Document:

SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (the "AGREEMENT"), dated as of May 1, 2006, by and
among Sorell Inc., a Nevada corporation, with headquarters located at Buk-ri 35,
Nama-Myun, Yongin City, South Korea (the "COMPANY"), and the investors listed on
the  Schedule  of  Buyers  attached  hereto  (individually,  a  "BUYER"  and
collectively,  the  "BUYERS").

WHEREAS:

A.     The  Company and each Buyer is executing and delivering this Agreement in
reliance  upon  the  exemption  from securities registration afforded by Section
4(2) of the Securities Act of 1933, as amended (the "1933 ACT"), and Rule 506 of
Regulation D ("REGULATION D") as promulgated by the United States Securities and
Exchange  Commission  (the  "SEC")  under  the  1933  Act.

B.     The  Company  has  authorized a new series of 8% Senior Convertible Notes
(the  "NOTES")  of  the  Company,  which  Notes  shall  be  convertible into the
Company's  common  stock,  $0.001  par  value per share (the "COMMON STOCK"), in
accordance  with  the  terms  of  the  Notes.

C.     Each  Buyer  wishes to purchase, and the Company wishes to sell, upon the
terms  and  conditions  stated  in  this Agreement, (i) that aggregate principal
amount  of  Notes,  in  substantially the form attached hereto as Exhibit A, set
                                                                  ---------
forth  opposite such Buyer's name in column (3) on the Schedule of Buyers (which
aggregate  amount  for  all  Buyers shall be a minimum of $1,000,000 and up to a
maximum of $2,000,000) (as converted, collectively, the "CONVERSION SHARES") and
(ii)  Warrants,  in  substantially  the  form  attached  hereto  as  Exhibit  B
                                                                     ----------
(collectively, the "WARRANTS"), to acquire that number of shares of Common Stock
(as  exercised,  collectively,  the  "WARRANT  SHARES")  set forth opposite such
Buyer's  name  in  column  (4)  on  the  Schedule  of  Buyers.

D.     The  Notes  bear  interest,  which, subject to certain conditions, may be
paid  in  Common  Stock  ("INTEREST  SHARES").

E.     Contemporaneously  with the execution and delivery of this Agreement, the
parties  hereto  are  executing  and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit C (the "REGISTRATION RIGHTS
                                             ---------
AGREEMENT"),  pursuant  to  which  the  Company  has  agreed  to provide certain
registration  rights  with respect to the Conversion Shares, Interest Shares and
Warrant  Shares  under  the  1933  Act and the rules and regulations promulgated
thereunder,  and  applicable  state  securities  laws.

F.     The  Notes,  the Conversion Shares, the Interest Shares, the Warrants and
the Warrant Shares, are collectively are referred to herein as the "SECURITIES".

NOW,  THEREFORE,  the  Company  and  each  Buyer  hereby  agree  as  follows:

1.     PURCHASE  AND  SALE  OF  NOTES  AND  WARRANTS.

(a)     Amount.  Subject  to  the satisfaction (or waiver) of the conditions set
        ------
forth

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<PAGE>

in  Sections  6 and 7 below, the Company shall issue and sell to each Buyer, and
each  Buyer  severally,  but not jointly, agrees to purchase from the Company on
the  Closing  Date  (as  defined  below), a principal amount of Notes, as is set
forth  opposite such Buyer's name in column (3) on the Schedule of Buyers, along
with  Warrants to acquire that number of Warrant Shares as is set forth opposite
such  Buyer's  name  in  column  (4)  on  the  Schedule  of  Buyers.

(b)     Closing.  The  closing  (the "CLOSING") of the purchase of the Notes and
        -------
the Warrants by the Buyers shall occur at the offices of Sichenzia Ross Friedman
Ference  LLP, 1065 Avenue of the Americas, 21st Floor, New York, New York 10018.
The  date  and time of the Closing (the "CLOSING DATE") shall be 10:00 a.m., New
York  City Time, on the date hereof, subject to notification of satisfaction (or
waiver) of the conditions to the Closing set forth in Sections 6 and 7 below (or
such  later  date  as  is  mutually  agreed  to  by the Company and each Buyer).

(c)     Purchase  Price.  The  purchase  price  for  each  Buyer  (the "PURCHASE
        ---------------
PRICE")  of  the Notes and related Warrants to be purchased by each Buyer at the
Closing  shall  be  equal  to  $1.00 for each $1.00 of principal amount of Notes
being  purchased  by such Buyer at the Closing.  The aggregate Purchase Price to
be  paid by each Buyer at the Closing is as set forth opposite such Buyer's name
in  column  (3)  on  the  Schedule  of  Buyers.

(d)     Form  of  Payment.  On  the  Closing  Date, (A) each Buyer shall pay its
        -----------------
aggregate  Purchase  Price  to  the Company for the Notes and the Warrants to be
issued  and  sold  to such Buyer at the Closing, by wire transfer of immediately
available  funds  to  the  Company's  escrow account (the "ESCROW ACCOUNT") with
Signature  Bank  as  escrow  agent  in  accordance  with  the below written wire
instructions,  and  (B)  the  Company shall deliver to each Buyer the Notes  (in
such  principal  amount as is set forth opposite such Buyer's name in column (3)
on  the Schedule of Buyers), along with the Warrants (exercisable for the number
of  shares  of Common Stock as is set forth opposite such Buyer's name in column
(4)  on the Schedule of Buyers), each duly executed on behalf of the Company and
registered in the name of such Buyer or its designee.  Wire instructions for the
Escrow  Account  are  as  follows:

Name:     Continental  Stock  Transfer  &  Trust  Company  AAF  SORELL  INC
     CST&T  AAF  SORELL  INC
     Bank:          JP  Morgan  Chase  Bank
Account:     530-061406
ABA:          021000021

     2.     BUYER'S  REPRESENTATIONS  AND  WARRANTIES.

Each  Buyer  represents  and  warrants  with  respect  to  only  itself  that:

(a)     Organization;  Authority.  Such  Buyer,  if an entity is duly organized,
        ------------------------
validly  existing and in good standing under the laws of the jurisdiction of its
organization.  Buyer  has the requisite power and authority to enter into and to
consummate  the  transactions  contemplated  by  the  Transaction  Documents (as
defined below) to which it is a party and otherwise to carry out its obligations
hereunder  and  thereunder.

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<PAGE>

(b)     No  Public  Sale or Distribution.  Such Buyer is (i) acquiring the Notes
        --------------------------------
and  the Warrants, (ii) upon conversion of the Notes will acquire the Conversion
Shares, and (iii) upon exercise of the Warrants will acquire the Warrant Shares,
in  each case, for its own account and not with a view towards, or for resale in
connection  with,  the  public  sale or distribution thereof, except pursuant to
sales  registered  or  exempted  under  the 1933 Act; provided, however, that by
making  the representations herein, such Buyer does not agree to hold any of the
Securities  for  any  minimum  or  other specific term and reserves the right to
dispose  of  the  Securities  at  any  time  in accordance with or pursuant to a
registration  statement  or  an  exemption  under  the  1933 Act.  Such Buyer is
acquiring the Securities hereunder in the ordinary course of its business.  Such
Buyer  does  not  presently  have  any  agreement  or understanding, directly or
indirectly,  with  any  Person  to  distribute  any  of  the  Securities.

(c)     Accredited  Investor  Status.  Such Buyer is an "accredited investor" as
        ----------------------------
that  term  is  defined  in  Rule  501(a)  of  Regulation  D.

(d)     Reliance  on Exemptions.  Such Buyer understands that the Securities are
        -----------------------
being  offered  and  sold  to  it  in  reliance  on specific exemptions from the
registration requirements of United States federal and state securities laws and
that  the  Company  is  relying in part upon the truth and accuracy of, and such
Buyer's  compliance  with,  the  representations,  warranties,  agreements,
acknowledgments  and  understandings  of such Buyer set forth herein in order to
determine  the availability of such exemptions and the eligibility of such Buyer
to  acquire  the  Securities.

(e)     Information.  Such  Buyer  and its advisors, if any, have been furnished
        -----------
with  all  materials  relating  to  the business, finances and operations of the
Company  and  materials  relating  to the offer and sale of the Securities which
have  been  requested  by such Buyer.  Such Buyer and its advisors, if any, have
been  afforded  the  opportunity  to ask questions of the Company.  Neither such
inquiries  nor any other due diligence investigations conducted by such Buyer or
its  advisors, if any, or its representatives shall modify, amend or affect such
Buyer's  right to rely on the Company's representations and warranties contained
herein.  Such Buyer understands that its investment in the Securities involves a
high  degree  of  risk.  Such  Buyer  has  sought such accounting, legal and tax
advice  as  it  has considered necessary to make an informed investment decision
with  respect  to  its  acquisition  of  the  Securities.

(f)     No  Governmental  Review.  Such  Buyer understands that no United States
        ------------------------
federal  or  state  agency  or  any  other government or governmental agency has
passed  on  or  made  any recommendation or endorsement of the Securities or the
fairness  or  suitability  of  the  investment  in  the Securities nor have such
authorities  passed  upon  or  endorsed  the  merits  of  the  offering  of  the
Securities.

(g)     Transfer  or  Resale.  Such Buyer understands that except as provided in
        --------------------
the  Registration Rights Agreement: (i) the Securities have not been and are not
being registered under the 1933 Act or any state securities laws, and may not be
offered  for  sale,  sold,  assigned  or  transferred  unless  (A)  subsequently
registered  thereunder,  (B)  such  Buyer shall have delivered to the Company an
opinion  of counsel, by counsel reasonably acceptable to the Company and in form
and  substance  reasonably  satisfactory to the Company, to the effect that such
Securities  to  be  sold,  assigned  or  transferred  may  be  sold, assigned or
transferred  pursuant  to  an  exemption

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<PAGE>

from  such  registration, or (C) such Buyer provides the Company with reasonable
assurance  that such Securities can be sold, assigned or transferred pursuant to
Rule  144  or  Rule  144A  promulgated  under  the  1933  Act, as amended, (or a
successor  rule  thereto)  (collectively,  "RULE  144");  (ii)  any  sale of the
Securities  made in reliance on Rule 144 may be made only in accordance with the
terms  of Rule 144 and further, if Rule 144 is not applicable, any resale of the
Securities under circumstances in which the seller (or the Person (as defined in
Section  3(s)) through whom the sale is made) may be deemed to be an underwriter
(as that term is defined in the 1933 Act) may require compliance with some other
exemption under the 1933 Act or the rules and regulations of the SEC thereunder;
and  (iii)  neither  the Company nor any other Person is under any obligation to
register  the  Securities  under the 1933 Act or any state securities laws or to
comply  with  the  terms  and  conditions  of  any  exemption  thereunder.  The
Securities  may  be pledged pursuant to an available exemption from registration
under  the  1933 Act in connection with a bona fide margin account or other loan
or financing arrangement secured by the Securities and such pledge of Securities
shall  not  be  deemed  to  be  a transfer, sale or assignment of the Securities
hereunder,  and  no  Buyer effecting a pledge of Securities shall be required to
provide  the  Company  with any notice thereof or otherwise make any delivery to
the  Company  pursuant  to  this Agreement or any other Transaction Document (as
defined  in  Section  3(b)),  including,  without limitation, this Section 2(g).

(h)     Legends.  Such  Buyer  understands  that  the  certificates  or  other
        -------
instruments  representing the Notes and the Warrants and, until such time as the
resale  of the Conversion Shares, the Warrant Shares and the Interest Shares, if
any, have been registered under the 1933 Act as contemplated by the Registration
Rights Agreement, the stock certificates representing the Conversion Shares, the
Warrant Shares and the Interest Shares, if any, except as set forth below, shall
bear  any  legend  as  required  by  the  "blue  sky"  laws  of  any state and a
restrictive  legend  in  substantially  the  following form (and a stop-transfer
order  may  be  placed  against  transfer  of  such  stock  certificates):

NEITHER  THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR  THE  SECURITIES  INTO WHICH THESE SECURITIES ARE [CONVERTIBLE][EXERCISABLE]
HAVE  BEEN][THE  SECURITIES  REPRESENTED  BY  THIS  CERTIFICATE  HAVE  NOT BEEN]
REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES  LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR  ASSIGNED  (I)  IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE  SECURITIES  UNDER  THE  SECURITIES  ACT OF 1933, AS AMENDED, AND APPLICABLE
STATE  SECURITIES  LAWS, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE
FORM,  THAT  REGISTRATION  IS  NOT  REQUIRED UNDER SAID ACT AND APPLICABLE STATE
SECURITIES  LAWS  OR  (II)  UNLESS  SOLD PURSUANT TO RULE 144(K) UNDER SAID ACT.
NOTWITHSTANDING  THE  FOREGOING,  THE  SECURITIES  MAY BE PLEDGED PURSUANT TO AN
AVAILABLE  EXEMPTION  FROM  REGISTRATION UNDER THE 1933 ACT IN CONNECTION WITH A
BONA  FIDE  MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.

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<PAGE>

The  legend  set  forth  above  shall  be  removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped,  if,  unless  otherwise  required  by  state  securities laws, (i) such
Securities are registered for resale under the 1933 Act, (ii) in connection with
a  sale,  assignment or other transfer, such holder provides the Company with an
opinion  of counsel, by counsel reasonably acceptable to the Company and in form
and  substance  reasonably  satisfactory to the Company, to the effect that such
sale,  assignment or transfer of the Securities may be made without registration
under the applicable requirements of the 1933 Act, or (iii) such holder provides
the  Company with reasonable assurance that the Securities can be sold, assigned
or  transferred  pursuant  to  Rule  144(k).

(i)     Validity;  Enforcement.  This  Agreement  and  the  Registration  Rights
        ----------------------
Agreement  to which such Buyer is a party have been duly and validly authorized,
executed  and  delivered on behalf of such Buyer and shall constitute the legal,
valid  and  binding  obligations of such Buyer enforceable against such Buyer in
accordance  with  their  respective  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.

(j)     No  Conflicts.  The execution, delivery and performance by such Buyer of
        -------------
this  Agreement  and  the Registration Rights Agreement to which such Buyer is a
party and the consummation by such Buyer of the transactions contemplated hereby
and  thereby  will  not (i)  if Buyer is an entity, result in a violation of the
organizational  documents  of  such Buyer or (ii) conflict with, or constitute a
default  (or  an event which 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 of, any agreement, indenture or instrument to which
such  Buyer  is  a  party,  or  (iii)  result  in  a violation of any law, rule,
regulation,  order,  judgment  or  decree  (including  United States federal and
state  securities  laws) applicable to such Buyer, except in the case of clauses
(ii)  and  (iii) above, for such conflicts, defaults, rights or violations which
would  not,  individually  or in the aggregate, reasonably be expected to have a
material  adverse effect on the ability of such Buyer to perform its obligations
hereunder.

(k)     Residency.  Such  Buyer  is  a  resident  of that jurisdiction specified
        ---------
below  its  address  on  the  Schedule  of  Buyers.

3.     REPRESENTATIONS  AND  WARRANTIES  OF  THE  COMPANY.

The  Company  represents  and  warrants  to  each  of  the  Buyers  that:

(a)     Organization  and  Qualification.  The  Company  and  its "SUBSIDIARIES"
        --------------------------------
(which  for  purposes  of  this Agreement means any entity in which the Company,
directly  or  indirectly,  owns  capital  stock  or  holds  an equity or similar
interest)  are  entities  duly  organized  and validly existing in good standing
under  the  laws  of  the  jurisdiction  in  which they are formed, and have the
requisite  power and authorization to own their properties and to carry on their
business  as  now  being conducted.  Each of the Company and its Subsidiaries is
duly  qualified  as  a  foreign entity to do business and is in good standing in
every  jurisdiction  in  which  its

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<PAGE>

ownership  of  property or the nature of the business conducted by it makes such
qualification  necessary,  except  to  the  extent  that  the  failure  to be so
qualified  or  be in good standing would not have a Material Adverse Effect.  As
used  in  this  Agreement,  "MATERIAL ADVERSE EFFECT" means any material adverse
effect  on  the business, properties, assets, operations, results of operations,
condition  (financial  or  otherwise)  or  prospects  of  the  Company  and  its
Subsidiaries,  taken  as a whole, or on the transactions contemplated hereby and
by  the  other  Transaction Documents or by the agreements and instruments to be
entered into in connection herewith or therewith, or on the authority or ability
of  the  Company  to perform its obligations under the Transaction Documents (as
defined  below).  The  Company  has  no  Subsidiaries,  except  as  set forth on
Schedule  3(a).
       -------

(b)     Authorization;  Enforcement;  Validity.  The  Company  has the requisite
        --------------------------------------
corporate  power  and  authority to enter into and perform its obligations under
this  Agreement, the Notes, the Warrants, the Registration Rights Agreement, and
each  of  the  other agreements entered into by the parties hereto in connection
with  the  transactions  contemplated  by  this  Agreement  (collectively,  the
"TRANSACTION  DOCUMENTS")  and  to  issue  the Securities in accordance with the
terms  hereof  and  thereof.  The  execution  and  delivery  of  the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated  hereby and thereby, including, without limitation, the issuance of
the  Notes,  the  reservation  for  issuance  and the issuance of the Conversion
Shares  issuable  upon conversion of the Notes, the issuance of the Warrants and
the  reservation  for  issuance and issuance of the Warrant Shares issuable upon
exercise  of  the  Warrants, have been duly authorized by the Company's Board of
Directors  and  (other  than the filing with the SEC of one or more Registration
Statements  in  accordance  with  the  requirements  of  the Registration Rights
Agreement  and  any  other  filings  as  may be required by any state securities
agencies)  no  further  filing,  consent,  or  authorization  is required by the
Company,  its  Board  of  Directors or its stockholders.  This Agreement and the
other  Transaction  Documents  of even date herewith have been duly executed and
delivered  by  the  Company,  and  constitute  the  legal,  valid  and  binding
obligations  of  the Company, enforceable against the Company in accordance with
their  respective terms, except as such enforceability may be limited by general
principles  of  equity  or  applicable  bankruptcy,  insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement  of  applicable  creditors'  rights  and  remedies.

