Document:

NOTE
      PURCHASE AGREEMENT

     

    This
      Note
      Purchase Agreement, dated as of November 18, 2008, (this “Agreement”)
      is
      entered into by and among Organic To Go Food Corporation, a Delaware corporation
      (the “Company”),
      and
      W.Health L.P., a limited partnership organized under the laws of the Bahamas
      (the “Investor”).
      

     

    RECITALS
      

     

    WHEREAS,
      on the terms and subject to the conditions set forth herein, the Investor is
      willing to purchase from the Company, and the Company is willing to sell to
      the
      Investor, a secured promissory note in the principal amount of $3,000,000 in
      substantially the form attached hereto as Exhibit A
      hereto
      (the “Note”);
      and

     

    WHEREAS,
      in
      connection with the sale of the Note
      the
      Company shall enter into a security agreement granting a security interest
      in
      all of the Company’s tangible and intangible assets, including, but not limited
      to, the Company’s intellectual property rights, to the Investor,
      in
      substantially the form attached hereto as Exhibit
      B
      (the
“Security
      Agreement”,
      and
      together with this Agreement and the Note, the “Transaction
      Documents”);
      and
      the Security Agreement shall also secure the repayment of that certain loan
      (principal and interest) made by the Investor to the Company pursuant to a
      Note
      and Warrant Purchase Agreement, dated as of June 1, 2008, by and between the
      Company and the Investor (the “Note
      and Warrant Purchase Agreement”).
      

     

    AGREEMENT
      

     

    NOW
      THEREFORE, in consideration of the foregoing, and the representations,
      warranties, and conditions set forth below, the parties hereto, intending to
      be
      legally bound, hereby agree as follows:

     

    1. The
      Note.

     

    (a) Issuance
      of the Note.
      At the
      Closing (as defined below), the Company agrees to issue and sell to the
      Investor, and, subject to all of the terms and conditions hereof, the Investor
      agrees to purchase the Note 

     

    2. Procedure. 

     

    (a) Delivery.
      The
      Closing (the “Closing”)
      shall
      occur within nine (9) Business Days (as defined below) following the date of
      this Agreement (the “Closing
      Date”).
      At the
      Closing, the Company will deliver to the Investor the Note against receipt
      by
      the Company of $3,000,000 (the “Purchase
      Price”),
      in
      United States dollars and in immediately available funds, by wire transfer
      to an
      account designated in writing by the Company. The Note will be registered in
      the
      Investor’s name in the Company’s records. “Business
      Day”
      means
      any day except Saturday, Sunday and any day which is a federal legal holiday
      in
      the United States or in Switzerland, or a day on which banking institutions
      in
      the State of New York are authorized or required by law or other governmental
      action to close. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b) Use
      of Proceeds.
      The
      proceeds of the sale and issuance of the Note shall be used solely for general
      working capital approved by the Company’s Board of Directors.

     

    3.
      Representations
      and Warranties of the Company.
      The
      Company hereby makes the following representations and warranties to the
      Investor:

     

    (a) Subsidiaries.
      The
      Company has no direct or indirect Subsidiaries (as defined below) other than
      as
      specified in all reports required to be filed by it under the Securities Act
      of
      1933, as amended (the “Securities
      Act”),
      and
      the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”),
      including pursuant to Section 13(a) or 15(d) thereof, for the twelve months
      preceding the date hereof (or such shorter period as the Company was required
      by
      law to file such reports) (the foregoing materials being collectively referred
      to herein as the “SEC
      Reports”).
      Except
      as disclosed in Schedule
      2(a),
      the
      Company owns, directly or indirectly, all of the capital stock of each
      Subsidiary free and clear of any and all Liens (as defined below), and all
      the
      issued and outstanding shares of capital stock of each Subsidiary are validly
      issued and are fully paid, non-assessable and free of preemptive and similar
      rights. “Lien”
      means
      any lien, charge, encumbrance, security interest, right of first refusal or
      other restrictions of any kind. “Subsidiary”
      means
      any “significant subsidiary” as defined in Rule 1-02(w) of the Regulation S-X
      promulgated by the Commission under the Exchange Act.

     

    (b) Organization
      and Qualification.
      The
      Company and each Subsidiary are duly incorporated or otherwise organized,
      validly existing and in good standing under the laws of the jurisdiction of
      its
      incorporation or organization (as applicable), with the requisite power and
      authority to own and use its properties and assets and to carry on its business
      as currently conducted. Neither the Company nor any Subsidiary is in violation
      of any of the provisions of its respective certificate or articles of
      incorporation, bylaws or other organizational or charter documents. The Company
      and each Subsidiary are duly qualified to conduct its respective businesses
      and
      are in good standing as a foreign corporation or other entity in each
      jurisdiction in which the nature of the business conducted or property owned
      by
      it makes such qualification necessary, except where the failure to be so
      qualified or in good standing, as the case may be, could not, individually
      or in
      the aggregate, have or reasonably be expected to result in a Material Adverse
      Effect. “Material
      Adverse Effect”
      means
      any of (i) a material and adverse effect on the legality, validity or
      enforceability of any Transaction Document, (ii) a material and adverse effect
      on the results of operations, assets, prospects, business or condition
      (financial or otherwise) of the Company and the Subsidiaries, taken as a whole,
      or (iii) an adverse impairment to the Company’s ability to perform on a timely
      basis its obligations under any Transaction Document (as defined
      below).

     

    (c) Authorization;
      Enforcement.
      The
      Company has the requisite corporate power and authority to enter into and to
      consummate the transactions contemplated by each of the Transaction Documents
      and otherwise to carry out its obligations thereunder. The execution and
      delivery of each of the Transaction Documents by the Company and the
      consummation by it of the transactions contemplated thereby have been duly
      authorized by all necessary action on the part of the Company and no further
      action is required by the Company in connection therewith. Each Transaction
      Document has been (or upon delivery will have been) duly executed by the Company
      and, when delivered in accordance with the terms hereof, will constitute the
      valid and binding obligation of the Company enforceable against the Company
      in
      accordance with its terms, except as such enforceability may be limited by
      applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
      or
      similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general
      application.

     

    (d) No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by the Company
      and the consummation by the Company of the transactions contemplated thereby
      do
      not and will not (i) conflict with or violate any provision of the Company’s or
      any Subsidiary’s certificate or articles of incorporation, bylaws or other
      organizational or charter documents, or (ii) conflict with, or constitute a
      default (or an event that with notice or lapse of time or both would become
      a
      default) under, or give to others any rights of termination, amendment,
      acceleration or cancellation (with or without notice, lapse of time or both)
      of,
      any agreement, credit facility, debt or other instrument (evidencing a Company
      or Subsidiary debt or otherwise) or other understanding to which the Company
      or
      any Subsidiary is a party or by which any property or asset of the Company
      or
      any Subsidiary is bound or affected, or (iii) result in a violation of any
      law,
      rule, regulation, order, judgment, injunction, decree or other restriction
      of
      any court or governmental authority to which the Company or a Subsidiary is
      subject (including federal and state securities laws and regulations), or by
      which any property or asset of the Company or a Subsidiary is bound or affected;
      except in the case of each of clauses (ii) and (iii), such as could not,
      individually or in the aggregate, have or reasonably be expected to result
      in a
      Material Adverse Effect. 

     

    
      
         

      

      
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    (e) Filings,
      Consents and Approvals.
      Neither
      the Company nor any Subsidiary is required to obtain any consent, waiver,
      authorization or order of, give any notice to, or make any filing or
      registration with, any court or other federal, state, local or other
      governmental authority or other Person in connection with the execution,
      delivery and performance by the Company of the Transaction Documents, other
      than
      (i) filings required by state securities laws, (ii) filings required in
      accordance with Section 5(e), (iii) filings required pursuant to the Security
      Agreement and (iv) those that have been made or obtained prior to the date
      of
      this Agreement.

     

    (f) Omitted

     

    (g) Capitalization.
      The
      number of shares and type of all authorized, issued and outstanding capital
      stock of the Company, and all shares of the Company’s common stock, par value
      $0.001 per share (the “Common
      Stock”),
      reserved for issuance under the Company’s various option and incentive plans, is
      specified in the SEC Reports. Except as specified in the SEC Reports and as
      disclosed in Schedule
      2(g),
      no
      securities of the Company are entitled to preemptive or similar rights, and
      no
      Person (as defined below) has any right of first refusal, preemptive right,
      right of participation, or any similar right to participate in the transactions
      contemplated by the Transaction Documents. Except as specified in the SEC
      Reports
      and
      except as set forth on Schedule
      2(g),
      there
      are no outstanding options, warrants, scrip rights to subscribe to, calls or
      commitments of any character whatsoever relating to, or securities, rights
      or
      obligations convertible into or exchangeable for, or giving any Person any
      right
      to subscribe for or acquire, any shares of Common Stock, or contracts,
      commitments, understandings or arrangements by which the Company or any
      Subsidiary is or may become bound to issue additional shares of Common Stock,
      or
      securities or rights convertible or exchangeable into shares of Common Stock.
      The
      issue
      and sale of the Note will not, immediately or with the passage of time, obligate
      the Company or any Subsidiary to issue shares of Common Stock or other
      securities to any Person (other than the Investor) and will not result in a
      right of any holder of Company or Subsidiary securities to adjust the exercise,
      conversion, exchange or reset price under such securities. “Person”
      means an
      individual or corporation, partnership, trust, incorporated or unincorporated
      association, joint venture, limited liability company, joint stock company,
      government (or an agency or subdivision thereof) or other entity of any
      kind.

     

    (h) SEC
      Reports; Financial Statements.
      Except
      as
      set forth on Schedule
      2(h),
      the
      Company
      has filed all SEC Reports required to be filed by it on a timely basis or has
      timely filed a valid extension of such time of filing and has filed any such
      SEC
      Reports prior to the expiration of any such extension. As of their respective
      dates, the SEC Reports complied in all material respects with the requirements
      of the Securities Act and the Exchange Act and the rules and regulations of
      the
      SEC promulgated thereunder, and none of the SEC Reports, when filed, contained
      any untrue statement of a material fact or omitted to state a material fact
      required to be stated therein or necessary in order to make the statements
      therein, in light of the circumstances under which they were made, not
      misleading. Since January 1, 2008, the Company has not received any material
      correspondence from the SEC or any Trading Market (as defined below) concerning
      the SEC Reports. The financial statements of the Company and any Subsidiary
      included in the SEC Reports comply in all material respects with applicable
      accounting requirements and the rules and regulations of the Commission with
      respect thereto as in effect at the time of filing. Such financial statements
      have been prepared in accordance with U.S. generally accepted accounting
      principles (“GAAP”)
      applied
      on a consistent basis during the periods involved, except as may be otherwise
      specified in such financial statements or the notes thereto, and fairly present
      in all material respects the financial position of the Company and its
      consolidated Subsidiaries as of and for the dates thereof and the results of
      operations and cash flows for the periods then ended, subject, in the case
      of
      unaudited statements, to normal, immaterial, year-end audit adjustments.
“Trading
      Market”
      means
      whichever of the New York Stock Exchange, the American Stock Exchange, the
      NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market
      or OTC Bulletin Board on which the Common Stock is listed or quoted for trading
      on the date in question.

     

    (i) Press
      Releases.
      The
      press releases
      disseminated by the Company since January
      1, 2008,
      taken as
      a whole do not contain any untrue statement of a material fact or omit to state
      a material fact required to be stated therein or necessary in order to make
      the
      statements therein, in light of the circumstances under which they were made
      and
      when made, not misleading.

     

    (j) Material
      Changes.
      Since
      the
      date of the latest audited financial statements included within the SEC Reports,
      except as specifically
      disclosed in the SEC Reports and
      except as disclosed on Schedule
      2(j),
      (i)
      there has been no event, occurrence or development that has had or that could
      reasonably be expected to result in a Material Adverse Effect, (ii) neither
      the
      Company nor any Subsidiary has entered into any material contract, agreement
      or
      other transaction that is not in the ordinary course of business, (iii) neither
      the Company nor any Subsidiary has incurred any liabilities or obligations
      (contingent or otherwise) other than (A) trade payables, accrued expenses and
      other liabilities incurred in the ordinary course of business consistent with
      past practice, (B) liabilities not required to be reflected in the Company’s
      financial statements pursuant to GAAP or required to be disclosed in filings
      made with the SEC, and (C) liabilities not exceeding in the aggregate $200,000;
      (iv) neither the Company nor any Subsidiary has altered its method of accounting
      or the identity of its auditors, (v) neither the Company nor any Subsidiary
      has
      declared or made any dividend or distribution of cash or other property to
      its
      stockholders or purchased, redeemed or made any agreements to purchase or redeem
      any shares of its capital stock, and (vi) neither the Company nor any Subsidiary
      has issued any equity securities to any officer, director or Affiliate (as
      defined below), except pursuant to existing stock option plans. The Company
      does
      not have pending before the Commission any request for confidential treatment
      of
      information. “Affiliate”
      means
      any Person that, directly or indirectly through one or more intermediaries,
      controls or is controlled by or is under common control with a Person, as such
      terms are used in and construed under Rule 144.

     

    
      
         

      

      
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    (k) Litigation.
      Except
      as set forth on Schedule
      2(k),
      there
      is no Action (as defined below) which (i) adversely affects or challenges the
      legality, validity or enforceability of any of the Transaction Documents or
      (ii)
      except as specifically disclosed in the SEC Reports, could, if there were an
      unfavorable decision, individually or in the aggregate, have or reasonably
      be
      expected to result in a Material Adverse Effect. Neither the Company nor any
      Subsidiary, nor any director or officer thereof (in his or her capacity as
      such), is or has been the subject of any Action involving a claim of violation
      of or liability under federal or state securities laws or a claim of breach
      of
      fiduciary duty, except as specifically disclosed in the SEC Reports. There
      has
      not been, and to the knowledge of the Company, there is not pending any
      investigation by the SEC involving the Company, any Subsidiary or any current
      or
      former director or officer of the Company (in his or her capacity as such).
      The
      SEC has not issued any stop order or other order suspending the effectiveness
      of
      any registration statement filed by the Company or any Subsidiary under the
      Exchange Act or the Securities Act. “Action”
      means
      any action, suit, inquiry, notice of violation, proceeding (including any
      partial proceeding such as a deposition) or investigation pending or threatened
      in writing against or affecting the Company, any Subsidiary or any of their
      respective properties before or by any court, arbitrator, governmental or
      administrative agency, regulatory authority (federal, state, county, local
      or
      foreign), stock market, stock exchange or trading facility.

