Document:

Exhibit 4.1

 

PROTECTIVE
LIFE CORPORATION

 

to

 

THE
BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee

 

SUPPLEMENTAL
INDENTURE NO. 11

 

Dated
as of December 11, 2007

 

6.40%
Senior Notes due January 15, 2018

 

$150,000,000

 

 

PROTECTIVE
LIFE CORPORATION

 

SUPPLEMENTAL
INDENTURE NO. 11

 

$150,000,000

 

6.40%
Senior Notes due January 15, 2018

 

SUPPLEMENTAL INDENTURE NO. 11, dated as of
December 11, 2007, from PROTECTIVE LIFE CORPORATION, a Delaware corporation
(the “Company”), to THE BANK OF NEW YORK TRUST COMPANY, N.A., a national
banking association, as trustee (the “Trustee”).

 

The Company has heretofore
executed and delivered to The Bank of New York a Senior Indenture, dated as of
June 1, 1994 (the “Indenture”), providing for the issuance from time to time of
series of the Company’s Securities.

 

The Company, The Bank of New
York and the Trustee have heretofore entered into that certain Agreement of
Resignation, Appointment and Acceptance effective as of August 25, 2006,
providing for the resignation of The Bank of New York as Trustee under the
Indenture and the appointment of the Trustee as successor to The Bank of New
York as Trustee under the Indenture.

 

Section 3.1 of the Indenture
provides for various matters with respect to any series of Securities issued
under the Indenture to be established in an indenture supplemental to the
Indenture.

 

Section 8.1(7) of the
Indenture provides for the Company and the Trustee to enter into an indenture
supplemental to the Indenture to establish the form or terms of Securities of
any series as provided by Sections 2.1 and 3.1 of the Indenture.

 

For and in consideration of
the premises and the issuance of the series of Securities provided for herein,
it is mutually covenanted and agreed as follows for the equal and ratable
benefit of the Holders of the Securities of such series:

 

ARTICLE
I

 

RELATION
TO INDENTURE; DEFINITIONS

 

Section 1.1. This
Supplemental Indenture No. 11 constitutes an integral part of the Indenture.

 

Section 1.2. For all
purposes of this Supplemental Indenture No. 11:

 

 

Section 1.2.1. Capitalized
terms used herein without definition shall have the meanings specified in the
Indenture;

 

Section 1.2.2. All
references herein to Articles and Sections, unless otherwise specified, refer
to the corresponding Articles and Sections of this Supplemental Indenture No.
11; and

 

Section 1.2.3. The terms “herein”,
“hereof”, “hereunder” and other words of similar import refer to this
Supplemental Indenture No. 11.

 

ARTICLE
II

 

THE
SERIES 2007 SENIOR NOTES

 

Section 2.1.  TITLE OF THE SECURITIES. There shall be a
series of Securities designated the           6.40%
Senior Notes due January 15, 2018 (the “Series 2007 Notes”).

 

Section 2.2.  LIMITATION ON AGGREGATE PRINCIPAL AMOUNT;
DATE OF SERIES 2007 NOTES. The aggregate principal amount of the
Series 2007 Notes shall be limited to $150,000,000 or such higher
principal amount as shall be outstanding as a result of the issuance of
Additional Notes (as defined herein). Each Series 2007 Note shall be dated
the date of its authentication.

 

Section 2.3.  PRINCIPAL PAYMENT DATES. The principal on the
Series 2007 Notes Outstanding (together with any accrued and unpaid
interest thereon) shall be payable in a single installment on January 15, 2018.

 

Section 2.4.  INTEREST AND INTEREST RATES. The rate of
interest on each Series 2007 Note shall be 6.40% per annum, accruing from
December 11, 2007 or from the most recent Interest Payment Date to which
interest on such Series 2007 Note has been paid or duly provided for. Interest
shall be payable in arrears on each Series 2007 Note semi-annually on
January 15 and July 15 of each year (each an “Interest Payment Date”),
commencing on July 15, 2008. The interest so payable on any Series 2007
Note which is punctually paid or duly provided for on any Interest Payment Date
shall be paid to the Person in whose name such Series 2007 Note is
registered at the close of business on January 1 or July 1 as the case may be,
preceding such January 15 or July 15 (each a “Regular Record Date”). The
interest so payable on a Series 2007 Note which is not punctually paid or
duly provided for on any Interest Payment Date shall forthwith cease to be
payable to the Person in whose name such Series 2007 Note is registered on
the relevant Regular Record Date, and such defaulted interest shall instead be
payable to the Person in whose name such Series 2007 Note is registered on
the Special Record Date or other specified date determined in accordance with
the Indenture.

 

Section 2.5.  PLACE OF PAYMENT. The Place of Payment where
the Series 2007 Notes may be presented or surrendered for payment, where
the Series 2007 Notes may be surrendered for registration of transfer or
exchange and where notices and demands to and upon the Company in respect of
the Series 2007 Notes and the Indenture may be served shall be in the
Borough of Manhattan, The City of New York, New York, and the office or agency
maintained by the Company for such purpose shall initially be the Corporate
Trust Office of the Trustee.

 

2

 

Section 2.6.  ADDITIONAL COVENANTS. For the benefit of the
Holders from time to time of the Series 2007 Notes and in addition to the
covenants set forth in Article 9 of the Indenture, the Company further
covenants and agrees as follows:

 

Section 2.6.1.  Limitations
on Disposition of Capital Stock of Restricted Subsidiaries. The
Company will not, and will not permit any Subsidiary to, sell, assign, transfer
or otherwise dispose of any shares of the capital stock of any Restricted
Subsidiary unless the entire capital stock of such Restricted Subsidiary at the
time owned directly or indirectly by the Company and its Subsidiaries shall be
disposed of at the same time for a consideration consisting of cash or other
property which the Board of Directors, as evidenced in a Board Resolution, has
determined to be at least equal to the fair value thereof. Notwithstanding the
foregoing provision, (i) the Company shall be permitted to sell, assign,
transfer or otherwise dispose of shares of the capital stock of a Restricted
Subsidiary (A) to any director (or any individual nominated to become a
director) of such Restricted Subsidiary but only to the extent ownership of
such shares is required as directors’ qualifying shares for such director or
individual and (B) to any Subsidiary; and (ii) any Restricted Subsidiary shall
be permitted to sell, assign, transfer or otherwise dispose of shares of its
capital stock or the capital stock of any other Restricted Subsidiary (A) to
any director (or any individual nominated to become a director) of such
Restricted Subsidiary but only to the extent ownership of such shares is
required as directors’ qualifying shares for such director or individual, or
(B) to the Company or any Subsidiary.

 

Section 2.6.2.  Limitations
upon Creation of Liens on Capital Stock of Restricted Subsidiaries.

 

(a)           The Company will not, and will not
permit any Restricted Subsidiary to, at any time directly or indirectly, issue,
assume, guarantee or permit to exist any indebtedness secured by a Lien on the
capital stock of any Restricted Subsidiary without making effective provision
whereby the Series 2007 Notes then outstanding (and if the Company so
elects, any other indebtedness ranking on a parity with the Series 2007
Notes) shall be equally and ratably secured with such indebtedness as to such
property so long as such other indebtedness shall be so secured; provided,
however, that the covenant set forth in this Section 2.6.2. will not be
applicable to Liens (i) on the shares of stock of a subsidiary of a Person that
is merged with or into the Company or a Subsidiary securing debt of such
Person, which debt was outstanding prior to such merger, but only if such
pledge and debt were not incurred in anticipation of such merger, (ii) in favor
of the Company securing debt of a Restricted Subsidiary owed to the Company,
(iii) for taxes or assessments or governmental charges or levies not then due
and delinquent or the validity of which are being contested in good faith or
which are less than $15,000,000, or (iv) created by or resulting from any
litigation or legal proceeding being contested in good faith or which are less
than $15,000,000.

 

(b)           If the Company shall hereafter be
required to secure the Series 2007 Notes equally and ratably with any
other indebtedness pursuant to this Section 2.6.2., (i) the Company will
promptly deliver to the Trustee an Officers’ Certificate stating that the
foregoing covenant has been complied with and an Opinion of Counsel stating
that in the 

 

3

 

opinion of such counsel the
foregoing covenant has been complied with and that any instruments executed by
the Company or any Restricted Subsidiary in the performance of the foregoing
covenant comply with the requirements of the foregoing covenant and (ii) the
Trustee is hereby authorized to enter into an indenture or agreement
supplemental hereto and to take such action, if any, as it may deem advisable
to enable it to enforce the rights of the Holders of the Series 2007
Notes.

 

Section 2.6.3.  For purposes of this Section 2.6., Restricted
Subsidiary shall mean any Subsidiary of the Company with assets greater than or
equal to 20% of all assets of the Company and its Subsidiaries, computed and
consolidated in accordance with generally accepted accounting principles.

 

Section 2.6.4.  For purposes of this Section 2.6., “Lien”
shall mean any mortgage, pledge, lien, charge, security interest, conditional
sale or other title retention agreement or other encumbrance of any nature
whatsoever.

 

Section 2.7. MODIFICATION OF
EVENTS OF DEFAULT. For the benefit of the Holders from time to time of the
Series 2007 Notes, clause 4 of Section 5.1 of the Indenture is hereby
modified by deleting such clause 4 in its entirety and replacing it with the
following:

 

A default under any
mortgage, agreement, indenture or instrument under which there may be issued,
or by which there may be secured, guaranteed or evidenced any Debt of the
Company (including this Indenture) whether such Debt now exists or shall hereafter
be created, in an aggregate principal amount then outstanding of $25,000,000 or
more, which default (a) shall constitute a failure to pay any portion of the
principal of such Debt when due and payable or (b) shall result in such Debt
becoming or being declared due and payable prior to the date on which it would
otherwise become due and payable, and such acceleration shall not be rescinded
or annulled, or such Debt shall not be paid in full, within a period of 30 days
after there has been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities of the Series 2007
Notes, a written notice specifying such event of default and requiring the
Company to cause such acceleration to be rescinded or annulled or to pay in
full such Debt and stating that such notice is a “Notice of Default” hereunder;
(it being understood, however, that the Trustee shall not be deemed to have
knowledge of such default under such agreement or instrument unless either (A)
a Responsible Officer of the Trustee shall have actual knowledge of such
default or (B) a Responsible Officer of the Trustee shall have received written
notice thereof from the Company, from any Holder, from the holder of any such
indebtedness or from the trustee under any such agreement or other instrument);
PROVIDED, HOWEVER, that if such default under such mortgage, agreement,
indenture or instrument is remedied or cured by the Company or waived by the
holders of such indebtedness, then the Event of Default hereunder by reason
thereof shall be deemed likewise to have been thereupon remedied, cured or
waived without further action upon the part of either the Trustee or any of
such Holders; PROVIDED, FURTHER, that the foregoing shall not apply to any
secured Debt under which the obligee has recourse (exclusive of recourse for
ancillary matters such as environmental indemnities, misapplication of funds,
costs of enforcement and the like) only to the collateral pledged 

 

4

 

for repayment so long as the
fair market value of such collateral does not exceed 2% of Total Assets at the
time of the “default;”

 

Section 2.8. REDEMPTION AT
THE OPTION OF THE COMPANY.

 

Section 2.8.1.  Redemption Right at
Company’s Option. The Company has the right to redeem the
Series 2007 Notes at its sole option, in whole or in part, at any time
prior to January 15, 2018 at the Redemption Price (as defined below), together
with accrued but unpaid interest on the principal amount to be redeemed to the
redemption date, subject to the terms and conditions set forth in this Section
2.8.

 

Section 2.8.2.  Redemption Price.
 
(a)           The “Redemption Price” as to any date of redemption shall be equal to the greater of (i) 100% of the principal amount of the Series 2007 Notes to be redeemed on such redemption date and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Series 2007 Notes to be redeemed on such redemption date (not including any portion of such payments of interest accrued to the redemption date) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) calculated as of the third Business Day immediately preceding the applicable redemption date (the “Calculation Date”) plus 20 basis points. The Company shall give the Trustee notice of the amount of the applicable Redemption Price promptly after the calculation thereof, and the Trustee shall have no responsibility for such calculation.
 
(b)           The “Treasury Rate” with respect to any Calculation Date shall be (i) the yield, under the heading that represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication that is published weekly by the Board of Governors of the Federal Reserve System and that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (as defined below); provided that if no maturity is within three months before or after the Remaining Life (as defined below), yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month; or (ii) if such release (or any successor release) is not published during the week preceding the Calculation Date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Calculation Date.
 
(c)           “Calculation Agent” means one of the reference treasury dealers (as defined below) appointed by the Senior Trustee after consultation with the Company, or if that firm is unwilling or unable to select the Comparable Treasury Issue, an investment banking institution of national standing appointed by the Trustee after consultation with the Company.
 
5

 
(d)           “Comparable Treasury Issue” means the U.S. Treasury security selected by the Calculation Agent as having a maturity comparable to the remaining term (“Remaining Life”) of the Series 2007 Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Series 2007 Notes.
 
(e)           “Comparable Treasury Price” means (1) the average of five Reference Treasury Dealer Quotations (as defined below) for such Calculation Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Calculation Agent obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations.
 
(f)            “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer (as defined below) and any Calculation Date, the average, as determined by the Calculation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Calculation Agent at 5:00 p.m., New York City time, on the Calculation Date.
 
(g)           “Reference Treasury Dealer” means each of Merrill, Lynch, Pierce, Fenner & Smith Incorporated and Lehman Brothers Inc., and their respective successors; provided that, if any of the foregoing ceases to be a primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”), the Company shall substitute another Primary Treasury Dealer.
 

Section 2.8.3.  Notice to
Trustee. If the Company wishes to redeem Series 2007 Notes
pursuant to the terms hereof and of the Series 2007 Notes, it shall notify
the Trustee of the redemption date and the principal amount of Series 2007
Notes to be redeemed. The Company shall give the notice provided for in this
Section not less than 45 nor more than 60 days prior to the redemption date.

 

Section 2.8.4.  Selection
of Series 2007 Notes to be Redeemed. If less than all the
Series 2007 Notes are to be redeemed, the Trustee shall select the
Series 2007 Notes to be redeemed by lot or by any other method the Trustee
shall deem fair and reasonable. The Trustee shall make the selection not more
than 60 days before the redemption date from Series 2007 Notes then outstanding
that have not been previously called for redemption. The Trustee shall promptly
notify the Company in writing of the Series 2007 Notes selected for redemption
and, in the case of any Series 2007 Note selected for partial purchase or
redemption, the principal amount thereof to be purchased or redeemed. The
Trustee may select for redemption portions of the principal of Series 2007
Notes that have denominations larger than $1,000. Series 2007 Notes and
portions of Series 2007 Notes that the Trustee selects shall be in amounts of
$1,000 or integral multiples of $1,000. Provisions of this Indenture that apply
to Series 2007 Notes called for redemption also apply to portions of Series
2007 Notes called for redemption.

 

Section 2.8.5.  Notice of
Redemption. At least 30 days but not more than 60 days before a
redemption date, the Company shall mail or cause to be mailed, by first class
mail, a 

 

6

 

notice of redemption to each
Holder whose Series 2007 Notes are to be redeemed at its registered address.

 

(a)           The notice shall identify the Series
2007 Notes to be redeemed and shall state:

 

(i)            the redemption date;

 

(ii)           the methodology for determination of the Redemption Price;

 

(iii)          if any Series 2007 Note is being
redeemed in part, the portion of the principal amount of such Series 2007 Note
to be redeemed;

 

(iv)          the name and address of the Paying
Agent;

 

(v)           that the Series 2007 Notes called for
redemption must be surrendered to the Paying Agent to collect the Redemption
Price;

 

(vi)          that, unless the Company defaults in
making such redemption payment, interest on Series 2007 Notes called for
redemption ceases to accrue on and after the redemption date; and

 

(vii)         that no representation is made as to
the correctness or accuracy of the CUSIP number, if any, listed in such notice
or printed on the Series 2007 Notes.

 

(b)           At the Company’s request, the Trustee
shall give the notice of redemption in the Company’s name and at its expense; provided, however, that the Company shall
have delivered to the Trustee, at least 45 days prior to the redemption date,
an Officers’ Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph (which request may be revoked by so notifying the Trustee
in writing on or before the Business Day immediately preceding the date
requested for the mailing of such notice).

 

Section 2.8.6.         Effect
of Notice of Redemption. Once notice of redemption is mailed in
accordance with the provisions hereof, Series 2007 Notes called for redemption
become irrevocably due and payable on the redemption date at the Redemption
Price. A notice of redemption may not be conditional.

 

Section 2.8.7.  Deposit of
Redemption Price.

 

(a)           One Business Day prior to the
redemption date, the Company shall deposit with the Trustee or with the Paying
Agent money sufficient to pay the Redemption Price of, and accrued interest, if
any, on all Series 2007 Notes to be redeemed on that date. The Trustee or the
Paying Agent shall promptly return to the Company any money deposited with the
Trustee or the Paying Agent by the Company in excess of the amounts necessary
to pay the redemption price of, and accrued interest on, all Series 2007 Notes
to be redeemed.

 

7

 

(b)           If the Company complies with the
provisions of the preceding paragraph, on and after the redemption date,
interest shall cease to accrue on the Series 2007 Notes or the portions of
Series 2007 Notes called for redemption. If a Series 2007 Note is redeemed on
or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Series 2007 Note was registered at the close of business on
such record date. If any Series 2007 Notes called for redemption shall not be
so paid upon surrender for redemption because of the failure of the Company to
comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the redemption date until such principal is paid, and to the
extent lawful on any interest not paid on such unpaid principal, in each case
at the rate provided in the Series 2007 Notes and in Section 2.4. hereof.

 

Section 2.8.8.  Series
2007 Notes Redeemed in Part. Upon surrender of a Series 2007 Note
that is redeemed in part, the Company shall issue and, upon the Company’s
written request, the Trustee shall authenticate for the Holder at the expense
of the Company, a new Series 2007 Note equal in principal amount to the
unredeemed portion of the Series 2007 Notes surrendered; provided, however, that so long as the
Series 2007 Notes are issued in the form of global securities as provided in
Section 2.11. hereof, then, in lieu of surrendering the Series 2007 Note being
redeemed in part, the principal amount of the applicable global Series 2007
Note shall be reduced as and to the extent provided in Section 2.11.4. hereof.

 

Section 2.9. DENOMINATION. The
Series 2007 Notes shall be issuable in denominations of $1,000 and integral
multiples thereof.

 

Section 2.10. CURRENCY. Principal
and interest on the Series 2007 Notes shall be payable in U.S. Dollars.

 

Section 2.11. REGISTERED
SECURITIES IN GLOBAL FORM.

 

Section 2.11.1. The Series
2007 Notes will be issued in the form of one or more fully registered global
securities, representing the aggregate principal amount of the Series 2007
Notes, that will be deposited with, or on behalf of, The Depository Trust
Company (“DTC”), and registered in the name of Cede & Co., the nominee of
DTC.

 

Section 2.11.2.  Except as provided in Section 3.5 of the
Indenture, Beneficial Owners of interests in the Series 2007 Notes may not
exchange such interests for certificated Series 2007 Notes.

 

Section 2.11.3.  In addition to the legend specified in
Section 2.4 of the Indenture, each certificate evidencing the Series 2007 Notes
shall bear the following legend:

 

UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS 

 

8

 

REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.

 

Section 2.11.4.  If the Series 2007 Notes are redeemed
pursuant to Section 2.8. hereof in whole or in part, the principal amount of
the applicable global Series 2007 Note shall be reduced by the amount of the
principal, or portion thereof, so redeemed and an endorsement shall be made on
such Series 2007 Note by the Trustee to reflect such reduction.

 

Section 2.12.  FORM OF SERIES 2007 SENIOR NOTES. The Series
2007 Notes shall be substantially in the form attached as Exhibit A hereto.

 

Section 2.13.  DEFEASANCE AND COVENANT DEFEASANCE. The
provisions of Section 4.4 of the Indenture shall apply to the Series 2007 Notes.
The provisions of Section 4.5 of the Indenture shall apply to the Series 2007
Notes with respect to the covenants specified in said Section 4.5 and the
covenants set forth in Section 2.6. of this Supplemental Indenture No. 11.

 

Section 2.14.  REGISTRAR AND PAYING AGENT. The Trustee shall
initially serve as Registrar and Paying Agent.

 

Section 2.15.  ADDITIONAL SERIES 2007 NOTES. The Company
shall, without the consent of the holders of the initial Series 2007 Notes, be
entitled to issue additional Series 2007 Notes (the “Additional Notes”) under
this Supplemental Indenture No. 11 which shall have substantially identical
terms to the initial Series 2007 Notes, other than with respect to the date of
issuance, issue price and amount of interest payable on the first interest
payment date applicable thereto. The initial Series 2007 Notes and any
Additional Notes shall be treated as a single class for all purposes under this
Supplemental Indenture No. 11.

 

ARTICLE
3

 

MISCELLANEOUS
PROVISIONS

 

Section 3.1.  The Indenture, as supplemented and amended by
this Supplemental Indenture No. 11, is in all respects hereby adopted, ratified
and confirmed.

 

Section 3.2.  This Supplemental Indenture No. 11 may be
executed in any number of counterparts, each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.

 

SECTION 3.3.  THIS SUPPLEMENTAL INDENTURE NO. 11 AND EACH
SERIES 2007 NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF 

 

9

 

THE STATE OF NEW YORK AND SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

 

10

 

IN WITNESS WHEREOF, the
parties hereto have caused this Supplemental Indenture No. 11 to be duly
executed, as of the day and year first written above.

 

	
   

  	
  PROTECTIVE LIFE
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Richard J. Bielen

  
	
   

  	
  Title:

  	
  Vice Chairman and

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Seal)

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Carl S. Thigpen

  
	
   

  	
  Title:

  	
  Executive Vice President,
  Investments

  
	
   

  	
   

  	
  and Chief
  Investment Officer

  
	
   

  	
   

  
	
  Attest: 

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Assistant Secretary

  	
   

  
	
  Name:

  	
  Harriette Hyche

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK TRUST

  
	
   

  	
  COMPANY, N.A., as Trustee

  
	
  (Seal)

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Charles S. Northen, IV

  
	
   

  	
  Title:

  	
  Vice President

  
									

 

	
  Attest:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  

 

11

 

EXHIBIT
A TO

SUPPLEMENTAL
INDENTURE NO. 11

 

(FORM
OF FACE OF SENIOR NOTE DUE January 15, 2018)

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

 

THIS SENIOR NOTE IS IN GLOBAL FORM WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF DTC OR A NOMINEE OF DTC. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN
PART FOR SENIOR NOTES IN CERTIFICATED FORM IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY DTC TO A NOMINEE OF DTC, OR BY A NOMINEE OF DTC TO ANOTHER NOMINEE OF DTC,
OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITORY.

 

PROTECTIVE
LIFE CORPORATION

6.40%
Senior Note due January 15, 2018

 

	
  No. 1

  	
  $150,000,000

  
	
   

  	
  CUSIP:
  743674AU7

  

 

Protective Life Corporation, a corporation
duly organized and existing under the laws of the State of Delaware (herein
called the “Company,” which term includes any successor corporation under the
Indenture (as defined on the reverse hereof), for value received, hereby
promises to pay to Cede & Co., or registered assigns, the
principal sum of $150,000,000 (One Hundred Fifty Million Dollars), or such
other amount as indicated on the Schedule of Redemptions attached hereto, on
January 15, 2018, and to pay interest thereon from December 11, 2007, or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for. Interest shall be payable on the Company’s 6.40% Senior Note due
January 15, 2018 (“Series 2007 Note”) semi-annually on January 15 and July 15
of each year (each an “Interest Payment Date”), commencing on July 15, 2008 at
the rate of 6.40% per annum, until the principal hereof is paid or made
available for payment; PROVIDED that any such installment of interest which is
overdue shall bear interest at the rate of 6.40% per annum (to the extent that
the payment of such interest shall be legally enforceable) from the dates such
amounts are due until they are paid or made available for payment, and such
interest shall be payable on demand. The amount of interest payable on any
Interest Payment Date shall be computed on the basis of twelve 30-day

 

A-1

 

months and a 360-day year and, for any period
that is shorter than a full calendar month, will be calculated on the basis of
the actual number of days elapsed in such period. In the event that any date on
which interest is payable on this Series 2007 Note is not a Business Day, then
payment of the interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect to any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. The interest so payable on any Interest Payment Date
which is punctually paid or duly provided for on any Interest Payment Date
will, as provided in the Indenture referred to on the reverse hereof, be paid
to the Person in whose name this Series 2007 Note is registered at the close of
business on the Regular Record Date for such Interest Payment Date, which shall
be December 15 or June 15, as the case may be, preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Person in whose name this Series 2007 Note
is registered on the relevant Regular Record Date, and such defaulted interest
shall instead be payable to the Person in whose name this Series 2007 Note is
registered on the Special Record Date or other specified date determined in
accordance with the Indenture and Supplemental Indenture No. 11, referred to on
the reverse hereof.

 

Payment of the principal of
and interest on this Series 2007 Note will be made at the office or agency of
the Company maintained for that purpose in the Borough of Manhattan, The City
of New York (which shall initially be the Corporate Trust Office of the
Trustee), in same day funds by wire transfer to an account maintained by the
Person entitled thereto as specified in the Register of Holders of the Series
2007 Notes, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.

 

Reference is hereby made to
the further provisions of this Series 2007 Note set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.

 

Unless the certificate of
authentication hereon has been executed by the Trustee referred to on the
reverse hereof by manual signature, this Series 2007 Note shall not be entitled
to any benefit under the Indenture and Supplemental Indenture No. 11 referred
to on the reverse hereof or be valid or obligatory for any purpose.

 

A-2

 

IN WITNESS WHEREOF,
Protective Life Corporation has caused this instrument to be executed under its
corporate seal.

 

	
  Dated:  December
  11, 2007

  	
   

  	
   

  
	
  (Corporate Seal)

  	
   

  	
   

  	
  PROTECTIVE LIFE
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Richard J. Bielen

  
	
   

  	
   

  	
  Vice Chairman and

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Carl S. Thigpen

  
	
   

  	
   

  	
  Executive Vice President,
  Investments

  
	
   

  	
   

  	
  and Chief Investment
  Officer

  
					

 

This is one of the Securities of the series
described in the within-mentioned Indenture.

 

Dated:  December 11, 2007

 

	
   

  	
  THE BANK OF NEW YORK TRUST

  
	
   

  	
           COMPANY,
  N.A., as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
             Authorized
  Signatory

  

 

A-3

 

(FORM
OF REVERSE OF SERIES 2007 NOTE)

 

This Series 2007 Note is one of a duly
authorized issue of securities of the Company (herein called the “Securities”),
issued and to be issued in one or more series under a Senior Indenture, dated
as of June 1, 1994 (herein, together with all indentures supplemental thereto,
including Supplemental Indenture No. 11, dated as December 11, 2007, called the
“Indenture”), from the Company to The Bank of New York (herein called the “Trustee,”
which term includes any successor or replacement trustee under the Indenture),
to which Indenture reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof, limited in aggregate principal
amount to $150,000,000 or such higher principal amount as shall be outstanding
as a result of the issuance of Additional Notes (as defined herein), and is
issued pursuant to Supplemental Indenture No. 11, dated as of December 11,
2007 from the Company to the Trustee, relating to the securities of this series
(herein called “Supplemental Indenture No. 11”). Notwithstanding the foregoing,
the Company shall, without the consent of the holders of the initial Series
2007 Notes, be entitled to issue additional Series 2007 Notes (the “Additional
Notes”) under this Supplemental Indenture No. 11 which shall have substantially
identical terms to the initial Series 2007 Notes, other than the respect to the
date of issuance, issue price and amount of interest payable on the first
interest payment date applicable thereto. The initial Series 2007 Notes and any
Additional Notes shall be treated as a single class for all purposes under
Supplemental Indenture No. 11.

 

The Company shall have no
obligation to redeem or purchase the Securities pursuant to any sinking fund.

 

Redemption Right at
Company’s Option. The
Company has the right to redeem the Series 2007 Notes at its sole option, in
whole or in part, at any time prior to January 15, 2018 at the Redemption Price
(as defined below), together with accrued but unpaid interest on the principal
amount to be redeemed to the redemption date, subject to the terms and
conditions set forth in the Indenture.

 

The “Redemption Price” as to any date of redemption shall be equal to the greater of (i) 100% of the principal amount of the Series 2007 Notes to be redeemed on such redemption date and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Series 2007 Notes to be redeemed on such redemption date (not including any portion of such payments of interest accrued to the redemption date) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) calculated as of the third Business Day immediately preceding the applicable redemption date (the “Calculation Date”) plus 20 basis points. The Company shall give the Trustee notice of the amount of the applicable Redemption Price promptly after the calculation thereof, and the Trustee shall have no responsibility for such calculation.
 
The “Treasury Rate” with respect to any Calculation Date shall be (i) the yield, under the heading that represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication that is published weekly by the Board of Governors of the Federal Reserve System and that establishes
 
A-4

 
yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (as defined below); provided that if no maturity is within three months before or after the Remaining Life (as defined below), yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month; or (ii) if such release (or any successor release) is not published during the week preceding the Calculation Date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Calculation Date.
 
“Calculation Agent” means one of the reference treasury dealers (as defined below) appointed by the Senior Trustee after consultation with the Company, or if that firm is unwilling or unable to select the Comparable Treasury Issue, an investment banking institution of national standing appointed by the Trustee after consultation with the Company.
 
“Comparable Treasury Issue” means the U.S. Treasury security selected by the Calculation Agent as having a maturity comparable to the remaining term (“Remaining Life”) of the Series 2007 Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Series 2007 Notes.
 
“Comparable Treasury Price” means (1) the average of five Reference Treasury Dealer Quotations (as defined below) for such Calculation Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Calculation Agent obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations.
 
“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer (as defined below) and any Calculation Date, the average, as determined by the Calculation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Calculation Agent at 5:00 p.m., New York City time, on the Calculation Date.
 
“Reference Treasury Dealer” means each of Merrill, Lynch, Pierce, Fenner & Smith Incorporated and Lehman Brothers Inc., and their respective successors; provided that, if any of the foregoing ceases to be a primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”), the Company shall substitute another Primary Treasury Dealer.
 

Selection of Series 2007 Notes to be Redeemed. If less than all the Series 2007 Notes are to
be redeemed, the Trustee shall select the Series 2007 Notes to be redeemed by
lot or by any other method the Trustee shall deem fair and reasonable. The
Trustee shall make the selection not more than 60 days before the redemption
date from Series 2007 Notes then outstanding that have not been previously
called for redemption. The Trustee shall promptly notify the Company in writing
of the Series 2007 Notes selected for redemption and, in the case of any Series
2007 Note selected for partial purchase or redemption, the principal amount
thereof to be purchased or redeemed. The Trustee may select for redemption
portions of the principal of Series 2007

 

A-5

 

Notes that have denominations larger than
$1,000. Series 2007 Notes and portions of Series 2007 Notes that the Trustee
selects shall be in amounts of $1,000 or integral multiples of $1,000. Provisions
of this Indenture that apply to Series 2007 Notes called for redemption also apply
to portions of Series 2007 Notes called for redemption.

 

Events of Default. The Indenture contains provisions for defeasance at any time of the
indebtedness on this Security or of certain restrictive covenants and Events of
Default with respect to this Security, in each case upon compliance by the
Company with certain conditions set forth therein, which provisions apply to
this Security.

 

If an Event of Default with respect to
Securities of this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the manner and
with the effect provided in the Indenture.

 

The Indenture permits, with certain
exceptions as therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of at least a majority
in aggregate principal amount of the Securities at the time Outstanding of each
series to be affected. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security. No reference herein to the
Indenture or to Supplemental Indenture No. 11 and no provision of this Security
or of the Indenture or of Supplemental Indenture No. 11 shall alter or impair
the obligation of the Company, which is absolute and unconditional, to pay the
principal of, and interest on, this Security at the times, place and rate, and
in the coin or currency, herein prescribed.

 

Transfer or Exchange of Series 2007 Notes. As provided in the Indenture and subject to
certain limitations as set forth therein and in Supplemental Indenture No. 11,
the transfer of this Security is registrable on the Register, upon surrender of
this Security for registration of transfer at the office or agency of the
Company in any place where the principal of and interest on this Security are
payable, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company, the Trustee and the Registrar duly
executed by the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of this series and of like tenor, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

 

The Securities of this series are issuable only
in registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series of a like tenor of
a different authorized denomination, as requested by the Holder surrendering
the same.

 

A-6

 

No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

 

Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the person in whose name this Security is registered
as the owner hereof for all purposes, whether or not the Security be overdue,
and neither the Company, the Trustee nor any such agent of the Company or the
Trustee shall be affected by notice to the contrary.

 

THIS SECURITY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.

 

All terms used in this Security which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.

