Document:

f8k122109ex10xvii_smartenrgy.htm

     

    Exhibit
10.17

    
      

       

      SECURITIES
PURCHASE AGREEMENT

       

      between

       

      SMART
ENERGY SOLUTIONS, INC.

       

      and

       

      BLACKPOOL
ACQUISITIONS, LLC.

      ("Purchaser")

       

       

      REGULATION
D

      U.S.
PERSONS

       

      Dated as
of December 21, 2009

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

       

      TABLE
OF CONTENTS

       

      
        
          	 
      	 
      	
                  Page

                
	
                  1.

                	
                  PURCHASE
      AND SALE OF SECURITIES.

                	
                  1

                
	 
      	
                  1.1

                	
                  Purchase and Sale of
    Securities

                	
                  1

                
	 
      	
                  1.2

                	
                  Purchase Price

                	
                  1

                
	 
      	 
      	 
      	 
      
	
                  2.

                	
                  CLOSING.

                	
                  1

                
	 
      	
                  2.1

                	
                  Date
      and Time

                	
                  1

                
	 
      	
                  2.2

                	
                  Deliveries
      by Purchaser

                	
                  1

                
	 
      	
                  2.3

                	
                  Deliveries
      by the Company

                	
                  2

                
	 
      	 
      	 
      	 
      
	
                  3.

                	
                  REPRESENTATIONS;
      WARRANTIES AND COVENANTS OF THE COMPANY

                	
                  2

                
	 
      	
                  3.1

                	
                  Organization
      and Good Standing

                	
                  2

                
	 
      	
                  3.2

                	
                  Capitalization

                	
                  2

                
	 
      	
                  3.3

                	
                  Validity
      of Transactions

                	
                  2

                
	 
      	
                  3.4

                	
                  No Violation

                	
                  2

                
	 
      	
                  3.5

                	
                  SEC Reports

                	
                  2

                
	 
      	
                  3.6

                	
                  Subsidiaries

                	
                  3

                
	 
      	
                  3.7

                	
                  Litigation

                	
                  3

                
	 
      	
                  3.8

                	
                  Taxes

                	
                  3

                
	 
      	
                  3.9

                	
                  Securities Law Compliance.

                	
                  3

                
	 
      	
                  3.10

                	
                  Restriction
      on Issuance of Additional Shares of Common Stock

                	
                  3

                
	 
      	 
      	 
      	 
      
	
                  4.

                	
                  REPRESENTATIONS
      AND WARRANTIES OF THE PURCHASERS

                	
                  3

                
	 
      	
                  4.1

                	
                  Legal
      Power

                	
                  3

                
	 
      	
                  4.2

                	
                  Due Execution

                	
                  4

                
	 
      	
                  4.3

                	
                  No Reliance on SEC Reports

                	
                  4

                
	 
      	
                  4.4

                	
                  No Reliance on Projections

                	
                  4

                
	 
      	
                  4.5

                	
                  Restricted Securities

                	
                  4

                
	 
      	
                  4.6

                	
                  Purchaser
      Sophistication and Ability to Bear Risk of Loss

                	
                  5

                
	 
      	
                  4.7

                	
                  Purchases
      by Groups

                	
                  5

                
	 
      	 
      	 
      	 
      
	
                  5.

                	
                  CONDITIONS
      TO CLOSING

                	
                  5

                
	 
      	
                  5.1

                	
                  Conditions
      to Obligations of the Purchaser

                	
                  5

                
	 
      	
                  5.2

                	
                  Conditions
      to Obligations of the Company

                	
                  5

                
	 
      	 
      	 
      	 
      
	
                  6.

                	
                  REMOVAL
      OF RESTRICTIVE LEGEND

                	
                  6

                
	 
      	
                  6.1

                	
                  Effective Date

                	
                  6

                
	 
      	
                  6.2

                	
                  Required Date

                	
                  6

                
	 
      	
                  6.3

                	
                  Procedure

                	
                  6

                
	 
      	
                  6.4

                	
                  Expenses

                	
                  6

                
	 
      	
                  6.5

                	
                  Rule 144

                	
                  6

                
	 
      	
                  6.6

                	
                  Failure
      to Cause Removal of Restrictive Legend and Other Events

                	
                  6

                
	 
      	 
      	 
      	 
      
	
                  7.

                	
                  MISCELLANEOUS

                	
                  7

                
	 
      	
                  7.1

                	
                  Fees and Expenses

                	
                  7

                
	 
      	
                  7.2

                	
                  Governing  Law

                	
                  7

                
	 
      	
                  7.3

                	
                  Specific
      Performance; Consent to Jurisdiction; Venue

                	
                  7

                
	 
      	
                  7.4

                	
                  Successors and Assigns

                	
                  7

                
	 
      	
                  7.5

                	
                  Entire Agreement

                	
                  7

                

           

           

          
            
              
              

            

            
              (i)

              
                

              

            

            
              
              

            

          

           

           

          
             

            TABLE
OF CONTENTS

            (cont'd)

          

           

           

          	 
      	
                  7.6

                	
                  Separability

                	
                  8

                
	 
      	
                  7.7

                	
                  Amendment and Waiver

                	
                  8

                
	 
      	
                  7.8

                	
                  Notices

                	
                  8

                
	 
      	
                  7.9

                	
                  Titles and Subtitles

                	
                  8

                
	 
      	
                  7.10

                	
                  Survival

                	
                  8

                
	 
      	
                  7.11

                	
                  Counterparts

                	
                  8

                
	 
      	
                  7.12

                	
                  Publicity

                	
                  8

                
	 
      	 
      	 
      	 
      
	
                  8.

                	
                  ISSUANCE
      OF ADDITIONAL SHARES

                	
                  9

                
	 
      	 
      	 
      	 
      
	
                  Exhibits:

                	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                  A

                	
                  Purchaser
      Representation Letter (Regulation D - Rule 506)

                	 
      

        

      

       

       

      
        
           

        

       

      
        
          
          

        

        
          (ii)

          
            

          

        

        
          
          

        

      

       

      SMART
ENERGY SOLUTIONS, INC.

       

      SECURITIES
PURCHASE AGREEMENT

       

      This
Securities Purchase Agreement ("Agreement") is made as of this 21st day of
December, 2009 by and between Smart Energy Solutions, Inc., a Nevada corporation
(the "Company"), with its principal office at 210 West Parkway, #7, Pompton
Plains, New Jersey, 07444, and BlackPool Acquisitions, LLC. (the
"Purchaser").

       

      RECITALS

       

      A. The
Company is conducting an offering under Regulation D under the Securities Act of
1933, as amended (the "Offering") on substantially the same terms and subject to
the conditions set forth herein, of up to 149,333,733 shares of the Company's
common stock, no par value per share ("Common Stock").

       

      B. The
Company desires to obtain funds from the Purchaser and Purchaser desires to
participate in the Offering of which this Securities Purchase Agreement is a
part, as provided in Section 2 below.

       

      AGREEMENT

       

      It is
agreed as follows:

       

      1.     PURCHASE AND
SALE OF SECURITIES.

       

      1.1 Purchase
and Sale of Securities. In reliance upon the representations and
warranties of the Company and Purchaser contained herein and in the Purchaser
Representation Letter attached hereto as Exhibit "A" and subject to the terms
and conditions set forth herein, Purchaser hereby agrees to purchase, and the
Company hereby agrees to sell and issue to Purchaser, the number of shares of
Common Stock (the "Shares") set forth on the Purchaser Signature Page
hereto.

       

      1.2 Purchase
Price. The purchase price for each Share sold to the Purchaser will be
$0.02
(the "Total Purchase Price per Share").

       

      2.     CLOSING.

       

      2.1 Date and
Time. The closing of the sale of the Shares contemplated by this
Agreement (the "Closing") shall take place incrementally by the delivery of
funds to the Company bank account.

       

      2.2
Deliveries by
Purchaser.

       

      2.2.1
Incrementally, on or before 5:00 p.m. Eastern Time on February 19, 2010,
Purchaser shall deliver to the Company a completed and duly executed Purchaser
Signature Page and Purchaser Representation Letter, Exhibit "A"
hereto.

       

      2.2.2
Incrementally from the date first written above, until 5:00 p.m. Eastern Time on
February 19, 2010, Purchaser shall have delivered wire transfers to the general
account of the Company in the amount of the applicable Purchase Price for such
Purchaser's Shares. The Purchaser and Seller agree that capital may be used for
its intended purposes as received.

       

      
 

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

       

      2.3 Deliveries by the Company.
At the time of each Closing, or as soon thereafter as practicable, the
Company will cause to be issued to Purchaser against payment of each applicable
Purchase Price a stock certificate for the Shares registered in the Purchaser's
name or as otherwise designated by the Purchaser.

       

      3.     REPRESENTATIONS;
WARRANTIES AND COVENANTS OF THE COMPANY.

       

      As a
material inducement to the Purchaser to enter into this Agreement and to
purchase the Shares, the Company represents and that the following statements
are true and correct in all material respects as of the date hereof and will be
true and correct in all material respects at the Closing, except as expressly
qualified or modified herein.

       

      3.1 Organization and Good
Standing. The Company is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Nevada and has full
corporate power and authority to enter into and perform its obligations under
this Agreement, and to own its properties and to carry on its business as
presently conducted and as proposed to be conducted. The Company is duly
qualified to do business as a foreign corporation in every jurisdiction in which
the failure to so qualify would have a material adverse effect upon the
Company.

       

      3.2 Capitalization. The
Company is authorized to issue 500,000,000 shares of Common Stock of which
112,314,095 shares were issued and outstanding as of September 30, 2009. The
Company is also authorized to issue 1,000,000 shares of preferred stock, no par
value per share, of which no shares have been designated Series A Preferred
Stock, none of which are issued and outstanding as of the date of this
Agreement. At the closing of the transaction contemplated herein, there will be
a maximum of 14,564,000 Common Stock Purchase Warrants and/or warrants
outstanding and exercisable. All outstanding shares of Common Stock have been
duly authorized and validly issued, and are fully paid, nonassessable, and free
of any preemptive rights. Except as set forth above and in the SEC Reports (as
hereinafter defined), as of September 30, 2009, there was not outstanding any
other right to purchase, or any security convertible into or exchangeable for,
any capital stock of the Company, including, but not limited to, options,
warrants, or rights. Except as set forth herein, the Company is under no
obligation (contingent or otherwise) to purchase or otherwise acquire or retire
any of its securities.

       

      3.3 Validity of Transactions.
This Agreement has been duly authorized, executed and delivered by the
Company and is the valid and legally binding obligation of the Company,
enforceable in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization and moratorium laws and other laws
affecting enforcement of creditor's rights generally and by general principles
of equity.

       

      3.4 No Violation. The
execution, delivery and performance of this Agreement has been duly authorized
by the Company's Board of Directors and, to the extent necessary, the
shareholders of the Company, will not violate any law or any order of any court
or government agency applicable to the Company, as the case may be, or the
Certificate of Incorporation or Bylaws of the Company, and will not result in
any breach of or default under, or, except as expressly provided herein, result
in the creation of any encumbrance upon any of the assets of the Company
pursuant to the terms of any agreement or instrument by which the Company or any
of its assets may be bound. No approval of or filing with any governmental
authority is required for the Company to enter into, execute or perform this
Agreement.

       

      3.5 SEC Reports. Copies
of the Company's Annual Report on Form I 0-KSB for the fiscal year ended
December 31, 2008, as filed with the U.S. Securities and Exchange Commission
("SEC") on April 14, 2009 and the Company's Quarterly Report for the nine months
ended

       

      
 

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

       

      September
30, 2009, as filed with the SEC on November 19, 2009 (collectively, the "SEC
Reports") are available online with the SEC and through the Edgar
system.

       

      3.6 Subsidiaries. The
Company does not own, directly or indirectly, any equity or debt
securities of any corporation, partnership, or other entity.

       

      3.7 Litigation. Except as
set forth in Note 8 of the Company's 10Q SEC Report filed on November 19, 2009
there are no suits or proceedings (including without limitation, proceedings by
or before any arbitrator, government commission, board, bureau or other
administrative agency) pending or, to the knowledge of the Company, threatened
against or affecting the Company which, if adversely determined, would have a
material adverse effect on the financial condition, results of operations,
prospects or business of the Company, and the Company is not subject to or in
default with respect to any order, writ, injunction or decree of any federal,
state, local or other governmental department.