     

    (l) Labor
      Relations.
      Except
      as set forth on Schedule
      2(l),
      no
      material labor dispute exists or, to the knowledge of the Company, is imminent
      with respect to any of the employees of the Company or any
      Subsidiary.

     

    (m) Compliance.
      Except
      as set forth on Schedule
      2(m),
      neither
      the Company nor any Subsidiary (i) is in default under or in violation of (and
      no event has occurred that has not been waived that, with notice or lapse of
      time or both, would result in a default by the Company or any Subsidiary under),
      nor has the Company or any Subsidiary received notice of a claim that it is
      in
      default under or that it is in violation of, any indenture, loan or credit
      agreement or any other agreement or instrument to which it is a party or by
      which it or any of its properties is bound (whether or not such default or
      violation has been waived), (ii) is in violation of any order of any court,
      arbitrator or governmental body, or (iii) is or has been in violation of any
      statute, rule or regulation of any governmental authority, including without
      limitation all foreign, federal, state and local laws relating to taxes,
      environmental protection, occupational health and safety, product quality and
      safety and employment and labor matters, except in each case as could not,
      individually or in the aggregate, have or reasonably be expected to result
      in a
      Material Adverse Effect. The Company is in compliance with all effective
      requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules and
      regulations thereunder, that are applicable to it, except where such
      noncompliance could not have or reasonably be expected to result in a Material
      Adverse Effect.

     

    (n) Regulatory
      Permits.
      The
      Company and the Subsidiaries possess all certificates, authorizations and
      permits issued by the appropriate federal, state, local or foreign regulatory
      authorities necessary to conduct their respective businesses as described in
      the
      SEC Reports, except where the failure to possess such permits could not,
      individually or in the aggregate, have or reasonably be expected to result
      in a
      Material Adverse Effect, and neither the Company nor any Subsidiary has received
      any notice of proceedings relating to the revocation or modification of any
      such
      permits.

     

    (o) Title
      to Assets.
      Except
      as set forth on Schedule
      2(o),
      the
      Company and the Subsidiaries have good and marketable title in fee simple to
      all
      real property owned by them that is material to their respective businesses
      and
      good and marketable title in all personal property owned by them that is
      material to their respective businesses, in each case free and clear of all
      Liens, except for Liens as do not materially affect the value of such property
      and do not materially interfere with the use made and proposed to be made of
      such property by the Company and the Subsidiaries. Any real property and
      facilities held under lease by the Company and the Subsidiaries are held by
      them
      under valid, subsisting and enforceable leases of which the Company and the
      Subsidiaries are in compliance, except as could not, individually or in the
      aggregate, have or reasonably be expected to result in a Material Adverse
      Effect.

     

    (p) Patents
      and Trademarks.
      The
      Company and the Subsidiaries have, or have rights to use, all patents, patent
      applications, trademarks, trademark applications, service marks, trade names,
      copyrights, licenses and other similar rights that are necessary or material
      for
      use in connection with their respective businesses as described in the SEC
      Reports and which the failure to so have could, individually or in the
      aggregate, have or reasonably be expected to result in a Material Adverse Effect
      (collectively, the “Intellectual
      Property Rights”).
      Except
      as set forth on Schedule
      2(p),
      neither
      the Company nor any Subsidiary has received a written notice that the
      Intellectual Property Rights used by the Company or any Subsidiary violates
      or
      infringes upon the rights of any Person. Except as set forth in the SEC Reports,
      to the knowledge of the Company, all such Intellectual Property Rights are
      enforceable and there is no existing infringement by another Person of any
      of
      the Intellectual Property Rights.

     

    (q) Insurance.
      The
      Company and the Subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are prudent
      and customary in the businesses in which the Company and the Subsidiaries are
      engaged. The Company is the named beneficiary of a key-man life insurance policy
      with respect to its Chief Executive Officer for a coverage amount of no less
      than $1,000,000. The Company has a directors and officers liability insurance
      policy with respect to the Company’s Board of Directors for a coverage amount of
      no less than $5,000,000. The Company has no reason to believe that it will
      not
      be able to renew its and the Subsidiaries’ existing insurance coverage as and
      when such coverage expires or to obtain similar coverage from similar insurers
      as may be necessary to continue its business on terms consistent with market
      for
      the Company’s and such Subsidiaries’ respective lines of business.

     

    
      
         

      

      
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    (r) Transactions
      With Affiliates and Employees.
      Except
      as set forth in or otherwise not required to be disclosed in the SEC Reports,
      none of the officers or directors of the Company and, to the knowledge of the
      Company, none of the employees of the Company or any Subsidiary is presently
      a
      party to any transaction with the Company or any Subsidiary (other than for
      services as employees, officers and directors), including any contract,
      agreement or other arrangement providing for the furnishing of services to
      or
      by, providing for rental of real or personal property to or from, or otherwise
      requiring payments to or from any officer, director or such employee or, to
      the
      knowledge of the Company, any entity in which any officer, director, or any
      such
      employee has a substantial interest or is an officer, director, trustee or
      partner.

     

    (s) Internal
      Accounting Controls.
      The
      Company and the Subsidiaries maintain a system of internal accounting controls
      sufficient to provide reasonable assurance that (i) transactions are executed
      in
      accordance with management’s general or specific authorizations, (ii)
      transactions are recorded as necessary to permit preparation of financial
      statements in conformity with GAAP and to maintain asset accountability, (iii)
      access to assets is permitted only in accordance with management’s general or
      specific authorization, and (iv) the recorded accountability for assets is
      compared with the existing assets at reasonable intervals and appropriate action
      is taken with respect to any differences. The Company has established disclosure
      controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
      15d-15(e)) for the Company and designed such disclosure controls and procedures
      to ensure that material information relating to the Company, including its
      Subsidiaries, is made known to the certifying officers by others within those
      entities, particularly during the period in which the Company’s Form 10-K or
      10-Q, as the case may be, is being prepared. The Company’s certifying officers
      have evaluated the effectiveness of the Company’s controls and procedures in
      accordance with Item 307 of Regulation S-K under the Exchange Act for the
      Company’s most recently ended fiscal quarter or fiscal year-end (such date, the
“Evaluation
      Date”).
      The
      Company presented in its most recently filed Form 10-K or Form 10-Q the
      conclusions of the certifying officers about the effectiveness of the disclosure
      controls and procedures based on their evaluations as of the Evaluation Date.
      Since the Evaluation Date, there have been no significant changes in the
      Company’s internal controls (as such term is defined in Item 308T of Regulation
      S-K under the Exchange Act) or, to the Company’s knowledge, in other factors
      that could significantly affect the Company’s internal controls.

     

    (t) Continuing
      Operations.
      Based
      on the financial condition of the Company and each Subsidiary as of the Closing
      Date (and assuming that the Closing shall have occurred), the Company and each
      Subsidiary shall have sufficient capital to carry on its business through the
      Maturity Date (as defined in the Note) as now conducted and as proposed to
      be
      conducted including its capital needs taking into account the particular capital
      requirements of the business conducted by the Company and each Subsidiary,
      and
      projected capital requirements and capital availability thereof. 

     

    (u) Certain
      Fees.
      Except
      as described in Schedule
      2(u),
      no
      brokerage or finder’s fees or commissions are or will be payable by the Company
      or any Subsidiary to any broker, financial advisor or consultant, finder,
      placement agent, investment banker, bank or other Person with respect to the
      transactions contemplated by this Agreement. The Investor shall have no
      obligation with respect to any fees or with respect to any claims (other than
      such fees or commissions owed by the Investor pursuant to written agreements
      executed by the Investor which fees or commissions shall be the sole
      responsibility of the Investor) made by or on behalf of other Person for fees
      of
      a type contemplated in this Section 3(u) that may be due in connection with
      the
      transactions contemplated by this Agreement.

     

    
      
         

      

      
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    (v) Certain
      Registration Matters.
      Assuming the accuracy of the Investor’s representations and warranties set forth
      in Section 4, no registration under the Securities Act is required for the
      offer
      and sale of the Note by the Company to the Investor under the Transaction
      Documents. The Company is eligible to register its Common Stock for resale
      by
      the Investor under Form S-1 promulgated under the Securities Act. Except as
      specified in the SEC Reports and except as set forth on Schedule
      2(v),
      neither
      the Company nor any Subsidiary has granted or agreed to grant to any Person
      any
      rights (including “piggy-back” registration rights) to have any securities of
      the Company registered with the SEC or any other governmental authority that
      have not been satisfied.

     

    (w) Listing
      and Maintenance Requirements.
      Except
      as specified in the SEC Reports, the Company has not, since January 1, 2008,
      received notice from any Trading Market to the effect that the Company is not
      in
      compliance with the listing, quoting or maintenance requirements thereof. The
      Company is, and has no reason to believe that it will not in the foreseeable
      future continue to be, in compliance with the listing, quoting or maintenance
      requirements for continued listing or quoting of the Common Stock on the Trading
      Market on which the Common Stock is currently listed or quoted. The issuance
      and
      sale of the Note under the Transaction Documents does not contravene the rules
      and regulations of the Trading Market on which the Common Stock is currently
      listed or quoted, and no approval of the stockholders of the Company thereunder
      is required for the Company to issue and deliver to the Investor the Note
      contemplated by Transaction Documents.

     

    (x) Investment
      Company.
      The
      Company and each Subsidiary is not, and is not an Affiliate of, and immediately
      following the Closing will not have become, an “investment company” within the
      meaning of the Investment Company Act of 1940, as amended.

     

    (y) Application
      of Takeover Protections.
      The
      Company has taken all necessary action, if any, in order to render inapplicable
      any control share acquisition, business combination, poison pill (including
      any
      distribution under a rights agreement) or other similar anti-takeover provision
      under the Company’s certificate of incorporation (or similar charter documents)
      or the laws of its state of incorporation that is or could become applicable
      to
      the Investor as a result of the Investor and the Company fulfilling their
      obligations or exercising their rights under the Transaction Documents,
      including without limitation the Company’s issuance of the Note and the
      Investor’s ownership of the Note.

     

    (z) No
      Additional Agreements.
      The
      Company does not have any agreement or understanding with the Investor with
      respect to the transactions contemplated by the Transaction Documents other
      than
      as specified in the Transaction Documents.

     

    (aa) Consultation
      with Auditors.
      The
      Company and each Subsidiary has consulted its independent auditors concerning
      the accounting treatment of the transactions contemplated by the Transaction
      Documents, and in connection therewith has furnished such auditors complete
      copies of the Transaction Documents.

     

    (bb) Foreign
      Corrupt Practices Act.
      Neither
      the Company nor any Subsidiary, nor to the knowledge of the Company, any agent
      or other person acting on behalf of any of the Company or any Subsidiary, has,
      directly or indirectly, (i) used any funds, or will use any proceeds from the
      sale of the Note, for unlawful contributions, gifts, entertainment or other
      unlawful expenses related to foreign or domestic political activity, (ii) made
      any unlawful payment to foreign or domestic government officials or employees
      or
      to any foreign or domestic political parties or campaigns from corporate funds,
      (iii) failed to disclose fully any contribution made by the Company or any
      Subsidiary (or made by any Person acting on their behalf of which the Company
      is
      aware) which is in violation of law, or (iv) has violated in any material
      respect any provision of the Foreign Corrupt Practices Act of 1977, as amended,
      and the rules and regulations thereunder.

     

    (cc) PFIC.
      Neither
      the Company nor any Subsidiary is or intends to become a “passive foreign
      investment company” within the meaning of Section 1297 of the U.S. Internal
      Revenue Code of 1986, as amended.

     

    (dd) OFAC.
      Neither
      the Company nor any Subsidiary nor, to the knowledge of the Company, any
      director, officer, agent, employee, Affiliate or Person acting on behalf of
      the
      Company or any Subsidiary is currently subject to any U.S. sanctions
      administered by the Office of Foreign Assets Control of the U.S. Treasury
      Department (“OFAC”);
      and
      the Company will not directly or indirectly use the proceeds of the sale of
      the
      Note, or lend, contribute or otherwise make available such proceeds to any
      Subsidiary, joint venture partner or other Person or entity, towards any sales
      or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country
      sanctioned by OFAC or for the purpose of financing the activities of any Person
      currently subject to any U.S. sanctions administered by OFAC.

     

    (ee) Money
      Laundering Laws.
      The
      operations of each of the Company and any Subsidiary are and have been conducted
      at all times in compliance with the money laundering statutes of applicable
      jurisdictions, the rules and regulations thereunder and any related or similar
      rules, regulations or guidelines, issued, administered or enforced by any
      applicable governmental agency (collectively, the “Money
      Laundering Laws”)
      and no
      action, suit or proceeding by or before any court or governmental agency,
      authority or body or any arbitrator involving the Company and/or any Subsidiary
      with respect to the Money Laundering Laws is pending or, to the best knowledge
      of the Company, threatened.

     

    (ff) Dependence
      on Major Customers.
      No
      single customer of the Company or any of its Subsidiaries accounted for more
      than 10% of the Company’s or any of its Subsidiaries’ total sales during the
      calendar year of 2007.

     

    (gg) Disclosure.
      All
      disclosure provided to the Investor regarding the Company (including each
      Subsidiary), its and any Subsidiary’s business and the transactions contemplated
      hereby, furnished by or on behalf of the Company (including the Company’s
      representations and warranties set forth in this Agreement) are true and correct
      and do not contain any untrue statement of a material fact or omit to state
      any
      material fact necessary in order to make the statements made therein, in light
      of the circumstances under which they were made, not misleading.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    4. Representations
      and Warranties of the Investor.
      The
      Investor hereby represents and warrants to the Company as follows:

     

    (a) This
      Agreement is made by the Company with the Investor who is a Non-U.S. Person
      in
      reliance upon such Non-U.S. Person’s representations, warranties and covenants
      made in this Section 4.

