Document:

FRANCHISE
DISCLOSURE DOCUMENT

      FOR
PROSPECTIVE SUBFRANCHISORS

      

      
        
          	
                  

                	
                  ESCO
      GLOBAL REALTY CORP.

                  594
      Dagall Road

                  Mill
      Bay, BC  V0R 2P4

                  CANADA

                

        

      

      

      The
Subfranchisor will assist the Franchisor in locating and securing prospective
Franchisees and will assist in the growth of Franchise offices in a specific
geographic territory (the “Regional Territory”). The Franchisee will operate a
real estate sales office, but this is not offered here.

       

      The total
investment necessary to begin operation of an ESCO® GLOBAL
REALTY Regional Territory ranges from $116,000 to $731,000.  This
amount includes the Initial Fee for a Subfranchise that must be paid to the
Franchisor or affiliate in the amount of $40,000 per 1,000,000 of population
within the Regional Territory.  Subfranchisor should refer to Items 5
and 7 of this Circular for further information regarding the
investment.

       

      This
disclosure document summarizes certain provisions of your franchise agreement
and other information in plain English.  Read this disclosure document
and all accompanying agreements carefully.  You must receive this
disclosure document at least 14 calendar-days before you sign a binding
agreement with, or make any payment to, the Franchisor or an affiliate in
connection with the proposed franchise sale.  Note, however, that no governmental
agency has verified the information contained in this
document.

       

      The terms
of your contract will govern your franchise relationship.  Don’t rely
on the disclosure document alone to understand your contract.  Read
all of your contract carefully.  Show your contract and this
disclosure document to an advisor, like a lawyer or an accountant.

       

      Buying a
franchise is a complex investment.  The information in this disclosure
document can help you make up your mind.  More information on
franchising, such as “A Consumer’s Guide to Buying
a Franchise,” which can help you understand how to use this disclosure
document, is available from the Federal Trade Commission.  You can
contact the FTC at 1-877-FTC-HELP or by writing to the FTC at 600 Pennsylvania
Avenue, NW, Washington D.C. 20580.  You can also visit the FTC’s home
page at www.ftc.gov for additional information.  Call your state
agency or visit your public library for other sources of information on
franchising.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        STATE
COVER PAGE

      

       

      Your
state may have a franchise law that requires a franchisor to register or file
with a state franchise administrator before offering or selling in Your
state.  REGISTRATION OF A FRANCHISE BY A STATE DOES NOT MEAN THAT THE
STATE RECOMMENDS OR HAS VERIFIED THE INFORMATION IN THIS DISCLOSURE
DOCUMENT.  Call the state franchise administrator listed in Exhibit B for information
about the franchisor or about franchising in Your state.

      

      MANY
FRANCHISE AGREEMENTS DO NOT ALLOW YOU TO RENEW UNCONDITIONALLY AFTER THE INITIAL
TERM EXPIRES.  YOU MAY HAVE TO SIGN A NEW AGREEMENT WITH DIFFERENT
TERMS AND CONDITIONS IN ORDER TO CONTINUE TO OPERATE YOUR BUSINESS. BEFORE YOU
BUY, CONSIDER WHAT RIGHTS YOU HAVE TO RENEW YOUR FRANCHISE, IF ANY, AND WHAT
TERMS YOU MIGHT HAVE TO ACCEPT IN ORDER TO RENEW.

      

      Please
consider the following RISK FACTORS before You buy this franchise:

      

      THE
FRANCHISE AGREEMENT REQUIRES YOU TO RESOLVE DISPUTES WITH US BY ARBITRATION ONLY
IN MILWAUKEE COUNTY, WISCONSIN.  OUT OF STATE ARBITRATION MAY FORCE
YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT MAY ALSO COST YOU
MORE TO ARBITRATE WITH US IN WISCONSIN THAN IN YOUR OWN STATE.  THE
FRANCHISE AGREEMENT REQUIRES THAT WISCONSIN LAW GOVERNS THE AGREEMENT, AND THIS
LAW MAY NOT PROVIDE THE SAME PROTECTIONS AND BENEFITS AS LOCAL LAW. YOU MAY WANT
TO COMPARE THESE LAWS.

       

      FRANCHISOR
BELIEVES THAT AN INTEGRAL PART OF THE ESCO® SYSTEM
INCLUDES THE OWN YOUR FUTURE PLAN (THE “OWN YOUR FUTURE® PLAN”),
WHICH ALLOWS PARTICIPANTS IN THE ESCO® SYSTEM
TO PURCHASE SECURITIES OF THE FRANCHISOR (THE “SECURITIES”).  AS OF
THE DATE OF THIS CIRCULAR, FRANCHISOR HAS NOT COMPLETED THE REGISTRATION OF THE
SECURITIES NECESSARY TO FULLY IMPLEMENT THE EQUITY
PROGRAM.  FURTHERMORE, EVEN IF THE SECURITIES ARE SUCCESSFULLY
REGISTERED, OTHER RESTRICTIONS MAY PROHIBIT FRANCHISOR FROM EVER FULLY
IMPLEMENTING THE OWN YOUR FUTURE PLAN.  THERE ARE OTHER RISKS
CONCERNING THE OWNERSHIP OF ANY SECURITIES.  THIS CIRCULAR IS NOT AN
OFFERING OF SECURITIES NOR AN INVITATION OR SOLICITATION TO BUY
THEM.

       

      THERE MAY
BE OTHER RISKS CONCERNING THIS FRANCHISE.

      

      ESCO uses
the services of one or more FRANCHISE BROKERS or referral sources to assist ESCO
in selling the Franchise.  A franchise broker or referral source
represents ESCO, not You.  We pay this person a fee for selling the
ESCO Franchise or referring You to us.  You should make sure to do
Your own investigation of the Franchise.

       

      
        Effective
Date: See the next page for state effective dates.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      STATE
EFFECTIVE DATES

      

      The
following states require that the Franchise Disclosure Document be registered or
filed with the state, or be exempt from registration: California, Hawaii,
Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode
Island, South Dakota, Virginia, Washington and Wisconsin.  This
Franchise Disclosure Document is registered, on file or exempt from registration
in the following states having franchise registration and disclosure laws, with
the following effective dates:

      

      
        
          
            	
                    STATE

                  	 	
                    EFFECTIVE DATE

                  
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      

          

        

      

      

      
        
          
            	 
      	
                    Page
      i

                  

          

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      TABLE
OF CONTENTS

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  	
                                                                                          ITEM
      1

                                                                                        	
                                                                                          THE
      FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES

                                                                                        	
                                                                                          Page
      1

                                                                                        
	 	 	 
	
                                                                                          ITEM
      2

                                                                                        	
                                                                                          BUSINESS
      EXPERIENCE

                                                                                        	
                                                                                          Page
      2

                                                                                        
	 	 	 
	
                                                                                          ITEM
      3

                                                                                        	
                                                                                          LITIGATION

                                                                                        	
                                                                                          Page
      3

                                                                                        
	 	 	 
	
                                                                                          ITEM
      4

                                                                                        	
                                                                                          BANKRUPTCY

                                                                                        	
                                                                                          Page
      3

                                                                                        
	 	 	 
	
                                                                                          ITEM
      5

                                                                                        	
                                                                                          INITIAL
      FEES

                                                                                        	
                                                                                          Page
      3

                                                                                        
	 	 	 
	
                                                                                          ITEM
      6

                                                                                        	
                                                                                          OTHER
      FEES

                                                                                        	
                                                                                          Page
      4

                                                                                        
	 	 	 
	
                                                                                          ITEM
      7

                                                                                        	
                                                                                          ESTIMATED
      INITIAL INVESTMENT

                                                                                        	
                                                                                          Page
      5

                                                                                        
	 	 	 
	
                                                                                          ITEM
      8

                                                                                        	
                                                                                          RESTRICTIONS
      ON SOURCES OF PRODUCTS AND SERVICES

                                                                                        	
                                                                                          Page
      6

                                                                                        
	 	 	 
	
                                                                                          ITEM
      9

                                                                                        	
                                                                                          SUBFRANCHISOR’S
      OBLIGATIONS

                                                                                        	
                                                                                          Page
      7

                                                                                        
	 	 	 
	
                                                                                          ITEM
      10

                                                                                        	
                                                                                          FINANCING

                                                                                        	
                                                                                          Page
      8

                                                                                        
	 	 	 
	
                                                                                          ITEM
      11

                                                                                        	
                                                                                          FRANCHISOR'S
      ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING

                                                                                        	
                                                                                          Page
      8

                                                                                        
	 	 	 
	
                                                                                          ITEM
      12

                                                                                        	
                                                                                          TERRITORY

                                                                                        	
                                                                                          Page
      11

                                                                                        
	 	 	 
	
                                                                                          ITEM
      13

                                                                                        	
                                                                                          TRADEMARKS

                                                                                        	
                                                                                          Page
      11

                                                                                        
	 	 	 
	
                                                                                          ITEM
      14

                                                                                        	
                                                                                          PATENTS,
      COPYRIGHTS AND PROPRIETARY INFORMATION

                                                                                        	
                                                                                          Page
      12

                                                                                        
	 	 	 
	
                                                                                          ITEM
      15

                                                                                        	
                                                                                          OBLIGATION
      TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE

                                                                                        	
                                                                                          Page
      13

                                                                                        
	 	 	 
	
                                                                                          ITEM
      16

                                                                                        	
                                                                                          RESTRICTIONS
      ON WHAT THE FRANCHISEE MAY SELL

                                                                                        	
                                                                                          Page
      13

                                                                                        
	 	 	 
	
                                                                                          ITEM
      17

                                                                                        	
                                                                                          RENEWAL,
      TERMINATION, TRANSFER AND DISPUTE RESOLUTION

                                                                                        	
                                                                                          Page
      13

                                                                                        
	 	 	 
	
                                                                                          ITEM
      18

                                                                                        	
                                                                                          PUBLIC
      FIGURES

                                                                                        	
                                                                                          Page
      15

                                                                                        
	 	 	 
	
                                                                                          ITEM
      19

                                                                                        	
                                                                                          FINANCIAL
      PERFORMANCE REPRESENTATIONS

                                                                                        	
                                                                                          Page
      15

                                                                                        
	 	 	 
	
                                                                                          ITEM
      20

                                                                                        	
                                                                                          OUTLETS
      AND FRACHISEE INFORMATION

                                                                                        	
                                                                                          Page
      16

                                                                                        
	 	 	 
	
                                                                                          ITEM
      21

                                                                                        	
                                                                                          FINANCIAL
      STATEMENTS

                                                                                        	
                                                                                          Page
      18

                                                                                        
	 	 	 
	
                                                                                          ITEM
      22

                                                                                        	
                                                                                          CONTRACTS

                                                                                        	
                                                                                          Page
      18

                                                                                        
	 	 	 
	
                                                                                          ITEM
      23

                                                                                        	
                                                                                          RECEIPTS

                                                                                        	
                                                                                          Page
      19

                                                                                        
	 	 	 
	
                                                                                          EXHIBIT
      A

                                                                                        	
                                                                                          LIST
      OF UNITED STATES ESCO SUBFRANCHISORS AND FRANCHISEES

                                                                                        	
                                                                                          Exhibit
      A

                                                                                        
	 	 	 
	
                                                                                          EXHIBIT
      B

                                                                                        	
                                                                                          STATE
      FRANCHISOR ADMINISTRATOR AND REGISTERED AGENTS FOR SERVICE

                                                                                        	
                                                                                          Exhibit
      B

                                                                                        
	 	 	 
	
                                                                                          EXHIBIT
      C

                                                                                        	
                                                                                          FINANCIAL
      STATEMENTS

                                                                                        	
                                                                                          Exhibit
      C

                                                                                        
	 	 	 
	
                                                                                          EXHIBIT
      D

                                                                                        	
                                                                                          SUBFRANCHISE
      AGREEMENT

                                                                                        	
                                                                                          Exhibit
      D

                                                                                        
	 	 	 
	
                                                                                          EXHIBIT
      E

                                                                                        	
                                                                                          PROMISSORY
      NOTE

                                                                                        	
                                                                                          Exhibit
      E

                                                                                        
	 	 	 
	
                                                                                          EXHIBIT
      F

                                                                                        	
                                                                                          FRANCHISE
      AGREEMENT

                                                                                        	
                                                                                          Exhibit
      F

                                                                                        
	 	 	 
	
                                                                                          EXHIBIT
      G

                                                                                        	
                                                                                          PERSONAL
      GUARANTY

                                                                                        	
                                                                                          Exhibit
      G

                                                                                        
	 	 	 
	
                                                                                          EXHIBIT
      H

                                                                                        	
                                                                                          TABLE
      OF CONTENTS OF TRAINING MANUAL

                                                                                        	
                                                                                          Exhibit
      H

                                                                                        

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
          
            	
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  	
                    Page
      ii

                  

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      ITEM
1 – THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES

       

      To
simplify the language in this offering circular, "ESCO" means ESCO GLOBAL REALTY
CORP., the Franchisor. "You” means the person who buys this Subfranchise. If You
form a corporation, partnership or other organization, the reference to "You”
includes the organization's owners.

       

      ESCO is a
Colorado corporation that was incorporated on January 30, 2003. ESCO does
business as “ESCO® GLOBAL
REALTY”. ESCO’s principal office is located at 594 Dagall Road, Mill Bay, BC V0R
2P4, CANADA.  Its United States address for service of process is
Suite 700 – 411 East Wisconsin Avenue, Milwaukee, Wisconsin,
53202.  ESCO's agent for service of process is disclosed in Exhibit B
for this Offering Circular.

       

      ESCO has
no parents or predecessors and has never owned or operated real estate sales
offices. ESCO sells real estate subfranchises and does not conduct any unrelated
business activity. ESCO began offering subfranchises for sale on February 1,
2004, and has sold four (4) Subfranchises to date. ESCO has no prior business
experience offering franchises in any line of business, or providing products or
services to the franchisees.

       

      The
franchise described in this Offering Circular is a subfranchise for a specific
geographic territory allowing You to sell ESCO® GLOBAL
REALTY franchises and to assist in the growth of the franchisees in that
specific geographical territory. You will execute a Subfranchise Agreement in
the form of Exhibit D attached to this Offering Circular. The fee structure is
outlined in the ESCO® Formula,
which is included as part of the Subfranchise Agreement. The Subfranchise
Agreement sets forth the obligations of You, as the Subfranchisor, and ESCO, as
the Franchisor.

       

      FRANCHISOR
BELIEVES THAT AN INTEGRAL PART OF THE ESCO® SYSTEM
INCLUDES THE OWN YOUR FUTURE PROGRAM (THE “OWN YOUR FUTURE® PLAN”),
WHICH ALLOWS PARTICIPANTS IN THE ESCO® SYSTEM
TO PURCHASE SECURITIES OF THE FRANCHISOR (THE “SECURITIES”).  AS OF
THE EFFECTIVE DATE OF THIS CIRCULAR, FRANCHISOR HAS NOT COMPLETED THE
REGISTRATION OF THE SECURITIES NECESSARY TO FULLY IMPLEMENT THE EQUITY
PROGRAM.  FURTHERMORE, EVEN IF THE SECURITIES ARE SUCCESSFULLY
REGISTERED, OTHER RESTRICTIONS MAY PROHIBIT FRANCHISOR FROM EVER FULLY
IMPLEMENTING THE OWN YOUR FUTURE PLAN.  THERE ARE OTHER RISKS
CONCERNING THE OWNERSHIP OF ANY SECURITIES.  THIS CIRCULAR IS NOT AN
OFFERING OF SECURITIES NOR AN INVITATION OR SOLICITATION TO BUY
THEM.

       

      Any real
estate office that joins the ESCO® System
is referred to in this Circular as a "Franchisee”. ESCO® GLOBAL
REALTY Franchisees offer real estate brokerage services to the general public as
independently owned and operated entities utilizing the ESCO® System
(as defined below) in a specific geographic territory for a certain term
pursuant to the terms of a Franchise Agreement in the form of Exhibit F attached
to this Offering Circular. You and the Franchisee are the only two (2) parties
to the Franchise Agreement. The Franchise Agreement sets out the obligations of
You and the Franchisee.

       

      Every
Franchisee must possess a bona fide real estate broker's license in good
standing under the laws of the state where the franchise is located. Your
activities as a Subfranchisor are subject to state and federal laws and
regulations related to franchise disclosure and real estate transfer and
brokerage laws.

       

      ESCO has
developed a plan (the "ESCO® System")
designed to enable independent real estate brokerage offices to utilize brand
name identification for the real estate industry. The ESCO® System
is identified by means of certain trade names, service marks, trademarks, logos,
and commercial symbols (the "Marks") that provide recognition of the ESCO® System
for customers and clients. The ESCO® System
includes training programs for Subfranchisors and Franchisees, training and
operating manuals, a program for the referral of real estate listings and real
estate buyers, and other procedures and systems to assist in the operation and
management of a real estate office. The ESCO® System
also includes programs for the establishment of advertising and promotional
campaigns. ESCO will provide certain specified support and services to all
subfranchisors in their assigned geographical territory. You will sell, service
and assist the Franchisees in the development of their franchised
offices.

       

      
        
          
            	
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  	
                    Page
      2

                  

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      The real
estate sales business is highly competitive. You must compete with numerous
other real estate franchise sales offices. The businesses with which You should
expect to compete include, in general, national or regional franchise systems
and other chains, and independently owned local firms. Your business will also
be affected by its location, the locations of competing real estate sales
offices, your financial and managerial capabilities, availability of labor,
interest rates, demographic or cultural conditions, and other factors. There is
also active competition for management and service personnel.

       

      ITEM
2 – BUSINESS EXPERIENCE AND AFFILIATES

       

      The
following are ESCO's directors, trustees, general partners, principal officers,
all individuals who will have a management responsibility relating to the sale
or operation of the franchises offered by this disclosure document, and the
Franchise Broker utilized by ESCO, together with a brief occupational history of
each person:

      

      John Alexander,
LL.B.

      Founder
& Consultant

      Mr.
Alexander is our former Chairman of the Board and Chief Executive Officer. A
former trial lawyer, Mr. Alexander has served as the head of our management team
since ESCO®’s
inception. He was a top producing Realtor® with
Re/Max from 1990-1996 and from 1997-2000 owned a real estate office. In 2002,
Mr. Alexander began the ground-up development of the ESCO® Global
Realty franchise system. In his role as Consultant, Mr. Alexander will assist
the Board of Directors and our Chief Executive Officer
to implement the securities and business development activities of the
Corporation.

      

      
        
          
            	
                    ESCO
      Global Realty Corp. (Victoria, BC)

                  	
                    Consultant

                  	
                    2007-present

                  
	
                    ESCO
      Global Realty Corp. (Victoria, BC)

                  	
                    CEO,
      Chairman

                  	
                    2002-2007

                  

          

        

      

      

      Brent
Boyd

      Senior
Vice President, Chief Operating Officer, Director

      Mr. Boyd
is our Senior Vice-President and Chief Operating Officer and member of our Board
of Directors. He brings over thirty years experience in the communications
industry to the Company. Mr. Boyd has worked closely with Mr. Alexander in the
development of the ESCO® Global
Realty franchise system and is responsible for ESCO®’s
organizational structure and technology offerings.

      

      
        
          
            	
                    ESCO
      Global Realty Corp. (Victoria, BC)

                  	
                    Senior
      Vice President, COO

                  	
                    2002-present

                  
	
                    Marketing
      Consultant (Victoria, BC)

                  	
                    Self-employed

                  	
                    1999-present

                  
	
                    Watermark
      Communications Group Inc. (Victoria, BC)

                  	
                    President

                  	
                    1987-1998

                  

          

        

      

      

      David
Alexander

      President,
Chief Executive Officer, Chairman

      An honors
graduate of prestigious Brentwood College, and subsequently an honors graduate
of University of Alberta, Mr. Alexander is fluently bilingual in French and
English and understands Russian. A gifted public speaker, he brings significant
personnel management and administrative experience to ESCO®. Mr.
Alexander has a ‘can do’ attitude and a commitment to realize ESCO®’s vision
of an ethical, community-minded real estate organization that meets the needs of
the public that it serves as well as the needs of its Regional Owners,
Franchisee-Brokers, Realtors® and
Support Staff through equity ownership in ESCO Global Realty Corp.