       

      3.8 Taxes. Federal income
tax returns and state and local income tax returns for the Company have been
filed as required by law; all taxes as shown on such returns or on any
assessment received subsequent to the filing of such returns have been paid, and
there are no pending assessments or adjustments or any income tax payable for
which reserves, which are reasonably believed by the Company to be adequate for
the payment of any additional taxes that may come clue, have not been
established. All other taxes imposed on the Company have been paid and any
reports or returns due in connection herewith have been filed.

       

      3.9 Securities Law Compliance.
Assuming the accuracy of the representations and warranties of Purchaser
set forth in Section 4 of this Agreement, the offer, issue, sale and delivery of
the shares of Common Stock will constitute an exempted transaction under the
Securities Act of 1933, as amended and now in effect ("Securities Act"). The
Company shall make such filings, if any, as may be necessary to comply with the
Federal securities laws

       

      3.10
Restriction on
Issuance of Additional Shares of Common Stock. The Company will not,
directly or indirectly, without the prior written consent of the Purchaser,
which consent will not be unreasonably withheld, issue, offer to sell, grant any
option to purchase or otherwise dispose of (or announce any issue, offer, sale,
grant of any option to purchase or other disposition of) any Common Shares or
any securities convertible into, or exchangeable or exercisable for, Common
Stock until the date in which all of the securities sold in the Offering have
had the Restrictive Legend removed, nor shall the Company publicly announce
until such date an intention to do so, except for (i) the issuance of Common
Stock in connection with the exercise of any currently outstanding stock options
or other warrants, (ii) the issuance of stock options pursuant to any of the
Company's stock option and stock incentive plans, or (iii) the issuance of
Common Stock in connection with any arm's length acquisition or other
reorganization by the Company.

       

      
        4.   REPRESENTATIONS
AND WARRANTIES OF THE PURCHASERS.

      

       

      
        Purchaser
hereby represents, warrants and covenants with the Company as
follows:

         

      

      4.1 Legal Power. Purchaser
has the requisite individual, corporate, partnership, trust or fiduciary power,
as appropriate, and is authorized, if Purchaser is a corporation, partnership or
trust, to enter into this Agreement, to purchase the Shares hereunder, and to
carry out and perform its obligations under the terms of this
Agreement.

      

       

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

         

      

       4.2
Due Execution.
This Agreement has been duly authorized, executed and delivered by
Purchaser, and, upon due execution and delivery by the Company, this Agreement
will be a valid and binding agreement of Purchaser.

       

       4.3
No Reliance on SEC
Reports. Purchaser represents that Purchaser has been given full and
complete access to the Company for the purpose of obtaining such information as
the Purchaser or its qualified representative has reasonably requested in
connection with the decision to purchase the Shares. Purchaser represents that
such Purchaser has been afforded the opportunity to ask questions of the
officers of the Company regarding its business prospects and the Shares all as
Purchaser or Purchaser's qualified representative have found necessary to make
an informed investment decision to purchase the Shares hereunder.

       

       4.4
No Reliance on
Projections. Purchaser has not relied on any financial projections,
models or other financial information relating to the Company, whether or not
provided by the Company or any other source. Purchaser acknowledges that such
financial projections are inherently unreliable and are not an accurate
indication of the Company's business prospects or future financial
performance.

       

       4.5
Restricted Securities.
Purchaser has been advised that the Shares have not been registered under
the Securities Act or any other applicable securities laws and that such
securities are being offered and sold pursuant to Section 4(2) of the Securities
Act and Regulation D thereunder, and that the Company's reliance upon Section
4(2) and Regulation D is predicated in part on each Purchaser's representations
as contained herein and in the Purchaser Representation Letter in the form
attached hereto as Exhibit "A" completed by each Purchaser.

       

      4.5.1
Purchaser acknowledges that the Shares will be issued as "restricted securities"
as defined by Rule 144 promulgated pursuant to the Securities Act. The Shares
may not be resold in the absence of an effective registration thereof under the
Securities Act and applicable state securities laws unless, in the opinion of
the Company's counsel, an applicable exemption from registration is
available.

       

      4.5.2
Purchaser represents that Purchaser is acquiring the Securities for Purchaser's
own account, for investment purposes only and not with a view to, or for sale in
connection with, a distribution, as that term is used in Section 2(11) of the
Securities Act, in a manner which would require registration under the
Securities Act or any state securities laws.

       

      4.5.3
Purchaser understands and acknowledges that the Shares will bear the
following
legend:

       

      THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED
FOR VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION THEREOF UNDER THE
SECURITIES ACT OF 1933 AND/OR THE SECURITIES ACT OF ANY STATE HAVING
JURISDICTION, OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.

      

       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

       

       

      4.5.4
Purchaser acknowledges that the Shares are not liquid and are transferable only
under limited conditions. Purchaser acknowledges that such securities must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Purchaser is aware of
the provisions of Rule 144 and Regulation D promulgated under the Securities
Act, which permits limited resale of restricted securities subject to the
satisfaction of certain conditions and that such Rule is not now available and,
in the future, may not become available for resale of the Shares and Warrant
Shares.

       

      4.6 Purchaser Sophistication and
Ability to Bear Risk of Loss. Purchaser acknowledges that it is able to
protect its interests in connection with the acquisition of the Securities and
can bear the economic risk of investment in the Securities without producing a
material adverse change in Purchaser's financial condition. Purchaser otherwise
has such knowledge and experience in financial or business matters that
Purchaser is capable of evaluating the merits and risks of the investment in the
Securities.

       

      4.7 Purchases by Groups.
Purchaser represents, warrants and covenants that it is not acquiring the
Securities as part of a group within the meaning of Section 13(d)(3) of the
Exchange Act and Purchaser has not agreed to act with any other Purchaser for
the purpose of acquiring, holding, voting or disposing of the Securities
purchased hereunder for purposes of Section 13(d) under the Exchange Act, and
Purchaser is acting independently with respect to its investment in the
Securities.

       

      5.     CONDITIONS TO
CLOSING.

       

      5.1 Conditions to Obligations of
the Purchaser. Purchaser's obligation to purchase the Shares at the
Closing is subject to the fulfillment or waiver, at or prior to the Closing, of
all of the following conditions:

       

      5.1.1
Representations and
Warranties True; Performance of Obligations. The representations and
warranties made by the Company in Section 3 hereof shall be true and correct in
all material respects at the Closing with the same force and effect as if they
had been made on and as of said date; and the Company shall have performed all
obligations and conditions herein required to be performed by it on or prior to
the Closing.

       

      5.1.2
Proceedings and
Documents. All corporate and other proceedings in connection with the
transactions contemplated at the Closing hereby and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to the Purchaser.

       

      5.2 Conditions to
Obligations of the Company.
The Company's obligation to issue and sell the Shares at the Closing is
subject to the fulfillment to the Company's satisfaction, on or prior to the
Closing, of the following conditions:

       

      5.2.1
Representations and
Warranties True. The representations and warranties made by Purchaser in
Section 4 hereof and on Exhibit "A" hereof shall be true and correct at the
Closing with the same force and effect as if they had been made on and as of the
Closing.

       

      5.2.2
Performance of
Obligations. Purchaser shall have performed and complied with all
agreements and conditions herein required to be performed or complied with by
them on or before the Closing, and Purchaser shall have delivered payment to the
Company in respect of its purchase of the Shares.

      

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

       

      5.2.3
Qualifications. Legal
and Investment. All authorizations, approvals, or permits, if any, of any
governmental authority or regulatory body of the United States that are required
in connection with the lawful sale and issuance of the Shares pursuant to this
Agreement shall have been duly obtained and shall be effective on and as of the
Closing. No stop order or other order enjoining the sale of the Shares shall
have been issued and no proceedings for such purpose shall be pending or, to the
knowledge of the Company, threatened by the SEC, or any commissioner of
corporations or similar officer of any state having jurisdiction over this
transaction. At the time of the Closing, the sale and issuance of the Shares and
the issuance of the Warrant shall be legally permitted by all laws and
regulations to which Purchaser and the Company are subject.

       

      5.2.4
Board Approval.
The Company's Board of Directors shall have authorized and approved the
issuance of the Shares pursuant to the terms and conditions set forth in this
Agreement.

       

      6.            REMOVAL
OF RESTRICTIVE LEGEND.

       

      6.1  Effective Date. The
six (6) month anniversary of the Shares purchased herein.

       

      6.2  Required Date. Within
Twenty (20) Business Days of the Effective Date.

       

      6.3 Procedure. Following
the Purchasers delivery to the Company all appropriate information and
certificates, the Company shall cause to have the Restrictive Legend removed
from the share certificates of Shares purchased herein by: (1) On the Effective
Date the Company shall notify and obtain an opinion letter from Company counsel
evidencing that the Restrictive Legend may be removed, and, (2) forwarding said
opinion letter to the Company's transfer agent instructing them to remove the
legend within the Required Date.

       

      6.4 Expenses. All
Expenses for the Removal of Restrictive Legend referred to herein shall be borne
by the Company. Purchaser shall bear all discounts, selling commissions, sales
concessions and similar expenses applicable to the sale of the Securities sold
by such holder.

       

      6.5 Rule 144. The Company
shall file the reports required to be filed by it under the Securities Act and
the Exchange Act and the rules and regulations adopted by the SEC thereunder,
and will take such further action as Purchaser may reasonably request, all to
the extent required from time to time to enable such holder to sell Shares
without registration under the Securities Act within the limitation of the
exemption provided by Rule 144 or Rule 144A. Upon the request of Purchaser, the
Company shall deliver to Purchaser a written statement as to whether the Company
has complied with such requirements. Notwithstanding the foregoing, nothing in
this Section 6.5 shall be deemed to require the Company to register any of its
securities under any section of the Exchange Act.

       

      6.6 Failure to Cause Removal of
Restrictive Legend and Other Events. Subject to Section 6.1 hereof, the
Company and the Purchaser agree that the Purchaser will suffer damages if the
Restrictive Legend is not removed in a timely manner. The Company and the
Purchaser further agree that it would not be feasible to ascertain the extent of
such damages with precision. Accordingly, if (i) the Company counsel is not
notified on the effective date; (ii) counsel has not rendered an opinion; or
(iii) the transfer agent has not removed the Restrictive Legend and issued new
certificates, the Company shall issue to the Purchaser of Shares herein as
liquidated damages for such failure or breach and not as a penalty (the
"Liquidated Damages") Warrants in an amount equal to one percent (1%) of the
Shares issuable to the Purchaser pursuant to the Purchase Agreement for each
thirty (30) day period during which any Event described above occurs and is
continuing, pro rated for any period less than thirty (30) days, following the
Event until the applicable Event has been cured; provided,
however, Purchaser will waive

       

      
 

      
        
          
          

        

        
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      any
Liquidated Damages resulting from the failure to remove the Restrictive Legend
and issue new certificates by the transfer agent if the Company cures such
failure or breach prior to the end of the first thirty (30) day period
thereafter. Notwithstanding the foregoing, in no event shall the Company be
required to deliver additional Warrants as aggregate Liquidated Damages to
Purchaser under this Section 6.6 in excess of a total of six percent (6%) of the
number of Shares issuable to the Purchaser pursuant to this Agreement. The
parties agree that the Liquidated Damages represent a reasonable estimate on the
part of the parties, as of the date of this Agreement, of the amount of damages
that may be incurred by the Purchaser if the Restrictive Legend is not removed
from the certificates of the Shares purchased herein within Twenty (20) Days of
the Effective Date.

       

      7.     MISCELLANEOUS.

       

      7.1 Fees and Expenses.
Except as otherwise set forth in this Agreement, each party shall pay the
fees and expenses of its advisors, counsel, accountants and other experts, if
any, and all other expenses, incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement.

       

      7.2 Governing Law. This
Agreement shall be governed by and construed under the laws of the State of New
York without giving effect to any of the conflicts of law principles which would
result in the application of the substantive law of another
jurisdiction.

       

      7.3 Specific Performance:
Consent to Jurisdiction: Venue.

       

      (a) The
Company and Purchaser acknowledge and agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement and
to enforce specifically the terms and provisions hereof or thereof, this being
in addition to any other remedy to which any of them may be entitled by law or
equity.

