Document:

<PAGE>

                           RECOM MANAGED SYSTEMS, INC.
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EXECUTED VIA FACSIMILE
----------------------

February 14, 2003 .

Lowell T. Harmison, Ph.D.
Gallery House
2022 R. Street, N.W.
Washington, D.C. 20009

RE:      Recom Managed Systems, Inc.

Dear Dr. Harmison:

We have appreciated the time you have spent evaluating the technologies of Recom
Managed  Systems,  Inc.  ("Recom").  Your  comments  to us today,  about how far
Recom's  technologies  have  already  developed  over the past few months,  were
heartening.  I am appreciative of your efforts to date and all the time you have
devoted to our efforts.

As  you  know,  Recom  is an  emerging  life  sciences  company  focused  on the
monitoring,  detection  and  researching  of  physiological  signals in order to
prevent medical  complications  and disease that impact an individual's  health.
The current  management believe you would be a valued asset to the team and that
your  insight,  talent,  and  experience  would assist  immeasurably  in Recom's
growth.  Therefore, I would like to extend an offer for you to become the Senior
Advisor to Recom with regard to technological support,  technological  strategy,
product  development,  medical advisory board development,  scientific  advisory
board  development,  and ultimately - after full and complete  productization of
Recom's current  technologies - FDA clearance of its heart  monitoring  devices;
this  would also be along with  other  surrounding  scientific  duties as may be
mutually agreed-upon between you and Recom in the future..

Being the Senior  Advisor to Recom during this time of growth is  exciting.  You
will have the  opportunity  to  participate  in the  development of cutting edge
technology  that  may one day  eliminate  phenomenon  such as heart  attacks,  a
leading cause of death, from the planet.  Notwithstanding any other benefits you
may derive from being associated with such an endeavor,  we realize your time is
valuable.  After careful review:  taking into account Recom's current and future
needs as well as the time  commitment  the  company  will ask of you as a Senior
Advisor, we have developed the following compensation plan:

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          4705 Laurel Canyon Blvd, Second Floor o Studio City, CA 91607
                  Phone 818-432-4560 o Facsimilie 818-432-4566

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<TABLE>
<CAPTION>
<S>                                 <C>
Upon Joining                        Upon joining Recom as a Senior Advisor,  you will be granted options to purchase
                                    36,000 (THIRTY SIX thousand) shares of the company's common stock and granted an
                                    equal number of shares ON THE ANNIVERSARY  DATE OF JOINING RECOM FOR YEARS 1, 2,
                                    AND 3 OF  SERVICE  TO THE  COMPANY  at the  market  price as of the date of this
                                    letter.  These  options  shall vest  quarterly  over EACH YEAR OF SERVICE TO THE
                                    COMPANY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.

Change In Control                   In the  event  that  ARC  Finance  Group is not the  fifty  one  percent  (51%)
                                    shareholder  of  Recom,  at any  time  subsequent  to the  date of this  letter
                                    (hereinafter  "change in  control"),  and in the event the change in control is
                                    consummated such that ARC voluntarily  divests itself of its shareholdings such
                                                              -----------
                                    that it is no longer in control  over  Recom,  you will  receive an  additional
                                    twenty  thousand   (20,000)  shares  in  excess  of  all  other   consideration
                                    hereunder.

Milestone Bonus                     In the event you meet product  milestones  set by the Recom Board of Directors,
                                    including,  without limitation,  the appropriate  clearances to market and sell
                                    Recom's final  products to the general  public,  you will receive an additional
                                    twenty  thousand   (20,000)  shares  in  excess  of  all  other   consideration
                                    hereunder.  Each  Board  milestone  shall  yield  an  additional  20,000  share
                                    payment to you including  THESE SPECIFIC THREE  MILESTONES:  A) PREPARATION AND
                                    FILING  OF 510K;  B) FDA  APPROVAL  OF THE 510K:  AND C)  MARKET  LAUNCH OF THE
                                    PRODUCT.  This will be  notwithstanding  an event  whereby  you  become a Board
                                    member of Recom, as Recom has consulted with separate  counsel and any conflict
                                    thereon has been waived.