      

      
        
          
            	
                    ESCO
      Global Realty Corp. (Vancouver, BC)

                  	
                    President

                  	
                    2008-present

                  
	
                    ESCO
      Global Realty Corp. (Vancouver, BC)

                  	
                    CEO,
      Chairman

                  	
                    2007-present

                  
	
                    Langley
      Christian School (Vancouver, BC)

                  	
                    Teacher;
      Fine Arts Coordinator

                  	
                    1995-present

                  

          

        

      

      

      Ron
Schwartz

      Vice-President
– Regional Development

      A top
real estate trainer, Mr. Schwartz began his real estate career over twenty-five
years ago. While experienced as a sales agent and owner/broker of a Century 21
franchise, Mr. Schwartz’ gift is his ability to recruit, train and build
organizations. For the past 10 years, he has been recruiting and training sales
agents for established real estate offices throughout Western Canada. Working
with the ESCO® Training
Institute, Mr. Schwartz will develop curriculum and present courses to pass on
his skills in recruiting and building real estate organizations.

      

      
        
          
            	
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  	
                    Page
      2

                  

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        
          
            	
                    1401041
      Alberta Ltd. (Calgary, AB)

                  	
                    Director

                  	
                    2008-present

                  
	
                    ESCO
      Global Realty Corp. (Calgary, AB)

                  	
                    Vice-President

                  	
                    2005-present

                  
	
                    Realty
      Executives Apex (Calgary, AB)

                  	
                    Recruiter

                  	
                    2004-2008

                  
	
                    Realty
      Executives Regional (Calgary, AB)

                  	
                    Recruiter

                  	
                    2004

                  
	
                    Market
      Networks (Calgary, AB)

                  	
                    President

                  	
                    2003-2004

                  
	
                    A.E.
      Lepage (Nanaimo, BC)

                  	
                    Recruiter/
      Trainer

                  	
                    2002

                  

          

        

      

      

      Gaius
Carmichael

      Vice
President – Atlantic Canada

      Mr.
Carmichael is Regional Owner of the ESCO® Atlantic
Canada region. He is also the owner of Solid Gold Construction, a Halifax-based
construction company that has built and sold over 200 high end homes in Atlantic
Canada since 2001. Prior to becoming a full-time home builder Mr. Carmichael
owned a highly successful landscaping business that earned him Entrepreneur of
the Year Award.

      

      
        
          
            	
                    ESCO
      Global Realty Corp. (Halifax, NS)

                  	
                    Vice-President

                  	
                    2007-present

                  
	
                    ESCO
      Atlantic Canada (Halifax, NS)

                  	
                    Regional
      Owner

                  	
                    2006-present

                  
	
                    Solid
      Gold Construction (Halifax, NS)

                  	
                    Owner

                  	
                    2001-present

                  

          

        

      

      

      Lyle
Spearing

      Vice
President – Western Canada

       

      Mr.
Spearing is Regional Owner of the ESCO® Western
Canada region. He owned and operated a third-generation family farm in
Saskatchewan which he sold before moving to Calgary and becoming a Realtor®. Mr.
Spearing volunteers with the Civil Air Search and Rescue Association, flying out
of Calgary as a spotter in search of downed aircraft.

      

      
        
          
            	
                    1401041
      Alberta Ltd. (Calgary, AB)

                  	
                    Director

                  	
                    2008-present

                  
	
                    ESCO
      Global Realty Corp. (Calgary, AB)

                  	
                    Vice-President

                  	
                    2008-present

                  
	
                    MaxWell
      Realty (Calgary, AB)

                  	
                    Realtor®

                  	
                    2006-2008

                  
	
                    Realty
      Executives (Calgary, AB)

                  	
                    Realtor®

                  	
                    2005-2006

                  
	
                    Farming/Highway
      Trucking Company (SK)

                  	
                    Owner/Operator

                  	
                    1965-2004

                  

          

        

      

      

      ITEM
3 – LITIGATION

       

      No
litigation is required to be disclosed in this offering circular.

       

      ITEM
4 – BANKRUPTCY

       

      No person
previously identified in Items 1 or 2 of this offering circular has been
involved as a debtor in proceedings under U.S. Bankruptcy Code required to be
disclosed in this Item.

       

      ITEM
5 – INITIAL FEES

       

      You must
pay an initial subfranchise fee of $40,000.00 per 1,000,000 persons who reside
in your Regional Territory when the Subfranchise Agreement is signed
("Subfranchise Fee"). Because your Regional Territory may differ in population
from those offered to other Subfranchisors, the Subfranchise Fee may not be the
same for all subfranchisees.  The Subfranchise Fee generally ranges
from $40,000 to $400,000.  This amount is the only Initial Fee payable
to ESCO before the business opens. The Subfranchise Fee is due on the date you
execute the Subfranchise Agreement, and is not refundable.

       

      
        
          
            	
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  	
                    Page
      3

                  

          

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      ITEM
6 – OTHER FEES

      

      
        
          
            	
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  	
                    Page
      4

                  

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	
                                                  Type of Fee

                                                	 
      	
                                                  Amount

                                                	 
      	
                                                  Due Date

                                                	
                                                   
      

                                                	
                                                  Remarks

                                                
	
                                                  Transaction
      Fees

                                                	 
      	
                                                  50%
      of the Transaction Fees generated from each Sales Representative
      transaction

                                                	 
      	
                                                  Transaction
      Closing Date

                                                	 
      	
                                                  Currently,
      the Transaction Fees from the Sales Representative for each Transaction
      total $150, resulting in a payment of $75 per transaction
    end.

                                                
	 	 	 	 	 	 	 
	
                                                  Transfer
      Fee

                                                	 
      	
                                                  $10,000

                                                	 
      	
                                                  Prior
      to transfer

                                                	 
      	 
      
	 	 	 	 	 	 	 
	
                                                  Training
      Fee

                                                	 
      	
                                                  $1,500
      plus costs for travel, lodging, meals and incidental costs

                                                	 
      	
                                                  Prior
      to training session

                                                	 
      	
                                                  There
      is no charge for tuition fees for the attendance of one person at the
      training session but there may be a fee for additional persons attending
      the session. All persons pay their own costs for travel, lodging, meals
      and incidental costs while attending.

                                                
	 	 	 	 	 	 	 
	
                                                  Stock
      Purchase Plan Remittance

                                                	 
      	
                                                  Two
      percent (2%) from Sales Agents and two-tenths of one percent (0.2%) from
      Franchisees of the gross commissions earned by each Sales Agent in Your
      Regional Territory, plus any elective withholding

                                                	 
      	
                                                  Transaction
      closing date

                                                	 
      	
                                                  Pursuant
      to the Own Your Future Plan, You will assist ESCO in facilitating the
      collection and submission of any amounts from the Sales Representatives
      and Franchisees within Your Regional Territory pursuant to the Own Your
      Future Plan.  For Sales Agents, this currently totals two
      percent (2%) of the total gross commissions from each Sales Agent, plus an
      elective amount up to an additional 3% of the total gross commissions
      earned by each Sales Agent; and for each Franchisee, two-tenths of one
      percent (0.2%) of the total gross commissions of the Sales Agents within
      their offices, plus an elective amount of three-tenths of one percent
      (0.3%) of the total gross commissions of the Sales Agents within their
      offices.

                                                
	 	 	 	 	 	 	 
	
                                                  Audit
      Fee

                                                	 
      	
                                                  Cost
      of audit plus five percent (5%) of under payment

                                                	 
      	
                                                  Completion
      of audit/inspection

                                                	 
      	
                                                  Payable
      only if an inspection and/or audit reveals that You have underpaid amounts
      owing to ESCO under the Subfranchise Agreement, and the underpayment is
      willful or exceeds five percent (5%) of the amount actually
      owing.

                                                
	 	 	 	 	 	 	 
	
                                                  Software
      License Fee

                                                	 
      	
                                                  $2,500
      per annum

                                                	 
      	
                                                  Anniversary
      of execution of Subfranchise Agreement

                                                	 
      	
                                                  Applicable
      when software system is fully implemented.

                                                
	 	 	 	 	 	 	 
	
                                                  Renewal
      Fee

                                                	 
      	
                                                  50%
      of the then current Initial Fee

                                                	 
      	
                                                  Upon
      renewal of Your Subfranchise Agreement.

                                                	 
      	 
      
	 	 	 	 	 	 	 
	
                                                  Ancillary
      Business Royalty

                                                	 
      	
                                                  25%
      of the gross income directly or indirectly earned by the Subfranchisor
      from Ancillary Business.

                                                	 
      	
                                                  Monthly

                                                	 
      	
                                                  Ancillary
      business shall mean any business undertaken that is not contemplated in
      the Subfranchise Agreement and may be undertaken only with the prior
      consent of ESCO.

                                                
	 	 	 	 	 	 	 
	
                                                  Initial
      Franchise Fees

                                                	 
      	
                                                  25%
      of all Initial Franchise Fees payable to the Subfranchisor by all
      Franchisees within the Regional Territory

                                                	 
      	
                                                  Upon
      signing of the Franchise Agreement

                                                	 
      	 
      
	 	 	 	 	 	 	 
	
                                                  Franchise
      Renewal and Transfer Fees

                                                	 
      	
                                                  25%
      of all Renewal and Transfer Fees payable to the Subfranchisor by all
      Franchisees in the Regional Territory

                                                	 
      	
                                                  Upon
      transfer or renewal of the Franchise Agreement

                                                	 
      	 
      
	 	 	 	 	 	 	 
	
                                                  Initiation
      Fees

                                                	 
      	
                                                  The
      Initiation Fees payable by the Sales Representatives of Franchisees within
      the Regional Territory, currently $195.00 per Sales
      Representative

                                                	 
      	
                                                  Upon
      Transfer to Franchisee of a Sales Represen-tative’s
License

                                                	 
      	
                                                  Each
      Sales Representative under written contract with a FRANCHISEE pays an
      initiation fee of one hundred ninety-five dollars ($195). The initiation
      fee is non-refundable and is due and payable on the effective date of the
      Sales Representative's agreement or the date the person or entity becomes
      a part of the ESCO®
      SYSTEM.  You are responsible for facilitating the collection of
      the initiation fee from the Sales Representatives and remitting the
      initiation fee directly to ESCO immediately upon the effective date of the
      Sales Representative.

                                                
	 	 	 	 	 	 	 
	
                                                  Annual
      Dues

                                                	 
      	
                                                  The
      Annual Dues payable by the Sales Representatives of Franchisees within the
      Regional Territory, currently $195.00 per Sales
    Representative

                                                	 
      	
                                                  Upon  each
      annual renewal of the execution of a new Sales Representative
      Agreement

                                                	 
      	
                                                  Each
      Sales Representative under written contract with a FRANCHISEE pays annual
      dues of one hundred ninety-five dollars ($195). The annual dues are
      non-refundable and are due and payable on the anniversary of the effective
      date of the Sales Representative's agreement or the anniversary of the
      date the person or entity becomes a part of the ESCO®
      SYSTEM.  You are responsible for facilitating the collection of
      annual dues from its Sales Representatives and remitting the annual dues
      directly to ESCO immediately upon each anniversary
date.

                                                
	 	 	 	 	 	 	 
	
                                                  Promotional
      Fund

                                                	 
      	
                                                  $50
      per Sales Representative per month

                                                	 
      	
                                                  Monthly

                                                	 
      	
                                                  Each
      Sales Representative contributes the sum of $50.00 per month to a
      Promotional Fund administered by ESCO (See Item 11). The Franchisee
      collects these funds and remits them to ESCO for deposit in the
      Promotional Fund monthly.

                                                
	 	 	 	 	 	 	 
	
                                                  Training
      Fund

                                                	 
      	
                                                  $50
      per Sales Representative per month

                                                	 
      	
                                                  Monthly

                                                	 
      	
                                                  Each
      Sales Representative contributes the sum of $50.00 per month to a Training
      Fund administered by ESCO (See Item 11). The Franchisee collects these
      funds and remits them to ESCO for deposit in the Training Fund
      monthly.

                                                
	 	 	 	 	 	 	 
	
                                                  Late
      Fees

                                                	
                                                    

                                                	
                                                  1.5%
      or applicable legal rate on past due amounts

                                                	
                                                    

                                                	
                                                  On
      Demand

                                                	
                                                    

                                                	 
      

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      All of
the foregoing fees and dues are imposed by and payable to ESCO and are subject
to change only by ESCO. All of the foregoing fees and dues are
nonrefundable.

       

      
        
          
            	
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  	
                    Page
      5

                  

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      ITEM
7 – YOUR ESTIMATED INITIAL INVESTMENT

       

      Although
costs may vary among Subfranchises, anticipated costs are presently estimated as
follows:

       

      
        
          
            
              
                
                  
                    
                      
                        	
                                Type of Expenditure

                              	 
      	
                                Estimated Amount

                              	 
      	
                                Method of

                                Payment

                              	 
      	
                                When Due

                              	 
      	
                                To Whom Payment is to be
    Made

                              
	
                                Subfranchise
      Fee

                              	 
      	
                                $40,000
      - $400,000

                                See
      Note 1

                              	 
      	
                                In
      Full

                              	 
      	
                                On
      signing of Franchise Agreement

                              	 
      	
                                ESCO

                                 

                              
	 	 	 	 	 	 	 	 	 
	
                                Travel
      & Living Expenses While Training

                              	 
      	
                                $2,000
      - $5,000

                              	 
      	
                                As
      Incurred

                              	 
      	
                                During
      Training

                              	 
      	
                                Airlines,
      Hotels, Restaurants

                              
	 	 	 	 	 	 	 	 	 
	
                                Insurance

                              	 
      	
                                $2,000
      - $10,000

                                See
      Note 2

                              	 
      	
                                As
      Billed

                              	 
      	
                                As
      Incurred

                              	 
      	
                                Insurance
      Company

                              
	
                                Legal
      Expenses

                              	 
      	
                                $1,000
      - $5,000

                              	 
      	
                                As
      Billed

                              	 
      	
                                As
      Incurred

                              	 
      	
                                Your
      Attorney

                              
	 	 	 	 	 	 	 	 	 
	
                                Improvements,
      Equipment, Opening Costs

                              	 
      	
                                $5,000
      - $25,000

                                See
      Note 3

                              	 
      	
                                As
      Billed

                              	 
      	
                                As
      Incurred

                              	 
      	
                                Your
      Lessor, Contractors, Vendors

                              
	 	 	 	 	 	 	 	 	 
	
                                Office
      Lease/Rental Payments (12 months)

                              	 
      	
                                $6,000
      - $36,000

                                See
      Note 4

                              	 
      	
                                As
      Billed

                              	 
      	
                                Monthly
      In Advance

                              	 
      	
                                Your
      Landlord

                              
	 	 	 	 	 	 	 	 	 
	
                                Additional
      Funds (6 – 12 months)

                              	 
      	
                                $60,000
      - $250,000

                                See
      Note 5

                              	 
      	
                                As
      Needed

                              	 
      	
                                As
      Incurred

                              	 
      	
                                Employees,
      Vendors, Bank, Lenders, etc.

                              
	 	 	 	 	 	 	 	 	 
	
                                Totals

                              	
                                  

                              	
                                $116,000
      - $731,000

                                See Note
    6

                              	
                                  

                              	 
      	
                                  

                              	 
      	
                                  

                              	 
      

                      

                    

                  

                

              

            

          

        

      

       

      
        	
              	
                Note
      1

              	
                The
      Subfranchise Fee for a Subfranchise Agreement is based upon $40,000 per
      1,000,000 of population within the Regional
  Territory.

              

      

       

      
        	
              	
                Note
      2

              	
                The
      costs of insurance will vary depending on the number of employees, the
      location of the brokerage office and the value of the equipment and
      improvements.

              

      

       

      
        	
              	
                Note
      3

              	
                Costs
      include furniture, fixtures, equipment, installations, security deposits,
      utility costs, incorporation fees, initial opening, advertising and
      promotional expenses, signage, materials, and any unforeseen incidental
      expenses related to facilities
improvements.

              

      

       

      
        
          
            	
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  	
                    Page
      6

                  

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
              	
                Note
      4

              	
                These
      figures will vary considerably depending on the location, size of office
      and type of office lease.

              

      

       

      
        	
              	
                Note
      5

              	
                ESCO
      has prepared the foregoing estimates based on its experience. Except as
      otherwise indicated, these estimates cover your initial cash investment up
      to the opening of your office. ESCO cannot guarantee that You will not
      have additional expenses starting your business. They do not provide for
      your cash needs to cover any financing incurred by you or your other
      expenses. You should not plan to draw income from the operations during
      the startup and development stage of your business, the actual duration of
      which will vary materially from office to office and cannot be predicted
      by ESCO. You must have additional reserves available, whether in cash or
      through a bank line of credit, or have other assets that You may liquidate
      or against which You may borrow, to cover other expenses and any operating
      losses You may sustain, whether during your startup and development stage,
      or beyond. The amount of necessary reserves will vary greatly from
      Subfranchise owner to Subfranchise owner and will depend upon many
      factors, including the rate of growth and success of your business, which
      in turn will depend upon factors such as demographics and economic
      conditions in the area in which your office is located, the public
      awareness of your business within the general vicinity of your office,
      your management skill, experience, business acumen and ability to operate
      efficiently and in conformance with our recommended methods of doing
      business, and competition. Because the exact amount of reserves will vary
      from operation to operation and cannot be meaningfully estimated by ESCO,
      ESCO urges You to retain the services of an experienced accountant or
      financial advisor to develop a business plan and financial projections for
      your particular operation.

              

      

       

      
        	
              	
                Note
      6

              	
                All
      payments are non-refundable.

              

      

       

      ITEM
8 – RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES

       

      ESCO
requires that all stationery, merchandising material and anything that is
utilized by You that contains ESCO's Marks be purchased from ESCO's Approved
Suppliers. ESCO maintains a list of Approved Suppliers, which is available to
You upon written request. If You wish to have a supplier You desire to have
designated as "Approved”, You may submit information about the supplier and its
relevant products or services to ESCO for review. ESCO will not unreasonably
withhold its approval of any supplier that meets the quality standards set forth
by ESCO and who agrees to execute ESCO's then current Confidentiality and
License Agreement.  The quality standards set forth by ESCO are not
available to You.  ESCO will notify You of its decision to approve or
disapprove the supplier within thirty (30) days.  ESCO may revoke any
Approved Supplier upon not less than sixty (60) days advance written notice to
You.  ESCO does not negotiate purchase arrangements with Suppliers
(including price terms) for the benefit of Subfranchisors or
Franchisees.  ESCO does not provide material benefits to
Subfranchisors or Franchisees based on the purchase of particular products or
services or use of particular suppliers.

       

      No
officer of ESCO currently owns an interest in any of ESCO’s Approved
Suppliers.

       

      ESCO may
require you to purchase a designated software system for the Franchise reporting
system. The system will be under ongoing development and will be licensed by
ESCO to You. There is no initial cost for the system. An annual license fee of
$2,500 may be imposed on Subfranchisors.

       

      You are
required to comply with quality standards and specifications described in ESCO's
Training Manual for furnishings, fixtures, equipment and operating
supplies.

       

      Approved
Suppliers may pay ESCO a royalty for products sold utilizing the ESCO Marks.
ESCO has not received any royalties from Approved Suppliers to
date.