 

A-7

 

SCHEDULE
OF REDEMPTIONS

 

The following redemptions of
interests in this Global Note have been made:

 

	
  Date of

  Redemption

  	
   

  	
  Amount of Decrease

  in Principal Amount

  of this Global Note

  	
   

  	
  Principal Amount of the

  Global Note

  Following Such

  Decrease

  	
   

  	
  Signature of

  Authorized

  Officer

  of Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-8ex10_1.htm

    
      
        

      

    

     

    

    www.enterconnect.com

     

    November
      16, 2007

     

    

     

    CONFIDENTIAL
      PRIVATE PLACEMENT MEMORANDUM

    
       

       
        
          

        

      

       

      TOTAL
        OFFERING

      Minimum
        Subscription Per Investor: $100,000

       

      Minimum
        Offering:        $500,000

      Maximum
        Offering:     $2,000,000

       

      OFFERING
        PRICE PER UNIT $100,000

      (Each
        Unit Consists of Common Stock

      With
        Warrants to Purchase Common Stock)

       

    

    
      
        

      

    

     

    THIS
      CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM (THIS “MEMORANDUM”) SUPERSEDES
      IN FULL THOSE CERTAIN CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUMS DATED OCTOBER
      3
      AND 17, 2007 (COLLECTIVELY, THE “PRIOR MEMORNADUM”).  THE PRIOR
      MEMORANDUM WAS FURNISHED TO CERTAIN PARTICIPATING BROKERS AND NO SUBSCRIPTION
      WAS EFFECTED UNDER IT.  OFFERINGS UNDER THE PRIOR MEMORANDUM HAVE BEEN
      ABANDONED. SHOULD ANY PERSON INVEST IN RELIANCE OF THE PRIOR MEMORANDUM OR
      ANY
      OTHER DOCUMENT, SUCH INVESTMENT WILL BE RETURNED TO THAT PERSON IMMEDIATELY
      UPON
      RECEIPT, WITHOUT ANY DEDUCTION. ANY PERSON WHO RECEIVED THE PRIOR MEMORANDUM
      MAY
      REQUEST THE COMPANY TO PROVIDE IT WITH A COMPARISON WITH THIS
      MEMORANDUM.

     

    This
      Memorandum is solely for the person whose name appears below (the
“Recipient”) and is not to be printed or reproduced in any manner
      whatsoever.  The Recipient agrees not to distribute, reproduce or use
      any of the information contained in this Memorandum except with the prior
      written permission of EnterConnect, Inc.  By accepting delivery of
      this Memorandum, the Recipient hereby acknowledges and agrees to be bound by
      the
      foregoing confidentiality provisions.  Further, the
      Recipient acknowledges the need to conduct his own thorough investigation
      and exercise his own due diligence before considering any investment in the
      Company.

     

    
      
        	 	
                RECIPIENT: 

              
	 	 	
                November
                  _____, 2007

              
	 	 	
                Print
                  Name:

              
	 	 	
                Number
                  of Offering
                  Circular:  ____

              

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ENTERCONNECT,
      INC.

    100
      Century Center Court, Suite 650

    San
      Jose, CA  95112-4537

    

     

    CONFIDENTIAL
      PRIVATE PLACEMENT MEMORANDUM 

    
      

    

    
       

      OFFERING
        UNITS

      (Each
        Unit Consists of Common Stock

      With
        Warrants to Purchase Common Stock)

       

      Minimum
        Offering:  $500,000

      Maximum
        Offering:     $2,000,000

       

      OFFERING
        PRICE PER UNIT $100,000 

      
        

      

    

     

    EnterConnect,
      Inc., a Nevada corporation (the “Company”) hereby offers (this “Offering”) units
      (the “Units”) consisting of certain number of its Common Stock, par value $0.001
      per share (the “Common Stock”) and certain number of warrants (the “Warrants”)
      to purchase Common Stock. Each Unit comprises 133,333 shares of Common Stock
      at
      a price per share of $0.75 and Warrants to purchase 66,666 shares of Common
      Stock, at a price per share of $1.50. The Company plans to use the proceeds
      of
      this Offering in connection with its distribution of the EnterConnect product
      suite and for general corporate purposes, including working
      capital.

     

     

    THE
      PURCHASE OF THE UNITS INVOLVES A HIGH DEGREE OF
      RISK.  See“RISK FACTORS” for a discussion of
      certain factors that should be considered by prospective investors.

    
      	 	 	 	 	 	 	 
	 	 	
              Offering
                Price

            	 	 	
              Net
                Proceeds to Company (2) (3)

            	 
	
              Per
                Unit (1)

            	 	$	
              100,000

            	 	 	$	
              100,000

            	 
	
              Minimum
                Offering

            	 	$	
              500,000

            	 	 	$	
              450,000

            	 
	
              Maximum
                Offering

            	 	$	
              2,000,000

            	 	 	$	
              1,800,000

            	 

    

     

    
      	
              (1)

            	
              Payable
                in full upon subscription.

            

    

     

    
      	
              (2)

            	
              Does
                not include selling commissions of ten percent (10%) of the purchase
                price
                in the event the Company retains the services of a placement agent, in its
                sole discretion.  Commissions will be paid only to
                broker-dealers that are members of the Financial Industry Regulatory
                Authority who have agreed to sell the Units on behalf of the
                Company.

            

    

     

    
      	
              (3)

            	
              After
                deducting expenses of approximately $50,000 for legal, accounting,
                printing and other costs associated with the
                offering.

            

    

     

    
      
        

      

    

     

    
      
        
        

      

      
        -i-

        
          

        

      

      
        
        

      

    

     

    THE
      SECURITIES OFFERED HEREIN HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
      EXCHANGE COMMISSION OR WITH THE SECURITIES COMMISSION OF ANY
      STATE.  NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR THE
      SECURITIES COMMISSION OF ANY STATE HAS REVIEWED OR PASSED UPON THE ACCURACY
      OR
      ADEQUACY OF THIS OFFERING.  ANY REPRESENTATION TO THE CONTRARY IS A
      CRIMINAL OFFENSE.

     

    ALL
      OFFERS AND SALES OF THE UNITS ARE MADE IN RELIANCE UPON EXEMPTIONS FROM THE
      REGISTRATION REQUIREMENTS OF THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED
      (THE
“SECURITIES ACT”), UNDER SECTION 4(2) OF THE SECURITIES ACT AND REGULATION D
      PROMULGATED THEREUNDER AND APPLICABLE STATE SECURITIES LAWS.

     

    THE
      UNITS
      CANNOT BE RESOLD UNLESS THEY ARE SUBSEQUENTLY REGISTERED OR AN EXEMPTION FROM
      REGISTRATION IS AVAILABLE.  THERE IS AND WILL BE NO PUBLIC MARKET FOR
      THE UNITS IN THE IMMEDIATE FUTURE.  ACCORDINGLY, THE UNITS SHOULD BE
      PURCHASED ONLY AS A LONG-TERM INVESTMENT. THE COMPANY WILL FILE A REGISTRATION
      STATEMENT WITHIN THIRTY (30) DAYS FROM THE LAST CLOSING OF THIS OFFERING FOR
      THE
      REGISTRATION OF THE SECURITIES OFFERED HEREIN BUT THERE CAN BE NO ASSURANCE
      THAT
      THE SECURITIES WILL BE REGISTERED AND IF REGISTERED, THERE WILL BE A PUBLIC
      MARKET FOR THE SECURITIES.  SEE REGISTRATION RIGHTS PAGE
      3.

     

    THE
      UNITS
      ARE BEING OFFERED AND SOLD ONLY TO PERSONS WHO ARE “ACCREDITED INVESTORS” WITHIN
      THE MEANING OF REGULATION D. EACH INVESTOR SHOULD BE KNOWLEDGEABLE ABOUT, AND
      EXPERIENCED IN, INVESTMENTS OF THIS TYPE, SHOULD BE ABLE TO BEAR THE ECONOMIC
      RISK OF THIS INVESTMENT FOR AN INDEFINITE PERIOD, AND MAY ACQUIRE UNITS FOR
      INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION
      WITH, ANY DISTRIBUTION OF SECURITIES.

     

    PURCHASERS
      OF UNITS WILL BE REQUIRED TO AGREE, BY SIGNING A CONFIDENTIAL SUBSCRIBER
      QUESTIONNAIRE AND A SUBSCRIPTION AGREEMENT (THE FORMS OF WHICH ARE ATTACHED
      HERETO AS EXHIBITS C AND D, RESPECTIVELY), THAT THEY WILL NOT OFFER, SELL OR
      OTHERWISE PLEDGE, HYPOTHECATE OR TRANSFER THE SECURITIES UNLESS SUCH SECURITIES
      ARE REGISTERED OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
      OF
      THE SECURITIES ACT OF ANY APPLICABLE STATE SECURITIES LAW IS
      AVAILABLE.

     

    THIS
      PRIVATE PLACEMENT MEMORANDUM DOES NOT CONSTITUTE AN OFFER OR SOLICITATION WITH
      RESPECT TO THE UNITS IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
      IS
      UNAUTHORIZED.

     

    NO
      OFFERING LITERATURE OR ADVERTISING IN WHATEVER FORM MAY BE EMPLOYED IN THE
      OFFERING OF THE UNITS EXCEPT FOR THE PRIVATE PLACEMENT MEMORANDUM.  NO
      DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
      INFORMATION OR TO MAKE ANY REPRESENTATION RELATED TO THIS OFFERING OTHER THAN
      AS
      SET FORTH IN THIS PRIVATE PLACEMENT MEMORANDUM.  THE COMPANY RESERVES
      THE RIGHT TO WITHDRAW OR MODIFY THIS OFFERING AND RETURN AMOUNTS TENDERED AT
      ANY
      TIME PRIOR TO THE COMPLETION OF THIS OFFERING.  THE COMPANY RESERVES
      THE RIGHT TO TERMINATE THIS OFFERING AT ANY SUCH TIME AND TO SELL LESS THAN
      ALL
      OF THE UNITS OFFERED HEREUNDER (BUT NOT LESS THAN THE MINIMUM
      OFFERING).

     

    
      
        
        

      

      
        -ii-

        
          

        

      

      
        
        

      

    

     

    THE
      STATEMENTS CONTAINED IN THE PRIVATE PLACEMENT MEMORANDUM CONCERNING THE COMPANY,
      THE RIGHTS, INTERESTS, AND OBLIGATIONS OF THE INVESTORS, AND THE VARIOUS
      DOCUMENTS RELATING THERETO ARE MERELY A SUMMARY AND DO NOT PURPORT TO BE
      COMPLETE.  COMPLETE ACCESS TO ALL DOCUMENTS AND RECORDS OF THE COMPANY
      WILL BE MADE AVAILABLE TO EACH OFFEREE AND HER OR HIS PURCHASER REPRESENTATIVE,
      IF ANY, UPON REQUEST OF THE COMPANY AT THE FOLLOWING ADDRESS:

     

    ENTERCONNECT,
      INC.

     100
      CENTURY CENTER COURT, SUITE 650

    SAN
      JOSE,
      CALIFORNIA 95112

    ATTENTION:
      SAM JANKOVICH, CHIEF EXECUTIVE OFFICER

     PHONE
      408-441-9500

    

    THE
      PRIVATE PLACEMENT MEMORANDUM CONSTITUTES AN OFFERING ONLY TO PERSONS RETURNING
      THE ENTERCONNECT, INC. CONFIDENTIAL SUBSCRIBER QUESTIONNAIRE TO THE DESIGNATED
      REPRESENTATIVE OF THE COMPANY.  ANY REPRODUCTION HEREOF, IN WHOLE OR
      IN PART, OR ANY DIVULGENCE OF THE CONTENTS HEREOF, IN WHOLE OR IN PART, WITHOUT
      THE PRIOR CONSENT OF THE COMPANY IS PROHIBITED.

     

    THE
      OFFEREE ACCEPTING DELIVERY OF THIS PRIVATE PLACEMENT MEMORANDUM AGREES PROMPTLY
      TO RETURN TO THE COMPANY THIS PRIVATE PLACEMENT MEMORANDUM AND ANY OTHER
      DOCUMENTS OR INFORMATION FURNISHED TO HIM IF THE OFFEREE DOES NOT AGREE TO
      PURCHASE ANY OF THE UNITS OFFERED HEREBY.

     

    

    IMPORTANT
      NOTICES

    

    PROSPECTIVE
      INVESTORS MUST NOT CONSTRUE THE CONTENTS OF THIS MEMORANDUM AS INVESTMENT,
      LEGAL
      OR TAX ADVICE.  EACH INVESTOR SHOULD CONSULT HIS OR HER OWN INVESTMENT
      ADVISOR, LEGAL COUNSEL AND TAX ADVISOR AS TO THE BUSINESS, LEGAL, TAX AND OTHER
      RELATED MATTERS CONCERNING THIS INVESTMENT.

    

    ***

     

    
      
        
        

      

      
        -iii-

        
          

        

      

      
        
        

      

    

     

    NEITHER
      THE DELIVERY OF THIS MEMORANDUM, NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
      CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
      MATTERS SET FORTH HEREIN SINCE THE DATE OF THIS MEMORANDUM.

    

    ***

     

    NO
      OFFERING LITERATURE OR ADVERTISING IN WHATEVER FORM MAY BE EMPLOYED IN THIS
      OFFERING EXCEPT FOR THIS MEMORANDUM.  NO PERSON HAS BEEN AUTHORIZED TO
      MAKE ANY REPRESENTATION WITH RESPECT TO THE SECURITIES OFFERED
      HEREIN.

    

    ***

    

    THIS
      OFFERING CAN BE WITHDRAWN BY THE COMPANY AT ANY TIME BEFORE CONSUMMATION AND
      IS
      SPECIFICALLY MADE SUBJECT TO THE CONDITIONS DESCRIBED IN THIS
      MEMORANDUM.  IN CONNECTION WITH THIS OFFERING AND SALE OF THE
      SECURITIES, THE COMPANY RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO REJECT
      ANY SUBSCRIPTION.

    

    ***

    

    STATEMENTS
      CONTAINED HEREIN AS TO THE CONTENTS OF ANY AGREEMENT OR OTHER DOCUMENTS ARE
      SUMMARIES AND, THEREFORE, ARE NECESSARILY SELECTIVE AND INCOMPLETE. COPIES
      OF
      THE DOCUMENTS REFERRED TO HEREIN MAY BE OBTAINED FROM THE COMPANY AND ARE
      AVAILABLE FOR INSPECTION AT THE OFFICES OF THE COMPANY.

    

    ***

    

    SALES
      OF
      THE SHARES CAN BE CONSUMMATED ONLY BY ACCEPTANCE BY THE COMPANY OF THE OFFERS
      TO
      PURCHASE TENDERED TO THE COMPANY BY PROSPECTIVE INVESTORS.

     

    ***

    

    PROSPECTIVE
      INVESTORS AND THEIR REPRESENTATIVES, ACCOUNTANTS AND ATTORNEYS ARE ENCOURAGED
      TO
      ASK QUESTIONS OF, AND RECEIVE ANSWERS FROM, THE COMPANY CONCERNING THE TERMS
      AND
      CONDITIONS OF THIS OFFERING AND TO OBTAIN ADDITIONAL INFORMATION CONCERNING
      THE
      COMPANY.

    ***

     

    
      
        
        

      

      
        -iv-

        
          

        

      

      
        
        

      

    

     

    NOTICES
      AND LEGENDS SECURITIES

     

    CERTAIN
      JURISDICTIONS REQUIRE NOTICES TO OFFEREES OF SECURITIES AND/OR LEGENDS TO BE
      PLACED ON CERTIFICATES REPRESENTING THE SECURITIES OFFERED BY AN ISSUER, IMPOSE
      RESTRICTIONS ON HOW ISSUERS OFFER AND SELL SECURITIES, OR REQUIRE ISSUERS OF
      SECURITIES TO ALERT INVESTORS OF CERTAIN LAWS RELATING TO THE OFFER AND SALE
      OF
      SECURITIES.  INVESTORS AND THEIR REPRESENTATIVES SHOULD REVIEW THE
      MATERIALS SET FORTH BELOW CAREFULLY TO DETERMINE WHETHER ANY OF THE MATERIALS
      APPLY TO THEM.

     

    The
      presence of a legend for any given State reflects only that a legend may be
      required by that State and should not be construed to mean an offer or sale
      may
      be made in any particular State. This Memorandum may be supplemented by
      additional State legends.  If an investor is uncertain as to whether
      or not offers or sales may be lawfully made in any given State, the investor
      is
      hereby advised to contact the Company.

    

    FOR
      RESIDENTS OF ALL STATES

    

    IN
      MAKING
      AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE
      COMPANY AND THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND RISKS
      INVOLVED.

    

    THE
      SECURITIES OFFERED HEREIN HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
      OF
      1933, AS AMENDED (THE “SECURITIES ACT”), OR APPROVED BY THE SECURITIES
      AND EXCHANGE COMMISSION (THE “COMMISSION”) OR ANY SECURITIES REGULATORY
      AUTHORITY IN ANY STATE, NOR HAS THE COMMISSION OR ANY STATE AUTHORITY PASSED
      UPON THE ACCURACY OR ADEQUACY OF THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM.
      ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

    

    THE
      SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY
      NOT
      BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE
      STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
      INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL
      RISKS
      OF AN INVESTMENT IN THE COMPANY FOR AN INDEFINITE PERIOD OF TIME.

    

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        -v-

        
          

        

      

      
        
        

      

    

     

    SPECIFIC
      STATE DISCLOSURES

    

    CALIFORNIA
      RESIDENTS ONLY

    

    IT
      IS
      UNLAWFUL FOR THE HOLDER OF ANY SECURITY TO CONSUMMATE A SALE OR TRANSFER OF
      THIS
      SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR,
      WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE
      STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER’S
      RULES.

    

    THE
      SALE
      OF SECURITIES WHICH ARE THE SUBJECT OF THIS MEMORANDUM HAVE NOT BEEN QUALIFIED
      WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE
      ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
      CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
      OF SECURITIES IS EXEMPT FROM THE QUALIFICATIONS BY SECTION 25100, 25102 OR
      25105
      OF THE CALIFORNIA CORPORATIONS CODE.  THE RIGHTS OF ALL PARTIES TO
      THIS MEMORANDUM ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED
      UNLESS THE SALE IS SO EXEMPT.

    

    CONNECTICUT
      RESIDENTS ONLY

    

    THE
      SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNIFORM SECURITIES ACT OF
      CONNECTICUT, AS AMENDED. THE SECURITIES CANNOT BE SOLD OR TRANSFERRED EXCEPT
      IN
      A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN EFFECTIVE
      REGISTRATION STATEMENT UNDER SUCH ACT. THESE SECURITIES HAVE NOT BEEN APPROVED
      OR DISAPPROVED BY THE BANKING COMMISSIONER OF THE STATE OF CONNECTICUT NOR
      HAS
      THE COMMISSIONER PASSED UPON THE ACCURACY OF THIS OFFERING.  ANY
      REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

    

    INDIANA
      RESIDENTS ONLY

    

    THESE
      SECURITIES HAVE NOT BEEN REGISTERED UNDER SECTION 3 OF THE INDIANA SECURITIES
      ACT AND THEREFORE, CANNOT BE RESOLD OR TRANSFERRED UNLESS THEY ARE SO REGISTERED
      OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

    

    NEW
      JERSEY RESIDENTS ONLY

    

    THESE
      SECURITIES ARE OFFERED IN RELIANCE ON AN EXEMPTION FROM REGISTRATION UNDER
      THE
      NEW JERSEY UNIFORM SECURITIES LAW. THE SECURITIES HAVE NOT BEEN REGISTERED
      UNDER
      SAID LAW AND MAY NOT BE RE-OFFERED FOR SALE, TRANSFERRED OR RESOLD WITHOUT
      COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SAID LAW OR AN EXEMPTION
      THEREFROM. THE BUREAU OF SECURITIES OF NEW JERSEY HAS NOT PASSED UPON THE
      ACCURACY OR COMPLETENESS OF THIS MEMORANDUM AND DOES NOT RECOMMEND OR ENDORSE
      THE PURCHASE OF THE SECURITIES.

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    NEW
      YORK RESIDENTS ONLY

    

    THIS
      CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM DOES NOT KNOWINGLY CONTAIN ANY UNTRUE
      STATEMENT OF A MATERIAL FACT OR KNOWINGLY OMIT TO STATE A MATERIAL FACT
      NECESSARY TO MAKE THE STATEMENTS MADE, IN LIGHT OF THE CIRCUMSTANCES UNDER
      WHICH
      THEY WERE MADE, NOT MISLEADING. IT CONTAINS A FAIR SUMMARY OF THE MATERIAL
      TERMS
      OF DOCUMENTS PURPORTED TO BE SUMMARIZED HEREIN.

    

    THIS
      MEMORANDUM HAS NOT BEEN FILED WITH OR REVIEWED BY THE ATTORNEY GENERAL OF THE
      STATE OF NEW YORK PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE
      STATE OF NEW YORK HAS NOT PASSED ON AND HAS NOT ENDORSED THE MERITS OF THIS
      OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

    

    GEORGIA
      RESIDENTS ONLY

    

    IT
      IS
      UNLAWFUL FOR ANY PERSON TO OFFER FOR SALE OR TO SELL ANY SECURITIES TO ANY
      PERSON IN THE STATE OF GEORGIA UNLESS: (1) THE SECURITIES ARE SUBJECT TO AN
      EFFECTIVE REGISTRATION STATEMENT; (2) THE SECURITY OR TRANSACTION IS EXEMPT
      UNDER CODE SECTION 10-5-8 OR CODE SECTION 10-5-9, RESPECTIVELY; OR (3) THE
      SECURITY IS A FEDERAL COVERED SECURITY.

    

    Stock
      certificates issued to an investor that is a resident of Georgia shall bear
      the
      following legend:

    

    THESE
      SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON PARAGRAPH (13) OF CODE
      SECTION 10-5-9 OF THE GEORGIA SECURITIES ACT OF 1973, AND MAY NOT BE SOLD OR
      TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT
      TO AN EFFECTIVE REGISTRATION UNDER SUCH ACT.

    

    TEXAS
      RESIDENTS ONLY

    

    The
      offer
      and sale of securities to residents of the State of Texas is exempted from
      the
      registration requirements of the Texas Securities Act, as amended, pursuant
      to
      Section 5(I)(a).  The offering is also exempt from registration
      pursuant to Regulation 114.4(b) promulgated pursuant to the Texas Securities
      Act.

     

    
      
        
        

      

      
        ii-

        
          

        

      

      
        
        

      

    

     

    KENTUCKY
      RESIDENTS ONLY

    

    PURSUANT
      TO KENTUCKY REVISED STATUTES §292.340, IT IS UNLAWFUL FOR ANY PERSON TO OFFER OR
      SELL ANY SECURITY IN KENTUCKY, UNLESS THE SECURITY IS REGISTERED UNDER CHAPTER
      292 OF THE REVISED STATUTE, OR THE SECURITY OR TRANSACTION IS EXEMPT UNDER
      THIS
      CHAPTER, OR THE SECURITY IS A COVERED SECURITY.

     

    MARYLAND
      RESIDENTS ONLY

    

    THESE
      SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MARYLAND SECURITIES ACT, BY REASON
      OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE
      OFFERING. THESE SECURITIES CANNOT BE RESOLD, TRANSFERRED OR OTHERWISE DISPOSED
      OF TO ANY PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES
      ACT OR THE MARYLAND SECURITIES ACT, IF SUCH REGISTRATION IS
      REQUIRED.

    

    FLORIDA
      RESIDENTS ONLY

    

    THESE
      SECURITIES HAVE NOT BEEN REGISTERED UNDER THE FLORIDA SECURITIES AND INVESTOR
      PROTECTION ACT AND ARE BEING SOLD IN RELIANCE UPON THE EXEMPTION CONTAINED
      IN
      SECTION 517.061(11) OF SUCH ACT.

    

    PURSUANT
      TO SECTION 517.061(11) OF THE FLORIDA STATUTES, IF SECURITIES ARE SOLD TO FIVE
      OR MORE FLORIDA RESIDENTS, FLORIDA INVESTORS WILL HAVE A THREE (3) DAY RIGHT
      OF
      RESCISSION, INVESTORS WHO HAVE EXECUTED A SUBSCRIPTION AGREEMENT MAY ELECT,
      WITHIN THREE (3) BUSINESS DAYS AFTER THE FIRST TENDER OF CONSIDERATION THEREFOR,
      TO WITHDRAW THEIR SUBSCRIPTION AND RECEIVE A FULL REFUND (WITH INTEREST) OF
      ANY
      MONEY PAID BY THEM.  SUCH WITHDRAWAL WILL BE WITHOUT ANY FURTHER
      LIABILITY TO ANY PERSON. TO ACCOMPLISH SUCH WITHDRAWAL, AN INVESTOR NEED ONLY
      SEND A LETTER OR TELEGRAM TO THE COMPANY AT THE ADDRESS SHOWN HEREIN INDICATING
      HIS INTENTION TO WITHDRAW. SUCH LETTER OR TELEGRAM MUST BE SENT AND POSTMARKED
      PRIOR TO THE END OF THE AFOREMENTIONED THIRD BUSINESS DAY. IF SENDING A LETTER,
      AN INVESTOR SHOULD SEND IT BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO
      ENSURE THAT IT IS RECEIVED AND TO EVIDENCE THE TIME WHEN IT IS MAILED. ANY
      ORAL
      REQUESTS FOR RESCISSION SHOULD BE ACCOMPANIED BY A REQUEST FOR OR CONFIRMATION
      THAT THE ORAL REQUEST WAS RECEIVED ON A TIMELY BASIS.

    

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        iii-

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

    

    

    
      	 	
              Page

            
	 	 
	
              SUMMARY
                OF THE OFFERING

            	
              1

            
	 	 
	
              RISK
                FACTORS

            	
              6

            
	 	 
	
              INVESTOR
                SUITABILITY STANDARDS

            	
              13

            
	 	
               

            
	
              USE
                OF PROCEEDS

            	
              14

            
	 	 
	
              CAPITALIZATION

            	
              16

            
	 	 
	
              THE
                BUSINESS OF THE COMPANY

            	
              18

            
	 	 
	
              RECENT
                EVENTS

            	
              32

            
	 	 
	
              LEGAL
                PROCEEDINGS

            	
              33

            
	 	 
	
              DIRECTORS
                AND OFFICERS OF THE COMPANY; COMPENSATION; OWNERSHIP

            	
              34

            
	 	 
	
              DESCRIPTION
                OF CAPITAL STOCK

            	
              36

            
	 	 
	
              TERMS
                OF THE UNITS AND THE OFFERING

            	
              37

            
	 	 
	
              CERTAIN
                FEDERAL INCOME TAX CONSEQUENCES

            	
              42

            
	 	 
	
              LEGAL
                MATTERS; EXPERTS

            	
              45

            
	 	 
	
              ACCESS
                TO ADDITIONAL INFORMATION; OFFERING PROCEDURE

            	
              46

            

    

    

    

    APPENDICES

    

    Exhibit
      A
– Subscription Agreement

    Exhibit
      B
– Form of Subscriber Questionnaire

    Exhibit
      C
– Form of Warrant

    Exhibit
      D
– Escrow Agreement

    Exhibit
      E
– Historical Financials

     

    
      
        
        

      

      
        iv-

        
          

        

      

      
        
        

      

    

     

    Cautionary
      Note Regarding Forward-Looking Statements

    

    Any
      statements that express, or involve
      discussions as to, expectations, beliefs, plans, objectives, assumptions or
      future events or performance (often, but not always, through the use of words
      or
      phrases such as “will result,” “are expected to,” “anticipated,” “plans,”
intends,” “will continue,” “estimated,” and “projection”) are not historical
      facts and may be forward-looking and, accordingly, such forward-looking
      statements involve known and unknown risks, uncertainties and other factors
      that
      may cause the actual results or performance of the Company to be materially
      different from any future results or performance expressed or implied by such
      forward-looking statements.

    

    Any
      forward-looking statement in this
      private placement memorandum and supporting exhibits speaks only as of the
      date
      on which such statements is made, and the Company undertakes no obligation
      to
      update any forward-looking statement or statements to reflect events or
      circumstances after the date on which such statement is made or to reflect
      the
      occurrence of unanticipated events. New factors emerge from time to time, and
      it
      is not possible for management to predict all of such factors. Further,
      management cannot assess the impact of each such factor on the business or
      the
      extent to which any factor, or combination of factors, may cause actual results
      to differ materially from those contained in any forward-looking
      statements.

    

    INVESTORS
      ARE URGED TO EVALUATE INVESTMENT IN THE COMPANY AND TO ASK ALL RELEVANT
      QUESTIONS OF MANAGEMENT CONCERNING THE COMPANY AND ITS PROPOSED
      BUSINESS.

    

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        -i-

        
          

        

      

      
        
        

      

    

     

    SUMMARY
      OF THE OFFERING

     

    The
      Company

     

    EnterConnect
      Inc., a Nevada corporation (“EnterConnect”, the “Company”, “we” or “us”) was
      formed on November 13, 2006 as Priority Software, Inc.  The Company
      was formed to acquire, develop, market and sell EnterConnect®, a software
      program
      that provides document management, content management, collaboration, search
      and
      security.  In November 2006, the Company commenced a Regulation D
      Offering of its securities to acquire the EnterConnect platform from Enterpulse,
      Inc., a Georgia corporation.  The Company offered $100,000 Units
      comprised of 10% Series A Convertible Debentures and 60,000 warrants to purchase
      shares of the Company’s common stock at exercise prices of $2.00, $3.00 and
      $4.00.  The Company raised a total of $2,112,732 in the
      Offering.  In addition, the Company conducted a private placement on
      July 31, 2007 of its securities solely to accredited investors. 
Subscriptions were for units at a purchase price of $25,000, comprised of a
      14%
      Debenture and 50,000 shares of the Company's Common Stock.  The Company
      executed subscriptions for investments of $585,500 for a total of 1,171,000
      shares of Common Stock.

     

    Our
      Business

    

    The
      Company leverages enterprise portal strategies and best practices to deliver
      proprietary, ‘business-ready’ employee, customer and partner portal
      solutions.  Our products and software-as-a-service (SaaS) offerings
      are deployed through our propriety application exchange, SOAAPPS.com, which
      SaaS
      enables other Independent Software Vendors (ISVs) and their applications -
      making it as easy as possible for global mid-market companies to find, try
      and
      buy software or services that meet their needs and budget.

    

    On
      December 21, 2006, the Company and Enterpulse consummated an Asset Purchase
      Agreement whereby the Company acquired the EnterConnect platform and certain
      related assets and personnel for the aggregate purchase price of
      $1,065,982.  On January 5, 2007 to reflect the Company’s acquisition
      of the EnterConnect platform, the Company amended its Articles of Incorporation
      to change its name to EnterConnect, Inc.

    

    To
      take
      products to market quickly, the Company leverages a proprietary Portal
      Application Platform, EnterConnect®, which
      the Company
      believes contains all of the core functionality required to rapidly build and
      deploy new end-user applications. The core functionality includes content
      management, digital asset management, search, security, personalization and
      end-user customization.  Utilizing the platform, the Company has
      developed two primary ‘business-ready’ product
      lines:  EnterConnect®
AppSuite
      and an application exchange, SOAAPPS.com, which
      provide collaborative online environments for employees, customers and
      partners.  By developing our products to be economical, easy-to-use,
      easy-to-deploy and easy-to-manage, targeted mid-market companies can easily
      acquire them either for use on-premise through traditional software licensing
      or
      for use as an outsourced subscription service, also known as
      software-as-a-service (SaaS) or on-demand software.  Our
‘business-ready’ products reduce the complexities, deployment cycles and
      expenses associated with traditional enterprise software portal implementations.
      As a result, our customers incur less risk and lower upfront costs while gaining
      greater technology flexibility as well as faster time-to-market and business
      value.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    The
      Company has, a proprietary portal application platform, two business-ready
      product lines, partnerships with software industry leaders – BEA Systems (NASDAQ
– BEAS) and Oracle (NASDAQ – ORCL) – and a tiered distribution channel program,
      including direct and indirect channels that both leverage the online application
      exchange, SOAAPPS.com.  We currently market the EnterConnect®
products
      and subscription services to global mid-market
      companies through both the direct and indirect channels.

    

    Registration
      of Securities

    

    The
      Company plans to become a reporting company. Thereafter, the Company will
      endeavor to establish a viable trading market for its securities.  As
      a public company, the Company believes that it will have the opportunity to
      raise additional capital by leveraging the market value of its common stock,
      as
      well as providing its investors with the potential for capital appreciation
      of
      their securities.

    

    The
      Company hereby covenants to file a registration statement on behalf of the
      investors under this Offering to register the securities offered
      herein.  Such statement will be filed within thirty (30) days of the
      final closing of this Offering.  See Registration Rights Page
      3.

    

    On
      August
      15, 2007, the Company filed a form SB2 with the United States Securities and
      Exchange Commission to register, on behalf of and for the benefit of selling
      security holders, 4,877,112 shares of its common stock.  The shares
      were initially issued to the selling security holders in one or more
      transactions exempt from the registration under the Securities Act.

    

    The
      SB2,
      as subsequently amended, was declared effective by the Securities and Exchange
      Commission on November 9, 2007.

    

    

    THE
      OFFERING

     

    
      	
              Securities
                Offered

            	
              A
                minimum of 5 Units are being offered on a “best efforts – all or none
                basis” and on a “best efforts” basis as to the remaining 15 Units. Each
                Unit comprises of 133,333 shares of the Company’s common stock, par value
                $.001 per share (“Common Stock”) and warrants (the “Warrants”) to purchase
                66,666 shares of Common Stock at $1.50 per
                share.

            

    

     

    
      	
              Offering
                Price

            	
              $100,000
                per Unit, minimum investment of one (1) Unit. However, the Company
                may
                waive the minimum subscription amount for an investor in its sole
                discretion.

            

    

     

    
      	
              Use
                of proceeds

            	
              We
                intend to use the net proceeds from the sale of the Units for general
                corporate purposes, including working capital and capital
                expenditures.  See “Use of
                Proceeds.”