NEW RECOM TECHNOLOGY PLATFORMS      TWO NEW  TECHNOLOGY  PLATFORMS  HAVE  BEEN  DISCLOSED  TO RECOM TO  BROADEN  THE
                                    COMPANY'S  BASE  AND TO MAKE  RECOM  A  STRONGER  LIFE  SCIENCE  COMPANY.  THESE
                                    PLATFORMS  PARALLEL  THE  EXISTING   CARDIO-ELECTROPHYSIOLOGICAL   BASE  TO  THE
                                    CARDIO-CHEMOPHYSIOLOGICAL  BASE AND TO A BROADER  CARDIO/GENERAL  HEALTH  STATUS
                                    PLATFORMS.  THE PLAN AND COMPENSATION  FOR EACH NEW TECHNOLOGY  PLATFORM WILL BE
                                    COMPLETED AND AGREED TO BY JULY 1, 2003.

Cash Consideration                  You shall  receive  $36,000  (thirty  six  thousand  dollars)  per year for your
                                    three-year term at Recom, payable quarterly.
</TABLE>

                                                         15
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         Note  all  compensation  provided  hereunder  will  be  subject  to any
applicable tax withholding requirements.  Of course, this contract is terminable
at the will of either  party.  IF THIS  AGREEMENT IS TERMINATED BY RECOM FOR ANY
REASON OTHER THAN FOR  NEGLIGENCE,  MISCONDUCT,  BREACH OF THE MATERIAL TERMS OF
THIS  AGREEMENT BY YOU, OR A FAILURE BY YOU TO PERFORM IN A  REASONABLE  FASHION
HEREUNDER AS SENIOR ADVISOR, THE REMAINING COMPENSATION OF THE AGREEMENT BECOMES
DUE AND PAYABLE WITHIN 90 DAYS.  Moreover,  Recom's offer is explicitly  made in
reliance  upon your  representations  and warrant that you have guided  start-up
companies such as Recom toward successful medical device or drug productization,
that you have regulatory  experience in these regards, that you are qualified to
guide Recom through these processes, and that you believe Recom represents, owns
and manages a set of  technologies,  non-invasiveness  thereof,  and other facts
that are in your view not  difficult or patently  untenable to move the ultimate
Recom products to the marketplace.  YOU WILL BE INDEMNIFIED BY RECOM AGAINST ANY
AND ALL LEGAL  ACTION  AND  EXPENSES  THAT MAY BE BROUGHT  AGAINST  YOU FROM ANY
SOURCE OTHER THAN FOR  NEGLIGENCE  OR  MISCONDUCT ON YOUR PART WHICH ARISES FROM
THIS AGREEMENT AND/OR FROM HIS SERVICES PROVIDED UNDER THIS AGREEMENT.

Any dispute  hereunder  shall be resolved by binding  arbitration in Los Angeles
County, California before the American Arbitration Association,  and judgment on
any award shall be fully binding and not subject to appeal.

We feel this  compensation  plan aligns your  interest with those of the company
and its  shareholders.  Please bear in mind that any  Advisory  compensation  is
separate from any other  compensation you may receive if selected for additional
positions with Recom or if you become employed by the company in the future. For
example,  any merger,  acquisition,  financing or sale of technologies by you to
Recom would be separately  negotiated in a separate document satisfactory to all
parties.  Any  merger,  acquisition,  financing  or sale  in  general  would  be
separately  negotiated and it is  contemplated  that you would receive  separate
consideration therefore.

If you would like to accept our  invitation  and join our fast pace and  quickly
growing company, please countersign below and the transaction will be completed.
Your signature  below, and initialing ever page of the attachment  hereto,  also
signifies your approval as true and correct of the press release appended hereto
that we shall release to the marketplace on Monday,  February 17, 2003 regarding
our  exciting  alignment  with you  where you will  exclusively  advise on these
critical matters for Recom.

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PAGE 4 of 4
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I thank you in advance for your time and  consideration and look forward to your
addition to the Recom.

Sincerely,

Recom Managed Systems, Inc.