       

      
        
          
            	
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  	
                    Page
      7

                  

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      ITEM
9 – SUBFRANCHISOR’S OBLIGATIONS

       

      THIS
TABLE LISTS YOUR PRINCIPAL OBLIGATIONS UNDER THE SUBFRANCHISE AND OTHER
AGREEMENTS. IT WILL HELP YOU FIND MORE DETAILED INFORMATION ABOUT YOUR
OBLIGATIONS IN THESE AGREEMENTS AND IN OTHER ITEMS OF THIS OFFERING
CIRCULAR.

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              	
                                                                      Obligation

                                                                    	 
      	
                                                                      Subfranchise

                                                                      Agreement

                                                                    	 
      	
                                                                      Disclosure Document

                                                                    
	
                                                                      a.
      Site Selection and Acquisition/Lease

                                                                    	 
      	
                                                                      Section
      9

                                                                    	 
      	
                                                                      Item
      11

                                                                    
	 	 	 	 	 
	
                                                                      b.
      Pre-opening Purchases/Leases

                                                                    	 
      	
                                                                      Section
      9

                                                                    	 
      	
                                                                      Items
      5, 6, 7

                                                                    
	 	 	 	 	 
	
                                                                      c.
      Site Development and other Pre-opening Requirements

                                                                    	 
      	
                                                                      Section
      9

                                                                    	 
      	
                                                                      Items
      5, 6, 7, 11

                                                                    
	 	 	 	 	 
	
                                                                      d.
      Initial and Ongoing Training

                                                                    	 
      	
                                                                      Section
      14

                                                                    	 
      	
                                                                      Item
      11

                                                                    
	 	 	 	 	 
	
                                                                      e.
      Opening

                                                                    	 
      	
                                                                      Section
      5

                                                                    	 
      	
                                                                      Item
      8, 11

                                                                    
	 	 	 	 	 
	
                                                                      f.
      Fees

                                                                    	 
      	
                                                                      Sections
      1, 7, 23

                                                                    	 
      	
                                                                      Items
      5, 6, 7

                                                                    
	 	 	 	 	 
	
                                                                      g.
      Compliance with Standards, Policies, Operating Manual

                                                                    	 
      	
                                                                      Sections
      16, 17

                                                                    	 
      	
                                                                      Items
      8, 11, 13, 14

                                                                    
	 	 	 	 	 
	
                                                                      h.
      Trademark and Proprietary Information

                                                                    	 
      	
                                                                      Sections
      4, 13

                                                                    	 
      	
                                                                      Item
      13, 14

                                                                    
	 	 	 	 	 
	
                                                                      i.
      Restrictions on Products/Services Offered

                                                                    	 
      	
                                                                      Sections
      10, 12

                                                                    	 
      	
                                                                      Item
      16

                                                                    
	 	 	 	 	 
	
                                                                      j.
      Warranty and Customer Service Requirements

                                                                    	 
      	
                                                                      Sections
      11, 16

                                                                    	 
      	
                                                                      Items
      1, 12

                                                                    
	 	 	 	 	 
	
                                                                      k.
      Territorial Development and Sales Quotas

                                                                    	 
      	
                                                                      Section
      17, Schedules 2, 3

                                                                    	 
      	
                                                                      Item
      12

                                                                    
	 	 	 	 	 
	
                                                                      I.
      Ongoing Product/Service Purchases

                                                                    	 
      	
                                                                      Section
      12

                                                                    	 
      	
                                                                      Item
      8

                                                                    
	 	 	 	 	 
	
                                                                      m.
      Maintenance, Appearance and Remodeling Requirements

                                                                    	 
      	
                                                                      Section
      9

                                                                    	 
      	
                                                                      Item
      7

                                                                    
	 	 	 	 	 
	
                                                                      n.
      Insurance

                                                                    	 
      	
                                                                      Section
      24

                                                                    	 
      	
                                                                      Item
      7

                                                                    
	 	 	 	 	 
	
                                                                      o.
      Advertising

                                                                    	 
      	
                                                                      Section
      17

                                                                    	 
      	
                                                                      Items
      7, 11

                                                                    
	 	 	 	 	 
	
                                                                      p.
      Indemnification

                                                                    	 
      	
                                                                      Section
      28

                                                                    	 
      	 
      
	 	 	 	 	 
	
                                                                      q.
      Owner's Participation/Management/Staffing

                                                                    	 
      	
                                                                      Sections
      16, 17

                                                                    	 
      	
                                                                      Item
      15

                                                                    
	 	 	 	 	 
	
                                                                      r.
      Records and Reports

                                                                    	 
      	
                                                                      Sections
      17, 20

                                                                    	 
      	
                                                                      Item
      11

                                                                    
	 	 	 	 	 
	
                                                                      s.
      Inspections and Audits

                                                                    	 
      	
                                                                      Section
      20

                                                                    	 
      	
                                                                      Item
      6, 11

                                                                    
	 	 	 	 	 
	
                                                                      t.
      Transfer

                                                                    	 
      	
                                                                      Section
      23

                                                                    	 
      	
                                                                      Items
      6, 17

                                                                    
	 	 	 	 	 
	
                                                                      u.
      Renewal

                                                                    	 
      	
                                                                      Section
      6

                                                                    	 
      	
                                                                      Item
      17

                                                                    
	 	 	 	 	 
	
                                                                      v.
      Post-termination Obligations

                                                                    	 
      	
                                                                      Section
      22

                                                                    	 
      	
                                                                      Item
      17

                                                                    
	 	 	 	 	 
	
                                                                      w.
      Non-competition Covenants

                                                                    	 
      	
                                                                      Section
      25

                                                                    	 
      	
                                                                      Item
      17

                                                                    
	 	 	 	 	 
	
                                                                      x.
      Dispute Resolution

                                                                    	
                                                                        

                                                                    	
                                                                      Section
      26

                                                                    	
                                                                        

                                                                    	
                                                                      Item
      17

                                                                    

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      

      
        
          
            	
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  	
                    Page
      8

                  

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      ITEM
10 – FINANCING

       

      If you
meet ESCO’s credit standards, ESCO may finance up to fifty percent (50%) of the
Subfranchise Fee, payable over thirty-six (36) months with interest at a rate
equal to two percent (2%) above the prime interest rate published in the Wall
Street Journal at the time the Promissory Note (the "Note", attached as Exhibit
E to this Offering Circular) evidencing the loan is signed. The Note may be
prepaid at any time without penalty and is secured by a personal guaranty in the
form of Exhibit G attached to this Offering Circular.  The Note sets
forth Your potential liabilities upon default, including Your accelerated
obligation to pay the entire amount due and the obligation to pay court costs
and attorney’s fees incurred in collecting the debt.

       

      ITEM
11 – FRANCHISOR'S ASSISTANCE, ADVERTISING,

      COMPUTER
SYSTEMS AND TRAINING

       

      Except
as listed below, ESCO is not required to provide You with any
assistance.

       

      
        	
                A.

              	
                Before
      You open your business, ESCO will provide the following assistance to
      You:

              

      

       

      
        	
                (1)

              	
                Provide
      You with a copy of our prototypical office plans and specifications, which
      You may adapt for your own use. (See Subfranchise Agreement, Article
      15.)

              

      

       

      
        	
                (2)

              	
                Train
      You (You must complete the initial training program to ESCO's
      satisfaction) as provided in the training course manual, the Table of
      Contents of which is attached to this Offering Circular as Exhibit H. (See
      Subfranchise Agreement, Article 15.)  The initial training
      program is conducted by John Alexander, Brent Boyd, and Ron Schwartz.
      Their background and experience is described in Item 2 of this
      Circular.  ESCO will provide you with a reasonable opportunity
      to review the Training Manual prior to the purchase of a
      franchise

              

      

       

      TRAINING
PROGRAM

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  	
                                                          Subject

                                                        	 
      	
                                                          Instructional

                                                          Material

                                                        	 
      	
                                                          Classroom

                                                          Hours

                                                        	 
      	
                                                          On-The-Job

                                                          Training

                                                          Hours

                                                        	 
      	
                                                          Instructor

                                                        
	
                                                          Preparation
      and Planning

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          0.5
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Alexander

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          Introduction
      to ESCO Ownership Culture

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          1.0
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Alexander

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          Regional
      Owner Agreement

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          1.5
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Alexander

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          Franchise
      Agreement

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          0.75
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Alexander

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          Independent
      Contractor Agreement

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          0.75
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Alexander

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          Franchise
      Procedure Checklist

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          1.0
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Boyd

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          ESCO
      Structure – Systems & Tools

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          2.5
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Boyd

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          Equipment

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          1.0
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Boyd

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          Regional
      Office Staffing

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          0.5
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Boyd

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          National
      & Regional Suppliers

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          1.0
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Boyd

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          Regional
      Council

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          0.5
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Alexander

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          Regional
      Advertising

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          0.5
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Alexander

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          Regional
      Responsibilities

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          1.0
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Alexander

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          Regional
      Franchise Development Plan – Target Marketing, 12 Month Plan, 3 Year
      Plan

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          2.0
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Alexander

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          Ownership
      Culture: ESCO Training Institute

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          1.0
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Alexander/Schwartz

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          Facilitating
      Multi-Agent Walkovers

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          1.0
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Alexander/Schwartz

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          Recruiting,
      Educating and Training of New Entrants to Real Estate
    Industry

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          1.0
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Alexander/Schwartz

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          Handling
      Objections

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          1.0
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Schwartz

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          Franchisee
      Training Program Overview

                                                        	 
      	
                                                          Training
      Manual

                                                        	 
      	
                                                          1.0
      hours

                                                        	 
      	
                                                          n/a

                                                        	 
      	
                                                          Schwartz

                                                        
	 	 	 	 	 	 	 	 	 
	
                                                          Summary
      and Certificate Presentation

                                                        	
                                                            

                                                        	
                                                          Training
      Manual

                                                        	
                                                            

                                                        	
                                                          1.0
      hours

                                                        	
                                                            

                                                        	
                                                          n/a

                                                        	
                                                            

                                                        	
                                                          Alexander

                                                        

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
          
            	
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  	
                    Page
      9

                  

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      You must
pay the travel, lodging, meals and incidental expenses of those attending the
initial training program. Training is conducted periodically in various
locations in Canada and the United States.

       

      
        	
                (3)

              	
                Lend
      You one (1) copy of the Training Manual, which covers ESCO's operating
      policies, marketing and advertising policies and standards, promotional
      programs and other matters. The Table of Contents of the Training Manual
      is attached to this Offering Circular as Exhibit H. In addition, each
      franchise office will receive an office Operating Procedures Manual which
      contains both mandatory and suggested standards and procedures for
      efficient office operation. These manuals are confidential and remain our
      property.

              

      

       

      
        	
                B.

              	
                ESCO
      will also provide the following to
You:

              

      

       

      
        	
                (1)

              	
                Ongoing
      Assistance

              

      

       

      
        	
              	
                (a)

              	
                Upon
      completion, provide You with continued access to ESCO's computer software.
      (See Subfranchise Agreement, Article
20).

              

      

       

      
        	
              	
                (b)

              	
                Periodically
      provide You with revised and updated sections of the Training Manual. (See
      Subfranchise Agreement, Article
15).

              

      

       

      
        	
              	
                (c)

              	
                Periodically
      provide You with additional revised and updated versions of the computer
      software. (See Subfranchise Agreement, Section
  15.20).

              

      

       

      
        	
              	
                (d)

              	
                Periodically
      train your management personnel. (See Subfranchise Agreement, Article
      14.)

              

      

       

      
        	
              	
                (e)

              	
                Periodically
      discuss operating and marketing issues concerning your Subfranchise with
      You. (See Subfranchise Agreement, Article
15).

              

      

       

      
        	
                 
      

              	
                (f)

              	
                Periodically
      inspect your office to determine whether You are operating and maintaining
      it as required by the Agreement and Training Manual, and provide You with
      written quality performance reviews. (See Subfranchise Agreement, Article
      9).

              

      

       

      
        	
              	
                (g)

              	
                At
      your request, consult with You on technical matters. You must pay ESCO's
      then current charges and related travel and living expenses for these
      services. (See Subfranchise Agreement, Article
  15).

              

      

       

      
        	
              	
                (h)

              	
                Franchise
      Development Training.

              

      

       

      
        	
                (2)

              	
                Promotional
      and Training Fund

              

      

       

      ESCO
administers a Promotional Fund to promote and enhance the image and identity of
the ESCO® System.
Currently, each Sales Representative contributes the sum of $50.00 per month to
the Fund. The Franchisee collects these funds and remits them to ESCO for
deposit in the Promotional Fund (See Item 6). The funds are deposited in a
separate account and segregated administratively on our books. We have the right
to cause the Promotional Fund to be incorporated or operated through a separate
entity, as we deem appropriate.

       

      At Your
request, we will furnish to You an unaudited report certified as correct by an
ESCO officer showing the Promotional Fund balance at the beginning of the
calendar year, the total amount contributed by Franchise owners, and the balance
or deficit at the calendar year end.

       

      
        
          
            	
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  	
                    Page
      10

                  

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      We are
obligated to spend an amount equal to the Promotional Fund revenue received or
allocated by us for international, national, regional or local advertising,
public relations and promotional campaigns, typically in media such as
newspapers, radio, cable and local television and the Internet. This amount may
also be spent for other items including creative, conducting marketing studies,
the promotion and purchasing of advertising art, television commercials, print
advertising, media advertising, outdoor advertising, direct mail pamphlets and
literature, participation in realtor conferences, and may also be allocated to
reimburse us for internal expenses of operating the advertising department and
administration of our advertising program. However, we may not allocate more
than 10% of all Promotional Fund contributions to the internal expenses incurred
by us. We determine, in our discretion, exercised in good faith, all matters
relating to advertising, public relations and promotional campaigns and we are
not required to allocate or expend advertising funds for the benefit of any
particular Franchise owner or group of Franchise owners on a pro rata or proportional
basis. For the year ending December 31, 2007, there were no funds collected for
the Promotional Fund. (See Subfranchise Agreement, Schedule 5.)

       

      We also
administer a Training Fund to develop and administer training programs for the
benefit of Sales Representatives, Franchisees, Regional Owners, and ESCO.
Currently each Sales Representative remits the sum of $50.00 per month to the
Training Fund.  The Franchisee collects these funds and remits them to
ESCO for deposit in the Training Fund (See Item 6).  The Training Fund
is deposited in a separate account and segregated administratively on our
books.  We have the right to cause the Training Fund to be
incorporated or operated through a separate entity, as we deem
appropriate.

       

      At Your
request, we will furnish to You an unaudited report certified as correct by an
ESCO officer showing the Training Fund balance at the beginning of the calendar
year, the total amount contributed by franchise owners, and the amount actually
expensed for the year, and the remaining balance or deficit in the Training Fund
at the calendar year end.

       

      We are
obligated to spend an amount equal to the Training Fund revenue received or
allocated by us for international, national, regional or local
training.  Any amounts remaining in the Training Fund at the end of
the calendar year are carried over to be used for the following
year.    For the year ending December 31, 2007, there were
no funds collected for the benefit of the Training Fund.  (See
Subfranchise Agreement, Schedule 5.)

       

      
        	
                (3)

              	
                Computer
      Equipment

              

      

       

      Set forth
below is a listing of the non-proprietary hardware and software currently
required to operate the computer system required by ESCO:

      

      Hardware
Requirements

      Personal
Computer with Intel Core 2 Duo or higher processor

      1GB RAM
minimum or greater

      Video
Card supporting 800 x 600 resolution

      Monitor
supporting 24-bit true color

      CD/DVD-R
Drive

      7200 RPM
Hard Drive: 65 MB free disk space for program files / 100 MB for data (larger
offices may require additional space)

      Uninterruptible
Power Supply (APC Back UPS 650 recommended)

      Laser
Printer (Hewlett Packard recommended)

      Software
Requirements

      Windows
XP Professional / Windows Vista Business or Vista Ultimate

      Broadband
Internet Connection

       

      ESCO may
require you to upgrade the hardware and software to maintain compatibility with
the Franchise Reporting System.

       

      
        	
                C.

              	
                Office

              

      

       

      
        	
                (1)

              	
                You
      must select your office site, subject to ESCO's review and consent (which
      will not be unreasonably withheld), and secure fee or leasehold title for
      the site. ESCO may consult with You regarding site selection, but You are
      ultimately responsible for locating and obtaining an acceptable site. (See
      Subfranchise Agreement, Section 9.)

              

      

       

      
        	
                (2)

              	
                In
      evaluating a proposed site, ESCO considers such factors as competition and
      market analysis, proximity to other real estate offices and other
      potential sources of customers, building suitability, traffic and
      transportation, the nature and extent of adjacent businesses, the
      comparative advantages of a particular market, and other factors selected
      by ESCO.

              

      

       

      
        
          
            
              	
                      ©
      2004 ESCO GLOBAL REALTY CORP.

                    	
                      Page
      11

                    

            

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                D.

              	
                Opening

              

      

       

      Subfranchisors
typically open their offices approximately two (2) to three (3) months after
they sign a Subfranchise Agreement. The primary factor affecting the time period
is whether the office is converted from an existing facility or built by You.
Other factors may include the time of year, availability of financing and
construction delays. You are required to open your office within 180 days after
You sign a Subfranchise Agreement. (See Subfranchise Agreement, Section
5).

       

      
        ITEM
12 – TERRITORY

      

       

      A.      The
Subfranchise Agreement grants You, as a Regional Owner, the right to a
geographic territory ("Regional Territory") outlined in the Description of Regional Territory
Addendum attached as Schedule 1 to the Subfranchise Agreement. The Subfranchise
Agreement provides that ESCO will not establish or franchise others to establish
Franchisees utilizing the ESCO® System
within your Regional Territory during the term of the Subfranchise
Agreement. Your exclusive rights to a Regional Territory may be terminated or
modified by ESCO if You fail to comply with the terms and conditions of the
Subfranchise Agreement or any other agreement with ESCO. You do not receive the
right to acquire additional Subfranchises.

       

      B.      You
are required to sell and cause to be opened ESCO franchises in the Regional
Territory according to the Development Schedule contained in the Subfranchise
Agreement. The number of ESCO Franchises to be developed in a Regional Territory
is determined by the population of the Regional Territory. Your exclusive rights
to a Regional Territory will terminate if You fail to sell and cause the
prescribed number of ESCO franchises to open within the designated period of
time (See Subfranchise Agreement, Schedule 3) or if the Franchisees in the
Regional Territory fail to retain the designated number of Sales Representatives
within a designated period of time (See Subfranchise Agreement, Schedule 2).
Otherwise, the continuation of the Regional Territory is not dependent upon the
achievement of a certain sales volume, market penetration or other contingency.
The Regional Territory may not be altered unless mutually agreed upon in writing
or unless You are in default under the terms of the Subfranchise
Agreement.

       

      C.      You
do not have the right to use other channels of distribution, such as the
Internet, catalog sales, telemarketing, or other direct marketing, to facilitate
sales outside of Your Regional Territory.

       

      D.      ESCO
has no plans to operate or franchise a business under a different
trademark.

       

      ITEM
13 – TRADEMARKS

       

      The
following marks are on the principal register in the United States Patent and
Trademark Office (USPTO). ESCO has filed all required affidavits and renewal
registrations for the trademarks listed below.