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
              Shares
                outstanding

            	
              Assuming
                the Maximum Offering is completed, immediately following the closing
                of
                this Offering, we will have issued and outstanding a total of 28,858,594
                shares of Common Stock (26,858,594 shares of Common Stock if the
                Minimum
                Offering is completed). No shares of preferred stock are issued or
                outstanding.

            

    

    

    
      	
              Registration
                rights

            	
              The
                Company will use its reasonable best efforts, subject to receipt
                of
                necessary information from the Investors, to cause a Registration
                Statement to be filed no later than thirty (30) days after the date
                of
                final Closing (the “Required Filing Date”) and to become effective
                no later than one hundred twenty (120) days after the Registration
                Statement was filed with the SEC (the “Required Effective Date”).
                If the Registration Statement has not been filed on or before the
                Required
                Filing Date, or has not been declared effective by the SEC on or
                before
                the Required Effective Date because of the Company’s breach of this
                provision, or does not remain effective (any such failure being referred
                to as an “Event”), then the Investor shall be entitled to receive
                from the Company, as payment in full satisfaction for such Event,
                warrants
                to purchase an aggregate number of shares of Common Stock equal to
                1.5% of
                the number of issued Shares upon the same terms as the Warrants (i)
                at the
                time of such Event, and (ii) upon each monthly anniversary of such
                Event
                until the Event is cured, up to a maximum aggregate amount of 10%
                of the
                Shares (the “Late Registration Warrants”). In the event of changes
                in the outstanding Common Stock of the Company by reason of a stock
                dividend, stock split, reverse stock split, reorganization,
                recapitalization, merger, consolidation, liquidation, separation,
                combination or exchange of stock, change in the Company’s business
                structure or sale or transfer of all or any part of the Company’s business
                or assets (referred to as a “Capital Adjustment”), the number of
                Late Registration Warrants shall be adjusted consistent with such
                Capital
                Adjustment. Until such time that the resale of the Units is registered
                pursuant to a registration statement declared effective by the Securities
                and Exchange Commission, the offered securities may be resold only
                pursuant to Rule 144 under the Securities Act or pursuant to another
                exemption from registration under the Securities Act, if
                any.

            

    

    

    
      	
              Trading

            	
              The
                offered securities have not been registered under the Securities
                Act or
                the securities laws of any jurisdiction.  Unless and until the
                securities are registered, under
                the
                Federal securities laws and the requirements of other jurisdictions
                complied with, they may be transferred only in transactions that
                are exempt from registration under the Securities
                Act.

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    
      	
              Private
                Offering

            	
              Neither
                the Units, Common Stock, Warrants, nor the Common Stock issuable
                upon
                exercise thereof may be sold or transferred in the absence of an
                effective
                registration under the Securities Act of 1933, as amended, or
                qualification under applicable state securities laws or an opinion
                of
                counsel satisfactory to the Company that such registration or
                qualification is not required.  These securities may be subject
                to additional restrictions pursuant to exemptions in the various
                states
                where they are being sold.  There is no assurance that a public
                market will develop for these securities in the future.  See
                “Risk Factors-No Assurance of a Public Market” and “Limited
                Transferability of Securities.”

            

    

     

    
      	
              Suitability
                Standards

            	
              An
                investment in Units is suitable only for certain investors capable
                of
                evaluating the merits and risks of an investment in the Company and
                of
                protecting their interest in the transaction.  Units will be
                offered and sold exclusively to persons who satisfy certain minimum
                income
                or net worth standards or otherwise qualify as “accredited investors”
                under the Federal and state securities laws.  See “Investor
                Suitability Standards.”

            

    

     

    
      	
              Plan
                of
                Distribution

            	
              Assistance
                in private placement of the Units by members of the National Association
                of Securities Dealers, Inc on a reasonable “Best Efforts”
                basis.  Participating broker-dealers will receive cash selling
                commissions of ten (10%) percent of the proceeds of the Units sold,
                certain Warrants, in addition to reimbursement of certain expenses.
                No
                commissions will be paid on any Units sold by officers or directors
                of the
                Company. See “Use of Proceeds” and “Plan of
                Distribution.”

            

    

     

    
      	
              Escrow
                Agreements

            	
              All
                subscription funds will be deposited into a bank trust account
                with the Law
                Firm of Levy & Boonshoft, P.C. located at 477 Madison Avenue, New
                York, New York 10022 pending receipt of the Minimum
                Offering.  If
                Minimum
                Offering has not been subscribed by the closing date (which cannot
                be
                extended beyond December 30, 2007), all subscription moneys will
                be
                refunded directly by the Escrow Agent to investors without
                deduction.

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    
      	
              Rights
                of First Refusal

            	
              Under
                the terms of the Subscription Agreement to be executed by each Purchaser,
                holders of Common Stock, Warrants, and Common Stock issued upon exercise
                thereof will be subject to a right of first refusal in favor of the
                Company upon any transfer of such securities, subject to certain
                exceptions for transfers to immediate family members.  The
                Company waives ‘Rights of First Refusal’ upon an effective registration
                statement of the securities of this offering.  See “Limited
                Transferability of Securities.”

            

    

     

    
      	
              Disclosure
                Update

            	
              The
                Company will provide Purchasers of Common Stock and Warrants with
                a
                supplement to this Memorandum at the beginning of the exercise period
                indicating any material changes affecting the Company at such date
                or may
                provide regular quarterly reports and annual reports to all
                Purchasers.

            

    

     

    
      	
              Offering
                Period; Closing

            	
              The
                Offering will terminate on the earlier of November 30, 2007 or when
                the
                entire 20 Units comprising the Maximum Offering are subscribed for
                and
                sold. The Offering may be extended in the sole discretion of the
                Company
                for an additional 30 days to December 31, 2007 at which time it will
                fully
                and finally terminate.

            

    

     

    
      	
              Risk
                Factors

            	
              A
                PURCHASE OF UNITS IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF
                RISK.  SEE “RISK
                FACTORS.”

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    RISK
      FACTORS

     

    Forward-looking
      statements include statements relating to the Company’s ability to maintain
      existing customer contracts and secure additional customer contracts, expected
      trends in the software as a service industry, expected increases in revenues
      derived from product sales and services, and the Company’s ability to increase
      sales, marketing and product development expenditures to levels required for
      the
      Company to compete in its market.  Other forward-looking statements
      can be identified by the use of forward-looking terminology such as “may,”
“will,” “should,” “expect,” “anticipate,” “continue,” “plans,” and
“intends.”  Prospective purchasers are cautioned that all
      forward-looking statements are subject to risks and uncertainties including,
      but
      not limited to, the risks set forth herein.

     

    THE
      SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE IN NATURE AND INVOLVE A HIGH
      DEGREE OF RISK OF LOSS AND IMMEDIATE SUBSTANTIAL DILUTION. THEREFORE, EACH
      PROSPECTIVE INVESTOR SHOULD, PRIOR TO PURCHASE, CONSIDER VERY CAREFULLY THE
      FOLLOWING RISK FACTORS AS WELL AS ALL OTHER INFORMATION SET FORTH ELSEWHERE
      IN
      THIS PRIVATE PLACEMENT MEMORANDUM.

     

    

    The
      Investor’s Risk Losing All of their Investment

    

    If
      the
      Company raises only the minimum offering and no more, investors risk losing
      all
      of their investment if additional capital is not raised in three (3)
      months.

    

    The
      Company has a Limited Operating History

    

    The
      Company was only recently formed and has no operating history in its intended
      field of endeavor and has sustained substantial losses. Since inception, the
      Company has suffered as of March 31, 2007 a net loss of $1,016,771 ($_1,636,381
      as of _June 30, 2007). There can be no assurance that the Company will be
      successful in building its business or that its business model will prove
      to be successful.

    

    Our
      Auditors have Issued a Going Concern Opinion

    

    Our
      independent public accountants have expressed a going concern opinion of our
      financial statements as of March 31, 2007.  This means there is
      substantial doubt that the Company can continue as a going concern without
      additional financing and/or generating profits.  If we are unable to
      do so, we will likely have to cease operations and you may lose all of your
      investments.  The Company anticipates remaining unprofitable through
      its fiscal year ending March 31, 2008.  The Company anticipates
      becoming profitable in April of 2008.

    

    The
      Company has Material Future Financing Needs

    

    The
      Company's business model requires additional financing in order to expand its
      marketing and sales efforts. No assurance can be given that additional financing
      will be available to the Company on acceptable terms, if at all. If the Company
      raises additional funds by issuing additional equity securities, further
      dilution to existing equity holders will result. If adequate additional funds
      are not available, the Company may be required to curtail significantly its
      long-term business objectives and its results from operations may be materially
      and adversely affected.  Accordingly, there is substantive doubt
      whether the Company can fulfill its business plan or commence revenue generating
      operations.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    If
      We Are Unable To Raise Capital In The Future, We May Be Unable To Fund Operating
      Cash Shortfalls

    

    There
      can
      be no assurance that additional financing, may be available to us on acceptable
      terms, or at all. Our inability to obtain any needed financing could hinder
      our
      ability to fund our operations and our sales efforts.  Any financing
      may cause significant dilution to existing stockholders. Any debt financing
      or
      other financing of securities senior to common stock likely will include
      financial and other covenants that will restrict our flexibility. At a minimum,
      we expect these covenants to include restrictions on our ability to pay
      dividends on our common stock.

    

    Restricted
      Securities

    

    All
      of
      the shares of Common Stock outstanding prior to this Offering, or issued in
      connection with the conversion of the Debentures or the Warrants, are
“restricted securities,” as that term is defined under Rule 144 promulgated
      under the Securities Act.  In general, under Rule 144, a person (or
      persons whose shares are aggregated) who has satisfied a one-year holding period
      may under certain circumstances sell without registration under the Securities
      Act within any three-month period that number of shares which does not exceed
      the greater of one percent of the then outstanding Common Stock or the average
      weekly trading volume of such stock during the four calendar weeks prior to
      such
      sale.  Rule 144 also permits, under certain circumstances, the sales
      of shares without any volume limitation by a person who has satisfied a two-year
      holding period and who is not, and has not been for the preceding three months,
      an affiliate of the Company.

    

    There
      is No Public Market for Our Common Stock, and even if a Market Develops, It
      Will
      Likely be Thin and Subject To Manipulation

    

    There
      is
      no public market for our common stock, and we can provide no assurance that
      a
      public market for our common stock will develop in the future. Even if a public
      market does develop, the volume of trading in our common stock will presumably
      be limited and likely dominated by a few individuals. The limited volume, if
      any, will make the price of our common stock subject to manipulation by one
      or
      more stockholders and will significantly limit the number of shares that one
      can
      purchase or sell in a short period of time. An investor may find it difficult
      to
      dispose of shares of our common stock or obtain a fair price for our common
      stock in the market.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    If
      a Market for Our Common Stock Develops, the Market Price for Our Common Stock
      Will Likely Be Volatile and May Change Dramatically At Any
      Time

     

    If
      a
      market for our common stock develops, the market price of our common stock,
      like
      that of the securities of other early-stage companies, may be highly volatile.
      Our stock price may change dramatically as the result of announcements of our
      quarterly results, the rate of our expansion, significant litigation or other
      factors or events that would be expected to affect our business or financial
      condition, results of operations and other factors specific to our business
      and
      future prospects. In addition, the market price for our common stock may be
      affected by various factors not directly related to our business, including
      the
      following:

     

    
      	
               

            	
              ●

            	
              intentional
                manipulation of our stock price by existing or future
                stockholders;

            

    

     

    
      	
               

            	
              ●

            	
              short
                selling of our common stock or related derivative
                securities;

            

    

     

    
      	
               

            	
              ●

            	
              a
                single acquisition or disposition, or several related acquisitions
                or
                dispositions, of a large number of our
                shares;

            

    

     

    
      	
               

            	
              ●

            	
              the
                interest, or lack of interest, of the market in our business sector,
                without regard to our financial condition or results of
                operations;

            

    

     

    
      	
               

            	
              ●

            	
              the
                adoption of governmental regulations and similar developments in
                the
                United States or abroad that may affect our ability to offer our
                products
                and services or affect our cost
                structure;

            

    

     

    
      	
               

            	
              ●

            	
              developments
                in the businesses of companies that purchase our products;
                and

            

    

     

    
      	
               

            	
              ●

            	
              economic
                and other external market factors, such as a general decline in market
                prices due to poor economic indicators or investor
                distrust.

            

    

    

    Our
      Ability to Issue Preferred Stock and Common Stock May Significantly Dilute
      Ownership and Voting Power, Negatively Affect the Price of Our Common Stock
      and
      Inhibit Hostile Takeovers

    

    Under
      our
      Articles of Incorporation, we are authorized to issue up to 10,000,000 shares
      of
      preferred stock and 100,000,000 shares of common stock without seeking
      stockholder approval. Our board of directors has the authority to create various
      series of preferred stock with such voting and other rights superior to those
      of
      our common stock and to issue such stock without stockholder approval. Any
      issuance of such preferred stock or common stock would dilute the ownership
      and
      voting power of existing holders of our common stock and may have a negative
      effect on the price of our common stock. The issuance of preferred stock without
      stockholder approval may also be used by management to stop or delay a change
      of
      control, or might discourage third parties from seeking a change of control
      of
      our company, even though some stockholders or potential investors may view
      possible takeover attempts as potentially beneficial to our
      stockholders.

    

    Arbitrary
      Determination of Offering Price

    

    The
      offering price for the shares of Common Stock was determined arbitrarily, and
      such price should not be considered an indication of the actual value of the
      Company as it bears no relationship to the book value, assets, or earnings
      to
      the Company or to other recognized criteria of value.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    Immediate
      Dilution of Offering Price

    

    The
      price of the securities offered
      herein will immediately drop because offering price has no bearing to book
      value.  If Company were to liquidate now, the investors would get
      nothing in return.

    

    We
      depend on key management personnel for our future
      success

    

    Our
      success will depend in large part on the continued services of Sam Jankovich,
      our Chairman and Chief Executive Officer. The loss of his services may
      materially and adversely affect our business and results of
      operations.  In addition, if any key management personnel resign to
      join a competitor or form a competing company, the loss of such personnel,
      together with the loss of any clients or potential clients to such competitor,
      could materially and adversely affect the business and results of operations
      of
      the company.  Currently, we do not have any agreements with Mr.
      Jankovich prohibiting him from joining competitors, forming competing companies,
      soliciting existing clients or disclosing information deemed confidential to
      us;
      there is no guarantee that such agreements will be effective in preventing
      the
      key management personnel from engaging in the prohibited actions.  We
      cannot guarantee that we will be able to replace any of these individuals in
      the
      event their services become unavailable.

    

    Expansion
      and Retention of Client Accounts

    

    Our
      success depends on our ability to attract and retain clients, these
      clients can terminate their accounts on little or short notice. Currently,
      we have engaged in only limited sales.  Accordingly, we may lose or
      gain significant accounts each year.  There can be no assurance that
      we can retain our existing clients and add new clients as it attempts to expand
      its business.  See “Business - Customers.”

    

    Competition

    

    Although
      we believe we will be able to compete on the basis of the quality of our
      service, price and reputation, and build personal relationships with clients,
      there can be no assurance that we will be able to generate or improve our
      competitive position as we implements our proposed marketing
      program.  See “Business – Competition.”

    

    Control
      by Current Stockholders

    

    Our
      directors, officers, 5% stockholders and their affiliates control approximately
      72% of our outstanding shares of common stock and are expected to continue
      to
      control a majority of our outstanding common stock following any financing
      transactions projected for the foreseeable future. These directors, officers
      and
      affiliates effectively control all matters requiring approval by the
      stockholders, including any determination with respect to the acquisition or
      disposition of assets, future issuances of securities, declarations of dividends
      and the election of directors. This concentration of ownership may also delay,
      defer, or prevent a change in control and otherwise prevent stockholders other
      than our affiliates from influencing our direction and future.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    We
      are
      currently controlled by Sam Jankovich, our Chairman and Chief Executive
      Officer, and Private Capital Group, LLC (“PCG”), whose principal,
      Michael Wainstein, serves as our Director and Treasurer, who own
      approximately 34.4% and 29.8% of our Common Stock respectively.  The
      principal stockholders will continue to own Common Stock giving them voting
      control over us.  Since the Common Stock does not have cumulative
      voting rights, they will be able to determine and direct our affairs and
      policies and the use of all funds available to us.  Conversely,
      purchasers of Common Stock will have no effective voice in the management of
      the
      Company.  See “Security Ownership of Management and Certain Security
      Holders.”

    

    Absence
      of Cash Dividends

    

    It
      is
      unlikely we will declare or pay dividends on Common Stock in the foreseeable
      future out of future earnings, if any, even if permitted to do so under
      applicable law.  We currently intend to retain earnings, if any, to
      fund our continued operations and proposed expansion.  See “Dividend
      Policy.”

    

    If
      the protection of intellectual property is inadequate, competitors may gain
      access to our content and technology

    

    We
      seek
      to develop and maintain the proprietary aspects of our products and technology.
      To protect this proprietary content and technology, we rely primarily on a
      combination of contractual provisions, confidentiality procedures, trade secrets
      and patent, copyright, and trademark laws.

    

    We
      seek
      to avoid disclosure of our trade secrets through a number of means including,
      but not limited to, requiring those persons with access to our proprietary
      information to execute confidentiality agreements.  We seek to protect
      our software, documentation, and other written materials under trade secret
      and
      copyright laws, which afford only limited protection.  We cannot be
      certain that any of our proprietary rights with respect to our products and
      services will be viable or of value in the future because, among other reasons,
      the validity, enforceability and type of protection of proprietary rights in
      our
      industries are uncertain and still evolving and many different entities are
      simultaneously seeking intellectual property rights relevant to software based
      applications.

    

    We
      have
      no patents and may not receive a patent related to any of our products and
      services.  Our future patents, if any, may be successfully challenged,
      rendering them invalid or unenforceable, or may not provide us with any
      competitive advantages.  We may not develop proprietary products or
      technologies that are patentable and other parties may have dominating patent
      claims.  Additionally, other parties may have patent rights relating
      to the same subject matter covered by patents issued to us, enabling them to
      use
      the patented technology or license it to others without our
      consent.  The validity and enforceability of our future patents, if
      any, may also be affected by future legislative actions or judicial
      decisions.

    

    Our
      trademarks may not provide us with any competitive advantages.  None
      of our trademarks may be registrable, and other parties may have priority of
      use
      of such trademarks or variants thereof.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Despite
      our efforts to protect our proprietary rights, unauthorized parties may attempt
      to copy aspects of our products and intellectual property or to obtain and
      use
      information that we regard as proprietary.  Policing unauthorized use
      of our products is difficult, and while we are unable to determine the extent
      to
      which piracy of our intellectual property exits, piracy can be expected to
      be a
      persistent problem.  In addition, the laws and enforcement mechanisms
      of some foreign countries do not protect our proprietary rights as much as
      do
      the laws of the United States.  Our means of protecting our
      proprietary rights may not be adequate and our competitors may independently
      develop similar technology, duplicate our products, or design around patents
      issued to us, our content, or other intellectual property.

    

    There
      has
      been a substantial amount of litigation in the Internet industry regarding
      intellectual property rights.  It is possible that in the future third
      parties may claim that we or our current or potential future products or
      services infringe upon their intellectual property.  We expect that
      developers and providers of e-commerce solutions will increasingly be subject
      to
      infringement claims as the number of products and competitors in this industry
      segment grows and the functionality of products in different industry segments
      overlaps.  Any claims, with or without merit, could be time-consuming,
      result in costly litigation, cause delays in implementation of our services
      or
      require us to enter into license agreements.  Licenses, if required,
      may not be available on terms acceptable to us, which could seriously harm
      our
      business.

    

    Our
      business is subject to U.S. and foreign government regulation of the
      Internet.

    

    We
      are
      affected by government regulation of the Internet by the United States, at
      the
      state, local and federal government levels, and foreign governmental
      bodies.  Because new legislation is continuously being created and
      implemented, we are not certain how our business will be impacted and cannot
      predict if or how any future legislation would impact our
      business.  In addition, we may be indirectly affected by certain new
      legislation to the extent it impacts our clients and potential
      clients.

    

    We
      will incur increased costs in the event that we become a public
      company.

    

    As
      a
      public company, with a class of reporting securities, we will incur significant
      legal, accounting and other expenses that we did not incur as a private company.
      We will incur costs associated with our public company reporting requirements.
      We also anticipate that we will incur costs associated with the new rules
      implemented by the Securities and Exchange Commission. We expect these rules
      and
      regulations to increase our legal and financial compliance costs and to make
      some activities more time-consuming and costly.

    

    No
      public market exists for the trading of our
      securities.

    

    Our
      selling stockholders are offering to sell shares of our common stock at a fixed
      price of $1.00 per share. Our common stock is not traded on any exchange at
      this
      time, but we will seek to have it listed to trade on the OTC Bulletin Board
      (“OTCBB”). Factors such as announcements by us of the financial results, the
      gain or loss of customers, changes in management, regulatory changes, trends
      in
      the industry or stock market and announcements by competitors, among other
      things, could cause the market price of our securities to fluctuate
      significantly.

     

    Our
      stock is a penny stock and there are significant risks related to buying and
      owning penny stocks.

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Rule
      15g-9 under the Securities Exchange Act of 1934 imposes additional sales
      practice requirements on broker-dealers that sell non-NASDAQ listed securities
      except in transactions exempted by the rule, including transactions meeting
      the
      requirements of Rule 506 of Regulation D under the Securities Act and
      transactions in which the purchaser is an institutional accredited investor
      (as
      defined) or an established customer (as defined) of the broker or dealer. For
      transactions covered by this rule, a broker-dealer must make a special
      suitability determination for the purchaser and have received the purchaser’s
      written consent to the transaction prior to sale. Consequently, this rule may
      adversely affect the ability of broker-dealers to sell our securities and may
      adversely affect your ability to sell any of the securities you
      own.

    

    The
      Securities and Exchange Commission regulations define a “penny stock” to be any
      non-NASDAQ equity security that has a market price (as defined in the
      regulations) of less than $5.00 per share or with an exercise price of less
      than
      $5.00 per share, subject to some exceptions. For any transaction by a
      broker-dealer involving a penny stock, unless exempt, the rules require
      delivery, prior to any transaction in a penny stock, of a disclosure schedule
      prepared by the SEC relating to the penny stock market. Disclosure is also
      required to be made about commissions payable to both the broker-dealer and
      the
      registered representative and current quotations (bid and ask prices) for the
      securities. Finally, monthly statements are required to be sent disclosing
      recent price information for the penny stock held in the account and information
      on the limited market in penny stocks. Our market liquidity could be severely
      adversely affected by these rules on penny stocks.

    

    

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        12

        
          

        

      

      
        
        

      

    

     

    INVESTOR
      SUITABILITY STANDARDS

     

    INVESTMENT
      IN THE UNITS INVOLVES A HIGH
      DEGREE OF RISK AND IS SUITABLE ONLY FOR THOSE INVESTORS WHO HAVE SUBSTANTIAL
      FINANCIAL RESOURCES IN RELATION TO THEIR INVESTMENT AND WHO UNDERSTAND THE
      PARTICULAR RISK FACTORS OF THIS INVESTMENT.  IN ADDITION, A PURCHASE
      OF UNITS IS SUITABLE ONLY FOR INVESTORS WHO NEED NO LIQUIDITY IN THEIR
      INVESTMENTS AND ARE WILLING TO ACCEPT SUBSTANTIAL RESTRICTIONS ON THE TRANSFER
      OF THESE SECURITIES.

     

    Investor
      Suitability

     

    The
      Company intends to offer and sell
      the Units to a limited number of “accredited investors” as such term is defined
      under Regulation D promulgated under the Securities Act.  Offers and
      sales will be made only to persons whom the Company believes (i) have such
      knowledge and experience in financial and business matters as to be capable
      of
      evaluating the merits and risks of the proposed investment, and (ii) can bear
      the economic risks of the investment.

     

    The
      Company reserves the right to
      determine whether any prospective investor meets the above requirements and
      will
      have the absolute discretion not to accept any subscription for any
      reason.

     

    Each
      investor will be required to
      represent in writing in a Subscription Agreement (see Appendices) and
      Confidential Subscriber Questionnaire (see Appendices) that he or she meets
      the
      requirements described above and can afford to bear the risk of the loss of
      his
      or her entire investment in the securities offered hereby.  The
      Company may also make such further inquiries as it deems appropriate to
      determine whether an investment in the Units is suitable for any prospective
      investor.

     

    Ability
      to Accept Limitations of Transferability

     

    It
      is unlikely that investors will be
      able to liquidate their investments in the Units in the event of an emergency
      or
      for any other reason.  A public market for the Units does not exist
      and it is not anticipated that one will ever develop.  Moreover, the
      transferability of the Units is subject to certain restrictions set forth in
      the
      Subscription Agreement, including a right of first refusal granted to the
      Company, and will be affected by restrictions on resale imposed under federal
      and state securities laws.  See “Risk factors.”

     

    EACH
      PROSPECTIVE INVESTOR SHOULD OBTAIN
      THE ADVICE OF HIS OR HER ATTORNEY, TAX CONSULTANT AND BUSINESS ADVISOR WITH
      RESPECT TO THE LEGAL, TAX AND BUSINESS ASPECTS OF THIS INVESTMENT PRIOR TO
      SUBSCRIBING FOR THESE SECURITIES.

     

    THIS
      MEMORANDUM SHALL NOT CONSTITUTE AN
      OFFER TO SELL TO, OR A SOLICITATION OF AN OFFER TO BUY FROM, ANY PERSON WHO
      DOES
      NOT MEET THE SUITABILITY STANDARDS SET FORTH HEREIN AND IN THE SUBSCRIPTION
      AGREEMENT.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    USE
      OF PROCEEDS

     

    The
      net
      proceeds from this Offering will be used primarily for the development of
      enterprise software-as-a-service and related direct and support
      operations.

    

    We
      reserve the right to have significant discretion with respect to the application
      of such proceeds at any time during or after this Offering. In the event that
      our plans change, our assumptions change or prove to be inaccurate, or the
      proceeds of the Offering prove to be insufficient, it may be necessary or
      advisable to reallocate proceeds or to use proceeds for other purposes, or
      we
      may be required to seek additional financing or we may be required to curtail
      our operations.  As a result of the foregoing, our success will be
      affected by our discretion and judgment with respect to the application and
      allocation of the proceeds of this Offering.  The proceeds of the
      Offering may be deposited in interest or non-interest bearing accounts, or
      invested in government obligations, certificates of deposit, commercial paper,
      money market accounts or similar investments, which may not be
      insured.

    

    The
      following table sets forth the estimated application of proceeds from the sale
      of the minimum and maximum number of Units being offered hereby:

    

    
      	 	 	
              Minimum

            	 	 	
              Maximum

            	 
	 	 	 	 	 	 	 
	
              Marketing
                (1)

            	 	$	
              150,000

            	 	 	$	
              600,000

            	 
	
              Product
                Development (2)

            	 	$	
              100,000

            	 	 	$	
              400,000

            	 
	
              Working
                Capital (3)

            	 	$	
              150,000

            	 	 	$	
              750,000

            	 
	
              Broker/Dealer
                (4)

            	 	$	
              50,000

            	 	 	$	
              200,000

            	 
	
              Offering
                Costs (5)

            	 	$	
              50,000

            	 	 	$	
              50,000

            	 
	
              Total
                Proceeds

            	 	$	
              500,000

            	 	 	$	
              2,000,000

            	 

    

    
      	
               

            	
              (1)

            	
              Represents
                expenditures for marketing to partners and
                customers.

            

    

     

    
      	
               

            	
              (2)

            	
              Represents
                estimates for product development and services within specific markets
                in
                which the Company is engaged.

            

    

     

    
      	
               

            	
              (3)

            	
              Represents
                reduction in accounts payable, and general corporate
                purposes.

            

    

     

    
      	
               

            	
              (4)

            	
              Represents
                commissions to be paid to broker-dealers that participate in the
                offering.  To the extent any of the Units are sold by officers
                or directors of the Company, no commissions will be paid and the
                additional proceeds as a result of the savings of the commissions
                will be
                used for working capital.

            

    

     

    
      	
               

            	
              (5)

            	
              Includes
                legal, accounting, printing, and other expenses associated with this
                offering.

            

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    The
      foregoing represents our present business intentions with respect to the
      allocation of proceeds of this offering based upon our present plans and
      business conditions.  The occurrence of certain unforeseen events or
      changed business conditions could result in the application of the proceeds
      of
      the offering in a manner other than as described in this
      prospectus.  See “Risk Factors” for additional discussions of these
      risks.

     

    

     

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        15

        
          

        

      

      
        
        

      

    

     

    CAPITALIZATION

     

    The
      Company had 26,191,928shares of Common Stock issued and outstanding as of the
      date of this Memorandum. The following table sets forth the capitalization
      of
      the Company as of the date hereof, giving effect to the Minimum Offering
      (assumed net proceeds of $450,000) and to the Maximum Offering (assumed net
      proceeds of $1,800,000), with an offering price of $0.75 per share.

    

    
      	 	 	
              Actual

            	 	 	
              Minimum
                Offering

            	 	 	
              As
                Adjusted Maximum Offering

            	 (1)
	
              Cash

            	 	$	
              1,936

            	 	 	$	
              401,936

            	 	 	$	
              1,501,936

            	 
	
              Total
                Liabilities

            	 	$	
              450,073

            	 	 	$	1,035,573	(1)	 	$	1,035,573	(1)
	
              Stockholders’
                equity:  Preferred stock at $0.001 par value; 10,000,000 shares
                authorized; no shares issued and outstanding

            	 	 	
              -0-

            	 	 	 	
              -0-

            	 	 	 	
              -0-

            	 
	
              Common
                stock at $0.001 par value;100,000 shares authorized; 26,191,928,
                Shares
                issued and outstanding (1)

            	 	$	
              26,191,928

            	 	 	$	
              26,858,594

            	 	 	$	
              28,858,594

            	 
	
              Additional
                paid-in capital

            	 	$	
              4,144,176

            	 	 	$	
              4,544,176

            	 	 	$	
              5,644,176

            	 
	
              Deferred
                Compensation (2)

            	 	$	(2,000,000	)	 	$	(2,000,000	)	 	$	(2,000,000	)
	
              Accumulated
                deficit

            	 	$	(1,636,381	)	 	$	(1,636,381	)	 	$	(1,636,381	)
	
              Total
                stockholders’ equity (1)

            	 	$	
              533,987

            	 	 	$	
              935,320

            	 	 	$	
              2,040,654

            	 

    

     

    See
      accompanying notes to the financial statements.

    

    
      	
              (1)

            	
              Gives
                effect to the Company’s receipt of gross proceeds of $585,500 in July and
                August 2007 from bridge loans which would increase the as adjusted
                total
                liabilities to $1,035,573. The Company conducted a private placement
                of
                its securities solely to accredited investors.  Subscriptions
                were for units at a purchase price of $25,000, comprised of a 14%
                Debenture and 50,000 shares of the Company's Common Stock.  The
                Company executed subscriptions for investments of $585,500 for a
                total of
                1,171,000 shares of Common Stock.

            

    

    

    
      	
              (2)

            	
              Gives
                effect to the issuance of 1,000,000 shares of its shares of common
                stock
                to Global Media Fund (“Global’) related to a Memorandum of Understanding
                with Global to provide marketing and advertising services for a term
                of
                twelve (12) months.  In consideration for the services,
                EnterConnect issued 1,000,000 shares of its common stock to Global
                at an
                agreed valuation of
                $2,000,000.  

            

    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    SECURITY
      HOLDERS

     

    The
      Company has an aggregate of 58 shareholders.  The following table
      reflects owners of five percent (5%) or more of all of the issued and
      outstanding shares of the Company’s Common Stock as of the date hereof and the
      percentage of shares held by each shareholder, all on a fully-diluted
      basis.

    

    The
      table
      also identifies owners of shares who are officers or directors of the
      Company.

    

    
      	
              PRE-OFFERING
                TABLE

            	 
	
              As
                of the date of this Memorandum

            	 
	
              Names
                of Shareholders

            	 	
              Number
                of Shares Held

            	 	 	
              Approximate
                Percentage
                Holding

            	 
	 	 	 	 	 	 	 
	
              Sam
                Jankovich, Chairman, President and Chief Executive Officer

            	 	 	
              9,000,000

            	 	 	 	34.36	%
	
              Private
                Capital Group LLC (Michael Wainstein, Director and
                Treasurer)

            	 	 	
              7,800,000

            	 	 	 	29.78	%
	
              Dean
                Galland, Chief Operating Officer

            	 	 	
              2,109,400

            	 	 	 	8.05	%
	
              Others

            	 	 	
              7,282,528

            	 	 	 	27.80	%
	
              Total

            	 	 	
              26,191,928

            	 	 	 	100.00	%

    

    

    The
      table
      below sets forth the post-Offering capitalization of the Company, assuming
      that
      the Maximum Offering is subscribed for and all Warrants are immediately
      exercised.