/a/ Marvin Fink
Marvin Fink
Chief Executive Officer

I accept  your  invitation  and agree to the  terms  outlined  herein,  in their
entirety:

/s/ Lowell T. Harmison
------------------------------------------
Lowell T. Harmison, Ph.D.<PAGE>

                               [LOGO] MAXIM GROUP

PRIVATE AND CONFIDENTIAL

July 17, 2003

Mr. Marvin H. Fink, Chairman
Recom Managed Systems, Inc
4705 Laurel Canyon Boulevard
Studio City, CA 91607

Dear Mr. Fink:

We are  pleased to propose  that Recom  Managed  Systems,  Inc  ("Recom"  or the
"Company")  retain  Maxim Group LLC  ("Maxim") as its  non-exclusive  investment
banker,  strategic advisor and financial advisor.  The principal elements of the
agreement ("Agreement") between Maxim and the Company are:

1.    SERVICES  TO BE  RENDERED:  The  services  that Maxim  will  render to the
      Company under the terms of this  Agreement,  subject to termination  under
      Section 3, will include the following:

      a)    Maxim  will  provide  the  following   strategic  advisory  services
            ("Advisory Services"):

            i)    advise Recom with respect to its  strategic  planning  process
                  and business plans including an analysis of markets, products,
                  positioning,  financial  models,  organization  and  staffing,
                  potential strategic alliances, capital requirements, valuation
                  and funding. To prepare for this advisory function, Maxim will
                  perform a due diligence review of Recom;

            ii)   work closely with Recom's  management team to develop a set of
                  long and  short-term  goals with  special  focus on  enhancing
                  corporate  and  shareholder  value.  This  will  also  include
                  assisting Recom in completing a "gap analysis," i.e.,  helping
                  Recom  determine  key  business   developments   and  actions,
                  including review of financing requirements and Recom's capital
                  structure,  intended  to help  enhance  shareholder  value and
                  Recom's exposure to the investment community and;

            iii)  review the Company's  presentation and marketing materials and
                  other  materials used to present the Company to the investment
                  community.

                               Members NASD & SIPC
                     405 Lexington Ave. * New York, NY 10174
          * tel (212) 895-3500 * (800) 724-0761 * fax (212) 895-3783 *
                                www.maximgrp.com
                  New York, NY * Long Island, NY * Chicago, IL

<PAGE>

      b)    Maxim will help Recom  develop  and  evaluate  financing  or capital
            raising  alternatives  including public and private issues of equity
            or debt, as appropriate from time to time ("Banking Services").

            i)    Public  Offerings:  In the event of a public  offering,  Maxim
                  will  have  the  right  of  first  refusal  to act as  lead or
                  co-underwriter. Maxim will work with the Company to manage the
                  process of  identifying,  evaluating  and  selecting any other
                  underwriters.  Maxim will  prepare a  comprehensive  letter of
                  intent for the proposed  transaction  that will be provided to
                  Recom  and will  supplement  the terms of this  Agreement.  If
                  Maxim  is  not  selected  as  the  lead  manager  in a  public
                  offering, Recom will use its best efforts to ensure that Maxim
                  receives at least 50% of the share  allocation  and 50% of the
                  total underwriting fees.

            ii)   Private Placements: Maxim will have the right of first refusal
                  to act as placement agent for any private placement.  Prior to
                  entering  into the Letter of Intent to act as placement  agent
                  for Recom,  Recom will issue a potential  list of investors to
                  Maxim.  Maxim  will  prepare a  comprehensive  "best  efforts"
                  letter of intent  for the  proposed  transaction  that will be
                  provided to Recom and will  supplement  the terms set forth in
                  EXHIBIT A attached hereto.