       

      
        
          	
                  ESCO®

                	 
	
                  Application
      Date

                	
                  11/17/2003

                
	
                  Serial
      Number

                	
                  78331981

                
	
                  Status

                	
                  Registered

                
	
                  Registration
      Date

                	
                  07/26/2005

                
	
                  Registration
      Number

                	
                  2979592

                

        

      

       

      
        
          
            	
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  	
                    Page
      12

                  

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        
          
            
              
                
                  
                    
                      
                        	
                                OWN
      YOUR FUTURE®

                              	 
      
	
                                Application
      Date

                              	
                                02/22/2004

                              
	
                                Serial
      Number

                              	
                                78372011

                              
	
                                Status

                              	
                                Registered

                              
	
                                Registration
      Date

                              	
                                08/05/2008

                              
	
                                

                                  Registration
      Number

                                

                              	

                                3482024

                              

                      

                    

                  

                

              

            

          

        

      

       

      
        
          
            	
                    ESCO
      Logo®

                    Application
      Date

                    Serial
      Number

                    Status

                    Registration
      Date

                    Registration
      Number

                  	
                     

                    04/21/2005

                    78613813

                    Registered

                    11/21/2006

                    3173267

                  	

          

        

      

       

      The
following mark is on the principal register in the Canadian Intellectual
Property Office (CIPO). ESCO has filed all required statements for the trademark
listed below.

       

      
        
          	
                  ESCO
      / LOGO / OWN YOUR FUTURE®

                	 
      
	
                  Filed

                	
                  12/12/2003

                
	
                  Application
      number

                	
                  1201607

                
	
                  Status

                	
                  Registered

                
	
                  Registration
      Date

                	
                  07/21/2006

                
	
                  Registration
      Number

                	
                  TMA668433

                

        

      

       

      You must
use ESCO's trademarks only in the manner set forth in the Subfranchise Agreement
and Training Manual, and as specified periodically by ESCO. You may not use any
of the trademarks as part of a corporate or partnership name.

       

      If You
learn of any claim, suit or demand against You by a third party for any alleged
infringement, unfair competition of similar matter due to your use of the ESCO
trademarks, in accordance with the terms and conditions of the Subfranchise
Agreement, you must promptly notify ESCO of any claim, suit or demand. ESCO will
then take whatever action it, in its sole discretion, considers necessary to
protect and defend You against the claim. You may not settle or compromise any
claim by a third party without ESCO's prior written consent. ESCO may defend,
compromise or settle any claim at its cost, using attorneys that it chooses and
You must cooperate fully with ESCO in defending the claim.

       

      ESCO
knows of no infringing or prior uses that could materially affect your use of
its trademarks.

       

      ESCO may
add to, delete or modify its trademarks. You must accept, use or cease using as
may be applicable, the trademarks, including modified or additional trademarks
in accordance with ESCO's prescribed procedures, policies, rules and
regulations, whether contained in the Training Manual, the Subfranchise
Agreement or otherwise. You will not be compensated as a result of any
discontinuation or modification.

       

      ITEM
14 – PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION

       

      ESCO does
not grant you the right to use any item governed by a patent or copyright, but
does permit You to use Proprietary Information in the Training Manual (See Item
11 of this Offering Circular). Although ESCO has not filed an Application for
Copyright Registration for the Training Manual, the information in the Training
Manual is proprietary and ESCO claims a copyright to the entire Training Manual
and in various advertising and sales promotion materials used in connection with
the ESCO® System.
You must also promptly tell us when You learn about unauthorized use of this
Proprietary Information. ESCO is not obligated to take any action but will
respond to this information as we think appropriate. ESCO will indemnify You for
losses brought by a third party concerning your use of this information. You
must keep the Training Manual current at all times, and upon the termination or
non-renewal of your Subfranchise, return all Training Manuals to ESCO. You
cannot incorporate ESCO or ESCO® GLOBAL
REALTY into the legal name of your entity. You must use ESCO® GLOBAL
REALTY in your registered business trade name.

       

      
        
          
            	
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  	
                    Page
      13

                  

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      ITEM
15 – OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION

      OF
THE FRANCHISE BUSINESS

       

      As a
Subfranchisor, You or your designated Regional Director must devote your full
time and best efforts to the development and expansion of ESCO's business and in
the assistance and development of every franchised ESCO office within your
Regional Territory.

       

      You are
required to attend the Initial Training Program. If You and the Regional
Director are not the same person, then both are required to attend the Initial
Training Program. All attendees at the Initial Training Program will be required
to sign agreements confirming their acknowledgment of the confidentiality of the
course information and individually affirming the non-compete provisions of the
Subfranchise Agreement.

       

      ITEM
16 – RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL

       

      You may
not engage in providing special services to Franchisees other than as approved
by ESCO in writing (See Items 8, 9 of this Offering Circular). ESCO has the sole
discretion to determine or change the types of authorized goods or services.
Unless otherwise approved by ESCO, and subject to state or local laws, as a
Subfranchisor You are limited to owning one (1) ESCO franchise within your
Regional Territory and owning a maximum of a five percent (5%) ownership
interest in ESCO Franchise offices inside of your Regional
Territory.

      

      
        
          
            	
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  	
                    Page
      14

                  

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    ITEM
17 – RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION

     

    THE
FRANCHISE RELATIONSHIP

     

    This
table lists certain important provisions of the Subfranchise and related
agreements. You should read these provisions in the agreements attached to this
disclosure document.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                
                                                                                                  
                                                                                                    
                                                                                                      
                                                                                                        	
                                                                                                                Provision

                                                                                                              	 
      	
                                                                                                                Subfranchise

                                                                                                                Agreement

                                                                                                              	 
      	
                                                                                                                Summary

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                a.
      Length of the Franchise term

                                                                                                              	 
      	
                                                                                                                Section
      6.1

                                                                                                              	 
      	
                                                                                                                The
      term of a Subfranchise Agreement is 15 years.

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                b.
      Renewal or extension of the term

                                                                                                              	 
      	
                                                                                                                Section
      6.2

                                                                                                              	 
      	
                                                                                                                A
      Subfranchise Agreement may be renewed for a 15-year
  period.

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                c.
      Requirement for You to renew or extend

                                                                                                              	 
      	
                                                                                                                Section
      6.2

                                                                                                              	 
      	
                                                                                                                You
      must not be in breach of the Agreement. You must give notice at least 6
      months prior to the expiration date. You must pay the Renewal Fee. You
      must execute a new Agreement.

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                d.
      Termination by You

                                                                                                              	 
      	
                                                                                                                Section
      21.1

                                                                                                              	 
      	
                                                                                                                Please
      see the applicable Article in the Agreement.

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                e.
      Termination by ESCO without cause

                                                                                                              	 
      	
                                                                                                                 N/A

                                                                                                              	 
      	
                                                                                                                Not
      applicable.

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                f.
      Termination by ESCO with cause

                                                                                                              	 
      	
                                                                                                                Section
      21.2

                                                                                                              	 
      	
                                                                                                                Cause
      means any breach of a material provision of the
  Agreement.

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                g.
      "Cause" defined – curable defaults

                                                                                                              	 
      	
                                                                                                                Section
      21.2

                                                                                                              	 
      	
                                                                                                                Please
      see the applicable Article in the Agreement.

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                h.
      "Cause" defined – non-curable defaults

                                                                                                              	 
      	
                                                                                                                Section
      21.2

                                                                                                              	 
      	
                                                                                                                Please
      see the applicable Article in the Agreement.

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                i.
      Your obligations on termination/non-renewal

                                                                                                              	 
      	
                                                                                                                Section
      22.1

                                                                                                              	 
      	
                                                                                                                Obligations
      include complete de- identification and payment of amounts due (also see
      the non-competition section below)

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                j.
      Assignment of contract by ESCO

                                                                                                              	 
      	
                                                                                                                Section
      23.1

                                                                                                              	 
      	
                                                                                                                No
      restriction on ESCO's right to assign. However, no assignment will be made
      by ESCO except to an assignee who, in ESCO's good faith judgment, is
      willing and able to assume ESCO's obligations under the Franchise
      Agreement.

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                k.
      “Transfer” by You – defined

                                                                                                              	 
      	
                                                                                                                Section
      23

                                                                                                              	 
      	
                                                                                                                Includes
      transfer of contract or assets or ownership change.

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                l.
      ESCO's approval of transfer by You

                                                                                                              	 
      	
                                                                                                                Section
      23

                                                                                                              	 
      	
                                                                                                                ESCO
      has the right to approve all transfers but will not unreasonably withhold
      approval.

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                m.
      Conditions for ESCO approval of transfer

                                                                                                              	 
      	
                                                                                                                Section
      23

                                                                                                              	 
      	
                                                                                                                New
      Subfranchisor or Franchisee qualifies, transfer fee paid, purchase
      agreement approved, training arranged, release signed by You and current
      Agreement signed by new Franchisor or Franchisee (also see the
      non-competition section below).

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                n.
      ESCO's right of first refusal to acquire Your business

                                                                                                              	 
      	
                                                                                                                Section
      23

                                                                                                              	 
      	
                                                                                                                Any
      proposed transfer by You is subject to ESCO’s right of first
      refusal.

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                o.
      ESCO's option to purchase Your business

                                                                                                              	 
      	
                                                                                                                 N/A

                                                                                                              	 
      	
                                                                                                                Not
      applicable.

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                p.
      Your death or disability

                                                                                                              	 
      	
                                                                                                                Section
      23

                                                                                                              	 
      	
                                                                                                                Treated
      as an ordinary transfer.

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                q.
      Non-competition covenants during the term of the Franchise

                                                                                                              	 
      	
                                                                                                                Section
      25.1

                                                                                                              	 
      	
                                                                                                                No
      involvement in competing business without Franchisor's prior written
      consent.

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                r.
      Non-competition covenants after the Franchise is terminated or
      expires

                                                                                                              	 
      	
                                                                                                                Section
      25.2

                                                                                                              	 
      	
                                                                                                                No
      competing business within 1 year within the Regional Territory or within
      25 miles of another Franchise.

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                s.
      Modification of the Agreement

                                                                                                              	 
      	
                                                                                                                Section
      30

                                                                                                              	 
      	
                                                                                                                Fees
      are subject to change by Franchisor. The Manual is subject to
      change.

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                t.
      Integration/merger clause

                                                                                                              	 
      	
                                                                                                                Section
      30

                                                                                                              	 
      	
                                                                                                                Only
      the terms of the Agreement are binding (subject to state law). Any other
      promises may not be enforceable.

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                u.
      Dispute resolution by arbitration or mediation

                                                                                                              	 
      	
                                                                                                                Section
      26

                                                                                                              	 
      	
                                                                                                                All
      disputes must be arbitrated in Milwaukee, Wisconsin

                                                                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                v.
      Choice of forum

                                                                                                              	 
      	
                                                                                                                Section
      26

                                                                                                              	 
      	
                                                                                                                All
      disputes must be arbitrated in Milwaukee, Wisconsin

                                                                                                              
	 	 	 	 	 
	
                                                                                                                w.
      Choice of law

                                                                                                              	 
      	
                                                                                                                Section
      34

                                                                                                              	 
      	
                                                                                                                State
      where Territory is
located.

                                                                                                              

                                                                                                      

                                                                                                    

                                                                                                  

                                                                                                

                                                                                              

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    The
following states have statutes that may supersede the Agreements in your
relationship with ESCO, including the areas of termination and renewal of your
Franchise.

     

    ARKANSAS
[Stat. Section 70-807], CALIFORNIA [Bus. & Prof. Code Sections 20000-20043],
CONNECTICUT [Gen. Stat. Section 42-133e et seq.], DELAWARE [Code, tit.], HAWAII
[Rev. Stat. Section 482E1], ILLINOIS [Rev. Stat. Chapter 8151LCS 705/19 and
705/20], INDIANA [Stat. Section 23-2-2.7], IOWA [Code Sections 523H.1 -523H.17],
MARYLAND [COMAR 02.02.08.16L, additionally, any claims under the Maryland
Registration and Disclosure Law must be brought within 3 years after the grant
of this subfranchise.], MICHIGAN [Stat. Section 19.854(27)], MINNESOTA [Stat.
Section 80C.14 -which requires us to comply with subs. 3,4, and 5 which require,
except in certain specified cases, that You be given 90 days notice of
termination with 60 days notice to cure and 180 days notice for non-renewal of
the agreement; 80C.21, Minn Rule 2860.4400J, which prohibit us from requiring
litigation to be conducted outside Minnesota. In addition, nothing in the
Offering Circular or Agreement can abrogate or reduce any of your rights as
provided for in Minnesota Statutes, Chapter 80C, or your rights to any
procedure, forum, or remedies provided for by the laws of the jurisdiction],
MISSISSIPPI [Code Section 75-24-51], MISSOURI [Stat. Section 407-400], NEBRASKA
[Rev. Stat. Section 87-401], NEW JERSEY [Stat. Section 56:10-1], SOUTH DAKOTA
[Codified Laws Section 37-5A-51], VIRGINIA [Code 13.1-557-574 -13.1-564],
WASHINGTON [Code Section 19.100.180], WISCONSIN [Stat. Section
135.03].

    
       

      
        
          	
                  © 2004 ESCO GLOBAL REALTY CORP.

                	
                  Page
      15

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    These and
other states may have court decisions that may supersede the Agreements in your
relationship with ESCO including the areas of termination and renewal of your
Franchise.

     

    ITEM
18 – PUBLIC FIGURES

     

    ESCO does
not use any public figure to promote its franchise.

     

    ITEM
19 – FINANCIAL PERFORMANCE REPRESENTATIONS

     

    The FTC’s
Franchise Rule permits ESCO to provide information about the actual or potential
financial performance of its franchised and/or franchised-owned outlets, if
there is a reasonable basis for the information, and if the information is
included in the disclosure document.  Financial performance
information that differs from that included in Item 19 may be given only
if:  (1) ESCO provides the actual records of an existing outlet You
are considering buying; or (2) ESCO supplements the information provided in this
Item 19, for example, by providing information about possible performance at a
particular location or under particular circumstances.

     

    ESCO does
not make any representations about a franchisee’s future financial performance
or the past financial performance of company-owned or franchised
outlets.  ESCO also does not authorize our employees or
representatives to make any such representations either orally or in
writing.  If You are purchasing an existing outlet, however, we may
provide you with the actual records of that outlet.  If You receive
any other financial performance information or projections of your future
income, You should report it to ESCO’s management by contacting ESCO CEO David
Alexander, the Federal Trade Commission, and the appropriate state regulatory
agency.

     

    
      	
              © 2004 ESCO GLOBAL REALTY CORP.

            	
              Page
      16

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ITEM
20 – INFORMATION REGARDING FRANCHISES OF FRANCHISOR

     

    System
wide Regional Territory Summary

    For
Years 2006 to 2008

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	
                                                  Regional Territory Type

                                                	 	
                                                  Year

                                                	 	
                                                  Regional

                                                  Territories at the

                                                  Start of the Year

                                                	 	
                                                  Regional Territories at

                                                  the End of the Year

                                                	 	
                                                  Net Change

                                                
	
                                                  Franchised

                                                	 	
                                                  2006

                                                	 	
                                                  1

                                                	 	
                                                  2

                                                	 	
                                                  1

                                                
	 
      	 	
                                                  2007

                                                	 	
                                                  2

                                                	 	
                                                  4

                                                	 	
                                                  2

                                                
	 
      	 	
                                                  2008

                                                	 	
                                                  4

                                                	 	
                                                  6

                                                	 	
                                                  2

                                                
	 	 	 	 	 	 	 	 	 
	
                                                  Company-Owned

                                                	 	
                                                  2006

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                
	 
      	 	
                                                  2007

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                
	 
      	 	
                                                  2008

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                
	 	 	 	 	 	 	 	 	 
	
                                                  Total

                                                	 	
                                                  2006

                                                	 	
                                                  1

                                                	 	
                                                  2

                                                	 	
                                                  1

                                                
	 
      	 	
                                                  2007

                                                	 	
                                                  2

                                                	 	
                                                  4

                                                	 	
                                                  2

                                                
	 
      	 	
                                                  2008

                                                	 	
                                                  4

                                                	 	
                                                  6

                                                	 	
                                                  2

                                                

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    Transfers
of Regional Territories from Franchisees to New Owners

    For
Years 2006 to 2008

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    State/Province

                                  	 	
                                    Year

                                  	 	
                                    Number of Transfers

                                  
	
                                    Western
      Canada

                                  	 	
                                    2006

                                  	 	
                                    0

                                  
	 
      	 	
                                    2007

                                  	 	
                                    0

                                  
	 
      	 	
                                    2008

                                  	 	
                                    1

                                  
	 	 	 	 	 
	
                                    Total

                                  	 	
                                    2006

                                  	 	
                                    0

                                  
	 
      	 	
                                    2007

                                  	 	
                                    0

                                  
	 
      	 	
                                    2008

                                  	 	
                                    1

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      	
              © 2004 ESCO GLOBAL REALTY CORP.

            	
              Page
      17

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Status
of Franchised Regional Territories

    For
Years 2006 to 2008

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    	
                                                                                            State/Province

                                                                                          	 	
                                                                                            Year

                                                                                          	 	
                                                                                            Regional

                                                                                            Territories

                                                                                            at Start of

                                                                                            Year

                                                                                          	 	
                                                                                            Regional

                                                                                            Territories

                                                                                            Opened

                                                                                          	 	
                                                                                            Termin-ations

                                                                                          	 	
                                                                                            Non-Renewals

                                                                                          	 	
                                                                                            Reacquired

                                                                                            by

                                                                                            Franchisor

                                                                                          	 	
                                                                                            Ceased

                                                                                            Operations –

                                                                                            Other

                                                                                            Reasons

                                                                                          	 	
                                                                                            Regional

                                                                                            Franchises

                                                                                            at End of

                                                                                            Year

                                                                                          
	
                                                                                            Western
      Canada

                                                                                          	 	
                                                                                            2006

                                                                                          	 	
                                                                                            1

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            1

                                                                                          
	 
      	 	
                                                                                            2007

                                                                                          	 	
                                                                                            1

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            1

                                                                                          
	 
      	 	
                                                                                            2008

                                                                                          	 	
                                                                                            1

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            1

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                            Atlantic
      Canada

                                                                                          	 	
                                                                                            2006

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            1

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            1

                                                                                          
	 
      	 	
                                                                                            2007

                                                                                          	 	
                                                                                            1

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            1

                                                                                          
	 
      	 	
                                                                                            2008

                                                                                          	 	
                                                                                            1

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            1

                                                                                          
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                            North
      & South 

                                                                                          	 	
                                                                                            2006

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          
	Carolina	 	
                                                                                            2007

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            2

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            2

                                                                                          
	 
      	 	
                                                                                            2008

                                                                                          	 	
                                                                                            2

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            2

                                                                                          
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                            New
      Jersey

                                                                                          	 	
                                                                                            2006

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          
	 
      	 	
                                                                                            2007

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          
	 
      	 	
                                                                                            2008

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            1

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            1

                                                                                          
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                            Canadian
      Prairies

                                                                                          	 	
                                                                                            2006

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          
	 
      	 	
                                                                                            2007

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          
	 
      	 	
                                                                                            2008

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            1

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            1

                                                                                          
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                            Canada
      North

                                                                                          	 	
                                                                                            2006

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          
	 
      	 	
                                                                                            2007

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          
	 
      	 	
                                                                                            2008

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            1

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            1

                                                                                          
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                            Total

                                                                                          	 	
                                                                                            2006

                                                                                          	 	
                                                                                            1

                                                                                          	 	
                                                                                            1

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            2

                                                                                          
	 
      	 	
                                                                                            2007

                                                                                          	 	
                                                                                            2

                                                                                          	 	
                                                                                            2

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            4

                                                                                          
	 
      	 	
                                                                                            2008

                                                                                          	 	
                                                                                            4

                                                                                          	 	
                                                                                            2

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            1

                                                                                          	 	
                                                                                            0

                                                                                          	 	
                                                                                            6

                                                                                          

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    Status
of Company-Owned Regional Territories

    For
Years 2006 to 2008

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	
                                                  State/Province

                                                	 	
                                                  Year

                                                	 	
                                                  Regional

                                                  Territories

                                                  at Start of

                                                  Year

                                                	 	
                                                  Regional

                                                  Territories

                                                  Opened

                                                	 	
                                                  Regional

                                                  Territories

                                                  Reacquired from

                                                  Subfranchisor

                                                	 	
                                                  Regional

                                                  Territories

                                                  Closed

                                                	 	
                                                  Regional

                                                  Territories Sold to

                                                  Subfranchisors

                                                	 	
                                                  Regional

                                                  Territories at

                                                  the End of the

                                                  Year

                                                
	
                                                  None

                                                	 	
                                                  2006

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                
	 
      	 	
                                                  2007

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                
	 
      	 	
                                                  2008

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                	 	
                                                  0

                                                

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      	
              © 2004 ESCO GLOBAL REALTY CORP.