     

    (b) Such
      Non-U.S. Person has been advised and acknowledges that (i) the Note has not
      been, and when issued, will not be registered under the Securities Act, the
      securities laws of any state of the United States or the securities laws of
      any
      other country; (ii) in issuing and selling the Note to such Non-U.S. Person
      pursuant hereto, the Company is relying upon the “safe harbor” provided by
      Regulation S and/or on Section 4(2) under the Securities Act; (iii) it is a
      condition to the availability of the Regulation S “safe harbor” that the Note
      not be offered or sold in the United States or to a U.S. Person until the
      expiration of a period of six (6) months following the Closing Date; (iv)
      notwithstanding the foregoing, prior to the expiration of six (6) months after
      the Closing (the “Restricted
      Period”),
      the
      Note may be offered and sold by the holder thereof only if such offer and sale
      is made in compliance with the terms of this Agreement and either: (A) if the
      offer or sale is within the United States or to or for the account of a U.S.
      Person, the Note is offered and sold pursuant to an effective registration
      statement or pursuant to Rule 144 under the Securities Act or pursuant to an
      exemption from the registration requirements of the Securities Act; or (B)
      the
      offer and sale is outside the United States and to other than a U.S. Person.
      

     

    (c) As
      used
      in this Agreement, the term “United
      States”
      means
      and includes the United States of America, its territories and possessions,
      any
      State of the United States, and the District of Columbia, the term “U.S.
      Person”
      means:
      (i) a natural person resident in the United States; (ii) any partnership or
      corporation organized or incorporated under the laws of the United States;
      (iii)
      any estate of which any executor or administrator is a U.S. person; (iv) any
      trust of which any trustee is a U.S. person; (v) any agency or branch of a
      foreign entity located in the United States; (vi) any nondiscretionary account
      or similar account (other than an estate or trust) held by a dealer or other
      fiduciary for the benefit or account of a U.S. person; (vii) any discretionary
      account or similar account (other than an estate or trust) held by a dealer
      or
      other fiduciary organized, incorporated and (if an individual) resident in
      the
      United States; or (viii) a corporation or partnership organized under the laws
      of any foreign jurisdiction and formed by a U.S. person principally for the
      purpose of investing in securities not registered under the Securities Act,
      unless it is organized or incorporated, and owned, by accredited investors
      (as
      defined in Rule 501(a) under the Securities Act) who are not natural persons,
      estates or trusts, and the term “Non-U.S.
      Person”
      means
      any person who is not a U.S. Person or is deemed not to be a U.S. Person under
      Rule 902(k)(2) of the Securities Act.

     

    (d) Such
      Non-U.S. Person agrees that with respect to the Note until the expiration of
      the
      Restricted Period: (i) such Non-U.S. Person, its agents or its representatives
      have not and will not solicit offers to buy, offer for sale or sell the Note,
      or
      any beneficial interest therein in the United States or to or for the account
      of
      a U.S. Person during the Restricted Period; (ii) notwithstanding the foregoing,
      prior to the expiration of the Restricted Period, the Note may be offered and
      sold by the holder thereof only if such offer and sale is made in compliance
      with the terms of this Agreement and either: (A) if the offer or sale is within
      the United States or to or for the account of a U.S. Person, the Note is offered
      and sold pursuant to an effective registration statement or pursuant to Rule
      144
      under the Securities Act or pursuant to an exemption from the registration
      requirements of the Securities Act; or (B) the offer and sale is outside the
      United States and to other than a U.S. Person; and (iii) such Non-U.S. Person
      shall not engage in hedging transactions with regard to the Note unless in
      compliance with the Securities Act. The foregoing restrictions are binding
      upon
      subsequent transferees of the Note, except for transferees pursuant to an
      effective registration statement. Such Non-U.S. Person agrees that after the
      Restricted Period, the Note may be offered or sold within the United States
      or
      to or for the account of a U.S. Person only pursuant to applicable securities
      laws. 

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    (e) Such
      Non-U.S. Person has not engaged, nor is it aware that any party has engaged,
      and
      such Non-U.S. Person will not engage or cause any third party to engage, in
      any
      directed selling efforts (as such term is defined in Regulation S) in the United
      States with respect to the Note. 

     

    (f) Such
      Non-U.S. Person: (i) is domiciled and has its principal place of business
      outside the United States; (ii) certifies it is not a U.S. Person and is not
      acquiring the Note for the account or benefit of any U.S. Person; and (iii)
      at
      the time of the Closing Date, the Non-U.S. Person or persons acting on Non-U.S.
      Person’s behalf in connection therewith will be located outside the United
      States.

     

    (g) At
      the
      time of offering to such Non-U.S. Person and communication of such Non-U.S.
      Person’s order to purchase the Note and at the time of such Non-U.S. Person’s
      execution of this Agreement, the Non-U.S. Person or persons acting on Non-U.S.
      Person’s behalf in connection therewith were located outside the United
      States.

     

    (h) Such
      Non-U.S. Person is not a “distributor” (as defined in Regulation S) or a
“dealer” (as defined in the Securities Act).

     

    (i) Such
      Non-U.S. Person acknowledges that the Company shall make a notation in its
      stock
      books regarding the restrictions on transfer set forth in this Section 4
      and shall transfer the Note on the books of the Company only to the extent
      consistent therewith. In particular, such Non-U.S. Person acknowledges that
      the
      Company shall refuse to register any transfer of the Note not made in accordance
      with the provisions of Regulation S, pursuant to registration under the
      Securities Act or pursuant to an available exemption from
      registration.

     

    (j) The
      Investor understands and agrees that the Note being issued hereunder shall
      bear
      the legend set forth on the form attached hereto as Exhibit
      A,
      until
      (i) the Note is registered under the Securities Act pursuant to a registration
      statement that has been declared effective or (ii) in the opinion of counsel
      reasonably acceptable to the Company, the Note may be sold without registration
      under the Securities Act as well as any applicable “Blue Sky” or state
      securities laws.

     

    (k) The
      Investor hereby represents that the Investor is satisfied as to the full
      observance of the laws of such Investor’s jurisdiction in connection with any
      invitation to subscribe for the Note, including (i) the legal requirements
      within such Investor’s jurisdiction for the purchase of the Note, (ii) any
      foreign exchange restrictions applicable to such purchase, (iii) any
      governmental or other consents that may need to be obtained and (iv) the income
      tax and other tax consequences, if any, that may be relevant to the purchase,
      holding, redemption, sale or transfer of the Note. Such Investor’s subscription
      and payment for, and such Investor’s continued beneficial ownership of, the
      Note, will not violate any applicable securities or other laws of such
      Investor’s jurisdiction.

     

    (l) The
      Investor has full power and authority to enter into this Agreement, the
      execution and delivery of which has been duly authorized, if applicable, and
      this Agreement constitutes a valid and legally binding obligation of the
      Investor enforceable against the Investor in accordance with its terms, except
      as such enforceability may be limited by general principles of equity or to
      applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
      and
      other similar laws relating to, or affecting generally, the enforcement of
      applicable creditors’ rights and remedies.

     

    (m) The
      information in the “Investor Questionnaire,” attached hereto as Exhibit
      C,
      completed and executed by the Investor (the “Investor
      Questionnaire”)
      is
      accurate and true in all material respects.

     

    (n) The
      Investor is not relying on the Company or its Affiliates with respect to
      economic considerations involved in this investment.

     

    (o) The
      Investor understands and agrees that the Investor must bear the economic risk
      of
      the Investor’s purchase because, among other reasons, the Note has not been
      registered under the Securities Act or under the securities laws of any state
      and, therefore, cannot be resold, assigned or otherwise disposed of unless
      they
      are subsequently registered under the Securities Act and under the applicable
      securities laws of such states, or an exemption from such registration is
      available. 

     

    (p) No
      representations or warranties have been made to the Investor by the Company
      or
      any of its officers, employees, agents, Affiliates or subsidiaries, other than
      any representations of the Company contained herein, and in subscribing for
      the
      Note the Investor is not relying upon any representations other than any
      contained herein; provided that nothing contained herein shall modify, amend
      or
      affect the Investor’s right to rely on the Company’s representations and
      warranties contained herein.

     

    (q) The
      Investor understands and acknowledges that the Investor’s purchase of the Note
      is a speculative investment that involves a high degree of risk and the
      potential loss of the Investor’s entire investment.

     

    (r) Neither
      the SEC nor any state securities commission has approved the Note, or passed
      upon or endorsed the merits of this offering or confirmed the accuracy or
      determined the adequacy of any information provided to the Investor by the
      Company.

     

    (s) The
      Investor and the Investor’s advisors, if any, have had a reasonable opportunity
      to ask questions of and receive answers from a person or persons acting on
      behalf of the Company concerning the offering and the business, financial
      condition, results of operations and prospects of the Company, and all such
      questions have been answered to the reasonable satisfaction of the Investor
      and
      the Investor’s advisors, if any.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (t) The
      Investor is unaware of, is in no way relying on, and did not become aware of
      the
      offering through or as a result of, any article, notice, advertisement or other
      communication published in any newspaper, magazine or similar media or broadcast
      over television, radio or over the Internet, in connection with the offering
      and
      sale of the Note and is not subscribing for the Note and did not become aware
      of
      the offering of the Note through or as a result of any seminar or meeting to
      which the Investor was invited by, or any solicitation of a subscription by,
      a
      person not previously known to the Investor in connection with investments
      in
      securities generally.

     

    (u) The
      Investor has not engaged any placement agent, financial advisor or broker,
      which
      would give rise to any claim by any person for brokerage commissions, finders’
fees or the like relating to this Agreement or the transactions contemplated
      hereby and, in turn, to be paid to other selected dealers.

     

    (v) The
      foregoing representations, warranties and agreements shall survive the
      Closing.

     

    5. Other
      Agreements of the Parties. 

     

    (a)  The
      Note
      may only be disposed of in compliance with state and federal securities laws.
      In
      connection with any transfer of the Note other than pursuant to an effective
      registration statement, to the Company, to an Affiliate of the Investor or
      in
      connection with a pledge as contemplated in Section 5(b), the Company may
      require the transferor thereof to provide to the Company an opinion of counsel
      selected by the transferor, the form and substance of which opinion shall be
      reasonably satisfactory to the Company, to the effect that such transfer does
      not require registration of such transferred Note under the Securities
      Act.

     

    (b) The
      Company acknowledges and agrees that the Investor may from time to time pledge,
      and/or grant a security interest in some or all of the Note pursuant to a bona
      fide margin agreement in connection with a bona fide margin account and, if
      required under the terms of such agreement or account, such Investor may
      transfer the pledged or secured Note to the pledgees or secured parties. Such
      a
      pledge or transfer would not be subject to approval or consent of the Company
      and no legal opinion of legal counsel to the pledgee, secured party or pledgor
      shall be required in connection with the pledge, but such legal opinion may
      be
      required in connection with a subsequent transfer following default by the
      Investor transferee of the pledge. No notice shall be required of such pledge.
      At the appropriate Investor’s expense, the Company will execute and deliver such
      reasonable documentation as a pledgee or secured party of the Note may
      reasonably request in connection with a pledge or transfer of the Note.

     

    (c) As
      long
      as the Investor owns the Note, the Company covenants to timely file (or obtain
      extensions in respect thereof and file within the applicable grace period)
      all
      reports required to be filed by the Company after the date hereof pursuant
      to
      the Exchange Act. As long as the Investor owns the Note, if the Company is
      not
      required to file reports pursuant to such laws, it will prepare and furnish
      to
      the Investor and make publicly available in accordance with Rule 144 such
      information as is required for the Investor to sell the Note under Rule 144.
      The
      Company further covenants that it will take such further action as any holder
      of
      the Note may reasonably request, all to the extent required from time to time
      to
      enable such Person to sell the Note without registration under the Securities
      Act within the limitation of the exemptions provided by Rule 144.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (d) The
      Company shall not, and shall use its best efforts to ensure that no Affiliate
      of
      the Company shall, sell, offer for sale or solicit offers to buy or otherwise
      negotiate in respect of any security (as defined in Section 2 of the Securities
      Act) that would be integrated with the offer or sale of the Note in a manner
      that would require the registration under the Securities Act of the sale of
      the
      Note to the Investor, or that would be integrated with the offer or sale of
      the
      Note for purposes of the rules and regulations of any Trading Market in a manner
      that would require stockholder approval of the sale of the Note to the
      Investor.

     

    (e) By
      9:00
      a.m. (New York time) four (4) Trading Days following the execution of this
      Agreement, and by 9:00 a.m. (New York time) four (4) Trading Days following
      the
      Closing Date, the Company shall issue press releases disclosing the transactions
      contemplated hereby and the Closing. Within four (4) Trading Days following
      the
      execution of this Agreement, the Company will file a current report on Form
      8-K
      disclosing the material terms of the Transaction Documents (and attach as
      exhibits thereto the Transaction Documents), and within four (4) Trading Days
      following the Closing Date the Company will file an additional current report
      on
      Form 8-K to disclose the Closing. In addition, the Company will make such other
      filings and notices in the manner and time required by the SEC and the Trading
      Market on which the Common Stock is quoted or listed in connection with the
      Transaction Documents. 

     

    (f) In
      addition to the indemnity provided in any other Transaction Document, the
      Company will indemnify and hold the Investor and its directors, officers,
      shareholders, partners, employees and agents (each, an “Investor
      Party”)
      harmless from any and all losses, liabilities, obligations, claims,
      contingencies, damages, costs and expenses, including all judgments, amounts
      paid in settlements, court costs and reasonable attorneys’ fees and costs of
      investigation that any such Investor Party may suffer or incur as a result
      of or
      relating to any misrepresentation, breach or inaccuracy of any representation,
      warranty, covenant or agreement made by the Company in any Transaction Document.
      In addition to the indemnity contained herein, the Company will reimburse each
      Investor Party for its reasonable legal and other expenses (including the cost
      of any investigation, preparation and travel in connection therewith) incurred
      in connection therewith, as such expenses are incurred. 

     

    (g) 
      The
      Company covenants and agrees that neither it nor any other Person acting on
      its
      behalf will provide the Investor or its agents or counsel with any information
      that the Company believes constitutes material non-public information, unless
      prior thereto such Investor shall have executed a written agreement regarding
      the confidentiality and use of such information. The Company understands and
      confirms that the Investor shall be relying on the foregoing representations
      in
      effecting transactions in securities of the Company.

     

    (h) Prior
      to
      the Closing, Company will not, without the Investor's prior written consent:
      (i)
      change the nature of its business; (ii) issue any equity, equity securities
      (other than stock options issued pursuant to Company’s stock option plan in the
      ordinary course of business) or debt in any form; (iii) divest, acquire, change
      the structure of its assets or otherwise decrease the value of its assets;
      or
      (iv) enter into any collaboration, partnership, distribution or other agreement
      binding Company to any future payments, services or other contractual
      obligations exceeding in value $250,000 (other than certain acquisitions
      contemplated by Company which have been previously disclosed to the
      Investor).