      c)    Maxim will provide Recom with merger and  acquisition  services (the
            "M&A  Services").  Maxim  will  assist the  Company  in  determining
            acquisition or strategic partnering strategies and tactics from time
            to time,  as  appropriate.  Maxim will  advise  and assist  Recom in
            identifying,  evaluating,  negotiating and structuring acquisitions,
            or strategic  investments or partnerships  which may be accomplished
            through  a  purchase  or sale of all or a  portion  of the  stock or
            assets,  a merger or reverse  merger,  joint  venture,  licensing or
            marketing agreement or arrangement or other business  combination or
            arrangement   ("Transaction")  with  any  entity  ("Candidate").   A
            strategic  investment  will  include any  investment  or exchange of
            cash,  equity,  warrants,  assets  or debt  as  part  of a  business
            relationship  with a third party, or any investment made directly by
            a third  party in the Company  subject to a term sheet or  agreement
            not marketed or syndicated beyond a specific investor.

      d)    If requested by Recom,  Maxim will  communicate  its  willingness to
            provide  an  opinion  of  fairness  (a  "Fairness   Opinion")  of  a
            particular  Transaction to the Company, and if Maxim determines that
            it is able to provide such Fairness Opinion,  it will allow it to be
            used  in  connection  with  materials  filed  or  submitted  to  the
            Securities  and  Exchange  Commission,  or included  in  information
            mailed to shareholders of Recom in connection with each transaction.

2.    COMPENSATION AND EXPENSES.

      a)    As compensation for providing the Advisory Services hereunder, Recom
            will pay Maxim a  retainer  of  $50,000,  $20,000  payable  upon the
            execution of this agreement, $15,000 payable one month from the date
            of this  Agreement  and $15,000  payable two months from the date of
            this  Agreement.  Upon the execution of this  Agreement,  Recom will
            issue  Maxim  warrants to purchase  100,000  shares of Recom  Common
            Stock for a period of five years from the date of this  Agreement at
            an exercise  price per share of 120% of the closing Bid price on the
            date  preceding  the  date of this  Agreement.  Further,  until  the
            termination   of  this  Agreement  as  provided  for  in  Section  3
            hereunder,  Recom  agrees to pay Maxim a monthly  retainer of $7,500
            beginning  on the  first day of the month  commencing  September  1,
            2003. If both parties  agree to continue the Agreement  after August
            31,  2004,  Recom will pay to Maxim an agreed upon amount  until the
            expiration of the Agreement.

                                       2
<PAGE>

      b)    Terms and fees for Banking Services  performed under section 1(b) or
            provision  of a  Fairness  Opinion  under  1(d)  will be  separately
            proposed  by Maxim  with  respect  to each  transaction  when and if
            services are provided.

      c)    For any M&A  Transaction  completed by the Company with a Candidate,
            Recom shall pay Maxim a fee  ("Success  Fee") upon closing  equal to
            the greater of: (i) the sum of 2 1/2% of the  aggregate  transaction
            value;  or (ii)  $75,000.00,  provided that Maxim either  introduces
            and/or performs specific services for the Transaction. The aggregate
            transaction  value shall include the sum of cash and the fair market
            value  at the  time  of  the  closing  of a  Transaction  of  equity
            securities;   warrants;   contingent  payments;  deferred  payments;
            non-compete agreements;  liabilities assumed,  acquired,  retired or
            de-feased (other than normal working capital liabilities);  the face
            value of any debt securities issued in such a Transaction;  the fair
            market  value  of  any   licensing,   marketing  or  other  business
            agreements or  arrangements;  and any other  valuable  consideration
            issued in connection with a Transaction.

      d)    The  Company  will  reimburse  Maxim  in a  timely  manner  for  any
            reasonable  out-of-pocket expenses relating to activities under this
            Agreement not to exceed  $2,000.00 per month. Any expenses in excess
            of the $2,000 monthly amount must be pre-approved by the Company.

      e)    In no case  will any fee  obligations  of the  Company  to any other
            financial  advisor  or any  other  person  in  connection  with this
            transaction  reduce the fees owed by the Company to Maxim under this
            Agreement.