    

    
      	
              POST-OFFERING
                TABLE

            	 
	
              Assuming
                Subscription for Maximum Offering

            	 
	
              Names
                of Shareholders

            	 	
              Number
                of Shares Held

            	 	 	
              Approximate
                Percentage
                Holding

            	 
	 	 	 	 	 	 	 
	
              Sam
                Jankovich, Chairman, President and Chief Executive Officer

            	 	 	
              9,000,000

            	 	 	 	31.18	%
	
              Private
                Capital Group LLC (Michael Wainstein, Director and
                Treasurer)

            	 	 	
              7,800,000

            	 	 	 	26.03	%
	
              Dean
                Galland, Chief Operating Officer

            	 	 	
              2,109,400

            	 	 	 	7.30	%
	
              Others

            	 	 	
              7,282,528

            	 	 	 	25.23	%
	
              Investors
                (assuming all warrants are exercised)

            	 	 	
              2,666,666

            	 	 	 	9.24	%
	
              Total

            	 	 	
              28,858,594

            	 	 	 	100.00	%

    

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    THE
      BUSINESS OF THE COMPANY

     

    Overview

     

    EnterConnect,
      Inc. (“EnterConnect”, the “Company” or “our”) leverages enterprise portal
      strategies and best practices to deliver proprietary, ‘business-ready’ employee,
      customer and partner portal solutions.  The Company’s products and
      software-as-a-service (SaaS) offerings are deployed through a propriety
      application exchange, SOAAPPS.com, which SaaS enables other Independent Software
      Vendors (ISVs) and their applications - enabling global mid-market companies
      to
      find, try and buy software or services that meet their needs and
      budget.

    

    To
      take
      products to market quickly, the Company leverages a proprietary Portal
      Application Platform, EnterConnect®, which
      the Company
      believes contains all of the core functionality required to rapidly build and
      deploy new end-user applications. The core functionality includes web content
      management, digital asset management, search, security, personalization and
      end-user customization.  Utilizing the platform, the Company has
      developed two primary ‘business-ready’ product
      lines:  EnterConnect® AppSuite
      and the application exchange, SOAAPPS.com, which provide collaborative online
      environments for employees, customers and partners.  By developing the
      EnterConnect products to be economical, easy-to-use, easy-to-deploy and
      easy-to-manage, targeted mid-market companies can easily acquire them either
      for
      use on-premise through traditional software licensing or for use as an
      outsourced subscription service, also known as software-as-a-service
      (SaaS).  The Company’s ‘business-ready’ products reduce the
      complexities, deployment cycles and expenses associated with traditional
      enterprise software portal implementations. As a result, our customers incur
      less risk and lower upfront costs while gaining greater technology flexibility
      as well as faster time-to-market and business value.  

    

    The
      Company has a proprietary portal application platform, two business-ready
      product lines, partnerships with software industry leaders – BEA Systems (NASDAQ
– BEAS) and Oracle (NASDAQ – ORCL) – and a tiered distribution channel program,
      including direct and indirect channels that both leverage the online application
      exchange, SOAAPPS.com. We currently market the EnterConnect® AppSuite
      product and subscription service to global mid-market companies through both
      the
      direct and indirect channels.

    

    Industry
      Background

    

    Enterprise
      Portals

    Leading
      technology analyst firm, Gartner Inc., defines a portal as "access to and
      interaction with relevant information assets (information/content, applications
      and business processes), knowledge assets and human assets by select targeted
      audiences, delivered in a highly personalized manner."  Some of the
      benefits of enterprise portals include improved communications and
      collaboration, increased productivity, improved customer and partner service
      delivery, increased revenue and reduced operating costs. CIO surveys reveal
      that
      portals continue to be among the top spending priorities at
      companies.  Goldman Sachs’ CIO survey placed portals alongside
      security and storage software in the top tier of spending priorities for
      2005.  A Smith Barney CIO survey showed portals as the highest
      application spending priority, coming out just ahead of traditional stalwarts
      ERP and CRM. A March 2007 report by International Data Corporation (IDC) states
      that 2006 worldwide enterprise portal revenue grew by 10.4% to an estimated
      $896
      million and is predicted to grow to $1.4 billion in 2011.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    Traditionally,
      companies have had three options when seeking to deploy an enterprise portal:
      develop from scratch; develop using a portal framework; or deploy an enterprise
      portal software solution.  Each of these options can enable a company
      to realize the benefits enterprise portals provide, but they also introduce
      a
      variety of other challenges, including:

    

    
      	
               

            	
              ·

            	
              Lengthy
                and costly deployments:  Companies choosing to develop a
                portal from scratch or utilizing a portal framework require expensive
                development resources either internally or on an outsourced basis.
                Typical
                deployment cycles vary with portal complexity, but range from 3-18
                months.  Companies choosing to deploy an enterprise portal
                software solution save on development expenses and shorten their
                deployment cycles to 3-6 months, but invest more in licensing, maintenance
                and professional services fees.

            

    

    

    
      	
               

            	
              ·

            	
              High
                cost of ownership:  Companies choosing to develop portals
                or to deploy an enterprise portal software solution will incur a
                high
                total cost of ownership as a result of expensive information technology
                (IT) resources required for upfront development, deployment, systems
                integration and ongoing customizations, support, administration and
                upgrades as well as costly licensing and maintenance
                fees.

            

    

    

    The
      impact of these challenges vary from increased risks and costs to increased
      time-to-value.  To address these challenges, mid-market companies are
      turning to business-ready portal software applications available in on-premise
      versions and as outsourced services, also known as software-as-a-service (SaaS)
      or on-demand software.  Business-ready portal applications are
      pre-configured for key business-use-cases, enabling companies to rapidly deploy
      new portals with significantly less upfront
      investment.  Business-ready portal applications can be deployed in
      just a few weeks and often deliver the majority of the functionality needed
      to
      achieve business results quickly.  Companies then only need to invest
      in development or professional services to complete the minor customizations
      required.

    

    Emergence
      of Software-as-a-Service (SaaS)

    The
      traditional software deployment model for packaged applications requires
      customers to make capital investments in upfront licensing fees along with
      an
      additional 20-30% average investment in professional service fees for lengthy
      implementation cycles.  Software-as-a-Service (SaaS) redefines this
      traditional deployment model, empowering customers with a dynamic “pay-as-you-go
      or subscription” service.  SaaS customers can access and utilize
      software through any standard Web browser – at anytime from anywhere. SaaS is
      not just about a new way of creating, delivering, selling and utilizing
      applications. SaaS enables companies to subscribe to a variety of application
      services, available via the Internet on an as-needed basis with little or no
      implementation services required and without the need to install and manage
      third-party software in-house.

    

    The
      Software-as-a-Service (SaaS) business model is designed to address seven major
      challenges in the software industry today:

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              ·

            	
              the
                availability of enterprise application services to global customers
                of all
                sizes and across all industries;

            

    

     

    
      	
               

            	
              ·

            	
              a
                fully outsourced service accessible over the Internet and through
                a
                variety of devices, including PCs, laptop computers, mobile phones,
                and
                PDAs;

            

    

     

    
      	
               

            	
              ·

            	
              rapid
                and simple deployment, configuration, and
                training;

            

    

     

    
      	
               

            	
              ·

            	
              a
                comprehensive set of application
                features;

            

    

     

    
      	
               

            	
              ·

            	
              a
                scalable, secure application architecture that can economically support
                hundreds of thousands of customers
                simultaneously;

            

    

     

    
      	
               

            	
              ·

            	
              the
                ability to integrate with businesses’ existing third party and internally
                developed enterprise applications and
                databases;

            

    

     

    
      	
               

            	
              ·

            	
              and
                the ability to tailor the appearance, policy settings, workflow and
                other
                characteristics of the service to meet the needs of a diverse customer
                base.

            

    

     

    According
      to a March 2007 announcement by Gartner, the SaaS market is growing at 48%
      per
      year as compared to the traditional enterprise software market which is only
      growing at 6% per year. Gartner predicts that the SaaS market will grow to
      $19.3
      billion in worldwide revenues in 2011, generating 25% of the revenues within
      the
      overall software market, an increase of 20% - up from 5% in 2006 which produced
      worldwide market revenues of $6.3 billion.  

    

    Application
      Exchanges

    To
      take
      advantage of the predicted growth in the software-as-a-service market, SaaS
      application exchanges (marketplaces) have entered as new market players seeking
      to capture market share by lowering traditional and SaaS barriers to market
      entry and growth for exchange partners. While traditional barriers have been
      associated with market presence and intellectual property, new SaaS barriers
      also include other limiting factors associated with successfully transitioning
      or supporting a services-based business model that requires a multi-tenant
      delivery infrastructure as well as re-tooled sales, marketing and distribution
      strategies, and effective alliance strategies.  Application exchanges
      provide software companies with a new channel to build, sell, deploy and manage
      their SaaS applications and in return generate revenue from a variety of
      sources, including: advertising fees; partner participation fees; partner
      enablement fees; partner application hosting and management fees; and shared
      revenue percentages for new SaaS subscriptions sold through the
      exchange.

    

    Our
      Strategy

    

    Our
      mission is to leverage our strength as a leader in enterprise portal strategies
      and best practices to deliver proprietary, ‘business-ready’ employee, customer
      and partner portal solutions that are economical, easy-to-use, easy-to-deploy
      and easy-to-manage. We deploy our products and software services through our
      propriety application exchange, SOAAPPS.com, which SaaS enables other
      Independent Software Vendors (ISVs) and their applications - making it as easy
      as possible for global mid-market companies to find, try and buy software or
      services that meet their needs and budget.

    

    Key
      elements of our strategy include:

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              ·

            	
              Strengthening
                and extending our product offerings.  We designed our
                standards-based products to easily accommodate new features, functions
                and
                business-use-case scenarios as well as the release of entirely new
                applications. For example, the first release of the EnterConnect® AppSuite
                was for generic intranet and extranet environments, however, the
                latest
                release includes four applications, EmployeeConnect, TeamConnect,
                CustomerConnect and PartnerConnect.  The EnterConnect®
                Portal Application Platform was also extended
                to
                include new functionality such as campaign and survey execution and
                management, which is now utilized in each of the new
                applications.

            

    

    

    
      	
               

            	
              ·

            	
              Deepening
                relationships with strategic partners and better leveraging their
                indirect
                channels.  Our strategic partner strategy focuses on
                developing partnerships with software leaders that have large indirect
                channels consisting of Independent Software Vendors (ISVs), Systems
                Integrators (SIs) and Value Added Resellers (VARs).  We
                currently have established partnerships with two of the leading middleware
                software providers, BEA Systems and Oracle. There are two key goals
                with
                our strategic partner strategy: to embed, integrate, bundle or co-sell
                our
                EnterConnect® products
                with our partner’s products to launch new business-ready portal
                applications and then distribute them through the application exchange,
                SOAAPPS.com, leveraging the indirect sales channels of strategic
                partners;
                to SaaS enable strategic partner ISVs in order to make their SaaS
                solutions available on the SOAAPPS.com application
                exchange.  The objective of our strategic partner strategy is to
                help our partners drive new revenue through indirect channels utilizing
                EnterConnect® products.

            

    

    

    
      	
               

            	
              ·

            	
              Establishing
                the Internet channel as our primary channel for global software
                deployment.  We believe the Internet channel provides the
                lowest cost - of sales, of customer and partner service delivery,
                and of
                deploying, managing and maintaining products - and provides the greatest
                access to customers worldwide.  The key to our Internet channel
                strategy is leveraging the EnterConnect® application
                exchange, SOAAPPS.com in conjunction with our strategic partner,
                BEA
                Systems, and their extensive network of indirect channel partners.
                SOAAPPS.com is the first application exchange to launch with our
                strategic
                partners.

            

    

    

    
      	
               

            	
              ·

            	
              Extending
                our tiered distribution channels.  Our tiered distribution
                channels consist of direct and indirect sales channels. The direct
                sales
                channel is comprised of our direct sales force and
                telesales.  The indirect sales channel is comprised of our
                strategic partners and their indirect partner network of ISVs, SIs
                and
                VARs. The objective of this strategy is to help partners maximize
                the use
                of our Internet channel, SOAAPPS.com, to: generate demand for solutions;
                enable easy demonstration of solutions; provide easy access to solution
                collateral; facilitate online transactions; and enable easy management
                and
                maintenance of purchased solutions.

            

    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    Our
      Solution

    

    We
      are a
      provider of standards-based, business-ready enterprise and exchange portal
      applications for mid-market companies.  We provide an Internet channel
      that enables customers to more easily access, demonstrate, acquire, deploy
      and
      manage either on-premise products or software-as-a-service
      offerings.  Our key EnterConnect® SaaS offerings
      enable us to provide our service to businesses worldwide through our
      proprietary, scalable and secure SaaS application architecture, which also
      allows us to serve large numbers of customers cost-effectively. By subscribing
      to our service, our customers do not have to make large and risky upfront
      investments in software, additional hardware, extensive implementation services,
      and additional IT staff. As a result, our service enables businesses to achieve
      higher productivity from, and a lower total cost of ownership for, their
      business-ready portal applications.

    

    The
      key
      advantages of our solution include:

    Comprehensive
      Product Suite.  We offer products that are designed to
      deliver high levels of accountability, productivity, and ease of
      use.  Our solutions allow businesses to enhance individual and
      workgroup productivity, improve customer service, strengthen marketing
      capabilities, increase revenue opportunities and reduce business operating
      costs.  We have identified the target markets that are in the greatest
      need of our applications and our portal platform can be expanded to build
      additional application opportunities identified within those
      industries.

    

    Ease
      of Use.  We have designed our products and SaaS offerings to
      be easy-to-use and intuitive.  Since our solutions contain many tools
      and features recognizable to users of popular websites such as Amazon.com,
      eBay
      and Yahoo!, they have a more familiar, user-friendly interface than typical
      enterprise applications.  As a result, our end users do not require
      substantial user training and therefore rapidly enjoy the
      benefits.  We also conduct extensive end user surveys to gauge their
      experiences with our solutions so that we may determine potential areas of
      improvement.  Additionally, because of the nature of our offerings, we
      receive automatic feedback as to which features customers use, enabling us
      to
      further improve our offerings.

    

    Rapid
      Deployment.   Since our business-ready portal
      applications are pre-configured for key business-use-cases they can be deployed
      rapidly to achieve business results quickly.  Customers utilizing our
      SaaS offerings have the added advantage of not having to spend time installing
      or maintaining the servers, networking equipment, security products or other
      infrastructure hardware and software necessary to ensure a scalable and reliable
      service required with on-premise solutions.  We believe the average
      time that a customer requires to deploy our offerings is significantly shorter
      than typical, traditional portal deployments.  We also offer
      complementary consulting and training services to assist customers in rapidly
      deploying and optimizing their use of our offerings.

    

    Lower
      Total Cost of Ownership.  We enable customers to achieve
      significant savings relative to the traditional enterprise portal models that
      require expensive information technology (IT) resources for upfront development,
      deployment, systems integration and ongoing customizations, support,
      administration and upgrades.  Our pricing strategies and choice of
      on-premise or SaaS delivery options enable customers to easily acquire a
      solution that fits their unique needs.  Customers utilizing our SaaS
      offerings also benefit from the predictability of their future costs since
      they
      pay for the software as a service, which already includes upgrades for the
      term
      of the subscription contract.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    Our
      Products & Offerings

    

    We
      have
      developed a proprietary Business-Ready Portal Application Platform,
      EnterConnect®,
      which contains all of the core functionality required to rapidly build and
      deploy new end-user applications quickly.  The core functionality
      includes web content management, digital asset management, search, security,
      personalization and end-user customization.  Utilizing the platform,
      we have developed two primary business-ready product
      lines:  EnterConnect® AppSuite
      and the application exchange, SOAAPPS.com, which provide online collaboration
      environments for employees, customers and partners.  The table below
      shows our key applications and feature categories.

    

    
      	
              
                EnterConnect®
                  Business-Ready Portal Application
                  Platform

              

            
	
              
                Key
                  Feature Categories

              

            	
              
                EmployeeConnect

              

            	
              
                TeamConnect

              

            	
              
                CustomerConnect

              

            	
              
                PartnerConnect

              

            
	
              Web
                Content Management

            	
              ü

            	
              ü

            	
              ü

            	
              ü

            
	
              Digital
                Asset Management

            	
              ü

            	
              ü

            	
              ü

            	
              ü

            
	
              Collaboration

            	
              ü

            	
              ü

            	
              ü

            	
              ü

            
	
              Personalization

            	
              ü

            	
              ü

            	
              ü

            	
              ü

            
	
              Survey
                Management

            	
              ü

            	
              ü

            	
              ü

            	
              ü

            
	
              Campaign
                Management

            	
              ü

            	
              ü

            	
              ü

            	
              ü

            
	
              Portal
                Administration

            	
              ü

            	
              ü

            	
              ü

            	
              ü

            
	
              Microsoft
                Outlook Integration

            	
              ü

            	
              ü

            	
              ü

            	
              ü

            
	
              Federated
                Secure Search

            	
              ü

            	
              ü

            	
              ü

            	
              ü

            
	
              Multi-Language
                Support

            	
              ü

            	
              ü

            	
              ü

            	
              ü

            
	
              Federated
                Authentication & Security

            	
              ü

            	
              ü

            	
              ü

            	
              ü

            

    

     

    EnterConnect® AppSuite
      is a business-ready portal application suite used for intranet and extranet
      environments.  The portal suite currently consists of EmployeeConnect,
      TeamConnect, CustomerConnect and PartnerConnect.  The suite targets
      mid-market companies seeking to improve communications and collaboration and
      those seeking to leverage employee, partner and customer self-service to lower
      operational costs and increase revenue.  The application suite is
      available in both on-premise and software-as-a-service offerings. The
      application suite is available in a variety of editions, all of which use the
      Portal Platform and core functionality, but provide flexible pricing options
      for
      customers to match their needs and the size of their user-base with the editions
      that will deliver the highest return on investment.

    

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    
      	
              
                EnterConnect®
                  AppSuite On-Premise Version

              

            
	
              
                Applications
                  in Suite

              

            	
              
                Standard
                  Edition

              

              
                (1
                  - 1,500 Users)

              

            	
              
                Corporate
                  Edition

              

              
                (1,501
                  - 2,500 Users)

              

            	
              
                Enterprise
                  Edition

              

              
                (2,501+
                  Users)

              

            
	
              EmployeeConnect

            	
              ü

            	
              ü

            	
              ü

            
	
              TeamConnect

            	
              ü

            	
              ü

            	
              ü

            
	
              CustomerConnect

            	
              ü

            	
              ü

            	
              ü

            
	
              PartnerConnect

            	
              ü

            	
              ü

            	
              ü

            
	
              Development
                APIs

            	 	 	
              ü

            
	
              Licensing
                Options

            	
              As
                a Suite

            	
              As
                a Suite

            	
              As
                a Suite

            

    

    

    

    
      	
              
                EnterConnect®
                  AppSuite Software-as-a-Service (SaaS)
                  Version

              

            
	
              
                Applications
                  in Suite

              

            	
              
                Trial
                  Edition

              

            	
              
                SaaS
                  Edition

              

            	 
	
              EmployeeConnect

            	
              ü

            	
              ü

            	 
	
              TeamConnect

            	
              ü

            	
              ü

            	 
	
              CustomerConnect

            	
              ü

            	
              ü

            	 
	
              PartnerConnect

            	
              ü

            	
              ü

            	 
	
              Subscription
                Options

            	
              30
                Days Free

            	
              Per-User
                Per-Suite

            	 

    

    

    The
      EnterConnect® application
      exchange, SOAAPPS.com, consists of a marketplace that promotes partner products
      and services, a storefront for partners to demo and sell offerings, a customer
      portal for partners to service and manage customers, and an administration
      portal to manage portal business services and partners on the
      exchange.   SOAAPPS.com launched September 10, 2007 in strategic
      partnership with BEA Systems and targets global mid-market companies seeking
      a
      variety of solutions from partner companies.

    

    
      	
              
                EnterConnect®
                  Application Exchange Portal, SOAAPPS.com - Software-as-a-Service
                  (SaaS)
                  Version

              

            
	
              
                Key
                  Applications

              

            	
              
                BEA
                  Edition

              

            
	
              Marketplace

            	
              ü

            
	
              Customer
                Portal

            	
              ü

            
	
              Storefront

            	
              ü

            
	
              Administration

            	
              ü

            
	
              Analytics

            	
              ü

            
	
              Hosting
                & Management of Partner Solutions

            	
              ü

            
	
              Subscription
                Options

            	
              Custom

            

    

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    Professional
      Services

    

    We
      intend
      to offer consulting and implementation services and training that complement
      our
      offerings.

    

    Consulting
      and Implementation Services.  We offer consulting and
      implementation services to our customers to facilitate the adoption of our
      business-ready portal offerings.  Consulting services consist of
      services such as information architecture, business process mapping, project
      management services, solution development and guidance on portal best practices
      in using our offerings.  Implementation services include systems
      integration, configuration and data conversion.  The majority of our
      consulting and implementation engagements will be billed on a time-and-materials
      basis.  For the majority of the mid-market customers, we offer certain
      implementation services on a fixed price basis.

    

    Training.  We
      offer a number of traditional classroom and online educational classes that
      address topics such as implementing and using and administering our
      offerings.  We also offer classes for our partners who implement our
      service on behalf of our customers. The traditional classroom and some of the
      on-line educational classes are billed on a per-person, per-class
      basis.  We intend to offer the majority of our on-line educational
      classes are available at no charge to customers who subscribe.  We
      also assist customers in developing and delivering a customized education
      program for their employees.  The majority of these custom training
      engagements are billed on a time-and-material basis.

    

    Technology,
      Development and Operations

    

    Technology

    

    Core
      Technology

    We
      believe that our proprietary, enterprise-class Portal Application Platform,
      EnterConnect®,
      contains all of the core functionality required to rapidly build and deploy
      new
      end-user applications that are economical, easy-to-use, easy-to-deploy and
      easy-to-manage.  The core functionality includes content management,
      digital asset management, search, security, personalization and end-user
      customization.  We believe that our enterprise portal product strategy
      combined with our SaaS application service model enables us to develop
      functionality and deliver it to customers more efficiently than traditional
      enterprise software vendors.  

    

    We
      believe the value of EnterConnect® not only
      lies in
      its performance as a product, but in its ability to leverage the software
      platforms that the product runs on. The value of EnterConnect® as a robust
      business-ready portal solution can be extended and enhanced by our leading
      world-class partner platforms:  BEA Systems’ WebLogic Portal® (“WLP”)
      and Oracle’s 10g Platform. These platforms provide robust standards-based design
      and run-time environments – empowering scalability and flexibility.

    

    BEA
      WebLogic Portal and Oracle 10g are the leading portal platforms for developers
      service-enabling their applications. The EnterConnect® Portal
      Platform
      leverages these partner platforms to achieve faster time-to-value when
      developing new business applications using open standards, web services and
      a
      Service-Oriented Architecture (“SOA”).  These platforms help empower
      EnterConnect®
      to connect people to business services, while simplifying the production and
      management of any custom service-oriented portals in order to deliver business
      value rapidly and cost effectively. The EnterConnect® products
      are
      available as a service or with the portal platforms embedded or bundled within
      the solutions or customers already owning BEA WebLogic Portal or Oracle 10g
      can
      purchase EnterConnect® AppSuite
      separately
      to run in their existing on-premise environment.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    SaaS
      Offering

    

    We
      believe that our SaaS offering enables us to develop functionality and deliver
      it to customers more efficiently than traditional enterprise software vendors.
      With the SaaS offering we do not provide software that must be written to
      different hardware, operating system and database platforms, or that depend
      upon
      a customer’s unique systems environment. Rather, we have optimized our service
      to run on a specific database and operating system using the tools and platforms
      best suited to serve our customers. Performance, functional depth and usability
      of our service drive our technology decisions and product
      direction.  To optimize our software-as-a-service offering for
      customers, we have added two new SaaS features: Federated Identity Management
      and Integrated Enterprise Search. Federated identity management enables us
      to
      authenticate users without exposing ‘identity credentials’ within the portal
      administration sub-systems, further improving the security EnterConnect® delivers.
      Integrated enterprise search enables us to expose our portal search services
      to
      other ‘search engine queries’, further improving search abilities.

    

    On-Premise
      Offering

    

    Customers
      purchasing the Standard or Corporate Editions of the EnterConnect® AppSuite
      will
      leverage the proprietary functionality of EnterConnect as well as the embedded
      functionality of either BEA Systems’ WebLogic Portal® (“WLP”) Platform
      or
      Oracle’s 10g Platform, depending on their platform preference.

    

    Customers
      purchasing the Enterprise Edition of the EnterConnect® AppSuite
      will
      leverage the proprietary functionality of EnterConnect as well as the bundled
      functionality of either BEA Systems’ WebLogic Portal® (“WLP”) Platform
      or
      Oracle’s 10g Platform, depending on their platform preference.  With
      the Enterprise Edition, customers have full access to the EnterConnect® AppSuite
      APIs as
      well as the full functionality of any bundled BEA or Oracle
      platforms.  The Enterprise Edition provides customers with access to
      the APIs for future customizations and proprietary integrations.  With
      the Enterprise Edition, customers gain a rich graphical interface for developing
      portals and business applications that can be easily adapted to business
      changes. This edition can enable rapid portal development while advanced
      administration simplifies portal assembly and management.

    

    Development

    

    The
      EnterConnect®
      Portal Application Platform contains all of the core functionality required
      to
      rapidly build and deploy new end-user applications. Utilizing our
      standards-based platform, we not only deliver intuitive portal applications
      and
      designs that are easy to use within a scalable and robust enterprise-class
      architecture, but we also have the flexibility to continue developing new
      vertical, horizontal or niche applications as market opportunities are
      identified.  

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    We
      anticipate that a significant portion of our research and development resources
      will be devoted to enhancing existing products as well as re-architecting our
      portal platform and products to optimally support a software-as-a-service
      architecture and business model.  The Company is re-architecting
      EnterConnect®
      to deliver our SaaS offering as a full multi-tenant application.  The
      re-architected SaaS offering will treat all customers as logically separate
      tenants in central applications and databases. As a result, we will be able
      to
      spread the cost of delivering our service across our user base. In addition,
      because we will not have to manage thousands of distinct applications with
      their
      own business logic and database schemas, we believe that we can scale our
      business faster than traditional software vendors.  The new
      multi-tenant architecture will enable us to then focus our resources on building
      new functionality for our customer base as a whole rather than on maintaining
      an
      infrastructure to support each of their distinct applications.  Our
      re-architected SaaS offering will be addressable by other applications on the
      Internet and applications behind our own firewall.

    

    While
      we
      expect such investments in research and development will generate revenue in
      the
      next several years, technological development is always subject to potential
      delays and there can be no assurance that any new product enhancements developed
      will achieve market acceptance.

    

    Operations

    

    The
      Company leases its principal facility in San Jose, California. EnterConnect
      serves all SaaS customers and users from a Tier 1 facility located in the
      Washington, D.C. metro area that is operated by OpSource, Inc., which is
      headquartered in Santa Clara, CA.  OpSource is a SAS 70 Type II
      audited provider of a complete SaaS delivery solution that includes carrier
      class network and security, 24x7x365 systems management and call center
      operations.

    

    Customers

    

    Contracts
      in the computer software business are generally cancelable with 30 days notice.
      While the Company has only made limited sales thus far, we intend to routinely
      sign one year contracts with customers and protect against cancellation of
      the
      contracts by meeting customer needs, providing excellent services, and by
      delivering unique proprietary software combined with all the added additional
      cost saving benefits.

    

    On-Premise
      Customers

    Each
      on-premise customer (Licensee) receives all subsequent updates and modifications
      to the purchased software which is furnished to the Licensee under a
      non-transferable, non-exclusive License for use by the Licensee and no title
      or
      ownership is vested to the Licensee.  Our contracts generally provide
      that the computer hardware furnished is warranted as specified under the
      manufacturer’s warranty, and if any defects, replacements, repairs or any other
      problem occurs the Licensee agrees to look solely to the
      manufacturer.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    SaaS
      Customers

    Each
      SaaS
      customer subscribes to utilize the EnterConnect® products
      as a
      software service, accessing it through any standard Web browser.  By
      subscribing to our software services offering, our customers gain several
      advantages over the on-premise solution, including: no requirement for risky
      upfront investments in software, additional hardware, extensive implementation
      services, or for additional IT staff. As a result, our service enables
      businesses to achieve higher productivity from, and a lower total cost of
      ownership for, their portal solutions.  Unlike on-premise customers,
      SaaS customers have the option of subscribing to individual applications or
      to
      the entire EnterConnect® AppSuite
      including
      EmployeeConnect, TeamConnect, CustomerConnect and PartnerConnect – all on a
      per-user, per-application basis.  

    

    

    Marketing
      and Distribution

    

    Target
      Markets

    

    Our
      target markets are primarily mid-market companies with (1,000 – 4,000)
      employee-users and secondarily, divisions of Fortune 1000 enterprise
      companies.  The vertical market focus is on Manufacturing, Healthcare,
      Business Services, Publishing and Media, Consumer Packaged Goods, Federal
      Contractors, Financial Services, Energy, Utilities, Telecommunications,
      Transportation and State & Local Government industries.

    

    Marketing

    

    We
      use a
      variety of marketing programs to stimulate demand for products and
      services.  These programs are focused within the target markets. In
      addition, we have developed co-marketing programs operated in conjunction with
      our strategic and channel partners in order to take advantage of their
      complementary marketing capabilities.  The key elements of our
      marketing strategy include:

    

    Marketing
      on the Internet.  The Internet is our primary channel for
      marketing, sales, deployment and service of products.  We intend to
      utilize the Internet to drive awareness of products and then to make the
      products available for demonstration, evaluation, subscription and
      purchase.  Within our online environment, customer information is
      collected electronically through an automated registration process, creating
      the
      basis for ongoing marketing of upgrades, new products and recruiting potential
      partners. We also generate web-based campaigns targeted at key executives and
      provide free product demonstrations via webinars.

    

    Target
      Marketing.  We focus direct marketing efforts on mid-market
      companies in vertical or geographic markets.  We leverage a variety of
      marketing mechanisms to generate demand for products and services,
      including:  a referral program for existing customers; outbound
      telemarketing; direct response advertising; direct marketing campaigns; vertical
      market specific trade shows and seminar events.  The goal of our
      target marketing efforts is to create product and service awareness, to identify
      potential buyers of products and services, and to generate leads for follow-on
      sales.

     

    
      
        
        

      

      
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    Distribution

    

    We
      have
      designed our Internet and traditional distribution strategy to address the
      particular requirements of diverse mid-market target
      customers.  Through our distribution strategy, we seek to make our
      EnterConnect®
      portal software the industry standard for mid-market companies.

    

    The
      Internet is our primary distribution channel but the strategy includes
      traditional distribution, including Direct Sales as well as Indirect
      Sales.  Our distribution efforts will consist of our Internet Channel,
      Indirect Sales Channel and Direct Sales Channel, with the primary focus being
      first on the Internet and then the indirect channel, followed by direct
      sales.

    

    Internet
      Channel

    

    We
      are
      establishing the Internet channel as our primary channel.  We believe
      that the Internet channel provides the lowest cost - of sales, of customer
      and
      partner service delivery, and of deploying, managing and maintaining our
      products - and provide the greatest access to customers
      worldwide.  The key to our Internet channel strategy is leveraging the
      EnterConnect® application
      exchange, SOAAPPS.com, in conjunction with our strategic partners and their
      extensive network of indirect channel partners.

    

    Indirect
      Channel

    

    Our
      indirect channel strategy focuses first on leveraging our strategic partners
      and
      their established channel partner networks consisting of Independent Software
      Vendors (ISVs), Systems Integrators (SIs) and Value Added Resellers (VARs)
      in
      order to drive new revenue with the sell of our products.   The
      objective of this strategy is to help partners maximize the use of our Internet
      channel to: generate demand for solutions; enable easy demonstration of
      solutions; provide easy access to solution collateral; facilitate online
      transactions; and enable easy management and maintenance of purchased
      solutions.

    

    Direct
      Channel

    

    Our
      direct channel strategy focuses first on leveraging the Internet as our primary
      channel and then on direct sales, which includes direct field sales and
      telesales.

    

    Internet
      Sales.  We are establishing the Internet channel as our
      primary channel.  We believe the Internet channel provides the lowest
      cost - of sales, of customer and partner service delivery, and of deploying,
      managing and maintaining our products - and provide the greatest access to
      customers worldwide.  The key to our Internet sales strategy is
      leveraging our strategic partners to drive awareness of the online channel.
      We
      will empower customers to purchase both our on-premise and SaaS offerings from
      our Internet channel. This will not only reduce our cost of sales, but also
      our
      cost of distributing and maintaining our products and services.

    

    Direct
      Field Sales.  Our direct sales force targets primarily
      mid-market companies in our target markets in alignment with their assigned
      geographic territories.  Our direct sales force prospects directly to
      target companies to close business and works with complementary ISVs, VARs
      and
      systems integrators when necessary to deliver complete solutions for customers.
      Our direct sales force is responsible for selling both on-premise and SaaS
      offerings.

     

    
      
        
        

      

      
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    Telesales.  Our
      telesales organization proactively prospects for new business by calling on
      contacts within our targeted mid-market companies.  Our telesales
      efforts are coordinated with other integrated demand development campaigns
      to
      achieve the highest return on results.

    

    Customer
      Service and Support

    

    We
      are
      adopting a comprehensive technical support program to assist our customers
      in
      the use of products and services and to identify, analyze and solve any problems
      or issues with associated with them.  The support program will include
      email support, an online repository of helpful support information, shared
      best
      practices for implementation and use, and telephone
      support.  Telephone support is provided by technical specialists who
      work for us on a full-time basis. Basic customer support during business hours
      is available at no charge to customers that purchase support and maintenance
      with on-premise products or SaaS offering.  SaaS customers access
      basic customer support at no charge on a 24x7x365 basis.  Premium
      customer support will be available for an additional charge.