       

      (b) The
parties agree that venue for any dispute arising under this Agreement will lie
exclusively in the state or federal courts located in New York County, New York,
and the parties irrevocably waive any right to raise forum
non
conveniens or any other argument that New York is not the proper venue.
The parties irrevocably consent to personal jurisdiction in the state and
federal courts of the state of New York. The Company and Purchaser consent to
process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing in this Section 7.3 shall affect
or limit any right to serve process in any other manner permitted by law. The
Company and Purchaser hereby agree that the prevailing party in any suit, action
or proceeding arising out of or relating to the Securities or this Agreement,
shall be entitled to reimbursement for reasonable legal fees from the
non-prevailing party.

       

      7.4 Successors and
Assigns. Except as
otherwise expressly provided herein, the provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors, and
administrators of the parties hereto.

       

      7.5 Entire Agreement. This
Agreement and the Exhibits hereto and thereto, and the other documents delivered
pursuant hereto and thereto, constitute the full and entire understanding and
agreement among the parties with regard to the subjects hereof and no party
shall be liable or bound to any other party in any manner by any
representations, warranties, covenants, or agreements except as specifically set
forth herein or therein. Nothing in this Agreement, express or implied, is
intended to

      

       

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

       

       

      confer
upon any party, other than the parties hereto and their respective successors
and assigns, any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided herein.

       

      7.6 Separability. In case
any provision of this Agreement shall be invalid, illegal, or unenforceable, it
shall to the extent practicable, be modified so as to make it valid, legal and
enforceable and to retain as nearly as practicable the intent of the parties,
and the validity, legality, and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.

       

      7.7 Amendment and Waiver.
Except as otherwise provided herein, any term of this Agreement may be
amended, and the observance of any term of this Agreement may be waived (either
generally or in a particular instance, either retroactively or prospectively,
and either for a specified period of time or indefinitely), with the written
consent of the Company and Purchaser, or, to the extent such amendment affects
only one Purchaser, by the Company and such individual Purchaser. Any amendment
or waiver effected in accordance with this Section shall be binding upon each
future holder of any security purchased under this Agreement (including
securities into which such securities have been converted) and the
Company.

       

      7.8 Notices. All notices
and other communications required or permitted hereunder shall be in writing and
shall be effective when delivered personally, or sent by Facsimile or email
(with receipt confirmed), provided that a copy is mailed by registered mail,
return receipt requested, or when received by the addressee, if sent by Express
Mail, Federal Express or other express delivery service (receipt requested) in
each case to the appropriate address set forth below:

       

      If to the
Company:               Smart
Energy Solutions, Inc.

      210 West
Parkway, #7

      Pompton
Plains, 07444N.I Attention: Ed Braniff CEO

       

      If to
Purchaser:                    
At the address listed on the Purchaser Signature Page hereof.

       

      7.9 Titles and Subtitles.
The titles of the paragraphs and subparagraphs of this Agreement are for
convenience of reference only and are not to be considered in construing this
Agreement.

       

      7.10
Survival. The
representations and warranties of the Company and Purchaser contained herein
shall survive the execution and delivery hereof and the Closing until the date
two (2) years from the Closing, and the agreements and covenants of the Company
set forth herein shall survive the execution and delivery hereof and the Closing
hereunder until the Registration Statement required by is no longer required to
be effective under the terms and conditions of this Agreement.

       

      7.11
Counterparts.
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument and shall
become effective when counterparts have been signed by each party and delivered to the other
parties hereto, it being understood that all parties need not sign the
same counterpart.

       

      7.12
Publicity. The
Company agrees that it will not disclose, and will not include in any public
announcement other than the Registration Statement, the name of Purchaser
without the consent of Purchaser unless and until such disclosure is required by
law or applicable regulation, and then only to the extent of such
requirement.

       

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

       

       

      
        	
                 
      

              	
                8.

              	
                ISSUANCE
      OF ADDITIONAL, SHARES UPON ISSUANCE OF COMMON STOCK,  OPTIONS
      OR CONVERTIBLE SECURITIES AT LOWER THAN THE PURCHASE  PRICE PER SHARE
      HEREUNDER

              

      

       

      If at any
time after the Closing Date and before the date the Shares purchased herein are
no longer restricted and the new certificates have been issued to the Purchaser,
the Company issues or sells, or is deemed to have issued or sold, any shares of
Common Stock other than on exercise of outstanding options or warrants
(including the issuance or sale of shares of Common Stock owned or held by or
for the account of the Company, for a consideration per share (the "New Issuance
Price") less than the Purchase Price per share set forth in Section 1.2 above
(the foregoing a "Dilutive Issuance"), then immediately after such Dilutive
Issuance, the Company shall promptly issue to Purchaser a number of additional
shares of Common Stock so that the effective purchase price of each share of
Common Stock sold to Purchaser is equal to the New Issuance Price.

       

      Smart
Energy Solutions, Inc.

       

       

      /s/
Ed Braniff

      Ed Braniff

      President/CEO

      

       

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

       

       

       

      PURCHASER
SIGNATURE PAGE

       

       

      BlackPool Acquisitions, LLC.

      Name of
Purchaser

       

       

      Number of
Shares Purchased:

       

       

      89 Fifth Avenue, Suite 703

      New York, New York 10003

      Address of
Purchaser

       

       

      info@theblackpoolgroup.com

      212.367.7079
888.844.1847

      Email,
telephone number and fax number of Purchaser

       

       

      BlackPool Acquisitions, LLC.

      Exact
Name in which Shares will be registered

       

       

      Jonathan Cross / Managing Director

      Printed
Name and Title of Authorized Signatory

       

       

                                                                                       
  

      Authorized
Signature

       

       

       

      Dated:
December         
, 2009

       

       

      Wire
Transfer Instructions: 

       

      Smart
Energy Solutions Inc. 

       

      Account
No.

       

      Route
#

      Branch
Manager: Phone:

      FAX:

       

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

       

       

      EXHIBIT "A"

       

      PURCHASER
REPRESENTATION LETTER

      (Regulation
D — Rule 506)

       

       

      Smart
Energy Solutions, Inc. 

      210 West
Parkway #7

      Pompton
Plains, NJ 07444

       

      Gentlemen:

       

      In
connection with the purchase by BlackPool Acquisitions, LLC.,
("BlackPool") of 149,333,733 shares of Common Stock, no par value (the
"Shares"), of Smart Energy Solutions, Inc., a Nevada corporation (the "Company),
Purchaser understands that the Shares have not been registered with the U.S.
Securities and Exchange Commission ("SEC") under the U.S. Securities Act of
1933, as amended (the "Act") in reliance on Rule 506 of Regulation D,
promulgated under the Act and that the Company is relying upon the
representations made in this letter in concluding that Rule 506 of Regulation D
applies. Capitalized terms used herein will have the meaning ascribed to such
terms in the Securities Purchase Agreement entered into between the Company and
the Purchaser. Purchaser hereby represents as follows:

       

      1.   BlackPool
is acquiring the Shares and for its own account, not as a nominee or agent, for
investment and not with a view to or for resale in connection with, any
distribution or public offering thereof within the meaning of the Act, except
pursuant an effective registration statement under the Act, or an exemption from
registration under the Act.

       

      2.   BlackPool
has been advised that the Shares have not been registered under the Securities
Act or any other applicable securities laws and that the securities are being
offered and sold pursuant to Section 4(2) of the Act and Rule 506 thereunder,
and that the Company's reliance upon Section 4(2) and Rule 506 is predicated in
part on Purchaser representations as contained herein.

       

      3.    BlackPool
represents to Company that:

       

      It is a
resident of the State of New York

       

      BlackPool Acquisitions, LLC.

       

      Please
print above the exact name(s) in which Shares are to be held

       

      
        	
                Its
      address is:

              	
                89
      Fifth Avenue, Suite 703

                
                  New
      York, New York 10003

                

              

      

       

       

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

      

       

      BlackPool
is an organization described in Section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the securities offered, with total assets
in excess of $5,000,000.

       

      BlackPool
Acquisitions, LLC., is a private equity group.

       

      The
undersigned is an entity in which all of the equity owners are "accredited
investors" as defined in Section 230.501(a) of the Securities Act.

       

      BlackPool
Acquisitions, LLC.,
is a private equity group.

       

      BlackPool
acknowledges that the Shares have not been registered under the Securities Act
or the securities laws of any state and are being offered, and will be sold,
pursuant to applicable exemptions from such registration for nonpublic offerings
and will be issued as "restricted securities" as defined by Rule 144 promulgated
pursuant to the Securities Act. The Shares may not be resold in the absence of
an effective registration thereof under the Securities Act and applicable state
securities laws unless, in the opinion of the Company's counsel, an applicable
exemption from registration is available.

       

      4.   BlackPool
is acquiring the Shares for Purchaser's own account, for investment purposes
only and not with a view to, or for sale in connection with, a distribution, as
that term is used in Section 2(11) of the Securities Act, in a manner which
would require registration under the Securities Act or any state securities
laws.

       

      5.   BlackPool
understands and acknowledges that the Shares will bear the following
legend:

       

      THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED
FOR VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION THEREOF UNDER THE
SECURITIES ACT OF 1933 AND/OR THE SECURITIES ACT OF ANY STATE HAVING
JURISDICTION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.

       

      6.   BlackPool
acknowledges that an investment in the Shares is not liquid and such securities
are transferable only under limited conditions. Purchaser acknowledges that such
securities must be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is available.
Purchaser is aware of the provisions of Rule 144 promulgated under the
Securities Act, which permits limited resale of securities purchased in a
private placement subject to the satisfaction of certain conditions and that
such Rule is not now available and, in the future, may not become available for
resale of the Shares.

       

      7.   BlackPool
acknowledges that it is able to protect its interests in connection with the
acquisition of the Shares and can bear the economic risk of investment in such
securities without producing a material adverse change in Purchaser's financial
condition. Purchaser otherwise has such knowledge and experience in financial or
business matters that Purchaser is capable of evaluating the merits and risks of
the investment in the Shares.

       

       

      
 

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

       

      8.   BlackPool
represents that it IS NOT a registered
broker-dealer and does not have any direct or indirect affiliation or
association with a registered broker-dealer, whether as a director, officer,
partner, beneficial owner of a 10% or greater
interest in a registered broker-dealer.

       

      9.   BlackPool
represents as follows:

       

      Purchaser
has not relied on any financial projections, models or other financial
information relating to the Company not contained in the Company's Annual
Report, whether such projections, models or other information were provided by
the Company, the placement agent or any other source. Purchaser acknowledges
that such projections and models are inherently unreliable and are not an
accurate indication of the Company's business prospects or future financial
performance.

       

      10.   BlackPool agrees to
defend, indemnify and hold the Company harmless against any liability, costs or
expenses arising as a result of any dissemination of the Shares by Purchaser in
violation of the Act or applicable state securities law.

       

       

      Very
truly yours,

       

      BlackPool Acquisitions, LLC.

       

       

      /s/
Jonathan
Cross                           

      Jonathan
Cross

       

      Dated:
December 21, 2009

       

       

       -3-f8k121609ex10i_decisionpnt.htm

    Exhibit
10.1

     

    SECURITIES
PURCHASE AGREEMENT

    

    

    THIS SECURITIES PURCHASE
AGREEMENT, dated as of  December16, 2009, is entered into by
and among Decisionpoint Systems, Inc., (fka Canusa Capital), a Delaware company
(“DS-Del”),
Decisionpoint Systems Group, Inc., a Delaware corporation and a wholly-owned
subsidiary of DS-Del. (“Group”),
Decisionpoint Systems CA, Inc., a California corporation and a wholly-owned
subsidiary of Group (“DS-CA”),
and Decisionpoint Systems CT, Inc., a Connecticut corporation and a wholly-owned
subsidiary of Holdings (“DS-Conn”),
with headquarters located at 19655 Descartes, Foothill Ranch, California
62910-2609 (Group), DS-CA and DS-Conn, are jointly and severally referred to
collectively as the “Company”),
and each purchaser set forth on Schedule
A hereto (each a “Purchaser,”
and, collectively, the “Purchasers”).