     

    (i) The
      Company will keep the existence and
      content of its negotiations with the Investor, including the terms of the
      Transaction Documents, confidential and will not disclose to any third party
      any
      information relating to the transactions hereunder, except to its employees,
      shareholders, Affiliates, counsel or consultants, who will each be bound by
      confidentiality agreements and who will have a ‘need to know’, and except as
      required by law. Except as required by applicable law, the Company will make
      no
      public statement, press release, or other announcement with respect to the
      transactions hereunder, without the Investor’s prior written approval. The
      Investor will maintain all confidential information it obtains from the Company
      in accordance with the provisions of that certain Confidentiality Agreement,
      dated as of December 26, 2007, by and among the Investor and the Company.
      Notwithstanding the foregoing, any activities undertaken by the Investor on
      behalf of the Company, such as discussions with potential investors or strategic
      partners, will not be deemed to be a breach of the Investor’s confidentiality
      obligations.

     

    (j) The
      Investor and the Company agree not to engage in any activities designed to
      manipulate the trading price of the Common Stock. 

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    6. Conditions
      to Closing of the Investor.
      The
      Investor’s obligations at the Closing are subject to the fulfillment, on or
      prior to the Closing Date, of all of the following conditions, any of which
      may
      be waived in whole or in part by the Investor:

     

    (a) Representations
      and Warranties.
      The
      representations and warranties made by the Company in Section 3 shall have
      been true and correct when made, and shall be true and correct on the Closing
      Date. 

     

    (b) Performance.
      The
      Company shall have performed, satisfied and complied in all material respects
      with all covenants, agreements and conditions required by the Transaction
      Documents to be performed, satisfied or complied with by it at or prior to
      the
      Closing Date;

     

    (c) No
      Injunction.
      No
      statute, rule, regulation, executive order, decree, ruling or injunction shall
      have been enacted, entered, promulgated or endorsed by any court or governmental
      authority of competent jurisdiction that prohibits the consummation of any
      of
      the transactions contemplated by the Transaction Documents;

     

    (d) Transaction
      Documents.
      The
      Company shall have duly executed and delivered to the Investor the following
      Transaction Documents:

     

    (i) this
      Agreement; 

     

    (ii) the
      Note
      issued in accordance with Section 2; and

     

    (iii) the
      Security Agreement, as well as all ancillary documents required in order to
      perfect the registration of the lien contemplated by the Security
      Agreement.

     

    (e) Officer’s
      Certificate.
      The
      Company shall have delivered to the Investor a certificate of the Company,
      dated
      as of the Closing Date, signed by the Chief Executive Officer of the Company,
      confirming that since the date of execution of this Agreement, no event or
      series of events have occurred that reasonably could have or result in a
      Material Adverse Effect; 

     

    (f) Legal
      Opinion.
      The
      Company shall have delivered to the Investor a legal opinion of Loeb & Loeb
      LLP, in agreed form, addressed to the Investor and a legal opinion of
Carr
      McClellan Ingersoll Thompson & Horn Professional Law Corporation,
      in
      agreed form, addressed to the Investor; 

     

    (g) Good
      Standing Certificate.
      The
      Company shall have delivered to the Investor good standing certificates from
      (a)
      the State of Delaware and (b) the State of Washington, dated as of no more
      than
      three (3) Business Days prior to the Closing Date, certifying that the Company
      is in good standing and qualified to do business in these
      jurisdictions;

     

    (h) Secretary’s
      Certificate.
      At the
      Closing, the Company shall have delivered to the Investor a certificate duly
      executed by the Secretary of the Company, having attached thereto and certified
      resolutions approved by the Board of Directors of the Company authorizing the
      transactions contemplated hereunder; 

     

    (i) Waivers.
      The
      Company shall have delivered to the Investor validly executed waivers of
      preemptive rights or any other rights that the stockholders of the Company
      may
      have in connection with this Agreement and the transaction contemplated
      hereunder, in a form reasonably suitable to the Investor; and 

     

    (j) No
      Suspensions of Trading in Common Stock; Listing.
      Trading
      in the Common Stock shall not have been suspended by the SEC or any Trading
      Market (except for any suspensions of trading of not more than one Trading
      Day
      solely to permit dissemination of material information regarding the Company)
      at
      any time since the date of execution of this Agreement, and the Common Stock
      shall have been at all times since such date listed or quoted for trading on
      a
      Trading Market.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    7. Conditions
      to Obligations of the Company.
      The
      Company’s obligation to issue and sell the Note at the Closing is subject to the
      fulfillment, on or prior to the Closing Date, of the following conditions,
      any
      of which may be waived in whole or in part by the Company:

     

    (a) Representations
      and Warranties.
      The
      representations and warranties made by the Investor in Section 4 shall be
      true and correct when made, and shall be true and correct on the Closing
      Date;

     

    (b) Performance.
      The
      Investor shall have performed, satisfied and complied in all material respects
      with all covenants, agreements and conditions required by the Transaction
      Documents to be performed, satisfied or complied with by such Investor at or
      prior to the Closing Date;

     

    (c) No
      Injunction.
      No
      statute, rule, regulation, executive order, decree, ruling or injunction shall
      have been enacted, entered, promulgated or endorsed by any court or governmental
      authority of competent jurisdiction that prohibits the consummation of any
      of
      the transactions contemplated by the Transaction Documents;

     

    (d) Transaction
      Documents.
      At the
      Closing, the Investor shall have duly executed and delivered to the Company
      this
      Agreement and the Security Agreement; and

     

    (e) Purchase
      Price.
      The
      Investor shall have delivered to the Company the Purchase Price in accordance
      with Section 2.

     

    8. Event
      of Defaults.
      If
      any of
      the following events (each, an “Event
      of Default”)
      shall
      occur: 

     

    (a) Voluntary
      Bankruptcy or Insolvency Proceedings. The
      Company shall (i) apply for or consent to the appointment of a receiver,
      trustee, liquidator or custodian of itself or of all or a substantial part
      of
      its property, (ii) be unable, or admit in writing its inability, to pay its
      debts generally as they mature, (iii) make a general assignment for the
      benefit of its or any of its creditors, (iv) be dissolved or liquidated,
      (v) commence a voluntary case or other proceeding seeking liquidation,
      reorganization or other relief with respect to itself or its debts under any
      bankruptcy, insolvency or other similar law now or hereafter in effect or
      consent to any such relief or to the appointment of or taking possession of
      its
      property by any official in an involuntary case or other proceeding commenced
      against it, or (vi) take any action for the purpose of effecting any of the
      foregoing; or 

     

    (b) Involuntary
      Bankruptcy or Insolvency Proceedings. Proceedings
      for the appointment of a receiver, trustee, liquidator or custodian of the
      Company or of all or a substantial part of the property thereof, or an
      involuntary case or other proceedings seeking liquidation, reorganization or
      other relief with respect to the Company or the debts thereof under any
      bankruptcy, insolvency or other similar law now or hereafter in effect shall
      be
      commenced and an order for relief entered or such proceeding shall not be
      dismissed or discharged within 60 days of commencement; or 

     

    (c) Material
      Breach.
      The
      Company shall breach any term of this Agreement, any of the Transaction
      Documents or any other agreement or instrument executed in connection therewith,
      which, individually or in the aggregate, materially and adversely affects any
      of
      the Investor’s rights under this Agreement or any of the Transaction Documents,
and
      as
      to any
      breach that is capable of cure, the Company fails to cure such breach within
      fifteen (15) days after the Investor provides written notice to the Company
      of
      such breach; or

     

    (d) Exit
      Event.
      Upon
      the occurrence of any of the following events: (i) a merger or consolidation
      or
      other change of control involving the Company, other than a merger or
      consolidation involving the Company or a subsidiary in which the capital stock
      of the Company outstanding immediately prior to such transaction continues
      to
      represent, or is converted into or exchanged for, capital stock that represents,
      immediately following such transaction, at least a majority by voting power
      of
      the capital stock of (A) the surviving or resulting company or (B) if the
      surviving or resulting company is a wholly-owned subsidiary of another company
      immediately following such merger or consolidation, the parent company of such
      surviving or resulting company; (ii) a sale of a majority of the then
      outstanding common stock in the Company on an as converted basis; or (iii)
      a
      sale, lease, exclusive license or other disposition of all or substantially
      all
      of the assets of the Company; or

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    (e) Exclusivity
      Violation. There
      is
      an Exclusivity Violation (as defined in the term sheet to be signed by the
      parties to this Agreement contemporaneously with this Agreement) and the Company
      fails to pay to the Investor the principal balance of the Note plus accrued
      and
      unpaid interest within five (5) Business Days following the date of the
      Exclusivity Violation.

     

    Then,
      upon the written consent of the Investor and in any such event and at any time
      thereafter if such Event of Default or any other Event of Default shall have
      not
      been waived by the Investor, the Investor may declare by notice to the Company
      this Note and the other notes issued pursuant to the Note and Warrant Purchase
      Agreement (together with the Note, the “Notes”)
      due
      and payable, upon which an amount equal to the aggregate principal amount of
      the
      Notes and any accrued interest and any other amounts owing under the Notes,
      immediately shall be due and payable, and the same shall forthwith become
      immediately due and payable without presentment, demand, protest, notice or
      other formality of any kind, all of which are hereby expressly
      waived.

     

    9. Miscellaneous.

     

    (a) Waivers
      and Amendments.
      Any
      provision of this Agreement may be amended, waived or modified only upon the
      written consent of the Company and the Investor.

     

    (b) Governing
      Law.
      This
      Agreement and all actions arising out of or in connection with this Agreement
      shall be governed by and construed in accordance with the laws of the State
      of
      California, without regard to the conflicts of law provisions of the State
      of
      California or of any other state. 

     

    (c) Survival.
      The
      representations, warranties, covenants and agreements made herein shall survive
      the execution and delivery of this Agreement.

     

    (d) Successors
      and Assigns.
      Subject
      to the restrictions on transfer described in Sections 9(e)
      and 9(f) below, the rights and obligations of the Company and the
      Investor shall be binding upon and benefit the successors, assigns, heirs,
      administrators and transferees of the parties.

     

    (e) Registration,
      Transfer and Replacement of the Note.
      The
      Note issuable under this Agreement shall be registered in the records of the
      Company. The Company will keep, at its principal executive office, books for
      the
      registration and registration of transfer of the Note. Prior to presentation
      of
      the Note for registration of transfer, the Company shall treat the Person in
      whose name the Note is registered as the owner and holder of the Note for all
      purposes whatsoever, whether or not the Note shall be overdue, and the Company
      shall not be affected by notice to the contrary. Subject to the restrictions
      on
      or conditions to transfer set forth in this Agreement or in the Note, the holder
      of the Note, at its option, may in person or by duly authorized attorney
      surrender the same for exchange at the Company’s principal executive office, and
      promptly thereafter and at the Company’s expense, except as provided below,
      receive in exchange therefor one or more new Note(s), each in the principal
      requested by such holder, dated the date of the Note so surrendered and
      registered in the name of such Person or Persons as shall have been designated
      in writing by such holder or its attorney for the same principal amount, in
      the
      aggregate, as the principal amount of the Note so surrendered. Upon receipt
      by
      the Company of evidence reasonably satisfactory to it of the ownership of and
      the loss, theft, destruction or mutilation of any Note and (a) in the case
      of loss, theft or destruction, of indemnity reasonably satisfactory to it;
      or
      (b) in the case of mutilation, upon surrender thereof, the Company, at its
      expense, will execute and deliver in lieu thereof a new Note executed in the
      same manner as the Note being replaced, in the same principal amount as the
      principal amount of the Note and dated the date of the Note.

     

    (f) Assignment
      by the Company.
      The
      rights, interests or obligations hereunder may not be assigned, by operation
      of
      law or otherwise, in whole or in part, by the Company.

     

    (g) Entire
      Agreement.
      This
      Agreement together with the other Transaction Documents constitute and contain
      the entire agreement among the Company and the Investor and supersede any and
      all prior agreements, negotiations, correspondence, understandings and
      communications among the parties, whether written or oral, respecting the
      subject matter hereof.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    (h) Notices.
      All
      notices and other communications made pursuant to this Agreement shall be in
      writing and shall be conclusively deemed to have been duly given: 

     

    (i) in
      the
      case of hand delivery to the address set forth below, on the next Business
      Day
      after delivery;

     

    (ii) in
      the
      case of delivery by an internationally recognized overnight courier to the
      address set forth below, freight prepaid, on the next Business Day after
      delivery and signed receipt by the recipient; and 

     

    (iii) in
      the
      case of a notice sent by facsimile transmission to the number and addressed
      as
      set forth below, on the next Business Day after delivery, if receipt of such
      facsimile transmission is confirmed. 

     

    For
      all
      notices given pursuant to one of the methods listed above, a copy of the notice
      should also be sent by email to the email address set forth below.

    

    Contact
      details:

     

    If
      to
      Investor:

    

    Address
      for notices being delivered by hand/courier: 

    

    c/o
      Inventages Whealth Management Inc.

    Winterbotham
      Place, Marlborough & Queen Streets

    P.
      O. Box
      N-3026

    Nassau,
      The Bahamas, Attn: Dr. Gunnar Weikert

    

    Always
      with a copy to: IVC SA, Route de Coppet 26A, 1291 - Commugny,  Switzerland,
      Attn: Dr. Bogdan von Rueckmann

    

    Always
      with a copy to:  weikert@inventages.com
      and
 portfolio@inventages.com

    

    Number
      for notices being delivered by facsimile transmission:

    

    To:
      IVC
      SA, Attn: Dr. Bogdan von Rueckmann, at: +41 21 823 0001

    

    Always
      with a copy to: weikert@inventages.com
      and
 portfolio@inventages.com 

    

    If
      to the
      Company:  

    

    Address
      for notices being delivered by hand/courier:

    

    Organic
      To Go Food Corporation

    3317
      Third Avenue South

    Seattle,
      Washington 98134

    Attn:
      Chief Financial Officer

    

    Always
      with a copy to:

    

    Loeb
      & Loeb LLP

    10100
      Santa Monica Boulevard

    Suite
      2200

    Los
      Angeles, California 90067

    Attention:
      Lawrence Venick, Esq.