            	
              Page
      18

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Projected
Openings as of December 31, 2009

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  State/Province

                                	 
      	
                                  Subfranchise

                                  Agreement Signed but

                                  Office Not Open as of 

                                  1/1/2009

                                	 
      	
                                  Subfranchise Offices

                                  Projected to be Sold in

                                  2009

                                	 
      	
                                  New Subfranchise

                                  Offices Open in 2009

                                	 
      	
                                  Projected Company

                                  Owned

                                  Subfranchise

                                  Openings in

                                  Next year

                                
	
                                  Canadian
      Prairies

                                	 
      	
                                  1

                                	 
      	
                                  0

                                	 
      	
                                  1

                                	 
      	
                                  0

                                
	
                                  Canada
      North

                                	 
      	
                                  1

                                	 
      	
                                  0

                                	 
      	
                                  0

                                	 
      	
                                  0

                                
	
                                  Ontario
      Canada

                                	 
      	
                                  0

                                	 
      	
                                  1

                                	 
      	
                                  0

                                	 
      	
                                  0

                                
	
                                  Pacific
      Canada

                                	 
      	
                                  0

                                	 
      	
                                  1

                                	 
      	
                                  0

                                	 
      	
                                  0

                                
	
                                  North
      & South Carolina

                                	 
      	
                                  2

                                	 
      	
                                  0

                                	 
      	
                                  0

                                	 
      	
                                  0

                                
	
                                  New
      Jersey

                                	 
      	
                                  1

                                	 
      	
                                  0

                                	 
      	
                                  0

                                	 
      	
                                  0

                                
	
                                  Totals

                                	 
      	
                                  5

                                	 
      	
                                  2

                                	 
      	
                                  1

                                	 
      	
                                  0

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    A list of
all current subfranchisors is set forth on Exhibit A.

     

    To date
there have been no Subfranchisor Regional Territories or franchisee outlets
terminated, canceled, not renewed, or otherwise voluntarily or involuntarily
ceased to do business.  If You buy this Franchise, Your contact
information may be disclosed to other buyers when You leave the ESCO Franchise
System.

     

    ESCO is
not currently selling any previously-owned franchised Regional Territories or
outlets.

     

    No
Subfranchisor has signed a confidentiality clause during the 2006, 2007, or 2008
fiscal years.

     

    ESCO
is unaware of any trade-mark specific subfranchisor organization associated with
the ESCO Franchise System being offered.

     

    ITEM
21 – FINANCIAL STATEMENTS

     

    Attached
to this Disclosure Document as Exhibit C are ESCO’s financial statements for the
fiscal years ending December 31, 2005, December 31, 2006, and December 31, 2007,
prepared according to United States generally accepted accounting principles,
and audited by the independent certified public accounting firm of Werdann &
DeVito, LLC.

     

    ITEM
22 – CONTRACTS

     

    Copies of
the form of Subfranchise Agreement (Exhibit D) and the Franchise Agreement
(Exhibit F) are attached to this Disclosure Document. The actual terms and
conditions of the Subfranchise Agreement and Franchise Agreement are subject to
negotiation, and may, in certain circumstances, vary from the terms contained in
the Subfranchise Agreement and Franchise Agreement included in this Disclosure
Document. ESCO urges You to carefully review the specific terms of your
individual Agreement with your own legal advisor.

     

    ANY FACT,
INFORMATION, PROMISE, ASSURANCE, REPRESENTATION OR CIRCUMSTANCE COMMUNICATED TO
YOU THAT IS NOT CONTAINED IN THE SUBFRANCHISE AGREEMENT, FRANCHISE AGREEMENT OR
THIS DISCLOSURE DOCUMENT IS UNAUTHORIZED BY ESCO AND SHOULD NOT BE RELIED UPON
BY YOU IN DECIDING WHETHER TO PURCHASE A ESCO FRANCHISE.

     

    
      	
              © 2004 ESCO GLOBAL REALTY CORP.

            	
              Page
      19

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ITEM
23 – RECEIPTS

     

    Receipt

    

    This
disclosure document summarizes certain provisions of the franchise agreement and
other information in plain language. Read this disclosure document and all
agreements carefully.

    

    If ESCO
offers you a franchise, it must provide this disclosure document to you 14
calendar-days before You sign a binding agreement with, or make a payment to,
the franchisor or an affiliate in connection with the proposed franchise
sale.

    

    Maryland,
New York and Rhode Island require that we give you this disclosure document at
the earlier of the first personal meeting or 10 business days before the
execution of the franchise or other agreement or the payment of any
consideration that relates to the franchise relationship.

    

    Michigan,
Oregon, and Washington require that we give you this disclosure document at
least 10 business days before the execution of any binding franchise or other
agreement or the payment of any consideration, whichever occurs
first.

    

    If ESCO
does not deliver this disclosure document on time or if it contains a false or
misleading statement, or a material omission, a violation of federal law and
state law may have occurred and should be reported to the Federal Trade
Commission, Washington, DC 20580 and the state agency listed on Exhibit
B.

    

    The
franchisor is ESCO Global Realty Corp., 594 Dagall Road, Mill Bay BC V0R 2P4
Canada.

    

    Issuance
date: January 1, 2009.

    

    The
franchise seller for this offering is John Alexander. His telephone number is
(250) 813-0337.

    

    ESCO
authorizes the respective state agencies identified on Exhibit B to receive
service of process for it in the particular state.

    

    I
received a disclosure document dated January 1, 2009 that included the following
Exhibits:

    

    EXHIBIT
A  LIST OF UNITED STATES ESCO SUBFRANCHISORS AND
FRANCHISEES

    EXHIBIT
B  STATE FRANCHISOR ADMINISTRATOR AND REGISTERED AGENTS FOR
SERVICE

    EXHIBIT
C  FINANCIAL STATEMENTS

    EXHIBIT
D  SUBFRANCHISE AGREEMENT

    EXHIBIT
E  PROMISSORY NOTE

    EXHIBIT
F  FRANCHISE AGREEMENT

    EXHIBIT
G  PERSONAL GUARANTY

    EXHIBIT
H  TABLE OF CONTENTS OF TRAINING MANUAL

    

    
      
        
          
            
              	
                      Date:

                    	 
      	 
      	 
      
	 
      	
                      (Do
      not leave blank)

                    	 
      	
                      Signature
      of Prospective Franchisee

                    
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                      Print
      Name

                    

            

          

        

      

    

    

    You may
return the signed receipt either by signing, dating, and mailing it to ESCO
Global Realty Corp., 594 Dagall Road, Mill Bay BC V0R 2P4 CANADA.

     

    
      	
              © 2004 ESCO GLOBAL REALTY CORP.

            	
              Page
      20

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Receipt
(Duplicate)

    

    This
disclosure document summarizes certain provisions of the franchise agreement and
other information in plain language. Read this disclosure document and all
agreements carefully.

    

    If ESCO
offers you a franchise, it must provide this disclosure document to you 14
calendar-days before You sign a binding agreement with, or make a payment to,
the franchisor or an affiliate in connection with the proposed franchise
sale.

    

    [Maryland,
New York and Rhode Island require that we give you this disclosure document at
the earlier of the first personal meeting or 10 business days before the
execution of the franchise or other agreement or the payment of any
consideration that relates to the franchise relationship.]

    

    [Michigan,
Oregon, and Washington require that we give you this disclosure document at
least 10 business days before the execution of any binding franchise or other
agreement or the payment of any consideration, whichever occurs
first.]

    

    If ESCO
does not deliver this disclosure document on time or if it contains a false or
misleading statement, or a material omission, a violation of federal law and
state law may have occurred and should be reported to the Federal Trade
Commission, Washington, DC 20580 and the state agency listed on Exhibit
B.

    

    The
franchisor is ESCO Global Realty Corp., 594 Dagall Road, Mill Bay BC V0R 2P4
Canada.

    

    Issuance
date: January 1, 2009.

    

    The
franchise seller for this offering is John Alexander. His telephone number is
(250) 813-0337.

    

    ESCO
authorizes the respective state agencies identified on Exhibit B to receive
service of process for it in the particular state.

    

    I
received a disclosure document dated January 1, 2009 that included the following
Exhibits:

    

    EXHIBIT
A  LIST OF UNITED STATES ESCO SUBFRANCHISORS AND
FRANCHISEES

    EXHIBIT
B  STATE FRANCHISOR ADMINISTRATOR AND REGISTERED AGENTS FOR
SERVICE

    EXHIBIT
C  FINANCIAL STATEMENTS

    EXHIBIT
D  SUBFRANCHISE AGREEMENT

    EXHIBIT
E  PROMISSORY NOTE

    EXHIBIT
F  FRANCHISE AGREEMENT

    EXHIBIT
G  PERSONAL GUARANTY

    EXHIBIT
H  TABLE OF CONTENTS OF TRAINING MANUAL

    

    
      
        
          
            
              	
                      Date:

                    	 
      	 
      	 
      
	 
      	
                      (Do
      not leave blank)

                    	 
      	
                      Signature
      of Prospective Franchisee

                    
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                      Print
      Name

                    

            

          

        

      

    

    

    You may
return the signed receipt either by signing, dating, and mailing it to ESCO
Global Realty Corp., 594 Dagall Road, Mill Bay BC V0R 2P4 CANADA.

     

    
      	
              © 2004 ESCO GLOBAL REALTY CORP.

            	
              Page
      21

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
A

     

    LIST
OF UNITED STATES ESCO SUBFRANCHISORS AND FRANCHISEES

     

    North
Carolina

     

    Solid
Gold Construction Ltd.

    Suite 4 –
1081 Cole Harbour Road

    Dartmouth,
NS B2V 1E8

    CANADA

     

    South
Carolina

     

    Solid
Gold Construction Ltd.

    Suite 4 –
1081 Cole Harbour Road

    Dartmouth,
NS B2V 1E8

    CANADA

     

    New
Jersey

     

    D. Wade
MacKay

    61
Edgewater Close

    Dartmouth,
NS B2W 6S3

    CANADA

     

    LIST
OF OTHER ESCO SUBFRANCHISORS AND FRANCHISEES

     

    Canadian Prairies
(including Alberta, Saskatchewan, Manitoba)

     

    1401041
Alberta Ltd.

    125
Woodpark Court SW

    Calgary,
AB  T2W 6E5

    CANADA

     

    Canada North
(including Yukon Territory, Northwest Territories, and Nunavut)

     

    1401041
Alberta Ltd.

    125
Woodpark Court SW

    Calgary,
AB  T2W 6E5

    CANADA

     

    Atlantic Canada
(including Nova Scotia, New Brunswick, Prince Edward Island, and
Newfoundland/Labrador)

     

    3137772
N.S. Limited

    Suite 4 –
1081 Cole Harbour Road

    Dartmouth,
NS B2V 1E8

    CANADA

     

    
      	
              © 2004 ESCO GLOBAL REALTY CORP.

            	
              Page
      22

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
B

     

    STATE/PROVINCIAL
FRANCHISOR ADMINISTRATOR

    AND
REGISTERED AGENTS

    FOR
SERVICE OF PROCESS

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                	
                                                        State

                                                      	 
      	
                                                        Agent for Service of Process

                                                      	 
      	
                                                        Person in Charge of Administering State Franchise
      Law

                                                      
	
                                                        California

                                                      	 
      	
                                                        California
      Commissioner of Corporations or any California entity

                                                      	 
      	
                                                        William
      Kenefick

                                                        Corporations
      Commissioner

                                                        Department
      of Corporations

                                                        320
      West 4th
      Street, Suite 750

                                                        Los
      Angeles, CA  90013-2244

                                                        (213)
      576-7505

                                                      
	 
      	 
      	 
      	 
      	 
      
	
                                                        Connecticut

                                                         

                                                      	 
      	
                                                        Connecticut
      Banking Commissioner

                                                      	 
      	
                                                        Ralph
      M. Shulansky

                                                        Banking
      Commissioner

                                                        44
      Capitol Avenue

                                                        Hartford,
      CT  06106

                                                        (203)
      566-4560

                                                      
	 
      	 
      	 
      	 
      	 
      
	
                                                        Hawaii

                                                         

                                                      	 
      	
                                                        Director
      of Hawaii Department of Commerce & Consumer Affairs

                                                      	 
      	
                                                        Virginia
      Lea Crandall

                                                        Commissioner
      of Securities

                                                        1010
      Richards Street

                                                        Honolulu,
      HI  96813

                                                        (808)
      548-6521

                                                      
	 
      	 
      	 
      	 
      	 
      
	
                                                        Illinois

                                                      	 
      	
                                                        Illinois
      Attorney General

                                                      	 
      	
                                                        Jim
      Ryan

                                                        Illinois
      Attorney General

                                                        500
      South Second Street

                                                        Springfield,
      IL  62706

                                                        (217)
      782-4465

                                                      
	 
      	 
      	 
      	 
      	 
      
	
                                                        Indiana

                                                      	 
      	
                                                        Secretary
      of State

                                                        201
      State House

                                                        200
      West Washington St.

                                                        Indianapolis,
      IN  46204

                                                      	 
      	
                                                        Indiana
      Securities Division

                                                        302
      West Washington Street, Room E-111

                                                        Indianapolis,
      IN  46204

                                                        (317)
      232-6681

                                                      
	 
      	 
      	 
      	 
      	 
      
	
                                                        Maryland

                                                      	 
      	
                                                        Maryland
      Securities Commissioner

                                                      	 
      	
                                                        Office
      of the Attorney General

                                                        Securities
      Division

                                                        200
      St. Paul Place, 20th
      Floor

                                                        Baltimore,
      MD  21202

                                                        (301)
      576-6360

                                                      
	 
      	 
      	 
      	 
      	 
      
	
                                                        Michigan

                                                      	 
      	
                                                        Michigan
      Department of Commerce, Corporations & Securities
    Bureau

                                                      	 
      	
                                                        Marilyn
      McEwen

                                                        Franchise
      Administrator

                                                        670
      Law Building

                                                        Lansing,
      MI  48913

                                                        (517)
      373-7117

                                                      
	 
      	 
      	 
      	 
      	 
      
	
                                                        Minnesota

                                                      	 
      	
                                                        Minnesota
      Commissioner of Commerce

                                                      	 
      	
                                                        Patrick
      L. Nelson

                                                        Deputy
      Commissioner

                                                        Minnesota
      Department of Commerce

                                                        133
      East Seventh Street

                                                        St.
      Paul, MN  55101

                                                        (612)
      296-6325

                                                      
	 
      	 
      	 
      	 
      	 
      
	
                                                        New
      York

                                                      	 
      	
                                                        Secretary
      of State of the State of New York

                                                      	 
      	
                                                        Sheldon
      Horowitz

                                                        Principal
      Attorney

                                                        New
      York State Department of Law

                                                        120
      Broadway, Room 23-122

                                                        New
      York, NY  10271

                                                        (212)
      416-8211

                                                      

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        	
                
                  ©
      2004 ESCO GLOBAL REALTY CORP.

                

              	
                
                  
                    Exhibit
      A – Page 2

                  

                

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	
                                                  State

                                                	 
      	
                                                  Agent for Service of Process

                                                	 
      	
                                                  Person in Charge of Administering State Franchise
      Law

                                                
	
                                                  North
      Dakota

                                                	 
      	
                                                  North
      Dakota Securities Commissioner

                                                   

                                                	 
      	
                                                  Jocelyn
      Smith

                                                  Franchise
      Examiner

                                                  600
      East Boulevard, 5th Floor

                                                  Bismarck,
      ND  58505

                                                  (701)
      224-4712

                                                
	
                                                  Oregon

                                                	 
      	
                                                  Theodore
      R. Kulongoski (Director of Oregon Department of Insurance &
      Finance)

                                                	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                  Rhode
      Island

                                                	 
      	
                                                  Director
      of Rhode Island Department of Business Regulation

                                                	 
      	
                                                  Michael
      B. Fines, Esq.

                                                  Associate
      Director and Superintendent of Securities

                                                  Division
      of Securities

                                                  233
      Richmond Street, Suite 232

                                                  Providence,
      RI  02903-4232

                                                  (401)
      277-304

                                                
	 
      	 
      	 
      	 
      	 
      
	
                                                  South
      Dakota

                                                	 
      	
                                                  Director
      of South Dakota Division of Securities

                                                	 
      	
                                                  Joe
      Bjerke

                                                  Franchise
      Administrator

                                                  Division
      of Securities

                                                  c/o
      500 East Capitol

                                                  Pierre,
      SD  57501-5070

                                                  (605)
      773-4823

                                                   

                                                  Express
      Deliveries Only:

                                                  Division
      of Securities

                                                  118
      West Capitol

                                                  Pierre,
      SD  57501-5070

                                                
	 
      	 
      	 
      	 
      	 
      
	
                                                  Texas

                                                	 
      	
                                                  Each
      company names its own Registered Agent for Service of
    Process

                                                	 
      	
                                                  George
      S. Bayoud, Jr.

                                                  Secretary
      of State

                                                  1019
      Brazos

                                                  Austin,
      TX  78701

                                                  (512)
      463-5701

                                                
	 
      	 
      	 
      	 
      	 
      
	
                                                  Virginia

                                                	 
      	
                                                  Clerk
      of the State Corporation Commission

                                                	 
      	
                                                  Stephen
      W. Goolsby

                                                  Chief
      Examiner/Investigator

                                                  State
      Corporation Commission

                                                  1300
      East Main Street, 9th Floor

                                                  Richmond,
      VA  23219

                                                  (804)
      371-9051

                                                
	 
      	 
      	 
      	 
      	 
      
	
                                                  Washington

                                                	 
      	
                                                  Washington
      Department of Financial Institutions

                                                	 
      	
                                                  Deborah
      Bortner

                                                  Acting
      Administrator

                                                  Department
      of Financial Institutions

                                                  Securities
      Division

                                                  P.O.
      Box 9033

                                                  Olympia,
      WA  98507-9033

                                                  (206)
      753-6928

                                                   

                                                  For
      Messenger Delivery Service Only:

                                                  Department
      of Financial Institutions General Administrations Bldg.

                                                  Securities
      Division

                                                  210-11th
      Ave. SW

                                                  Olympia,
      WA  98504

                                                
	 
      	 
      	 
      	 
      	 
      
	
                                                  Wisconsin

                                                	 
      	
                                                  Wisconsin
      Commissioner of Securities

                                                	 
      	
                                                  Wesley
      Ringo

                                                  Commissioner
      of Securities

                                                  James
      R. Fischer, Franchise Administrator

                                                  111
      West Wilson Street

                                                  P.O.
      Box 1768

                                                  Madison,
      WI  53701

                                                  (608)
      266-3431 (White)

                                                  (608)
      266-8559
(Fischer)

                                                

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          	
                  
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  

                	
                  
                    
                      Exhibit B
      – Page 2

                    

                  

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
C

    FINANCIAL
STATEMENTS

     

    
      
        
          	
                  
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  

                	
                  
                    
                      Exhibit C
      – Page 1

                    

                  

                

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
D

    SUBFRANCHISE
AGREEMENT

    
       

      
        
          	
                  
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  

                	
                  
                    
                      Exhibit D
      – Page
1

                    

                  

                

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
E

    PROMISSORY
NOTE

     

    
      	
              $______________________

            	 
      	
              Dated:
      ___________ , 200_____

            

    

     

    FOR VALUE
RECEIVED,___________________________________ (the "Borrower"), promises to pay
to ESCO GLOBAL REALTY CORP. (the "Lender"), at 594 Dagall Road, Mill Bay, BC,
Canada V0R 2P4, the principal sum of ____________________ Dollars ($
__________________________) together with interest on the unpaid principal
balance at a rate equal to  ________________________ percent
(_________ %) per annum, to be paid in thirty-six (36) equal monthly
installments of $_____________ commencing ____________________ ,
200___ and continuing on the same day of each month thereafter until paid in
full. Any unpaid principal and interest, if not sooner paid, shall be due and
payable three years from the date of this Note.