(c)     Issuance  of Securities.  The issuance of the Notes and the Warrants are
        -----------------------
duly  authorized  and  upon  issuance  in  accordance  with  the  terms  of  the
Transaction  Documents  shall  be  free  from  all taxes, liens and charges with
respect  to  the  issue  thereof.  As  of  the  Closing,  the Company shall have
reserved  from  its  duly  authorized capital stock not less than the sum of (i)
100% of the maximum number of shares of Common Stock issuable upon conversion of
the  Notes  (assuming for purposes hereof, that the Notes are convertible at the
Conversion  Price  and  without  taking  into  account  any  limitations  on the
conversion  of  the  Notes  set forth in the Notes) and (ii) 100% of the maximum
number of shares of Common Stock issuable upon exercise of the Warrants (without
taking into account any limitations on the exercise of the Warrants set forth in
the  Warrants).  Upon  issuance  or  conversion  in accordance with the Notes or
exercise  in  accordance  with  the  Warrants,  as the case may be, the Interest
Shares,  the  Conversion  Shares  and  the Warrant Shares, respectively, will be
validly  issued,  fully  paid  and nonassessable and free from all preemptive or
similar rights, taxes, liens and charges with respect to the issue thereof, with
the  holders  being entitled to all rights accorded to a holder of Common Stock.
Based  on  the

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<PAGE>

representations  and warranties of the Buyers contained in Section 2 hereof, the
offer  and issuance by the Company of the Securities is exempt from registration
under  the  1933  Act.

(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 hereby and thereby (including, without limitation, the
issuance  of  the  Notes,  the  Warrants,  and  reservation  for issuance of the
Conversion  Shares  and the Warrant Shares and Interest Shares, if any) will not
(i)  result  in  a  violation  of  the  Articles of Incorporation (as defined in
Section  3(r))  of  the Company or any of its Subsidiaries, any capital stock of
the  Company or Bylaws (as defined in Section 3(r)) of the Company or any of its
Subsidiaries  or  (ii) conflict with, or constitute a default (or an event which
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 of,
any  agreement,  indenture  or  instrument  to  which  the Company or any of its
Subsidiaries  is  a  party,  except  to  the  extent  such  conflict, default or
termination  right  would  not reasonably be expected to have a Material Adverse
Effect,  or  (iii)  result  in  a violation of any law, rule, regulation, order,
judgment or decree (including United States federal and state securities laws or
regulations  and  the  rules  and  regulations  of  the  OTC Bulletin Board (the
"PRINCIPAL  MARKET")  applicable to the Company or any of its Subsidiaries or by
which  any  property or asset of the Company or any of its Subsidiaries is bound
or affected except to the extent such violation would not reasonably be expected
to  have  a  Material  Adverse  Effect.

(e)     Consents.  The  Company  is  not  required  to  obtain  any  consent,
        --------
authorization  or  order of, or make any filing or registration with, any court,
        --
governmental  agency  or  any  regulatory or self-regulatory agency or any other
Person  in  order  for  it to execute, deliver or perform any of its obligations
under  or  contemplated by the Transaction Documents, in each case in accordance
with the terms hereof or thereof.  All consents, authorizations, orders, filings
and  registrations  which  the  Company  is  required  to obtain pursuant to the
preceding  sentence  have  been  obtained or effected on or prior to the Closing
Date,  and  the  Company  and  its  Subsidiaries  are  unaware  of  any facts or
circumstances which might prevent the Company from obtaining or effecting any of
the  registration,  application  or  filings pursuant to the preceding sentence.
The  Company  is  not  in violation of the listing requirements of the Principal
Market  and  has  no  knowledge  of  any  facts  which  would reasonably lead to
delisting  or  suspension  of  the  Common  Stock  in  the  foreseeable  future.

(f)     Acknowledgment  Regarding  Buyer's  Purchase of Securities.  The Company
        ----------------------------------------------------------
acknowledges  and  agrees  that  each  Buyer is acting solely in the capacity of
arm's  length  purchaser  with  respect  to  the  Transaction  Documents and the
transactions contemplated hereby and thereby and that no Buyer is (i) an officer
or  director  of  the Company, (ii) an "affiliate" of the Company (as defined in
Rule 144) or (iii) to the knowledge of the Company, a "beneficial owner" of more
than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of
the  Securities Exchange Act of 1934, as amended (the "1934 ACT")).  The Company
further acknowledges that no Buyer is acting as a financial advisor or fiduciary
of  the  Company  (or  in  any similar capacity) with respect to the Transaction
Documents  and  the transactions contemplated hereby and thereby, and any advice
given  by a Buyer or any of its representatives or agents in connection with the
Transaction  Documents  and  the transactions contemplated hereby and thereby is
merely  incidental  to  such  Buyer's  purchase  of  the  Securities.

                                        7
<PAGE>

The  Company  further  represents  to  each Buyer that the Company's decision to
enter  into  the  Transaction Documents has been based solely on the independent
evaluation  by  the  Company  and  its  representatives.

(g)     No  General  Solicitation; Placement Agent's Fees.  Neither the Company,
        -------------------------------------------------
nor  any  of  its  affiliates, nor any Person acting on its or their behalf, has
engaged  in  any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offer or sale of the Securities.
The  Company shall be responsible for the payment of any placement agent's fees,
financial advisory fees, or brokers' commissions (other than for persons engaged
by  any  Buyer  or  its  investment  advisor)  relating to or arising out of the
transactions  contemplated  hereby.  The  Company shall pay, and hold each Buyer
harmless against, any liability, loss or expense (including, without limitation,
attorney's  fees and out-of-pocket expenses) arising in connection with any such
claim.  The Company acknowledges that it has engaged New York Global Securities,
Inc.  as  placement  agent  (the  "AGENT")  in  connection  with the sale of the
Securities.  Other  than  the  Agent,  the Company has not engaged any placement
agent  or  other  agent  in  connection  with  the  sale  of  the  Securities.

(h)     No  Integrated  Offering.  None of the Company, its Subsidiaries, any of
        ------------------------
their  affiliates,  and  any  Person  acting  on  their  behalf has, directly or
indirectly,  made any offers or sales of any security or solicited any offers to
buy  any security, under circumstances that would require registration of any of
the Securities under the 1933 Act or cause this offering of the Securities to be
integrated  with  prior offerings by the Company for purposes of the 1933 Act or
any  applicable  stockholder approval provisions, including, without limitation,
under the rules and regulations of any exchange or automated quotation system on
which  any  of  the securities of the Company are listed or designated.  None of
the  Company,  its Subsidiaries, their affiliates and any Person acting on their
behalf  will take any action or steps referred to in the preceding sentence that
would  require registration of any of the Securities under the 1933 Act or cause
the  offering  of  the  Securities  to  be  integrated  with  other  offerings.

(i)     Dilutive  Effect.  The  Company  understands  and  acknowledges that the
        ----------------
number  of  Conversion  Shares  issuable  upon conversion of the Notes, and, the
Warrant  Shares issuable upon exercise of the Warrants, will increase in certain
circumstances.  The  Company  further  acknowledges that its obligation to issue
Conversion Shares upon conversion of the Notes in accordance with this Agreement
and  the  Notes  and its obligation to issue the Warrant Shares upon exercise of
the  Warrants  in  accordance  with  this Agreement and the Warrants is, in each
case,  absolute  and  unconditional  regardless of the dilutive effect that such
issuance  may  have  on  the  ownership  interests  of other stockholders of the
Company.

(j)     Application  of Takeover Protections; Rights Agreement.  The Company and
        ------------------------------------------------------
its  Board  of  Directors  have  taken all necessary action, if any, in order to
render  inapplicable  any poison pill (including any distribution under a rights
agreement)  or  other  similar  anti-takeover provision which is or could become
applicable  to  any  Buyer  as a result of the transactions contemplated by this
Agreement,  including,  without  limitation,  the  Company's  issuance  of  the
Securities  and  any  Buyer's  ownership of the Securities.  The Company has not
adopted  a  stockholder  rights  plan  or  similar  arrangement  relating  to
accumulations  of beneficial ownership of Common Stock or a change in control of
the  Company.

                                        8
<PAGE>

(k)          SEC  Documents;  Financial  Statements.  During  the  two (2) years
             --------------------------------------
prior  to  the date hereof, the Company has filed all reports, schedules, forms,
statements  and other documents required to be filed by it with the SEC pursuant
to  the reporting requirements of the 1934 Act (all of the foregoing filed prior
to  the  date hereof and all exhibits included therein and financial statements,
notes  and  schedules  thereto  and  documents incorporated by reference therein
being  hereinafter  referred  to  as  the  "SEC  DOCUMENTS").  The  Company  has
delivered  to  the  Buyers or their respective representatives true, correct and
complete  copies  of each of the SEC Documents not available on the EDGAR system
that  have  been requested by each Buyer.  As of their respective dates, the SEC
Documents  complied  in  all material respects with the requirements of the 1934
Act  and  the rules and regulations of the SEC promulgated thereunder applicable
to the SEC Documents, and none of the SEC Documents, at the time they were filed
with  the  SEC,  contained any untrue statement of a material fact or omitted to
state  a  material  fact  required to be stated therein or necessary in order to
make  the statements therein, in the light of the circumstances under which they
were  made,  not  misleading.  As  of  their  respective  dates,  the  financial
statements  of  the Company included in the SEC Documents complied as to form in
all  material respects with applicable accounting requirements and the published
rules  and  regulations  of  the SEC with respect thereto as in effect as of the
time of filing.  Such financial statements have been prepared in accordance with
generally  accepted  accounting  principles,  consistently  applied,  during the
periods  involved  (except  (i)  as may be otherwise indicated in such financial
statements  or  the  notes  thereto,  or  (ii)  in the case of unaudited interim
statements,  to  the  extent  they  may exclude footnotes or may be condensed or
summary  statements)  and  fairly present in all material respects the financial
position  of  the  Company  as  of  the  dates  thereof  and  the results of its
operations  and  cash  flows for the periods then ended (subject, in the case of
unaudited  statements,  to  normal  year-end  audit  adjustments).

(l)     Absence of Certain Changes.  Except as disclosed in Schedule 3(l), since
        --------------------------                          -------------
the  date of the Company's most recent audited financial statements contained in
a Form 10-KSB, there has been no material adverse change and no material adverse
development  in  the  business,  assets,  properties,  operations,  condition
(financial  or  otherwise),  results  of operations or prospects of the Company.
Except  as  disclosed  in  Schedule  3(l),  since the date of the Company's most
                           --------------
recent audited financials statements contained in a Form 10-KSB, the Company has
not (i) declared or paid any dividends, (ii) sold any assets, individually or in
the  aggregate,  in excess of $50,000 outside of the ordinary course of business
or  (iii)  had capital expenditures, individually or in the aggregate, in excess
of  $50,000.  The Company has not taken any steps to seek protection pursuant to
any  bankruptcy law nor does the Company have any knowledge or reason to believe
that  its creditors intend to initiate involuntary bankruptcy proceedings or any
actual  knowledge  of  any fact which would reasonably lead a creditor to do so.

(m)     No  Undisclosed  Events, Liabilities, Developments or Circumstances.  No
        -------------------------------------------------------------------
event,  liability,  development  or  circumstance  has occurred or exists, or is
contemplated  to  occur  with  respect to the Company, its Subsidiaries or their
respective  business,  properties, prospects, operations or financial condition,
that  would  be  required  to  be  disclosed  by  the  Company  under applicable
securities  laws  on  a  registration  statement  on Form S-1 filed with the SEC
relating  to  an  issuance and sale by the Company of its Common Stock and which
has  not  been  publicly  announced.

(n)     Conduct  of  Business;  Regulatory Permits.  Neither the Company nor its
        ------------------------------------------

                                        9
<PAGE>

Subsidiaries  is in violation of any term of or in default under its Articles of
Incorporation  or  Bylaws  or  their  organizational  charter  or  Articles  of
Incorporation  or  bylaws,  respectively.  Neither  the  Company  nor any of its
Subsidiaries  is  in  violation of any judgment, decree or order or any statute,
ordinance, rule or regulation applicable to the Company or its Subsidiaries, and
neither  the  Company  nor  any of its Subsidiaries will conduct its business in
violation  of  any of the foregoing, except in all cases for possible violations
which  would  not,  individually  or  in  the aggregate, have a Material Adverse
Effect.  Without limiting the generality of the foregoing, the Company is not in
violation  of  any  of  the  rules, regulations or requirements of the Principal
Market  and has no knowledge of any facts or circumstances that would reasonably
lead  to  delisting or suspension of the Common Stock by the Principal Market in
the  foreseeable future.  During the two (2) years prior to the date hereof, (i)
the Common Stock has been designated for quotation on the Principal Market, (ii)
trading  in  the Common Stock has not been suspended by the SEC or the Principal
Market  and  (iii)  the  Company has received no communication, written or oral,
from  the  SEC  or the Principal Market regarding the suspension or delisting of
the  Common  Stock  from the Principal Market.  The Company and its Subsidiaries
possess  all  certificates, authorizations and permits issued by the appropriate
regulatory  authorities necessary to conduct their respective businesses, except
where  the failure to possess such certificates, authorizations or permits would
not  have,  individually  or  in  the  aggregate, a Material Adverse Effect, and
neither  the  Company  nor  any  such  Subsidiary  has  received  any  notice of
proceedings  relating to the revocation or modification of any such certificate,
authorization  or  permit.

(o)     Foreign  Corrupt  Practices.  Neither  the  Company  nor  any  of  its
        ---------------------------
Subsidiaries  nor  any director, officer, agent, employee or other Person acting
        -
on  behalf  of  the Company or any of its Subsidiaries has, in the course of its
actions  for,  or on behalf of, the Company (i) used any corporate funds for any
unlawful  contribution,  gift, entertainment or other unlawful expenses relating
to  political activity; (ii) made any direct or indirect unlawful payment to any
foreign  or domestic government official or employee from corporate funds; (iii)
violated  or  is  in  violation  of  any  provision  of the U.S. Foreign Corrupt
Practices  Act  of  1977,  as  amended; or (iv) made any unlawful bribe, rebate,
payoff,  influence payment, kickback or other unlawful payment to any foreign or
domestic  government  official  or  employee.

(p)     Sarbanes-Oxley  Act.  The  Company  is  in  compliance  with any and all
        -------------------
applicable  requirements of the Sarbanes-Oxley Act of 2002 that are effective as
of the date hereof, and any and all applicable rules and regulations promulgated
by  the  SEC  thereunder  that are effective as of the date hereof, except where
such  noncompliance would not have, individually or in the aggregate, a Material
Adverse  Effect.

(q)     Transactions  With Affiliates.  Except as set forth in the SEC Documents
        -----------------------------
filed  at  least  ten  days prior to the date hereof and other than the grant of
stock  options  disclosed  on  Schedule 3(q), none of the officers, directors or
                               -------------
employees  of  the  Company  is  presently  a  party to any transaction with the
Company  or  any of its Subsidiaries (other than for ordinary course services as
employees,  officers  or  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 such officer, director or employee or, to the knowledge of the
Company,  any  corporation, partnership, trust or other entity in which any such
officer,  director,  or  employee  has  a  substantial  interest  or  is  an

                                       10
<PAGE>

officer,  director,  trustee  or  partner.

(r)     Equity  Capitalization.  As  of  the date hereof, the authorized capital
        ----------------------
stock of the Company consists of 100,000,000 shares of Common Stock, of which as
of  the  date  hereof,  34,107,784 are issued and outstanding, and no shares are
reserved  for  issuance  pursuant  to  securities  (other than the Notes and the
Warrants) exercisable or exchangeable for, or convertible into, shares of Common
Stock.  All  of  such  outstanding  shares  have been, or upon issuance will be,
validly  issued  and  are  fully paid and nonassessable.  Except as disclosed in
Schedule  3(r): (i) none of the Company's share capital is subject to preemptive
   -----------
rights  or  any  other  similar  rights or any liens or encumbrances suffered or
permitted  by  the  Company;  (ii)  there  are no outstanding options, warrants,
scrip,  rights to subscribe to, calls or commitments of any character whatsoever
relating  to,  or  securities  or  rights  convertible  into,  or exercisable or
exchangeable  for,  any share capital of the Company or any of its Subsidiaries,
or  contracts,  commitments, understandings or arrangements by which the Company
or  any  of  its  Subsidiaries  is or may become bound to issue additional share
capital  of  the Company or any of its Subsidiaries or options, warrants, scrip,
rights  to  subscribe  to,  calls  or  commitments  of  any character whatsoever
relating  to,  or  securities  or  rights  convertible  into,  or exercisable or
exchangeable  for,  any share capital of the Company or any of its Subsidiaries;
(iii) there are no outstanding debt securities, notes, credit agreements, credit
facilities or other agreements, documents or instruments evidencing Indebtedness
of  the Company or any of its Subsidiaries or by which the Company or any of its
Subsidiaries  is  or  may  become  bound; (iv) there are no financing statements
securing obligations in any material amounts, either singly or in the aggregate,
filed  in  connection with the Company or any of its Subsidiaries; (v) there are
no agreements or arrangements under which the Company or any of its Subsidiaries
is  obligated to register the sale of any of their securities under the 1933 Act
(except  the  Registration  Rights  Agreement);  (vi)  there  are no outstanding
securities  or  instruments  of  the  Company  or  any of its Subsidiaries which
contain  any  redemption  or  similar  provisions,  and  there are no contracts,
commitments,  understandings  or arrangements by which the Company or any of its
Subsidiaries  is  or may become bound to redeem a security of the Company or any
of  its  Subsidiaries;  (vii)  there are no securities or instruments containing
anti-dilution  or  similar  provisions that will be triggered by the issuance of
the  Securities;  (viii) the Company does not have any stock appreciation rights
or  "phantom  stock"  plans  or agreements or any similar plan or agreement; and
(ix)  the  Company  and  its  Subsidiaries  have  no  liabilities or obligations
required  to  be  disclosed in the SEC Documents but not so disclosed in the SEC
Documents,  other than those incurred in the ordinary course of the Company's or
its  Subsidiaries'  respective  businesses  and  which,  individually  or in the
aggregate,  do not or would not have a Material Adverse Effect.  The Company has
furnished  to  the  Buyer  true,  correct  and  complete copies of the Company's
Articles  of  Incorporation, as amended and as in effect on the date hereof (the
"ARTICLES  OF  INCORPORATION"),  and  the Company's Bylaws, as amended and as in
effect  on  the  date  hereof  (the  "BYLAWS"),  and the terms of all securities
convertible into, or exercisable or exchangeable for, shares of Common Stock and
the  material  rights  of  the  holders  thereof  in  respect  thereto.