    

    Competition

    

    The
      market for enterprise portals and enterprise business applications is generally
      highly competitive, rapidly evolving, and subject to changing technology,
      shifting customer needs and frequent introductions of new products and
      services.  We compete with vendors providing enterprise portal
      platforms for developing custom portals, enterprise business-ready portal
      software applications and packaged portal software.  Additionally, we
      also compete with a limited number of vendors providing portal solutions through
      Internet-based software-as-a-service offerings.

    

    The
      Company believes that increased competitive pressures will occur over the next
      12 months due to the mid-market’s preference for and shift to the SaaS
      subscription model and due to the success of SaaS leaders such as Salesforce.com
      and WebEx. Typically, system features, product pricing, ease of use and
      installation, sales engineering and marketing support, and product reliability
      are the primary basis of competition.  We believe that the Company
      competes favorably with respect to these factors.

    

    EnterConnect® AppSuite
      Competitors

    

    Principle
      AppSuite competitors in the collaboration category include: ColSpace, Sodesqa
      and Webex.  Principle AppSuite competitors in the SaaS category
      include: Adenin-Dynamic Intranet, HyperOffice, Adweb-Intranet Dashboard,
      TeamPortals-IceBox, Ice Web- IcePortal, Trichy-WorkZone and
      iCentera.

    

    EnterConnect® Application
      Exchange – SOAAPPS.com Competitors

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    Principle
      SOAAPPS.com competitors include:   SalesForce.com’s AppExchange,
      NetSuite’s SuiteFlex, and WebEx Communications’ WebEx Connect, which is being
      acquired by Cisco Systems.  Increased competition is also anticipated
      from the Microsoft LIVE Exchange to launch later this year, as well as
      marketplaces by IBM, SAP and others.

    

    Intellectual
      Property

    

    The
      Company owns the proprietary, standards-based EnterConnect® Portal
      Application
      Platform and product lines, EnterConnect® AppSuite
      and the
      application exchange, SOAAPPS.com. We rely on a combination of trademark,
      copyright, trade secret and patent laws in the United States and other
      jurisdictions as well as confidentiality procedures and contractual provisions
      to protect our proprietary technology and our brand.   We
      currently have no U.S. or international patent applications
      pending.  We do enter into confidentiality and proprietary rights
      agreements with our employees, consultants and other third parties and control
      access to software, documentation and other proprietary
      information.

    

    EnterConnect®
      is a trademark of
      the Company.  All other trademarks referenced in this document are the
      property of their respective owners.

    

    Employees

    

    We
      believe that one of our key competitive advantages is our diverse and
      experienced development, sales and management teams.  Our development
      group includes key members of engineering and project management teams that
      have
      developed several enterprise portal systems for Fortune 500 companies for which
      they have obtained several industry awards and certifications. Our sales team
      includes key members of direct and channel sales, experienced at successfully
      accelerating sales within both the mid-market and
      enterprise-market.  Our team consists of 6 full time employees and 12
      outside contractors.

     

    

    Description
      of Property

    

    EnterConnect
      leases a 3,143 square foot office in San Jose, California.  The lease
      is for a term of 3 years at the monthly rate of $6,915 per
      month.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    RECENT
      EVENTS

    

    Working
      Capital

    

    The
      Company is in the process of a negotiating an unsecured line of credit for
      about
      $5 million for its working capital needs.  There can be no assurance,
      and none is hereby given, that the Company will be able to negotiate the line
      of
      credit or negotiate it upon terms favorable to the Company.

    

    Convertible
      Debentures

    

    From
      December 20, 2006, through February 28, 2007 the Company executed 10%
      convertible debentures aggregating approximately $2,113,000 with forty-four
      (44)
      individuals.  The holders are entitled, at their option, to convert
      the debentures, plus accrued interest, into shares of the Company’s common stock
      at $1.00 per share.  If not converted, the entire principal amount
      shall be due to the holder on the five year anniversary of the debenture with
      interest to be paid quarterly in cash or shares. In connection with the
      convertible debentures, the Company issued to these individuals an aggregate
      of
      1,267,641 warrants with exercise prices of $2.00 per share on the first 422,547
      warrants, $3.00 per share on the second 422,547 warrants, and $4.00 per share
      on
      the final 422,546 warrants.  These warrants are exercisable for a
      period of three years from the date of issuance. The fair value of the warrants
      issued using the Black-Scholes Option Pricing Model was $36,960.  The
      Black-Scholes Option Pricing Model had the following assumptions: Risk-free
      interest of 5.00%; Dividend yield 0.00%; Volatility of 265.73% and a warrant
      life of five (5) years. At March 31, 2007 all convertible note holders converted
      their debentures plus accrued and bonus interest into 2,266,112 shares of the
      Company’s common stock.

    

    

    Financial
      Advisory Agreement

    

    On
      June
      11, 2007 EnterConnect entered into a Financial Advisory Agreement for Investment
      Banking Services with Bridgestream Partners, LLC
      (“Bridgestream”).  Pursuant to the terms of the Agreement,
      Bridgestream shall assist EnterConnect in identifying targets for strategic
      partnerships and procuring financing.  The term of the
      Agreement is for eighteen (18) months, unless EnterConnect has raised
      sufficient capital not to require additional financing or upon ninety (90)
      days’
written notice.  The initial retainer for Bridgestream’s services was
      $9,000.  EnterConnect also agreed to issue to Bridgestream a portion
      of any equity raised in a financing, depending on the type and amount raised
      in
      the financing, plus equity participation equal to twelve percent
      (12%).  Bridgestream will also be entitled to receive a fee based upon
      any merger consummated with an entity introduced by
      Bridgestream.  

    

    Media
      Services Contract

    

    On
      June
      19, 2007 EnterConnect entered into a Memorandum of Understanding with Global
      Media Fund, Inc. (“Global”) to provide marketing and advertising services for a
      term of twelve (12) months.  In consideration for the services,
      EnterConnect issued 1,000,000 shares of its common stock to Global at an agreed
      valuation of $2,000,000.  

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    Bridge
      Financing

    

    On
      July
      31, 2007, EnterConnect conducted a private placement of its securities solely
      to
      accredited investors.  Subscriptions were for units at a purchase
      price of $25,000, comprised of a 14% Debenture and 50,000 shares of the
      Company's Common Stock.  The Company executed subscriptions for
      investments of $585,000 for a total of 1,171,000 shares of Common
      Stocks.

    

    Appointment
      of Placement Agent

    

    On
      September 12, 2007, EnterConnect entered into a non-exclusive Placement Agent
      Agreement with Sandgrain Securities, Inc. (“Sandgrain”).  Pursuant to
      the terms of the Agreement, Sandgrain will act as private placement agent for
      the Company in connection with the Placement of Securities (the “Services”) for
      a period of Twelve (12) months. Sandgrain will seek to complete the Placement
      on
      a reasonable best efforts basis, acting as the Company’s agent and not as a
      principal or underwriter.  Sandgrain is free to engage, at its own
      expense, sub-agents as it may deem necessary or appropriate. Sandgrain shall
      not
      act as a financial advisor for the company.  The initial retainer for
      Sandgrain’s services was $12,000.  EnterConnect also agreed to pay
      Sandgrain
      cash selling commissions of ten (10%) percent of the proceeds of the Units
      sold,
      certain Warrants, in addition to reimbursement of certain
      expenses.

    

    LEGAL
      PROCEEDINGS

    

    We
      are
      not a party to any material legal proceedings nor are we aware of any
      circumstance that may reasonably lead any third party to initiate legal
      proceedings against us.

    

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    DIRECTORS
      AND OFFICERS OF THE COMPANY

    

    
      	
              Name

            	
              Age

            	
              Position

            
	
               

            	
               

            	
               

            
	
              
                Sam
                  Jankovich

              

            	
              
                46

              

            	
              
                Chairman
                  and Chief Executive Officer

              

            
	
              Michael
                Wainstein

            	
              35

            	
              Director
                and Treasurer

            
	
              
                Dean
                  Galland

              

            	
              
                46

              

            	
              
                Chief
                  Operating Officer

              

            

    

    

    Sam
      Jankovich, Chairman and Chief Executive Officer

    

    As
      Chairman and Chief Executive Officer of EnterConnect Inc., Mr. Jankovich,
      46 is taking his vision of enterprise portals delivered in a software as a
      service (SAAS) model to the market. In this role, Mr. Jankovich will define
      the
      overall company strategy and set standards in the on-demand portal space. Prior
      to founding EnterConnect Inc., and from November 2000 to December 2006, Mr.
      Jankovich was instrumental in driving the direction and revenue growth of
      Enterpulse, the company that originally incepted the EnterConnect product and
      spun off EnterConnect, Inc. Mr. Jankovich launched Enterpulse's portal strategy,
      which serves as the foundation of many of its offerings, and led to the creation
      of the premier intranet/extranet portal product, EnterConnect.  Mr.
      Jankovich has held key executive roles for former companies in the computer
      telephony and CRM industries, including PwC, marchFirst, Groundswell, and CTI
      Interactive, which he founded.  He holds a Bachelor of Arts degree in
      Business Administration from Washington State University.

    

    

    Michael
      Wainstein, Director, Treasurer

    

    Michael
      Wainstein, 35 is a co-founder of EnterConnect Inc. and serves as its Treasurer.
      He has also served as a founder of Private Capital Group, LLC. since its
      formation in 2001. Mr. Wainstein has invested for PCG in a variety of industries
      ranging from new media to energy. Mr. Wainstein is a graduate of New York
      University with a Bachelor of Arts degree in Economics and a graduate of New
      York Law School. He is a member of the New York Bar.

    

    Dean
      Galland, Executive Vice President and Chief Operating
      Officer

    

    As
      Chief
      Operating Officer of EnterConnect Inc., Mr. Galland oversees daily operations,
      supports the strategies set forth by the CEO, and is responsible for overall
      business results.  Prior to EnterConnect Inc. and from November 2000
      to December 2006, Mr. Galland served as regional vice president for Enterpulse,
      where he managed the company's West Coast presence, growing its business and
      mentoring its staff.  Deeply involved from an executive account
      leadership perspective for premier clients in the West, Mr. Galland was
      responsible for ensuring that the emerging needs of complex systems were met
      through program management, systems integration, and Q&A
      support.  Mr. Galland also provided client executives with strategy
      and design recommendations, including how to connect business objectives to
      portal initiatives that serve the needs of customers, suppliers and
      employees.  He facilitated numerous organizational, creative, and
      developmental programs and played an essential role in managing client
      teams.  Mr. Galland graduated with a Bachelor of Science in Computer
      Science from Colorado State University.

     

    
      
        
        

      

      
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    EXECUTIVE
      COMPENSATION

    

    It
      is
      anticipated that Mr. Jankovich will receive $250,000, Mr. Wainstein will receive
      $83,333 and Mr. Galland will receive $250,000 as compensation from the Company
      in 2007.

    

    Compensation
      of Directors

     

    All
      directors are reimbursed for out-of-pocket expenses in connection with
      attendance at Board of Director's and/or committee meetings.

    

     

    SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     

    The
      following table sets forth information regarding beneficial ownership of our
      common stock as of the date hereof (i) by each person who is known by us to
      beneficially own more than 5% of our common stock (ii) by each of our officers
      and directors; and (iii) by all of our officers and directors as a
      group:

     

    
      	
              Name
                of Beneficial Owners

            	
              Shares
                Beneficially Owned

            	
              Percentage
                of Outstanding Shares
                Owned (3)

            
	
               

            	
               

            	
               

            
	
              
                Sam
                  Jankovich (1)

              

            	
              
                9,000,000

              

            	
              
                34.4%

              

            
	
              
                Michael
                  Wainstein (2)

              

            	
              
                7,800,000

              

            	
              
                29.8%

              

            
	
              
                Dean
                  Galland

              

            	
              
                2,109,400

              

            	
              
                8.1%

              

            
	
              
                Officers
                  and directors as a group (3 persons)

              

            	
              
                18,909,400

              

            	
              
                72.2%

              

            

    

     

    (1)  Mr.
      Jankovich may be considered a promoter of the Company.  He is located
      at 100 Century Center Court, Suite 650, San Jose, California 95112.

    (2)  Beneficially
      owned by Private Capital Group, LLC.  Mr. Wainstein may be considered
      a promoter of the Company.  He is located at 1500 Broadway, Suite
      2003, New York, New York, 10036.

    (3)  Based
      upon 26,191,928 shares outstanding.

    

    The
      Company has authorized 100,000,000 shares of Common Stock of which
      26,191,928 shares are issued and outstanding and 10,000,000 shares of Preferred
      Stock of which no shares were issued and outstanding.

    

    

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        A-2

        
          

        

      

      
        
        

      

    

     

    DESCRIPTION
      OF CAPITAL STOCK

     

    Our
      authorized capital stock consists
      of 100,000,000 shares of Common Stock, par value $0.001 per share, and
      10,000,000 shares of preferred stock, par value $0.001 per share, with such
      rights and preferences as the Board of Directors determines from time to
      time.

     

    The
      Company has 26,191,928 shares of common stock issued and outstanding before
      the
      date of this Offering.  No preferred stock is issued or
      outstanding.  No other securities of the Company are issued or
      outstanding.

     

    Common
      Stock

    

    Holders
      of Common Stock are entitled to one vote per share, either in person or by
      proxy, on all matters that may be voted upon by the holders thereof at meetings
      of the shareholders.  There is no provision for cumulative voting with
      respect to the election of directors by shareholders.  Therefore, the
      holders of more than 50% of the shares can, if they chose to do so and act
      together, elect all of our directors.  In such event, the holders of
      the remaining Common Stock will not be able to elect any
      directors.  Our shareholders do not have any preemptive rights to
      subscribe for additional shares of Common Stock.

     

    The
      holders of Common Stock have equal rights to dividends and other distributions
      from funds legally available therefore when and if declared by our Board of
      Directors and subject to the preferences of any preferred stock then
      outstanding, are entitled to share ratably in all of our assets available for
      distribution to shareholders upon liquidation, dissolution, or winding up of
      our
      affairs.

     

    Preferred
      Stock

    

    Our
      articles of incorporation allow the Board of Directors, without further action
      or vote by the holders of Common Stock, to issue shares of preferred stock
      in
      one or more series and to fix any preferences, conversion and other rights,
      voting powers, restrictions, limitations, qualifications and terms and
      conditions of redemption as adopted by the Board of Directors.  Shares
      of preferred stock may be issued for any general corporate
      purpose.  Our Board of Directors may issue one or more series of
      preferred stock with rights more favorable with regard to dividends and
      liquidation than the rights of holders of Common Stock.  Any such
      series of preferred stock also could otherwise adversely affect the voting
      power
      of the holders of Common Stock and could serve to perpetuate the directors’
control of the Company under certain circumstances.

     

    

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        A-3

        
          

        

      

      
        
        

      

    

     

    TERMS
      OF THE UNITS AND THE OFFERING

     

    General

     

    A
      minimum
      of 5 Units are being offered on a “best efforts – all or none basis.” Fifteen
      (15) additional Units are offered on a “best efforts” basis. Each Unit shall
      consist of 133,333 shares of the Company’s common stock, par value $.001 per
      share (“Common Stock”) and warrants (the “Warrants”) to purchase 66,666 shares
      of the Common Stock at $1.50 per share.

     

    Minimum
      investment per subscriber is for one Unit at the offering price of $100,000
      per
      Unit.  The subscriber will be required to enter into a Subscription
      Agreement (the “Subscription Agreement”) in the form attached hereto as
      Exhibit A. The Company may waive the minimum subscription amount in its sole
      discretion.

     

    The
      Offering will terminate on November 30, 2007 (the “Offering Termination
      Date”) or such earlier date by which all the Units are sold.  The
      Offering Termination Date may be extended for up to 30 days, at our discretion,
      through December 30, 2007 but no later than that.

     

    THERE
      ARE
      TRANSFER RESTRICTIONS IN THE SUBSCRIPTION AGREEMENT.  AS A RESULT, AN
      INVESTOR IN THIS OFFERING MIGHT NOT BE ABLE TO SELL SUCH INVESTOR’S COMMON UNITS
      STOCK AND MAY HAVE TO HOLD THE COMMON STOCK INDEFINITELY. THE COMPANY WILL
      ALLOW
      THE PURCHASERS TO PARTICIPATE IN REGISTRATION OF SECURITIES WITHIN THIRTY (30)
      DAYS FROM THE CLOSING OF THE OFFERING.

     

    The
      statements in this Confidential Offering Memorandum relating to the Subscription
      Agreement and Form of Warrant are summaries, do not purport to be complete
      and
      are qualified in their entirety by reference to the actual agreements, which
      are
      attached as Appendices to this Memorandum and must be read prior to making
      an
      investment herein.

    

    Description
      of the Warrants

     

    Each
      Purchaser will be issued Warrants to purchase 66,666 shares of Common Stock
      of
      the Company at a price per share of $1.50. The Warrants will be exercisable
      until the seventh anniversary of their date of issuance. The Warrants will
      be
      separately certificated, and redemption or sale of the Common Stock will not
      affect the rights of Purchasers under the Warrants.

     

    The
      Warrants may be exercised in whole or in part at the option of the warrant
      holder.  For so long as the Warrants are issued and outstanding, we
      will reserve a sufficient number of authorized shares of Common Stock to permit
      the exercise of the Warrants.

     

    The
      Warrants may be callable in whole or in part by the Company in the event the
      stock trades at an average weighted price of $2.25 for thirty (30) consecutive
      days.

     

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

     

    Neither
      the Warrants nor shares of Common Stock issuable upon exercise of the Warrants
      will be registered under the Securities Act of 1933, as amended.  As a
      result, there may not be a market for such Warrants or shares for the
      foreseeable future.

     

    The
      form
      of warrant is attached hereto as Exhibit C.

     

    Plan
      of Distribution

     

    The
      Units are being privately placed
with
      assistance from members of the Financial Industry Regulatory Authority.
The Units are also being offered through its Officers and Directors
      (no
      selling commissions will be paid to these individuals).

    

    Offering
      proceeds will be deposited in
      a non-interest bearing escrow account for the benefit of subscribers with the
      Company at a bank account with the Law Firm of Levy & Boonshoft, P.C.
      located at 477 Madison Avenue, New York, New York 10022 pursuant to an Escrow
      Agreement, a true, correct and complete copy of which is attached hereto as
      Exhibit D.  Unless a minimum of five (5) Units are duly subscribed and
      paid for before November 30, 2007, the Offering will terminate and all funds
      will be promptly refunded to the subscribers in full without interest or
      deduction; provided, however, that the Company reserves the right
      to extent the Offering through December 30, 2007.

    

    The
      minimum subscription is for
      $100,000 for one (1) Unit, although the Company reserves the right to accept
      partial subscriptions.  The subscription price is payable upon
      submission to the Company of a fully completed and executed Subscription
      Agreement and Subscriber Questionnaire.  The form of Subscriber
      Questionnaire is attached hereto as Exhibit B.

    

    The
      certificates evidencing the Common
      Stock and Warrants to be issued hereunder will be delivered to investors
      promptly after funds representing the sale of the Units offered hereby have
      cleared the banking system and the Company has received and accepted properly
      completed and executed subscription documents for the Units (the
“Closing”).

    

     

    Subscription
      Procedures

     

    A
      copy of
      the Subscription Agreement is included in this Confidential Offering Memorandum
      in the Appendices.  In order to purchase a Unit, a prospective
      investor must submit an executed copy of the Subscription Agreement, completed
      to reflect the principal amount of the Units for which such investor is
      subscribing, along with a check payable for such amount to EnterConnect,
      Inc.  It is important that the Subscription Agreement be completely
      filled out and executed by the investor.  The Subscription Agreement
      must also be accompanied by a completed, signed Subscriber Questionnaire in
      the
      form attached in the Appendices, and a completed, signed Substitute Form
      W-9.  We reserve the right, in our sole discretion, to reject any
      request to purchase Units.  The Company may waive the minimum
      subscription amount at its sole discretion.

     

    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

     

    Sale
      by the Company

     

    No
      general solicitation will be permitted in connection with the
      Offering.  Persons offering and selling Units will offer the
      securities only to prospective purchasers who meet the conditions for investment
      discussed under “Investment Suitability Standards” and will be required to
      otherwise conduct the Offering in compliance with Regulation D promulgated
      under
      the Securities Act and applicable state securities laws.

     

    A
      prospective purchaser may be represented in making an investment in Common
      Stock
      by a purchaser representative, as that term is defined in Rule 501 (h) under
      the
      Securities Act, in which case a Professional Investment Advisor Purchaser
      Representative Questionnaire must be executed by such representative and the
      prospective purchaser. Any purchaser representative so retained must comply
      with
      the requirements of Rule 501 (h).

     

    Payments
      to Participating Broker/Dealers

     

    The
      Company will engage certain members of the Financial Industry Regulatory
      Authority (‘Representative Placement Agents’) for the sale of Units in this
      Offering, and such placement agents shall be entitled to receive ten (10%)
      percent selling commissions, which will not be paid with respect to Units sold
      to persons introduced by directors and officers of the Company.

    

    The
      Company shall deliver to Representative Placement Agents warrants (the
“Warrants”), which may be exercised cashless, for the issuance of such
      number of the Securities that equals fifty percent (50%) of the amount of the
      Securities sold at such Closing (or Closings). The Warrants shall have the
      same
      exercise price as the per share equity valuation established in the Financing
      Transaction. The Warrants shall be exercisable for five (5) years from the
      date
      of grant. All Securities issued hereunder to Representative Placement Agents
      shall have full anti-dilution rights, demand registration rights and all other
      rights identical to those offered to investors under the Financing
      Transaction.

    

    The
      Company shall also pay Representative Placement Agents a non-accountable expense
      allowance equal to three percent (3%) of the purchase price of the Securities
      sold for each Closing (the “Expense Allowance”). The allowance is
      intended to cover Representative Placement Agent’s out-of-pocket and other
      expenses connected with the offering, as for instance, legal fees, accounting
      fees etc. In the event there shall occur more than one Closing, the Expense
      Allowance with respect to each Closing shall be calculated as though all
      Securities previously sold were sold together at such Closing, except that
      the
      total amount of Expense Allowance previously paid shall be deducted from the
      Expense Allowance calculated for that Closing.

    

    Investor
      Suitability Requirements

     

    The
      Units
      are being offered pursuant to an exemption from registration under the
      Act.  This offering is intended to comply with the provisions of Rule
      506 of Regulation D promulgated by the Securities and Exchange Commission under
      the Act, as well as exemptions from registration provided by various state
      laws
      or regulations.  Rule 506 requires that all its provisions be met in
      order for exemption from registration to be available
      thereunder.  Therefore, this offering will be made in accordance with
      the requirements of Rule 506.  If that exemption is not available, it
      is still intended that the Units will be offered under an exemption from
      registration under the Act.

     

    
      
        
        

      

      
        A-6

        
          

        

      

      
        
        

      

    

     

    In
      order
      to purchase units and meet the requirements of Rule 506 and certain state
      securities laws, a prospective investor must demonstrate, among other things,
      that the investor:

     

    
      	
               

            	
              ·

            	
              if
                a natural person, is over 21 years of
                age;

            

    

     

    
      	
               

            	
              ·

            	
              has
                such knowledge and experience in financial matters that he is capable
                of
                understanding the matters set forth herein and of evaluating the
                merits
                and assessing the risks of investing in the Company;
                and

            

    

     

    
      	
               

            	
              ·

            	
              is
                purchasing for long-term investment and not with a view to resale
                or
                distribution of the common stock.

            

    

     

    A
      potential investor must complete and submit to us an Subscriber Questionnaire
      in
      the form attached in the Appendices to provide us with information sufficient
      to
      determine whether the potential investor qualifies as an accredited investor
      under Regulation D, or otherwise has the requisite knowledge and experience
      in
      financial and business matters and is able to bear the economic risk of the
      investment such that he is a suitable investor.  A partnership,
      corporation, or trust may have to provide special documents to confirm
      compliance with applicable suitability standards for such entities.

     

    Common
      Stock will not be readily transferable because there is no established market
      for them, and there are stringent restrictions on transfer imposed by
      law.  In addition, our Subscription Agreement, attached to this
      Offering Confidential Offering Memorandum in the Appendices, imposes further
      restrictions on transfer.  Investment in the Company is suitable,
      therefore, only for persons of substantial financial means who have no need
      for
      liquidity with respect to the investment.  By investing in
      EnterConnect, an investor acknowledges that he or she has been advised of,
      and
      understands, the import of applicable federal and state securities laws, and
      that no public market exists or is expected to exist for the resale of the
      Common Stock.

     

    We
      have
      the right to refuse to accept a subscription if, in our sole discretion, we
      believe that the prospective purchaser does not meet the applicable suitability
      requirements or that the Units are otherwise an unsuitable investment for the
      prospective purchaser.

     

    “Accredited
      Investor” Criteria

     

    In
      order
      to qualify as an “accredited investor” under Regulation D, a potential investor
      must come within one of the following categories:

     

    
      	
               

            	
              (1)

            	
              A
                bank as defined in section 3(a)(2) of the Act or a savings and loan
                association or other institution as defined in section 3(a)(5)(A)
                of the
                Act whether acting in its individual or fiduciary capacity; a broker
                dealer registered pursuant to section 15 of the Securities Exchange
                Act of
                1934; an insurance company as defined in section 2(13) of the Act;
                an
                investment company registered under the Investment Company Act of
                1940 or
                a business development company as defined in section 2(a)(48) of
                the
                Investment Company Act of 1940; a small business investment company
                licensed by the U.S. Small Business Administration under section
                301(c) or
                (d) of the Small Business Investment Act of 1958; a plan established
                and
                maintained by a state, its political subdivisions, or any agency
                or
                instrumentality of a state or its political subdivisions for the
                benefit
                of its employees, if such plan has total assets in excess of $5,000,000;
                an employee benefit plan within the meaning of the Employee Retirement
                Income Security Act of 1974, if the investment decision is made by
                a plan
                fiduciary, as defined in section 3(21) of such act, which is either
                a
                bank, savings and loan association, insurance company or registered
                investment adviser, or if the employee benefit plan has total assets
                in
                excess of $5,000,000 or, if a self-directed plan, with investment
                decisions made solely by persons that are accredited
                investors;

            

    

     

    
      
        
        

      

      
        A-7

        
          

        

      

      
        
        

      

       

    

    
      	
               

            	
              (2)

            	
              A
                private business development company as defined in section 202(a)
                (22) of
                the Investment Advisers Act of
                1940;

            

    

     

    
      	
               

            	
              (3)

            	
              An
                organization described in section 501(c)(3) of the Internal Revenue
                Code,
                a corporation, a 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;

            

    

     

    
      	
               

            	
              (4)

            	
              A
                director or executive officer of the
                Company;

            

    

     

    
      	
               

            	
              (5)

            	
              A
                natural person whose individual net worth, or joint net worth with
                that
                person’s spouse, exceeds $1,000,000 at the time of
                purchase;

            

    

     

    
      	
               

            	
              (6)

            	
              A
                natural person who had an individual income (not including that of
                his or her spouse) in excess of $200,000 in 2004 and 2005 or joint
                income
                with his or her spouse in excess of $300,000 in each of those years,
                and
                who reasonably expects the same income level in
                2006;

            

    

     

    
      	
               

            	
              (7)

            	
              A
                trust, with total assets in excess of $5,000,000, not formed for
                the
                specific purpose of acquiring the securities offered, whose purchase
                is
                directed by a person who, either alone or together with his or her
                purchaser representative(s), has such knowledge and experience in
                financial and business matters that such person is capable of evaluating
                the merits and risks of the prospective investment;
                or

            

    

     

    
      	
               

            	
              (8)

            	
              An
                entity in which all of the equity owners are accredited
                investors.

            

    

     

    If
      we
      determine that a potential investor does not qualify as an accredited investor
      and does not alone have the requisite knowledge and experience, but the
      investment may otherwise be suitable for the person, the prospective investor
      will be requested to retain a qualified “purchaser representative” (as defined
      in Rule 501 of Regulation D) to assist the investor in analyzing the merits
      and
      risks of the investment.

     

    

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        A-8

        
          

        

      

      
        
        

      

    

     

    CERTAIN
      FEDERAL INCOME TAX CONSEQUENCES

     

    The
      following is a general discussion of certain material United States federal
      income tax considerations relating to the purchase, ownership and disposition
      of
      securities such as those offered herein.  This discussion is based
      upon the Code, existing and proposed Treasury Regulations and judicial decisions
      and administrative interpretations hereunder, as of the date of this
      Confidential Offering Memorandum, all of which are subject to change, possibly
      with retroactive effect, or to different interpretations.  We cannot
      assure you that the Internal Revenue Service (the “IRS”) will not
      challenge one or more of the tax consequences described herein, and we have
      not
      obtained, nor do we intend to obtain, a ruling from the IRS or an opinion of
      counsel with respect to the United States federal tax consequences resulting
      from acquiring, holding or disposing of the common stock or
      warrants.

     

    In
      this
      discussion, we do not purport to address tax consequences that might be
      important to a particular holder in light of the holder’s circumstances (such as
      the alternative minimum tax provisions of the Code), or to certain categories
      of
      investors (including, but not limited to, certain financial institutions,
      insurance companies, tax-exempt organizations, dealers in securities, persons
      who hold the Common Stock or Warrants as part of a hedge, conversion
      transaction, straddle or other risk reduction transaction, pass-through entities
      (e.g., partnerships) or persons who hold the common stock and warrants through
      a
      pass-through entity, foreign entities or individuals who are not citizens or
      residents of the United States) that may be subject to special
      rules.  This discussion is limited to initial investors generally who
      hold the common stock and warrants as capital assets.  This discussion
      also does not address the tax considerations arising under the laws of any
      foreign, state or local jurisdiction.

     

    ANY
      DISCUSSION OF FEDERAL TAX ISSUES IN THIS CONFIDENTIAL OFFERING MEMORANDUM IS
      NOT
      INTENDED TO BE RELIED UPON AND CANNOT BE RELIED UPON BY UNIT HOLDERS FOR THE
      PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER THE INTERNAL REVENUE
      CODE.  THE DISCUSSION IN THIS SECTION IS WRITTEN TO SUPPORT THE
      PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED
      HEREIN.  YOU SHOULD CONSULT YOUR OWN TAX ADVISORS AS TO THE PARTICULAR
      TAX CONSIDERATIONS TO YOU OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF
      THE
      COMMON STOCK AND WARRANTS, INCLUDING THE EFFECT AND APPLICABILITY OF STATE,
      LOCAL OR FOREIGN TAX LAWS.

     

    Purchase
      of the Common Stock and Warrants

     

    The
      amount invested by each investor is allocated between the Common Stock and
      the
      Warrant in accordance with the fair market value of each.  We will
      determine the allocation of the investment amount paid for each of the Common
      Stock and the Warrant and will inform you of such allocation as soon as
      possible.  That determination is binding on each investor unless an
      investor explicitly discloses that his or her allocation is different from
      ours.  Generally, the investor must make the disclosure on a statement
      attached to the investor’s timely filed federal income tax return for the
      taxable year that includes the acquisition date of the Common Stock and
      Warrant.

     

    
      
        
        

      

      
        A-9

        
          

        

      

      
        
        

      

    

     

    An
      investor’s tax basis in a Common Stock and a Warrant will equal the amount of
      money paid for each of the Common Stock and the Warrant,
      respectively.

     

    Sale,
      Exchange, Retirement or Other Taxable Disposition of the Common
      Stock

     

    Upon
      the
      sale, exchange, retirement or other taxable disposition of the Common Stock,
      an
      investor will recognize gain or loss equal to the difference between the fair
      market value of the proceeds received in exchange for the Common Stock and
      the
      investor’s adjusted tax basis in the Common Stock.

     

    An
      investor’s adjusted tax basis in the Common Stock generally will equal the
      portion of the investment allocated to the Common Stock decreased by any
      repayments of principal received thereon.  Gain or loss realized on
      the sale, exchange or retirement of the Common Stock will generally be capital
      gain or loss.

     

    Sale,
      Exchange, Retirement or Other Taxable Disposition of the
      Warrant

     

    Upon
      the
      sale, exchange, retirement or other taxable disposition of a Warrant, an
      investor will recognize gain or loss equal to the difference between the fair
      market value of the proceeds received in exchange for the Warrant and the
      investor’s adjusted tax basis in the warrant.

     

    An
      investor’s adjusted tax basis in a Warrant generally will equal the portion of
      the investment allocated to the Warrant.  Gain or loss realized on the
      sale, exchange or retirement of the Common Stock will be capital gain or
      loss.

     

    Exercise
      of the Warrants

     

    The
      exercise of a Warrant will not cause the holder of the Warrant to recognize
      gain
      or loss.  The adjusted tax basis of the stock received in exchange for
      the Warrant will be equal to the adjusted basis in the Warrant plus the amount
      paid pursuant to the exercise of the Warrant.  The holding period for
      the stock received in exchange for the Warrant will begin on the date of
      issuance of the stock to the Warrant holder.

     

    Backup
      Withholding and Information Reporting

     

    Information
      reporting will apply to payments of interest on or the proceeds of the sale
      or
      other disposition of the Common Stock made by us with respect to certain
      non-corporate investors.  An investor will further be subject to
      backup withholding at the rate of 28% with respect to interest, principal and
      premium, if any, we pay on the Common Stock, unless the holder:

     

    
      	
               

            	
              ·

            	
              is
                an entity (including corporations, tax-exempt organizations and certain
                qualified nominees) that is exempt from withholding and, when required,
                demonstrates this fact; or

            

    

     

    
      	
               

            	
              ·

            	
              provides
                us with a correct taxpayer identification number, certifies that
                the
                taxpayer identification number is correct and that the holder has
                not been
                notified by the IRS that it is subject to backup withholding due
                to
                underreporting of interest or dividends, and otherwise complies with
                applicable requirements of the backup withholding
                rules.