    

    Number
      for notices being delivered by facsimile transmission:

    

    To:
      Organic To Go Food Corporation, Attn: Chief Financial Officer, at: +1
 206
      299
      3707 

    

    Always
      with a copy to: Loeb & Loeb LLP, Attn: Lawrence Venick, Esq, at:
 +1
      310
      282 2200

     

    A
      party
      may change or supplement the contact details for service of any notice pursuant
      to this Agreement, or designate additional addresses, facsimile numbers and
      email addresses for the purposes of this Section 9(h) by giving the other
      parties written notice of the new contact details in the manner set forth
      above.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    (i) Arbitration.
      Each
      party agrees that any dispute, controversy, or claim arising in relation to
      this
      Agreement, including with regard to its validity, invalidity, breach,
      enforcement or termination, shall be resolved by binding arbitration in London,
      England, in accordance with the rules of arbitration which are in force in
      the
      United Kingdom on the date when the notice of arbitration is submitted. The
      arbitrability of such dispute, claim or controversy shall also be determined
      in
      such arbitration. Such arbitration proceeding shall be conducted in the English
      language before one (1) arbitrator agreed to by the parties. Both the foregoing
      agreement of the parties to arbitrate any and all such disputes, claims and
      controversies, and the results, determinations, findings, judgments and/or
      awards rendered through any such arbitration shall be final and binding on
      the
      parties hereto and may be specifically enforced by legal
      proceedings.

     

    (j) Expenses.
      Each
      party shall pay the fees and expenses of its advisers, counsel, accountants
      and
      other experts, if any, and all other expenses incurred by such party incident
      to
      the negotiation, preparation, execution, delivery and performance of the
      Transaction Documents; provided, however, that the Company shall pay up to
      $25,000 in reasonable legal expenses incurred by the Investor. 

     

    (k) Severability.
      If
      any
      provision of this Agreement is held to be invalid or unenforceable in any
      respect, the validity and enforceability of the remaining terms and provisions
      of this Agreement shall not in any way be affected or impaired thereby and
      the
      parties will attempt to agree upon a valid and enforceable provision that is
      a
      reasonable substitute therefor, and upon so agreeing, shall incorporate such
      substitute provision in this Agreement. 

     

    (l) Limitation
      of Liability. Notwithstanding
      anything herein to the contrary, the Company acknowledges and agrees that no
      trustee, officer, investment vehicle, investor, shareholder or holder of shares
      of beneficial interest of the Investor shall be personally liable for any
      liabilities of the Investor.

     

    (m) Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which will be
      deemed an original, but all of which together will constitute one and the same
      agreement. Facsimile copies of signed signature pages will be deemed binding
      originals.

     

    [Signature
      Page Follows]

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    The
      parties have caused this Agreement to be duly executed and delivered by their
      proper and duly authorized officers as of the date and year first written
      above.

     

    
      	 	
              COMPANY:

               

              ORGANIC
                TO GO FOOD CORPORATION

              a
                Delaware corporation

               

              By:_________________________________

              Name:
                Jason Brown

              Title:
                Chief Executive Officer

               

              INVESTOR:

               

              W.HEALTH
                L.P.

               

              By: _________________________________

               

              Dr.
                Gunnar Weikert

               

              Director,
                Inventages Whealth Management, Inc., as General Partner of W.Health
                L.P.

              

               

              By:
                __________________________________

               

              Dr.
                Wolfgang Reichenberger

              Director,
                Inventages Whealth Management, Inc., as General Partner of W.Health
                L.P.

            

    

     

    [Signature
      page for Note Purchase
      Agreement]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    DISCLOSURE
      SCHEDULE

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Exhibit
      A

     

    Form
      of Note

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Exhibit
      B

     

    Security
      Agreement 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
      C

     

    Investor
      Questionnaire

     

     

    Organic
      To Go Food Corporation (the “Company”)
      will
      use the responses to this questionnaire to qualify prospective investors for
      purposes of U.S. securities laws.

     

    Your
      answers will be kept confidential at all times. However, by signing this
      questionnaire, you agree that the Company may present this questionnaire to
      such
      parties as it deems appropriate to establish the availability of exemptions
      from
      registration under U.S. securities laws.

     

    
      	
              Investor:

            	 
	 	
              Exact
                name as it should appear on the Note. If the name is a “nominee name,”
                please so state and in addition, provide the name of the legal
                owner.

            
	
              Address

            	 
	 	 
	 	 
	 	 
	 	
              Address
                for securityholder records. All notices and mailings will be made
                to this
                address. Indicate, if appropriate, the person at that address to
                whose
                attention the mailing should be
                directed.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    1.    Representations,
      Warranties and Agreements.
      In
      order for the Company to offer the Note (the “Note”)
      in
      conformance with Regulation S (“Regulation
      S”)
      promulgated under the Securities Act of 1933, as amended (the “Securities
      Act”),
      the
      following information must be obtained. (For purposes of answering the following
      questions, the term “United States” means the United States of America, its
      territories and possessions, any State of the United States and the District
      of
      Columbia.)

     

    (a) Please
      initial the blank that correctly responds to the following statement: The
      undersigned is not purchasing the Note for the account or benefit of any person,
      entity, group or organization that resides in the United States or has a place
      of business in the United States.

     

    _____
      True

     

    _____
      False

     

    (b) Please
      initial the blank that correctly responds to the following statement: (i) the
      undersigned did not receive an offer to subscribe for the Note in the United
      States (as defined above); and
      (ii)
      this Investor Suitability Questionnaire (“Questionnaire”)
      is
      being executed and entered into outside of the United States (as defined
      above).

    
       

      _____
        True

       

      _____
        False

    

     

    (c) The
      undersigned agrees to transfer the Note only in accordance with the provisions
      of Regulation S, pursuant to registration under the Securities Act or pursuant
      to an available exemption from registration under the Securities Act. Any
      transfer in violation of the preceding sentence will be null and void and the
      Company will not recognize any such attempted transfer. The undersigned
      acknowledges that the Note is characterized as a “restricted security” under
      U.S. federal securities laws and may be resold without registration under the
      Securities Act only in certain limited circumstances. Additionally, the Note
      may
      be subject to certain contractual limitations on transferability.

    
       

      _____
        True

       

      _____
        False

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    Indicate
      the form of entity of the undersigned:

     

    
      	 	
              Individual

            
	 	
              Corporation

            
	 	
              Limited
                Partnership

            
	 	
              General
                Partnership

            
	 	
              Limited
                Liability Company

            
	 	
              Trust

            
	 	
              Other
                form of organization (indicate form of organization):

            
	 	 

    

     

    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 the closing (the
“Closing”)
      of any
      sale of the Note to the undersigned and shall survive such date. If
      in
      any respect such representations and warranties shall not be true and accurate
      prior to Closing, the undersigned shall give immediate notice of such fact
      to
      the Company, specifying which representations and warranties are not true and
      accurate and the reasons therefor.

     

    2.    Indemnification.
      The
      undersigned understands the meaning and legal consequences of the
      representations and warranties made by the undersigned herein, and that the
      Company is relying on such representations and warranties in making its
      determination to accept or reject the undersigned’s offer to purchase the Note
      in this offering. The undersigned hereby agrees to indemnify and hold harmless
      the Company and each director, officer, employee or agent thereof from and
      against any and all loss, damage or liability due to or arising out of a breach
      of any representation or warranty of the undersigned contained in this
      Questionnaire.

     

    3.    Survival
      of Representations, Warranties and Agreements.
      All
      representations, warranties and agreements contained herein or made in writing
      by or on behalf of the undersigned in connection with the transactions
      contemplated hereby shall survive the Closing of any sale of the Note by the
      Company to the undersigned.

     

    4.    Headings.
      The
      headings in this Questionnaire are for convenience of reference, and shall
      not
      by themselves determine the meaning of this Questionnaire or of any part
      hereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    CORPORATIONS,
      PARTNERSHIPS, LLCs, TRUSTS AND OTHER ENTITIES

     

    Date:
      November __, 2008

    
      	 	 
	 	
              NAME
                OF ENTITY

            
	 	 
	 	
              BY
                (Signature)

            
	 	 
	 	
              PRINT
                NAME

            
	 	 
	 	
              TITLE

            
	 	 
	 	
              PRINCIPAL
                PLACE OF BUSINESS:

            
	 	 
	 	
              NUMBER
                AND STREET

            
	 	 
	 	
              CITY/PROVINCE/COUNTRY/POSTAL
                CODE

            
	 	 
	 	
              TELEPHONE
                NUMBER

            
	 	 
	 	
              FAX
                NUMBERSECURITY
      AGREEMENT

     

    This
      Security Agreement (this “Agreement”)
      is
      made as of the _____ day of November, 2008, by and between Organic To Go Food
      Corporation, a Delaware corporation (the “Company”
or
      the
“Securing
      Party”),
      and
      W.Health L.P., a limited partnership organized under the laws of the Bahamas
      (the “Secured
      Party”).

     

    RECITALS

     

    
      	 	
              A.

            	
              The
                Securing Party and the Secured Party are parties to a Note Purchase
                Agreement, dated November [__], 2008 (the “Purchase
                Agreement”),
                pursuant to which the Secured Party shall purchase the Note (as defined
                in
                the Purchase Agreement); and 

            

    

     

    
      	 	
              B.

            	
              The
                Securing Party and the Secured Party are also parties to a Note and
                Warrant Purchase Agreement, dated June 1, 2008 (the “Note
                and Warrant Purchase Agreement”),
                pursuant to which the Secured Party has agreed to purchase one or
                more
                convertible promissory notes in the aggregate principal amount of
                up to
                $10,000,000 (the “Previous
                Notes”
                and together with the Note, the “Notes”);
                and 

            

    

     

    
      	 	
              C.

            	
              The
                parties intend that the Securing Party’s obligations to repay the Notes
                (whether now owned or hereafter purchased by the Secured Party) and
                any
                other obligation in favor of Secured Party arising under the Purchase
                Agreement, the Note and Warrant Purchase Agreement and the Notes
                be
                secured by all of the tangible and intangible assets of the Securing
                Party, and shall be governed by the terms and conditions of this
                Agreement. 

            

    

     

    AGREEMENT

     

    In
      consideration of the purchase of the Notes by the Secured Party and for other
      good and valuable consideration, the receipt and adequacy of which are hereby
      acknowledged, the parties hereto hereby agree as follows:

     

    1. Grant
      of Security Interest. 

     

    (a) To
      secure
      the Securing Party’s full and timely performance of the Obligations, the
      Securing Party hereby grants to the Secured Party a continuing Lien on and
      security interest (the “Security
      Interest”)
      in,
      all of the Securing
      Party’s right,
      title and interest in and to all of its personal property and assets (both
      tangible and intangible), including, without limitation, the following, whether
      now owned or hereafter acquired and wherever located: (a) all Receivables;
      (b)
      all Equipment; (c) all Fixtures; (d) all General Intangibles; (e) all Inventory;
      (f) all Investment Property; (g) all Deposit Accounts; (h) all Cash; (i) all
      other Goods of the Securing Party; (j) all Intellectual Property; and (k) all
      Proceeds of each of the foregoing and all accessions to, and replacements for,
      each of the foregoing (collectively, the “Collateral”).
      

     

    Notwithstanding
      the foregoing, the grant, assignment and transfer of a Security Interest as
      provided herein shall not extend to, and the term “Collateral” shall not
      include: (a) “intent-to-use” trademarks at all times prior to the first use
      thereof, whether by the actual use thereof in commerce, the recording of a
      statement of use with the United States Patent and Trademark Office or
      otherwise, or (b) any Account, Chattel Paper, General Intangible, or Promissory
      Note in which Securing Party has any right, title or interest if and to the
      extent such Account, Chattel Paper, General Intangible, or Promissory Note
      includes a provision containing a restriction on assignment such that the
      creation of a security interest in the right, title or interest of Securing
      Party therein would be prohibited and would, in and of itself, cause or result
      in a default thereunder enabling another person party to such Account, Chattel
      Paper, General Intangible, or Promissory Note to enforce any remedy with respect
      thereto; provided
      that
      the
      foregoing exclusion shall not apply if (i) such prohibition has been waived
      or
      such other person has otherwise consented to the creation hereunder of a
      security interest in such Account, Chattel Paper, General Intangible, or
      Promissory Note or (ii) such prohibition would be rendered ineffective
      pursuant to Sections 9-406(d), 9-407(a) or 9-408(a) of the UCC, as applicable
      and as then in effect in any relevant jurisdiction, or any other applicable
      law
      (including the Bankruptcy Code) or principles of equity; provided
      further
      that
      immediately upon the ineffectiveness, lapse or termination of any such
      provision, the Collateral shall include, and the Securing Party shall be deemed
      to have granted a security interest in, all its rights, title and interests
      in
      and to such Account, Chattel Paper, General Intangible, or Promissory Note
      as if
      such provision had never been in effect; and provided further that the foregoing
      exclusion shall in no way be construed so as to limit, impair or otherwise
      affect the Secured Party’s unconditional continuing security interest in and to
      all rights, title and interests of Securing Party in or to any payment
      obligations or other rights to receive monies due or to become due under any
      such Account, Chattel Paper, General Intangible, or Promissory Note and in
      any
      such monies and other proceeds of such Account, General Intangible, Contract,
      Promissory Note or Chattel Paper.
      

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b) The
      following terms shall have the following meanings for purposes of this
      Agreement:

     

    “Account”
      means
      any “Account,” as such term is defined in the UCC now owned or hereafter
      acquired by the Securing Party or in which the Securing Party now holds or
      hereafter acquires any interest and, in any event, shall include, without
      limitation, all accounts receivable, book debts, rights to payment and other
      forms of obligations (other than forms of obligations evidenced by Chattel
      Paper, Documents or Instruments) now owned or hereafter received or acquired
      by
      or belonging or owing to the Securing Party whether or not arising out of goods
      or software sold or services rendered by the Securing Party or from any other
      transaction, whether or not the same involves the sale of goods or services
      by
      the Securing Party and all of the Securing Party’s rights in, to and under all
      purchase orders or receipts now owned or hereafter acquired by it for goods
      or
      services, and all of the Securing Party’s rights to any goods represented by any
      of the foregoing, and all monies due or to become due to the Securing Party
      under all purchase orders and contracts for the sale of goods or the performance
      of services or both by the Securing Party or in connection with any other
      transaction (whether or not yet earned by performance on the part of the
      Securing Party), now in existence or hereafter occurring, including, without
      limitation, the right to receive the proceeds of said purchase orders and
      contracts, and all collateral security and guarantees of any kind given by
      any
      Person with respect to any of the foregoing. 