(s)     Indebtedness  and  Other  Contracts.  Neither the Company nor any of its
        -----------------------------------
Subsidiaries (i) has any outstanding Indebtedness (as defined below), (ii) is in
violation  of  any  term  of  or  in  default  under  any contract, agreement or
instrument  relating  to  any  Indebtedness,  except  where  such violations and
defaults  would  not  result,  individually  or  in the aggregate, in a Material
Adverse  Effect,  or  (iii)  is a party to any contract, agreement or instrument
relating  to

                                       11
<PAGE>

any  Indebtedness,  the  performance  of which, in the judgment of the Company's
officers,  has  or is expected to have a Material Adverse Effect.  Schedule 3(s)
                                                                   -------------
provides  a  detailed  description of the material terms of any such outstanding
Indebtedness.  For purposes of this Agreement:  (x) "INDEBTEDNESS" of any Person
means,  without  duplication  (A)  all  indebtedness for borrowed money, (B) all
obligations  issued,  undertaken  or  assumed  as the deferred purchase price of
property  or  services  (including,  without  limitation,  "capital  leases"  in
accordance  with  generally  accepted  accounting  principals) (other than trade
payables entered into in the ordinary course of business), (C) all reimbursement
or payment obligations with respect to letters of credit, surety bonds and other
similar  instruments,  (D) all obligations evidenced by notes, bonds, debentures
or  similar  instruments,  including  obligations  so  evidenced  incurred  in
connection  with  the  acquisition  of  property,  assets or businesses, (E) all
indebtedness  created  or  arising  under  any  conditional  sale or other title
retention  agreement,  or  incurred as financing, in either case with respect to
any  property  or  assets  acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the
event  of default are limited to repossession or sale of such property), (F) all
monetary  obligations  under  any  leasing  or  similar  arrangement  which,  in
connection  with  generally accepted accounting principles, consistently applied
for  the  periods  covered  thereby,  is  classified as a capital lease, (G) all
indebtedness  referred  to  in  clauses (A) through (F) above secured by (or for
which  the  holder  of  such  Indebtedness  has an existing right, contingent or
otherwise,  to  be  secured  by)  any  mortgage,  lien, pledge, charge, security
interest  or  other  encumbrance  upon  or  in any property or assets (including
accounts  and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment of
such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
or  obligations  of  others  of the kinds referred to in clauses (A) through (G)
above;  (y)  "CONTINGENT  OBLIGATION"  means,  as  to  any Person, any direct or
indirect  liability, contingent or otherwise, of that Person with respect to any
indebtedness,  lease,  dividend  or  other  obligation  of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect  thereof,  is  to provide assurance to the obligee of such liability that
such  liability  will  be  paid  or  discharged, or that any agreements relating
thereto  will  be  complied  with, or that the holders of such liability will be
protected  (in  whole  or  in  part)  against loss with respect thereto; and (z)
"PERSON"  means  an  individual,  a  limited liability company, a partnership, a
joint  venture,  a  corporation,  a  trust, an unincorporated organization and a
government  or  any  department  or  agency  thereof.

(t)     Absence of Litigation.  There is no action, suit, proceeding, inquiry or
        ---------------------
investigation  before  or  by  the  Principal  Market,  any court, public board,
government  agency,  self-regulatory  organization  or  body  pending or, to the
knowledge  of  the  Company,  threatened  against  or affecting the Company, the
Common Stock or any of the Company's Subsidiaries or any of the Company's or its
Subsidiaries'  officers  or  directors,  that  could,  individually  or  in  the
aggregate,  reasonably  be  expected  to  result  in  a Material Adverse Effect.

(u)     Insurance.  The  Company  and  each  of  its Subsidiaries are insured by
        ---------
insurers  of  recognized  financial responsibility against such losses and risks
and  in  such  amounts  as  management of the Company believes to be prudent and
customary  in  the  businesses  in  which  the  Company and its Subsidiaries are
engaged.  Neither  the  Company  nor  any  such  Subsidiary has been refused any
insurance  coverage  sought  or applied for and neither the Company nor any such
Subsidiary  has  any  reason  to  believe  that it will not be able to renew its
existing  insurance  coverage  as  and  when  such coverage expires or to obtain
similar  coverage  from  similar  insurers

                                       12
<PAGE>

as  may  be  necessary  to continue its business at a cost that would not have a
Material  Adverse  Effect.

(v)     Employee Relations.  (i)  Neither Company nor any of its Subsidiaries is
        ------------------
a party to any collective bargaining agreement or employs any member of a union.
The  Company  and  its  Subsidiaries  believe  that  their  relations with their
employees  are  good.  No  executive  officer  of  the  Company  or  any  of its
Subsidiaries  (as  defined  in  Rule  501(f)  of  the 1933 Act) has notified the
Company or any such Subsidiary that such officer intends to leave the Company or
any  such  Subsidiary  or otherwise terminate such officer's employment with the
Company  or  any such Subsidiary.  No executive officer of the Company or any of
its Subsidiaries, to the knowledge of the Company or any such Subsidiary, is, or
is  now  expected  to  be,  in  violation of any material term of any employment
contract,  confidentiality,  disclosure  or  proprietary  information agreement,
non-competition agreement, or any other contract or agreement or any restrictive
covenant,  and  the continued employment of each such executive officer does not
subject  the Company or any such Subsidiary to any liability with respect to any
of  the  foregoing  matters.

(ii)     The  Company and its Subsidiaries are in compliance with all applicable
South  Korean  and  United  States federal, state, provincial, local and foreign
laws  and  regulations respecting labor, employment and employment practices and
benefits,  terms  and conditions of employment and wages and hours, except where
failure  to be in compliance would not, either individually or in the aggregate,
reasonably  be  expected  to  result  in  a  Material  Adverse  Effect.

(w)     Title.  The  Company and its Subsidiaries have good and marketable title
        -----
in fee simple to all real property and good and marketable title to all personal
property  owned by them which is material to the business of the Company and its
Subsidiaries, in each case free and clear of all liens, encumbrances and defects
except  such  as  do not materially affect the value of such property and do not
interfere  with  the  use  made  and proposed to be made of such property by the
Company  and  any  of  its Subsidiaries.   Any real property and facilities held
under  lease  by  the Company and any of its Subsidiaries are held by them under
valid,  subsisting  and  enforceable  leases  with  such  exceptions  as are not
material  and do not interfere with the use made and proposed to be made of such
property  and  buildings  by  the  Company  and  its  Subsidiaries.

(x)     Intellectual  Property  Rights.  The Company and its Subsidiaries own or
        ------------------------------
possess  adequate rights or licenses to use all trademarks, trade names, service
marks,  service  mark  registrations,  service  names,  patents,  patent rights,
copyrights,  inventions, licenses, approvals, governmental authorizations, trade
secrets  and other intellectual property rights ("INTELLECTUAL PROPERTY RIGHTS")
necessary  to  conduct their respective businesses as now conducted except where
the failure to so own or possess would not reasonably be expected to result in a
Material  Adverse  Effect.  None  of  the Company's Intellectual Property Rights
have expired or terminated, or are expected to expire or terminate, within three
years  from the date of this Agreement.  The Company does not have any knowledge
of  any infringement by the Company or its Subsidiaries of Intellectual Property
Rights  of  others.  There  is  no  claim,  action  or  proceeding being made or
brought,  or  to  the  knowledge  of  the Company, being threatened, against the
Company  or  its  Subsidiaries  regarding its Intellectual Property Rights.  The
Company is unaware of any facts or circumstances which might give rise to any of
the  foregoing

                                       13
<PAGE>

infringements  or  claims,  actions  or  proceedings.  The  Company  and  its
Subsidiaries  have  taken  reasonable  security measures to protect the secrecy,
confidentiality  and  value  of  all  of  their  intellectual  properties.

(y)     Environmental  Laws.  The  Company  and  its  Subsidiaries  (i)  are  in
        -------------------
compliance  with  any  and  all  applicable  Environmental  Laws (as hereinafter
defined),  (ii)  have received all permits, licenses or other approvals required
of  them  under  applicable  Environmental  Laws  to  conduct  their  respective
businesses and (iii) are in compliance with all terms and conditions of any such
permit,  license  or  approval where, in each of the foregoing clauses (i), (ii)
and  (iii),  the  failure  to  so  comply  could be reasonably expected to have,
individually  or  in  the  aggregate,  a  Material  Adverse  Effect.  The  term
"ENVIRONMENTAL  LAWS"  means  all  applicable  South  Korean  and  United States
federal,  state,  provincial,  local  or  foreign  laws relating to pollution or
protection  of  human  health or the environment (including, without limitation,
ambient  air,  surface  water,  groundwater, land surface or subsurface strata),
including,  without limitation, laws relating to emissions, discharges, releases
or  threatened  releases  of  chemicals,  pollutants,  contaminants, or toxic or
hazardous  substances  or  wastes (collectively, "HAZARDOUS MATERIALS") into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as  well  as  all  authorizations,  codes,  decrees,  demands or demand letters,
injunctions,  judgments,  licenses,  notices or notice letters, orders, permits,
plans  or  regulations  issued,  entered,  promulgated  or  approved thereunder.

(z)     Subsidiary  Rights.  The  Company  or  one  of  its Subsidiaries has the
        ------------------
unrestricted  right  to  vote, and (subject to limitations imposed by applicable
law)  to  receive  dividends and distributions on, all capital securities of its
Subsidiaries  as  owned  by  the  Company  or  such  Subsidiary.

(aa)     Investment Company.  The Company is not, and is not an affiliate of, an
         ------------------
"investment  company"  within the meaning of the Investment Company Act of 1940,
as  amended.

(bb)     Tax  Status.  The  Company and each of its Subsidiaries (i) has made or
         -----------
filed  all  foreign,  South  Korean, United States federal, state and provincial
income  and  all  other  tax  returns,  reports and declarations required by any
jurisdiction  to  which  it  is  subject,  (ii)  has  paid  all  taxes and other
governmental  assessments  and  charges  that  are  material in amount, shown or
determined  to  be  due  on such returns, reports and declarations, except those
being  contested  in  good  faith and (iii) has set aside on its books provision
reasonably  adequate  for the payment of all taxes for periods subsequent to the
periods  to  which  such  returns,  reports or declarations apply.  There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any  jurisdiction, and the officers of the Company know of no basis for any such
claim.

(cc)     Internal  Accounting  and Disclosure Controls.  The Company maintains 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 generally
accepted  accounting  principles  and  to  maintain  asset  and  liability
accountability, (iii) access to assets or incurrence of liabilities is permitted
only  in  accordance

                                       14
<PAGE>

with  management's  general  or  specific  authorization  and  (iv) the recorded
accountability  for  assets and liabilities is compared with the existing assets
and  liabilities  at  reasonable  intervals and appropriate action is taken with
respect  to  any  difference.  The  Company  maintains  disclosure  controls and
procedures  (as such term is defined in Rule 13a-14 under the 1934 Act) that are
designed  to  ensure that information required to be disclosed by the Company in
the  reports that it files or submits under the 1934 Act is recorded, processed,
summarized  and  reported,  within  the  time periods specified in the rules and
forms  of  the  SEC,  including,  without  limitation,  controls  and procedures
designed  in  to ensure that information required to be disclosed by the Company
in  the  reports  that it files or submits under the 1934 Act is accumulated and
communicated  to  the  Company's  management,  including its principal executive
officer  or  officers  and  its  principal  financial  officer  or  officers, as
appropriate,  to  allow  timely decisions regarding required disclosure.  During
the  twelve  months  prior to the date hereof neither the Company nor any of its
Subsidiaries  have  received  any  notice  or correspondence from any accountant
relating  to  any  potential  material  weakness  in  any  part of the system of
internal  accounting  controls  of  the  Company  or  any  of  its Subsidiaries.

(dd)     Off  Balance Sheet Arrangements.  There is no transaction, arrangement,
         -------------------------------
or  other  relationship  between  the Company and an unconsolidated or other off
balance  sheet  entity  that  is  required to be disclosed by the Company in its
Exchange  Act  filings  and  is  not  so  disclosed  or  that otherwise would be
reasonably  likely  to  have  a  Material  Adverse  Effect.

(ee)     Ranking of Notes.  No Indebtedness of the Company is senior to or ranks
         ----------------
pari  passu  with the Notes in right of payment, whether with respect of payment
of  redemptions,  interest,  damages  or  upon  liquidation  or  dissolution  or
otherwise.

(ff)     Registration  Eligibility.  The  Company  is  eligible  to register the
         -------------------------
Conversion  Shares, the Warrant Shares and the Interest Shares for resale by the
Buyers  using  Form  SB-2  promulgated  under  the  1933  Act.

(gg)     Manipulation  of  Price.  The  Company has not, and to its knowledge no
         -----------------------
one  acting  on  its  behalf  has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the price
of  any  security  of the Company to facilitate the sale or resale of any of the
Securities,  (ii)  other  than  the Agent, sold, bid for, purchased, or paid any
compensation  for soliciting purchases of, any of the Securities, or (iii) other
than  the  Agent,  paid  or  agreed  to  pay  to any person any compensation for
soliciting  another  to  purchase  any  other  securities  of  the  Company.

(hh)     Disclosure.  The  Company confirms that neither it nor any other Person
         ----------
acting  on  its behalf has provided any of the Buyers or their agents or counsel
with  any  information  that  constitutes  or  could  reasonably  be expected to
constitute  material,  nonpublic  information  other  than  as  set forth in the
following  sentence.  The  Company  understands  and  confirms  that each of the
Buyers  will  rely on the foregoing representations in effecting transactions in
securities  of the Company.  All disclosure provided to the Buyers regarding the
Company,  its  business  and the transactions contemplated hereby, including the
Schedules  to  this  Agreement, furnished by or on behalf of the Company is true
and correct and does 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  the  light  of  the  circumstances  under  which  they  were made,

                                       15
<PAGE>

not misleading.  Each press release issued by the Company during the twelve (12)
months  preceding  the  date  of  this  Agreement did not at the time of release
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  the  light  of  the  circumstances  under which they are made, not
misleading.  No  event  or  circumstance has occurred or information exists with
respect  to  the  Company  or  any of its Subsidiaries or its or their business,
properties,  prospects,  operations  or  financial  conditions,  which,  under
applicable  law,  rule or regulation, requires public disclosure or announcement
by  the  Company  but  which  has  not  been so publicly announced or disclosed.

4.     COVENANTS.

(a)     Best  Efforts.  Each  party shall use its best efforts timely to satisfy
        -------------
each  of the conditions to be satisfied by it as provided in Sections 6 and 7 of
this  Agreement.

(b)     Form  D  and Blue Sky.  The Company agrees to file a Form D with respect
        ---------------------
to  the  Securities as required under Regulation D and to provide a copy thereof
to  each  Buyer promptly after such filing.  The Company shall, on or before the
Closing  Date,  take  such  action  as the Company shall reasonably determine is
necessary  in  order to obtain an exemption for or to qualify the Securities for
sale  to  the  Buyers at the Closing pursuant to this Agreement under applicable
securities  or  "Blue Sky" laws of the states of the United States (or to obtain
an  exemption  from  such qualification), and shall provide evidence of any such
action  so  taken  to  the  Buyers on or prior to the Closing Date.  The Company
shall  make  all  filings  and  reports  relating  to  the offer and sale of the
Securities required under applicable securities or "Blue Sky" laws of the states
of  the  United  States  following  the  Closing  Date.

(c)     Reporting  Status.  Until  the  later of the date on which the Investors
        -----------------
(as  defined  in  the  Registration  Rights  Agreement)  shall have sold all the
Conversion  Shares,  Warrant Shares and Interest Shares, if any, and none of the
Notes  or  Warrants is outstanding or the date which is four years from the date
hereof  (the "REPORTING PERIOD"), the Company shall file all reports required to
be  filed  pursuant  to  the  1934  Act, and the Company shall not terminate its
status as an issuer required to file reports under the 1934 Act even if the 1934
Act  or  the  rules  and  regulations  thereunder  would  otherwise  permit such
termination.

(d)     Use of Proceeds.  The Company will use the proceeds from the sale of the
        ---------------
Securities  for  raw  materials  and  general  working  capital, and not for (A)
repayment  of  any  outstanding  Indebtedness  of  the  Company  or  any  of its
Subsidiaries  or  (B) redemption or repurchase of any of its or its Subsidiaries
equity  securities.

(e)     Financial Information.  The Company agrees to send the following to each
        ---------------------
Investor  (as defined in the Registration Rights Agreement) during the Reporting
Period  (i)  unless  the  following are filed with the SEC through EDGAR and are
available  to  the  public through the EDGAR system, within one (1) Business Day
after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K
or  10-KSB,  any  interim  reports  or  any  consolidated balance sheets, income
statements,  stockholders' equity statements and/or cash flow statements for any
period  other  than annual, any Current Reports on Form 8-K and any registration
statements  (other  than  on  Form S-8) or amendments filed pursuant to the 1933
Act,  and  (ii)  copies  of  any

                                       16
<PAGE>

notices and other information made available or given to the stockholders of the
Company generally, contemporaneously with the making available or giving thereof
to  the  stockholders.

