment in the event of a stock dividend on the Common Stock
      or
      a change in the number of issued and outstanding shares of Common Stock as
      a
      result of a stock split, consolidation, or other re-capitalization. The Company,
      at its option, may adjust the grants and rights made hereunder, issue
      replacements, or declare grants void.

    

    10.
      Options
      to Foreign Nationals.

     

    The
      Plan Administrators may, in order to
      fulfill the purpose of this Plan and without amending this Plan, make grants
      to
      foreign nationals or individuals residing in foreign countries that contain
      provisions, restrictions, and limitations different from those set forth in
      this
      Plan and the Options made to United States residents in order to recognize
      differences among the countries in law, tax policy, and custom. Such grants
      shall be made in an attempt to give such individuals essentially the same
      benefits as contemplated by a grant to United States residents under the terms
      of this Plan.

    

    11.
      Listing
      and Registration of Shares.

     

    Each
      grant shall be subject to the
      requirement that if at any time the Plan Administrators shall determine, in
      their sole discretion, that it is necessary or desirable to list, register,
      or
      qualify the shares covered thereby on any securities exchange or under any
      state
      or federal law, or obtain the consent or approval of any governmental agency
      or
      regulatory body as a condition of, or in connection with, the granting of such
      rights or the issuance or purchase of shares thereunder, such right may not
      be
      exercised in whole or in part unless and until such listing, registration,
      consent, or approval shall have been effected or obtained free of any conditions
      not acceptable to the Plan Administrators.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    
       

    

    12.
      Expiration and Termination of this Plan.

     

    This
      Plan may be abandoned or terminated
      at any time by the Plan Administrators except with respect to any rights then
      outstanding under this Plan. This Plan shall otherwise terminate on the earlier
      of the date that is five years from the date first appearing in this Plan or
      the
      date on which the final share, under the Plan, may issue.

    

    SUPPLEMENT
      1, ATTACHED, IS INCORPORATED
      INTO THIS PLAN

     

    Shares:
      1,000,000,000

    

    BY
      ORDER OF THE BOARD OF
      DIRECTORS

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    SUPPLEMENT
      1

    

    

    1.     Grant
      of Shares.The Company
      shall only issue Shares or grant options as determined by the Board of
      Directors.

    

    2.     Services.Consultants
      have been or will be
      engaged by the Company and the Company has received business consultation
      services and/or promises of additional services. Services may be detailed in
      additional documentation, including confirmatory letters and agreements, as
      provided to one or more officers of the Company, or may be provided as otherwise
      acceptable to the officers.

    

    3.     Compensation.The
      Consultants are not entitled
      to receive cash compensation, unless and until any agreement to the contrary
      is
      reached with any particular Consultant. Consultants' sole compensation is the
      Shares identified herein, unless the parties agree otherwise as in the case
      of
      options. The Company makes no promise or representation as to the value of
      the
      securities.

    

    4.     Registration
      or Exemption.Notwithstanding anything
      to the contrary
      contained herein, the Shares may not be issued unless the Shares are registered
      pursuant to the Securities Act of 1933, as amended ("Act").

    

    5.     Delivery
      of
      Shares.The Company shall
      deliver, subject to the terms and conditions of this Plan, to each Consultant,
      as soon as practicable, a Certificate representing the Shares. Each Consultant
      agrees to be bound by the terms and conditions under the Plan by accepting
      delivery of the Shares, and any other terms individually agreed to in writing
      by
      the parties.

    

    6.     Company's
      Rights.The existence of
      the Shares and/or this Plan shall not affect in any way the rights of the
      Company to conduct its business.

    

    7.     Disclosure.Each
      Consultant agrees to having
      read and fully considered the disclosures under attached hereto and incorporated
      herein by reference.

    

    8.     Amendments.This
      Plan may not be amended
      unless by action of the Board of Directors.

    

    9.     Governing
      Law.This Plan shall be
      governed by the laws of the State of Florida, and the sole venue for any action
      arising hereunder or in connection herewith shall be a court of competent
      jurisdiction in the state of the headquarters of the Company.

    

    10.     Binding
      Effect.This Plan shall be
      binding upon and for the benefit of the parties hereto and their respective
      heirs, permitted successors, assigns and/or delegates.