     

    “Bankruptcy
      Code”
means
      Title XI of the United States Code.

     

    “Cash”
      means
      all cash, money, currency, and liquid funds, wherever held, in which the
      Securing Party now or hereafter acquires any right, title, or interest.

     

    “Chattel
      Paper”
      means
      any “Chattel paper,” as such term is defined in the UCC, now owned or hereafter
      acquired by the Securing Party or in which the Securing Party now holds or
      hereafter acquires any interest. 

     

    “Contracts”
      means
      all contracts (including any customer, vendor, supplier, service or maintenance
      contract), leases, licenses, undertakings, purchase orders, permits, franchise
      agreements or other agreements (other than any right evidenced by Chattel Paper,
      Documents or Instruments), whether in written or electronic form, in or under
      which Securing Party now holds or hereafter acquires any right, title or
      interest, including, without limitation, with respect to an Account, any
      agreement relating to the terms of payment or the terms of performance
      thereof.

     

    “Deposit
      Accounts”
      means
      any “Deposit accounts,” as such term is defined in the UCC, and includes any
      checking account, savings account, or certificate of deposit, now owned or
      hereafter acquired by the Securing Party or in which the Securing Party now
      holds or hereafter acquires any interest. 

     

    “Documents”
      means
      any “Documents,” as such term is defined in the UCC, now owned or hereafter
      acquired by the Securing Party or in which the Securing Party now holds or
      hereafter acquires any interest. 

     

    “Equipment”
      means
      any “Equipment,” as such term is defined in the UCC, now owned or hereafter
      acquired by the Securing Party or in which the Securing Party now holds or
      hereafter acquires any interest and any and all additions, upgrades,
      substitutions and replacements of any of the foregoing, together with all
      attachments, components, parts, equipment and accessories installed thereon
      or
      affixed thereto, now owned or hereafter acquired by the Securing Party or in
      which the Securing Party now holds or hereafter acquires interest. 

     

    “Event
      of Default”
shall
      have the meaning given that term in the Purchase Agreement.

     

    “Fixtures”
      means
      any “Fixtures,” as such term is defined in the UCC, together with all right,
      title and interest of the Securing Party in and to all extensions, improvements,
      betterments, accessions, renewals, substitutes, and replacements of, and all
      additions and appurtenances to any of the foregoing property, and all
      conversions of the security constituted thereby, immediately upon any
      acquisition or release thereof or any such conversion, as the case may be,
      now
      owned or hereafter acquired by the Securing Party or in which the Securing
      Party
      now holds or hereafter acquires any interest. 

     

    “General
      Intangible”
      means
      any “General intangible,” as such term is defined in the UCC, now owned or
      hereafter acquired by the Securing Party or in which the Securing Party now
      holds or hereafter acquires any interest and, in any event, shall include,
      without limitation, all right, title and interest that the Securing Party may
      now or hereafter have in or under any contracts, rights to payment, payment
      intangibles, confidential information, interests in partnerships, limited
      liability companies, corporations, joint ventures and other business
      associations, permits, goodwill, claims in or under insurance policies,
      including unearned premiums and premium adjustments, uncertificated securities,
      deposit, checking and other bank accounts, but shall not include any
      Intellectual Property (including the right to receive all proceeds and damages
      therefrom), rights to receive tax refunds and other payments and rights of
      indemnification.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    “Goods”
      means
      any “Goods,” as such term is defined in the UCC, now owned or hereafter acquired
      by the Securing Party or in which the Securing Party now holds or hereafter
      acquires any interest. 

     

    “Instruments”
      means
      any “Instrument,” as such term is defined in the UCC, now owned or hereafter
      acquired by the Securing Party or in which the Securing Party now holds or
      hereafter acquires any interest.

     

    “Intellectual
      Property”
      means
      all patents, patent applications, trademarks, trademark applications, service
      marks, trade names, copyrights, licenses and other similar rights that are
      necessary or material for use in connection with the Company’s respective
      businesses as described in the SEC Reports (as defined in the Purchase
      Agreement).

     

    “Inventory”
      means
      any “Inventory,” as such term is defined in the UCC, now owned or hereafter
      acquired by the Securing Party or in which the Securing Party now holds or
      hereafter acquires any interest, and, in any event, shall include, without
      limitation, all inventory, goods and other personal property that are held
      by or
      on behalf of the Securing Party for sale or lease or are furnished or are to
      be
      furnished under a contract of service or that constitute raw materials, work
      in
      process or materials used or consumed or to be used or consumed in the Securing
      Party’s business, or the processing, packaging, promotion, delivery or shipping
      of the same, and all finished goods, whether or not the same is in transit
      or in
      the constructive, actual or exclusive possession of the Securing Party or is
      held by others for the Securing Party’s account, including, without limitation,
      all goods covered by purchase orders and contracts with suppliers and all goods
      billed and held by suppliers and all such property that may be in the possession
      or custody of any carriers, forwarding agents, truckers, warehousemen, vendors,
      selling agents or other Persons. 

     

    “Investment
      Property”
      means
      any “Investment property,” as such term is defined in the UCC, and includes
      certificated securities, uncertificated securities, money market funds and
      U.S.
      Treasury bills or notes, now owned or hereafter acquired by the Securing Party
      or in which the Securing Party now holds or hereafter acquires any interest.
      

     

    “Letter
      of Credit Right”
      means
      any “Letter of credit right,” as such term is defined in the UCC, now owned or
      hereafter acquired by the Securing Party or in which the Securing Party now
      holds or hereafter acquires any interest, including any right to payment or
      performance under any letter of credit. 

     

    “Lien”
      means
      any
      mortgage, deed of trust, pledge, hypothecation, assignment for security,
      security interest, encumbrance, levy, lien or charge of any kind, whether
      voluntarily incurred or arising by operation of law or otherwise, against any
      property, any conditional sale or other title retention agreement, any lease
      in
      the nature of a security interest, and the filing of any financing statement
      (other than a precautionary financing statement with respect to a lease that
      is
      not in the nature of a security interest) under the UCC or comparable law of
      any
      jurisdiction. 

     

    “Obligations”
      shall
      mean and include all loans, advances, debts, liabilities and obligations,
      howsoever arising, owed by the Securing Party to the Secured Party of every
      kind
      and description (whether or not evidenced by any note or instrument and whether
      or not for the payment of money), direct or indirect, absolute or contingent,
      due or to become due, now existing or hereafter owed by the Securing Party
      to
      the Secured Party, under or in connection with the Purchase Agreement, the
      Note
      and Warrant Purchase Agreement and the Notes, including without limitation
      all
      interest, fees, charges, expenses, attorneys’ fees and accountants’ fees
      chargeable to the Securing Party or payable by the Securing Party
      thereunder.

    

    “Permitted
      Lien”
means:
      (a) Liens in favor of the Secured Party; (b) any Liens existing on the date
      of
      this Agreement and set forth on Exhibit
      A
      attached
      hereto; (c) Liens for taxes, fees, assessments or other governmental charges
      or
      levies, either not delinquent or being contested in good faith by appropriate
      proceedings; (d) Liens (i) upon or in any Equipment acquired or held by Securing
      Party to secure the purchase price of such Equipment or indebtedness (including
      capital leases) incurred solely for the purpose of financing the acquisition
      of
      such Equipment or (ii) existing on such Equipment at the time of its
      acquisition, provided that the Lien is confined solely to the Equipment so
      acquired, improvements thereon and the Proceeds of such Equipment; (e) leases
      or
      subleases and licenses or sublicenses granted to others in the ordinary course
      of the Securing Party’s business; (f) any right, title or interest of a licensor
      under a license; (g) Liens arising from judgments, decrees or attachments;
      (h)
      easements, reservations, rights-of-way, restrictions, minor defects or
      irregularities in title and other similar Liens affecting real property not
      interfering in any material respect with the ordinary conduct of the business
      of
      the Securing Party; (i) Liens in favor of customs and revenue authorities
      arising as a matter of law to secure payment of customs duties in connection
      with the importation of goods; (j) Liens arising solely by virtue of any
      statutory or common law provision relating to banker’s liens, rights of setoff
      or similar rights and remedies as to deposit accounts or other funds maintained
      with a creditor depository institution; (k) Liens in favor of a depository
      bank
      or a securities intermediary pursuant to such depository bank’s or securities
      intermediary’s customary customer account agreement; provided that any such
      Liens shall at no time secure any indebtedness or obligations other than
      customary fees and charges payable to such depository bank or securities
      intermediary; (l) statutory or common law Liens of landlords and carriers,
      warehousemen, mechanics, suppliers, materialmen, repairmen and other similar
      Liens, arising in the ordinary course of business and securing obligations
      that
      are not yet delinquent or are being contested in good faith by appropriate
      proceedings; (m) Liens incurred or deposits made to secure the performance
      of
      tenders, bids, leases, statutory or regulatory obligations, surety and appeal
      bonds, government contracts, performance and return-of-money bonds, and other
      obligations of like nature, in each case, in the ordinary course of business;
      (n) Liens incurred or deposits made in the ordinary course of business in
      connection with workers’ compensation, unemployment insurance and other types of
      social security; and (o) pledges and deposits securing liability for
      reimbursement or indemnification obligations in respect of letters of credit
      or
      bank guarantees for the benefit of landlords.  

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    “Person”
      means
      any individual, sole proprietorship, partnership, joint venture, trust,
      unincorporated organization, association, corporation, limited liability
      company, institution, public benefit corporation, other entity or government
      (whether federal, state, county, city, municipal, local, foreign, or otherwise,
      including any instrumentality, division, agency, body or department thereof).
      

     

    “Proceeds”
      means
“Proceeds,” as such term is defined in the UCC and, in any event, shall include,
      without limitation, (a) any and all Accounts, Chattel Paper, Instruments, cash
      or other forms of money or currency or other proceeds payable to the Securing
      Party from time to time in respect of the Collateral, (b) any and all proceeds
      of any insurance, indemnity, warranty or guaranty payable to the Securing Party
      from time to time with respect to any of the Collateral, (c) any and all
      payments (in any form whatsoever) made or due and payable to the Securing Party
      from time to time in connection with any requisition, confiscation,
      condemnation, seizure or forfeiture of all or any part of the Collateral by
      any
      governmental authority (or any Person acting under color of governmental
      authority), (d) the proceeds, damages, or recovery based on any claim of the
      Securing Party against third parties (i) for past, present or future
      infringement of any copyright, patent or patent license or (ii) for past,
      present or future infringement or dilution of any trademark or trademark license
      or for injury to the goodwill associated with any trademark, trademark
      registration or trademark licensed under any trademark license and (e) any
      and
      all other amounts from time to time paid or payable under or in connection
      with
      any of the Collateral. 

     

    “Receivables”
      means
      all of the Securing Party’s Accounts, Instruments, Documents, Chattel Paper,
      Supporting Obligations, and letters of credit and Letter of Credit Rights.
      

     

    “Supporting
      Obligation”
      means
      any “Supporting obligation,” as such term is defined in the UCC, now owned or
      hereafter acquired by the Securing Party or in which the Securing Party now
      holds or hereafter acquires any interest. 

     

    “UCC”
      means
      the Uniform Commercial Code as the same may, from time to time, be in effect
      in
      the State of Delaware; provided,
      that in
      the event that, by reason of mandatory provisions of law, any or all of the
      attachment, perfection or priority of, or remedies with respect to, the Secured
      Party’s Lien on any Collateral is governed by the Uniform Commercial Code as
      enacted and in effect in a jurisdiction other than the State of Delaware, the
      term “UCC” shall mean the Uniform Commercial Code as enacted and in effect, from
      time to time, in such other jurisdiction solely for purposes of the provisions
      thereof relating to such attachment, perfection, priority or remedies and for
      purposes of definitions related to such provisions. 

     

    Unless
      otherwise defined herein, all capitalized terms used herein and defined in
      the
      Purchase Agreement shall have the respective meaning given to those terms in
      the
      Purchase Agreement, and the terms that are defined in the UCC and used herein
      shall have the meanings given to them in the UCC.

     

    2. Representations
      and Warranties.
      The
      Securing Party hereby represents and warrants to the Secured Party
      that:

     

    (a) Ownership
      of Collateral.
      The
      Securing Party is the legal and beneficial owner of the Collateral (or, in
      the
      case of after-acquired Collateral, at the time the Securing Party acquires
      rights in the Collateral, will be the legal and beneficial owner thereof).
      Except for Permitted Liens, the Securing Party has rights in or the power to
      transfer the Collateral free and clear of any Lien, security interest or
      encumbrance. 

     

    (b) Valid
      Security Interest.
      The
      Security Interest granted pursuant to this Agreement will constitute a valid
      and
      continuing perfected security interest in favor of the Secured Party in the
      Collateral for which perfection is governed by the UCC or filing with the United
      States Copyright Office or United States Patent and Trademark Office. The
      Security Interest will be prior to all other Liens on the Collateral except
      for
      Permitted Liens.

     

    (c) Organization
      and Good Standing.
      The
      Securing Party has been duly incorporated, and is validly existing and in good
      standing, under the laws of the State of Delaware. 

     

    (d) Receivables.
      Each
      Receivable is genuine and enforceable against the parties obligated to pay
      the
      same free from any right of rescission, defense, setoff or
      discount.

     

    (e) Insurance.
      Each
      insurance policy maintained by the Securing Party is validly existing and is
      in
      full force and effect. The Securing Party is not in default under the provisions
      of any insurance policy, and there are no facts which, with the giving of notice
      or passage of time (or both), would result in such a default under any provision
      of any such insurance policy. 

     

    (f) Valid
      Lien.
      This
      Agreement is effective to create a valid and continuing Lien upon the
      Collateral. All action by the Securing Party necessary or desirable to protect
      and perfect such Lien on each item of the Collateral has been duly taken, to
      the
      extent that a security interest in the Collateral can be perfected under the
      Code by the filing of a UCC-1 financing statement in the filing office of the
      Secretary of State of the State of Delaware.