(f)     Listing.  The  Company  shall  promptly secure the listing of all of the
        -------
Registrable  Securities  (as  defined in the Registration Rights Agreement) upon
each  national  securities exchange and automated quotation system, if any, upon
which  the  Common Stock is then listed (subject to official notice of issuance)
and  shall maintain such listing of all Registrable Securities from time to time
issuable  under  the  terms  of  the  Transaction  Documents.  The Company shall
maintain the Common Stocks' authorization for quotation on the Principal Market.
Neither  the  Company  nor  any  of its Subsidiaries shall take any action which
would  be  reasonably  expected  to result in the delisting or suspension of the
Common  Stock  on  the  Principal  Market.  The  Company  shall pay all fees and
expenses  in connection with satisfying its obligations under this Section 4(f).

(g)     Fees.  The Company shall be responsible for the payment of any placement
        ----
agent's  fees,  financial advisory fees, or broker's commissions (other than for
Persons  engaged  by  any  Buyer) relating to or arising out of the transactions
contemplated  hereby,  including,  without  limitation,  any fees payable to the
Agent.  The  Company  shall  pay,  and  hold  each  Buyer  harmless against, any
liability, loss or expense (including, without limitation, reasonable attorney's
fees  and  out-of-pocket expenses) arising in connection with any claim relating
to  any  such  payment.

(h)     Pledge  of  Securities.  The  Company  acknowledges  and agrees that the
        ----------------------
Securities  may  be pledged pursuant to an available exemption from registration
under  the  1933  Act  by  an  Investor  (as  defined in the Registration Rights
Agreement)  in  connection  with  a  bona fide margin agreement or other loan or
financing  arrangement  that  is  secured  by  the  Securities.  The  pledge  of
Securities  shall  not  be  deemed  to  be a transfer, sale or assignment of the
Securities  hereunder, and no Investor effecting a pledge of Securities shall be
required  to  provide  the Company with any notice thereof or otherwise make any
delivery  to  the  Company  pursuant  to this Agreement or any other Transaction
Document,  including,  without limitation, Section 2(g) hereof; provided that an
Investor  and  its  pledgee  shall  be required to comply with the provisions of
Section  2(g)  hereof  in  order  to  effect  a  sale, transfer or assignment of
Securities  to  such  pledgee.  The Company hereby agrees to execute and deliver
such  documentation  as  a  pledgee  of the Securities may reasonably request in
connection  with  a  pledge  of  the  Securities to such pledgee by an Investor.

(i)     Disclosure  of Transactions and Other Material Information.  The Company
        ----------------------------------------------------------
shall file a Current Report on Form 8-K describing the terms of the transactions
contemplated  by  the Transaction Documents in the form required by the 1934 Act
and attaching the material Transaction Documents (including, without limitation,
this  Agreement  (and  all  schedules to this Agreement), the form of Notes, the
form  of  Warrant  and  the  Registration  Rights  Agreement)  (including  all
attachments,  the  "8-K  FILING").  From  and after the filing of the 8-K Filing
with  the  SEC,  the  Company  shall  have  disclosed  any  material  nonpublic
information  delivered  to the Buyers by the Company or any of its Subsidiaries,
or  any  of  their  respective  officers,  directors,  employees or agents.  The
Company  shall not, and shall cause each of its Subsidiaries and its and each of
their  respective  officers,  directors,  employees  and  agents,  not  to,

                                       17
<PAGE>

provide any Buyer with any material, nonpublic information regarding the Company
or  any of its Subsidiaries from and after the filing of the 8-K Filing with the
SEC  without  the  express  written  consent  of  such  Buyer.

(j)     Additional  Notes.  So  long  as  any  Buyer  beneficially  owns  any
        -----------------
Securities,  the  Company  will not, without the prior written consent of Buyers
        --
holding  a majority of the principal amount of the Notes, issue any Notes (other
than  to  the Buyers as contemplated hereby) and the Company shall not issue any
other  securities  that  would  cause  a  breach  or  default  under  the Notes.

(k)     Conduct  of  Business.  The business of the Company and its Subsidiaries
        ---------------------
shall  not  be conducted in violation of any law, ordinance or regulation of any
governmental  entity,  except  where  such  violations  would not result, either
individually  or  in  the  aggregate,  in  a  Material  Adverse  Effect.

(l)     Additional  Issuances  of  Securities.
        -------------------------------------

(i)     For  purposes  of  this  Section  4(l),  the following definitions shall
apply.

(A)     "CONVERTIBLE  SECURITIES"  means  any  stock  or  securities (other than
Options)  convertible  into  or exercisable or exchangeable for shares of Common
Stock.

(B)     "OPTIONS"  means  any  rights,  warrants  or options to subscribe for or
purchase  shares  of  Common  Stock  or  Convertible  Securities.

(C)     "COMMON  STOCK EQUIVALENTS" means, collectively, Options and Convertible
Securities.

(ii)     From  the  date  hereof  until  one hundred eighty (180) days after the
Effective  Date  (as  defined  in the Registration Rights Agreement) the Company
will  not,  directly or indirectly, file any registration statement with the SEC
other  than  the  Registration  Statement (as defined in the Registration Rights
Agreement)  or  a  registration  statement on Form S-8 pursuant to the 1933 Act.

(iii)     From the Closing Date until the date twelve months after the Effective
Date,  the  Company  will  not,  directly  or indirectly, offer, sell, grant any
option  to purchase, or otherwise dispose of (or announce any offer, sale, grant
or  any  option  to  purchase  or  other  disposition  of)  any  of  its  or its
Subsidiaries'  equity  or  equity  equivalent  securities,  including  without
limitation any debt, preferred stock or other instrument or security that is, at
any  time  during  its  life  and  under  any circumstances, convertible into or
exchangeable  or  exercisable  for  shares  of  Common  Stock  or  Common  Stock
Equivalents  (any  such  offer,  sale,  grant, disposition or announcement being
referred  to  as  a  "SUBSEQUENT PLACEMENT") unless the Company shall have first
complied  with  this  Section  4(l).

(A)     The  Company  shall  deliver  to each Buyer a written notice (the "OFFER
NOTICE")  of  any  proposed  or  intended  issuance  or  sale  or  exchange

                                       18
<PAGE>

(the  "OFFER")  of  the securities being offered (the "OFFERED SECURITIES") in a
Subsequent  Placement,  which  Offer  Notice shall (w) identify and describe the
Offered  Securities,  (x) describe the price and other terms upon which they are
to  be  issued,  sold  or  exchanged,  and  the  number or amount of the Offered
Securities  to  be  issued,  sold  or exchanged, and (y) identify the persons or
entities  (if  known)  to  which  or with which the Offered Securities are to be
offered,  issued,  sold  or  exchanged  and  (z) offer to issue and sell to such
Buyers  at  least 80% of the Offered Securities, allocated among such Buyers (a)
based  on  such  Buyer's  pro  rata portion of the aggregate principal amount of
Notes  purchased  hereunder  (the  "BASIC AMOUNT"), and (b) with respect to each
Buyer  that  elects  to purchase its Basic Amount, any additional portion of the
Offered  Securities  attributable  to  the Basic Amounts of other Buyers as such
Buyer  shall  indicate  it  will  purchase  or  acquire  should the other Buyers
subscribe  for  less  than their Basic Amounts (the "UNDERSUBSCRIPTION AMOUNT").

(B)     To  accept  an  Offer,  in  whole  or in part, such Buyer must deliver a
written  notice  to the Company prior to the end of the fifth (5th) Business Day
after  such  Buyer's  receipt  of the Offer Notice (the "OFFER PERIOD"), setting
forth  the  portion  of  such  Buyer's  Basic  Amount  that such Buyer elects to
purchase and, if such Buyer shall elect to purchase all of its Basic Amount, the
Undersubscription  Amount, if any, that such Buyer elects to purchase (in either
case,  the  "NOTICE OF ACCEPTANCE").  If the Basic Amounts subscribed for by all
Buyers  are less than the total of all of the Basic Amounts, then each Buyer who
has  set  forth an Undersubscription Amount in its Notice of Acceptance shall be
entitled  to  purchase,  in  addition  to  the Basic Amounts subscribed for, the
Undersubscription  Amount  it has subscribed for; provided, however, that if the
                                                  --------  -------
Undersubscription Amounts subscribed for exceed the difference between the total
of  all  the  Basic Amounts and the Basic Amounts subscribed for (the "AVAILABLE
UNDERSUBSCRIPTION  AMOUNT"),  each  Buyer  who  has  subscribed  for  any
Undersubscription  Amount shall be entitled to purchase only that portion of the
Available  Undersubscription  Amount  as the Basic Amount of such Buyer bears to
the total Basic Amounts of all Buyers that have subscribed for Undersubscription
Amounts,  subject  to rounding by the Company to the extent its deems reasonably
necessary.

(C)     The Company shall have ten (10) Business Days from the expiration of the
Offer  Period  above  to  offer, issue, sell or exchange all or any part of such
Offered  Securities as to which a Notice of Acceptance has not been given by the
Buyers  (the  "REFUSED  SECURITIES").

(D)     In the event the Company shall propose to sell less than all the Refused
Securities  (any  such  sale  to  be in the manner and on the terms specified in
Section  4(l)(iii)(C) above), then each Buyer may, at its sole option and in its
sole discretion, reduce the number or amount of the Offered Securities specified
in  its Notice of Acceptance to an amount that shall be not less than the number
or amount of the Offered Securities that such Buyer elected to purchase pursuant
to  Section  4(l)(iii)(B)  above  multiplied by a fraction, (1) the numerator of
which  shall  be the number or amount of Offered Securities the Company actually
proposes  to  issue, sell or exchange (including Offered Securities to be issued
or  sold  to  Buyers  pursuant  to  Section  4(l)(iii)(C)  above

                                       19
<PAGE>

prior  to such reduction) and (2) the denominator of which shall be the original
amount  of  the  Offered  Securities.

(E)     Upon  the  closing of the issuance, sale or exchange of all or less than
all  of  the  Refused Securities, the Buyers shall acquire from the Company, and
the  Company  shall  issue  to  the  Buyers,  the  number  or  amount of Offered
Securities  specified  in  the  Notices  of  Acceptance,  as reduced pursuant to
Section  4(l)(iii)(C)  above  if  the Buyers have so elected, upon the terms and
conditions  specified  in  the Offer.  The purchase by the Buyers of any Offered
Securities is subject in all cases to the preparation, execution and delivery by
the  Company  and  the  Buyers  of a purchase agreement relating to such Offered
Securities reasonably satisfactory in form and substance to the Buyers and their
respective  counsel.

(iv)     The  restrictions  contained  in  subsections  (ii)  and  (iii) of this
Section  4(l)  shall  not  apply in connection with the issuance of any Excluded
Securities  (as  defined  in  the  Notes)  or any security issued in a bona fide
underwritten  public  offering  by  the  Company  or  any  of  its Subsidiaries.

5.     REGISTER.  The  Company shall maintain at its principal executive offices
(or  such other office or agency of the Company as it may designate by notice to
each  holder  of Securities), a register for the Notes and the Warrants in which
the  Company  shall  record the name and address of the Person in whose name the
Notes  and the Warrants have been issued (including the name and address of each
transferee),  the  principal  amount of Notes held by such Person, the number of
Conversion  Shares  issuable  upon  conversion  of  the Notes and Warrant Shares
issuable  upon  exercise of the Warrants held by such Person.  The Company shall
keep  the  register  open  and  available at all times during business hours for
inspection  of  any  Buyer  or  its  legal  representatives.

6.     CONDITIONS  TO  THE  COMPANY'S OBLIGATION TO SELL.  The obligation of the
Company  hereunder  to issue and sell the Notes and the related Warrants to each
Buyer  at  the  Closing is subject to the satisfaction, at or before the Closing
Date,  of  each  of the following conditions, provided that these conditions are
for  the  Company's sole benefit and may be waived by the Company at any time in
its  sole  discretion by providing each Buyer with prior written notice thereof:

(a)     Such  Buyer  shall  have  executed  each of the Transaction Documents to
which  it  is  a  party  and  delivered  the  same  to  the  Company.

(b)     Such  Buyer and each other Buyer shall have delivered to the Company the
Purchase  Price  for  the Notes and the related Warrants being purchased by such
Buyer at the Closing by wire transfer of immediately available funds pursuant to
the  wire  instructions  provided  in  Section  1(d)  hereof.

(c)     The  representations  and  warranties  of  such  Buyer shall be true and
correct  in all material respects as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date), and such Buyer shall have performed, satisfied and
complied  in  all  material  respects  with  the  covenants,

                                       20
<PAGE>

agreements  and conditions required by this Agreement to be performed, satisfied
or  complied  with  by  such  Buyer  at  or  prior  to  the  Closing  Date.

7.     CONDITIONS  TO  EACH  BUYER'S  OBLIGATION TO PURCHASE.  The obligation of
each  Buyer  hereunder  to  purchase  the  Notes and the related Warrants at the
Closing  is  subject to the satisfaction, at or before the Closing Date, of each
of the following conditions, provided that these conditions are for each Buyer's
sole  benefit and may be waived by such Buyer at any time in its sole discretion
by  providing  the  Company  with  prior  written  notice  thereof:

(a)     The  Company shall have executed and delivered to such Buyer (i) each of
the  Transaction  Documents  and (ii) the Notes (in such principal amounts as is
set  forth across from such Buyer's name in column (3) of the Schedule of Buyers
and  the related Warrants (in such principal amounts as is set forth across from
such  Buyer's  name  in column (4) of the Schedule of Buyers) being purchased by
such  Buyer  at  the  Closing  pursuant  to  this  Agreement.

(b)     The  Company  shall have delivered to such Buyer a certificate, executed
by  the Secretary of the Company and dated as of the Closing Date, as to (i) the
resolutions  consistent  with  Section 3(b) as adopted by the Company's Board of
Directors  in  a  form reasonably acceptable to such Buyer, (ii) the Articles of
Incorporation  and  (iii)  the  Bylaws, each as in effect at the Closing, in the
form  attached  hereto  as  Exhibit  D.
                            ----------

(c)     The  representations  and  warranties  of  the Company shall be true and
correct  as  of  the date when made and as of the Closing Date as though made at
that time (except for representations and warranties that speak as of a specific
date)  and  the  Company  shall  have  performed,  satisfied and complied in all
respects  with  the  covenants,  agreements  and  conditions  required  by  the
Transaction Documents to be performed, satisfied or complied with by the Company
at  or prior to the Closing Date.  Such Buyer shall have received a certificate,
executed  by the Chief Executive Officer of the Company, dated as of the Closing
Date,  to the foregoing effect and as to such other matters as may be reasonably
requested  by  such  Buyer  in  the  form  attached  hereto  as  Exhibit  E.
                                                                 ----------

(d)     Each  officer  and  director of the Company shall have delivered to such
Buyer  a  signed  Lock-Up  Agreement  in  the form attached hereto as Exhibit F.
                                                                      ---------

(e)     The  Common Stock (i) shall be designated for quotation or listed on the
Principal Market and (ii) shall not have been suspended, as of the Closing Date,
by  the  SEC  or  the  Principal Market from trading on the Principal Market nor
shall  suspension by the SEC or the Principal Market have been threatened, as of
the  Closing  Date,  either (A) in writing by the SEC or the Principal Market or
(B)  by  falling  below  the  minimum  listing  maintenance  requirements of the
Principal  Market.

(f)     The  Company  shall  have obtained all governmental, regulatory or third
party  consents and approvals, if any, necessary for the sale of the Securities.

(g)     The  Company  shall  have  delivered  to such Buyer such other documents
relating to the transactions contemplated by this Agreement as such Buyer or its
counsel  may  reasonably  request.

                                       21
<PAGE>

8.     TERMINATION.  In  the event that the Closing shall not have occurred with
respect  to a Buyer on or before ten (10) Business Days from the date hereof due
to  the Company's or such Buyer's failure to satisfy the conditions set forth in
Sections  6  and  7  above  (and  the nonbreaching party's failure to waive such
unsatisfied  condition(s)),  the  nonbreaching  party  shall  have the option to
terminate  this  Agreement  with respect to such breaching party at the close of
business  on  such  date  without  liability  of  any  party to any other party.

9.     MISCELLANEOUS.

(a)     Governing  Law;  Jurisdiction; Jury Trial.  All questions concerning the
        -----------------------------------------
construction,  validity,  enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to  any choice of law or conflict of law provision or rule (whether of the State
of  New York or any other jurisdictions) that would cause the application of the
laws  of  any jurisdictions other than the State of New York.  Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and United States
federal  courts  sitting  in The City of New York, Borough of Manhattan, for the
adjudication  of  any  dispute  hereunder  or in connection herewith or with any
transaction  contemplated  hereby  or  discussed  herein, and hereby irrevocably
waives,  and  agrees  not to assert in any suit, action or proceeding, any claim
that  it  is  not personally subject to the jurisdiction of any such court, that
such  suit, action or proceeding is brought in an inconvenient forum or that the
venue  of  such  suit,  action  or  proceeding  is  improper.  Each party hereby
irrevocably  waives  personal  service  of process and consents to process being
served  in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such  service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to  serve process in any manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY
WAIVES  ANY  RIGHT  IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION  OF  ANY  DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS  AGREEMENT  OR  ANY  TRANSACTION  CONTEMPLATED  HEREBY.

(b)     Counterparts.  This  Agreement  may be executed in two or more identical
        ------------
counterparts,  all  of  which shall be considered one and the same agreement and
shall  become  effective  when  counterparts  have been signed by each party and
delivered  to  the  other  party;  provided  that a facsimile signature shall be
considered  due  execution  and shall be binding upon the signatory thereto with
the  same force and effect as if the signature were an original, not a facsimile
signature.

(c)     Headings.  The  headings  of  this  Agreement  are  for  convenience  of
        --------
reference  and  shall  not  form  part of, or affect the interpretation of, this
Agreement.

(d)     Severability.  If  any  provision  of this Agreement shall be invalid or
        ------------
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction  or  the  validity  or  enforceability  of  any  provision  of this
Agreement  in  any  other  jurisdiction.