3.    TERM OF AGREEMENT.  The term of this agreement is indefinite.  However, if
      by October  31,  2003 Maxim has not raised the  Company a gross  amount of
      $1,000,000,  as placement agent in the placement contemplated by and under
      this document,  the Company will have the right to terminate the agreement
      upon thirty (30) days  written  notice.  Also,  after  August 31, 2004 the
      Company or Maxim may terminate this Agreement upon 30 days written notice.
      Any future  obligation  that could be reasonably  expected to survive this
      Agreement will survive  termination of this Agreement.  Specific surviving
      conditions  will  include,  but not be limited  to: (i) payment of Success
      Fees earned  under  section 2(c) during the Term and  completed  within 18
      months of the termination of this Agreement, and (ii) Section 4, Indemnity

                                       3
<PAGE>

4.    INDEMNITY.  The  Company  agrees to  indemnify  and hold  harmless  Maxim,
      including  any  affiliated  companies,   and  their  respective  officers,
      directors,  controlling  persons and employees and any persons retained in
      connection  with this Agreement in accordance  with the terms set forth in
      the attached letter.

5.    DISCLAIMERS.

      a)    It is understood by Maxim and the Company that the Company's ability
            to raise capital will be affected by various  factors at the time of
            a proposed  offering,  including  but not limited to,  stock  market
            conditions,  competitive positioning of Recom's products,  achieving
            business plan goals that have been mutually agreed upon by Maxim and
            the Company, short- and long-term business prospects,  the plans and
            performance of the management team and the capital  structure of the
            Company. In the event that Maxim does not deem itself able to act as
            a manager for a proposed  placement or offering,  subject to Maxim's
            sole  reasonable  discretion,  it  will  advise  the  Company  on an
            appropriate course of action.

      b)    In performing its M&A Services hereunder, Maxim may rely entirely on
            publicly available  information and such other information as may be
            furnished  to Maxim by the Company or a  Candidate,  and has not and
            does not assume any responsibility  for independent  verification of
            such information or independent appraisal or valuation of assets.

6.    ENTIRE  AGREEMENT AND GOVERNING  LAW. This Agreement may not be amended or
      modified  except in writing,  and shall be governed  by and  construed  in
      accordance with the laws of the State of New York. Any dispute between the
      parties  arising out of or related to this Agreement shall be submitted to
      binding  arbitration  administered  by, and  pursuant to the rules of, the
      American  Arbitration  Association  ("AAA") in the State of New York, with
      the  expenses  of the  arbitration  to be shared  equally by the  parties,
      subject to the arbitrator's  authority to apportion such expenses in favor
      of the prevailing party under applicable law.

If the foregoing correctly sets forth your understanding,  please so indicate by
signing and  returning to us the enclosed copy of this letter along with a check
for $20,000  representing the initial retainer fee under the Agreement.  We look
forward to working with you and the rest of Recom's management.

Sincerely,

/s/ Anthony J. Sarkis
Anthony J. Sarkis
Managing Director

                                       4
<PAGE>

                               MAXIM GROUP, LLC.

By: /s/ Anthony J. Sarkis                     Date: December 29, 2003
    ---------------------------------
         Anthony J. Sarkis
         Managing Director

RECOM MANAGED SYSTEMS, INC

By: /s/ Marvin H. Fink                        Date: December 29, 2003
    ---------------------------------
         Marvin H. Fink, Chairman

                                       5
<PAGE>

December 29, 2003

Maxim Group, LLC
405 Lexington Avenue
New York, NY 10174

Gentlemen:

         This letter will  confirm  that we have  engaged  Maxim  Group,  LLC to
advise and assist us in  connection  with the matters  referred to in our letter
dated December 29, 2003 (the  "Engagement  Letter").  In  consideration  of your
agreement  to act on our behalf in  connection  with such  matters,  we agree to
indemnify and hold harmless you and your affiliates and you and their respective
officers,  directors,  employees  and  agents  and each  other  person,  if any,
controlling  you or any of your affiliates (you and each such other person being
an  "Indemnified  Person")  from and  against  any  losses,  claims,  damages or
liabilities related to, arising out of or in connection with the engagement (the
"Engagement")  under the Engagement  Letter, and will reimburse each Indemnified
Person for all  expenses  (including  fees and  expenses of counsel) as they are
incurred in connection with investigating,  preparing, pursuing or defending any
action,  claim, suit,  investigation or proceeding related to, arising out of or
in connection  with the  Engagement,  whether or not pending or  threatened  and
whether  or not any  Indemnified  Person is a party.  We will not,  however,  be
responsible for any losses, claims, damages or liabilities (or expenses relating
thereto)  that are finally  judicially  determined to have resulted from the bad
faith or gross  negligence  of any  Indemnified  Person.  We also  agree that no
Indemnified  Person shall have any  liability  (whether  direct or indirect,  in
contract or tort or otherwise) to us for or in  connection  with the  Engagement
except  for any such  liability  for  losses,  claims,  damages  or  liabilities
incurred by us that are finally judicially  determined to have resulted from the
bad faith or gross negligence of such Indemnified Person.