     

    If any of
the principal or interest is not paid within ten (10) days from due date or if
the Borrower or any guarantor:

     

    
      	
            	
              (a)

            	
              makes
      an assignment for the benefit of creditors,
or

            

    

     

    
      	
            	
              (b)

            	
              becomes
      a party to any receivership, bankruptcy or similar proceeding, which is
      not dismissed within sixty (60) days in the event of any involuntary
      proceeding, or

            

    

     

    
      	
            	
              (c)

            	
              becomes
      insolvent,

            

    

     

    the
entire principal of this Note, together with accrued interest, shall become
immediately due and owing at the option of the Lender.

     

    Principal
and interest is payable in lawful money of the United States. The Borrower
promises to pay all costs of collection, including reasonable attorneys' fees
incurred by the Lender in collection of this Note in full or any
part.

     

    This Note
may be prepaid in whole or in part at any time. Any prepayment of principal
shall be accompanied by payment of accrued interest to the date of such
prepayment on the amount prepaid.

     

    The
Borrower waives presentment for payment, demand, notice of nonpayment and
dishonor, protest and notice of protest.

     

    
      
        
          
            	
                    BORROWER

                  
	 
      	 
      
	
                      
      By (Name)

                  	 
      
	 
      	 
      
	 
      	 
      
	
                    Authorized
      Signature

                  	
                    Date

                  

          

        

      

    

    

    (CONTINUED
ON NEXT PAGE)

    
       

      
        
          	
                  
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  

                	
                  
                    
                      Exhibit E
      – Page 1

                    

                  

                

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Payment
is guaranteed in accordance with the Personal Guaranty And Agreement To Be Bound
Personally By The Terms And Conditions Of The Subfranchise Agreement attached as
Exhibit G hereto.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                
                                                                                                  
                                                                                                    
                                                                                                      	
                                                                                                              In
      the Presence of:

                                                                                                            	 
      	
                                                                                                              PERSONAL
      GUARANTORS

                                                                                                            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                              Witness
      (Name)

                                                                                                            	 
      	 
      	
                                                                                                              Individual
      (Name)

                                                                                                            	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                              Signature

                                                                                                            	
                                                                                                              Date
         

                                                                                                            	 
      	
                                                                                                              Signature

                                                                                                            	
                                                                                                              Date   

                                                                                                            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                              Address

                                                                                                            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                              City/State/Zip
      Code

                                                                                                            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                              Telephone

                                                                                                            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                              Witness
      (Name)

                                                                                                            	 
      	 
      	
                                                                                                              Individual
      (Name)

                                                                                                            	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                              Signature

                                                                                                            	
                                                                                                              Date   

                                                                                                            	 
      	
                                                                                                              Signature

                                                                                                            	
                                                                                                              Date   

                                                                                                            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                              Address

                                                                                                            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                              City/State/Zip
      Code

                                                                                                            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                              Telephone

                                                                                                            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                              Witness
      (Name)

                                                                                                            	 
      	 
      	
                                                                                                              Individual
      (Name)

                                                                                                            	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                              Signature

                                                                                                            	
                                                                                                              Date   

                                                                                                            	 
      	
                                                                                                              Signature

                                                                                                            	
                                                                                                              Date   

                                                                                                            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                              Address

                                                                                                            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                              City/State/Zip
      Code

                                                                                                            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                              Telephone

                                                                                                            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                              Witness
      (Name)

                                                                                                            	 
      	 
      	
                                                                                                              Individual
      (Name)

                                                                                                            	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                              Signature

                                                                                                            	
                                                                                                              Date   

                                                                                                            	 
      	
                                                                                                              Signature

                                                                                                            	
                                                                                                              Date   

                                                                                                            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                              Address

                                                                                                            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                              City/State/Zip
      Code

                                                                                                            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                              Telephone

                                                                                                            	 
      

                                                                                                    

                                                                                                  

                                                                                                

                                                                                              

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          	
                  
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  

                	
                  
                    
                      Exhibit E
      – Page 2

                    

                  

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
F

    FRANCHISE
AGREEMENT

    
       

      
        
          	
                  
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  

                	
                  
                    
                      Exhibit F
      – Page 1

                    

                  

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
G

    PERSONAL
GUARANTY

     

    PERSONAL
GUARANTY AND AGREEMENT TO BE BOUND PERSONALLY

     BY
THE TERMS AND CONDITIONS OF THE SUBFRANCHISE AGREEMENT

     

    In
consideration of the execution of the foregoing Subfranchise Agreement by the
SUBFRANCHISOR, and for other good and valuable consideration, the undersigned,
for themselves, their heirs, successors, and assigns, do jointly, individually
and severally hereby become surety and guaranty for the payment of all amounts
and the performance of the covenants, terms and conditions in the Subfranchise
Agreement, to be paid, kept and performed by the SUBFRANCHISOR.

     

    Further,
the undersigned, individually and jointly, hereby agree to be personally bound
by each and every condition and term contained In the Subfranchise Agreement and
agree that this Personal Guaranty should be construed as though the undersigned
and each of them executed an Agreement containing the identical terms and
conditions of the Subfranchise Agreement, including, but not limited to, the
covenant not to compete provisions contained in Section 25.

     

    If any
default should at any time be made by the SUBFRANCHISOR, then the undersigned,
their heirs, successors and assigns, do hereby, individually, jointly and
severally, promise and agree to pay to the FRANCHISOR all monies due and payable
to the FRANCHISOR under the terms and conditions of the Subfranchise
Agreement.

     

    In
addition, if SUBFRANCHISOR fails to comply with any other terms and conditions
of the Subfranchise Agreement, then the undersigned, their heirs, successors and
assigns, do hereby, individually, jointly and severally, promise and agree to
comply with the terms and conditions of the Subfranchise Agreement for and on
behalf of the SUBFRANCHISOR.

     

    In
addition, should SUBFRANCHISOR at any time be in default on any obligation to
pay monies to FRANCHISOR or any subsidiary or affiliate of FRANCHISOR, whether
for products, supplies, furniture, fixtures, equipment or other goods purchased
by SUBFRANCHISOR from FRANCHISOR, or any subsidiary or affiliate of FRANCHISOR,
or for any other indebtedness of SUBFRANCHISOR to FRANCHISOR, or any subsidiary
or affiliate of FRANCHISOR, then the undersigned, their heirs, successors and
assigns, do hereby individually, jointly and severally promise and agree to pay
all such monies due and payable from SUBFRANCHISOR to FRANCHISOR, or any
subsidiary or affiliate of FRANCHISOR.

     

    It is
further understood and agreed by the undersigned that the provisions, covenants,
and conditions of this Personal Guaranty will inure to the benefit of the
successors and assigns of FRANCHISOR.

     

    The
undersigned each agrees that its obligations under this Guaranty shall be
binding upon the undersigned and its respective successors and assigns and shall
remain in full force and effect irrespective of:

     

    1.The
validity or enforceability of the Subfranchise Agreement;

     

    2. Any
failure or lack of diligence in collection of any amounts due under the terms of
the Subfranchise Agreement;

     

    3. The
acceptance of any security or other guaranty, the extension of any credit or
amendments, modifications, consents or waivers with respect to the Subfranchise
Agreement;

     

    4. Any
defense that the SUBFRANCHISOR or any other person or entity might have by
reason of any action in bankruptcy or other statutory or common law proceedings
for debtor relief by SUBFRANCHISOR or any other Guarantor;

     

    5. Any
legal or equitable principle of marshaling or other rule of law requiring a
creditor to proceed against specific property, apply proceeds in a particular
manner or otherwise exercise remedies so as to preserve the several estates of
joint obligors or common debtors; and

     

    6. Any
act or failure to act with regard to the Subfranchise Agreement that might vary
the risk of the undersigned.

     

    The
undersigned agrees that FRANCHISOR shall have no obligation to resort in any
manner or form for payment from SUBFRANCHISOR or to any other person, firm or
entity, their properties or assets or to any security, property or other rights
or remedies whatsoever and FRANCHISOR shall have the right to enforce this
Guaranty irrespective of whether or not proceedings or steps are pending seeking
to resort to or realize on or upon any of the foregoing remedies.

     

    
      
        
          	
                  
                    ©
      2004 ESCO GLOBAL REALTY CORP.

                  

                	
                  
                    
                      Exhibit G
      – Page 1

                    

                  

                

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The
undersigned agrees to pay FRANCHISOR, upon demand, all legal and other costs,
expenses and fees at any time paid or incurred by FRANCHISOR in endeavoring to
collect any amounts due FRANCHISOR pursuant to the Subfranchise Agreement or to
realize upon this Guaranty or to enforce any right under the Subfranchise
Agreement or this Guaranty. It is the intent of the undersigned that this
Guaranty is a guaranty of performance and payment and not a guaranty of
collection.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                	
                                                                                                        In
      the Presence of:

                                                                                                      	 
      	
                                                                                                        PERSONAL
      GUARANTORS

                                                                                                      
	 	 	 
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                        Witness
      (Name)

                                                                                                      	 
      	 
      	
                                                                                                        Individual
      (Name)

                                                                                                      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                        Signature

                                                                                                      	
                                                                                                        Date   

                                                                                                      	 
      	
                                                                                                        Signature

                                                                                                      	
                                                                                                        Date   

                                                                                                      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                        Address

                                                                                                      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                        City/State/Zip
      Code

                                                                                                      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                        Telephone

                                                                                                      	 
      
	 	 	 	 	 
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                        Witness
      (Name)

                                                                                                      	 
      	 
      	
                                                                                                        Individual
      (Name)

                                                                                                      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                        Signature

                                                                                                      	
                                                                                                        Date   

                                                                                                      	 
      	
                                                                                                        Signature

                                                                                                      	
                                                                                                        Date   

                                                                                                      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                        Address

                                                                                                      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                        City/State/Zip
      Code

                                                                                                      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                        Telephone

                                                                                                      	 
      
	 	 	 	 	 
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                        Witness
      (Name)

                                                                                                      	 
      	 
      	
                                                                                                        Individual
      (Name)

                                                                                                      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                        Signature

                                                                                                      	
                                                                                                        Date   

                                                                                                      	 
      	
                                                                                                        Signature

                                                                                                      	
                                                                                                        Date   

                                                                                                      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                        Address

                                                                                                      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                        City/State/Zip
      Code

                                                                                                      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                        Telephone

                                                                                                      	 
      
	 	 	 	 	 
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                        Witness
      (Name)

                                                                                                      	 
      	 
      	
                                                                                                        Individual
      (Name)

                                                                                                      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                                                                        Signature

                                                                                                      	
                                                                                                        Date   

                                                                                                      	 
      	
                                                                                                        Signature

                                                                                                      	
                                                                                                        Date   

                                                                                                      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                        Address

                                                                                                      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                        City/State/Zip
      Code

                                                                                                      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                                                                        Telephone

                                                                                                      	 
      

                                                                                              

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            	
                    
                      ©
      2004 ESCO GLOBAL REALTY CORP.

                    

                  	
                    
                      
                        Exhibit G
      – Page 2

                      

                    

                  

          

           

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
H

    TABLE
OF CONTENTS OF TRAINING MANUAL

     

    Preparation
and Planning

     

    Introduction
to ESCO Ownership Culture

     

    Regional
Owner Agreement

     

    Franchise
Agreement

     

    Independent
Contractor Agreement

     

    Franchise
Procedure Checklist

     

    ESCO
Structure – Systems & Tools

     

    Equipment

     

    Regional
Office Staffing

     

    National
& Regional Suppliers

     

    Regional
Council

     

    Regional
Advertising

     

    Regional
Responsibilities

     

    Regional
Franchise Development Plan – Target Marketing: 12 Month Plan, 3 Year
Plan

     

    Ownership
Culture: ESCO Training Institute

     

    Facilitating
Multi-Agent Walkovers

     

    Recruiting,
Educating and Training of New Entrants to Real Estate Industry

     

    Handling
Objections

     

    Franchisee
Training Program Overview

     

    Summary
and Certificate Presentation

    
       

      
        
          
            
              	
                      
                        ©
      2004 ESCO GLOBAL REALTY CORP.

                      

                    	
                      
                        
                          Exhibit H
      – Page
1Unassociated Document

    
      

       Exhibit
10.1

      

      SECURITIES
PURCHASE AGREEMENT

       

      This
Securities Purchase Agreement (this “Agreement”) is dated
as of January 28, 2009 among Celsia Technologies, Inc., a Nevada corporation
(the “Company”), and each
purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and
collectively the “Purchasers”).

       

      WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and
Rule 506 promulgated thereunder, the Company desires to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, desires to purchase
from the Company, securities of the Company as more fully described in this
Agreement.

       

      NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company and each Purchaser agree as
follows:

       

      ARTICLE
I.

      DEFINITIONS

       

      1.1          Definitions.  In
addition to the terms defined elsewhere in this Agreement: (a) capitalized terms
that are not otherwise defined herein have the meanings given to such terms in
the Debentures (as defined herein), and (b) the following terms have the
meanings set forth in this Section 1.1:

       

      “Action” shall have
the meaning ascribed to such term in Section 3.1(j).

       

      “Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person, as such terms are
used in and construed under Rule 405 under the Securities Act.

       

      “Business Day” means
any day except Saturday, Sunday, any day which shall be a federal legal holiday
in the United States or any day on which banking institutions in the State of
New York are authorized or required by law or other governmental action to
close.

       

      “Certificate of
Designation” means the Certificate of Designation to be filed prior to
the Closing by the Company with the Secretary of State of Nevada, in the form of
Exhibit I
attached hereto.

       

       “Closing” means the
closing of the purchase and sale of the Securities pursuant to Section
2.1.

       

      “Closing Date” means
the Trading Day when all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to (i)
the Purchasers’ obligations to pay the Subscription Amount and (ii) the
Company’s obligations to deliver the Securities have been satisfied or
waived.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      “Closing Statement”
means the Closing Statement in the form Annex A attached hereto.

       

       “Commission” means the
Securities and Exchange Commission.

       

      “Common Stock” means
the common stock of the Company, par value $.001 per share, and any other class
of securities into which such securities may hereafter be reclassified or
changed into.

       

      “Common Stock
Equivalents” means any securities of the Company or the Subsidiaries
which would entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, rights, options,
warrants or other instrument that is at any time convertible into or exercisable
or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

       

      “Company Counsel”
means DLA Piper LLP (US), with offices located at 1251 Avenue of the Americas,
New York, New York 10020.

       

      “Consent, Waiver and
Amendment Agreement” shall have the meaning ascribed to such term in
Section 2.3(b)(iii).

       

      “Conversion Price”
shall have the meaning ascribed to such term in the Debentures.

       

      “Debentures” means the
Original Issue Discount Senior Secured Convertible Debentures due, subject to
the terms therein, December 31, 2010, issued by the Company to the Purchasers
hereunder, in the form of Exhibit A attached
hereto.

       

      “Disclosure Schedules”
shall have the meaning ascribed to such term in Section 3.1.

       

      “Discussion Time”
shall have the meaning ascribed to such term in Section 3.2(f).

       

      “Dormant Subsidiary”
shall have the meaning ascribed to such term in Section 4.18.

       

      “Effective Date” means
the date that the Initial Registration Statement filed by the Company pursuant
to the Registration Rights Agreement is first declared effective by the
Commission.

       

      “Evaluation Date”
shall have the meaning ascribed to such term in Section 3.1(r).

       

      “Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      “Exempt Issuance”
means the issuance of (a) shares of Common Stock or options to employees,
officers or directors of the Company pursuant to any stock or option plan duly
adopted for such purpose by a majority of the non-employee members of the Board
of Directors of the Company or a majority of the members of a committee of
non-employee directors established, (b) securities upon the exercise or exchange
of or conversion of any Securities issued hereunder and/or other securities
exercisable or exchangeable for or convertible into shares of Common Stock
issued and outstanding on the date of this Agreement, provided that such
securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise, exchange or
conversion price of such securities, (c) securities issued pursuant to
acquisitions or strategic transactions approved by a majority of the
disinterested directors of the Company, provided that any such issuance shall
only be to a Person which is, itself or through its subsidiaries, engaged in a
business synergistic with the business of the Company and in which the Company
receives benefits in addition to the investment of funds, but shall not include
a transaction in which the Company is issuing securities primarily for the
purpose of raising capital or to an entity whose primary business is investing
in securities and (d) up to 1,250,000 shares of Common Stock issued as
reasonable compensation for services rendered to the Company or its
Subsidiaries.

       

       “FWS” means Feldman
Weinstein & Smith LLP with offices located at 420 Lexington Avenue, Suite
2620, New York, New York 10170-0002.

       

      “GAAP” shall have the
meaning ascribed to such term in Section 3.1(h).

       

      “Indebtedness” shall
have the meaning ascribed to such term in Section 3.1(aa).

       

      “Intellectual Property
Rights” shall have the meaning ascribed to such term in Section
3.1(o).

       

       “Legend Removal Date”
shall have the meaning ascribed to such term in Section 4.1(c).

       

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

       

      “Material Adverse
Effect” shall have the meaning assigned to such term in Section
3.1(b).

       

      “Material Permits”
shall have the meaning ascribed to such term in Section 3.1(m).

       

      “Maximum Rate” shall
have the meaning ascribed to such term in Section 5.17.

       

      “May Purchase
Agreement” means the Securities Purchase Agreement, dated May 25, 2007,
by and among the Company and each of the purchasers signatories thereto for the
issuance of debentures and warrants.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       “May 2007 Purchasers”
means the purchasers of the securities issued pursuant to the May Purchase
Agreement and any successors in interest to any of the debentures and warrants
issued pursuant to the May Purchase Agreement (by way of assignment or
cancellation and reissuance of the same).

      

       “May Purchasers Intercreditor
Agreement” means the intercreditor agreement, dated as of the date
hereof, duly executed by the Company, each of the Purchasers, and each of the
May 2007 Purchasers in the form of Exhibit G attached
hereto

       

       “Participation
Maximum” shall have the meaning ascribed to such term in Section
4.12.

       

      “Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.

       

      “Preferred Stock”
means the shares of the Company’s Series C Preferred Stock issued hereunder
having the rights, preferences and privileges set forth in the Certificate of
Designation, in the form of Exhibit I
hereto.

      

      “Pre-Notice” shall
have the meaning ascribed to such term in Section 4.12.

       

      “Principal Amount”
means, as to each Purchaser, the amounts set forth below such Purchaser’s
signature block on the signature pages hereto and next to the heading “Principal
Amount,” in United States dollars, which shall equal such Purchaser’s
Subscription Amount multiplied by 1.315789.

       

       “Proceeding” means an
action, claim, suit, investigation or proceeding (including, without limitation,
an investigation or partial proceeding, such as a deposition), whether commenced
or threatened.

       

      “Public Information
Failure” shall have the meaning ascribed to such term in Section
4.3(b).

       

      “Public Information Failure
Payments” shall have the meaning ascribed to such term in Section
4.3(b).