(e)     Entire  Agreement;  Amendments.  This  Agreement  and  the  other
        ------------------------------

                                       22
<PAGE>

Transaction  Documents  supersede  all  other  prior  oral or written agreements
between  the  Buyers,  the Company, their Affiliates and Persons acting on their
behalf  with  respect  to  the matters discussed herein, and this Agreement, the
other  Transaction  Documents  and the instruments referenced herein and therein
contain  the  entire  understanding  of  the parties with respect to the matters
covered  herein  and  therein  and,  except  as specifically set forth herein or
therein,  neither  the Company nor any Buyer makes any representation, warranty,
covenant  or  undertaking  with  respect  to such matters.  No provision of this
Agreement  may  be  amended other than by an instrument in writing signed by the
Company  and  the  holders  of  at  least  a majority of the aggregate number of
Registrable  Securities issued and issuable hereunder, and any amendment to this
Agreement  made  in conformity with the provisions of this Section 9(e) shall be
binding  on  all  Buyers and holders of Securities, as applicable.  No provision
hereof  may be waived other than by an instrument in writing signed by the party
against whom enforcement is sought.  No such amendment shall be effective to the
extent  that  it  applies  to  less  than  all  of the holders of the applicable
Securities  then  outstanding.  No consideration shall be offered or paid to any
Person  to  amend or consent to a waiver or modification of any provision of any
of  the  Transaction  Documents unless the same consideration also is offered to
all  of the parties to the Transaction Documents, holders of Notes or holders of
the  Warrants, as the case may be.  The Company has not, directly or indirectly,
made  any  agreements with any Buyers relating to the terms or conditions of the
transactions  contemplated  by  the Transaction Documents except as set forth in
the Transaction Documents.  Without limiting the foregoing, the Company confirms
that, except as set forth in this Agreement, no Buyer has made any commitment or
promise  or  has any other obligation to provide any financing to the Company or
otherwise.

(f)     Notices.  Any  notices,  consents,  waivers  or  other  communications
        -------
required  or  permitted to be given under the terms of this Agreement must be in
writing  and  will  be  deemed  to  have been delivered:  (i) upon receipt, when
delivered  personally;  (ii)  upon  receipt,  when  sent  by facsimile (provided
confirmation  of  transmission  is  mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
an  overnight  courier  service, in each case properly addressed to the party to
receive  the  same.  The addresses and facsimile numbers for such communications
shall  be:

If  to  the  Company:

Sorell  Inc.
Buk-ri  35
Nama-Myun
Yongin  City,  South  Korea
Telephone:     +82312334664
Facsimile:     +82312334795
Attention:     Bon Kwan Ku, Chief Executive Officer

With a copy (for informational purposes only) to:

Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas, 21st Floor
New York, New York 10018
Telephone:     (212) 930-9700
Facsimile:     (212) 930-9725
Attention:     Marc J. Ross, Esq.

And to:

Cutler Law Group
3206 West Wimbledon Dr
Augusta, GA 30909
Telephone:     (706) 737-6600
Facsimile:     (706) 738-1966
Attention:     M. Richard Cutler

     If  to  a  Buyer,  to  its  address  and  facsimile number set forth on the
Schedule  of Buyers, with copies to such Buyer's representatives as set forth on
the  Schedule  of  Buyers,

or to such other address and/or facsimile number and/or to the attention of such
other  Person  as  the  recipient party has specified by written notice given to
each  other  party  five  (5)  days  prior  to the effectiveness of such change.
Written  confirmation  of  receipt  (A)  given  by the recipient of such notice,
consent,  waiver  or  other  communication,  (B)  mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile  number  and  an  image  of the first page of such transmission or (C)
provided  by  an  overnight  courier  service  shall  be  rebuttable evidence of
personal  service,  receipt  by  facsimile  or receipt from an overnight courier
service  in  accordance  with  clause  (i),  (ii)  or (iii) above, respectively.

(g)     Successors  and Assigns.  This Agreement shall be binding upon and inure
        -----------------------
to  the  benefit  of  the  parties  and their respective successors and assigns,
including  any  purchasers  of the Notes or the Warrants.  The Company shall not
assign  this  Agreement or any rights or obligations hereunder without the prior
written consent of the holders of at least a majority of the aggregate number of
Registrable  Securities  issued  and  issuable  hereunder, including by way of a
Fundamental Transaction (unless the Company is in compliance with the applicable
provisions  governing  Fundamental  Transactions  set forth in the Notes and the
Warrants).  A Buyer may assign some or all of its rights hereunder in connection
with  transfer  of  any of its Securities without the consent of the Company, in
which  event  such assignee shall be deemed to be a Buyer hereunder with respect
to  such  assigned  rights.

(h)     No  Third  Party  Beneficiaries.  This  Agreement  is  intended  for the
        -------------------------------
benefit  of  the  parties  hereto  and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by,  any  other  Person.

(i)     Survival.  Unless  this  Agreement  is  terminated  under Section 8, the
        --------
representations  and  warranties  of  the  Company  and  the Buyers contained in
Sections 2 and 3 and the agreements and covenants set forth in Sections 4, 5 and
9  shall  survive the Closing.  Each Buyer shall be responsible only for its own
representations,  warranties,  agreements  and  covenants  hereunder.

(j)     Further  Assurances.  Each  party  shall  do and perform, or cause to be
        -------------------
done  and  performed,  all  such  further acts and things, and shall execute and
deliver  all  such other agreements, certificates, instruments and documents, as
any  other  party  may  reasonably  request in order to carry out the intent and
accomplish  the  purposes  of  this  Agreement  and  the  consummation  of  the
transactions  contemplated  hereby.

(k)     Indemnification.  In  consideration  of  each  Buyer's  execution  and
        ---------------
delivery  of  the  Transaction Documents and acquiring the Securities thereunder
and  in addition to all of the Company's other obligations under the Transaction
Documents,  the  Company shall defend, protect, indemnify and hold harmless each
Buyer  and  each  other  holder of the Securities and all of their stockholders,
partners,  members,  officers,  directors,  employees  and  direct  or  indirect
investors  and  any  of  the  foregoing Persons' agents or other representatives
(including,  without  limitation,  those  retained  in  connection  with  the
transactions  contemplated  by this Agreement) (collectively, the "INDEMNITEES")
from  and  against any and all actions, causes of action, suits, claims, losses,
costs,  penalties,  fees,  liabilities  and  damages, and expenses in connection
therewith  (irrespective of whether any such Indemnitee is a party to the action
for  which  indemnification  hereunder  is  sought),  and  including  reasonable
attorneys'  fees  and disbursements (the "INDEMNIFIED LIABILITIES"), incurred by
any  Indemnitee  as  a  result  of,  or  arising  out of, or relating to (a) any
misrepresentation  or  breach  of  any  representation  or  warranty made by the
Company  in  the  Transaction  Documents or any other certificate, instrument or
document  contemplated  hereby  or  thereby,  (b)  any  breach  of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any  other certificate, instrument or document contemplated hereby or thereby or
(c)  any  cause of action, suit or claim brought or made against such Indemnitee
by  a  third  party (including for these purposes a derivative action brought on
behalf  of  the Company) and arising out of or resulting from (i) the execution,
delivery,  performance  or enforcement of the Transaction Documents or any other
certificate,  instrument  or  document  contemplated hereby or thereby, (ii) any
transaction  financed  or  to  be  financed  in  whole  or  in part, directly or
indirectly,  with  the  proceeds of the issuance of the Securities, or (iii) the
status  of  such Buyer or holder of the Securities as an investor in the Company
pursuant  to the transactions contemplated by the Transaction Documents.  To the
extent  that  the  foregoing undertaking by the Company may be unenforceable for
any  reason,  the Company shall make the maximum contribution to the payment and
satisfaction  of  each of the Indemnified Liabilities which is permissible under
applicable  law.  Except  as  otherwise  set  forth  herein,  the  mechanics and
procedures  with  respect  to the rights and obligations under this Section 9(k)
shall  be  the  same  as those set forth in Section 6 of the Registration Rights
Agreement.

(l)     No  Strict  Construction.  The  language  used in this Agreement will be
        ------------------------
deemed  to be the language chosen by the parties to express their mutual intent,
and  no  rules  of  strict  construction  will  be  applied  against  any party.

(m)     Remedies.  Each  Buyer  and each holder of the Securities shall have all
        --------
rights  and  remedies  set forth in the Transaction Documents and all rights and
remedies  which  such  holders  have  been  granted  at any time under any other
agreement  or  contract  and all of the rights which such holders have under any
law.  Any  Person  having any rights under any provision of this Agreement shall
be entitled to enforce such rights specifically (without posting a bond or other
security),  to  recover damages by reason of any breach of any provision of this
Agreement  and  to  exercise  all other rights granted by law.  Furthermore, the
Company  recognizes  that  in  the  event  that it fails to perform, observe, or
discharge  any  or  all  of its obligations under the Transaction Documents, any
remedy  at  law  may  prove  to be inadequate relief to the Buyers.  The Company
therefore  agrees  that  the  Buyers  shall  be  entitled  to seek temporary and
permanent  injunctive  relief  in any such case without the necessity of proving
actual  damages  and  without  posting  a  bond  or  other  security.

(n)     Payment  Set  Aside.  To  the extent that the Company makes a payment or
        -------------------
payments  to  the  Buyers  hereunder or pursuant to any of the other Transaction
Documents  or  the  Buyers  enforce  or  exercise  their  rights  hereunder  or
thereunder,  and such payment or payments or the proceeds of such enforcement or
exercise  or  any  part  thereof  are  subsequently  invalidated, declared to be
fraudulent  or  preferential,  set  aside,  recovered  from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver  or  any other Person under any law (including, without limitation, any
bankruptcy  law, foreign, provincial, state or United States federal law, common
law  or  equitable  cause of action), then to the extent of any such restoration
the  obligation  or  part  thereof  originally intended to be satisfied shall be
revived  and  continued in full force and effect as if such payment had not been
made  or  such  enforcement  or  setoff  had  not  occurred.

(o)     Currency.  Unless otherwise indicated, all dollar amounts referred to in
        --------
this  Agreement  are in United States Dollars ("US DOLLARS").  All amounts owing
under  this  Agreement  or any Transaction Document shall be paid in US Dollars.
All  amounts denominated in other currencies shall be converted in the US Dollar
equivalent  amount  in  accordance  with  the  Exchange  Rate  on  the  date  of
calculation.  "EXCHANGE RATE" means, in relation to any amount of currency to be
converted  into  US  Dollars  pursuant to this Agreement, the US Dollar exchange
rate  as  published  in  the  Wall  Street  Journal  on  the  relevant  date  of
calculation.

(p)     Judgment  Currency.
        ------------------

(i)     If  for  the  purpose  of  obtaining  or  enforcing judgment against the
Company or any Subsidiary, in any court in any jurisdiction it becomes necessary
to  convert  into  any  other currency (such other currency being hereinafter in
this  Section  9(p)  referred to as the "JUDGMENT CURRENCY") an amount due in US
Dollars  under this Agreement, the conversion shall be made at the Exchange Rate
prevailing  on  the  Business  Day  immediately  preceding:

(A)     the  date  of  actual  payment  of  the  amount  due, in the case of any
proceeding  in the courts of New York or in the courts of any other jurisdiction
that  will  give  effect  to  such  conversion  being  made  on  such  date:  or

(B)     the  date  on  which  the  foreign  court determines, in the case of any
proceeding  in  the  courts of any other jurisdiction (the date as of which such
conversion  is  made pursuant to this Section 9(p) being hereinafter referred to
as  the  "JUDGMENT  CONVERSION  DATE").

(ii)     If  in  the  case  of  any  proceeding in the court of any jurisdiction
referred  to in Section 9(p)(i)(B) above, there is a change in the Exchange Rate
prevailing  between  the Judgment Conversion Date and the date of actual payment
of the amount due, the applicable party shall pay such adjusted amount as may be
necessary  to  ensure  that  the  amount  paid  in  the  Judgment Currency, when
converted  at  the Exchange Rate prevailing on the date of payment, will produce
the  amount  of  US  Dollars  which could have been purchased with the amount of
Judgment  Currency  stipulated in the judgment or judicial order at the Exchange
Rate  prevailing  on  the  Judgment  Conversion  Date.

(iii)     Any  amount  due  from  the  Company  or  any  Subsidiary,  under this
provision  shall be due as a separate debt and shall not be affected by judgment
being  obtained for any other amounts due under or in respect of this Agreement.

(q)     Independent  Nature  of Buyers' Obligations and Rights.  The obligations
        ------------------------------------------------------
of  each Buyer under any Transaction Document are several and not joint with the
obligations of any other Buyer, and no Buyer shall be responsible in any way for
the  performance  of  the  obligations  of any other Buyer under any Transaction
Document.  Nothing contained herein or in any other Transaction Document, and no
action  taken  by  any  Buyer  pursuant  hereto  or  thereto, shall be deemed to
constitute  the  Buyers as a partnership, an association, a joint venture or any
other  kind  of  entity,  or create a presumption that the Buyers are in any way
acting  in  concert  or  as  a  group  with  respect  to such obligations or the
transactions  contemplated  by  the  Transaction  Documents  and  the  Company
acknowledges  that  the  Buyers  are  not  acting  in concert or as a group with
respect  to such obligations or the transactions contemplated by the Transaction
Documents.  Each  Buyer  confirms  that it has independently participated in the
negotiation  of  the  transaction contemplated hereby with the advice of its own
counsel and advisors.  Each Buyer shall be entitled to independently protect and
enforce  its  rights,  including,  without limitation, the rights arising out of
this  Agreement  or  out of any other Transaction Documents, and it shall not be
necessary  for  any  other  Buyer  to  be  joined  as an additional party in any
proceeding  for  such  purpose.

                            [Signature Pages Follow]

                                       23
<PAGE>

IN  WITNESS  WHEREOF,  each  Buyer  and the Company have caused their respective
signature  page  to this Securities Purchase Agreement to be duly executed as of
the  date  first  written  above.

COMPANY:

SORELL  INC.

By:    /s/  B.  K.  Koo
     ------------------
Name:  Bon  Kwan  Koo
 Title:  Chief  Executive  Officer

                                       24
<PAGE>

     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature  page  to this Securities Purchase Agreement to be duly executed as of
the  date  first  written  above.

BUYERS:

MIDSOUTH INVESTOR FUND LP

By:   /s/  Lyman  O.  Heidtke
     ------------------------
Name:  Lyman  O.  Heidtke
 Title:   General  Partner

                                       25
<PAGE>
29

IN  WITNESS  WHEREOF,  each  Buyer  and the Company have caused their respective
signature  page  to this Securities Purchase Agreement to be duly executed as of
the  date  first  written  above.

BUYERS:

SOVGEM LIMITED

By:   /s/  Alan  W.  Moloney
     -----------------------
Name:  Alan  W.  Moloney
 Title:   Director

                                       26
<PAGE>

IN  WITNESS  WHEREOF,  each  Buyer  and the Company have caused their respective
signature  page  to this Securities Purchase Agreement to be duly executed as of
the  date  first  written  above.

BUYERS:

ALPHA CAPITAL AG

By:   /s/  Konrad  Ackerman
     ----------------------
Name:  Konrad  Ackerman
 Title:   Director

                                       27
<PAGE>

IN  WITNESS  WHEREOF,  each  Buyer  and the Company have caused their respective
signature  page  to this Securities Purchase Agreement to be duly executed as of
the  date  first  written  above.

BUYERS:  LAKE  STREET  FUND,  L.P.

BY: LAKE STREET MANAGEMENT, LLC, GP

By:   /s/  Scott  W.  Hood
     ---------------------
Name:  Scott  W.  Hood
 Title:   Managing  Director

                                       28
<PAGE>

                               SCHEDULE OF BUYERS

<TABLE>
<CAPTION>
<S>                         <C>                                 <C>                    <C>

(1)                             (2)                               (3)                (4)                       (5)

                            ADDRESS AND                      AGGREGATE PRINCIPAL    AGGREGATE NUMBER  LEGAL
BUYER                       FACSIMILE NUMBER                  AMOUNT OF NOTES        OF WARRANTS      REPRESENTATIVE'S ADDRESS
                                                                                                      AND FACSIMILE NUMBER

MidSouth Invewtor Fund LP   1776 Peachtree St. Suite 412 N      $  300,000            600,000         c/o Heidtke & Co., Inc.
                            Atlanta, GA 30309                                                         201 4th Ave. North
                                                                                                      Nashville, TN 37219
                                                                                                      615-254-0992 (tel)
                                                                                                      615-254-1603 (fax)

SovGEM LIMITED              6 Britannia Place                   $  250,000            500,000         NYGS
                            Bath Street, St. Heller
                            Jersey JE2 4SU
                            Tel: + 44 1534 837600
                            Fax: + 44 1534 837601

Alpha Capital AG            Prachfont 7                         $  200,000            400,000         L.H.Financial
                            Furstentums 9490
                            Vaduz Liechtenstein

Lake Street Fund, L.P.      1224 East Green Street, Suite 200   $  250,000            400,000
                            Pasadena, California 91106
                            (626) 796-6622 Telephone
                                           (626) 796-8990 Fax

</TABLE>

                                       29
<PAGE>

                              DISCLOSURE SCHEDULES
                                       TO
                          SECURITIES PURCHASE AGREEMENT
(Prepared  in  connection  with  Notes  and  Warrants sold by the Company to the
Buyers  pursuant  to  the  Securities Purchase Agreement dated as of May 1, 2006
(the  "May  2006  Purchase  Agreement").  Capitalized  terms  not defined herein
shall  have the meaning given to such terms in the May 2006 Purchase Agreement.)

                                   MAY 1, 2006

                                       30
<PAGE>
                                  SCHEDULE 3(A)
                                  SUBSIDIARIES
                                  ------------

     None  other  than the Company's primary operating subsidiary which is S-CAM
Co.,  LTD.  -  a  Korean  entity.  The Company itself is a U.S. holding company.

                                       31
<PAGE>
                                  SCHEDULE 3(L)
                           ABSENCE OF CERTAIN CHANGES
                           --------------------------

     None.

                                       32
<PAGE>
                                  SCHEDULE 3(Q)
                          TRANSACTIONS WITH AFFILIATES
                          ----------------------------

     None.