    

    R
E C I T A L S

     

    W
I T N E S S E T H:

    

    WHEREAS, the Company is a data
collection systems integrator that sells and installs field mobility devices,
software and related bar coding equipment and provides radio frequency
identification solutions as well as professional services and software
customization solutions;

    

    WHEREAS, the Company and the
Purchasers are executing and delivering this Agreement in accordance with and in
reliance upon the exemption from securities registration for offers and sales to
accredited investors afforded, inter alia, by Rule 506 under Regulation D
(“Regulation
D”) as promulgated by the United States Securities and Exchange
Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “Securities
Act”), and/or Section 4(2) of the Securities Act;

    

    WHEREAS, the Company has
requested the Purchasers and the Purchasers have agreed to purchase from the
Company $2,500,000 aggregate principal amount of fifteen (15%) percent Senior
Subordinated Secured Promissory Notes of the Company (each, a “Note,”
and, collectively, the “Notes”),
in the amounts for each Purchaser set forth in Schedule
A hereto, subject to and  upon the terms and conditions of this
Agreement and acceptance of this Agreement by the Company, on the terms and
conditions referred to herein;

     

    WHEREAS, as partial
consideration to the Purchasers purchasing the Notes, the Company will issue to
the Purchasers’ in the aggregate (i) warrants (the “Warrants”)
to purchase 2,000,000 shares of common stock, par value $0.001 per share (the
“Warrant
Shares”) of the Company (the “Common
Stock”), of which Warrants to purchase 1,000,000 Warrant Shares and
1,000,000 Warrant Shares will have exercise prices of $.60 per Warrant Share and
$.50 per Warrant Share, respectively, and (ii) 500,000 shares of Common Stock
(the “Shares”),
in the amounts to each Purchaser set forth on Schedule
B hereto;

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    WHEREAS, the Company and each
Purchaser shall enter into a registration rights agreement covering the resale
of the Shares and the Warrant Shares (the “Registration
Rights Agreement”).

     

    WHEREAS, among other
conditions to the Purchasers purchasing the Notes  (i) the Company,
the Purchasers and the Senior Bank shall enter into a Subordination Agreement
pursuant to which, among other items, the Purchasers will subordinate their
Notes (the “Intercreditor
Agreement”); and (ii)(a) the Company, Nicholas R. Toms and Donald W.
Rowley shall agree with the Purchasers that the Company will not make and such
persons will not demand and/or accept  any payments in excess of
$1,200,000 in the aggregate ($300,000 per quarter commencing with the quarter
ending March 31, 2010) in accordance with and subject to Section
4(g) hereof, for, among other obligations, the $2,000,000 of outstanding
notes, accounts payable, accrued but unpaid salaries, and benefits, accrued but
unpaid interest on any such obligations (collectively, the “Accrued
Payables”), until the Notes and all accrued but unpaid interest thereon
is repaid in full (the “$300,000
Quarterly Payments”), and (b) Messrs. Toms and Rowley shall pay out of
each $300,000 Quarterly Payment received by them, $125,000 and $150,000 to the
holders of $250,000 aggregate principal amount of Company Subordinated
Convertible Notes issued in June 2009 (the “2009
Notes”), and the 2007 Notes, respectively, until all principal and
accrued but unpaid interest thereon is repaid;

    

    WHEREAS, the Company’s
obligations to repay the Notes will be (i) secured by all of the assets of the
Company pursuant to a Security Agreement of even date herewith (the “Security
Agreement”); subordinated only to indebtedness under and pursuant to the
Loan and Security Agreement by and between the Senior Bank, the Company and the
other signatories thereto, as amended pursuant to the Amendment to Loan and
Security Agreement dated March 19, 2009 by and between the Company, the Senior
Bank and the other signatories thereto (collectively, the “Senior
Credit Agreement”), and (ii) guaranteed by each Subsidiary (as defined
below) pursuant to guaranties executed by each Subsidiary in favor of the
Purchasers (the “Guaranties”);
and

    

    NOW THEREFORE, in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

    

    1.           AGREEMENT
TO PURCHASE; PURCHASE PRICE.

    

    a.           Purchase.

    

    (i)           Subject
to the terms and conditions of this Agreement and the other Transaction
Agreements, the Purchasers hereby agrees to purchase the Notes for the sum of
Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000) (the “Purchase
Amount”), in the amounts for each Purchaser as set forth on Schedule
A hereto.

    

    (ii)           The
Note(s), the Warrants, the Registration Rights Agreement, the Intercreditor
Agreement, the Security Agreement and the Guaranties referred to herein shall be
in the form of Annex
I, Annex
II, Annex
III, Annex
IV, Annex
V and Annex
VI attached
hereto, respectively.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (iii)           The
purchase of the Note(s) and the other transactions contemplated hereby are
sometimes referred to herein and in the other Transaction Agreements as the
purchase and sale of the Securities (as defined below), and are referred to
collectively as the “Transactions”.

    

    b.           Certain Definitions. As
used herein, each of the following terms has the meaning set forth below, unless
the context otherwise requires:

    

    “Affiliate”
means, with respect to a specific Person referred to in the relevant provision,
another Person who or which controls or is controlled by or is under common
control with such specified Person.

    

    “Certificate”
means the original ink-signed Note(s) duly executed by the Company.

    

    “Closing
Date” means the date of the closing of the Transactions, as provided
herein.

    

    “Company
Control Person” means each director, executive officer, promoter, and
such other Persons as may be deemed in control of DS-Del and/or any Subsidiary
pursuant to Rule 405 under the Securities Actor Section 20 of the Exchange
Act.

    

    “Consolidated
EBITDA” means,
for any applicable period, consolidated earnings before consolidated interest,
consolidated taxes, consolidated depreciation and consolidated amortization, as
determined based upon the Company’s financial statements included in the
Company’s SEC Reports for such period.  For purposes hereof,
consolidated earnings, consolidated interest, consolidated taxes, consolidated
depreciation and consolidated amortization for any period shall be determined in
accordance with United States Generally Accepted Accounting Principles,
consistently applied (“GAAP”);
provided, however; that
notwithstanding anything to the contrary provided herein or elsewhere,
Consolidated EBITDA shall exclude all amounts relating to gains from
non-recurring events (such as reorganizations) as well as from any and all asset
and/or stock acquisitions and/or sales made by the Company.

     

    “Disclosure
Annex” means Annex
VII to this Agreement; provided, however, that the
Disclosure Annex shall be arranged in sections corresponding to the identified
Sections of this Agreement, but the disclosure in any such section of the
Disclosure Annex shall qualify other provisions in this Agreement to the extent
that it would be readily apparent to an informed reader from a reading of such
section of the Disclosure Annex that it is also relevant to other provisions of
this Agreement.

    

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

     

    “Holder(s)”
means the Person(s) holding the relevant Securities at the relevant
time.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    “Liens”
means a lien, charge, security interest, encumbrance, right of first refusal,
preemptive right or other restriction.

    

    “Material
Adverse Effect” means an event or combination of events, which
individually or in the aggregate, would reasonably be expected to (w) adversely
affect the legality, validity or enforceability of the Securities or any of the
Transaction Agreements, (x) have or result in a material adverse effect on the
results of operations, assets, or condition (financial or otherwise) of the
Company, taken as a whole, (y) adversely impair the Company’s ability to perform
fully on a timely basis its obligations under any of the Transaction Agreements
or the transactions contemplated thereby, or (z) materially and adversely affect
the value of the rights granted to the Purchaser in the Transaction
Agreements.

    

    “Person”
means any living person or any entity, such as, but not necessarily limited to,
a corporation, partnership or trust.

    

    “Purchaser
Control Person” means each director, executive officer, promoter, and
such other persons as may be deemed in control of any Purchaser pursuant to Rule
405 under the Securities Act or Section 20 of the Exchange Act.

    

    “Securities”
means the Note(s), the 500,000 Shares, the Warrants and the Warrant
Shares  issuable to the Purchaser(s) in connection with the
Transaction Documents.

    

    “Senior
Bank” means Silicon Valley Bank.

    

    “Subsidiary”
means each of Group, DS-CA, DS-Conn.

    

    “Subsidiaries”
means Group, DS-CA and DS-Conn on a collective basis.

    

    “Transaction
Fees” means legal and due diligence fees incurred by the
Purchaser(s).

    

    “Transaction
Agreements” means this Purchase Agreement, the Notes, the Warrants, the
Intercreditor Agreement, the Guaranties, the Security Agreement, the
Registration Rights Agreement and all ancillary documents referred to in those
agreements.

    

    c.           Form of Payment; Delivery of
Certificates.

    

    (i)           The
Purchaser shall pay the Purchase Amount by delivering immediately available good
funds in United States Dollars to the Company on the Closing Date.

    

    (ii)           On
the Closing Date, the Company shall deliver the Certificate and the Warrant,
duly executed on behalf of the Company, to the Purchaser.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (iii)           By
signing this Agreement, each of the Purchasers and the Company agrees to all of
the terms and conditions of the Transaction Agreements, all of the provisions of
which are incorporated herein by this reference as if set forth in
full.

    

    d.           Method of
Payment.  Payment of the Purchase Amount shall be made by wire
transfer of immediately available funds to an account of the Company as provided
to the Purchaser.

    

    e.           Payments to
Purchasers.

    

    (i)           Upon
execution of this Agreement by the Company, the Company shall pay to the
Purchasers, pro-rata, based upon each such Purchasers, principal amount of Note
owned compared to the principal amount of all Notes outstanding, a closing
payment of three percent (3%) of the Purchase Amount.  Such payment
shall be deemed fully earned on the Closing Date and shall not be subject to
rebate or proration for any reason.

    

    (ii)           If
any principal amount is owing on the date twelve (12) months following the
Closing Date, the Company will pay to the Purchaser, pro-rata, based upon each
such Purchasers principal amount of Note owed compared to the principal amount
of all Notes outstanding, a payment of one and one half (1.5%) percent of the
then outstanding aggregate principal amount of Notes.  Such amount
shall be deemed fully earned on such date and not subject to rebate or
pro-ration for any reason.

    

    (iii)           If
the Notes are extended one (1) or more times pursuant to and in accordance with
the terms of this Purchase Agreement and the Notes, upon each such extension,
the Company shall pay to the Purchasers at each closing of each extension,
pro-rata, a closing payment equal to one and one half (1.5%) percent of the then
outstanding aggregate principal amount of Notes, which payment shall be in
addition to the payment set forth in Section
(1)(e)(ii) above.  Such amount shall be deemed fully earned on
the closing date of such extension and shall not be subject to rebate or
pro-ration for any reason.

    

    (iv)           The
Company shall pay the Purchasers’ reasonable legal and due diligence expenses up
to $40,000.  The Company has paid to the Purchasers prior to the
Closing Date a $25,000 deposit towards these expenses.  Any additional
expenses, subject to the limitations in this subsection, shall be paid to the
Purchasers and will be deducted from the proceeds of the Purchase Amount on the
Closing Date.  In this instance, the Purchasers will provide the
Company with an accounting of all such additional expenses.  In no
case shall all expenses exceed $40,000 in total without the express written
consent of the Company.

    

    (v)           If
the Notes are extended pursuant to and in accordance with the terms of the
Notes, the Company shall pay the Purchasers reasonable legal and due diligence
expenses.  The Purchasers will provide the Company with an accounting
of all such additional expenses.  In no case shall all due diligence
expenses exceed $35,000 in total without the express written consent of the
Company.  All such funds shall be paid at closing of the Note
extension.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    2.  PURCHASER
REPRESENTATIONS, WARRANTIES, ETC.

    

    The
Purchasers represent and warrant to, to the best of their knowledge, and
covenant and agree with, the Company as follows:

    

    a.           Without
limiting Purchasers’ right to sell the Securities pursuant to an effective
registration statement or otherwise in compliance with the Securities Act, the
Purchasers are purchasing the Securities for their own account for investment
only and not with a view towards the public sale or distribution thereof and not
with a view to or for sale in connection with any distribution
thereof.

    

    b.           Each
Purchaser is (i) an “accredited investor” as that term is defined in Rule 501 of
the General Rules and Regulations under the Securities Act by reason of Rule
501(a)(3), (ii) experienced in making investments of the kind described in this
Agreement and the related documents, (iii) able, by reason of the business and
financial experience of its officers (if an entity) and professional advisors
(who are not affiliated with or compensated in any way by the Company or any of
its Affiliates or selling agents), to protect its own interests in connection
with the transactions described in this Agreement, and the related documents,
and to evaluate the merits and risks of an investment in the Securities, and
(iv) able to afford the entire loss of its investment in the
Securities.