            

    

     

    
      
        
        

      

      
        A-10

        
          

        

      

      
        
        

      

    

     

    Any
      amount withheld under the backup withholding rules is allowable as a credit
      against the investor’s United States federal income tax liability, provided that
      the required information is furnished to the IRS.

     

    

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        A-11

        
          

        

      

      
        
        

      

    

     

    LEGAL
      MATTERS

    

    The
      validity of the common stock offered hereby has been passed upon for
      EnterConnect Inc., by Levy & Boonshoft, P.C., at 477 Madison Avenue, New
      York, New York 10022.

    

    Levy
      & Boonshoft, P.C. are also serving as Escrow Agent under this
      Memorandum.

    

    

    EXPERTS

    

    Our
      financial statements have been audited by Li &
Company, PC, independent registered
      public accountants, and have been included in this prospectus in reliance upon
      the report of that firm and their authority as experts in accounting and
      auditing.

    

    

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        A-12

        
          

        

      

      
        
        

      

    

    

    ACCESS
      TO ADDITIONAL INFORMATION

     

    Each
      prospective investor and his advisor may inquire about any aspect of this
      offering.  The Company or its designees will answer all inquiries
      concerning the Company and any matter relating to our proposed plan of business,
      the offering or the Acquisition.  Prospective investors and their
      advisors or representatives will be afforded the opportunity to obtain, and
      are
      encouraged to request, additional information to the extent the Company or
      its
      designees possess such information or can acquire it without unreasonable effort
      and expense.

     

    Copies
      of
      documents referred to in this Confidential Offering Memorandum or otherwise
      pertaining to the Company will be made available for inspection by offerees
      and
      their designated advisors upon request.  Inquiries and requests for
      additional information may be directed to Mr. Jankovich, Chief Executive
      Officer, at the following address and phone number:  100 Century
      Center Court, Suite 650, San Jose, California 95112, (408)
      441-9500.

     

     

    OFFERING
      PROCEDURE

    

    Subscription
      Agreement and Procedures

    

    In
      order
      to subscribe to the Offered Securities, a prospective investor must deliver
      the
      following items to the Placement Agent:

    

    
      	
              1.

            	
              Two
                executed copies of the Subscription Agreement (included in the Appendices
                as Exhibit A of the Memorandum) with signatures properly
                completed;

            

    

    

    
      	
              2.

            	
              One
                completed and signed copy of the appropriate Confidential Subscriber
                Questionnaire (included in the Appendices as Exhibit B of the
                Memorandum);

            

    

    

    
      	
              3.

            	
              (a)        A
                check payable to “Levy
                & Boonshoft, P.C, as Escrow Agent for EnterConnect,” for
                $100,000 multiplied by the number of Units subscribed
                for.  Please add the name of the Placement Agent in the memo
                section of the check or

            

    

    

    (b)           A
      wire transfer for $100,000 multiplied by the number of subscription Units as
      per
      the following instructions:

    

    Signature
      Bank

    261
      Madison Avenue

    New
      York,
      New York 10016

    ABA
      No.
      026013576

    

    Levy
      & Boonshoft, P.C.

    IOLA
      Account

    477
      Madison Avenue

    New
      York,
      New York 10022

    Account
      No. 1500198423

     

    
      
        
        

      

      
        A-13

        
          

        

      

      
        
        

      

    

     

    Subscribers
      introduced by any Placement Agent should write the name of the Placement Agent
      on the Subscription Agreement or on the Check or make a reference in the wire
      transfer.

    

    All
      subscriptions must be made by the execution and delivery of the Subscription
      Agreement included in the Appendices. By executing the Subscription Agreement,
      each purchaser will represent, among other things, that (a) he or she is
      acquiring the Offered Securities being purchased by him or her for his or her
      own account, for investment purposes and not with a view towards resale or
      distribution and (b) immediately prior to the purchase, such purchaser satisfies
      the eligibility requirements set forth in this Memorandum. See “Investor
      Suitability Requirements”. Notwithstanding the foregoing representations, the
      Company and the Placement Agent each have the right to revoke the offer made
      herein and to refuse to sell Offered Securities to a particular subscriber
      for
      any reason.

    

    In
      addition, since each purchaser will be subject to certain restrictions on the
      sale, transfer or disposition of his Offered Securities as contained herein
      or
      in the Subscription Agreement, a purchaser must be prepared to bear the economic
      risk of an investment in the Offered Securities for an indefinite period of
      time. An investor in the Offered Securities, pursuant to the Subscription
      Agreement and applicable law, will not be permitted to transfer or dispose
      of
      the Offered Securities, unless they are registered or unless such transaction
      is
      exempt from registration under the Securities Act and other applicable
      securities laws, and in the case of a purportedly exempt sale, such investor
      provides (at his or her own expense) an opinion of counsel satisfactory to
      the
      Company that such exemption is, in fact, available. Certificates representing
      the shares of Common Stock and Warrants comprising the Offered Securities will
      bear a legend relating to such restrictions on transfer.

    

    Subscriptions
      are not binding on the Company until accepted by the Company. The Company will
      refuse any subscription by giving written notice to the subscriber by personal
      delivery or first-class mail. In its sole discretion, the Company may establish
      a limit on the purchase of Offered Securities by a particular
      purchaser.

    

    All
      subscription funds will be deposited in a non-interest bearing bank account
      maintained by the Law Firm of
      Levy & Boonshoft, P.C. (the “Escrow Agent”) pursuant to the Escrow
      Agreement attached hereto as Exhibit D. In the event that subscriptions accepted
      on or before the expiration of this Offering Period aggregate to fewer than
      $500,000, all funds received from subscribers and held by the Escrow Agent
      shall
      be promptly returned to the subscribers without interest or deduction directly
      by the Escrow Agent. The Company and the Placement Agent reserve the right
      to
      accept or reject any subscription in their sole discretion for any reason
      whatsoever and to withdraw this Offering at any time prior to acceptance of
      the
      subscriptions received. Subscription funds paid by any subscriber whose
      subscription is rejected will be returned promptly.

     

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        A-14

        
          

        

      

      
        
        

      

    

     

    
      EXHIBIT
        “A”

      SUBSCRIPTION
        AGREEMENT

       

       

      ENTERCONNECT,
        INC.

       

      

      INVESTORSUBSCRIPTION
        AGREEMENT (the "Subscription Agreement") dated _____________ ____,
        2007, between ENTERCONNECT INC., a Nevada corporation (the
        "Company") and the person or persons executing this Agreement on the last
        page
        (the "Subscriber").  All documents mentioned herein are incorporated
        herein by reference.

      

      1.              Description
        of the Offering.  This Subscription Agreement is for units
        (the “Units”) comprised of Common Stock, par value $0.001 per share (the “Common
        Stock”) and warrants (the “Warrants”) to purchase shares of the Common
        Stock.  This Offering (the “Offering”) is made only to accredited
        investors who qualify as accredited investors pursuant to the suitability
        standards for investors described under Regulation D of the Securities Act
        of
        1933, as amended (the “Securities Act”) and who have no need for liquidity in
        their investments.  The Offering is for a minimum investment of
        $100,000.00. However, the Company reserves the right, in its sole discretion,
        to
        accept fractional subscriptions.  Prior to this Offering there was no
        public market for the Common Stock, the Warrants of the Common Stock, and
        no
        assurance can be given that a market will develop for the Common Stock or
        the
        Warrants of the Common Stock, if developed, that it will be maintained so
        that
        any subscribers in this Offering may avail any benefit from the
        same.

      

      2.              
        Registration Rights. The Company will use its reasonable best efforts,
        subject to receipt of necessary information from the Investors, to cause
        the
        Registration Statement to be filed no later than thirty (30) days after the
        date
        of final Closing (the “Required Filing Date”) and to become effective no later
        than one hundred twenty (120) days after the Registration Statement was filed
        with the SEC (the “Required Effective Date”). If the Registration Statement has
        not been filed on or before the Required Filing Date, or has not been declared
        effective by the SEC on or before the Required Effective Date because of
        the
        Company’s breach of this provision, or does not remain effective (any such
        failure being referred to as an “Event”), then the Investor shall be entitled to
        receive from the Company, as payment in full satisfaction for such Event,
        warrants to purchase an aggregate number of shares of Common Stock equal
        to 1.5%
        of the number of issued Shares upon the same terms as the Warrants (i) at
        the
        time of such Event, and (ii) upon each monthly anniversary of such Event
        until
        the Event is cured, up to a maximum aggregate amount of 10% of the Shares
        (the
“Late Registration Warrants”). In the event of changes in the outstanding Common
        Stock of the Company by reason of a stock dividend, stock split, reverse
        stock
        split, reorganization, recapitalization, merger, consolidation, liquidation,
        separation, combination or exchange of stock, change in the Company’s business
        structure or sale or transfer of all or any part of the Company’s business or
        assets (referred to as a “Capital Adjustment”), the number of Late Registration
        Warrants shall be adjusted consistent with such Capital Adjustment. Until
        such
        time that the resale of the Units is registered pursuant to a registration
        statement declared effective by the Securities and Exchange Commission, the
        offered securities may be resold only pursuant to Rule 144 under the Securities
        Act or pursuant to another exemption from registration under the Securities
        Act,
        if any.

      

      
        
          
            
            

          

          
            A-15

            
              

            

          

          
            
            

          

        

      

      

      AS
        MORE PARTICULARLY SET FORTH IN THAT CERTAIN CONFIDENTIAL PRIVATE PLACEMENT
        MEMORANDUM DATED OCTOBER 16, 2007 (THE “MEMORANDUM”) AND SUBJECT TO THE TERMS
        AND CONDITIONS SET FORTH THERIN MORE FULLY, THE SECURITIES OFFERED HEREBY
        ARE
        SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK AND SHOULD NOT BE PURCHASED
        BY
        ANYONE WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. THE SECURITIES
        OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE
        SECURITIES LAWS OF ANY STATE, OR OTHER JURISDICTION AND ARE BEING OFFERED
        AND
        SOLD IN RELIANCE ON EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
        SECURITIES ACT AND SUCH LAWS. THESE SECURITIES MAY NOT BE TRANSFERRED, SOLD,
        PLEDGED, HYPOTHECATED OR ASSIGNED EXCEPT AS PERMITTED UNDER SUCH ACT OR SUCH
        LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.

      

      3.    Terms
        of the
        Subscription.   This Offering is made pursuant to the
        terms and conditions set forth in the Memorandum which is incorporated by
        reference and made a part of this Subscription Agreement. The subscription
        is
        for units (the “Units”) comprised of shares of Common Stock and Warrants to
        purchase shares of the Common Stock.  The Common Stock is of $0.75 per
        share, subject to adjustment.  The Warrants (a form of which is
        attached to the Memorandum in the Appendices) may be exercised immediately
        upon
        issuance to purchase shares of the Company’s Common Stock as
        follows:  66,666 shares at a price of $1.50 per share, subject to
        adjustment.

      

      4.    Other
        Terms of the Offering.   The execution of this
        Subscription Agreement shall constitute an offer by the Subscriber to subscribe
        for the Common Stock and the Warrants in the amount and on the terms specified
        herein.  The Subscriber must also complete and execute the Subscriber
        Questionnaire included in the Memorandum Appendices.  The Company
        reserves the right, in its sole discretion, to reject in whole or in part,
        any
        subscription offer.  If the Subscriber's offer is accepted, the
        Company will execute a copy of this Subscription Agreement and return it
        to
        Subscriber.  The Company may, at its sole discretion, accept
        fractional subscriptions.

      

      5.    Subscription
        Payment.   Subscription for each Unit requires a total
        cash investment of $100,000.  The subscription price will be payable
        in full upon acceptance of the subscription.  The Company reserves the
        right to accept fractional subscriptions.

      

      6.    The
        Company's Representations and Warranties.  The Company hereby
        represents and warrants as follows:

      

      (a)    The
        Company
        is a corporation duly formed and in good standing under the laws of the State
        of
        Nevada with full power and authority to conduct its business as presently
        contemplated; and

      

      (b)    The
        Company warrants and covenants that
        there are no material misstatements or omissions in this Subscription Agreement
        or in the Memorandum

      

      
        
          
            
            

          

          
            A-16

            
              

            

          

          
            
            

          

        

      

      

      7.    Subscriber's
        Representations, Warranties and Covenants.  The undersigned
        understands and acknowledges that the Common Stock, the Warrants and the
        Common
        Stock underlying same subscribed for herein (the “Securities”) are being offered
        and sold under one or more of the exemptions from registration provided for
        in
        Section 3(b), 4(2) and 4(6) of the Securities Act including, Regulation D
        promulgated thereunder, that the undersigned acknowledges that the Securities
        are being purchased without the undersigned being offered or furnished any
        offering literature, prospectus or other material, financial or otherwise,
        and
        that this action has not been scrutinized by the United States Securities
        and
        Exchange Commission or by any regulatory authority charged with the
        administration of the securities laws of any state.  The undersigned
        hereby further represents and warrants as follows:

      

      (a)    The
        undersigned confirms that he understands and has fully considered, for purposes
        of this investment, the risks of an investment in the Securities and understands
        that:  (i) this investment is suitable only for an investor who is
        able to bear the economic consequences or losing his entire investment, (ii)
        the
        purchase of the Securities is a speculative investment which involves a high
        degree of risk of loss by the undersigned of his entire investment, and (iii)
        that there will be no public market for the Securities and the Common Stock
        thereunder and accordingly, it may not be possible for the undersigned to
        liquidate an investment in the Securities in case of an emergency.

      

      (b)    The
        Subscriber is an "Accredited Investor" as defined in Rule 501(a) of Regulation
        D
        under the Securities Act.  This representation is based on the fact
        that the Subscriber, inter alia, is an accredited individual who, together
        with
        the Subscriber’s spouse, have a net worth of at least $1,000,000 or the
        Subscriber, individually, has had net income of not less than $200,000 during
        the last two years, and reasonably anticipates that the Subscriber will have
        an
        income of at least $200,000 during the present year and the next
        year;

      

      (c)    If
        the
        Subscriber is a corporation, partnership, trust or any unincorporated
        association: (i) the person executing this Subscription Agreement does so
        with
        full right, power and authority to make this investment; (ii) that such entity
        was not formed for the specific purpose of making an investment in the Company;
        and (iii) that all further representations and warranties made herein are
        true
        and correct with respect to such corporation, partnership, trust and
        unincorporated association;

      

      (d)    The
        address
        set forth below is the Subscriber's true and correct residence or place of
        business, and the Subscriber has no present intention of becoming a resident
        of
        any other state or jurisdiction;

      

      (e)    The
        Subscriber understands and agrees that the Company prohibits the investment
        of
        funds by any persons or entities that are acting, directly or indirectly,
        (i) in
        contravention of any U.S. or international laws and regulations, including
        anti-money laundering regulations or conventions, (ii) on behalf of terrorists
        or terrorist organizations, including those persons or entities that are
        included on the List of Specially Designated Nationals and Blocked Persons
        maintained by the U.S. Treasury Department's Office of Foreign Assets
        Control1 ("OFAC"), as such list may be amended from time to time,
        (iii) for a senior foreign political figure, any member of a senior foreign
        political figure’s immediate family or any close associate of a senior foreign
        political figure2, unless the Company, after being specifically
        notified by the Subscriber in writing that it is such a person, conducts
        further
        due diligence, and determines that such investment shall be permitted, or
        (iv)
        for a foreign shell bank3 (such persons or entities in (i) – (iv) are
        collectively referred to as "Prohibited Persons").

      
        ______________________

      

      1    The
        OFAC list may be accessed on the web at http://www.treas.gov/ofac.

      

        
          
            
            

          

          
            A-17

            
              

            

          

          
            
            

          

        

      (f)    The
        Subscriber represents, warrants and covenants that: (i) it is not, nor is
        any
        person or entity controlling, controlled by or under common control with
        the
        Subscriber, a Prohibited Person, and (ii) to the extent the Subscriber has
        any
        beneficial owners5, (a) it has carried out thorough due diligence to
        establish the identities of such beneficial owners, (b) based on such due
        diligence, the Subscriber reasonably believes that no such beneficial owners
        are
        Prohibited Persons, (c) it holds the evidence of such identities and status
        and
        will maintain all such evidence for at least five years from the date of
        the
        Subscriber's complete withdrawal from the Company, and (d) it will make
        available such information and any additional information requested by the
        Company that is required under applicable regulations.

      

      (g)           If
        any of the foregoing representations, warranties or covenants cease to be
        true
        or if the Company no longer reasonably believes that it has satisfactory
        evidence as to their truth, notwithstanding any other agreement to the contrary,
        the Company may, in accordance with applicable regulations, freeze the
        Subscriber's investment, either by prohibiting additional investments, declining
        or suspending any withdrawal requests and/or segregating the assets constituting
        the investment, or the Subscriber's investment may immediately be involuntarily
        withdrawn by the Company, and the Company may also be required to report
        such
        action and to disclose the Subscriber's identity to OFAC or other
        authority.  In the event that the Company is required to take any of
        the foregoing actions, the Subscriber understands and agrees that it shall
        have
        no claim against the Company, and its respective affiliates, directors, members,
        partners, shareholders, officers, employees and agents for any form of damages
        as a result of any of the aforementioned actions.

      

      (h)           The
        Subscriber agrees to indemnify and hold harmless the Company, its respective
        affiliates, directors, members, partners, shareholders, officers, employees
        and
        agents from and against any and all losses, liabilities, damages, penalties,
        costs, fees and expenses (including legal fees and disbursements) which may
        result, directly or indirectly, from any inaccuracy in or breach of any
        representation, warranty, covenant or agreement set forth in this
        Agreement.

      
        ______________________

      

      2           Senior
        foreign political figure means a senior official in the executive, legislative,
        administrative, military or judicial branches of a foreign government (whether
        elected or not), a senior official of a major foreign political party, or
        a
        senior executive of a foreign government-owned corporation.  In
        addition, a senior foreign political figure includes any corporation, business
        or other entity that has been formed by, or for the benefit of, a senior
        foreign
        political figure.  The immediate family of a senior foreign political
        figure typically includes the political figure’s parents, siblings, spouse,
        children and in-laws.  A close associate of a senior foreign political
        figure is a person who is widely and publicly known internationally to maintain
        an unusually close relationship with the senior foreign political figure,
        and
        includes a person who is in a position to conduct substantial domestic and
        international financial transactions on behalf of the senior foreign political
        figure.

      3           Foreign
        shell bank means a foreign bank without a physical presence in any country,
        but
        does not include a regulated affiliate.  A post office box or
        electronic address would not be considered a physical presence.  A
        regulated affiliate means a foreign shell bank that: (1) is an affiliate
        of a
        depository institution, credit union, or foreign bank that maintains a physical
        presence in the United States or a foreign country, as applicable; and (2)
        is
        subject to supervision by a banking authority in the country regulating such
        affiliated depository institution, credit union, or foreign bank.

      4           Beneficial
        owners will include, but not be limited to: (i) shareholders of a corporation;
        (ii) partners of a partnership; (iii) members of a limited liability company;
        (iv) investors in a fund-of-funds; (v) the grantor of a revocable or grantor
        trust; (vi) the beneficiaries of an irrevocable trust; (vii) the individual
        who
        established an IRA; (viii) the participant in a self-directed pension plan;
        (ix)
        the sponsor of any other pension plan; and (x) any person being represented
        by
        the Subscriber in an agent, representative, intermediary, nominee or similar
        capacity.  If the beneficial owner is itself an entity, the
        information and representations set forth herein must also be given with
        respect
        to its individual beneficial owners.  If the Subscriber is a
        publicly-traded company, it need not conduct due diligence as to its beneficial
        owners.

      

      
        
          
            
            

          

          
            A-18

            
              

            

          

          
            
            

          

        

      

      

      (i)    The
        Subscriber has received and read or reviewed, is familiar with and fully
        understands the Memorandum  furnished by the Company.  The
        Subscriber also fully understands this Subscription Agreement and the risks
        associated with this interest and confirms that all documents, records and
        books
        pertaining to the Subscriber’s investment in the Securities and requested by the
        Subscriber have been made available or delivered to the Subscriber by the
        Company;

      

      (j)    The
        Subscriber has
        had an opportunity to ask questions of and receive answers from, the Company
        or
        a person or persons acting on its behalf, concerning the terms and conditions
        of
        this investment and confirms that all documents, records and books pertaining
        to
        the investment in the Securities and requested by the Subscriber has been
        made
        available or delivered to the Subscriber;

      

      (k)           The
        Subscriber will be acquiring the Securities, and the shares of Common Stock
        underlying the Securities, solely for the Subscriber's own account, for
        investment and not with a view toward the resale, distribution, subdivision
        or
        fractionalization thereof; and the Subscriber has no present plans to enter
        into
        any such contract, undertaking, agreement or arrangement;

      

      (l)    The
        Subscriber
        acknowledges and understands that prior to this Offering there was no public
        market for the Securities and no assurance can be given that a public market
        will develop for the Securities offered hereby, or if developed, that it
        will be
        maintained so that any subscribers in this Offering may avail any benefit
        from
        the same;

      

      (m)           The
        Subscriber's compliance with the terms and conditions of this Subscription
        Agreement will not conflict with any instrument or agreement pertaining to
        the
        Securities or the transactions contemplated herein; and will not conflict
        in,
        result in a breach of, or constitute a default under any instrument to which
        the
        Subscriber is a party;

      

      (n)           The
        Subscriber will seek its own legal, tax and investment advice concerning
        tax
        implications attendant upon the purchase of the Securities and understands
        and
        accepts that the Company is relying upon this representation insofar as
        disclosure of tax matters is concerned;

      

      (o)   The
        Subscriber
        hereby acknowledges and represents that the Subscriber is aware of the
        information set forth in this document and in any exhibits attached hereto;
        and

      

      (p)   The
        foregoing
        representations and warranties are true and accurate as of the date hereof
        and
        shall be true and accurate as of the date of delivery of the subscription
        to the
        Company and shall survive such delivery.  If, in any respect, such
        representations and warranties shall not be true and accurate, the Subscriber
        shall give written notice of such fact to the Company, specifying which
        representations and warranties are not true and accurate and the reasons
        therefore.

      

      
        
          
            
            

          

          
            A-19

            
              

            

          

          
            
            

          

        

      

      

      8.    Risk
        Factors.  THE SUBSCRIBER ACKNOWLEDGES THAT THERE ARE SIGNIFICANT RISKS
        ASSOCIATED WITH THE PURCHASE OF THE UNITS AND THAT SUCH SECURITIES ARE HIGHLY
        SPECULATIVE AND SHOULD NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD A TOTAL
        LOSS
        OF HIS ENTIRE INVESTMENT. The Subscriber represents and warrants that
        he or she has carefully considered and reviewed the risk factors set forth
        in
        the Memorandum which are hereby incorporated by reference in reaching a
        determination to purchase the Securities:

       

      9.    Responsibility.  The
        Company or its officers and directors shall not be liable, responsible or
        accountable for damages or otherwise to any Subscriber for any act or omission
        performed or omitted by them in good faith and in a manner reasonably believed
        by them to be within the scope of the authority granted to them by this
        Subscription Agreement and in the best interests of the Company, provided
        they
        were not guilty of gross negligence, willful or wanton misconduct, fraud,
        bad
        faith or any other breach of fiduciary duty with respect to such acts or
        omissions.

      

      10.   
          Miscellaneous.

      

      (a)   The
        Company and the
        Subscriber hereby covenant that this Subscription Agreement is intended to
        and
        does contain and embody herein only finally and exclusively all of the
        understandings and agreements, both written or oral, of the Company and the
        Subscriber with respect to the subject matter of this Subscription Agreement,
        and that there exists no oral agreement or understanding, express or implied
        liability, whereby the absolute, final and unconditional character and nature
        of
        this Subscription Agreement shall be in any way invalidated, empowered or
        affected.  There are no representations, warranties or covenants other
        than those set forth herein.

      

      (b)   The
        headings of this
        Subscription Agreement are for convenient reference only and they shall not
        limit or otherwise affect the interpretation or effect of any terms or
        provisions hereof.

      

      (c)   This
        Subscription Agreement
        shall not be changed or terminated except as set forth herein.  All of
        the terms and provisions of this Subscription Agreement shall be binding
        upon
        and inure to the benefit of and be enforceable by and against the successors
        and
        assigns of the Company and the heirs, executors, administrators and assigns
        of
        the Subscriber.

      

      (d)   A
        modification or waiver of
        any of the provisions of this Subscription Agreement shall be effective only
        if
        made in writing and executed with the same formality as this Subscription
        Agreement.  The failure of either the Company or the Subscriber to
        insist upon strict performance of any of the provisions of this Subscription
        Agreement shall not be construed as a waiver of any subsequent default of
        the
        same or similar nature, or of any other nature or kind.

      

      (e)   The
        various provisions of
        this Subscription Agreement are severable from each other and from the other
        provisions of this Agreement, and in the event that any provision in this
        Subscription Agreement shall be held invalid or unenforceable by a court
        of
        competent jurisdiction, the remainder of this Subscription Agreement shall
        be
        fully effective, operative and enforceable.

      

      
        
          
            
            

          

          
            A-20

            
              

            

          

          
            
            

          

        

      

      

      (f)    Pronouns
        used herein
        are to be interpreted as referring to both the masculine and feminine
        gender.

      

      (g)   This
        Subscription Agreement
        shall be construed and interpreted in accordance with the laws of the State
        of
        Nevada without reference to conflict of laws principle.  The parties
        agree that in the event of a laws controversy arising out of the interpretation,
        construction, performance or breach of this Subscription Agreement, any and
        all
        claims arising out of, or relating to, this Subscription Agreement shall
        be
        submitted by arbitration according to the Commercial Arbitration Rules of
        the
        American Arbitration Association located in New York City before a single
        arbitrator.  Notwithstanding the prior sentence, any other action
        commenced by either party herein shall be venued in the appropriate court
        of
        competent jurisdiction located in the county of New York, State of New
        York.

      

      (h)   This
        Subscription Agreement
        may be executed in one or more counterparts each of which shall be deemed
        an
        original and all of which together shall be deemed to be one and the same
        instrument.

      

      THE
        SUBSCRIBER ACKNOWLEDGES THAT,
        EXCEPT AS SET FORTH IN THIS AGREEMENT OR THE MEMORANDUM, NO REPRESENTATIONS
        OR
        WARRANTIES HAVE BEEN MADE TO IT, OR TO ITS ADVISORS, BY THE COMPANY, OR BY
        ANY
        PERSON ACTING ON BEHALF OF THE COMPANY, WITH RESPECT TO THE INTERESTS, THE
        PROPOSED BUSINESS OF THE COMPANY, THE DEDUCTIBILITY OF ANY ITEM FOR TAX
        PURPOSES, AND/OR THE ECONOMIC, TAX, OR ANY OTHER ASPECTS OR CONSEQUENCES
        OF A
        PURCHASE OF AN INTEREST AND/OR ANY INVESTMENT IN THE COMPANY, AND THAT IT
        HAS
        NOT RELIED UPON ANY INFORMATION CONCERNING THE OFFERING, WRITTEN OR ORAL,
        OTHER
        THAN THAT CONTAINED IN THIS AGREEMENT OR THE MEMORANDUM.

      

       

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            A-21

            
              

            

          

          
            
            

          

        

      

      

      SUBSCRIPTION
        AGREEMENT

       

      ENTERCONNECT
        INC.

       

      

      SIGNATURE
        PAGE

      

      The
        Subscriber hereby offers to purchase and subscribe to _______Unit(s) and
        encloses payment of $________ for an aggregate investment of
        $_________.

      

      The
        Subscriber was referred, if at all, by the following Placement
        Agent:

      

      Placement
        Agent:___________________

      

      

      
        	 	
                 

              	 
	 	
                Signature
                  of Subscriber

              	 
	 	 	 
	 	
                 

              	 
	 	
                Name
                  of Subscriber

              	 
	 	 	 
	 	
                 

              	 
	 	
                Name
                  and Title of Authorized Signatory

              	 
	 	
                (If
                  Applicable)

              	 
	 	 	 
	 	
                 

              	 
	 	
                (Print)
                  Street Address - Residence

              	 
	 	 	 
	 	
                 

              	 
	 	
                (Print)
                  City, State and Zip Code

              	 
	 	 	 
	 	
                 

              	 
	 	
                Social
                  Security/Taxpayer I.D. Number

              	 

      

      

      AGREED
        TO AND ACCEPTED:

      

      As
        of
        ___________, 2007

      

      ENTERCONNECT
        INC.

      

      

      
        	
                By:

              	
                 

              	 
	 	
                Sam
                  Jankovich, Chief Executive Officer

              	 

      

       

      
        
          
          

        

        
          A-22

          
            

          

        

        
          
          

        

      

    

     

    COMPLETE
      “SUBSCRIBER QUESTIONNAIRE” BELOW;

    PROVIDE
      ADDITIONAL REQUISITE INFORMATION

    

    EXHIBIT
      “B”

    SUBSCRIBER
      QUESTIONNAIRE

    

    

    PERSONAL
      DATA:

    

    
      	
               

            	 	
               

            	 
	
              Full
                Name

            	 	
              Residence
                Telephone (Area Code Number)

            	 
	 	 	 	 
	
               

            	 	
               

            	 
	
              Residence
                or Principal Address (Street/City/State/Zip Code)

            	 	
              Business
                Telephone (Area Code Number)

            	 
	 	 	 	 
	
               

            	 	
               

            	 
	
              Mailing
                Address (if other than residence)

            	 	
              Mobile
                Telephone (Area Code Number)

            	 
	 	 	 	 
	
               

            	 	
               

            	 
	
              Date
                of Birth

            	 	
              Social
                Security/Taxpayer I.D.  Number

            	 
	 	 	 	 
	
               

            	 	
               

            	 
	
              Marital
                Status

            	 	
              Citizenship
                (U.S./Other)

            	 
	 	 	 	 
	
               

            	 	
               

            	 
	
              Spouse’s
                Full Name

            	 	
              Email
                Address

            	 
	 	 	 	 
	
               

            	 	
               

            	 
	
              Spouse’s
                Social Security Number

            	 	
              Facsimile
                Number (Area Code/Number)

            	 

    

    

    

    ACCREDITED
      INVESTOR.  If Subscriber (or the entity on behalf of which
      Subscriber is acting) is an “accredited investor” as that term is defined in
      Rule 501(a) of Regulation D promulgated under the Act, and, as such, falls
      within at least one of the following categories, then please
INITIAL each applicable
      category.

    

    
      	
              ______

            	
              (a)

            	
              A
                bank or savings and loan association or other institution (acting
                either
                in an individual or fiduciary capacity), registered broker-dealer,
                insurance company, registered investment company, or business development
                company, or licensed “small business investment company,” or an employee
                benefit plan which either is represented in a fiduciary capacity
                by a
                bank, savings and loan association, insurance company or registered
                investment advisor, has total assets in excess of $5,000,000 or is
                self-directed and the plan’s business investments are made solely by
                accredited investors.

            

    

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

       

    

    
      	
              ______

            	
              (b)

            	
              A
                trust (i) with total assets in excess of $5,000,000, (ii) which was
                not
                formed for the specific purpose of acquiring the subject securities,
                and
                (iii) whose purchase is directed by a person who has such knowledge
                and
                experience in financial and business matters as to be capable of
                evaluating the merits and risks of the prospective
                investment.

            

    

    

    
      	
              ______

            	
              (c)

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

            

    

    

    
      	
              ______

            	
              (d)

            	
              An
                entity in which all of the equity owners are “accredited
                investors.”

            

    

    

    
      	
              ______

            	
              (e)

            	
              A
                director or an executive officer of the
                Company.

            

    

    

    
      	
              ______

            	
              (f)

            	
              A
                natural person whose individual net worth, or joint net worth with
                spouse
                (if any), exceeds $1,000,000

            

    

    

    
      	
              ______

            	
              (g)

            	
              A
                natural person whose income in each of the two most recent calendar
                years
                exceeded $200,000 individually, or $300,000 jointly with spouse (if
                any),
                and who reasonably expects to reach that income level in the current
                year.

            

    

    

     
      
        

      

    

     

    
      
        	 	
                Signature
                  of Subscriber

              
	 	 
	 	
                 

              
	 	
                Name
                  of Subscriber

              
	 	 
	 	
                 

              
	 	
                Name
                  and Title of Authorized Signatory

              
	 	
                (If
                  Applicable)

              
	 	 
	 	
                 

              
	 	
                (Print)
                  Street Address - Residence

              
	 	 
	 	
                 

              
	 	
                (Print)
                  City, State and Zip Code

              
	 	 
	 	
                 

              
	 	
                Social
                  Security/Taxpayer I.D. Number

              

      

    

     

    
      
        
        

      

      
        B-2

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      “D”

    ESCROW
      AGREEMENT

    

    THIS
      ESCROW AGREEMENT (this “Agreement”) is made as of the 12th day of November,
      2007, by and between ENTERCONNECT INC., a
      Nevada corporation (the “Corporation”), and LEVY & BOONSHOFT,
      P.C., a New York professional corporation (the “Escrow
      Agent”).