                                       33
<PAGE>
                                  SCHEDULE 3(R)
                              EQUITY CAPITALIZATION
                              ---------------------

All  outstanding debt securities, notes, credit agreements, credit facilities or
other  agreements,  documents  or  instruments  evidencing  indebtedness  of the
Company  or  its Subsidiaries or by which the Company or its Subsidiaries are or
may  become  bound:

<TABLE>
<CAPTION>

<S>         <C>       <C>      <C>       <C>         <C>                 <C>
TERM        BANK      BALANCE  INTEREST  MATURITY                        SECURED BY
----------  --------  -------  --------  ----------                      ------------------
LONG-TERM   HANA          349      0.00  2006/11/06                      UNDER CONSTRUCTION
----------  --------  -------  --------  ----------                      ------------------
            KIUP        1,500      3.50  2012/03/15                      LAND & BUILDING
            --------  -------  --------  ----------                      ------------------
            KIUP        2,800      4.40  2012/05/19                      LAND & BUILDING
            --------  -------  --------  ----------                      ------------------
                        4,649
                      -------
SHORT-TERM  HANA          600      5.90  MAR-21                          LAND & BUILDING
            --------  -------  --------  ----------                      ------------------
            EXIM        1,900      4.75  MAY-18                          *KTCG 975
            --------  -------  --------  ----------                      -------------------------
            CITI        3,815      5.95  MAY-28                          *KCG 2,812, DEPOSIT 500
            --------  -------  --------  ----------                      -------------------------
            CHOHEUNG    1,200      6.00  JUNE-24                         CREDIT + SAVING
            --------  -------  --------  ----------                      -------------------------
            KIUP          800      5.79              OCT-20              CREDIT (CONNECTED TO L/T)
            --------  -------  --------              ------------------  -------------------------
                        8,315
                      -------
REVOLVING   EXCHANGE    1,759      0.25  FEB-02                          CREDIT
            --------  -------  --------  ----------                      -------------------------
            SHINHAN       902      5.60  FEB-04                          *KTCG 918
            --------  -------  --------  ----------                      -------------------------
            EXCHANGE    1,100      2.50  MAY-30                          *KCG 1,020
            --------  -------  --------  ----------                      -------------------------
            JEIL           93      2.50  MAY-30                          *KCG 340
            --------  -------  --------  ----------                      -------------------------
            KIUP          255      2.50              OCT-20              CREDIT (CONNECTED TO L/T)
            --------  -------  --------              ------------------  -------------------------
            EXCHANGE    1,588      5.37              OCT-21              *KTCG 1,360
            --------  -------  --------              ------------------  -------------------------
                        5,697
                      -------
TOTAL                  18,661
                      -------
</TABLE>

                                       34
<PAGE>
                                  SCHEDULE 3(S)
                        INDEBTEDNESS AND OTHER CONTRACTS
                        --------------------------------

     See Schedule 3(r).

                                       35
<PAGE>
                                     ------

                                    EXHIBITS
                                    --------

Exhibit  A     Form  of  Notes
Exhibit  B     Form  of  Warrants
Exhibit  C     Registration  Rights  Agreement
Exhibit  D     Secretary's  Certificate
Exhibit  E     Officer's  Certificate
Exhibit  F     Form  of  Lock-Up  AgreementREGISTRATION RIGHTS AGREEMENT

REGISTRATION  RIGHTS  AGREEMENT  (this "AGREEMENT"), dated as of May 1, 2006, by
and among Sorell Inc., a Nevada corporation, with headquarters located at Buk-ri
35,  Nama-Myun,  Yongin  City,  South Korea (the "COMPANY"), and the undersigned
buyers  (each,  a  "BUYER",  and  collectively,  the  "BUYERS").

WHEREAS:

A.     In  connection  with  the  Securities Purchase Agreement by and among the
parties  hereto of even date herewith (the "SECURITIES PURCHASE AGREEMENT"), the
Company  has  agreed,  upon the terms and subject to the conditions set forth in
the Securities Purchase Agreement, to issue and sell to each Buyer (i) 8% Senior
Convertible  Notes  of the Company (the "NOTES") which will, among other things,
be  convertible  into shares of the Company's common stock, par value $0.001 per
share  (the  "COMMON  STOCK")  (as  converted,  the  "CONVERSION  SHARES"),  in
accordance with the terms of the Notes, and (ii) warrants (the "WARRANTS") which
will  be  exercisable  to  purchase  shares  of  Common  Stock  (as  exercised
collectively,  the  "WARRANT  SHARES").

B.     The  Notes  bear interest, which at the option of the Company, subject to
certain  conditions,  may  be  paid  in  shares  of  Common Stock (the "INTEREST
SHARES").

C.     To  induce  the  Buyers  to  execute  and deliver the Securities Purchase
Agreement,  the  Company has agreed to provide certain registration rights under
the  Securities  Act  of  1933,  as  amended,  and  the  rules  and  regulations
thereunder, or any similar successor statute (collectively, the "1933 ACT"), and
applicable  state  securities  laws.

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

1.     Definitions.  Capitalized terms used herein and not otherwise defined
       -----------
herein shall have the respective meanings set forth in the Securities Purchase
Agreement.  As used in this Agreement, the following terms shall have the
following meanings:

a.     "BUSINESS DAY" means any day other than Saturday, Sunday or any other day
on  which commercial banks in The City of New York are authorized or required by
law  to  remain  closed.

b.     "CLOSING  DATE"  shall  have  the  meaning  set  forth  in the Securities
Purchase  Agreement.

c.     "EFFECTIVE  DATE" means the date that the Registration Statement has been
declared  effective  by  the  SEC.

                                        1
<PAGE>

d.     "EFFECTIVENESS  DEADLINE"  means  the  date  which  is 120 days after the
Closing  Date  if  the  Registration Statement is not reviewed by the SEC or 150
days  after  the  Closing  Date if the Registration Statement is reviewed by the
SEC.

e.     "FILING  DEADLINE"  means  30  days  after  the  Closing  Date.

f.     "INVESTOR"  means  a  Buyer or any transferee or assignee of the Notes or
Warrants, as applicable, to whom a Buyer assigns its rights under this Agreement
and who agrees to become bound by the provisions of this Agreement in accordance
with  Section  9  and any transferee or assignee thereof to whom a transferee or
assignee  of the Notes or Warrants, as applicable, assigns its rights under this
Agreement  and who agrees to become bound by the provisions of this Agreement in
accordance  with  Section  9 and, in each case, is identified in the register of
the  Company.

g.     "PERSON" means an individual, a limited liability company, a partnership,
a  joint  venture,  a corporation, a trust, an unincorporated organization and a
government  or  any  department  or  agency  thereof.

h.     "REGISTER,"  "REGISTERED,"  and  "REGISTRATION"  refer  to a registration
effected by preparing and filing one or more Registration Statements (as defined
below)  in  compliance  with  the  1933  Act  and  pursuant  to Rule 415 and the
declaration  of  effectiveness  of  such  Registration  Statement(s) by the SEC.

i.     "REGISTRABLE  SECURITIES"  means  (i)  the  Conversion  Shares  issued or
issuable  upon  conversion  of  the  Notes,  (ii)  the  Warrant Shares issued or
issuable  upon  exercise  of  the  Warrants, (iii) the Interest Shares issued or
issuable  under  the  Notes  and (iv) any share capital of the Company issued or
issuable,  with  respect  to  the  Conversion  Shares,  the Interest Shares, the
Warrant  Shares  or the Warrants as a result of any share split, share dividend,
recapitalization,  exchange or similar event or otherwise, without regard to any
limitations  on  conversions  of  the  Notes  or  exercises  of  the  Warrants.

j.     "REGISTRATION  STATEMENT"  means a registration statement or registration
statements  of  the  Company  filed  under the 1933 Act covering the Registrable
Securities.

k.     "REQUIRED  HOLDERS"  means  the  holders  of  at  least a majority of the
Registrable  Securities.

l.     "REQUIRED  REGISTRATION  AMOUNT" means 100% of the sum of (i) the maximum
number of Interest Shares issued and issuable pursuant to the terms of the Notes
calculated  as  if  all such Interest Shares were to be issued as of the trading
date immediately preceding the applicable date of determination, (ii) the number
of Conversion Shares issued and issuable pursuant to the Notes as of the trading
day  immediately  preceding  the applicable date of determination, and (iii) the
number  of Warrant Shares issued and issuable pursuant to the Warrants as of the
trading  day  immediately  preceding  the  applicable date of determination, all
subject  to  adjustment  as  provided  in  Section  2(c).

                                        2
<PAGE>

m.     "RULE  415"  means  Rule  415  under  the  1933 Act or any successor rule
providing  for  offering  securities  on  a  continuous  or  delayed  basis.

n.     "SEC"  means  the  United  States  Securities  and  Exchange  Commission.

2.     Registration.
       ------------

a.     Mandatory  Registration.  The  Company  shall  prepare,  and,  as soon as
       -----------------------
practicable,  but  in no event later than the Filing Deadline, file with the SEC
the  Registration  Statement  on  Form  S-3  covering  the  resale of all of the
Registrable  Securities.  In  the  event that Form S-3 is unavailable for such a
registration,  the  Company shall use such other form as is available for such a
registration  on  another appropriate form reasonably acceptable to the Required
Holders.  The Registration Statement prepared pursuant hereto shall register for
resale  at  least  the  number  of  shares of Common Stock equal to the Required
Registration Amount as of the date the Registration Statement is initially filed
with  the  SEC.  The Company shall use its best efforts to have the Registration
Statement  declared effective by the SEC as soon as practicable, but in no event
later  than  the  Effectiveness  Deadline.

b.     Allocation  of Registrable Securities.  The initial number of Registrable
       -------------------------------------
Securities included in any Registration Statement and any increase in the number
of Registrable Securities included therein shall be allocated pro rata among the
Investors based on the number of Registrable Securities held by each Investor at
the  time the Registration Statement covering such initial number of Registrable
Securities  or  increase thereof is declared effective by the SEC.  In the event
that an Investor sells or otherwise transfers any of such Investor's Registrable
Securities,  each  transferee  that becomes an Investor shall be allocated a pro
rata  portion of the then remaining number of Registrable Securities included in
such  Registration  Statement  for  such transferor.  Any Shares of Common Stock
included  in  a  Registration Statement and which remain allocated to any Person
which  ceases  to  hold  any Registrable Securities covered by such Registration
Statement  shall  be allocated to the remaining Investors, pro rata based on the
number  of  Registrable Securities then held by such Investors which are covered
by  such  Registration  Statement.  In  no  event  shall the Company include any
securities  other  than  Registrable  Securities  on  any Registration Statement
without  the  prior  written  consent  of  the  Required  Holders.

c.     Sufficient  Number  of  Shares  Registered.  In  the  event the number of
       ------------------------------------------
shares  available  under a Registration Statement filed pursuant to Section 2(a)
is  insufficient  to  cover  all  of  the  Registrable Securities required to be
covered by such Registration Statement or an Investor's allocated portion of the
Registrable  Securities  pursuant  to  Section 2(b), the Company shall amend the
applicable  Registration Statement, or file a new Registration Statement (on the
short  form available therefor, if applicable), or both, so as to cover at least
the Required Registration Amount as of the trading day immediately preceding the
date  of  the  filing  of  such amendment or new Registration Statement, in each
case,  as soon as practicable, but in any event not later than fifteen (15) days
after  the necessity therefor arises.  The Company shall use its best efforts to
cause  such  amendment  and/or new Registration Statement to become effective as
soon as practicable following the filing thereof.  For purposes of the foregoing
provision,  the  number of shares available under a Registration Statement shall
be  deemed

                                        3
<PAGE>

"insufficient  to  cover  all  of the Registrable Securities" if at any time the
number  of  shares  of  Common Stock available for resale under the Registration
Statement  is  less  than the product determined by multiplying (i) the Required
Registration  Amount as of such time by (ii) 0.90.  The calculation set forth in
the  foregoing  sentence  shall be made without regard to any limitations on the
conversion  of  the  Notes  or the exercise of the Warrants and such calculation
shall  assume that the Notes are then convertible into Shares of Common Stock at
the  then  prevailing  Conversion  Rate  (as  defined in the Notes) and that the
Warrants  are then exercisable for Shares of Common Stock at the then prevailing
Exercise  Price  (as  defined  in  the  Warrants).

d.     Effect  of  Failure  to  File  and  Obtain  and Maintain Effectiveness of
       -------------------------------------------------------------------------
Registration  Statement.  If  (i)  a  Registration Statement covering all of the
      -----------------
Registrable  Securities  required to be covered thereby and required to be filed
by  the  Company  pursuant to this Agreement is (A) not filed with the SEC on or
before  the  respective Filing Deadline (a "FILING FAILURE") or (B) not declared
effective  by  the  SEC  on  or before the respective Effectiveness Deadline (an
"EFFECTIVENESS  FAILURE")  or  (ii) on any day after the Effective Date sales of
all  of  the Registrable Securities required to be included on such Registration
Statement  cannot  be  made  (other  than  during  an Allowable Grace Period (as
defined  in  Section  3(m))  pursuant to such Registration Statement (including,
without  limitation,  because  of  a failure to keep such Registration Statement
effective,  to  disclose  such  information as is necessary for sales to be made
pursuant  to  such  Registration Statement or to register a sufficient number of
Shares  of  Common  Stock) (a "MAINTENANCE FAILURE") then, as partial relief for
the  damages  to  any  holder by reason of any such delay in or reduction of its
ability  to  sell  the  underlying Shares of Common Stock (which remedy shall be
exclusive of any other remedies available at law or in equity, the Company shall
pay  to  each  holder  of  Registrable  Securities relating to such Registration
Statement  an  amount  in  cash  equal  to  two  percent (2.0%) of the aggregate
Purchase Price (as such term is defined in the Securities Purchase Agreement) of
such  Investor's  Registrable Securities included in such Registration Statement
on  each  of  the following dates:  (i) the day of a Filing Failure and on every
thirtieth  day  (pro  rated  for periods totaling less than thirty days) after a
Filing  Failure  until  such  Filing  Failure  is  cured;  (ii)  the  day  of an
Effectiveness Failure and on every thirtieth day (pro rated for periods totaling
less  than  thirty days) after an Effectiveness Failure until such Effectiveness
Failure  is  cured;  and  (iii)  the initial day of a Maintenance Failure and on
every thirtieth day (pro rated for periods totaling less than thirty days) after
a  Maintenance Failure until such Maintenance Failure is cured.  The payments to
which  a  holder shall be entitled pursuant to this Section 2(d) are referred to
herein  as  "REGISTRATION  DELAY PAYMENTS." Registration Delay Payments shall be
paid on the day of the Filing Failure, Effectiveness Failure and the initial day
of  a  Maintenance  Failure, as applicable, and thereafter on the earlier of (I)
the  thirtieth  day  after  the event or failure giving rise to the Registration
Delay  Payments  has occurred and (II) the third Business Day after the event or
failure  giving  rise  to  the  Registration  Delay  Payments  is  cured.

                                        4
<PAGE>

3.     Related  Obligations.  At such time as the Company is obligated to file a
       --------------------
Registration  Statement  with  the  SEC  pursuant  to  Section 2(a) or 2(c), the
Company  will use its best efforts to effect the registration of the Registrable
Securities  in  accordance  with the intended method of disposition thereof and,
pursuant  thereto,  the  Company  shall  have  the  following  obligations:

a.     The  Company  shall promptly prepare and file with the SEC a Registration
Statement with respect to the Registrable Securities and use its reasonable best
efforts  to  cause  such  Registration  Statement  relating  to  the Registrable
Securities  to become effective as soon as practicable after such filing (but in
no  event  later  than the Effectiveness Deadline).  The Company shall keep each
Registration  Statement  effective  pursuant  to Rule 415 at all times until the
earlier  of  (i)  the  date  as  of  which  the  Investors  may  sell all of the
Registrable  Securities  covered  by  such  Registration  Statement  without
restriction pursuant to Rule 144(k) (or any successor thereto) promulgated under
the  1933 Act or (ii) the date on which the Investors shall have sold all of the
Registrable Securities covered by such Registration Statement (the "REGISTRATION
PERIOD").  The  Company shall ensure that each Registration Statement (including
any  amendments or supplements thereto and prospectuses contained therein) shall
not  contain any untrue statement of a material fact or omit to state a material
fact  required to be stated therein, or necessary to make the statements therein
(in  the  case  of prospectuses, in the light of the circumstances in which they
were  made)  not  misleading.  The Company shall submit to the SEC, within three
(3)  Business  Days  after the later of the date that the Company learns that no
review  of  a particular Registration Statement will be made by the staff of the
SEC  or  that  the  staff  has  no further comments on a particular Registration
Statement,  as  the  case may be, a request for acceleration of effectiveness of
such Registration Statement to a time and date not later than 48 hours after the
submission  of  such  request.

b.     The  Company  shall  prepare  and  file  with  the  SEC  such  amendments
(including  post-effective  amendments)  and  supplements  to  a  Registration
Statement  and  the  prospectus  used  in  connection  with  such  Registration
Statement,  which  prospectus  is  to  be filed pursuant to Rule 424 promulgated
under  the  1933  Act,  as  may be necessary to keep such Registration Statement
effective  at all times during the Registration Period, and, during such period,
comply  with  the  provisions of the 1933 Act with respect to the disposition of
all Registrable Securities of the Company covered by such Registration Statement
until  such  time as all of such Registrable Securities shall have been disposed
of  in  accordance  with  the  intended  methods of disposition by the seller or
sellers  thereof  as  set  forth in such Registration Statement.  In the case of
amendments  and supplements to a Registration Statement which are required to be
filed  pursuant  to  this Agreement (including pursuant to this Section 3(b)) by
reason  of  the Company filing a report on Form 10-Q, Form 10-K or any analogous
report  under  the Securities Exchange Act of 1934, as amended (the "1934 ACT"),
the  Company  shall  have  incorporated  such  report  by  reference  into  such
Registration  Statement,  if  applicable,  or  shall  file  such  amendments  or
supplements  with  the SEC on the same day on which the 1934 Act report is filed
which  created  the  requirement  for  the  Company  to amend or supplement such
Registration  Statement.