    

    c.           All
subsequent offers and sales of the Securities by the Purchasers shall be made
pursuant to registration of the relevant Securities under the 1933 Act or
pursuant to an exemption from registration.

    

    d.           The
Purchasers understand that the Securities are being offered and sold to them in
reliance on specific exemptions from the registration requirements of the
Securities Act and state securities laws and that the Company is relying upon
the truth and accuracy of, and the Purchasers’ compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Purchasers set forth herein in order to determine the availability of such
exemptions and the eligibility of the Purchasers to acquire the
Securities.

    

    e.           The
Purchasers and their advisors, if any, have been furnished with or have been
given access to all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Securities
which have been requested by the Purchasers, including those set forth on in any
annex attached hereto. The Purchasers and their advisors, if any, have been
afforded the opportunity to ask questions of the Company and its management and
have received complete and satisfactory answers to any such
inquiries.

    

    f.           The
Purchasers understand that their investment in the Securities involves a high
degree of risk.

    

    g.           The
Purchasers understand that no United States federal or state agency or any other
government or governmental agency has passed on or made any recommendation or
endorsement of the Securities.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    h.           This
Purchase Agreement and the other Transaction Agreements to which the Purchasers
are a party, and the transactions contemplated thereby, have been duly and
validly authorized, executed and delivered on behalf of the Purchasers and are
valid and binding agreements of the Purchasers enforceable in accordance with
their respective terms, subject as to enforceability to general principles of
equity and to bankruptcy, insolvency, moratorium and other similar laws
affecting the enforcement of creditors’ rights generally.

    

    3.           COMPANY REPRESENTATIONS,
ETC.   The Company represents and warrants, to the best of
its knowledge, to the Purchasers as of the date hereof and as of the Closing
Date that, except as otherwise provided in the Disclosure Annex:

    

    a.           Rights of Others Affecting the
Transactions.  There are no preemptive rights and/or
anti-dilution rights of any person holding securities of the Company. No person
has a right of first refusal.

    

    b.           Status.  DS-Del,
Group, DS-CA and DS-Conn are each corporations duly organized, validly existing
and in good standing under the laws of Delaware, Delaware, California and
Connecticut, respectfully, and each has the power to own its respective
properties and to carry on its business as now being conducted.  Each
of such entities is duly qualified as a foreign entity to do business and is in
good standing in each jurisdiction where the nature of the business conducted or
property owned by each makes such qualification necessary, other than those
jurisdictions in which the failure to so qualify would not have or result in a
Material Adverse Effect.

    

    c.           Transaction
Agreements.  This Purchase Agreement and each of the other
Transaction Agreements, and the transactions contemplated thereby, have been
duly and validly authorized by the Company, this Agreement has been duly
executed and delivered by the Company and this Agreement is, and the Note and
each of the other Transaction Agreements, when executed and delivered by the
Company, will be, valid and binding agreements of the Company enforceable in
accordance with their respective terms, subject as to enforceability to general
principles of equity and to bankruptcy, insolvency, moratorium, and other
similar laws affecting the enforcement of creditors’ rights
generally.

    

    d.           Non-contravention.  The
execution and delivery of this Purchase Agreement and each of the other
Transaction Agreements by the Company, the issuance of the Securities
(including, but not limited to the Warrant Shares), and the consummation by the
Company of the other transactions contemplated by this Purchase Agreement and
the other Transaction Agreements, do not and will not conflict with or result in
a breach by the Company of any of the terms or provisions of, or constitute a
default under (i) the Certificate of Incorporation and /or By-laws of the
Company, each as currently in effect (the “Internal
Documents”), (ii) the Senior Credit Agreement and all documents executed
in connection therewith, (iii) any indenture, mortgage, deed of trust, or other
material agreement or instrument to which the Company is a party or by which it
or any of its properties or assets are bound, except as herein set forth, or
(iv) to its knowledge, any existing applicable law, rule, or regulation or any
applicable decree, judgment, or order of any court, United States federal or
state regulatory body, administrative agency, or other governmental body having
jurisdiction over the Company or any of its properties or assets, except such
conflict, breach or default which would not have or result in a Material Adverse
Effect.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    e.           Approvals.  No
authorization, approval or consent of any court, governmental body, regulatory
agency, self-regulatory organization, or stock exchange or market or the
membership interest holders of the Company is required to be obtained by the
Company for the issuance and sale of the Securities to the Purchasers as
contemplated by this Agreement, except such authorizations, approvals and
consents that have been obtained.

     

    g.         Capitalization.  As of November 30, 2009, the
authorized capital stock of the
Company consists solely of (i) 100,000,000 shares of Common Stock of which
28,000,000 shares are and will be issued and outstanding as of the Closing Date,
and immediately prior to the issuance of any Securities, and (ii) 10,000,000
shares of preferred stock, par value $0.001 per share (the “Preferred
Stock”), of which 10,000 such shares are designated “Series A Preferred
Stock” (the “A
Shares”) of which 975 A Shares are and will be issued and outstanding on
the Closing Date with a stated value of $1,000 per A Share. The Company has no
other shares of Preferred Stock and /or Common Stock issued and
outstanding.  The Company has reserved for issuance 11,650,000 shares
of Common Stock issuable upon exercise exchange and/or conversion of issued and
outstanding warrants, options, the A Shares, and other
securities.  Other than such 11,650,000 shares of Common Stock
reserved, the Company has no other securities and/or obligations to issue other
securities that are exchangeable, exercisable, convertible, and/or require the
issuance of Common Stock.  The Company has furnished or made available
to the Purchasers true and correct copies of the Company’s Internal Documents,
in effect on the date.  All of the outstanding shares of the Common
Stock and Preferred Stock have been duly and validly authorized and are fully
paid and nonassessable.  Except as described in the Disclosure Annex,
no shares of Common Stock and/or other securities are entitled to registration
rights.  Except as described in the Disclosure Annex, there are no
outstanding options, warrants, scrip, rights to subscribe to, call or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company.  The
Company is not a party to, and it has no knowledge of, any agreement restricting
the voting of any shares of the capital stock of the Company, or restricting the
transfer of the Securities.  The offer and sale of all capital stock,
convertible securities, rights, warrants, or options of the Company issued prior
to the Closing Date complied with all applicable Federal and state securities
laws, and no stockholder has a right of rescission or claim for damages with
respect thereto.  DS-Del. owns all of the issued and outstanding
capital stock of each Subsidiary.  Other than Group, DS-Conn. and
DS-CA., the Company has no other subsidiaries and on the Closing Day will not
have any.

    

                   h.           Issuance of
Securities.  The Notes, 500,000 Shares and Warrants to be
issued to the Purchasers at the Closing and the
Warrant Shares have been duly and validly authorized by all necessary
corporate action.  When the Warrant Shares are issued in accordance
with the terms of the Warrants, such Warrant Shares will be validly issued and
outstanding, fully paid and nonassessable, without
any further action of the Company or its stockholders and the holders
shall be entitled to all rights accorded to a holder of Common
Stock.  Until such time as all of the Warrants are fully exercised or
expire, the Company shall have an amount of authorized Common Stock at least
sufficient for the full issuance of all Warrant Shares to be issued full
exercise of all Warrants.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

                          
        i.          SEC Reports.  The
Current Report on Form 8-K (the “8-K”),
to be filed with the SEC describing the transactions set forth in this Agreement
and the other Transaction Agreements will comply in all material respects with
the requirements of the Exchange Act, and the rules and regulations promulgated
thereunder.  The Form 8-K does not contain any untrue statement of a
material fact or omit 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.  The Company has delivered
to the Purchasers or made available through the SEC’s EDGAR filing system true
and complete copies of the reports (the “SEC
Reports”), filed by the Company under the Securities Act, and/or the
Exchange Act, which includes the audited financial statements of the Company for
the fiscal years ended December 31, 2008 and 2007 (the “Audited
Financial Statements Date”) and unaudited financial statements for the
Company for the quarter ended September 30, 2009 ((the “Quarterly
Financial Statements Date”).  Such audited and unaudited
financial statements, are referred to collectively as the “Financial
Statements.”  The Financial Statements complied in all material
respects with the requirements of the Exchange Act, and the rules and
regulations of the Commission promulgated thereunder. Such Financial Statements
have been prepared in accordance with accounting principles generally accepted
in the United States (“GAAP”)
applied on a consistent basis during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto or (ii) in
the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements), and fairly present in all
material respects the financial position of the Company and its Subsidiaries as
of the dates thereof and the results of operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).

     

                 
  j.          No Material Adverse
Change.  Since
the Quarterly Financial Statements Date, the Company has not experienced or
suffered any Material Adverse Effect or any event that is reasonably likely,
through the passage of time or otherwise, to result in a Material Adverse
Effect.  For the purposes of this Agreement, “Material
Adverse Effect” means any material adverse effect on the business,
properties, assets, operations, results of operations or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole, or on the
transactions contemplated hereby.

     

               
   k.          No Undisclosed Events or
Circumstances.  No event or circumstance has occurred or exists
with respect to the Company or its business, properties, prospects, operations
or financial condition, 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.

     

                 
  l.          
Title to
Assets.  Except for liens representing debt owed to the Senior
Bank pursuant to the Senior Credit Agreement, each of DS-Del and the
Subsidiaries have good and marketable title to all of its respective owned real
and personal property whether tangible or intangible (collectively, the “Assets”),
free and clear of any mortgages, pledges, charges, liens, security interests,
claim, community property interest, condition, equitable interest or other
encumbrances, license, option, right of first refusal or restriction of any
kind, including any restriction on use, voting, transfer, receipt of income or
exercise of any other attribute of ownership (“Liens”).  All
leases of DS-Del and each Subsidiary are valid and subsisting and in full force
and effect and neither this Agreement nor the transactions contemplated hereby
will give any party to such leases any right to terminate or modify the
leases.

     

                
  m.          Taxes.  DS-Del and
each Subsidiary has accurately prepared and filed all material foreign, federal,
state income and all other tax returns, reports and declarations required by law
to be paid or filed by it by any jurisdiction to which DS-Del and each
Subsidiary is subject, has paid or made provisions for the payment of all taxes
shown to be due and all additional assessments, and adequate provisions have
been and are reflected in the Financial Statements for all current taxes and
other charges to which DS-Del and each Subsidiary is subject and which are not
currently due and payable.  None of the federal income tax returns of
DS-Del and its Subsidiaries or any Subsidiary have been audited by the Internal
Revenue Service.  The Company has no knowledge of any additional
assessments, adjustments or contingent tax liability (whether federal or state)
of any nature whatsoever, whether pending or threatened against DS-Del or any
Subsidiary for any period, nor of any basis for any such assessment, adjustment
or contingency.  DS-De; and its Subsidiaries have complied in all
material respects with all applicable legal requirements relating to the payment
and withholding of taxes and, within the time and in the manner prescribed by
law, has withheld from wages, fees and other payments, and paid over to the
proper governments or regulatory authorities, all amounts required.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

                   
n.         Books and Records Internal Accounting
Controls.  The books and records of DS-Del and its Subsidiaries
accurately reflect in all material respects the information relating to the
business of DS-Del and its Subsidiaries, the location and collection of their
assets, and the nature of all transactions giving rise to the obligations or
accounts receivable of DS-Del or any Subsidiary to the extent required to be
contained therein.  The Company and each of its Subsidiaries maintain
a system of internal accounting controls sufficient, in the judgment of the
Company, to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
actions is taken with respect to any differences.

     

                   
o.          No Integrated
Offering.  Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf, has directly or indirectly made any
offers or sales of any security or solicited any offers to buy any security
under circumstances that would cause the offering of the Securities pursuant to
this Agreement to be integrated with prior offerings by the Company for purposes
of the Securities Act which would prevent the Company from selling the
Securities pursuant to Rule 506 under the Securities Act, or any applicable
exchange-related stockholder approval provisions, nor will the Company or any of
its affiliates or Subsidiaries take any action or steps that would cause the
offering of the Securities to be integrated with other offerings.