     

    3. Covenants.
      Unless
      the Secured Party otherwise consents, Securing Party covenants and agrees that,
      from and after the date of this Agreement until the Obligations are paid in
      full:

     

    (a) Other
      Liens.
      The
      Securing Party will defend the Collateral against the claims and demands of
      all
      persons at any time claiming the same or any interest therein, except Permitted
      Liens. 

     

    (b) Further
      Documentation.
      At any
      time and from time to time, upon the writ-ten request of the Secured Party,
      and
      at the sole expense of the Securing Party, the Securing Party will promptly
      and
      duly authenticate and deliver such further instruments and documents and take
      such further action as such Secured Party determines necessary or
      desirable for
      the
      purpose of obtaining or preserving the full benefits of this Agreement and
      of
      the rights and powers herein granted including, without limitation, filing
      any
      financing or continuation statements under the UCC in effect with respect to
      the
      Liens created hereby. The Securing Party also hereby authorizes the Secured
      Party to file any such financing, amendment or continuation statement without
      the authentication of the Securing Party to the extent permitted by applicable
      law. A reproduction of this Agreement shall be sufficient as a financing
      statement (or as an exhibit to a financing statement on form UCC-1) and for
      filing in any jurisdiction.
      Within
      five (5) business days following the date hereof, the Securing Party will file
      appropriate financing statements on form UCC-1 in the State of
      Delaware.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (c) Indemnification.
      The
      Securing Party agrees to defend, indemnify and hold harmless the Secured Party
      against any and all liabilities, costs and expenses (including, without
      limitation, reasonable legal fees and expenses) (“Liabilities”):
      (i) with respect to, or resulting from, any delay in paying, any and all
      excise, sales or other taxes which may be payable or determined to be payable
      with respect to any of the Collateral, excluding any taxes based on or measured
      by the net income of the Secured Party, except to the extent the validity
      thereof is being contested in good faith and adequate reserves are being
      maintained in connection therewith, (ii) with respect to, or resulting
      from, any delay in complying with any law, rule, regu-lation or order of any
      governmental authority applicable to any of the Collateral, or (iii) in
      connection with any of the transactions contemplated by this Agreement, except
      in each case for Liabilities directly caused by the gross negligence or willful
      misconduct of the Secured Party.

     

    (d) Maintenance
      of Records.
      The
      Securing Party will keep and maintain at its own expense complete and
      satisfactory records
      of the Collateral.

     

    (e) Inspection
      Rights.
      The
      Secured Party shall have full access during normal business hours, and upon
      prior reasonable notice, to all the books, correspondence and other records
      of
      the Securing Party relating to the Collateral. The Secured Party or its
      repre-sentative may examine such records and make photocopies or otherwise
      take
      extracts from such records. The Securing Party agrees to render to the Secured
      Party, at the Securing Party’s expense, such clerical and other assistance as
      such Secured Party may reasonably request with regard to the exercise of its
      rights pursuant to this paragraph. 

     

    (f) Compliance
      with Laws, etc.
      The
      Securing Party (i) will comply in all material respects with all laws, rules,
      regulations and orders of any governmental authority applicable to
      any part
      of
      the Collateral or to the operation of the Securing Party’s business and
      (ii)
      shall not use or permit any Collateral to be used in violation of any provision
      of the Purchase Agreement, the Note and Warrant Purchase Agreement and the
      Notes, any law, rule or obligation or order of any governmental authority,
      or
      any policy of insurance covering the Collateral.

     

    (g) Payment
      of Taxes, Etc.
      The
      Securing Party will pay promptly when due all taxes, assessments and
      governmental charges or levies imposed upon the Collateral or with respect
      to
      any of its income or profits derived from the Collateral, as well as all claims
      of any kind (including, without limitation, claims for labor, materials and
      supplies) against or with respect to the Collateral, except to the extent the
      validity thereof is being contested in good faith and adequate reserves are
      being maintained in connection therewith.

     

    (h) Limitation
      on Liens on Collateral.
      The
      Securing Party will not create, incur or permit to exist, will defend the
      Collateral against, and will take such other action as is necessary to remove,
      any Lien or claim on or to the Collateral, other than Permitted Liens, and
      will
      defend the right, title and interest of the Secured Party in and to any of
      the
      Collateral against the claims and demands of all other persons other than
      Permitted Liens.

     

    (i) Limitations
      on Dispositions of Collateral.
      The
      Securing Party will not sell, transfer, lease, or otherwise dispose of any
      of
      the Collateral, or attempt, offer or contract to do so, other than in the
      ordinary course of business. 

     

    (j) Further
      Identification of Collateral.
      The
      Securing Party will furnish to the Secured Party from time to time statements
      and schedules further identifying and describing the Collateral and such other
      reports in connection with the Collateral as such Secured Party may reasonably
      request, all in detail reasonably acceptable to such Secured Party.

     

    (k) Insurance.
      The
      Securing Party shall (i) maintain and keep in force insurance of the types
      and in amounts customarily carried from time to time during the term of this
      Agreement in its lines of business, including fire, public liability, property
      damage and worker’s compensation, such insurance to be carried with companies
      and in amounts satisfactory to the Secured Party, (ii) deliver to the
      Secured Party from time to time, as the Secured Party may reasonably request,
      schedules setting forth all insurance then in effect, and (iii) deliver to
      the Secured Party copies of each policy of insurance which replaces, or
      evidences the renewal of, each existing policy of insurance at least 15 days
      prior to the expiration of such policy. The Secured Party shall be named as
      additional insured or additional loss payee, as appropriate, on all liability
      and property insurance of the Securing Party and such policies shall contain
      such additional endorsements as shall be reasonably required by the Secured
      Party.

     

    (l) Intellectual
      Property Matters.
      The
      Securing Party shall notify the Secured Party immediately if it knows or has
      reason to know (i) that any application or registration relating to any of
      its
      Intellectual Property may become abandoned or dedicated, or (ii) of any adverse
      determination or development (including the institution of, or any such
      determination or development in, any proceeding in the United States Patent
      and
      Trademark Office, the United States Copyright Office or any court) regarding
      the
      Securing Party’s ownership of any Intellectual Property.

     

    (m) Intellectual
      Property Applications.
      In no
      event shall the Securing Party, either by itself or through any agent, employee,
      licensee or designee, file an application for the registration of any patent,
      trademark or copyright with the United States Patent and Trademark Office,
      the
      United States Copyright Office or any similar office or agency without giving
      the Secured Party prior written notice thereof, and, upon request of the Secured
      Party, the Securing Party shall execute and deliver any and all security
      documents as such Secured Party may request to evidence such Secured Party’s
      Lien on such Intellectual Property and the general intangibles of the Securing
      Party relating thereto or represented thereby. The Securing Party hereby
      authorizes the Secured Party to amend this Agreement (without any further action
      or consent from the Securing Party) to include any such patent, trademark or
      copyright as Collateral hereunder.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (n) Intellectual
      Property Abandonment.
      The
      Securing Party shall take all actions reasonably necessary or requested by
      the
      Secured Party to maintain and pursue each application, to obtain the relevant
      registration and to maintain the registration of its Intellectual Property,
      including the filing of applications for renewal, affidavits of use, affidavits
      of noncontestability and opposition and interference and cancellation
      proceedings, unless the Secured Party shall determine that such Intellectual
      Property is not material to the conduct of its business.

     

    4. Rights
      with Respect to Collateral

     

    (a) Accounts,
      General Intangibles, etc.
      Secured
      Party hereby authorizes Securing Party to collect any Accounts, Chattel Paper
      and General Intangibles in which Secured Party has been granted a security
      interest hereunder, and Securing Party agrees to use its best efforts to effect
      the prompt collection thereof. Secured Party hereby further authorizes Securying
      Party to use the proceeds of any such collections in the conduct of its business
      in the ordinary course. 

     

    (b) Deposit
      Accounts and Securities Accounts.
      The
      Secured Party agrees that it will not send a notice of exclusive control or
      otherwise exercise control regarding any of the Securing Party’s Deposit
      Accounts or Securities Accounts unless an Event of Default shall have occurred
      and be continuing. 

     

    (c) Investment
      Collateral.
      With
      respect to any Collateral consisting of securities, partnership interest, joint
      venture interest, investments or the like (referred to collectively and
      individually in this Section 4(c) as the “Investment
      Collateral”),
      so
      long as no Event of Default has occurred and is continuing (i) Securing Party
      shall be entitled to exercise any and all voting and other consensual rights
      pertaining to the Investment Collateral, or any part thereof, for any purpose
      not inconsistent with the terms of this Agreement, the Purchase Agreement,
      the
      Note and Warrant Purchase Agreement or the Notes; and (ii) Securing Party shall
      be entitled to receive and to retain and use any and all dividends and
      distributions paid in respect of the Investment Collateral.

     

    (d) Attorney-In-Fact.
      Without
      limiting in any way the responsibility and obligations of the Securing Party
      and
      not as substitute to such obligations, and without derogating from Section
      5
      below, the Securing Party hereby appoints the Secured Party and any officer
      or
      agent of the Secured Party, with full power of substitution, as its
      attorney-in-fact with full irrevocable power and authority in the place of
      the
      Securing Party and in the name of the Securing Party or its own name, from
      time
      to time in the Secured Party’s discretion so long as an Event of Default has
      occurred and is continuing, for the purpose of carrying out the terms of this
      Agreement, to take any appropriate action and to authenticate any instrument
      which may be necessary or desirable to accomplish the purposes of this
      Agreement. Without limiting the foregoing, so long as an Event of Default has
      occurred and is continuing, the Secured Party shall have the right, without
      notice to, or the consent of, the Securing Party, to do any of the following
      on
      the Securing Party’s behalf:

     

    (i) to
      pay or
      discharge any taxes or Liens levied or placed on or threatened against the
      Collateral;

     

    (ii) to
      direct
      any party liable for any payment under any of the Collateral to make payment
      of
      any and all amounts due or to become due thereunder directly to the Secured
      Party or as the Secured Party directs;

     

    (iii) to
      ask
      for or demand, collect, and receive payment of and receipt for, any payments
      due
      or to become due at any time in respect of or arising out of any
      Collateral;

     

    (iv) to
      commence and prosecute any suits, actions or proceedings at law or in equity
      in
      any court of competent jurisdiction to enforce any right in respect of any
      Collateral;

     

    (v) to
      defend
      any suit, action or proceeding brought against the Securing Party with respect
      to any Collateral;

     

    (vi) to
      settle, compromise or adjust any suit, action or proceeding described in
      subsection (v) above and to give such discharges or releases in connection
      therewith as the Secured Party may deem appropriate;

     

    (vii) to
      assign
      any patent right included in the Collateral of the Securing Party (along with
      the goodwill of the business to which any such patent right pertains),
      throughout the world for such term or terms, on such conditions, and in such
      manner, as the Secured Party shall in its sole discretion determine;
      and

     

    (viii) generally,
      to sell, transfer, pledge and make any agreement with respect to or otherwise
      deal with any of the Collateral and to take, at the Secured Party’s option and
      the Securing Party’s expense, any actions which the Secured Party deems
      necessary to protect, preserve or realize upon the Collateral and the Secured
      Party’s Lien on the Collateral and to carry out the intent of this Agreement, in
      each case to the same extent as if the Secured Party was the absolute owner
      of
      the Collateral for all purposes.

     

    The
      Securing Party hereby ratifies whatever actions the Secured Party shall lawfully
      do or cause to be done in accordance with this Section 4. This power of attorney
      shall be a power coupled with an interest and shall be irrevocable.

     

    (e) No
      Duty on the Secured Party’s Part.
      The
      powers conferred on the Secured Party by this Section 4 are solely to protect
      the Secured Party’s interest in the Collateral and shall not impose any duty
      upon it to exercise any such powers. The Secured Party shall be accountable
      only
      for amounts that they actually received as a result of the exercise of such
      powers, and no action taken by the Secured Party or any of its officers,
      directors, employees or agents or omitted to be taken by any such Persons
      pursuant to this Section 4 shall give rise to any defense, counterclaim or
      offset in favor of Securing Party or affect any of the Obligations.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    5. Filing
      Agent.
      

     

    (a) Appointment.
      The
      Secured Party hereby appoints any of Michael A. Heller, Ashok J. Chandrasekhar
      and Adam M. Klein as agent for filing purposes for the Secured Party under
      this
      Agreement (in such capacity, the “Filing
      Agent”)
      to
      serve from the date hereof until the termination of this Agreement.

     

    (b) Powers
      and Duties of Filing Agent, Indemnity by the Secured
      Party.
      The
      Secured Party hereby irrevocably authorizes the Filing Agent to take any action
      and to exercise any power in the name of the Secured Party and on its behalf,
      as
      shall be required and as shall be requested by the Securing Party, solely for
      the purpose of filing any registration or application at or with any
      governmental authority, together with such powers as are reasonably incidental
      thereto. Filing Agent may execute any of its duties hereunder by or through
      agents or employees and shall be entitled to request and act in reliance upon
      the advise of counsel concerning all matters pertaining to its duties hereunder
      and shall not be liable for any action taken or omitted to be taken by it in
      good faith in accordance therewith. 

     

    Neither
      the Filing Agent nor any of its directors, officers or employees shall be liable
      or responsible to the Secured Party or to the Securing Party for any action
      taken or omitted to be taken by the Filing Agent or any other such person
      hereunder or under any related agreement, instrument or document, except in
      the
      case of gross negligence or willful misconduct on the part of the Filing Agent,
      nor shall the Filing Agent or any of its directors, officers or employees be
      liable or responsible for (A) the validity, effectiveness, sufficiency,
      enforceability or enforcement of the Notes, this Agreement or any instrument
      or
      document delivered hereunder or relating hereto; (B) the title of the
      Company to any of the Collateral or the freedom of the Collateral from any
      prior
      or other liens or security interests; (C) the determination, verification
      or enforcement of the Company’s compliance with any of the terms and conditions
      of this Agreement; (D) the failure by the Company to deliver any instrument
      or document required to be delivered pursuant to the terms hereof; or
      (E) the receipt, disbursement, waiver, extension or other handling of
      payments or proceeds made or received with respect to the Collateral, the
      servicing of the Collateral or the enforcement or the collection of any amounts
      owing with respect to the Collateral.