       

      “Purchaser Party”
shall have the meaning ascribed to such term in Section 4.10.

       

      “Registration Rights
Agreement” means the Registration Rights Agreement, dated the date
hereof, among the Company and the Purchasers, in the form of Exhibit B attached
hereto.

       

      “Registration
Statement” means a registration statement meeting the requirements set
forth in the Registration Rights Agreement and covering the resale of the
Underlying Shares by each Purchaser as provided for in the Registration Rights
Agreement.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      “Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e).

       

      “Required Minimum”
means, as of any date, the maximum aggregate number of shares of Common Stock
then issued or potentially issuable in the future pursuant to the Transaction
Documents, including any Underlying Shares issuable upon exercise in full of all
Warrants or conversion in full of all Debentures, ignoring any conversion or
exercise limits set forth therein, and assuming that the Conversion Price is at
all times on and after the date of determination 75% of the then Conversion
Price on the Trading Day immediately prior to the date of
determination.

       

      “Rule 144” means Rule
144 promulgated by the Commission pursuant to the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.

       

      “SEC Reports” shall
have the meaning ascribed to such term in Section 3.1(h).

       

      “Securities” means the
Debentures, the Preferred Stock, the Warrants, the Warrant Shares and the
Underlying Shares.

       

      “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

       

      “Security Agreement”
means the Security Agreement, dated the date hereof, among the Company and the
Purchasers, in the form of Exhibit E-1 attached
hereto.

      

      “Security Documents”
shall mean the Security Agreement, the Subsidiary Guarantees, the Taiwan Trust
Agreement, and any other documents and filing required thereunder in order to
grant the Purchasers security interest in the assets of the Company and the
Subsidiaries as provided in the Security Agreement, including all UCC-1 filing
receipts.

      

      “Short Sales” means
all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange
Act (but shall not be deemed to include the location and/or reservation of
borrowable shares of Common Stock). 

       

       “Subscription Amount”
means, as to each Purchaser, the aggregate amount to be paid for Debentures, the
Preferred Stock and Warrants purchased hereunder as specified below such
Purchaser’s name on the signature pages of this Agreement and next to the
heading “Subscription Amount,” in United States dollars and in immediately
available funds.

       

      “Subsequent Financing”
shall have the meaning ascribed to such term in Section 4.13.

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      “Subsequent Financing
Notice” shall have the meaning ascribed to such term in Section
4.13.

       

      “Subsidiary” means any
subsidiary of the Company as set forth on Schedule
3.1(a).

       

      “Subsidiary Guarantee”
means the Subsidiary Guarantee, dated the date hereof, executed by Celsia Taiwan
and any (other Subsidiaries hereafter formed or acquired) in favor of the
Purchasers, in the form of Exhibit F attached
hereto.

       

      Taiwan Trust
Agreement  means that certain trust agreement dated as of the
date hereof, among Celsia Technologies, Inc., Celsia Technologies Taiwan, Inc.
(“Celsia
Taiwan”) and China Trust Commercial Bank, Ltd., in the form attached
hereto as Exhibit
E-2, established for the benefit of the Purchasers and the May 2007
Purchasers.

       

      “Trading Day” means a
day on which the New York Stock Exchange is open for trading.

       

      “Trading Market” means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the American Stock Exchange, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange or the OTC Bulletin Board.

       

       “Transaction
Documents” means this Agreement, the Debentures, the Warrants, the
Registration Rights Agreement, the Security Agreement, the Taiwan Trust
Agreement, the Subsidiary Guarantee, all exhibits and schedules hereto and
thereto and any other documents or agreements executed pursuant
thereto.

       

      “Transfer Agent” means
Interwest Transfer Co. Inc., with a mailing address of 1981 East 4800 South,
Suite 100, Salt Lake City, Utah 84117 and a facsimile number of (801) 277-3147,
and any successor transfer agent of the Company.

       

      “Underlying Shares”
means the shares of Common Stock issued and issuable upon conversion of the
Debentures and the Preferred Stock and upon exercise of the
Warrants.

       

      “Variable Rate
Transaction” shall have the meaning ascribed to such term in Section
4.14(b).

       

      “VWAP” means, for any
date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed
or quoted for trading as reported by Bloomberg L.P. (based on a Trading Day from
9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)); (b)  if
the Common Stock is not then listed or quoted for trading on a Trading Market
and if prices for the Common Stock are then reported in the “Pink Sheets”
published by Pink OTC Markets, Inc. (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported; or (c) in all other cases, the fair
market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Purchasers holding a majority in
interest of the Securities then-outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the
Company.

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      “Warrants” means
collectively the Common Stock purchase warrants delivered to the Purchasers at
the Closing in accordance with Section 2.2(a) hereof, which Warrants shall be
exercisable immediately and have a term of exercise equal to 5 years, in the
form of Exhibit C
attached hereto.

       

      “Warrant Shares” means
the shares of Common Stock issuable upon exercise of the Warrants.

       

      ARTICLE
II.

      PURCHASE
AND SALE

       

      2.1          Closing.  On
the Closing Date, upon the terms and subject to the conditions set forth herein,
substantially concurrent with the execution and delivery of this Agreement by
the parties hereto, the Company agrees to sell, and each Purchaser, severally
and not jointly, agrees to purchase Debentures, Preferred Stock and Warrants
with an aggregate Subscription Amount of up to $2,000,000.  Each
Purchaser shall deliver to the Company, via wire transfer or a certified check,
immediately available funds equal to its Subscription Amount and the Company
shall deliver to each Purchaser its respective Debenture and a Warrant, as
determined pursuant to Section 2.2(a), and the Company and each Purchaser shall
deliver the other items set forth in Section 2.2 deliverable at the
Closing.  Upon satisfaction of the covenants and conditions set forth
in Sections 2.2 and 2.3, the Closing shall occur at the offices of FWS or such
other location as the parties shall mutually agree.

       

      2.2          Deliveries

       

      (a)           On
or prior to the Closing Date, the Company shall deliver or cause to be delivered
to each Purchaser (except as noted) the following:

       

      
        (i)    this
Agreement duly executed by the Company;

      

       

      (ii)           a
legal opinion or opinions of Company counsel, in the form attached hereto as
Exhibit
D;

       

      (iii)          subject
to clause 2.4 below, a certificate evidencing a number of shares of Preferred
Stock equal to the Principal Amount of such Purchaser’s Debenture, registered in
the name of such Purchaser;

       

      (iv)          subject
to clause 2.4 below, a Debenture with a principal amount equal to such
Purchaser’s Principal Amount, registered in the name of such
Purchaser;

      
        
           

        

        
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      (v)           evidence
of the filing of the Certificate of Designation with the Secretary of State of
Nevada;

       

      (vi)          the
May Purchasers Intercreditor Agreement duly executed by the Company and the
other signatories thereto;

       

      (vii)         subject
to clause 2.4 below, a Warrant registered in the name of such Purchaser to
purchase up to a number of shares of Common Stock equal to 100% of the principal
amount of the Debenture issuable to such Purchaser hereunder divided by $0.10,
with an exercise price equal to $0.10, subject to adjustment
therein;

       

      (viii)        the
Security Agreement, duly executed by the Company and each Subsidiary, along with
all of the Security Documents, including the Subsidiary Guarantee, and the
Taiwan Trust Agreement duly executed by the parties thereto; and

       

      (ix)           the
Registration Rights Agreement duly executed by the Company.

       

      (b)           On
or prior to the Closing Date, each Purchaser shall deliver or cause to be
delivered to the Company the following:

       

      
        (i)    this
Agreement duly executed by such Purchaser;

      

       

      (ii)           the
May Purchasers Intercreditor Agreement duly executed by such
Purchaser;

       

      (iii)          subject
to clause 2.4 below, such Purchaser’s Subscription Amount by wire transfer to
the account as specified in writing by the Company;

       

      (iv)          the
Security Agreement duly executed by such Purchaser; and

       

      (v)           the
Registration Rights Agreement duly executed by such Purchaser.

       

      2.3          Closing
Conditions.

       

      (a)           The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:

       

      (i)        
   the accuracy in all material respects when made and on the
Closing Date of the representations and warranties of the Purchasers contained
herein;

       

      (ii)           all
obligations, covenants and agreements of each Purchaser required to be performed
at or prior to the Closing Date shall have been performed; and

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      (iii)          the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this
Agreement.

       

      (b)           The
respective obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being met:

       

      (i)     
      the accuracy in all material respects when
made and on the Closing Date of the representations and warranties of the
Company contained herein;

       

      (ii)           all
obligations, covenants and agreements of the Company required to be performed at
or prior to the Closing Date shall have been performed;

       

      (iii)          the
delivery of a consent, waiver and amendment agreement, in the form attached
hereto as Exhibit
H duly executed by May 2007 Purchasers holding at least 70% of the
principal amount of debentures issued pursuant to the May Purchase Agreement
(the “Consent, Waiver
and Amendment Agreement”);

       

      (iv)          the
delivery by the Company of the items set forth in Section 2.2(a) of this
Agreement;

       

      (v)           there
shall have been no Material Adverse Effect with respect to the Company since the
date hereof; and

       

      (vi)          from
the date hereof to the Closing Date, trading in the Common Stock shall not have
been suspended by the Commission  or the Company’s principal Trading
Market (except for any suspension of trading of limited duration agreed to by
the Company, which suspension shall be terminated prior to the Closing), and, at
any time prior to the Closing Date, trading in securities generally as reported
by Bloomberg L.P. shall not have been suspended or limited, or minimum prices
shall not have been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium have been
declared either by the United States or New York State authorities nor shall
there have occurred any material outbreak or escalation of hostilities or other
national or international calamity of such magnitude in its effect on, or any
material adverse change in, any financial market which, in each case, in the
reasonable judgment of each Purchaser, makes it impracticable or inadvisable to
purchase the Debentures at the Closing.

       

      2.4          Certain Post-Closing
Items. Notwithstanding anything herein to the contrary the parties hereto
acknowledge and agree Lewis Opportunity Fund, LP (“Lewis”) whose
Subscription Amount hereunder is $250,000 has agreed to fund its Subscription
Amount in two tranches as follows: (i) $125,000 on or before the Closing Date
and (ii) $125,000 on or before the 90th
calendar day following the Closing Date.  The Debenture, Warrants and
shares of Preferred Stock issuable to Lewis shall be issued ratably, at the time
it wires its Subscription Amount to the Company (i.e., 50% of its Debenture,
Warrants and shares of Preferred Stock on the Closing Date and 50% when it wires
the additional $125,000 of its Subscription Amount
hereunder).  Further, in the event that Lewis fails to wire its second
$125,000 of Subscription Amount to the Company on or before the 90th
calendar day following the date hereof, the amendments to the exercise price,
conversion price and interest rate of 50% of the debentures and warrants issued
pursuant to the May Purchase Agreement held by Lewis on the Closing Date as
provided under the Consent, Waiver and Amendment Agreement shall be void ab initio, and Lewis shall be
deemed a “Non-Participating Holder” under the Consent, Waiver and Amendment
Agreement with respect to such amendments as to 50% of its holdings under the
May Purchase Agreement.

      
        
           

        

        
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      ARTICLE
III.

      REPRESENTATIONS
AND WARRANTIES

       

      3.1          Representations and
Warranties of the Company.  Except as set forth in the
disclosure schedules delivered to Purchasers concurrently herewith (the “Disclosure
Schedules”), which Disclosure Schedules shall be deemed a part hereof and
shall qualify any representation or otherwise made herein to the extent of the
disclosure contained in the corresponding section of the Disclosure Schedules,
the Company hereby makes the following representations and warranties to each
Purchaser:

       

      (a)           Subsidiaries.  All
of the direct and indirect subsidiaries of the Company are set forth on Schedule
3.1(a).  The Company owns, directly or indirectly, all of the
capital stock or other equity interests of each Subsidiary free and clear of any
Liens, and all of the issued and outstanding shares of capital stock of each
Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase
securities.

       

      (b)           Organization and
Qualification.  The Company and each of the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
(as applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any Subsidiary is in violation or
default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter
documents.  Each of the Company and the Subsidiaries is duly qualified
to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not
have or reasonably be expected to result in (i) a material adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business, or
condition (financial or otherwise) of the Company and the Subsidiaries, taken as
a whole, or (iii) a material adverse effect on the Company’s ability to perform
in any material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material Adverse
Effect”) and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.

      
        
           

        

        
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      (c)           Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder.  The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Company and no further action is required by
the Company, its board of directors or its stockholders in connection therewith
other than in connection with the Required Approvals.  Each
Transaction Document to which it is a party has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms except
(i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.

       

      (d)           No
Conflicts.  Except as set forth on Schedule 3.1(d), the
execution, delivery and performance by the Company of this Agreement and the
other Transaction Documents and the consummation by the Company of the
transactions contemplated hereby and thereby do not and will not: (i) conflict
with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter
documents, or (ii) subject to the execution of the Consent, Waiver and Amendment
Agreement, conflict with, or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, result in the creation
of any Lien (other than pursuant to the Transaction Documents) upon any of the
properties or assets of the Company or any Subsidiary, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) subject to the Required Approvals, conflict with or result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company or a
Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such
as could not have or reasonably be expected to result in a Material Adverse
Effect.

       

      (e)           Filings, Consents and
Approvals.  The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other than
(i) filings required pursuant to Section 4.6 of this Agreement, (ii) the filing
with the Commission of the Registration Statement, (iii) the notice and/or
application(s) to each applicable Trading Market for the issuance and sale of
the Securities and the listing of the Underlying Shares for trading thereon in
the time and manner required thereby, (iv) the filing of Form D with the
Commission and such filings as are required to be made under applicable state
securities laws and (v) filings required under the Security Documents
(collectively, the “Required
Approvals”).

      
        
           

        

        
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      (f)           Issuance of the
Securities.  The Securities are duly authorized and, when
issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company other than restrictions on transfer provided
for in the Transaction Documents.  The Underlying Shares, when issued
in accordance with the terms of the Transaction Documents (including Section
4.11 hereof), will be validly issued, fully paid and nonassessable, free and
clear of all Liens imposed by the Company other than restrictions on transfer
provided for in the Transaction Documents.  The Company has reserved
from its duly authorized capital stock a number of shares of Common Stock for
issuance of the Underlying Shares equal to at least the Required Minimum as of
the date hereof.

       

      (g)           Capitalization.  The
capitalization of the Company is as set forth on Schedule 3.1(g)
(whether or not disclosed in SEC Reports), which Schedule 3.1(g) shall
also include the number of shares of Common Stock owned beneficially, and of
record, by Affiliates of the Company as of the date hereof. Schedule 3.1(g), also
sets forth a schedule of the fully-diluted capitalization of the Company
immediately prior to the time the transactions contemplated hereunder are
consummated, and a pro-forma fully-diluted capitalization (assuming the maximum
amount of Debentures and Warrants are sold hereunder).  Except as set
forth on Schedule
3.1(g)(i), the Company has not issued any capital stock since its most
recently filed periodic report under the Exchange Act, other than pursuant to
the exercise of employee stock options under the Company’s stock option plans,
the issuance of shares of Common Stock to employees pursuant to the Company’s
employee stock purchase plan and pursuant to the conversion and/or exercise of
Common Stock Equivalents outstanding as of the date of the most recently filed
periodic report under the Exchange Act.  Except as set forth on Schedule 3.1(g), no
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by the
Transaction Documents.  Except as set forth on Schedule 3.1(g), or
as a result of the purchase and sale of the Securities, there are no outstanding
options, warrants, scrip rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any
right to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock or
Common Stock Equivalents. Except as described on Schedule 3.1(g), the
issuance and sale of the Securities will not obligate the Company to issue
shares of Common Stock or other securities to any Person (other than the
Purchasers) and will not result in a right of any holder of Company securities
to adjust the exercise, conversion, exchange or reset price under any of such
securities. All of the outstanding shares of capital stock of the Company are
validly issued, fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and none of such outstanding shares
was issued in violation of any preemptive rights or similar rights to subscribe
for or purchase securities.  No further approval or authorization of
any stockholder, the Board of Directors of the Company or others is required for
the issuance and sale of the Securities.  There are no stockholders
agreements, voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the knowledge of
the Company, between or among any of the Company’s
stockholders.

      
        
           

        

        
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      (h)           SEC Reports; Financial
Statements.  The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the Company under
the Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as the Company was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as the
“SEC Reports”)
on a timely basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such
extension.  As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the
Exchange Act, as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.  The financial statements of the Company included in the
SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing.  Such financial statements
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved
(“GAAP”),
except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated Subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.

       

      (i)           Material
Changes.  Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
a subsequent SEC Report filed prior to the date hereof or on Schedule 3.1(i)
hereto, (i) there has been no event, occurrence or development that has had or
that could reasonably be expected to result in a Material Adverse Effect, (ii)
the Company has not incurred any liabilities (contingent or otherwise) other
than (A) trade payables and accrued expenses incurred in the ordinary course of
business consistent with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to GAAP or disclosed in
filings made with the Commission, (iii) the Company has not altered its method
of accounting, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock option plans.
The Company does not have pending before the Commission any request for
confidential treatment of information.  Except for the issuance of the
Securities contemplated by this Agreement or as set forth on Schedule 3.1(i), no
event, liability or development has occurred or exists with respect to the
Company or its Subsidiaries or their respective business, properties, operations
or financial condition, that would be required to be disclosed by the Company
under applicable securities laws at the time this representation is made that
has not been publicly disclosed at least one Trading Day prior to the date that
this representation is made.

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      (j)           Litigation.  Except
as set forth under the heading “Legal Proceedings” in the most recently filed
periodic SEC Report, and except as set forth on Schedule 3.1(j),
there is no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company, threatened against or
affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or
regulatory authority (federal, state, county, local or foreign) (collectively,
an “Action”)
which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii)
could, if there were an unfavorable decision, have or reasonably be expected to
result in a Material Adverse Effect.  Neither the Company nor any
Subsidiary, nor any director or officer thereof, is or has been the subject of
any Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty.  There has not
been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the Commission involving the Company or any current or
former director or officer of the Company.  The Commission has not
issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company or any Subsidiary under the Exchange
Act or the Securities Act during the two years preceding the date
hereof.

       

      (k)           Labor
Relations.  No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company which could reasonably be expected to result in a Material Adverse
Effect.  None of the Company’s or its Subsidiaries’ employees is a
member of a union that relates to such employee’s relationship with the Company,
and neither the Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and its Subsidiaries believe that their
relationships with their employees are good.  No executive officer, to
the knowledge of the Company, is, or is now expected to be, in violation of any
material term of any employment contract, confidentiality, disclosure or
proprietary information agreement or 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 of its
Subsidiaries to any liability with respect to any of the foregoing
matters.  The Company and its Subsidiaries are in compliance with all
U.S. federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

      
        
           

        

        
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      (l)           Compliance.  Except
as set forth on Schedule 3.1(l),
neither the Company nor any Subsidiary (i) is in material default under or in
violation of (and, to the knowledge of the Company, no event has occurred that
has not been waived that, with notice or lapse of time or both, would result in
a default by the Company or any Subsidiary under), nor has the Company or any
Subsidiary received notice of a claim that it is in default under or that it is
in violation of, any indenture, loan or credit agreement or any other agreement
or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or governmental body relating to
the Company, or (iii) to the knowledge of the Company is or has been in
violation of any statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws
applicable to its business and all such laws that affect the environment, except
in each case as could not have or reasonably be expected to result in a Material
Adverse Effect.

       

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

       

      (n)           Title to
Assets.  Except for Permitted Liens (as defined in the
Debentures), the Company and the Subsidiaries have good and marketable title in
fee simple to all real property owned by them that is material to the business
of the Company and the Subsidiaries and good and marketable title in all
personal property owned by them that is material to the business of the Company
and the Subsidiaries, in each case free and clear of all Liens.  Any
real property and facilities held under lease by the Company and the
Subsidiaries are held by them under valid, subsisting and enforceable leases
with which the Company and the Subsidiaries are in compliance.