     

    WITNESSETH

     

    WHEREAS,
      the Corporation is desirous of conducting a private placement (the “Offering”)
      of its securities (the “Units”) pursuant an exemption from registration provided
      by Regulation D of the Securities Act of 1933, as amended for a minimum,
      aggregate offering of ten (5) Units for a subscription amount of Five Hundred
      Thousand Dollars ($500,000) (the “Minimum Offering”) and a maximum, aggregate
      offering of fifty (20) Units for a subscription amount of Five Million Dollars
      ($2,000,000) (the “Maximum Offering”); and

     

    WHEREAS,
      the Escrow Agent will serve as an escrow agent for the proceeds of the
      subscription; and

     

    WHEREAS,
      the Offering will commence immediately upon the execution and delivery of this
      Agreement and will continue until the earlier to occur of (i) the sale of a
      number of Units to equal the Maximum Offering, or (ii) the termination of the
      Offering on November 30, 2007 (the “Initial Closing Date”), unless such date is
      extended by the Corporation in its sole discretion to a date that is in no
      event
      later than December 31, 2007 (the “Termination Date”); the period from the date
      hereof through the Termination Date is hereinafter called, the “Offering
      Period”; and

     

    WHEREAS,
      all subscription proceeds are proposed to held by the Escrow Agent pursuant
      to
      this Agreement until subscription moneys from eligible investors equal to the
      Minimum Offering are received at or prior to the Initial Closing Date, at which
      date and time the Corporation will conduct a closing (the “Closing”) on the sale
      of Units and the proceeds of the Offering will be immediately thereafter
      disbursed in accordance with and subject to the terms and conditions of this
      Agreement; and

     

    
      
        
        

      

      
        D-1

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
      any subsequent Closings may be held at the discretion of the Corporation with
      respect to additional sales of Units up to the Maximum Offering amount during
      the Offering Period; and

     

    WHEREAS,
      subscriptions
      tendered for all Units shall be subject to acceptance by the Corporation (each,
      a “Closing”), which subscriptions may be reduced in the sole discretion of the
      Corporation or rejected should the subscriber not satisfy the requirements
      of
      the Offering, or for any other reason in the sole discretion of the Corporation;
      and

     

    WHEREAS,
      proceeds from
      the sale of the Units shall be held in escrow by the Escrow Agent in a
      non-interest bearing account pending a Closing and if no such Closing is
      conducted, then such funds shall be returned to the subscribers, with interest
      (to the extent obtained by the Corporation) after the Termination Date or any
      earlier termination of the Offering;

     

    NOW,
      THEREFORE, in consideration of the mutual promises herein contained and
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the parties hereto, intending to be legally bound, hereby
      agree as follows:

     

    1.           Appointment
      of Escrow Agent: The Corporation hereby appoints Levy & Boonshoft,
      P.C. as Escrow Agent in accordance with the terms and conditions set forth
      herein, and the Escrow Agent hereby accepts such appointment.

     

    2.           Delivery
      of Subscription Proceeds: All checks, drafts or other instruments
      received from subscribers for the Units will be delivered by the Corporation
      to
      the Escrow Agent, made payable to “Levy & Boonshoft, P.C. as Escrow Agent of
      EnterConnect” together with, as to each subscriber, his name, address, social
      security number or employer identification number, number of Shares subscribed
      for, and the amount paid in connection with such subscription.  The
      Escrow Agent is hereby empowered, on behalf of the Corporation, to endorse
      and
      collect all checks, drafts, wire transfers or other instruments received on
      account of subscriptions for Units.  The Escrow Agent hereby
      represents and warrants that it has not received any subscription documents
      or
      subscription money from any person pursuant to that certain Confidential Private
      Placement Memorandum of the Corporation dated as of October 17, 2007 under
      which
      the Escrow Agent previously served as an escrow agent.

     

    
      
        
        

      

      
        D-2

        
          

        

      

      
        
        

      

    

     

    3.           Escrow
      Agent to Hold and Distribute Funds: The Escrow Agent will hold and
      disburse all funds received by it (the “Escrow Funds”), as follows:

     

    3.1
      The
      Escrow Funds (or any portion thereof) shall be disbursed solely and exclusively
      in accordance with this Agreement upon written instructions signed by the
      undersigned officer on behalf of the Corporation;

     

    3.2
      All
      Escrow Funds shall be held in a non-interest bearing account held by the Escrow
      Agent in a separate account with the Escrow Agent called the “Levy &
Boonshoft, P.C., as Escrow Agent of EnterConnect”;

     

    3.3
      Subject to the Escrow Agent receiving the aggregate Minimum Offering amount
      by
      the Initial Closing Date (or the Termination Date if the Closing is extended
      by
      written notice to Escrow Agent), in the event that the Escrow Agent has not
      received written instructions from the Corporation for the disbursement of
      the
      Escrow Funds, then the Escrow Agent shall, within ten (10) business days of
      Termination Date, return to the subscribers for the Units the respective amounts
      which such subscribers have paid, without deduction of any kind
      whatsoever;

     

    
      
        
        

      

      
        D-3

        
          

        

      

      
        
        

      

    

     

    3.4
      In
      the event that by the Initial Closing Date (or the Termination Date if the
      Closing is extended), the Escrow Agent has not received subscriptions for the
      Minimum Offering amount of Five Hundred Thousand Dollars ($500,000), then the
      Escrow Agent shall, within five (5) business days after the Initial Closing
      Date
      (or the Termination Date, as applicable) return to the subscribers for the
      Units
      the respective amounts which such subscribers have paid, without deduction
      of
      any kind whatsoever;

     

    3.5
      The
      Corporation will conduct a Closing upon receiving the Minimum Offering
      amount.  At such time and any subsequent Closings, the Escrow Agent
      shall disburse to: (i) each participating broker-dealer ten (10%) percent of
      the
      aggregate Offering amount received until then by the Escrow Agent from
      subscribers introduced by that participating broker-dealer. The following are
      participating broker dealers: Sandgrain Securities, Inc.; and (ii) balance
      of
      the Corporation. In no event any disbursement of any subscription money shall
      be
      made to the Corporation without corresponding disbursement being made to the
      participating broker that introduced the subscriber.  In the event of
      any doubt as to the appropriate participating broker-dealer, the Escrow Agent
      shall continue to hold the Escrow Fund.

     

    3.6
      The
      Escrow Agent shall not be required to pay any uncollected funds that are not
      available for withdrawal.

     

    
      	
               

            	
              4.

            	
              Exculpation
                and Indemnification of Escrow
                Agent:

            

    

     

    4.1           The
      Escrow Agent shall have no duties or responsibilities other than those expressly
      set forth herein. The Escrow Agent shall have no duty to enforce any obligation
      of any person to make any payment or delivery, or to direct or cause any payment
      or delivery to be made, or to enforce any obligation of any person to perform
      any other act.  The Escrow Agent shall be under no liability to the
      other parties hereto (other than the participating broker dealers) or to anyone
      else by reason of any failure on the part of any party hereto or any maker,
      guarantor, endorser or other signatory of any document or any other person
      to
      perform such person’s obligations under any such document.  Except for
      amendments to this Agreement referred to below, and except for instructions
      given to the Escrow Agent in accordance with this Agreement by the Corporation
      relating to the Escrow Funds, the Escrow Agent shall not be obligated to
      recognize any agreement between any and all of the persons referred to herein,
      notwithstanding that references thereto may be made herein and whether or not
      it
      has knowledge thereof.

     

    
      
        
        

      

      
        D-4

        
          

        

      

      
        
        

      

    

     

    4.2           The
      Escrow Agent shall not be liable to the Corporation or to anyone else for any
      action taken or omitted by it, or any action suffered by it to be taken or
      omitted, unless the Escrow Agent shall be adjudged to be liable for gross
      negligence or willful misconduct.  The Escrow Agent may rely
      conclusively and shall be protected in acting upon any order, notice, demand,
      certificate, opinion or advice of counsel (including counsel chosen by the
      Escrow Agent), statement instrument, report or other paper or document (not
      only
      as to its due execution and the validity and effectiveness of its provisions,
      but also as to the truth and acceptability of any information therein
      contained), which is believed by the Escrow Agent to be genuine and to be signed
      or presented by the proper person or persons.  The Escrow Agent shall
      not be bound by any notice or demand, or any waiver, modification, termination
      or rescission of this Agreement or any of the terms thereof, unless evidenced
      by
      a writing delivered to the Escrow Agent signed by the proper party or parties
      and, if the duties or rights of the Escrow Agent are affected, unless it shall
      give its prior written consent thereto.  In addition, the Escrow Agent
      shall not be required to ascertain whether any instructions received by the
      Escrow Agent have been duly authorized or whether any signature is genuine.
      The
      names and true signatures of each individual authorized to act singly on behalf
      of the Corporation are stated in Schedule A, which is attached hereto and made
      a
      part hereof.

     

    4.3           The
      Escrow Agent shall not be responsible for the sufficiency or accuracy of the
      form of, or the execution, validity or genuineness of, any document or property
      received, held or delivered by it hereunder, or of any signature or endorsement
      thereon, or for any lack of endorsement thereon, or for any description therein;
      nor shall the Escrow Agent be responsible or liable to the other parties hereto
      or to anyone else in any respect on account of the indemnity, authority or
      rights of the persons executing or delivering or purporting to execute or
      deliver any document or property on this Agreement.  The Escrow Agent
      shall have no responsibility with respect to the use or application of any
      funds
      or other property paid or delivered by the Escrow Agent pursuant to the
      provisions hereof.  The Escrow Agent shall not be liable to the
      Corporation or to anyone else for any loss which may be incurred by reason
      of
      any investment of any monies which it holds hereunder provided the Escrow Agent
      has complied with the provisions hereunder.

     

    
      
        
        

      

      
        D-5

        
          

        

      

      
        
        

      

    

     

    4.4           The
      Escrow Agent shall have the right to assume in the absence of written notice
      to
      the contrary from the proper person or persons that a fact or an event by reason
      of which an action would or might be taken by the Escrow Agent does not exist
      or
      has not occurred, without incurring liability to the other parties hereto or
      to
      anyone else for any action taken or omitted, or any action suffered by it to
      be
      taken or omitted, in good faith and in the exercise of its own best judgment,
      in
      reliance upon such assumption.

     

    4.5           The
      Escrow Agent shall be indemnified and held harmless by the Corporation from
      and
      against any and all expenses, including reasonable counsel fees and
      disbursements, or loss suffered by the Escrow Agent in connection with any
      action, suit or other proceeding involving any claim, or in connection with
      any
      claim or demand, which in any way, directly or indirectly, arises out of or
      relates to this Agreement, the services of the Escrow Agent hereunder, the
      monies or other property held by it hereunder or any income earned from
      investment of such monies.  The Escrow Agent shall have a lien for the
      amount of any such expenses or loss on the monies and other property held by
      it
      hereunder and shall be entitled to reimburse itself from such monies and other
      property held by it hereunder for the amount of any such expense or
      loss.  Promptly after the receipt by the Escrow Agent or notice of any
      demand or claim or the commencement of any action, suit or proceeding, the
      Escrow Agent shall, if a claim in respect thereof is to be made against the
      Corporation, notify the Corporation thereof in writing, but the failure by
      the
      Escrow Agent to give such notice shall not relieve the Corporation from any
      liability which the Corporation may have to the Escrow Agent
      hereunder.  Notwithstanding any obligation to make payments and
      deliveries hereunder, the Escrow Agent may retain and hold for such time as
      it
      deems necessary such amount of monies or property as it shall, from time to
      time, in its sole discretion, deem sufficient to indemnify itself for any such
      loss or expense and for any amounts due it under Section 7.

     

    
      
        
        

      

      
        D-6

        
          

        

      

      
        
        

      

    

     

    4.6           For
      the purposes hereof, the term “expense or loss” shall include all amounts paid
      or payable to satisfy any claim, demand or liability, or in settlement of any
      claim, demand, action, suit or proceeding settled with the express written
      consent of the Escrow Agent, and all costs and expenses, including, but not
      limited to, reasonable counsel fees and disbursements, paid or incurred in
      investigating or defending against any such claim, demand, action, suit or
      proceeding.

     

    
      	
               

            	
              5.

            	
              Termination
                of Agreement and Registration of Escrow
                Agent.

            

    

     

    5.1           This
      Escrow Agreement shall terminate on the final disposition of the monies and
      property held in escrow hereunder, provided that the rights of the Escrow Agent
      and the obligations of the other parties hereto under Sections 4 and 7 shall
      survive the termination hereof.

     

    5.2           The
      Escrow Agent may resign at any time and be discharged from its duties as Escrow
      Agent hereunder by giving the Corporation at least thirty (30) days’ notice
      thereof.  As soon as practicable after its resignation, the Escrow
      Agent shall turn over to a successor escrow agent appointed by the Corporation
      all monies and property held hereunder (less such amount as the Escrow Agent
      is
      entitled to retain pursuant to Section 7) upon presentation of the document
      appointing the new escrow agent and its acceptance thereof.  If no new
      agent is so appointed within the thirty (30) day period following such notice
      of
      resignation, the Escrow Agent may deposit the aforesaid monies and property
      with
      any court it deems appropriate.

     

    
      
        
        

      

      
        D-7

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              6.

            	
              Form
                of Payments by Escrow
                Agent

            

    

     

    6.1           Any
      payments by the Escrow Agent to subscribers or to persons other than the
      Corporation and the participating broker-dealers pursuant to the terms of this
      Agreement shall be made by check or wire transfer with instructions for same
      to
      be provided by the Corporation and the participating broker-dealers upon each
      break from Escrow.  The wire instructions of Sandgrain Securities Inc.
      are attached hereto as Exhibit A.

     

    6.2           All
      amounts referred to herein are expressed in United States Dollars and all
      payments by the Escrow Agent shall be made in such dollars.

     

    7.           Compensation
      of Escrow Agent.  For services rendered, the Escrow Agent
      shall also be entitled to reimbursement from the Corporation for all expenses
      paid or incurred by it in the administration of its duties hereunder, including,
      but not limited to all counsel, advisors’ and Escrow Agents’ fees and
      disbursements and all reasonable taxes or other governmental
      charges.  It is anticipated that such disbursement shall not exceed
      $500 barring any unforeseen circumstances.

     

    8.           Notices.  All
      notices, requests, demands and other communication provided for herein shall
      be
      in writing, shall be delivered by hand or by first-class mail, shall be deemed
      given when received and shall be addressed to the parties hereto at their
      respective addresses listed below or to such other persons or addresses as
      the
      relevant party shall designate as to itself from time to time in writing
      delivered in like manner.

     

    
      
        
        

      

      
        D-8

        
          

        

      

      
        
        

      

    

     

    If
      to the Corporation:

    

    EnterConnect,
      Inc.

    100
      Century Center Court

    Suite
      650

    San
      Jose,
      CA 95112

    Attn:  Sam
      Jankovich, CEO

    Tel:  (408)
      441-5280

    Fax:
      (408) 452-9040

    

    With
      a
      copy to:

    

    Sandgrain
      Securities, Inc.

    1050
      Franklin Avenue, Suite 300

    Garden
      City, New York 11530

    Tel:
      516-750-7800

    Fax:
      516-741-0390

    Attn.:
      Peter Grassel

     

    If
      to Escrow Agent:

    

    Levy
      & Boonshoft, P.C.

    Attn:
      Peter Campitiello, Esq.

    477
      Madison Avenue - 14th Floor

    New
      York,
      New York 10022

    Tel:
      (212) 751-1414

    Fax:
      (212) 751-6943

     

    9.           Further
      Assurances.  From time to time on and after the date hereof,
      the Corporation shall deliver to the Escrow Agent such further documents and
      instruments and shall do and cause to be done such further acts as the Escrow
      Agent shall reasonably request (it being understood that the Escrow Agent shall
      have no obligation to make any such request) to carry out more effectively
      the
      provisions and purposes of this Agreement, to evidence compliance herewith
      or to
      assure itself that it is protected in acting hereunder.

     

    10.           Consent
      to Service of Process.  The Corporation hereby irrevocably
      consents to the jurisdiction of the courts of the Georgia and of any federal
      court located in such State in connection with any action, suit or other
      proceeding arising out of or relating to this Agreement or any action taken
      or
      omitted hereunder, and waives personal service of any summons, complaint or
      other process and agrees that the service thereof may be made by certified
      or
      registered mail directed to the Corporation at its address for the purposes
      of
      notices hereunder.

     

    
      
        
        

      

      
        D-9

        
          

        

      

      
        
        

      

    

     

    11.           Miscellaneous.

     

    11.1           If
      for any reason the Escrow Funds are not received by the Escrow Agent as
      contemplated herein, the Corporation shall reimburse the Escrow Agent for all
      expenses, including reasonable counsel fees and disbursements, paid or incurred
      by it in making preparations for providing the services contemplated
      hereby.

     

    11.2           This
      Agreement shall be construed without regard to any presumption or other rule
      requiring construction against the party causing such instrument to be
      drafted.  The term “hereby”, “hereof”, “hereto”, “hereunder” and any
      similar terms, as used in this Agreement, refer to the Agreement in its entirety
      and not only to the particular portion of this Agreement where the term is
      used.  The word “person” shall mean any natural person, partnership,
      corporation, government or other form of business or legal
      entity.  All words or terms used in this Agreement, regardless of the
      number or gender in which they are used, shall be deemed to include any other
      number and any other gender as the context may require.  This
      Agreement shall not be admissible in evidence to construe the provisions of
      any
      prior agreement.  The rule of ejusdern generis shall not be
      applicable herein to limit a general statement, which is followed by or
      referable to an enumeration of specific matters, to matters similar to the
      matters specifically mentioned.

     

    11.3           This
      Agreement and the rights and obligations hereunder of the Corporation may be
      assigned by the Corporation only to a successor to the Corporation’s entire
      business.  This Agreement and the rights and obligations hereunder of
      the Escrow Agent may be assigned by the Escrow Agent only to a successor to
      its
      entire business.  This Agreement shall be binding upon and insure to
      the benefit of each party’s respective successors, heirs and permitted
      assigns.  No person, other than the participating broker-dealers,
      shall acquire or have any rights under or by virtue of this
      Agreement.  This Agreement may not be changed orally or modified,
      amended or supplemented without an express written agreement executed by the
      Escrow Agent, the Corporation and each participating
      broker-dealer.  Except as otherwise set forth herein, there are no
      third-party beneficiaries.

     

    
      
        
        

      

      
        D-10

        
          

        

      

      
        
        

      

    

     

    11.4           This
      Agreement shall be governed by and construed in accordance with the internal
      laws of the State of New York.  The representations and warranties
      contained in this Agreement shall survive the execution and delivery hereof
      and
      any investigations made by any party.  The headings in this Agreement
      are for purposes of reference only and shall not limit or otherwise affect
      any
      of the terms hereof.

     

    11.5           Each
      of the Recitals, exhibits and schedules attached hereto shall be deemed a part
      of this Agreement.

     

    12.          
        Execution in Counterparts.  This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed to be an original as against any party whose signature appears thereon,
      and all of which shall together constitute one and the same
      instrument.  This Agreement shall become binding when one or more
      counterparts hereof, individually or taken together, shall bear the signature
      of
      all of the parties reflected hereon as the signatures.

     

    13.          
       Prior Agreement Superseded.   This
      Agreement supersedes in full that certain Escrow Agreement between the Parties
      dated as of October 17, 2007.  This Agreement is full, final and
      exclusive agreement between the Parties with respect to the subject matter
      hereof and all prior and contemporaneous agreements or understandings, whether
      written or oral, are hereby merged into this Agreement.

     

    
      
        
        

      

      
        D-11

        
          

        

      

      
        
        

      

    

     

    13.

     

    IN
      WITNESS WEREOF, the parties have executed and delivered this agreement
      on the day and year first above written.

     

    
      	 	
              LEVY
                & BOONSHOFT, P.C.

            	 
	 	 	 	 
	 	
              By:

            	
              /s/
                Peter Campitiello

            	 
	 	 	
              Peter
                Campitiello, Partner

            	 
	 	 	 	 
	 	
              ENTERCONNECT,
                INC.

            	 
	 	 	 	 
	 	
              By:

            	
              /s/
                Sam Jankovich

            	 
	 	 	
              Name:
                Sam Jankovich

            	 
	 	 	
              Title:    Chief
                Executive Officer

            	 

    

    

    
      
        
        

      

      
        D-12

        
          

        

      

      
        
        

      

    

     

    Schedule
      A

    
 

    The
      Escrow Agent is authorized to accept instructions signed or believed by the
      Escrow Agent to be signed by any one of the following on behalf of
EnterConnect, Inc.

    

    
      	
              Name

            	
              True
                Signature

            	 
	 	 	 
	 	 	 
	
              Sam
                Jankovich

            	
              /s/
                Sam Jankovich

            	 
	
              Title:
                Chief Executive Officer, President

            	 	 

    

    

    
      
        
        

      

      
        D-13

        
          

        

      

      
        
        

      

    

     

    EXHIBIT-A

    

    PARTICIPATING
      BROKER-DEALERS

    

    

    Sandgrain
      Securities, Inc.

    1050
      Franklin Avenue, Suite 300

    Garden
      City, New York 11530

    Tel:
      516-750-7800

    Fax:
      516-741-0390

    Attn.:
      Peter Grassel

    

    Wire
      transfer instructions

    

    Bank:                         Chase
      Bank

    Bank
      Address:         Stewart Avenue and
      Clinton Road, Garden City, NY 11530

    ABA
      Number:          021000021

    Beneficiary:
                   Sandgrain
      Securities, Inc.

    Beneficiary
      Account Number:           
6900823183

     

    
      
        
        

      

      
        D-14

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      “E”

    FINANCIALS

    

    ENTERCONNECT
      INC.

    

    INDEX
      TO FINANCIAL STATEMENTS

     

    
      
        	
                Contents

              	
                Page(s)

              
	 	 
	 	 
	
                Balance
                  Sheet as of June 30, 2007 (Unaudited)

              	
                E-2

              
	 	 
	
                Statements
                  of Operations for the Period From November 13, 2006 (Inception)
                  through  June 30, 2007 (Unaudited) and for the Period From April 1,
                  2007 through June 30, 2007 (Unaudited)

              	
                E-3

              
	 	 
	
                Statement
                  of Stockholders’ Equity for the Period From November 13, 2006 (Inception)
                  through June 30, 2007 (Unaudited)

              	
                E-4

              
	 	 
	
                Statements
                  of Cash Flows for the Period From November 13, 2006 (Inception)
                  through  June 30, 2007 (Unaudited) and for the Period From April 1,
                  2007 through June 30, 2007 (Unaudited)

              	
                E-5

              
	 	 
	
                Notes
                  to Interim Financial Statements (Unaudited)

              	
                E-6

              
	 	 
	
                Report
                  of Independent Registered Public Accounting Firm

              	
                E-8

              
	 	 
	
                Balance
                  Sheet at March 31, 2007

              	
                E-9

              
	 	 
	
                Statement
                  of Operations for the Period From November 13, 2006 (Inception)
                  through
                  March 31, 2007

              	
                E-10

              
	 	 
	
                Statement
                  of Stockholders’ Equity for the Period From November 13, 2006 (Inception)
                  through March 31, 2007

              	
                E-11

              
	 	 
	
                Statement
                  of Cash Flows for the Period From November 13, 2006 (Inception)
                  through
                  March 31, 2007

              	
                E-12

              
	 	 
	
                Notes
                  to the Financial Statements

              	
                E-13 to E-19

              

      

    

     

    
      
        
        

      

      
        E-1

        
          

        

      

      
        
        

      

    

     

    ENTERCONNECT
      INC.

    (A
      DEVELOPMENT STAGE COMPANY)

    Balance
      Sheet

    June
      30,
      2007

    (Unaudited)

    

    ASSETS

    

    
      	
              CURRENT
                ASSETS

            	 	 	 
	
              Cash

            	 	$	
              1,936

            	 
	
              Accounts
                receivable

            	 	 	
              10,000

            	 
	
              Prepaid
                expenses and other current assets

            	 	 	
              15,587

            	 
	
              Total
                current assets

            	 	 	
              27,523

            	 
	 	 	 	 	 
	
              Equipment
                and software, net of accumulated depreciation of $8,576

            	 	 	
              46,688

            	 
	
              Intangible
                assets, net of amortization of $100,000

            	 	 	
              900,000

            	 
	
              Deposits

            	 	 	
              8,678

            	 
	
              TOTAL
                ASSETS

            	 	$	
              982,889

            	 

    

    

    LIABILITIES
      AND STOCKHOLDERS' EQUITY

    

    
      	
              CURRENT
                LIABILITIES

            	 	 	 
	
              Accounts
                payable

            	 	$	
              219,473

            	 
	
              Accrued
                expenses

            	 	 	
              139,600

            	 
	
              Other
                current liabilities

            	 	 	
              71,000

            	 
	
              Deferred
                revenue

            	 	 	
              20,000

            	 
	
              Total
                current liabilities

            	 	 	
              450,073

            	 
	 	 	 	 	 
	
              STOCKHOLDERS'
                EQUITY

            	 	 	 	 
	
              Preferred
                stock at $0.001 par value; 10,000,000 shares authorized; no shares
                issued

            	 	 	
              -

            	 
	
              Common
                stock at $0.001 par value; 100,000,000 shares authorized; 25,020,928
                shares issued and outstanding

            	 	 	
              25,021

            	 
	
              Additional
                Paid-in capital

            	 	 	
              4,144,176

            	 
	
              Deferred
                Compensation

            	 	 	(2,000,000	)
	
              Accumulated
                deficit

            	 	 	(1,636,381	)
	
              Total
                Stockholders' Equity

            	 	 	
              532,816

            	 
	
              TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY

            	 	$	
              982,889

            	 

    

    

    See
      accompanying notes to the financial statements.

     

    
      
        
        

      

      
        E-2

        
          

        

      

      
        
        

      

    

     

    ENTERCONNECT
      INC.

    (A
      DEVELOPMENT STAGE COMPANY)

    Statement
      of Operations

     (Unaudited)

    

    
      	 	 	
              Period From
                Inception (November
                13, 2006) through
                June 30, 2007

            	 	 	
              Three Months Ended
                June 30, 2007

            	 
	 	 	 	 	 	 	 
	
              Revenue

            	 	$	
              25,000

            	 	 	$	
              25,000

            	 
	 	 	 	 	 	 	 	 	 
	
              Cost
                of revenue

            	 	 	
              -

            	 	 	 	
              -

            	 
	 	 	 	 	 	 	 	 	 
	
              Gross
                Margin

            	 	 	
              25,000

            	 	 	 	
              25,000

            	 
	 	 	 	 	 	 	 	 	 
	
              Operating
                Expenses:

            	 	 	 	 	 	 	 	 
	
              Selling
                and marketing

            	 	 	
              285,422

            	 	 	 	
              113,304

            	 
	
              General
                and administrative

            	 	 	
              678,991

            	 	 	 	
              275,157

            	 
	
              Research
                and development

            	 	 	
              487,791

            	 	 	 	
              256,149

            	 
	
              Total
                Operating Expenses

            	 	 	
              1,452,204

            	 	 	 	
              644,610

            	 
	 	 	 	 	 	 	 	 	 
	
              Operating
                loss

            	 	 	(1,427,204	)	 	 	(619,610	)
	 	 	 	 	 	 	 	 	 
	
              Other
                Expenses:

            	 	 	 	 	 	 	 	 
	
              Interest

            	 	 	
              209,177

            	 	 	 	
              -

            	 
	
              Total
                Other Expenses

            	 	 	
              209,177

            	 	 	 	
              -

            	 
	 	 	 	 	 	 	 	 	 
	
              Loss
                from operations before income taxes

            	 	 	(1,636,381	)	 	 	(619,610	)
	 	 	 	 	 	 	 	 	 
	
              Income
                taxes

            	 	 	
              -

            	 	 	 	
              -

            	 
	
              Net
                loss

            	 	$	(1,636,381	)	 	$	(619,610	)
	
              Loss
                per common share - basic and diluted

            	 	$	(0.09	)	 	$	(0.03	)
	 	 	 	 	 	 	 	 	 
	
              Weighted
                average number of common shares outstanding - basic and
                diluted

            	 	 	
              18,947,791

            	 	 	 	
              20,711,514

            	 

    

    

    See
      accompanying notes to the financial statements.

     

    
      
        
        

      

      
        E-3

        
          

        

      

      
        
        

      

    

     

    ENTERCONNECT
      INC.

    (A
      DEVELOPMENT STAGE COMPANY)

    Statement
      of Stockholders’ Equity

    For
      the
      Period From November 13, 2006 (Inception) through June 30, 2007

    (Unaudited)

     

    
      
        	 	 	
                
                  Common
Shares

              	 	 	
                Amount

              	 	 	
                
                  
                    Additional
Paid-in
Capital

              	 	 	
                
                  Retained
Earnings

              	 	 	
                Total

              	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Balance,
                  November 13, 2006 (Inception)

              	 	 	
                -

              	 	 	$	
                -

              	 	 	$	
                -

              	 	 	$	
                -

              	 	 	$	
                -

              	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Issuance
                  of common stock for services

              	 	 	
                18,000,000

              	 	 	 	
                18,000

              	 	 	 	
                -

              	 	 	 	
                -

              	 	 	 	
                18,000

              	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Issuance
                  of warrants in connection with convertible notes

              	 	 	
                -

              	 	 	 	
                -

              	 	 	 	
                56,115

              	 	 	 	
                -

              	 	 	 	
                56,115

              	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Issuance
                  of common stock from conversion of notes (net of costs of
                  $262,548)

              	 	 	
                2,266,112

              	 	 	 	
                2,266

              	 	 	 	
                1,987,160

              	 	 	 	
                -

              	 	 	 	
                1,989,426

              	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Net
                  loss

              	 	 	
                -

              	 	 	 	
                -

              	 	 	 	
                -

              	 	 	 	(1,016,771	)	 	 	(1,016,771	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Balance,
                  March 31, 2007

              	 	 	
                20,266,112

              	 	 	$	
                20,266

              	 	 	$	
                2,043,275

              	 	 	$	(1,016,771	)	 	$	
                1,046,770

              	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Issuance
                  of common stock for services

              	 	 	
                4,754,816

              	 	 	 	
                4,755

              	 	 	 	
                2,100,901

              	 	 	 	
                -

              	 	 	 	
                2,105,656

              	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Net
                  loss

              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(619,610	)	 	 	(619,610	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Balance,
                  June 30, 2007

              	 	 	
                25,020,928

              	 	 	$	
                25,021

              	 	 	$	
                4,144,176

              	 	 	$	(1,636,381	)	 	$	
                2,532,816

              	 

      

    

     

    See
      accompanying notes to the financial statements.

     

    
      
        
        

      

      
        E-4

        
          

        

      

      
        
        

      

    

     

    ENTERCONNECT
      INC.

    (A
      DEVELOPMENT STAGE COMPANY)

    Statement
      of Cash Flows

     (Unaudited)

     

    
      
        	 	 	
                Period From
                  Inception (November 13, 2006) through
                  June 30, 2007

              	 	 	
                Three Months
                  Ended June 30, 2007

              	 
	 	 	 	 	 	 	 
	
                CASH FLOW
                  FROM OPERATING ACTIVITIES:

              	 	 	 	 	 	 
	
                Net
                  loss

              	 	$	(1,636,381	)	 	$	(619,610	)
	
                Adjustments
                  to reconcile net loss to net cash used in operating
                  activities:

              	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	
                Depreciation
                  and amortization

              	 	 	
                108,577

              	 	 	 	
                54,531

              	 
	
                Non-cash
                  interest expense

              	 	 	
                209,176

              	 	 	 	
                -

              	 
	
                Non-cash
                  compensation expense

              	 	 	
                123,655

              	 	 	 	
                105,655

              	 
	
                Changes
                  in assets and liabilities:

              	 	 	 	 	 	 	 	 
	
                Increase
                  in accounts receivable

              	 	 	(10,000	)	 	 	(10,000	)
	
                Increase
                  in prepaid expenses

              	 	 	(15,587	)	 	 	
                25,616

              	 
	
                Increase
                  in deposits

              	 	 	(8,678	)	 	 	
                -

              	 
	
                Increase
                  in accounts payable

              	 	 	
                219,472

              	 	 	 	
                141,119

              	 
	
                Increase
                  in accrued expenses

              	 	 	
                139,600

              	 	 	 	
                99,379

              	 
	
                Increase
                  in deferred revenue

              	 	 	
                20,000

              	 	 	 	
                20,000

              	 
	
                Net
                  Cash Used in Operating Activities

              	 	 	(850,166	)	 	 	(183,310	)
	 	 	 	 	 	 	 	 	 
	
                CASH
                  FLOWS FROM INVESTING ACTIVITIES:

              	 	 	 	 	 	 	 	 
	
                Purchase
                  of computer equipment

              	 	 	(55,264	)	 	 	
                -

              	 
	
                Acquired
                  Technology

              	 	 	(1,000,000	)	 	 	
                -

              	 
	
                Net
                  Cash Used in Investing Activities

              	 	 	(1,055,264	)	 	 	
                -

              	 
	 	 	 	 	 	 	 	 	 
	
                CASH
                  FLOWS FROM FINANCING ACTIVITIES:

              	 	 	 	 	 	 	 	 
	
                Proceeds
                  from issuance of convertible notes

              	 	 	
                1,836,366

              	 	 	 	
                -

              	 
	
                Proceeds/(repayments)
                  from short-term notes

              	 	 	
                71,000

              	 	 	 	
                71,000

              	 
	
                Net
                  Cash Provided by Financing Activities

              	 	 	
                1,907,366

              	 	 	 	
                71,000

              	 
	 	 	 	 	 	 	 	 	 
	
                INCREASE
                  IN CASH

              	 	 	
                1,936

              	 	 	 	(112,310	)
	 	 	 	 	 	 	 	 	 
	
                CASH
                  AT BEGINNING OF PERIOD

              	 	 	
                -

              	 	 	 	
                114,246

              	 
	
                CASH
                  AT END OF PERIOD

              	 	$	
                1,936

              	 	 	$	
                1,936

              	 
	 	 	 	 	 	 	 	 	 
	
                SUPPLEMENTAL
                  SCHEDULE OF CASH FLOW ACTIVITIES:

              	 	 	 	 	 	 	 	 
	
                Noncash
                  financing and investing activities:

              	 	 	 	 	 	 	 	 
	
                Issuance
                  of Common Stock for deferred compensation

              	 	 	 	 	 	$	
                2,000,000

              	 

      

    

     

    See
      accompanying notes to the financial statements.