     

                  
 p.          No Commission or FINRA
Inquiries.  To the best of the Company’s knowledge, the Company
is not, and has never been, the subject of any formal or informal inquiry or
investigation by the SEC or Financial Industry Regulatory Authority,
Inc.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

                 
 q.          Anti-takeover
Device.  The Company does not have any outstanding shareholder
rights plan or “poison pill” or any similar arrangement.  There are no
provisions of any anti-takeover or business combination statute applicable to
the Company or its Internal Documents which would preclude the issuance and sale
of the Notes, Warrants and/or the Warrant Shares, and the consummation of the
other transactions contemplated by this Agreement and the other Transaction
Documents.

     

                                   
r.          Absence of Certain
Changes.  Since the Quarterly Financial Statement Date, neither
DS-Del nor any Subsidiary has: (i) incurred or become subject to any material
liabilities (absolute or contingent) except liabilities incurred in the ordinary
course of business consistent with past practices; (ii) discharged or satisfied
any material lien or encumbrance or paid any material obligation or liability
(absolute or contingent), other than current liabilities paid in the ordinary
course of business consistent with past practices; (iii) declared or made any
payment or distribution of cash or other property to shareholders with respect
to its capital stock, or purchased or redeemed, or made any agreements to
purchase or redeem, any shares of its capital stock; (iv) sold, assigned or
transferred any other tangible assets, or canceled any debts owed to the Company
by any third party  or claims of the Company against any third party,
except in the ordinary course of business consistent with past practices; (v)
suffered the loss of any material amount of existing business; (vi) made any
increases in employee compensation, except in the ordinary course of business
consistent with past practices; or (vii) experienced any material problems with
labor or management in connection with the terms and conditions of their
employment.

     

    s.           Absence of
Litigation.  There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board or body pending or, to the
knowledge of the Company, threatened against or affecting the Company before or
by any governmental authority or nongovernmental department, commission, board,
bureau, agency or instrumentality or any other person, wherein an unfavorable
decision, ruling or finding would have a Material Adverse Effect or which would
adversely affect the validity or enforceability of, or the authority or ability
of the Company to perform its obligations under, any of the Transaction
Agreements.  The Company is not aware of any valid basis for any such
claim that (either individually or in the aggregate with all other such events
and circumstances) could reasonably be expected to have a Material Adverse
Effect. There are no outstanding or unsatisfied judgments, orders, decrees,
writs, injunctions or stipulations to which the Company is a party or by which
it or any of its properties is bound, that involve the transaction contemplated
herein or that, alone or in the aggregate, could reasonably be expect to have a
Material Adverse Effect.

    

    t.           Absence of Events of
Default.  (i) Neither DS-Del nor any of its Subsidiaries is in
default in the performance or observance of any material obligation, agreement,
covenant or condition contained in any material indenture, mortgage, deed of
trust or other material agreement to which it is a party or by which its
property is bound, and (ii) no Event of Default (or its equivalent term), as
defined in the respective agreement to which the DS-Del or any Subsidiary is a
party, and no event which, with the giving of notice or the passage of time or
both, would become an Event of Default (or its equivalent term) (as so defined
in such agreement), has occurred and is continuing, which would have a Material
Adverse Effect.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    u.          Absence of Certain Company Control
Person Actions or Events.  To the Company’s knowledge, none of
the following has occurred during the past three (3) years with respect to a
Company Control Person:

    

    (1) A
petition under the federal bankruptcy laws or any state insolvency law was filed
by or against, or a receiver, fiscal agent or similar officer was appointed by a
court for the business or property of such Company Control Person, or any
partnership in which he was a general partner at or within two (2) years before
the time of such filing, or any corporation or business association of which he
was an executive officer at or within two years before the time of such
filing;

    

    (2) Such
Company Control Person was convicted in a criminal proceeding or is a named
subject of a pending criminal proceeding (excluding traffic violations and other
minor offenses);

    

    (3) Such
Company Control Person was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him from, or otherwise
limiting, the following activities:

    

    (i)
acting, as an investment advisor, underwriter, broker or dealer in securities,
or as an affiliated person, director or employee of any investment company,
bank, savings and loan association or insurance company, as a futures commission
merchant, introducing broker, commodity trading advisor, commodity pool
operator, floor broker, any other Person regulated by the Commodity Futures
Trading Commission (“CFTC”)
or engaging in or continuing any conduct or practice in connection with such
activity;

    

    (ii)  engaging
in any type of business practice; or

     

    (iii)
engaging in any activity in connection with the purchase or sale of any security
or commodity or in connection with any violation of federal or state securities
laws or federal commodities laws;

    

    (4) Such
Company Control Person was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any federal or state authority
barring, suspending or otherwise limiting for more than sixty (60) days the
right of such Company Control Person to engage in any activity described in
paragraph (3) of this item, or to be associated with Persons engaged in any such
activity; or

    

    (5) Such
Company Control Person was found by a court of competent jurisdiction in a civil
action or by the CFTC or SEC to have violated any federal or state securities
law, and the judgment in such civil action or finding by the CFTC or SEC has not
been subsequently reversed, suspended, or vacated.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

                            v.        
 No Undisclosed
Liabilities or Events.  Except as provided in the Disclosure
Annex, the Company has no undisclosed liabilities or obligations. No event or
circumstances has occurred or exists with respect to the Company or its
properties, business, operations, condition (financial or otherwise), or results
of operations, which, under applicable law, rule or regulation, requires public
disclosure or announcement prior to the date hereof by the Company but which has
not been so publicly announced or disclosed.  There are no proposals
currently under consideration or currently anticipated to be under consideration
by the Board of Directors or the executive officers of the Company which
proposal would (x) change the Internal Documents, as each as currently in
effect, or (y) materially or substantially change the business, assets or
capital of the Company, including its interests in Subsidiaries.

    

                 
 w.         Dilution.  Any
equity interests issued in connection with the Transaction Agreements may have a
dilutive effect on the ownership interests of the other shareholders (and
Persons having the right to become shareholders) of the Company.  The
Company’s executive officers and directors have studied and fully understand the
nature of the Securities being sold hereby and recognize that they have such a
potential dilutive effect.

    

                   x.           Fees to Brokers, Finders and
Others.  Other than with respect to Affiliates of one or more
of the Purchasers, the Company has taken no action which would give rise to any
claim by any Person for brokerage commission, finder’s fees or similar payments
by Purchasers relating to this Agreement or the transactions contemplated
hereby.  Purchasers shall have no obligation with respect to such fees
or with respect to any claims made by or on behalf of other Persons for fees of
a type contemplated in this paragraph that may be due in connection with the
transactions contemplated hereby.  The Company shall indemnify and
hold harmless each Purchaser, its employees, officers, directors, agents, and
partners, and their respective Affiliates, from and against all claims, losses,
damages, costs (including the costs of preparation and reasonable attorneys’
fees) and expenses suffered in respect of any such claimed or existing fees, as
and when incurred.

    

                  
y.          Confirmation.  The
Company confirms that all statements of the Company contained herein shall
survive acceptance of this Agreement by the Purchasers but shall terminate when
all obligations under all of the Securities have been fully
satisfied.  The Company agrees that, if any events occur or
circumstances exist prior to the Closing Date or the release of the Purchase
Amount to the Company which would make any of the Company’s representations,
warranties, agreements or other information set forth herein materially untrue
or materially inaccurate as of such date, the Company shall immediately notify
the Purchasers (directly or through its counsel, if any) in writing prior to
such date of such fact, specifying which representation, warranty or covenant is
affected and the reasons therefor.

    

                    z.      
   Labor Relations.  No material labor dispute
exists or, to the knowledge of the Company, is imminent with respect to any of
the employees of the Company which could reasonably be expected to result in a
Material Adverse Effect.

     

                                   
aa.   
     Regulatory Permits.  DS-Del and
the Subsidiaries possess all certificates, authorizations and permits issued by
the appropriate federal, state, local or foreign regulatory authorities
necessary to conduct their respective businesses, except where the failure to
possess such permits could not have or reasonably be expected to result in a
Material Adverse Effect (“Material
Permits”), and neither DS-Del nor any Subsidiary has received any notice
of proceedings relating to the revocation or modification of any Material
Permit.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

                                   
bb.         Patents and
Trademarks.  DS-Del and the Subsidiaries have, or have rights
to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights, licenses and other similar rights
necessary or material for use in connection with their respective businesses and
which the failure to so have could have a Material Adverse Effect (collectively,
the “Intellectual
Property Rights”).  To the best knowledge of the Company, all
of its Intellectual Property Rights are enforceable.  Neither DS-Del
nor any Subsidiary has received a written notice that the Intellectual Property
Rights used by DS-Del or any Subsidiary violates or infringes upon the rights of
any Person other than a letter dated November 5, 2009 from PetSmart, Inc. with
accompanying materials, notifying DS-DEL of PetSmart’s receipt of a letter and
accompanying materials from U.S. Ethernet Innovations, LLC alleging purported
claims of patent infringement by PetSmart, which according to the letter, appear
to involve the use of Pet Smart of products that PetSmart purchased from
DS-DEL.  DS-DEL acted solely as a distributor of the products, and has
notified Motorola, Inc., the manufacturer of the
allegations.  Motorola is presently addressing the
matter.  The Company does not believe such matters will have a
Material Adverse Effect.

     

                                    cc.          Insurance.  DS-Del
and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which DS-Del and the Subsidiaries are engaged
in, and in an amount at least equal to the Purchase Amount.  To the
best of Company’s knowledge, such insurance contracts and policies are accurate
and complete.  Neither the Company nor any Subsidiary has reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business without a significant increase in
cost.  The Company is current on all of its premiums for all of its
insurance policies.  Set forth in the Disclosure Annex is a detailed
summary of the Company’s Directors and Officers liability insurance policy
including, but not limited to, the coverage amount on a per incident basis
and  in the aggregate.

     

                                   
dd.         Transactions
with Affiliates and Employees.  Except as disclosed in the
Disclosure Annex, 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 with DS-Del or any Subsidiary (other than for services
as employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge
of the Company, any entity in which any officer, director, or any such employee
has a substantial interest or is an officer, director, trustee or partner, in
each case in excess of $20,000 in the aggregate.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

                              
     ee.        Solvency.  Based
on the financial condition of the Company as of the Closing Date after giving
effect to the receipt by the Company of the net proceeds from the sale of the
Securities hereunder: (i) the Company’s fair saleable value of its assets
exceeds the amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature; (ii) after giving effect to the transactions
contemplated by the Transaction Agreements, the Company’s assets do not
constitute unreasonably small capital to carry on its business for the current
fiscal year as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of the
business conducted by the Company, and projected capital requirements and
capital availability thereof; and (iii) the current cash flow of the Company,
together with the proceeds the Company would receive, were it to liquidate all
of its assets, after taking into account all anticipated uses of the cash, would
be sufficient to pay all amounts on or in respect of its debt when such amounts
are required to be paid.  The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of its
debt).  The Company has no knowledge of any facts or circumstances
which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year
from the Closing Date.  The Financial Statements set forth as of the
dates thereof all outstanding secured and unsecured Indebtedness of the Company
and/or any Subsidiary, or for which the Company and/or any Subsidiary has
commitments.  For the purposes of this Agreement, “Indebtedness”
shall mean (a) any liabilities for borrowed money or amounts owed (other than
trade accounts payable incurred in the ordinary course of business), (b) all
guaranties, endorsements and other contingent obligations in respect of
Indebtedness of others, whether or not the same are or should be reflected in
the Company’s balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (c) the present value of
any lease payments due under leases required to be capitalized in accordance
with GAAP. Neither the Company nor any Subsidiary is in default with respect to
any Indebtedness.

     

                                   
ff.          Tax
Status.  Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, DS-Del and each Subsidiary has filed all necessary federal, state and
foreign income and franchise tax returns and has paid or accrued all taxes shown
as due thereon, and the Company has no knowledge of a tax deficiency which has
been asserted or threatened against the Company or any Subsidiary.

     

    

                                  
 gg.       Full
Disclosure.  No statement in writing furnished by the Company
to the Purchasers in connection with the transactions contemplated herein
contains any untrue statement of material fact or omits to state a material fact
necessary to make the statement made not misleading in any material
respects.