         We will not,  without your prior written consent,  settle,  compromise,
consent to the entry of any  judgment  in or  otherwise  seek to  terminate  any
action,  claim,  suit or proceeding in respect of which  indemnification  may be
sought  hereunder  (whether or not any  Indemnified  Person is a party  thereto)
unless such settlement, compromise, consent or termination includes a release of
each Indemnified Person from any liabilities arising out of such action,  claim,
suit or proceeding. No Indemnified Person seeking indemnification, reimbursement
or contribution  under this agreement will,  without our prior written  consent,
settle, compromise, consent to the entry of any judgment in or otherwise seek to
terminate any action,  claim, suit,  investigation or proceeding  referred to in
the preceding paragraph.

                                       6
<PAGE>

         If the  indemnification  provided  for in the first  paragraph  of this
agreement is judicially  determined to be unavailable  (other than in accordance
with the third sentence of the first paragraph hereof) to an Indemnified  Person
in respect of any losses,  claims,  damages or  liabilities  referred to herein,
then,  in lieu of  indemnifying  such  Indemnified  Person  hereunder,  we shall
contribute to the amount paid or payable by such Indemnified  Person as a result
of such losses,  claims,  damages or liabilities (and expense relating  thereto)
(i) in such  proportion as is  appropriate  to reflect the relative  benefits to
you, on the one hand,  and us, on the other hand,  of the  Engagement or (ii) if
the allocation provided by clause (i) above is not available, in such proportion
as is appropriate to reflect not only the relative  benefits referred to in such
clause  (i) but also the  relative  fault of each of you and us,  as well as any
other relevant equitable  considerations;  provided,  however, in no event shall
your aggregate  contribution  to the amount paid or payable exceed the aggregate
amount of fees actually  received by you under the  Engagement  Letter.  For the
purposes  of  this  agreement,  the  relative  benefits  to us  and  you  of the
Engagement  shall be deemed to be in the same  proportion as (a) the total value
paid or contemplated to be paid or received or contemplated to be received by us
or our shareholders, as the case may be, in the transaction or transactions that
are the  subject  of the  Engagement,  whether  or not any such  transaction  is
consummated,  bears  to  (b)  the  fees  paid  to  you in  connection  with  the
Transaction.

         The provisions of this agreement  shall apply to the Engagement and any
modification thereof and shall remain in full force and effect regardless of any
termination or the completion of your services under the Engagement Letter.

         This  agreement  and the  Engagement  Letter  shall be  governed by and
construed in  accordance  with the laws of the State of New York  applicable  to
contracts executed and to be performed in that state.

                                    Very truly yours,

                                    Recom Managed Systems, Inc

                                    By:  ___________________________

                            Marvin H. Fink, Chairman

ACCEPTED AND AGREED TO as of the date of ___________, 2003.

MAXIM GROUP, LLC

By: ___________________________
       Anthony Sarkis
       Managing Director

                                       7
<PAGE>

                                    EXHIBIT A

                           RECOM MANAGED SYSTEMS, INC

                         SUMMARY OF TERMS AND CONDITIONS

ISSUER:                             Recom Managed Systems, Inc (the "Company")

AMOUNT:                             Minimum    $1,000,000   Maximum   $3,000,000
                                    ("Offering")

SECURITY:                           Series A  Convertible  Preferred  Stock (the
                                    "Preferred")

OFFERING PRICE:                     The Preferred per share offering price shall
                                    be $3.00 ("Offering Price").