     

    
      
        
        

      

      
        E-5

        
          

        

      

      
        
        

      

    

     

    ENTERCONNECT
      INC.

    (A
      DEVELOPMENT STAGE COMPANY)

    

    NOTES
      TO THE FINANCIAL STATEMENTS

    
      FOR
        THE PERIOD FROM NOVEMBER 13, 2006 (INCEPTION)

    

    
      THROUGH
        JUNE 30, 2007

    

     

    
      	
              NOTE
                1 -

            	
              NATURE
                OF OPERATIONS

            

    

     

    
      	
               

            	
              Priority
                Software, Inc. was incorporated on November 13, 2006 under the laws
                of the
                State of Nevada. On January 4, 2007, the stockholders approved an
                amendment to the Certificate of Incorporation to change the name
                to
                EnterConnect Inc. (a development stage company) (“EnterConnect”, or the
                “Company”).  The Company is the
                developer of “EnterConnect,” a
                ‘business-ready’, enterprise-level intranet/extranet solution that
                includes document management,
                web content management, collaboration, search and
                security. EnterConnect is an intranet/extranet tool enabling companies
                to
                deploy internal employee, division, department, team portals and
                external
                customer, partner, and investor portals while
                leveraging a scalable portal infrastructure to accomplish present
                as well
                as future organizational requirements, initiatives
                and projects.

            

    

     

    
      
        	
                NOTE
                  2 -

              	
                BASIS
                  OF PRESENTATION

              

      

    

     

    The
      accompanying interim financial statements for the three month periods ended
      June
      30, 2007 and the period from November 13, 2006 (Inception) through June 30,
      2007
      are unaudited and include all adjustments (consisting of normal recurring
      adjustments) considered necessary by management for a fair presentation.
 The results of operations realized during an interim period are not
      necessarily indicative of results to be expected for a full year. These
      financial statements should be read in conjunction with the information filed
      as
      part of the Company’s Registration Statement on Form SB2, of which this
      Prospectus is a part.

    

    The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States requires management to make estimates
      and assumptions that affect the reported amounts of assets and liabilities
      and
      disclosure of contingent assets and liabilities at the date of the financial
      statements as well as the reported amount of revenues and expenses during the
      reporting period. Actual results could differ from these estimates.

     

    
      
        	
                NOTE
                  9 -

              	
                STOCKHOLDERS’
                  EQUITY

              

      

       

    

    The
      Company is currently authorized to issue 100,000,000 shares of $0.001 par value
      common stock and 10,000,000 shares of $0.001 par value preferred
      stock.

    

    Common
      Stock

     

    On
      June
      19, 2007, the Company entered into a Memorandum of Understanding with Global
      Media Fund, Inc. (“Global”) whereby Global agreed to distribute newspaper
      features, radio features and other marketing media with an agreed-upon value
      of
      $2,000,000 for 1,000,000 shares of the Company’s Common Stock.  The
      Company agreed that if the market value of these shares is below $700,000,
      the
      Company must issue Global an additional number of shares to equal $1,000,000
      or
      Global has the right to terminate the Agreement.

    On
      June
      29, 2007, the Company entered into Release and Settlement Agreements with five
      of its key employees. The Company issued 3,375,816 shares of Common Stock in
      consideration of the employees releasing the Company from any and all claims,
      contracts, liabilities and suits.  The issuance of these shares was
      exempt from registration pursuant to Section 4(2) of the Securities
      Act.

     

    
      
        
        

      

      
        E-6

        
          

        

      

      
        
        

      

    

     

    
      
        	
                NOTE
                  10 -

              	
                SUBSEQUENT
                  EVENT

              

      

       

    

    On
      July
      31, 2007, the Company conducted a private placement of its securities solely
      to
      accredited investors.  The offering was exempt from registration
      pursuant to Regulation D of the Securities Act of 1933.  Subscriptions
      were for units at a purchase price of $25,000 comprised of a 14% Debenture
      and
      50,000 shares of the Company's Common Stock.  The Company executed
      subscriptions for investments of $585,500 and issued a total of 1,171,000 shares
      of common stock from 19 accredited investors.

     

    
      
        
        

      

      
        E-7

        
          

        

      

      
        
        

      

    

     

    REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

    

    To
      the
      Board of Directors and Stockholders of

    EnterConnect
      Inc.

    (A
      development stage company)

    San
      Jose,
      California

    

    We
      have
      audited the accompanying balance sheet of EnterConnect Inc. (a development
      stage
      company) (“EnterConnect” or the "Company") as of March 31, 2007 and the related
      statements of operations, stockholders' equity and cash flows for the period
      from November 13, 2006 (Inception) through March 31, 2007. These financial
      statements are the responsibility of the Company's management. Our
      responsibility is to express an opinion on these financial statements based
      on
      our audit.

    

    We
      conducted our audit in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audits to obtain reasonable assurance about whether the
      financial statements are free of material misstatement. The Company is not
      required to have, nor were we engaged to perform, an audit of its internal
      control over financial reporting. An audit includes consideration of internal
      control over financial reporting as a basis for designing audit procedures
      that
      are appropriate in the circumstances, but not for the purpose of expressing
      an
      opinion on the effectiveness of the Company's internal control over financial
      reporting. Accordingly, we express no such opinion. An audit includes examining,
      on a test basis, evidence supporting the amounts and disclosures in the
      financial statements. An audit also includes assessing the accounting principles
      used and significant estimates made by management, as well as evaluating the
      overall financial statement presentation. We believe that our audit provides
      a
      reasonable basis for our opinion.

    

    In
      our
      opinion, based on our audit and the report of the other auditors, the financial
      statements referred to above present fairly, in all material respects, the
      financial position of EnterConnect as of March 31, 2007, and the results of
      its
      operations and its cash flows for the year period from November 13, 2006
      (Inception) through March 31, 2007 in conformity with accounting principles
      generally accepted in the United States of America.

    

    The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. As discussed in Note 3 to the financial
      statements, the Company had an accumulated deficit of $1,016,771 and had a
      net
      loss and cash used in operations of $1,016,771 and $819,917 for the period
      from
      November 13, 2006 (Inception) through March 31, 2007, respectively, with no
      revenues. These conditions raise substantial doubt about its ability to continue
      as a going concern. Management's plans in regards to these matters are also
      described in Note 3. The financial statements do not include any adjustments
      that might result from the outcome of this uncertainty.

    

    Skillman,
      New Jersey

    May
      23,
      2007

     

    
      
        
        

      

      
        E-8

        
          

        

      

      
        
        

      

    

     

    ENTERCONNECT
      INC.

    (A
      DEVELOPMENT STAGE COMPANY)

    Balance
      Sheet

    March
      31,
      2007

    

    ASSETS

    

    
      
        	
                CURRENT
                  ASSETS

              	 	 	 
	
                Cash

              	 	$	
                114,246

              	 
	
                Prepaid
                  expenses and other current assets

              	 	 	
                41,203

              	 
	
                Total
                  Current Assets

              	 	 	
                155,449

              	 
	 	 	 	 	 
	
                Equipment
                  and software, net of accumulated depreciation and  amortization
                  of $54,046

              	 	 	
                1,001,218

              	 
	 	 	 	 	 
	
                Deposits

              	 	 	
                8,678

              	 
	
                TOTAL
                  ASSETS

              	 	$	
                1,165,345

              	 

      

      

      LIABILITIES
        AND STOCKHOLDERS’ EQUITY

      

      
        	
                CURRENT
                  LIABILITIES

              	 	 	 
	
                Accounts
                  payable

              	 	$	
                78,353

              	 
	
                Accrued
                  expenses

              	 	 	
                40,221

              	 
	
                Total
                  Current Liabilities

              	 	 	
                118,574

              	 
	 	 	 	 	 
	
                STOCKHOLDERS’
                  EQUITY

              	 	 	 	 
	
                Preferred
                  stock at $0.001 par value; 10,000,000 shares authorized; no shares
                  issued
                  or outstanding

              	 	 	
                
                

                -

              	 
	
                Common
                  stock at $0.001 par value; 100,000,000 shares authorized; 20,266,112
                  shares issued and outstanding

              	 	 	
                
                

                20,266

              	 
	
                Additional
                  Paid-in Capital

              	 	 	
                2,043,276

              	 
	
                Accumulated
                  deficit

              	 	 	(1,016,771	)
	
                Total
                  Stockholders’ Equity

              	 	 	
                1,046,771

              	 
	 	 	 	 	 
	
                TOTAL
                  LIABILITIES AND STOCKHOLDERS’ EQUITY

              	 	$	
                1,165,345

              	 

      

See
      accompanying notes to the financial statements.

     

    
      
        
        

      

      
        E-9

        
          

        

      

      
        
        

      

    

     

    ENTERCONNECT
      INC.

    (A
      DEVELOPMENT STAGE COMPANY)

    Statement
      of Operations

    For
      the
      Period from November 13, 2006 (Inception) Through March 31, 2007

     

    
      
        	
                Operating
                  Expenses:

              	 	 	 
	
                Selling
                  and marketing

              	 	$	
                172,118

              	 
	
                General
                  and administrative

              	 	 	
                403,834

              	 
	
                Research
                  and development

              	 	 	
                231,642

              	 
	
                Total
                  Operating Expenses

              	 	 	
                807,594

              	 
	 	 	 	 	 
	
                Operating
                  loss

              	 	 	(807,594	)
	 	 	 	 	 
	
                Other
                  Expenses:

              	 	 	 	 
	
                Interest

              	 	 	
                209,177

              	 
	
                Total
                  Other Expense

              	 	 	
                209,177

              	 
	
                Loss
                  from operations before income taxes

              	 	 	(1,016,771	)
	
                Income
                  taxes

              	 	 	
                -

              	 
	
                Net
                  loss

              	 	$	(1,016,771	)
	
                Loss
                  per common share – basic and diluted

              	 	$	(0.06	)
	 	 	 	 	 
	
                Weighted
                  average number of common shares outstanding – basic and
                  diluted

              	 	 	
                
                

                18,016,303

              	 

      

    

     

    See
      accompanying notes to the financial
      statements.

    
      
        
        

      

      
        E-10

        
          

        

      

      
        
        

      

    

     

    ENTERCONNECT
      INC.

    (A
      DEVELOPMENT STAGE COMPANY)

    Statement
      of Stockholders’ Equity

    For
      the
      Period from November 13, 2006 (Inception) Through March 31, 2007

    
      

      
        	 	 	
                
                

                Common
                  Shares

              	 	 	
                
                

                Amount

              	 	 	
                
                

                Additional
                  Paid-in
                  Capital

              	 	 	
                
                

                Retained
                  Earnings

              	 	 	
                
                

                Total

              	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Balance,
                  November 13, 2006 (Inception)

              	 	 	
                -

              	 	 	$	
                -

              	 	 	$	
                -

              	 	 	$	
                -

              	 	 	$	
                -

              	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Issuance
                  of common stock for services

              	 	 	
                18,000,000

              	 	 	 	
                18,000

              	 	 	 	
                -

              	 	 	 	
                -

              	 	 	 	
                18,000

              	 
	
                Issuance
                  of warrants in connection with convertible notes

              	 	 	
                -

              	 	 	 	
                -

              	 	 	 	
                56,115

              	 	 	 	
                -

              	 	 	 	
                56,115

              	 
	
                Issuance
                  of common stock from conversion of notes (net of costs of
                  $262,548)

              	 	 	
                2,266,112

              	 	 	 	
                2,266

              	 	 	 	
                1,987,161

              	 	 	 	
                -

              	 	 	 	
                1,989,427

              	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Net
                  loss

              	 	 	
                -

              	 	 	 	
                -

              	 	 	 	
                -

              	 	 	 	(1,016,771	)	 	 	(1,016,771	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Balance,
                  March 31, 2007

              	 	 	
                20,266,112

              	 	 	$	
                20,266

              	 	 	$	
                2,043,276

              	 	 	$	(1,016,771	)	 	$	
                1,046,771

              	 

      

    

     

    See
      accompanying notes to the financial statements.

     

    
      
        
        

      

      
        E-11

        
          

        

      

      
        
        

      

    

     

    ENTERCONNECT
      INC.

    (A
      DEVELOPMENT STAGE COMPANY)

    Statement
      of Cash Flows

     For
      the Period from November 13, 2006 (Inception) Through March 31,
      2007

     

    
      
        	
                CASH
                  FLOWS FROM OPERATING ACTIVITIES:

              	 	 	 
	
                Net
                  loss

              	 	$	(1,016,771	)
	
                Adjustments
                  to reconcile net loss to net cash used in operating
                  activities:

              	 	 	 	 
	
                Depreciation

              	 	 	
                54,046

              	 
	
                Common
                  stock issued for services

              	 	 	
                18,000

              	 
	
                Warrants
                  issued for interest expense

              	 	 	
                56,115

              	 
	
                Changes
                  in assets and liabilities:

              	 	 	 	 
	
                Increase
                  in prepaid expenses

              	 	 	(41,203	)
	
                Increase
                  in deposits

              	 	 	(8,678	)
	
                Increase
                  in accounts payable

              	 	 	
                78,353

              	 
	
                Increase
                  in accrued expenses

              	 	 	
                40,221

              	 
	
                Net
                  Cash Used in Operating Activities

              	 	 	(819,917	)
	 	 	 	 	 
	
                CASH
                  FLOWS FROM INVESTING ACTIVITIES:

              	 	 	 	 
	
                Purchase
                  of computer equipment

              	 	 	(55,264	)
	
                Acquired
                  technology

              	 	 	(1,000,000	)
	
                Net
                  Cash Used in Investing Activities

              	 	 	(1,055,264	)
	 	 	 	 	 
	
                CASH
                  FLOWS FROM FINANCING ACTIVITIES

              	 	 	 	 
	
                Proceeds
                  from convertible debt, net of costs of $262,548

              	 	 	
                1,989,427

              	 
	
                Net
                  Cash Provided by Financing Activities

              	 	 	
                1,989,427

              	 
	 	 	 	 	 
	
                INCREASE
                  IN CASH

              	 	 	
                114,246

              	 
	 	 	 	 	 
	
                CASH
                  AT BEGINNING OF PERIOD

              	 	 	
                -

              	 
	
                CASH
                  AT END OF PERIOD

              	 	$	
                114,246

              	 
	 	 	 	 	 
	
                SUPPLEMENTAL
                  SCHEDULE OF CASH FLOW ACTIVITIES:

              	 	 	 	 
	
                Cash
                  Paid For:

              	 	 	 	 
	
                Income
                  taxes

              	 	$	
                -

              	 
	 	 	 	 	 
	
                Non-Cash
                  Transaction

              	 	 	 	 
	
                Common
                  stock issued for convertible debt

              	 	$	
                1,989,427

              	 

      

    

     

    See
      accompanying notes to the financial statements.

     

    
      
        
        

      

      
        E-12

        
          

        

      

      
        
        

      

    

     

    ENTERCONNECT
      INC.

    (A
      DEVELOPMENT STAGE COMPANY)

    NOTES
      TO THE FINANCIAL STATEMENTS

    
      FOR
        THE PERIOD FROM NOVEMBER 13, 2006 (INCEPTION)

    

    
      THROUGH
        MARCH 31, 2007

    

     

    
      
        	
                NOTE 1  -

              	
                
                  NATURE
                    OF OPERATIONS

                

              

      

    

     

    Priority
      Software, Inc. was incorporated on November 13, 2006 under the laws of the
      State
      of Nevada. On January 4, 2007, the stockholders approved an amendment to the
      Certificate of Incorporation to change the name to EnterConnect Inc. (a
      development stage company) (“EnterConnect”, or the “Company”).  The
      Company is the
      developer of “EnterConnect,” a
‘business-ready’, enterprise-level intranet/extranet solution
      that
      includes document management, web
      content management, collaboration, search and security.
      EnterConnect is an intranet/extranet tool enabling companies to deploy internal
      employee, division, department, team portals and external customer, partner,
      and
      investor portals while leveraging a scalable portal
      infrastructure to accomplish present as well as future organizational
      requirements, initiatives and projects.

    

    
      
        	
                NOTE 2  -

              	
                SUMMARY
                  OF SIGNIFICANT ACCOUNTING
                  POLICIES

              

      

    

     

    a)        Development
      stage company

     

    The
      Company is a development stage company as defined by Statement of Financial
      Accounting Standards (“SFAS”) No. 7, Accounting and Reporting by Development
      Stage Enterprises. All losses accumulated since inception have been
      considered as part of the Company's development stage activities.

     

    b)       
      Use of estimates

     

    The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements and
      the reporting amounts of revenues and expenses during the reported period.
      Significant estimates include the estimated useful lives of property and
      equipment. Actual results could differ from those estimates.

     

    c)        
      Cash and cash equivalents

     

    The
      Company considers all highly liquid investments with maturities of three months
      or less at the time of purchase to be cash equivalents.

     

    d)        Computer
      equipment and software

     

    Computer
      equipment and acquired software are recorded at cost.  Expenditures
      for major additions and betterments are capitalized.  Maintenance and
      repairs are charged to operations as incurred. Depreciation of computer
      equipment and amortization of software are computed by the straight-line method
      (after taking into account their respective estimated residual values) over
      the
      assets estimated useful lives of three and five years, respectively. Upon sale
      or retirement of computer equipment and software, the related cost and
      accumulated depreciation are removed from the accounts and any gain or loss
      is
      reflected in operations.

     

    
      
        
        

      

      
        E-13

        
          

        

      

      
        
        

      

    

     

    e)        Impairment
      of long-lived assets

     

    Long-lived
      assets, which include property and acquired technology, are reviewed for
      impairment whenever events or changes in circumstances indicate that the
      carrying amount of assets may not be recoverable or the useful life is shorter
      than originally estimated.

     

    The
      Company assesses the recoverability of its assets by comparing the projected
      undiscounted net cash flows associated with the related asset or group of assets
      over their remaining lives against their respective carrying amounts.
      Impairment, if any, is based on the excess of the carrying amount over the
      fair
      value of those assets. Fair value is generally determined using the asset’s
      expected future discounted cash flows or market value, if readily determinable.
      If assets are determined to be recoverable, but the useful lives are shorter
      than originally estimated, the net book value of the assets is depreciated
      over
      the newly determined remaining useful lives. At December 31, 2006, the Company
      determined that there was no impairment based on management’s
      evaluation.

     

    f)         Fair
      value of financial instruments

     

    The
      fair
      value of a financial instrument is the amount at which the instrument could
      be
      exchanged in a current transaction between willing parties.  The carrying
      amounts of financial assets and liabilities, such as cash, prepayments, accounts
      payable, and accrued expenses approximate their fair values because of the
      short
      maturity of these instruments and market rates of interest.

     

    g)        Income
      taxes

     

    The
      Company follows Statement of Financial Accounting Standards No. 109 - Accounting
      for Income Taxes, which requires recognition of deferred tax assets and
      liabilities for the expected future tax consequences of events that have been
      included in the financial statements or tax returns. Under this method, deferred
      tax assets and liabilities are based on the differences between the financial
      statement and tax bases of assets and liabilities using enacted tax rates in
      effect for the year in which the differences are expected to reverse. Deferred
      tax assets are reduced by a valuation allowance to the extent management
      concludes it is more likely than not that the assets will not be realized.
      Deferred tax assets and liabilities are measured using enacted tax rates
      expected to apply to taxable income in the years in which those temporary
      differences are expected to be recovered or settled. The effect on deferred
      tax
      assets and liabilities of a change in tax rates is recognized in the
      consolidated statements of operations in the period that includes the enactment
      date.

     

    
      h)        Net
        loss
        per common share

    

     

    Net
      loss
      per common share is computed pursuant to SFAS No. 128, “Earnings Per
      Share”.  Basic loss per share is computed by taking net loss divided
      by the weighted average number of common shares outstanding for the
      period.  Diluted loss per share is computed by dividing net loss by
      the weighted average number of shares of common stock and potentially
      outstanding shares of common stock during each period to reflect the potential
      dilution that could occur from common shares issuable through stock options,
      warrants, and convertible debt. As of March 31, 2007, 1,267,640 warrants were
      excluded from the diluted loss per share computation, as their effect would
      be
      anti-dilutive.

     

    
      
        
        

      

      
        E-14

        
          

        

      

      
        
        

      

    

     

     i)       
      New
      accounting pronouncements

     

    In
      March
      2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial
      Assets—an amendment of FASB Statement No. 140 (“SFAS No. 156”), that
      provides guidance on accounting for separately recognized servicing assets
      and
      servicing liabilities. In accordance with the provisions of SFAS No. 156,
      separately recognized servicing assets and servicing liabilities must be
      initially measured at fair value, if practicable. Subsequent to initial
      recognition, the Company may use either the amortization method or the fair
      value measurement method to account for servicing assets and servicing
      liabilities within the scope of this Statement. The Company does not anticipate
      that the adoption of this Statement to have a material effect on the Company’s
      financial condition and results of operations.

    

    In
      July
      2006, the FASB issued FASB Interpretation Number 48, Accounting for
      Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109
(“FIN 48”). FIN 48 prescribes a recognition threshold and measurement
      attribute for the financial statement recognition and measurement of a tax
      position taken in a tax return. The Company must determine whether it is
“more-likely-than-not” that a tax position will be sustained upon examination,
      including resolution of any related appeals or litigation processes, based
      on
      the technical merits of the position. Once it is determined that a position
      meets the more-likely-than-not recognition threshold, the position is measured
      to determine the amount of benefit to recognize in the financial statements.
      FIN
      48 applies to all tax positions related to income taxes subject to FASB
      Statement No. 109, Accounting for Income Taxes. The interpretation
      clearly scopes out income tax positions related to FASB Statement No. 5,
Accounting for Contingencies. The Company will adopt the provisions of
      this statement on July 1, 2007. The cumulative effect of applying the provisions
      of FIN 48, if any, will be reported as an adjustment to the opening balance
      of
      retained earnings on July 1, 2007. The Company does not anticipate that the
      adoption of this statement will have a material effect on the Company’s
      financial condition and results of operations.

    

    On
      September 15, 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
      ("SFAS 157").  SFAS 157 defines fair value, establishes a framework
      for measuring fair value and expands disclosures about fair value
      measurements.  SFAS 157 is effective as of the beginning of the first
      fiscal year beginning after November 15, 2007.  The Company does not
      anticipate that the adoption of this statement will have a material effect
      on
      the Company’s financial condition and results of operations.

    

    In
      September 2006, FASB issued SFAS No. 158, Employers' Accounting for Defined
      Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements
      No 87, 88, 106 and 132(R)  (SFAS 158) .  SFAS
      158 requires the recognition of the overfunded or underfunded status of a
      defined benefit postretirement plan as an asset or liability in the statement
      of
      financial position and the recognition of changes in that funded status in
      the
      year in which the changes occur through comprehensive income. SFAS 158 also
      requires the measurement of the funded status of a plan as of the date of the
      year-end statement of financial position. The Company does not anticipate that
      the adoption of this statement will have a material effect on the Company’s
      financial condition and results of operations.

     

    
      
        
        

      

      
        E-15

        
          

        

      

      
        
        

      

    

     

    On
      February 15, 2007, the FASB issued SFAS No. 159, The Fair Value Option for
      Financial Assets and Financial Liabilities: Including an amendment of FASB
      Statement No. 115 (SFAS 159). SFAS 159 permits all entities to elect to
      measure many financial instruments and certain other items at fair value with
      changes in fair value reported in earnings. SFAS 159 is effective as of the
      beginning of the first fiscal year that begins after November 15, 2007, with
      earlier adoption permitted. The Company does not anticipate that the adoption
      of
      this statement will have a material effect on the Company’s financial condition
      and results of operations.

    

    Management
      does not believe that any other recently issued, but not yet effective
      accounting pronouncements, if adopted, would have a material effect on the
      accompanying financial statements.

     

    
      	
              NOTE 3  -

            	DEVELOPMENT STAGE ACTIVITIES AND GOING
              CONCERN

    

     

    The
      Company is currently in the development stage. The Company intends to enter
      the
      enterprise-level intranet/extranet portal market by offering a value added
      product and software-as-a-service.  Its activities as of March 31,
      2007 have been organizational and developmental.

    

    The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern, which contemplates continuity of operations,
      realization of assets, and liquidation of liabilities in the normal course
      of
      business.  As reflected in the accompanying financial statements, the
      Company had an accumulated deficit of $1,016,771, a net loss and net cash used
      in operations of $1,016,771 and $819,917 for the period from November 13, 2006
      (Inception) through March 31, 2007, respectively, with no revenues. These
      conditions raise substantial doubt about its ability to continue as a going
      concern.

    

    While
      the
      Company is attempting to produce sufficient sales, the Company’s cash position
      may not been sufficient to support the Company’s daily
      operations.  Management intends to attempt to raise additional funds
      by way of a public or private offering.  While the Company believes in
      the viability of its strategy to produce sales volume and in its ability to
      raise additional funds, there can be no assurances to that
      effect.        The ability of the
      Company to continue as a going concern is dependent upon the Company’s ability
      to further implement its business plan and generate sufficient revenues. The
      financial statements do not include any adjustments that might be necessary
      if
      the Company is unable to continue as a going concern.  Management
      believes that the actions presently being taken to further implement its
      business plan and generate revenues provide the opportunity for the Company
      to
      continue as a going concern.

     

    
      
        
        

      

      
        E-16

        
          

        

      

      
        
        

      

       

    

    
      
        	
                NOTE 4  -

              	
                PREPAID
                  EXPENSES AND OTHER CURRENT
                  ASSETS

              

      

    

     

    At
      March
      31, 2007, prepaid expenses and other current assets consisted of the
      following:

    

    
      	
              Prepaid
                expenses

            	 	
              $

            	
              34,203

            	 
	
              Other
                receivables

            	 	 	
              7,000

            	 
	
              Total

            	 	
              $

            	
              41,203

            	 

    

    

    
      
        	
                NOTE 5  -

              	EQUIPMENT AND
                SOFTWARE

      

    

     

    At
      March
      31, 2007, equipment and software consisted of the following:

    

    
      	
              Computer
                equipment

            	 	
              $

            	
              49,624

            	 
	
              Software

            	 	 	
              1,005,640

            	 
	 	 	 	
              1,055,264

            	 
	
              Less:
                accumulated depreciation and amortization

            	 	 	
              (54,046

            	
              )

            
	 	 	
              $

            	
              1,001,218

            	 

    

    

    Depreciation
      and amortization expense for the period from November 13, 2006 (inception)
      through March 31, 2007 amounted to $54,046.

     

    
      
        	
                NOTE 6  -

              	
                CONVERTIBLE
                  NOTES PAYABLE

              

      

       

    

    From
      December 20, 2006, through February 28, 2007 the Company executed 10%
      convertible debentures aggregating approximately $2,113,000 with forty-four
      (44)
      individuals.  The holders are entitled, at their option, to convert
      the debentures, plus accrued interest, into shares of the Company’s common stock
      at $1.00 per share.  If not converted, the entire principal amount
      shall be due to the holder on the five year anniversary of the debenture with
      interest to be paid quarterly in cash or shares. In connection with the
      convertible debentures, the Company issued to these individuals an aggregate
      of
      1,267,641 warrants with exercise prices of $2.00 per share on the first 422,547
      warrants, $3.00 per share on the second 422,547 warrants, and $4.00 per share
      on
      the final 422,546 warrants.  These warrants are exercisable for a
      period of three years from the date of issuance. The fair value of the warrants
      issued using the Black-Scholes Option Pricing Model was $36,960.  The
      Black-Scholes Option Pricing Model had the following assumptions: Risk-free
      interest of 5.00%; Dividend yield 0.00%; Volatility of 265.73% and a warrant
      life of five (5) years. At March 31, 2007 all convertible note holders converted
      their debentures plus accrued and bonus interest into 2,266,112 shares of the
      Company’s common stock.

     

    
      	
              NOTE 7  -

            	
              
                INCOME
                  TAXES

              

            

    

     

    As
      of
      March 31, 2007, the Company had deferred tax assets of approximately $340,000,
      resulting from temporary differences and net operating loss (“NOL”)
      carry-forwards of approximately $1,000,000, which are available to offset future
      taxable income, if any, through 2027. As utilization of the net operating loss
      carry-forwards and temporary difference is not assured, the deferred tax asset
      has been fully offset by a valuation allowance.

     

    
      
        
        

      

      
        E-17

        
          

        

      

      
        
        

      

    

     

    The
      tax
      effects of temporary differences, loss carry-forwards and the valuation
      allowance that give rise to deferred income tax assets at March 31, 2007 are
      as
      follows:

     

    
      
        	
                Temporary
                  differences:

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                Net
                  operating losses and deferred expenses

              	
                 

              	
                $

              	
                340,000

              	
                 

              
	
                Less
                  valuation allowance

              	
                 

              	
                 

              	
                (340,000

              	
                )

              
	
                Deferred
                  tax assets

              	
                 

              	
                $

              	
                -

              	
                 

              
	 	 	 	 	 
	
                The
                  reconciliation of the effective income tax rate to the
                  federal statutory rate for the period ended March
                  31, 2007 is as follows:

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                Federal
                  income tax rate

              	
                 

              	
                 

              	
                34.0

              	
                %

              
	
                Change
                  in valuation allowance on net operating

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                loss
                  carry-forwards

              	
                 

              	
                 

              	
                (34.0

              	
                )%

              
	
                Effective
                  income tax rate

              	
                 

              	
                 

              	
                0.0

              	
                %

              

      

       

    

    
      	
              NOTE 8  -

            	
              
                
                  STOCKHOLDERS’
                    EQUITY

                

              

            

    

     

    
      	
               

            	
              The
                Company is currently authorized to issue 100,000,000 shares of $0.001
                par
                value common stock and 10,000,000 shares of $0.001 par value preferred
                stock.

            

    

    

    Common
      Stock

     

    On
      November 13, 2006, the Company issued 9,000,000 shares of common stock to each
      of its founders, Sam Jankovich and Private Capital Group, LLC.
      (“PCG”)  These shares were recorded at their par value of $0.001 or
      $18,000.

    

    The
      holders of the common stock are entitled to equal dividends and distributions
      per share with respect to the common stock, when and if declared by the Board
      of
      Directors, from funds legally available. No holder of any shares of common
      stock
      has a preemptive right to subscribe for any shares of any class of Company
      stock. Upon liquidation, dissolution or winding up, and after payment to
      creditors and preferred stockholders, if any, assets will be divided pro-rata
      on
      a share-for-share basis among the holders of the shares of common stock. Each
      share of common stock is entitled to one vote with respect to the election
      of
      any director or any other matter upon which stockholders are required or
      permitted to vote. Holders of our common stock do not have cumulative voting
      rights.

    

    Preferred
      Stock

     

    The
      Company’s Articles of Incorporation authorize the Board of Directors to issue
      10,000,000 shares of preferred stock from time to time in one or more series.
      The Board of Directors is authorized to determine, prior to issuing any such
      series of preferred stock and without any vote or action by the shareholders,
      the rights, preferences, privileges and restrictions of the shares of such
      series, including dividend rights, voting rights, terms of redemption, the
      provisions of any purchase, retirement or sinking fund to be provided for the
      shares of any series, conversion and exchange rights, the preferences upon
      any
      distribution of the assets of the Company, including in the event of voluntary
      or involuntary liquidation, dissolution or winding up of the Company, and the
      preferences and relative rights among each series of preferred stock. At
      September 17, 2007, the Company had no shares of preferred stock issued and
      outstanding.

     

    
      
        
        

      

      
        E-18

        
          

        

      

      
        
        

      

    

     

    Warrants

     

    The
      Company has outstanding warrants to purchase 3,379,062 shares of its common
      stock.  1,267,641 warrants are exercisable immediately to purchase
      422,547 shares of Common Stock, at a price per share of $2.00, 422,547 shares
      of
      Common Stock at a price per share of $3.00 and 422,547 shares of Common Stock
      at
      a price per share of $4.00 and expire on the third anniversary of the date
      of
      issuance.  Additional warrants to purchase 2,111,421 shares of Common
      Stock are outstanding exercisable at $1.00 per share and expiring on the third
      anniversary after issuance.

     

    
      
        	
                NOTE 9  -

              	
                
                  
                    COMMITMENTS

                  

                

              

      

       

    

    The
      Company has a non-cancelable lease for executive and general office space
      through August 31, 2010, requiring minimum annual lease payments of
      approximately $83,000, plus increases after September 1, 2008. In addition
      to
      the minimum lease payments the Company is responsible for their share of
      operating expenses, liability insurance and property insurance.

    

    Future
      minimum payments required under non-cancelable lease agreement that have initial
      or remaining service terms in excess of one year at March 31, 2007 were as
      follows:

    

    
      	 	
              2008

            	
              $82,975

            	 
	 	
              2009

            	
              $84,427

            	 
	 	
              2010

            	
              $86,960

            	 
	 	
              2011

            	
              $36,679

            	 

    

    

    Rent
      expense for the period from November 13, 2006 (inception) through March 31,
      2007
      was approximately $13,000.

     

     

    E-19

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