     

    In
      the
      case of this Agreement and the transactions contemplated hereby and any related
      document relating to any of the Collateral, the Secured Party agrees to pay
      to
      the Filing Agent, on demand, all fees and all expenses incurred in connection
      with the operation and enforcement of this Agreement, the Notes or any related
      agreement to the extent that such fees or expenses have not been paid by the
      Company. In connection to this Agreement, and each instrument and document
      relating to any of the Collateral, the Secured Party and the Securing Party
      hereby agree to hold the Filing Agent harmless, and to indemnify the Filing
      Agent from and against any and all loss, damage, expense or liability which
      may
      be incurred by the Filing Agent under this Agreement and the transactions
      contemplated hereby, unless such liability shall be caused by the willful
      misconduct or gross negligence of the Filing Agent; provided,
      however,
      that
      the Secured Party shall only be required to indemnify the Filing Agent for
      up to
      an amount equal to the amount paid by the Secured Party pursuant to the Notes
      issued to the Secured Party.

    

    6.
      Performance
      by the Secured Party of the Securing Party’s
      Obligations.
      If the
      Securing Party fails to per-form or comply with any of its representations,
      warranties, covenants or agreements contained in this Agreement and the Secured
      Party performs or complies, or otherwise causes performance or compliance,
      with
      such representation, warranty, covenant or agreement in accordance with the
      terms of this Agreement, then the reasonable expenses of the Secured Party
      incurred in connection with such performance or compliance shall be payable
      by
      the Securing Party to the Secured Party on demand and
      shall
      constitute Obligations secured
      by this Agreement.

     

    7. Remedies.
      If an
      Event of Default has occurred and is continuing, the Secured Party may exercise,
      in addition to all other rights and remedies granted to it in this Agreement
      and
      in any other instrument or agreement relating to the Obligations, all rights
      and
      remedies of a secured party under the UCC. Without limiting the foregoing,
      the
      Secured Party, without demand of performance or other demand, presentment,
      protest, advertisement or notice of any kind (except any notice required by
      law
      or expressly required herein) to or upon the Securing Party or any other person
      (all of which demands, defenses, advertisements and notices are hereby waived),
      may in such circumstances exercise any and all of the following rights and
      remedies, all of which shall be cumulative and not mutually exclusive:

     

    (a) The
      Secured Party may declare by written notice to the Company the Notes, including
      principal plus any accrued interest and any other amounts owing thereunder,
      immediately due and payable;

     

    (b)
       The
      Secured Party may collect, receive, appropriate and realize upon any or all
      of
      the Collateral; and/or 

     

    (c) The
      Secured Party may sell, lease, assign, give an option or options to purchase,
      or
      otherwise dispose of and deliver any or all of the Collateral (or contract
      to do
      any of the foregoing), in one or more parcels at a public or private sale or
      sales, at any exchange, broker’s board or office of the Secured Party or
      elsewhere upon such terms and conditions as the Secured Party may deem
      advisable, for cash or on credit or for future delivery without assumption
      of
      any credit risk. The Secured Party shall have the right upon any such public
      sale or sales and, to the extent permitted by law, upon any such private sale
      or
      sales, to purchase all or any part of the Collateral so sold, free of any right
      or equity of redemption in the Securing Party, which right or equity is hereby
      waived or released. 

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    8. Application
      of Proceeds.
      The
      Secured Party shall apply the net proceeds of any collection, recovery, receipt,
      appropriation, realization, sale or other sum received or collected by the
      Secured Party, whether before or after an Event of Default, on account of the
      Collateral, after deducting all reasonable expenses incurred therein or in
      connection with the care or safekeeping of any of the Collateral or in any
      way
      relating to the Collateral or the rights of the Secured Party under this
      Agreement (including, without limitation, reasonable attorneys’ fees and
      expenses), to the payment in whole or in part of the Obligations, in such order
      as the Secured Party may elect, and only after such application and after the
      payment by the Secured Party of any other amount required by any provision
      of
      law. Any remaining surplus shall be paid to the Securing Party without demand.
      If any notice of a proposed sale or other disposition of Collateral shall be
      required by law, such notice shall be deemed reasonable and proper if given
      at
      least ten days before such sale or other disposition. The Securing Party shall
      remain liable for any deficiency if the proceeds of any sale or other
      disposition of the Collateral are insufficient to pay the Obligations and the
      reasonable fees and disbursements of any attorneys employed by the Secured
      Party
      to collect such deficiency. 

     

    9. Limitation
      on Duties Regarding Preservation of Collateral.
      The
      Secured Party’s sole duty with respect to the custody, safekeeping and
      preservation of the Collateral, under Section 9207 of the UCC or otherwise,
      shall be to use reasonable care in the custody and preservation thereof. Neither
      the Secured Party nor any of its respective directors, officers, employees
      or
      agents shall be liable for failure to demand, collect or realize upon all or
      any
      part of the Collateral or for any delay in doing so or shall be under any
      obligation to sell or otherwise dispose of any Collateral upon the request
      of
      the Securing Party or otherwise.

     

    10. No
      Waiver; Cumulative Remedies.
      The
      Secured Party shall not by any act (except by a written instrument pursuant
      to
      Section 12(a) hereof), delay, indulgence, omission or otherwise be deemed
      to have waived any right or remedy hereunder or to have acquiesced in any
      default under the Notes or in any breach of any of the terms and conditions
      of
      this Agreement. No failure to exer-cise, nor any delay in exercising, on the
      part of the Secured Party, any right, power or privilege hereunder shall operate
      as a waiver thereof. No single or partial exercise of any right, power or
      privilege hereunder shall preclude any other or further exercise thereof or
      the
      exercise of any other right, power or privilege. A waiver by the Secured Party
      of any right or remedy under this Agreement on any one occasion shall not be
      construed as a bar to any right or remedy which the Secured Party would
      otherwise have on any subsequent occasion. The rights and remedies provided
      in
      this Agreement are cumulative, may be exercised singly or concurrently and
      are
      not exclusive of any rights or remedies provided by law.

     

    11. Termination
      of Security Interest.
      Upon
      satisfaction of the Securing Party’s Obligations pursuant to the Notes and this
      Agreement, the security interest granted herein shall terminate and all rights
      to the Collateral shall revert to the Securing Party. Upon any such termination,
      the Secured Party shall authenticate and deliver to the Securing Party such
      documents as the Securing Party may reasonably request to evidence such
      termination.

     

    12. Miscellaneous.

     

    (a) Amendments
      and Waivers.
      This
      Agreement may be amended or terminated and the observance of any term of this
      Agreement may be waived (either generally or in a particular instance and either
      retroactively or prospectively), with the written consent of the Company and
      the
      Secured Party. 

     

    (b) Transfer;
      Successors and Assigns.
       The
      terms
      and conditions of this Agreement shall be binding upon the Securing Party and
      its successors and assigns, as well as all persons who become bound as a
      Securing Party to this Agreement and inure to the benefit of the Secured Party
      and its successors and assigns. Nothing in this Agreement, express or implied,
      is intended to confer upon any parties other than the parties hereto or their
      respective successors and assigns any rights, remedies, obligations
      or liabilities under or by reason of this Agreement, except as expressly
      provided in this Agreement.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (c)
       Arbitration. Each
      party agrees that any dispute, controversy, or claim arising in relation to
      this
      Agreement, including with regard to its validity, invalidity, breach,
      enforcement or termination, shall be resolved by binding arbitration in London,
      England, in accordance with the rules of arbitration which are in force in
      the
      United Kingdom on the date when the notice of arbitration is submitted. The
      arbitrability of such dispute, claim or controversy shall also be determined
      in
      such arbitration. Such arbitration proceeding shall be conducted in the English
      language before one (1) arbitrator agreed to by the parties. Both the foregoing
      agreement of the parties to arbitrate any and all such disputes, claims and
      controversies, and the results, determinations, findings, judgments and/or
      awards rendered through any such arbitration shall be final and binding on
      the
      parties hereto and may be specifically enforced by legal proceedings.

     

    (d) Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original and all of which together shall constitute one instrument.
      Either or all parties may execute this Agreement by facsimile signature or
      scanned
      signature in PDF format, and
      any
      such facsimile signature or scanned signature, if
      identified, legible and complete, shall
      be
      deemed an original signature and each of the parties is hereby authorized to
      rely thereon.

     

    (e) Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this
      Agreement.

     

    (f) Notices.
      All
      notices and other communications made pursuant to this Agreement shall be in
      writing and shall be conclusively deemed to have been duly given: 

     

     

    (i) in
      the
      case of hand delivery to the address set forth below, on the next Business
      Day
      after delivery;

     

    (ii) in
      the
      case of delivery by an internationally recognized overnight courier to the
      address set forth below, freight prepaid, on the next Business Day after
      delivery and signed receipt by the recipient; and 

     

    (iii) in
      the
      case of a notice sent by facsimile transmission to the number and addressed
      as
      set forth below, on the next Business Day after delivery, if receipt of such
      facsimile transmission is confirmed. 

     

    For
      all
      notices given pursuant to one of the methods listed above, a copy of the notice
      should also be sent by email to the email address set forth below.

    

    Contact
      details:

     

    If
      to
      the Secured Party:

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    Address
      for notices being delivered by hand/courier: 

    

    c/o
      Inventages Whealth Management Inc.

    Winterbotham
      Place, Marlborough & Queen Streets

    P.
      O. Box
      N-3026

    Nassau,
      The Bahamas, Attn: Dr. Gunnar Weikert

    

    Always
      with a copy to: IVC SA, Route de Coppet 26A, 1291 - Commugny, Switzerland,
      Attn:
      Dr. Bogdan von Rueckmann

    

    Always
      with a copy to:  weikert@inventages.com
      and
portfolio@inventages.com

    

    Number
      for notices being delivered by facsimile transmission:

    

    To:
      IVC
      SA, Attn: Dr. Bogdan von Rueckmann, at: +41 21 823 0001

    

    Always
      with a copy to: weikert@inventages.com
      and
portfolio@inventages.com 

    

    If
      to
      the Company:
       

    

    Address
      for notices being delivered by hand/courier:

    

    Organic
      To Go Food Corporation

    3317
      Third Avenue South

    Seattle,
      Washington 98134

    Attn:
      Chief Financial Officer

    

    Always
      with a copy to:

    

    Loeb
      & Loeb LLP

    10100
      Santa Monica Boulevard

    Suite
      2200

    Los
      Angeles, California 90067

    Attention:
      Lawrence Venick, Esq.

    

    Number
      for notices being delivered by facsimile transmission:

    

    To:
      Organic To Go Food Corporation, Attn: Chief Financial Officer, at: +1 206 299
      3707 

    

    Always
      with a copy to: Loeb & Loeb LLP, Attn: Lawrence Venick, Esq, at: +1 310 282
      2200

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    A
      party
      may change or supplement the contact details for service of any notice pursuant
      to this Agreement, or designate additional addresses, facsimile numbers and
      email addresses for the purposes of this Section 8(h) by giving the other
      parties written notice of the new contact details in the manner set forth
      above.

     

    (g) Payments
      Free of Taxes, Etc. All
      payments made by the Securing Party under this Agreement shall be made by the
      Securing Party free and clear of and without deduction for any and all present
      and future taxes, levies, charges, deductions and withholdings excluding any
      taxes based on or measured by the net income of the Secured Party. In addition,
      the Securing Party shall pay upon demand any stamp or other taxes, levies or
      charges of any jurisdiction with respect to the execution, delivery,
      registration, performance and enforcement of this Agreement. Upon request by
      the
      Secured Party, the Securing Party shall furnish evidence satisfactory to such
      Secured Party that all requisite authorizations and approvals by, and notices
      to
      and filings with, governmental authorities and regulatory bodies have been
      obtained and made and that all requisite taxes, levies and charges have been
      paid except to the extent the validity thereof is being contested in good faith
      and adequate reserves are being maintained in connection therewith.

     

    (h) Severability.
      If one
      or more provisions of this Agreement are held to be unenforceable under
      applicable law, the parties agree to renegotiate such provision in good faith,
      in order to maintain the economic position enjoyed by each party as close as
      possible to that under the provision rendered unenforceable. In the event that
      the parties cannot reach a mutually agreeable and enforceable replacement for
      such provision, then (i) such provision shall be excluded from this
      Agreement, (ii) the balance of the Agreement shall be interpreted as if
      such provision were so excluded and (iii) the balance of the Agreement
      shall be enforceable in accordance with its terms.

     

    (i) Entire
      Agreement.
      This
      Agreement, and the documents referred to herein constitute the entire agreement
      between the parties hereto pertaining to the subject matter hereof.

     

    (j) Confidentiality.
      The
      Secured Party agrees to use the same degree of care as Secured Party uses to
      protect its own confidential information to keep confidential any information
      furnished to such Secured Party pursuant to the Purchase Agreement, the Note
      and
      Warrant Purchase Agreement, the Notes or this Agreement that the Company
      identifies as being confidential or proprietary (so long as such information
      is
      not in the public domain), except that the Secured Party may disclose such
      proprietary or confidential information (i) to any partner, subsidiary or parent
      of such Secured Party as long as such partner, subsidiary or parent is advised
      of and agrees or has agreed to be bound by the confidentiality provisions of
      this Section 11(j) or comparable restrictions; (ii) at such time as it
      enters the public domain through no fault of such Secured Party; (iii) that
      is
      communicated to it free of any obligation of confidentiality; (iv) that is
      developed by such Secured Party or its agents independently of and without
      reference to any confidential information communicated by the Company; or (v)
      as
      required by applicable law.

     

    (k) Governing
      Law.
      This
      Agreement and all actions arising out of or in connection with this Agreement
      shall be governed by and construed in accordance with the laws of the State
      of
      California, without regard to the conflicts of law provisions of the State
      of
      California or of any other state. 

     

    [Signature
      Page Follows]

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    The
      Securing Party and the Secured Party have caused this Agreement to be duly
      executed and delivered as of the date first above written.

     

    
      	 	
              ORGANIC
                TO GO FOOD CORPORATION

              a
                Delaware corporation

               

              By:
                _________________________________

              Name:
                Jason Brown

              Title:
                Chief Executive Officer

               

               

              W.HEALTH
                L.P.

               

              By:
                _________________________________

              Dr.
                Gunnar Weikert

              Director,
                Inventages Whealth Management, Inc., as General Partner of W.Health
                L.P.

              

              By:
                __________________________________

              Dr.
                Wolfgang Reichenberger

              Director,
                Inventages Whealth Management, Inc., as General Partner of W.Health
                L.P.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Exhibit
      A

    List
      of Existing Liens

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