c.     The  Company  shall  use  its  best  efforts to (i) register and qualify,
unless  an  exemption from registration and qualification applies, the resale by
Investors  of  the  Registrable  Securities  covered by a Registration Statement
under  such  other securities or "blue sky" laws of all applicable jurisdictions
in  the  United  States,  (ii)  prepare  and  file  in  those

                                        5
<PAGE>

jurisdictions,  such  amendments  (including  post-effective  amendments)  and
supplements  to  such  registrations  and  qualifications as may be necessary to
maintain  the  effectiveness  thereof during the Registration Period, (iii) take
such  other  actions  as  may  be  necessary  to maintain such registrations and
qualifications  in  effect at all times during the Registration Period, and (iv)
take  all  other  actions  reasonably  necessary  or  advisable  to  qualify the
Registrable  Securities  for sale in such jurisdictions; provided, however, that
the  Company  shall  not  be  required in connection therewith or as a condition
thereto  to  (x)  qualify  to do business in any jurisdiction where it would not
otherwise  be  required to qualify but for this Section 3(c), (y) subject itself
to  general  taxation in any such jurisdiction, or (z) file a general consent to
service  of process in any such jurisdiction.  The Company shall promptly notify
each  Investor who holds Registrable Securities of the receipt by the Company of
any  notification  with  respect  to  the  suspension  of  the  registration  or
qualification of any of the Registrable Securities for sale under the securities
or  "blue  sky"  laws of any jurisdiction in the United States or its receipt of
actual  notice  of  the  initiation  or  threatening  of any proceeding for such
purpose.

d.     The Company shall notify each Investor in writing of the happening of any
event,  as  promptly  as  practicable  after  becoming aware of such event, as a
result  of which the prospectus included in a Registration Statement, as then in
effect,  includes  an untrue statement of a material fact or omission to state a
material  fact required to be stated therein or necessary to make the statements
therein,  in  the  light  of  the  circumstances under which they were made, not
misleading  (provided  that  in no event shall such notice contain any material,
nonpublic  information),  and,  subject  to  Section  3(m),  promptly  prepare a
supplement  or  amendment  to such Registration Statement to correct such untrue
statement  or omission.  The Company shall also promptly notify each Investor in
writing  (i)  when  a  prospectus or any prospectus supplement or post-effective
amendment  has  been  filed,  and  when  a  Registration  Statement  or  any
post-effective  amendment  has  become effective, (ii) of any request by the SEC
for  amendments or supplements to a Registration Statement or related prospectus
or related information, and (iii) of the Company's reasonable determination that
a  post-effective  amendment  to  a Registration Statement would be appropriate.

e.     The  Company  shall  use  its best efforts to prevent the issuance of any
stop  order or other suspension of effectiveness of a Registration Statement, or
the  suspension  of  the  qualification of any of the Registrable Securities for
sale  in  any  jurisdiction  and,  if  such an order or suspension is issued, to
obtain  the  withdrawal  of  such  order  or suspension at the earliest possible
moment  and  to notify each Investor who holds Registrable Securities being sold
of  the  issuance  of  such  order  and the resolution thereof or its receipt of
actual  notice  of  the initiation or threat of any proceeding for such purpose.

f.     The  Company  shall  hold  in  confidence  and not make any disclosure of
information concerning an Investor provided to the Company unless (i) disclosure
of  such  information  is  necessary  to comply with federal or state securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement  or  omission  in  any Registration Statement, (iii) the release of
such  information  is  ordered  pursuant  to  a  subpoena  or  other  final,
non-appealable  order  from  a  court  or  governmental  body  of  competent
jurisdiction,  or (iv) such information has been made generally available to the
public  other  than  by  disclosure  in violation of this Agreement or any other
agreement.  The  Company  agrees that it shall, upon learning that disclosure of
such  information  concerning  an  Investor  is  sought  in  or  by  a  court or

                                        6
<PAGE>

governmental  body of competent jurisdiction or through other means, give prompt
written  notice  to  such  Investor  and  allow such Investor, at the Investor's
expense,  to undertake appropriate action to prevent disclosure of, or to obtain
a  protective  order  for,  such  information.

g.     The  Company  shall  use its best efforts to cause all of the Registrable
Securities  covered  by  a Registration Statement to be listed or quoted on each
securities  exchange  or  securities association on which securities of the same
class or series issued by the Company are then listed, if any, if the listing of
such  Registrable  Securities is then permitted under the rules of such exchange
or  association.  The Company shall pay all fees and expenses in connection with
satisfying  its  obligation  under  this  Section  3(g).

h.     The  Company  shall  cooperate  with  the  Investors who hold Registrable
Securities  being  offered  and, to the extent applicable, facilitate the timely
preparation  and  delivery  of certificates (not bearing any restrictive legend)
representing the Registrable Securities to be offered pursuant to a Registration
Statement  and  enable such certificates to be in such denominations or amounts,
as  the  case  may be, as the Investors may reasonably request and registered in
such  names  as  the  Investors  may  request.

i.     If  requested  by an Investor, the Company shall within five (5) business
days  of  receipt  of  notice from such Investor (i) incorporate in a prospectus
supplement  or  post-effective  amendment  such  information  as  an  Investor
reasonably requests to be included therein relating to the sale and distribution
of  Registrable  Securities,  including,  without  limitation,  information with
respect  to  the  number  of  Registrable  Securities being offered or sold, the
purchase  price  being  paid therefor and any other terms of the offering of the
Registrable  Securities  to  be  sold  in  such offering; (ii) make all required
filings  of  such  prospectus supplement or post-effective amendment after being
notified  of  the  matters  to  be incorporated in such prospectus supplement or
post-effective  amendment;  and  (iii)  supplement  or  make  amendments  to any
Registration  Statement  if  reasonably  requested  by  an  Investor holding any
Registrable  Securities.

j.     The  Company  shall  use  its  best  efforts  to  cause  the  Registrable
Securities  covered  by  the  Registration  Statement  to  be registered with or
approved  by such other governmental agencies or authorities as may be necessary
to  consummate  the  disposition  of  such  Registrable  Securities.

k.     The  Company  shall  make  generally available to its security holders as
soon  as  practical,  but not later than ninety (90) days after the close of the
period  covered  thereby,  an earnings statement (in form complying with, and in
the  manner provided by, the provisions of Rule 158 under the 1933 Act) covering
a  twelve-month  period  beginning not later than the first day of the Company's
fiscal  quarter next following the effective date of the Registration Statement.

l.     The  Company  shall  otherwise  use  its  best efforts to comply with all
applicable  rules and regulations of the SEC in connection with any registration
hereunder.

                                        7
<PAGE>

m.     Notwithstanding  anything  to  the contrary herein, at any time after the
Registration  Statement  has been declared effective by the SEC, the Company may
delay  the disclosure of material, non-public information concerning the Company
the  disclosure  of  which  at the time is not, in the good faith opinion of the
Board  of  Directors of the Company and its counsel, in the best interest of the
Company  and,  in  the  opinion of counsel to the Company, otherwise required (a
"GRACE  PERIOD");  provided,  that  the  Company  shall  promptly (i) notify the
Investors in writing of the existence of material, non-public information giving
rise  to  a  Grace  Period  (provided  that  in each notice the Company will not
disclose  the content of such material, non-public information to the Investors)
and the date on which the Grace Period will begin, and (ii) notify the Investors
in  writing  of  the date on which the Grace Period ends; and, provided further,
that no Grace Period shall exceed five (5) consecutive days and during any three
hundred  sixty  five  (365)  day  period  such Grace Periods shall not exceed an
aggregate  of  twenty (20) days and the first day of any Grace Period must be at
least  two  (2) trading days after the last day of any prior Grace Period (each,
an "ALLOWABLE GRACE PERIOD").  For purposes of determining the length of a Grace
Period above, the Grace Period shall begin on and include the date the Investors
receive  the  notice  referred to in clause (i) and shall end on and include the
later  of  the  date the Investors receive the notice referred to in clause (ii)
and  the date referred to in such notice.  The provisions of Section 3(e) hereof
shall  not  be applicable during the period of any Allowable Grace Period.  Upon
expiration  of  the  Grace Period, the Company shall again be bound by the first
sentence  of  Section  3(d)  with respect to the information giving rise thereto
unless  such  material,  non-public  information  is  no  longer  applicable.
Notwithstanding  anything  to the contrary, the Company shall cause its transfer
agent  to  deliver  unlegended  Shares  of  Common  Stock  to a transferee of an
Investor  in  accordance  with the terms of the Securities Purchase Agreement in
connection  with  any  sale  of  Registrable Securities with respect to which an
Investor  has  entered  into  a  contract  for sale, and delivered a copy of the
prospectus  included  as part of the applicable Registration Statement, prior to
the  Investor's  receipt  of  the  notice  of  a  Grace Period and for which the
Investor  has  not  yet  settled.

4.     Obligations of the Investors.
       ----------------------------

a.     At  least  five  (5) days prior to the first anticipated filing date of a
Registration Statement, the Company shall notify each Investor in writing of the
information the Company requires from each such Investor if such Investor elects
to  have  any  of  such  Investor's  Registrable  Securities  included  in  such
Registration Statement.  It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement with respect
to  the Registrable Securities of a particular Investor that such Investor shall
furnish  to  the  Company  such  information  regarding  itself, the Registrable
Securities  held by it and the intended method of disposition of the Registrable
Securities  held  by  it, as shall be reasonably required to effect and maintain
the  effectiveness  of the registration of such Registrable Securities and shall
execute  such  documents in connection with such registration as the Company may
reasonably  request.

b.     Each  Investor,  by  such  Investor's  acceptance  of  the  Registrable
Securities,  agrees to cooperate with the Company as reasonably requested by the
Company  in  connection  with  the  preparation  and  filing of any Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such  Investor's  election  to  exclude  all  of  such  Investor's  Registrable
Securities  from  such  Registration  Statement.

                                        8
<PAGE>

c.     Each Investor agrees that, upon receipt of any notice from the Company of
the  happening  of  any event of the kind described in Section 3(e) or the first
sentence  of  3(d),  such  Investor  will immediately discontinue disposition of
Registrable  Securities  pursuant to any Registration Statement(s) covering such
Registrable  Securities  until  such  Investor's  receipt  of  the copies of the
supplemented  or  amended  prospectus  contemplated by Section 3(e) or the first
sentence  of  3(d)  or  receipt  of  notice  that  no supplement or amendment is
required.  Notwithstanding anything to the contrary, the Company shall cause its
transfer  agent  to deliver unlegended Shares of Common Stock to a transferee of
an Investor in accordance with the terms of the Securities Purchase Agreement in
connection  with  any  sale  of  Registrable Securities with respect to which an
Investor has entered into a contract for sale prior to the Investor's receipt of
a notice from the Company of the happening of any event of the kind described in
Section  3(e)  or  the first sentence of 3(d) and for which the Investor has not
yet  settled.

d.     Each  Investor  covenants  and  agrees  that  it  will  comply  with  the
prospectus  delivery  requirements  of  the  1933  Act  as  applicable  to it in
connection  with  sales  of  Registrable Securities pursuant to the Registration
Statement.

5.     Expenses  of  Registration.  All  reasonable  expenses,  other  than
       --------------------------
underwriting  discounts  and  commissions,  incurred  in  connection  with
       ---
registrations,  filings  or  qualifications  pursuant  to  Sections  2  and  3,
       ---
including,  without  limitation,  all  registration,  listing and qualifications
       --
fees,  printers  and  accounting fees, and fees and disbursements of counsel for
the  Company  shall  be  paid  by  the  Company.

6.     Indemnification.  In the event any Registrable Securities are included in
       ---------------
a  Registration  Statement  under  this  Agreement:

a.     To  the  fullest  extent  permitted  by law, the Company will, and hereby
does,  indemnify,  hold  harmless  and  defend  each  Investor,  the  directors,
officers,  members,  partners,  employees,  agents, representatives of, and each
Person,  if any, who controls any Investor within the meaning of the 1933 Act or
the  1934  Act  (each,  an  "INDEMNIFIED  PERSON"),  against any losses, claims,
damages,  liabilities,  judgments,  fines, penalties, charges, costs, reasonable
attorneys'  fees,  amounts  paid  in  settlement  or expenses, joint or several,
(collectively,  "CLAIMS")  incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing  by  or  before  any  court  or  governmental, administrative or other
regulatory  agency,  body  or the SEC, whether pending or threatened, whether or
not  an  indemnified party is or may be a party thereto ("INDEMNIFIED DAMAGES"),
to  which  any  of them may become subject insofar as such Claims (or actions or
proceedings,  whether  commenced or threatened, in respect thereof) arise out of
or  are  based  upon:  (i) any untrue statement or alleged untrue statement of a
material  fact  in  a  Registration  Statement  or  any post-effective amendment
thereto  or  in  any  filing  made  in  connection with the qualification of the
offering  under  the  securities or other "blue sky" laws of any jurisdiction in
which Registrable Securities are offered ("BLUE SKY FILING"), or the omission or
alleged  omission  to  state  a  material  fact required to be stated therein or
necessary  to  make  the  statements  therein  not  misleading,  (ii) any untrue
statement  or  alleged  untrue  statement  of  a  material fact contained in any
preliminary  prospectus if used prior to the effective date of such Registration
Statement,  or contained in the final prospectus (as amended or supplemented, if
the  Company  files any amendment thereof or supplement thereto with the SEC) or
the  omission  or  alleged

                                        9
<PAGE>

omission  to  state  therein  any material fact necessary to make the statements
made  therein,  in light of the circumstances under which the statements therein
were  made,  not  misleading,  (iii)  any  violation or alleged violation by the
Company  of  the  1933  Act,  the  1934  Act,  any other law, including, without
limitation,  any  state  securities  law,  or  any rule or regulation thereunder
relating  to  the  offer  or  sale  of  the Registrable Securities pursuant to a
Registration  Statement  or (iv) any violation of this Agreement (the matters in
the  foregoing  clauses  (i)  through  (iv)  being, collectively, "VIOLATIONS").
Subject  to  Section  6(c), the Company shall reimburse the Indemnified Persons,
promptly  as  such  expenses are incurred and are due and payable, for any legal
fees  or  other  reasonable  expenses  incurred  by  them  in  connection  with
investigating  or  defending  any  such  Claim.  Notwithstanding anything to the
contrary  contained  herein,  the  indemnification  agreement  contained in this
Section  6(a):  (i)  shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with  information furnished in writing to the Company by such Indemnified Person
for such Indemnified Person expressly for use in connection with the preparation
of  the  Registration  Statement  or  any  such  amendment thereof or supplement
thereto;  (ii)  shall  not  be  available to the extent such Claim is based on a
failure  of  the  Investor to deliver or to cause to be delivered the prospectus
made available by the Company, including a corrected prospectus; and (iii) shall
not  apply  to  amounts  paid  in  settlement of any Claim if such settlement is
effected  without  the prior written consent of the Company, which consent shall
not  be  unreasonably  withheld or delayed.  Such indemnity shall remain in full
force  and  effect  regardless  of any investigation made by or on behalf of the
Indemnified  Person and shall survive the transfer of the Registrable Securities
by  the  Investors  pursuant  to  Section  9.

b.     In  connection  with  any  Registration Statement in which an Investor is
participating, each such Investor agrees to severally and not jointly indemnify,
hold  harmless  and  defend, to the same extent and in the same manner as is set
forth  in Section 6(a), the Company, each of its directors, each of its officers
who  signs  the Registration Statement and each Person, if any, who controls the
Company  within  the  meaning  of  the  1933  Act  or  the  1934  Act  (each, an
"INDEMNIFIED  PARTY"),  against any Claim or Indemnified Damages to which any of
them  may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar
as  such  Claim  or  Indemnified  Damages  arise  out  of  or are based upon any
Violation,  in  each  case  to  the  extent,  and  only to the extent, that such
Violation  occurs  in  reliance  upon and in conformity with written information
furnished  to  the Company by such Investor expressly for use in connection with
such  Registration  Statement;  and, subject to Section 6(c), such Investor will
reimburse  any  legal  or  other  expenses reasonably incurred by an Indemnified
Party  in  connection  with investigating or defending any such Claim; provided,
however,  that  the  indemnity  agreement contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 7 shall not apply to
amounts  paid  in settlement of any Claim if such settlement is effected without
the  prior  written  consent  of  such  Investor,  which  consent  shall  not be
unreasonably  withheld or delayed; provided, further, however, that the Investor
shall  be  liable  under  this  Section  6(b) for only that amount of a Claim or
Indemnified  Damages  as  does not exceed the net proceeds to such Investor as a
result  of  the  sale  of  Registrable  Securities pursuant to such Registration
Statement.  Such  indemnity  shall remain in full force and effect regardless of
any  investigation  made  by  or  on  behalf of such Indemnified Party and shall
survive  the transfer of the Registrable Securities by the Investors pursuant to
Section  9.  Notwithstanding  anything  to  the  contrary  contained herein, the
indemnification  agreement  contained  in  this Section 6(b) with respect to any
preliminary  prospectus  shall not inure to the benefit of any Indemnified Party
if  the  untrue  statement  or

                                       10
<PAGE>

omission  of material fact contained in the preliminary prospectus was corrected
on  a  timely  basis  in  the  prospectus,  as  then  amended  or  supplemented.

c.     Promptly  after  receipt  by  an  Indemnified Person or Indemnified Party
under  this  Section 6 of notice of the commencement of any action or proceeding
(including  any  governmental  action  or  proceeding)  involving  a Claim, such
Indemnified  Person or Indemnified Party shall, if a Claim in respect thereof is
to  be  made against any indemnifying party under this Section 6, deliver to the
indemnifying  party  a  written  notice  of  the  commencement  thereof, and the
indemnifying  party  shall  have the right to participate in, and, to the extent
the  indemnifying  party  so  desires, jointly with any other indemnifying party
similarly  noticed,  to  assume  control  of  the  defense  thereof with counsel
mutually  satisfactory  to  the indemnifying party and the Indemnified Person or
the  Indemnified  Party,  as  the  case  may  be;  provided,  however,  that  an
Indemnified  Person  or Indemnified Party shall have the right to retain its own
counsel  with  the  fees  and expenses of not more than one counsel for all such
Indemnified  Person  or  Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation  by  such  counsel of the Indemnified Person or Indemnified Party
and  the  indemnifying  party  would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other  party  represented by such counsel in such proceeding.  In the case of an
Indemnified  Person,  legal  counsel  referred  to  in the immediately preceding
sentence  shall  be  selected  by  the  Investors holding at least a majority in
interest of the Registrable Securities included in the Registration Statement to
which  the  Claim  relates.  The  Indemnified  Party or Indemnified Person shall
cooperate  reasonably  with  the  indemnifying  party  in  connection  with  any
negotiation or defense of any such action or Claim by the indemnifying party and
shall  furnish to the indemnifying party all information reasonably available to
the  Indemnified  Party  or  Indemnified  Person which relates to such action or
Claim.  The  indemnifying  party shall keep the Indemnified Party or Indemnified
Person  fully  apprised  at  all  times  as  to the status of the defense or any
settlement  negotiations  with  respect thereto.  No indemnifying party shall be
liable  for  any  settlement of any action, claim or proceeding effected without
its  prior written consent, provided, however, that the indemnifying party shall
not  unreasonably  withhold,  delay  or  condition its consent.  No indemnifying
party  shall,  without  the  prior  written  consent of the Indemnified Party or
Indemnified  Person,  consent  to  entry  of  any  judgment  or  enter  into any
settlement  or  other compromise which does not include as an unconditional term
thereof  the  giving  by  the claimant or plaintiff to such Indemnified Party or
Indemnified  Person  of a release from all liability in respect to such Claim or
litigation.  Following  indemnification  as  provided  for  hereunder,  the
indemnifying party shall be subrogated to all rights of the Indemnified Party or
Indemnified  Person  with  respect  to  all third parties, firms or corporations
relating  to the matter for which indemnification has been made.  The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability  to  the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend  such  action.

d.     The  indemnification required by this Section 6 shall be made by periodic
payments  of  the  amount  thereof  during  the  course  of the investigation or
defense,  as  and  when  bills are received or Indemnified Damages are incurred.