    

                    hh.        Use of Rule
144.  Holders of Common Stock will be eligible to sell such
securities under Rule 144 commencing on June 18, 2010, which is the date twelve
(12) months from the date that the Company filed its Current Report on Form 8-K
reporting the Company’s acquisition of Holdings in a reverse
merger.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    4.           CERTAIN
COVENANTS AND ACKNOWLEDGMENTS.

    

    Each of
the Company and the Purchasers (as applicable), hereby covenants and
acknowledges as follows, which covenants and acknowledgements by the Company to
the Purchasersshall survive until
all of the Company’s obligations under the Securities (including, but not
limited to, the full repayment of all principal and accrued but unpaid interest
on the Notes) and the other Transaction Agreements have been fully
satisfied:

    

    a.           Transfer
Restrictions.  The Purchasers acknowledge that: (1) the
Securities have not been and are not being registered under the provisions of
the Securities Act or otherwise included in an effective registration statement,
the Shares have not been and are not being registered under
the  Securities Act, and may not be transferred unless (A)
subsequently registered thereunder or (B) the Purchasers shall have delivered to
the Company an opinion of counsel, reasonably satisfactory in form, scope and
substance to the Company, to the effect that the Securities to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration; (2) any sale of the Securities made in reliance on Rule 144
promulgated under the  Act (“Rule
144") may be made only in accordance with the terms of said Rule 144 and
further, if said Rule 144 is not applicable, any resale of such Securities under
circumstances in which the seller, or the Person through whom the sale is made,
may be deemed to be an underwriter, as that term is used in
the  Securities Act, may require compliance with some other exemption
under the  Securities Act or the rules and regulations of the SEC
thereunder; and (3) neither the Company nor any other Person is under any
obligation to register the Securities under the  Securities Act or to
comply with the terms and conditions of any exemption thereunder.

    

    b.           Restrictive
Legend.  The Purchasers acknowledge and agree that, until such
time as the relevant Securities have been registered under the Securities Act
and sold in accordance with an effective registration statement or otherwise in
accordance with another effective registration statement, the certificates and
other instruments representing any of the Securities shall bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of any such Securities):

    

    THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR
AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.

    

    c.           Filings.  The
Company undertakes and agrees to make all necessary filings if necessary in
connection with the sale of the Securities to the Purchasers under any United
States laws and regulations applicable to the Company, or by any domestic
securities exchange or trading market, and to provide a copy thereof to the
Purchasers promptly after such filing.

    

           
       d.           Publicity, Filings, Releases,
Etc.  Each of the parties agrees that it will not disseminate
any information relating to the Transaction Agreements or the transactions
contemplated thereby, including issuing any press releases, holding any press
conferences or other forums, or filing any reports (collectively, “Publicity”),
without giving the other party reasonable advance notice and an opportunity to
comment on the contents thereof.  Neither party will include in any
such Publicity any statement or statements or other material to which the other
party reasonably objects, unless in the reasonable opinion of counsel to the
party proposing such statement, such statement is legally required to be
included.

     

    
      
         

      

      
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e.           Financial Statements and Other
Reports.  The Company shall maintain a system of accounting and
keep such books, records and accounts (which shall be true and complete in all
material respects), as may be required or as may be necessary to permit the
performance of an annual audit and the preparation of financial statements in
accordance with GAAP, consistently applied.  The Company will deliver
to the Purchasers the financial statements and other reports described below
until payment and performance in full of all obligations under the
Notes.  All financial statements to be delivered hereunder may be
delivered by facsimile, regular or express mail or by hand, but shall also be
delivered in electronic form using the Microsoft Excel.xls format.

     

    (i)           Monthly
Financials.  As soon as available and in any event within
thirty (30) days after the end of each month, commencing with December 2009, the
Company will deliver (1) the consolidated and consolidating balance sheet of the
Company as at the end of such month and the related consolidated and
consolidating statements of income, stockholder’s or member’s (as applicable)
equity and cash flow for such month and for the period from the beginning of the
then current fiscal year to the end of such month, and (2) a schedule of the
outstanding indebtedness for borrowed money of the Company and its subsidiaries
describing in reasonable detail each such debt issue or loan outstanding and the
principal amount and amount of accrued and unpaid interest with respect to each
such debt issue or loan.

     

     

    (ii)           Quarterly
Financials.  In addition to the relevant monthly financial
statements referred to in the above, as soon as available and in any event
within fifty (50) days after the end of each quarter of each fiscal year, the
Company will deliver the consolidated and consolidating balance sheet of the
Company, as adjusted in conformity with GAAP, as at the end of such period and
the related consolidated and consolidating statements of income, stockholder’s or member’s
(as applicable) equity and cash flow for such quarter of such  fiscal
year and for the period from the beginning of the then current fiscal year to
the end of such quarter of such Fiscal Year.

     

     

    (iii)           Year-End
Financials.  In addition to the relevant monthly and quarterly
financial statements referred to the above, as soon as available and in any
event within one hundred five (105) days after the end of each
fiscal year, the Company will deliver to the Purchaser:  (1) the
audited consolidated and consolidating balance sheet of the Company as at the
end of such year and the related consolidated and consolidating statements of
income, stockholder’s or member’s (as
applicable) equity and cash flow for such fiscal year; (2) a schedule of the
outstanding indebtedness of the Company describing in reasonable detail each
such debt issue or loan outstanding and the principal amount and amount of
accrued and unpaid interest with respect to each such debt issue or loan; (3) a
report with respect to the financial statements from the Company’s independent
certified public accountants selected by the Company and registered with the
Public Company Accounting Oversight Board, which report shall be unqualified as
to going concern and scope of audit of the Company and its Subsidiaries and
shall state (a) that such financial statements present fairly the financial
position of the Company as at the dates indicated and the results of their
operations and cash flow for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years and (b)  that the
examination by such accountants in connection with such financial statements has
been made in accordance with generally accepted auditing standards and (c) such
accountants acknowledge that the Purchasers are relying on such
statements.

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    (iv)           Accountants’ Certification and
Reports.  Promptly upon receipt thereof, the Company will
deliver (A) copies of all reports submitted to the Company by their independent
public accountants in connection with each annual, interim or special audit or
review of the financial statements or financial controls of the Company made by
such accountants, including the comment letter submitted by such accountants to
management or any member or committee of the Company in connection with their
annual, interim or special audit or review, and (B) a certificate of the
independent public accountants who performed such annual, interim or special
audits or review, to the effect that, in making the examination necessary for
the audits or review, they have obtained no knowledge of any condition or event
which constitutes a default or Event of Default, or if such accountants shall
have obtained knowledge of any such condition or event, specifying in such
certificate each such condition or event of which they have knowledge and the
nature and status thereof.

     

    

    (f)           Board Seat;
Observer.  The Company shall take any and all actions necessary
and/or requested by the Purchasers owning at least $1,000,000 of the then
outstanding principal amount of Notes (the “Required
Holders”) to (i) appoint one (1) person selected by the Required Holders
to be a director on the Company’s Board of Directors (the “Note
Director”), and (ii) ensure the Note Director remains a director until
such time as all unpaid principal outstanding on the Notes is in the aggregate
below $1,000,000 and all accrued but unpaid interest then owed is
paid.  The Note Director shall be covered by the Company’s director
and officer liability insurance policy and shall be entitled to all compensation
other directors receive, as well as reimbursement for expenses (travel, lodging,
etc.) to attend Board meetings.  In lieu of appointing the Note
Director, the Required Holders may as long as the note is outstanding, appoint
an observer to the Company’s Board of Directors, which observer shall have the
right to attend in person or by phone all Board meetings and be reimbursed for
all expenses in connection therewith.

     

    (g)           Certain
Restrictions.  Notwithstanding anything to the contrary
provided herein or elsewhere, the Company and Messrs. Toms and Rowley hereby
expressly and irrevocably agree with each Purchaser that until all the Notes are
repaid in full (including interest and principal thereon), the Company shall not
pay and neither Messrs. Toms nor Rowley shall demand and/or accept (i) an annual
salary greater than $250,000; provided, however, that in the
event (A) the Company’s Consolidated EBITDA for the year ended December 31, 2010
is $3,000,000 or greater, based upon the Company’s consolidated audited
financial statements included in the Company’s Annual Report on Form 10-K for
the year ended December 31, 2010, and (B) the Required Holders consent in
writing to the following salary increases, then Messrs. Toms’ and Rowley’s
salaries shall increase retroactively to January 1, 2011, to $350,000 each; and
(ii) any Accrued Payables Messrs. Toms and Rowley shall be entitled to receive
collectively $1,200,000  of Accrued Payables, payable in four (4)
equal consecutive quarterly payments of $300,000 in the aggregate as determined
by the Company and Messrs. Toms and Rowley),  with the first $300,000
aggregate quarterly payment being paid for the quarter ended March 31, 2010
($150,000 and $125,000 of which shall be used to reduce outstanding principal on
the 2007 Bridge Notes and 2009 Notes, respectively), and, thereafter, for each
quarter ending on June 30, 2010 ($150,000 and $125,000 of which shall be used to
repay the remaining outstanding principal on the 2007 Bridge Notes and 2009
Notes, respectively), September 30, 2010 and December 31, 2010 (each a “Permitted
Payment,” and, collectively, the “Permitted
Payments”); provided, however, that notwithstanding anything to the
contrary provided herein or elsewhere (a) if for a quarter no Permitted Payment
is paid, the obligation of Messrs. Rowley and Toms to make payments on the 2007
Bridge Notes and 2009 Notes shall be carried over until the next quarter when a
Permitted Payment is paid to them, and (b) no Permitted Payments shall be paid
and/or demanded for any quarter if on the last day of the quarter in which such
Permitted Payment would otherwise be paid, or at any time prior to the payment
of such Permitted Payment (i) there exists any default, any default would exist
upon passage of time and/or after the Permitted Payment is paid, there is or
would be a default under the Senior Credit Agreement, Transaction Documents
and/or any other agreement, contract or other obligation of the Company; (ii)
the Company prior to paying such Permitted Payment, has paid all payments to the
Senior Bank and each Purchaser then due, including, but not limited to, all
scheduled amortization, principal and interest payments, and/or (iii) the
Consolidated EBITDA for the following applicable quarter is less than the
following amounts:

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    
 

    
      	
              Quarter
      Ended

            	
              EBITDA
      Target for Such Quarter

            
	
              March
      31, 2010

            	
              $500,000

            
	
              June
      30, 2010

            	
              $700,000

            
	
              September
      30, 2010

            	
              $850,000

            
	
              December
      31,2010

            	
              $950,000

            
	
              March
      31, 2011

            	
              As
      mutually agreed to by the parties thereto in writing when such payments
      are due

            
	
              June
      31, 2011

            	
              As
      mutually agreed to by the parties thereto in writing when such payments
      are due

            

    

    

    

    Other
then such Permitted Payments, Messrs. Toms and Rowley shall not be entitled to
receive any other payments for Accrued Payables.  If a Permitted
Payment is not paid by the Company as a result of the Company’s failure to meet
one or more conditions in this Section
4(g), such Permitted Payment shall not be paid (unless consented to in
writing by the Required Holders, in their sole discretion, if the conditions to
payment are subsequently met including, but not limited to, the aggregate
Consolidated EBITDA), at any time until all of the Notes are repaid in full
(including all accrued but unpaid interest thereon).  Prior to any
Permitted Payment being paid, the Company shall provide a certificate (a “Certificate”)
to each Purchaser signed by Messrs. Toms and Rowley showing in detail how each
condition to the Company paying the Permitted Payment for such quarter has been
met and how the proceeds will be used, which Certificate the Required Holders
must consent to in writing.

    

    (h)           Certain Securities Restrictions.
The Company agrees with each Purchaser that it shall not (i) increase,
declare and/or pay dividends on the A Shares, and/or (ii) redeem and/or make any
payments to the holders of the A Shares and/or any other class of Preferred
Stock, Common Stock and/or other securities of the Company until all principal
and accrued but unpaid interest on the Notes are repaid in full.

    

    

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    

    5.           CLOSING
DATE.

    

    a.           The
Closing Date shall occur on the date which is the first Business Day after each
of the conditions contemplated by Section
6 and Section
7 hereof shall have either been satisfied or been waived by the party in
whose favor such conditions run.