USE OF PROCEEDS:                    The  Company  shall  use  the  proceeds  for
                                    general   working   capital   purposes   and
                                    obtaining a listing on a national  exchange.
                                    It is  understood  that the Company will not
                                    use the proceeds from the Placement to repay
                                    debts,  other than those debts classified as
                                    General Payables.

REGISTRATION RIGHTS:                Customary for  transactions  of this nature,
                                    including,   but  not   limited   to  demand
                                    registration   rights   and  the   Company's
                                    agreement   to   register   all   underlying
                                    securities  within a reasonable period after
                                    the closing.

CONVERSION:                         The Preferred  shall be convertible on a one
                                    for one basis  (1:1) into  Common  Shares of
                                    the Company (the "Common Stock").

                                    The    Preferred    shares   will    convert
                                    automatically into Common Stock upon 45 days
                                    written   notice  to  the   holders  of  the
                                    Preferred,   if  the  Common  Stock  of  the
                                    Company  trades  at  a  price  equal  to  or
                                    greater  than 2.5 times the  Offering  Price
                                    for a period of no less than 30  consecutive
                                    trading days.

                                    Automatic  conversion  can only occur if (i)
                                    the Common Stock of the Company is listed on
                                    a qualified nation exchange  (NASDAQ,  AMEX,
                                    NYSE) and (ii) the Common Shares  underlying
                                    the  conversion  are subject to an effective
                                    registration statement with the SEC pursuant
                                    to the Securities Act of 1933, as amended.

WARRANTS:                           Investors in the Preferred will also receive
                                    warrant  coverage on the basis of one Common
                                    Stock Purchase  Warrant (the "Warrants") for
                                    each  two   shares   of   Preferred   shares
                                    purchased  (i.e.,  50%  warrant  coverage so
                                    that an individual  purchasing 100 shares of
                                    the  Preferred  shall  receive  Warrants  to
                                    purchase an  additional  50 Common  Shares).
                                    The Warrant  will expire Five (5) years from
                                    the final  closing date of the Placement and
                                    have an exercise price equal to $5.00.

                                       8
<PAGE>

FINANCIAL
STATEMENTS
AND REPORTING:                      The Company will provide all information and
                                    materials,  including,  without  limitation,
                                    all internal management  documents,  reports
                                    of    operations,    reports    of   adverse
                                    developments,   copies  of  any   management
                                    letters, communications with shareholders or
                                    directors,    and   press    releases    and
                                    registration  statements,  as well as access
                                    to  all  senior  managers  as  requested  by
                                    Maxim.

PLACEMENT AGENT FEES:

                                    a)       An  amount  in cash  equal to eight
                                             percent  (8.0%)  of  the  principal
                                             amount  of  any  Placement   placed
                                             and/or  committed,  payable  at the
                                             time   of  each   closing   of  the
                                             Financing.

                                    b)       The  Company  will  issue  to Maxim
                                             warrants to purchase  securities of
                                             the  Company  equal to ten  percent
                                             (10.0%) of the number of  preferred
                                             shares,    common   shares   and/or
                                             warrants  ("Securities")  issued in
                                             the  Placement,  exercisable  at an
                                             exercise price equal to $4.80. Such
                                             Warrants will be issued pursuant to
                                             a Warrant Agreement to be signed by
                                             Maxim   and  the   Company,   which
                                             agreement   shall  provide,   among
                                             other  things,  that  the  Warrants
                                             shall  expire  five (5) years  from
                                             the  date  of   issuance,   include
                                             customary  registration rights, and
                                             provisions  for cashless  exercise,
                                             and such other  terms as are normal
                                             and  customary for warrants of this
                                             type.

                                    c)       The Company  will pay Maxim at each
                                             closing, a non-accountable  expense
                                             allowance  equal to 2% of the gross
                                             amount raised at such closing.

OTHER PROVISIONS:                   The   purchase   agreement   shall   include
                                    standard and customary  representations  and
                                    warranties  of the  Company,  and the  other
                                    agreements   prepared  to   implement   this
                                    financing  shall contain other  standard and
                                    customary provisions.

                                       9

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