                                       11
<PAGE>

e.     The  indemnity  agreements  contained herein shall be in addition to  (i)
any  cause  of  action  or similar right of the Indemnified Party or Indemnified
Person  against  the  indemnifying party or others, and (ii) any liabilities the
indemnifying  party  may  be  subject  to  pursuant  to  the  law.

7.     Contribution.  To the extent any indemnification by an indemnifying party
       ------------
is  prohibited  or  limited  by  law,  the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable  under  Section  6  to  the  fullest  extent  permitted by law; provided,
however,  that:  (i)  no  Person  involved in the sale of Registrable Securities
which  Person  is  guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) in connection with such sale shall be entitled to
contribution from any Person involved in such sale of Registrable Securities who
was  not  guilty  of  fraudulent misrepresentation; and (ii) contribution by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds  received  by  such seller from the sale of such Registrable Securities
pursuant  to  such  Registration  Statement.

8.     Reports  Under  the  1934  Act.  With  a  view to making available to the
       ------------------------------
Investors  the  benefits of Rule 144 promulgated under the 1933 Act or any other
similar  rule or regulation of the SEC that may at any time permit the Investors
to  sell  securities  of  the  Company to the public without registration ("RULE
144"),  the  Company  agrees  until  four  years  from  Closing  to:

a.     make and keep public information available, as those terms are understood
and  defined  in  Rule  144;

b.     file  with  the  SEC  in  a timely manner all reports and other documents
required  of  the  Company  under  the  1933 Act and the 1934 Act so long as the
Company  remains  subject to such requirements (it being understood that nothing
herein  shall  limit  the  Company's  obligations  under  Section  4(c)  of  the
Securities  Purchase  Agreement)  and  the  filing  of  such  reports  and other
documents  is  required  for  the  applicable  provisions  of  Rule  144;  and

c.     furnish  to  each  Investor  so  long  as  such Investor owns Registrable
Securities,  promptly  upon  request,  (i)  a  copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the  Company,  and (ii) such other information as may be reasonably requested to
permit  the  Investors  to  sell  such  securities  pursuant to Rule 144 without
registration.

9.     Assignment of Registration Rights.  The rights under this Agreement shall
       ---------------------------------
be  automatically  assignable  by  the Investors to any transferee of all or any
portion of such Investor's Registrable Securities if: (i) the Investor agrees in
writing  with  the  transferee  or assignee to assign such rights, and a copy of
such  agreement  is furnished to the Company within a reasonable time after such
assignment; (ii) the Company is, within a reasonable time after such transfer or
assignment,  furnished  with  written notice of (a) the name and address of such
transferee  or  assignee,  and  (b)  the  securities  with respect to which such
registration  rights  are  being  transferred  or  assigned;  (iii)  immediately
following such transfer or assignment the further disposition of such securities
by  the  transferee  or  assignee  is  restricted  under  the  1933  Act  and

                                       12
<PAGE>

applicable  state  securities  laws;  (iv)  at  or  before  the time the Company
receives  the  written  notice  contemplated by clause (ii) of this sentence the
transferee  or assignee agrees in writing with the Company to be bound by all of
the  provisions  contained herein; and (v) such transfer shall have been made in
accordance  with  the  applicable  requirements  of  the  Securities  Purchase
Agreement.

10.     Amendment  of  Registration Rights.  Provisions of this Agreement may be
        ----------------------------------
amended  and  the  observance  thereof  may  be waived (either generally or in a
particular  instance  and  either retroactively or prospectively), only with the
written  consent  of  the  Company  and  the Required Holders.  Any amendment or
waiver  effected  in  accordance with this Section 10 shall be binding upon each
Investor  and  the  Company.  No such amendment shall be effective to the extent
that  it  applies to less than all of the holders of the Registrable Securities.
No consideration shall be offered or paid to any Person to amend or consent to a
waiver or modification of any provision of any of this Agreement unless the same
consideration  also  is  offered  to  all  of  the  parties  to  this Agreement.

11.     Miscellaneous.
        -------------

a.     A Person is deemed to be a holder of Registrable Securities whenever such
Person  owns  or is deemed to own of record such Registrable Securities.  If the
Company receives conflicting instructions, notices or elections from two or more
Persons  with  respect to the same Registrable Securities, the Company shall act
upon  the  basis  of  instructions,  notice or election received from the record
owner  of  such  Registrable  Securities.

b.     Any  notices,  consents,  waivers  or  other  communications  required or
permitted  to  be given under the terms of this Agreement must be in writing and
will  be  deemed  to  have  been  delivered:  (i)  upon  receipt, when delivered
personally;  (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending  party);  or  (iii)  one  Business  Day  after deposit with a nationally
recognized  overnight  delivery  service, in each case properly addressed to the
party  to  receive  the  same.  The  addresses  and  facsimile  numbers for such
communications  shall  be:

               If to the Company:

     Sorell Inc.
Buk-ri 35
Nama-Myun
Yongin City, South Korea
Telephone:     +82312334664
Facsimile:     +82312334795
Attention:     Bon Kwan Ku, Chief Executive Officer

                                       13
<PAGE>
With a copy (for informational purposes only) to:

Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas, 21st Floor
New York, New York 10018
Telephone:     (212) 930-9700
Facsimile:     (212) 930-9725
Attention:     Marc J. Ross, Esq.

And to:

Cutler Law Group
3206 West Wimbledon Dr
Augusta, GA 30909
Telephone:     (706) 737-6600
Facsimile:     (706) 738-1966
Attention:     M. Richard Cutler, Esq.

     If  to  a  Buyer,  to  its  address  and  facsimile number set forth on the
Schedule  of Buyers attached hereto, with copies to such Buyer's representatives
as  set  forth  on  the  Schedule  of  Buyers,

or to such other address and/or facsimile number and/or to the attention of such
other  Person  as  the  recipient party has specified by written notice given to
each  other  party  five  (5)  days  prior  to the effectiveness of such change.
Written  confirmation  of  receipt  (A)  given  by the recipient of such notice,
consent,  waiver  or  other  communication,  (B)  mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile  number  and  an  image  of the first page of such transmission or (C)
provided  by a courier or overnight courier service shall be rebuttable evidence
of  personal  service,  receipt  by  facsimile  or  receipt  from  a  nationally
recognized  overnight  delivery  service  in accordance with clause (i), (ii) or
(iii)  above,  respectively.

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

d.     All  questions  concerning  the  construction,  validity, enforcement and
interpretation  of  this Agreement shall be governed by the internal laws of the
State of New York, without giving effect to any choice of law or conflict of law
provision  or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State  of  New  York.  Each  party  hereby  irrevocably submits to the exclusive
jurisdiction  of  the  state and federal courts sitting in The City of New York,
Borough  of  Manhattan,  for  the  adjudication  of  any dispute hereunder or in
connection  herewith  or  with  any transaction contemplated hereby or discussed
herein,  and  hereby  irrevocably  waives, and agrees not to assert in any suit,
action  or  proceeding,  any  claim  that  it  is  not personally subject to the
jurisdiction  of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper.  Each  party  hereby

                                       14
<PAGE>

irrevocably  waives  personal  service  of process and consents to process being
served  in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such  service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to  serve  process  in  any  manner  permitted by law.  If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or  unenforceability  shall  not  affect  the  validity or enforceability of the
remainder  of  this  Agreement  in  that  jurisdiction  or  the  validity  or
enforceability  of  any  provision  of this Agreement in any other jurisdiction.
EACH  PARTY  HEREBY  IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST,  A  JURY  TRIAL  FOR  THE  ADJUDICATION  OF ANY DISPUTE HEREUNDER OR IN
CONNECTION  HEREWITH  OR  ARISING  OUT  OF  THIS  AGREEMENT  OR  ANY TRANSACTION
CONTEMPLATED  HEREBY.

e.     This  Agreement,  the  other  Transaction  Documents  (as  defined in the
Securities Purchase Agreement) and the instruments referenced herein and therein
constitute  the  entire  agreement  among the parties hereto with respect to the
subject  matter  hereof  and  thereof.  There  are  no  restrictions,  promises,
warranties or undertakings, other than those set forth or referred to herein and
therein.  This  Agreement,  the  other Transaction Documents and the instruments
referenced  herein and therein supersede all prior agreements and understandings
among  the parties hereto with respect to the subject matter hereof and thereof.

f.     Subject  to  the requirements of Section 9, this Agreement shall inure to
the  benefit of and be binding upon the permitted successors and assigns of each
of  the  parties  hereto.

g.     The  headings in this Agreement are for convenience of reference only and
shall  not  limit  or  otherwise  affect  the  meaning  hereof.

h.     This  Agreement  may be executed in identical counterparts, each of which
shall  be  deemed an original but all of which shall constitute one and the same
agreement.  This  Agreement,  once  executed by a party, may be delivered to the
other party hereto by facsimile transmission of a copy of this Agreement bearing
the  signature  of  the  party  so  delivering  this  Agreement.

i.     Each  party  shall do and perform, or cause to be done and performed, all
such  further  acts  and  things,  and  shall execute and deliver all such other
agreements,  certificates,  instruments  and  documents  as  any other party may
reasonably  request in order to carry out the intent and accomplish the purposes
of  this Agreement and the consummation of the transactions contemplated hereby.

j.     All  consents  and  other  determinations  required  to  be  made  by the
Investors  pursuant  to this Agreement shall be made, unless otherwise specified
in  this  Agreement,  by  the  Required  Holders.

k.     The  language  used  in  this Agreement will be deemed to be the language
chosen  by  the  parties  to  express their mutual intent and no rules of strict
construction  will  be  applied  against  any party, determined as if all of the
Notes  held  by  Investors then outstanding have been converted into Registrable
Securities and all Warrants then outstanding have been exercised for Registrable
Securities  without  regard  to any limitations on conversion of the Notes or on
exercises  of  the  Warrants.

l.     This  Agreement  is  intended  for  the benefit of the parties hereto and
their  respective  permitted  successors and assigns, and is not for the benefit
of,  nor  may  any  provision  hereof  be  enforced  by,  any  other  Person.

m.     Unless  otherwise  indicated,  all  dollar  amounts  referred  to in this
Agreement  are in United States Dollars ("US DOLLARS").  All amounts owing under
this  Agreement  or  any  Transaction Document shall be paid in US Dollars.  All
amounts  denominated  in  other  currencies  shall be converted in the US Dollar
equivalent  amount  in  accordance  with  the  Exchange  Rate  on  the  date  of
calculation.  "EXCHANGE RATE" means, in relation to any amount of currency to be
converted  into  US  Dollars  pursuant to this Agreement, the US Dollar exchange
rate  as  published  in  the  Wall  Street  Journal  on  the  relevant  date  of
calculation.

n.     (i)     If for the purpose of obtaining or enforcing judgment against the
Company or any Subsidiary, in any court in any jurisdiction it becomes necessary
to  convert  into  any  other currency (such other currency being hereinafter in
this  Section  11(n) referred to as the "JUDGMENT CURRENCY") an amount due in US
Dollars  under this Agreement, the conversion shall be made at the Exchange Rate
prevailing  on  the  Business  Day  immediately  preceding:

(A)     the  date  of  actual  payment  of  the  amount  due, in the case of any
proceeding  in the courts of New York or in the courts of any other jurisdiction
that  will  give  effect  to  such  conversion  being  made  on  such  date:  or

(B)     the  date  on  which  the  foreign  court determines, in the case of any
proceeding  in  the  courts of any other jurisdiction (the date as of which such
conversion  is made pursuant to this Section 11(n) being hereinafter referred to
as  the  "JUDGMENT  CONVERSION  DATE").

(ii)     If  in  the  case  of  any  proceeding in the court of any jurisdiction
referred to in Section 11(n)(i)(B) above, there is a change in the Exchange Rate
prevailing  between  the Judgment Conversion Date and the date of actual payment
of the amount due, the applicable party shall pay such adjusted amount as may be
necessary  to  ensure  that  the  amount  paid  in  the  Judgment Currency, when
converted  at  the Exchange Rate prevailing on the date of payment, will produce
the  amount  of  US  Dollars  which could have been purchased with the amount of
Judgment  Currency  stipulated in the judgment or judicial order at the Exchange
Rate  prevailing  on  the  Judgment  Conversion  Date.

Any amount due from the Company or any Subsidiary, under this provision shall be
due  as a separate debt and shall not be affected by judgment being obtained for
any  other  amounts  due  under  or  in  respect  of  this  Agreement.

o.     The obligations of each Investor hereunder are several and not joint with
the  obligations  of  any  other Investor, and no provision of this Agreement is
intended to confer any obligations on any Investor vis- -vis any other Investor.
Nothing  contained  herein, and no action taken by any Investor pursuant hereto,
shall  be deemed to constitute the Investors as a partnership, an association, a
joint  venture  or  any  other  kind of entity, or create a presumption that the
Investors  are  in  any way acting in concert or as a group with respect to such
obligations  or  the  transactions  contemplated  herein.

                            [Signature Pages Follow]

                                       15
<PAGE>

19

IN  WITNESS  WHEREOF,  each  Buyer  and the Company have caused their respective
signature  page  to this Registration Rights Agreement to be duly executed as of
the  date  first  written  above.

     COMPANY:

     SORELL INC.

     By:    /s/ B. K. Koo
          ---------------
     Name:   Bon Kwan Koo
     Title:    Chief Executive Officer

                                       16
<PAGE>

     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature  page  to this Registration Rights Agreement to be duly executed as of
the  date  first  written  above.
     BUYERS:

     MIDSOUTH INVESTOR FUND LP

     By: /s/ Lyman O. Heidtke
        ---------------------
      Name:  Lyman O. Heidtke
      Title:    General Partner

                                       17
<PAGE>
19

     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature  page  to this Registration Rights Agreement to be duly executed as of
the  date  first  written  above.
     BUYERS:

     SOVGEM LIMITED

     By: /s/ Allan W. Moloney
        ---------------------
      Name:  Allan W. Moloney
      Title:    Director

                                       18
<PAGE>
     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature  page  to this Registration Rights Agreement to be duly executed as of
the  date  first  written  above.
     BUYERS:

     ALPHA CAPITAL AG

     By: /s/ Konrad Ackerman
        --------------------
      Name:  Konrad Ackerman
      Title:    Director

                                       19
<PAGE>
     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature  page  to this Registration Rights Agreement to be duly executed as of
the  date  first  written  above.
     BUYERS: LAKE STREET FUND, L.P.

     BY: LAKE STREET MANAGEMENT, LLC, GP

     By: /s/ Scott W. Hood/s/
        ------------------
      Name:  Scott W. Hood
      Title:    Managing Director

                                       20
<PAGE>

                               SCHEDULE OF BUYERS

<TABLE>
<CAPTION>

<S>                        <C>                                <C>
                                                              BUYER'S REPRESENTATIVE'S
                           BUYER ADDRESS, TELEPHONE           ADDRESS, TELEPHONE
BUYER                      AND FACSIMILE NUMBER               AND FACSIMILE NUMBER

MidSouth Investor Fund LP  1776 Peachtree St. NW              Heidtke & Co., Inc.
                           Suite 412 North                    201 4th Ave. North, Suite 1950
                           Atlanta, GA 30309                  Nashville, TN 37219
                           (Tel) 404-855-9508                 (Tel) 615-254-0992
                                                             (Fax) 615-254-1603

SovGEM LIMITED             6 Britannia Place                  NYGS
                           Bath Street,
                           St. Heller   Jersey
                           JE2 4SU
                           Tel: + 44 (1534) 837600
                           Fax: + 44 (1534) 837601
                           Contact liason: Allan Moloney

Alpha Capital              Prachfont 7                        L.H. Financial
                           Furstentums 9490
                           Vaduz Liechtenstein

Lake Street Fund, L.P.     1224 East Green Street, Suite 200  Scott W. Hood
                           Pasadena, California 91106         1224 East Green Street, Suite 200
                           (626) 796-6622 Telephone           Pasadena, California 91106
                           (626) 796-8990 Fax                 (626) 796-6622 Telephone
                                                              (626) 796-8990 Fax

</TABLE>

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