    

    12.     Captions.The
      captions herein are for
      convenience and shall not control the interpretation of this Plan.

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    13.     Cooperation.The
      parties agree to execute such
      reasonable necessary documents upon advice of legal counsel in order to carry
      out the intent and purpose of this Plan as set forth hereinabove.

    

    14.     Gender
      and Number.Unless the
      context otherwise requires, references in this Plan in any gender shall be
      construed to include all other genders, references in the singular shall be
      construed to include the plural, and references in the plural shall be construed
      to include the singular.

    

    15.     Severability.In
      the event anyone or more of the
      provisions of this Plan shall be deemed unenforceable by any court of competent
      jurisdiction for any reason whatsoever, this Plan shall be construed as if
      such
      unenforceable provision had never been contained herein.

    

    Additionally:

    

    Item
      1 -
      Plan Information

     

        (a)
      General Plan
      Information

    

    
      	
               

            	
                    1.
                The title of the Plan is: 2008 Equity Compensation Plan, as may be
                amended
                ("Plan") and the name of the registrant whose securities are to be
                offered pursuant to the Plan is Raven Moon Entertainment
                ("Company").

            

    

     

    
      	
               

            	
                    2.
                The general nature and purpose of the Plan is to grant
                Consultants shares of the Common Stock of the Company as compensation
                for consultation services for the Company.

            

    

     

    
      	
               

            	
                    3.
                To the best of Company's knowledge, the Plan is not subject to any of
                the provisions of the Employee Retirement Income Security Act of
                1974, as amended or replaced by any subsequent law.

            

    

     

    
      	
               

            	
                    4.
                (a) The Company shall act as Plan Administrator. The Company address
                and telephone number is stated herein.

            

    

               

    The
      Company, as administrator of the
      Plan, will merely issue to the Consultants shares of Common Stock pursuant
      to
      the terms of the Plan, which may also include shares under Options or
      Options.

    

    
      	
               

            	
                  (b)Securities
                to be
                Offered.Pursuant to
                the terms of the Plan, shares of the Company's Common Stock will be
                offered, and may be offered under Options. Terms shall be set by the
                Board of Directors.

            

    

     

    
      	
               

            	
                  (c)Employees
                Who May
                Participate in the Plan.Consultants
                are the
                sole participants in this Plan. Consultants are defined to include
                various persons including advisors. Consultants are eligible to
                receive the securities provided the securities have been
                registered under the Securities Act of 1933, as amended (the
                "Act").

            

    

     

    
      	
               

            	
                  (d)Purchase
                of Securities
                Pursuant to the Plan.The Company
                shall issue the
                underlying securities to Consultants as soon as practicable
                after respective agreements are reached. In the case of Options,
                Consultants are required to pay the exercise price set by the Company
                to receive their shares.

            

    

     

    
      
         

      

      
        -6-

        
          

        

      

      
         
(e)Resale
        Restrictions.Consultants
        may assign, sell, convey or otherwise transfer the securities received,
        subject to the requirements of the Act.

    

     

    (f)
Tax
      Effects of Plan
      Participation.The Plan is
      not qualified under  Sec. 401 of the Internal Revenue Code of 1986, as
      amended or replaced by any subsequent law.

    (g)Investment
      of Funds.n/a

     

    (h)
Withdrawal
      from the Plan; Assignment of
      Interest.Withdrawal
      or termination as to the Plan may occur upon determination of the Company
      Consultants have the right to assign or hypothecate Consultant's
      interest  in the Plan, subject to Plan provisions.

     

    (i)Forfeitures
      and Penalties.n/a 

     

    (j)Charges
      and
      Deductions and Liens Therefore.n/a

     

    Item
      2
      Registrant Information and Employee Plan Annual Information.

    

    Registrant,
      upon oral or written request
      by Consultants, shall provide, without charge, the documents incorporated by
      reference in Part II, Item 3 of Company's Form S-8 Registration Statement for
      the securities as well as any other documents required to be delivered pursuant
      to SEC Rule 428(b) (17 CFR Section 230.428(b)). All requests are to be directed
      to the Company at the address provided above.

     

    
      
         

      

      
        -7-

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