    

    b.           The
closing of the Transactions shall occur on the Closing Date at the offices of
the Purchaser or by electronic means and shall take place no later than 3:00
P.M., New York time, on such day or such other time as is mutually agreed upon
by the Company and the Purchaser.

    

    6.           CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL.

    

    The
Purchasers understand that the Company’s obligation to sell the Notes, and to
issue any other Securities to the Purchasers in connection with any of the
Transaction Agreements, to the Purchasers pursuant to this Agreement on the
Closing Date is conditioned upon:

    

    a.           The
execution and delivery of this Agreement by the Purchasers;

    

    b.           Delivery
by the Purchasers to the Company of good funds as payment in full of an amount
equal to the Purchase Amount in accordance with this Agreement;

    

    c.           The
accuracy on the Closing Date of the representations and warranties of the
Purchasers contained in this Agreement, each as if made on such date, and the
performance by the Purchasers on or before such date of all covenants and
agreements of the Purchasers required to be performed on or before such
date;

    

    d.           There
shall not be in effect any law, rule or regulation prohibiting or restricting
the transactions contemplated hereby, or requiring any consent or approval which
shall not have been obtained; and

    

    

    7.           CONDITIONS
TO THE PURCHASERS’ OBLIGATION TO PURCHASE.

    

    The
Company understands that the Purchasers’ obligation to purchase the Notes and
issue the Securities to the Purchasers in connection with the Transaction
Agreements on the Closing Date is conditioned upon:

    

    a.           The
execution and delivery of this Agreement and the other Transaction Agreements by
the Company and by Messrs. Rowley and Toms as to Section 4(g)
hereof;

     

    
      
         

      

      
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    b.           Delivery
by the Company to the Purchasers of the Notes, the 500,000 Shares and Warrants
in accordance with this Agreement or any other agreements between the
parties;

    

    c.           All
matters relating to this Agreement and the other Transaction Agreements have
been approved by the Board of Directors of the Company (and shareholders of the
Company to the extent required by law) of the Company.

    

    d. The
execution and delivery of the Security Agreement, and the filing within five (5)
business days after the closing date of a UCC-1 Financing Statement on all of
the Company’s assets;

    

    e.           The
Notes contemplated by this Agreement shall be senior to all other debt of the
Company other than obligations under the Senior Credit Agreement;

    

    f.           The
accuracy in all material respects on the Closing Date of the representations and
warranties of the Company contained in this Agreement, each as if made on such
date, and the performance by the Company on or before such date of all covenants
and agreements of the Company required to be performed on or before such
date;

    

    g.           There
shall not be in effect any law, rule or regulation prohibiting or restricting
the transactions contemplated hereby, or in the other Transaction Agreements, or
requiring any consent or approval which shall not have been obtained;
and

    

    h.           The
delivery of such other documents as requested by the Purchasers and/or its legal
counsel including, but not limited to, 10b-5 letters from Messrs. Toms and
Rowley (qualified to the best of each such person’s knowledge as to information
about the Company) and limited 10b-5 letters from all other officers and/or
directors of the Company as to such officers and directors ownership of
securities in the Company and their lack of certain bankruptcy events, SEC, CFTC
and other civil and criminal violations, a legal opinion from Company counsel
(which shall include a 10b-5 opinion) and Certificates of Good Standing of each
of DS-Del and the Subsidiaries.

    

    8.           INDEMNIFICATION
AND REIMBURSEMENT.

    

    a.           The
Company agrees to indemnify and hold harmless each Purchaser and each of their
respective officers, directors, employees, and agents, and each Purchaser
Control Person from and against any losses, claims, damages, liabilities or
expenses incurred (collectively, “Damages”),
joint or several, and any action in respect thereof to which the Purchaser, its
partners, Affiliates, officers, directors, employees, and duly authorized
agents, and any such Purchaser Control Person becomes subject to, resulting
from, arising out of or relating to any misrepresentation, breach of warranty or
nonfulfillment of or failure to perform any covenant or agreement on the part of
Company contained in this Agreement, as such Damages are incurred, except to the
extent such Damages result primarily from any Purchaser’s failure to perform any
covenant or agreement contained in this Agreement or any Purchaser’s or its
officer’s, director’s, employee’s, agent’s or Purchaser Control Person’s gross
negligence, or bad faith in performing its obligations under this
Agreement.

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

    b.           The
Company hereby agrees that, if any Purchaser, other than by reason of its gross
negligence, illegal or willful misconduct (in each case, as determined by a
non-appealable judgment to such effect), (x) becomes involved in any capacity in
any action, proceeding or investigation brought by any shareholder or membership
interest holder of the Company, in connection with or as a result of the
consummation of the transactions contemplated by this Agreement or the other
Transaction Agreements, or if any Purchaser is impleaded in any such action,
proceeding or investigation by any Person, or (y) becomes involved in any
capacity in any action, proceeding or investigation brought by the SEC, any
self-regulatory organization or other body having jurisdiction, against or
involving the Company or in connection with or as a result of the consummation
of the transactions contemplated by this Agreement or the other Transaction
Agreements, or (z) is impleaded in any such action, proceeding or investigation
by any Person, then in any such case, the Company shall indemnify, defend and
hold harmless any Purchaser from and against and in respect of all losses,
claims, liabilities, damages or expenses resulting from, imposed upon or
incurred by any Purchaser, directly or indirectly, and reimburse such Purchaser
for its reasonable legal and other expenses (including the cost of any
investigation and preparation) incurred in connection therewith, as such
expenses are incurred.  The indemnification and reimbursement
obligations of the Company under this paragraph shall be in addition to any
liability which the Company may otherwise have, shall extend upon the same terms
and conditions to any Affiliates of any Purchaser who is actually named in such
action, proceeding or investigation, and partners, directors, agents, employees
and Purchaser Control Persons (if any), as the case may be, of any Purchaser and
any such Affiliate, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company, the
Purchasers, any such Affiliate and any such Person.  The Company also
agrees that neither the Purchasers nor any such Affiliate, partner, director,
agent, employee or Purchaser Control Person shall have any liability to the
Company or any Person asserting claims on behalf of or in right of the Company
in connection with or as a result of the consummation of this Agreement or the
other Transaction Agreements, except as may be expressly and specifically
provided in or contemplated by this Agreement.

    

    c.           The
indemnity agreements contained herein shall be in addition to (i) any cause of
action or similar rights of the indemnified party against the indemnifying party
or others, and (ii) any liabilities the indemnifying party may be subject
to.

    

    9.           JURY TRIAL
WAIVER.   The Company and the Purchaser hereby waive a
trial by jury in any action, proceeding or counterclaim brought by either of the
Parties hereto against the other in respect of any matter arising out or in
connection with the Transaction Agreements.

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    
 

    10.           GOVERNING
LAW:  MISCELLANEOUS.

    

    a.           (i)  This
Agreement shall be governed by and construed solely and exclusively in
accordance with the internal laws of the State of New York without regard to the
conflicts of laws principles thereof. The parties hereto hereby expressly and
irrevocably agree that any suit or proceeding arising directly and/or indirectly
pursuant to or under this Agreement shall be brought solely in a federal or
state court located in the City, County and State of New York. By its execution
hereof, the parties hereby covenant and irrevocably submit to the in personam
jurisdiction of the federal and state courts located in the City, County and
State of New York and agree that any process in any such action may be served
upon any of them personally, or by certified mail or registered mail upon them
or their agent, return receipt requested, with the same full force and effect as
if personally served upon them in New York City. The parties hereto expressly
and irrevocably waive any claim that any such jurisdiction is not a convenient
forum for any such suit or proceeding and any defense or lack of in personam
jurisdiction with respect thereto. In the event of any such action or
proceeding, the party prevailing therein shall be entitled to payment from the
other party hereto of all of its reasonable counsel fees and
disbursements.

    

    (ii)  The
Company and the Purchasers acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Agreement or the other
Transaction Agreements were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent or cure breaches of
the provisions of this Agreement and the other Transaction Agreements and to
enforce specifically the terms and provisions hereof and thereof, this being in
addition to any other remedy to which any of them may be entitled by law or
equity.

    

    b.           Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate as a
waiver thereof.

    

    c.           This
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto.

    

    d.           All
pronouns and any variations thereof refer to the masculine, feminine or neuter,
singular or plural, as the context may require.

    

    e.           A
facsimile or pdf transmission of this signed Agreement shall be legal and
binding on all parties hereto.

    

    f.           This
Agreement may be signed in one or more counterparts, each of which shall be
deemed an original.

    

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

    

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

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    i.           This
Agreement may be amended only by an instrument in writing signed by the party to
be charged with enforcement thereof.

    

    j.           This
Agreement supersedes all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof.

    

     

                           
11.           USE OF PROCEEDS. Subject to
the limitations set forth in Section 7
hereof, the net proceeds from the sale of the Notes shall be used
exclusively for working capital purposes.

    

    12.           NOTICES.  All
notices required or permitted hereunder shall be in writing and shall be deemed
effectively given: (a) upon personal delivery to the party to be notified;
(b) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (c) the next business day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt.  All
communications shall be sent to the Company or the Holder at the address below
or at such address as either party hereto may designate by ten (10) days’
advance written notice to the other party hereto.

     

    If to the
Company:

     

    

    Decisionpoint
Systems, Inc.

    19655
Descortes

    Foothill
Ranch, California 92610-2609

    Attention:
Nicholas R. Toms

    

    With a
copy, which will not constitute notice to:

    

    Sichenzia
Ross Friedman Ference LLP

    61
Broadway

    New York,
New York 10006

    Attention:
Greg Sichenzia

    

    If to the
Purchasers:

    

    Genesis
Merchant Partners, LP

    15 Valley
Drive

    Greenwich,
Connecticut  06831

    Attention:
Timothy W. Doede

     

    With a
copy which will not constitute notice to:

    

    Gusrae,
Kaplan, Bruno & Nusbaum PLLC

    120 Wall
Street – 11th
Floor

    New York,
New York 10005

    Attention:  Lawrence
G. Nusbaum, Esq.

     

    
      
         

      

      
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    13.           SURVIVAL OF REPRESENTATIONS AND
WARRANTIES. The Company’s and the Purchaser’s representations and
warranties herein shall survive the execution and delivery of this Agreement and
the delivery of the Certificates and shall inure to the benefit of the Purchaser
and the Company and their respective successors and assigns, but shall terminate
when all obligations of the Company under the Securities have been fully
satisfied.

    

    14.           CROSS DEFAULT.  The
Company’s obligations under the terms of this Agreement, the Note, the other
Transaction Agreements and all documents executed in connection herewith and/or
therewith shall be cross-defaulted with all other financing and other
obligations of the Company, as well as any future financing accommodations
extended or to be extended by the Purchasers to the Company so that a default
under any financing accommodations extended by any lender, including as well as
financing accommodations extended by the Purchasers to the Company shall be an
Event of Default (as defined in the Note) hereunder and under all of the other
loans extended by the Purchasers to the Company.

    

    [SIGNATURE
PAGES TO FOLLOW]

     

    
      
         

      

      
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    SIGNATURE
PAGE FOR SECURITIES PURCHASE AGREEMENT

    

    IN
WITNESS WHEREOF, this Agreement has been duly executed by the Purchaser and the
Company as of the date set first above written.

    

    

    GENESIS MERCHANT PARTNERS
L.P.

    

    

    By:
_________________________________

    Name:

    Title:

    

    GENESIS MERCHANT PARTNERS II,
LP

    

    

    By:_________________________________                                                                

    Name:

    Title:

    

    SB
OPPORTUNITY TECHNOLOGY MANAGEMENT ASSOCIATES INSTITUTION LLC

    

    

    By:_________________________________                                                                

    Name:

    Title:

    

    

    SANDS
BROTHERS VENTURE CAPITAL

      III
LLC

    

    By:_________________________________                                                                

    Name:
Scott A. Baily

    Title:   Portfolio
Manager

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    DECISIONPOINT
SYSTEMS, INC.

    

    

    By:_________________________________                                                      

        Name:

        Title:

    
 

                             _________________________________

    (as to Section
4(g))

    NICHOLAS R.  TOMS
(Individually)

    

    

                             _________________________________

    (as to Section 4(g))

    DONALD W.  ROWLEY
(Individually)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00166-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00166-of-00352.parquet"}]]