       

      (o)           Patents and
Trademarks.  The Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights necessary or
material for use in connection with their respective businesses as described in
the SEC Reports and which the failure to so have could have a Material Adverse
Effect (collectively, the “Intellectual Property
Rights”).  Neither the Company nor any Subsidiary has received
a notice (written or otherwise) that any of the Intellectual Property Rights
used by the Company or any Subsidiary violates or infringes upon the rights of
any Person. To the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person
of any of the Intellectual Property Rights.  The Company and its
Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties, except where
failure to do so could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

      
        
           

        

        
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      (p)           Insurance.  Schedule 3.1(p) sets
forth a complete list of all insurance policies maintained by the Company and
its Subsidiaries, including, but not limited to, directors and officers
insurance coverage at least equal to the amount set forth on Schedule
3.1(p).  Neither the Company nor any 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 as may be necessary to continue its business without a significant
increase in cost.

       

      (q)           Transactions with Affiliates
and Employees.  Except as set forth in the SEC Reports or Schedule 3.1(q)
attached hereto, none of the officers or directors of the Company and, to the
knowledge of the Company, none of the employees of the Company is presently a
party to any transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner, in each case in excess of $120,000 other than for (i) payment of salary
or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including
stock option agreements under any stock option plan of the Company.

       

      (r)           Sarbanes-Oxley; Internal
Accounting Controls.  The Company is in material compliance
with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it
as of the Closing Date.  The Company and the Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under
the Exchange Act is recorded, processed, summarized and reported, within the
time periods specified in the Commission’s rules and forms.  The
Company’s certifying officers have evaluated the effectiveness of the Company’s
disclosure controls and procedures as of the end of the period covered by the
Company’s most recently filed periodic report under the Exchange Act (such date,
the “Evaluation
Date”).  The Company presented in its most recently filed
periodic report under the Exchange Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date.  Since the Evaluation
Date, there have been no changes in the Company’s internal control over
financial reporting (as such term is defined in the Exchange Act) that has
materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.

      
        
           

        

        
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      (s)           Certain
Fees.  Except as described on Schedule 3.1(s), no brokerage or
finder’s fees or commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by
the Transaction Documents.  The Purchasers shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of
other Persons for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by the Transaction
Documents.

       

      (t)           Private
Placement.  Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, no registration under
the Securities Act is required for the offer and sale of the Securities by the
Company to the Purchasers as contemplated hereby. The issuance and sale of the
Securities hereunder does not contravene the rules and regulations of the
Trading Market.

       

      (u)           Investment Company.
The Company is not, and is not an Affiliate of, and immediately after receipt of
payment for the Securities, will not be or be an Affiliate of, an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended.  The Company shall conduct its business in a manner so that
it will not become subject to the Investment Company Act of 1940, as
amended.

       

      (v)           Registration
Rights.  Except as set forth on Schedule 3.1(v), other than
each of the Purchasers, no Person has any right to cause the Company to effect
the registration under the Securities Act of any securities of the
Company.

       

      (w)           Listing and Maintenance
Requirements.    The Company has not, in the 12
months preceding the date hereof, received notice from any Trading Market on
which the Common Stock is or has been listed or quoted to the effect that the
Company is not in compliance with the listing or maintenance requirements of
such Trading Market. Except as set forth on Schedule 3.1(w), the
Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and maintenance
requirements.

       

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

      
        
           

        

        
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      (y)           Disclosure.  Except
with respect to (i) the material terms and conditions of the transactions
contemplated by the Transaction Documents and (ii) Purchasers that have executed
a written non-disclosure agreement with the Company as set forth on Schedule
3.1(y), the Company confirms that neither it nor any other Person acting on its
behalf has provided any of the Purchasers or their agents or counsel with any
information that it believes constitutes or might constitute material, nonpublic
information.  The Company understands and confirms that the Purchasers
will rely on the foregoing representation in effecting transactions in
securities of the Company.  All disclosure furnished by or on behalf
of the Company to the Purchasers regarding the Company, its business and the
transactions contemplated hereby, including the Disclosure Schedules to this
Agreement, taken as a whole, 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 light of the circumstances under
which they were made, not misleading.   The press releases
disseminated by the Company during the twelve months preceding the date of this
Agreement taken as a whole do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements made therein, in light of the circumstances
under which they were made and when made, not misleading.  The Company
acknowledges and agrees that no Purchaser makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than
those specifically set forth in Section 3.2 hereof.

       

      (z)           No Integrated
Offering. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2, neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of
(i) the Securities Act which would require the registration of any such
securities under the Securities Act, or (ii) any applicable shareholder approval
provisions of any Trading Market on which any of the securities of the Company
are listed or designated.

      
        
           

        

        
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      (aa)           Solvency.  Except
as set forth on Schedule 3.1(aa),
based on the financial condition of the Company as of the Closing Date after
giving effect to the receipt by the Company of the proceeds from the sale of the
Securities hereunder, the Company’s assets do not constitute unreasonably small
capital to carry on its business as now conducted and as proposed to be
conducted including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, and projected capital
requirements and capital availability thereof.  The Company does not
intend to incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be payable on or in
respect of its debt).  The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for reorganization or
liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year from the Closing Date.  Schedule 3.1(aa) sets
forth as of the date hereof all outstanding secured and unsecured Indebtedness
of the Company or any Subsidiary, or for which the Company or any Subsidiary has
commitments and includes the Company’s and its consolidated Subsidiaries’
balance sheet included in its most recently filed SEC Report.  For the
purposes of this Agreement, “Indebtedness” means
(a) any liabilities for borrowed money or amounts owed in excess of $50,000
(other than trade accounts payable incurred in the ordinary course of business),
(b) all guaranties, endorsements and other contingent obligations in respect of
indebtedness of others, whether or not the same are or should be reflected in
the Company’s balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (c) the present value of
any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP.  Neither the Company nor any
Subsidiary is in default with respect to any Indebtedness.

       

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

       

      (cc)           No General
Solicitation. Neither the Company nor any person acting on behalf of the
Company has offered or sold any of the Securities by any form of general
solicitation or general advertising.  The Company has offered the
Securities for sale only to the Purchasers and certain other “accredited
investors” within the meaning of Rule 501 under the Securities Act.

       

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

       

      (ee)           Accountants.  The
Company’s accounting firm is set forth on Schedule 3.1(ee) of
the Disclosure Schedule.  To the knowledge and belief of the Company,
such accounting firm is a registered public accounting firm as required by the
Exchange Act.

       

      (ff)           Seniority.  As
of the Closing Date, no Indebtedness or other claim against the Company is
senior to the Debentures in right of payment, whether with respect to interest
or upon liquidation or dissolution, or otherwise, other than indebtedness
secured by purchase money security interests (which is senior only as to
underlying assets covered thereby) and capital lease obligations (which is
senior only as to the property covered thereby).

      
        
           

        

        
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      (gg)           No Disagreements with
Accountants and Lawyers.  There are no disagreements of any
kind presently existing, or reasonably anticipated by the Company to arise,
between the Company and the accountants and lawyers formerly or presently
employed by the Company which could affect the Company’s ability to perform any
of its obligations under any of the Transaction Documents, and, except as set
forth on Schedule
3.1(gg), the Company is current with respect to any fees owed to its
accountants and lawyers.

       

      (hh)           Acknowledgment Regarding
Purchasers’ Purchase of Securities.  The Company acknowledges
and agrees that each of the Purchasers is acting solely in the capacity of an
arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated thereby. The Company further acknowledges that no
Purchaser 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 thereby and any advice given by any Purchaser or any
of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the
Purchasers’ purchase of the Securities.  The Company further
represents to each Purchaser that the Company’s decision to enter into this
Agreement and the other Transaction Documents has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company
and its representatives.

       

      (ii)           Acknowledgment Regarding
Purchasers’ Trading Activity.  Notwithstanding anything in this Agreement
or elsewhere herein to the contrary (except for Sections 3.2(f) and 4.15
hereof), it is understood and acknowledged by the Company  that (i)
none of the Purchasers has been asked to agree, nor has any Purchaser agreed, to
desist from purchasing or selling, long and/or short, securities of the Company,
or “derivative” securities based on securities issued by the Company or to hold
the Securities for any specified term; (ii) past or future open market or other
transactions by any Purchaser, including Short Sales, and specifically
including, without limitation, Short Sales or “derivative” transactions, before
or after the closing of this or future private placement transactions, may
negatively impact the market price of the Company’s publicly-traded securities;
(iii) any Purchaser, and counter-parties in “derivative” transactions to which
any such Purchaser is a party, directly or indirectly, may presently have a
“short” position in the Common Stock, and (iv) each Purchaser shall not be
deemed to have any affiliation with or control over any arm’s length
counter-party in any “derivative” transaction.  The Company
further understands and acknowledges that (a) one or more Purchasers may engage
in hedging activities at various times during the period that the Securities are
outstanding, including, without limitation, during the periods that the value of
the Underlying Shares deliverable with respect to Securities are being
determined and (b) such hedging activities (if any) could reduce the value of
the existing stockholders' equity interests in the Company at and after the time
that the hedging activities are being conducted.  The Company acknowledges
that such aforementioned hedging activities do not constitute a breach of any of
the Transaction Documents.

      
        
           

        

        
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      (jj)           Regulation M
Compliance.  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) sold, bid for, purchased, or paid any compensation for
soliciting purchases of, any of the Securities or (iii) paid or agreed to pay to
any Person any compensation for soliciting another to purchase any other
securities of the Company, other than, in the case of clauses (ii) and (iii),
compensation paid to the Company’s placement agent in connection with the
placement of the Securities.

       

      3.2          Representations and
Warranties of the Purchasers.    Each Purchaser, for
itself and for no other Purchaser hereby, represents and warrants as of the date
hereof and as of the Closing Date to the Company as follows (unless as of a
specified date therein):

       

      (a)           Organization;
Authority.  Such Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with full right, corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of the Transaction Documents and the performance by
such Purchaser of the transactions contemplated by the Transaction Documents
have been duly authorized by all necessary corporate or similar action on the
part of such Purchaser.  Each Transaction Document to which it is a
party has been duly executed by such Purchaser, and when delivered by such
Purchaser in accordance with the terms hereof, will constitute the valid and
legally binding obligation of such Purchaser, enforceable against it in
accordance with its terms, except (i) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.

       

      (b)           Own
Account.  Such Purchaser understands that the Securities are
“restricted securities” and have not been registered under the Securities Act or
any applicable state securities law and is acquiring the Securities as principal
for its own account and not with a view to or for distributing or reselling such
Securities or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of distributing any of
such Securities in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings with
any other persons to distribute or regarding the distribution of such Securities
(this representation and warranty not limiting such Purchaser’s right to sell
the Securities pursuant to the Registration Statement or otherwise in compliance
with applicable federal and state securities laws) in violation of the
Securities Act or any applicable state securities law.  Such Purchaser
is acquiring the Securities hereunder in the ordinary course of its
business.

      
        
           

        

        
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      (c)           Purchaser
Status.  At the time such Purchaser was offered the Securities,
it was, and at the date hereof it is, and on each date on which it exercises any
Warrants or converts any Debentures it will be either (i) an “accredited
investor” as defined in Rule 501(a)(1),(a)(2),(a)(3),(a)(7) or (a)(8) under the
Securities Act or (ii) a “qualified institutional buyer” as defined in Rule
144A(a)  under the Securities Act.  Such Purchaser is not
required to be registered as a broker-dealer under Section 15 of the Exchange
Act.

       

      (d)           Experience of Such
Purchaser.  Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment.  Such Purchaser is able to bear the
economic risk of an investment in the Securities and, at the present time, is
able to afford a complete loss of such investment.

       

      (e)           General
Solicitation.  Such Purchaser is not purchasing the Securities
as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media
or broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.

       

      (f)           Short Sales and
Confidentiality Prior To The Date Hereof.  Other than
consummating the transactions contemplated hereunder, such Purchaser has not
directly or indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with such Purchaser, executed any purchases or sales,
including Short Sales, of the securities of the Company during the period
commencing from the time that such Purchaser first received a term sheet
(written or oral) from the Company or any other Person setting forth the
material terms of the transactions contemplated hereunder until the date hereof
(“Discussion
Time”).  Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser's assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser's assets, the
representation set forth above shall only apply with respect to the portion of
assets managed by the portfolio manager that made the investment decision to
purchase the Securities covered by this Agreement.  Other than to
other Persons party to this Agreement, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this
transaction).  Notwithstanding the foregoing, for avoidance of doubt,
nothing contained herein shall constitute a representation or warranty, or
preclude any actions, with respect to the identification of the availability of,
or securing of, available shares to borrow in order to effect short sales or
similar transactions in the future.

      
        
           

        

        
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      (g)           Information. Such
Purchaser represents that it has been afforded the opportunity to review the
Company’s SEC Reports and to ask questions of, and receive answers from, duly
authorized officers or other representatives of the Company (including the
placement agents engaged by the Company) concerning the Company and the terms
and conditions of the transaction contemplated hereby.

       

      ARTICLE
IV.

      OTHER
AGREEMENTS OF THE PARTIES

       

      4.1          Transfer
Restrictions.

       

      (a)           The
Securities may only be disposed of in compliance with state and federal
securities laws.  In connection with any transfer of Securities other
than pursuant to an effective registration statement or Rule 144, to the Company
or to an Affiliate of a Purchaser or in connection with a pledge as contemplated
in Section 4.1(b), the Company may require the transferor thereof to provide to
the Company an opinion of counsel selected by the transferor and reasonably
acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration of such transferred Securities under the Securities
Act.  As a condition of transfer, any such transferee shall agree in
writing to be bound by the terms of this Agreement and shall have the rights of
a Purchaser under this Agreement and the Registration Rights
Agreement.

       

      (b)           The
Purchasers agree to the imprinting, so long as is required by this Section 4.1,
of a legend on any of the Securities in the following form:

       

      [NEITHER]
THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE]
[CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.  THIS SECURITY [AND THE SECURITIES ISSUABLE
UPON [EXERCISE] [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
SECURITIES.

      
        
           

        

        
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      The
Company acknowledges and agrees that a Purchaser may from time to time pledge
pursuant to a bona fide margin agreement with a registered broker-dealer or
grant a security interest in some or all of the Securities to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and who agrees to be bound by the provisions of this Agreement
and the Registration Rights Agreement and, if required under the terms of such
arrangement, such Purchaser may transfer pledged or secured Securities to the
pledgees or secured parties.  Such a pledge or transfer would not be
subject to approval of the Company and no legal opinion of legal counsel of the
pledgee, secured party or pledgor shall be required in connection
therewith.  Further, no notice shall be required of such
pledge.  At the appropriate Purchaser’s expense, the Company will
execute and deliver such reasonable documentation as a pledgee or secured party
of Securities may reasonably request in connection with a pledge or transfer of
the Securities, including, if the Securities are subject to registration
pursuant to the Registration Rights Agreement, the preparation and filing of any
required prospectus supplement under Rule 424(b)(3) under the Securities Act or
other applicable provision of the Securities Act to appropriately amend the list
of selling stockholders thereunder.

       

      (c)           Certificates
evidencing the Underlying Shares shall not contain any legend (including the
legend set forth in Section 4.1(b) hereof): (i) while a registration statement
(including the Registration Statement) covering the resale of such security is
effective under the Securities Act, (ii) following any sale of such Underlying
Shares pursuant to Rule 144, (iii) if such Underlying Shares are eligible for
sale under Rule 144, without the requirement for the Company to be in compliance
with the current public information required under Rule 144 as to such
Underlying Shares and without volume or manner-of-sale restrictions or (iv) if
such legend is not required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of
the Commission). The Company shall cause its counsel to issue a legal opinion to
the Transfer Agent promptly after the Effective Date if required by the Transfer
Agent to effect the removal of the legend hereunder.  If all or any
portion of a Debenture is converted or Warrant is exercised at a time when there
is an effective registration statement to cover the resale of the Underlying
Shares, or if such Underlying Shares may be sold under Rule 144, without the
requirement for the Company to be in compliance with the current public
information required under Rule 144 as to such Underlying Shares and without
volume or manner-of-sale restrictions or if such legend is not otherwise
required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission) then
such Underlying Shares shall be issued free of all legends.  The
Company agrees that following the Effective Date or at such time as such legend
is no longer required under this Section 4.1(c), it will, no later than three
Trading Days following the delivery by a Purchaser to the Company or the
Transfer Agent of a certificate representing Underlying Shares, as applicable,
issued with a restrictive legend (such third Trading Day, the “Legend Removal
Date”), deliver or cause to be delivered to such Purchaser a certificate
representing such shares that is free from all restrictive and other
legends.  The Company may not make any notation on its records or give
instructions to the Transfer Agent that enlarge the restrictions on transfer set
forth in this Section 4.  Certificates for Underlying Shares subject
to legend removal hereunder shall be transmitted by the Transfer Agent to the
Purchaser by crediting the account of the Purchaser’s prime broker with the
Depository Trust Company System as directed by such Purchaser.

      
        
           

        

        
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      (d)           In
addition to such Purchaser’s other available remedies, the Company shall pay to
a Purchaser, in cash, as partial liquidated damages and not as a penalty, for
each $1,000 of Underlying Shares (based on the VWAP of the Common Stock on the
date such Securities are submitted to the Transfer Agent) delivered for removal
of the restrictive legend and subject to Section 4.1(c), $10 per Trading Day
(increasing to $20 per Trading Day 5 Trading Days after such damages have begun
to accrue) for each Trading Day after the Legend Removal Date until such
certificate is delivered without a legend.  Nothing herein shall limit
such Purchaser’s right to pursue actual damages for the Company’s failure to
deliver certificates representing any Securities as required by the Transaction
Documents, and such Purchaser shall have the right to pursue all remedies
available to it at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief.

       

      (e)           Each
Purchaser, severally and not jointly with the other Purchasers, agrees that such
Purchaser will sell any Securities pursuant to either the registration
requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom, and that if Securities are sold
pursuant to a Registration Statement, they will be sold in compliance with the
plan of distribution set forth therein, and acknowledges that the removal of the
restrictive legend from certificates representing Securities as set forth in
this Section 4.1 is predicated upon the Company’s reliance upon this
understanding.

       

      4.2          Acknowledgment of
Dilution.  The Company acknowledges that the issuance of the
Securities may result in dilution of the outstanding shares of Common Stock,
which dilution may be substantial under certain market
conditions.  The Company further acknowledges that its obligations
under the Transaction Documents, including without limitation its obligation to
issue the Underlying Shares pursuant to the Transaction Documents, are
unconditional and absolute and not subject to any right of set off,
counterclaim, delay or reduction, regardless of the effect of any such dilution
or any claim the Company may have against any Purchaser and regardless of the
dilutive effect that such issuance may have on the ownership of the other
stockholders of the Company.

       

      4.3          Furnishing of
Information.

       

      
        (a)   As long
as any Purchaser owns Securities, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell the Securities under Rule
144.  The Company further covenants that it will take such further
action as any holder of Securities may reasonably request, to the extent
required from time to time to enable such Person to sell such Securities without
registration under the Securities Act within the requirements of the exemption
provided by Rule 144.

      

      
        
           

        

        
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      (b)           At
any time during the period commencing from the six (6) month anniversary of the
date hereof and ending at such time that all of the Securities may be sold
without the requirement for the Company to be in compliance with Rule 144(c)(1)
and otherwise without restriction or limitation pursuant to Rule 144, if the
Company shall fail for any reason to satisfy the current public information
requirement under Rule 144(c) (a “Public Information
Failure”) then, in addition to such Purchaser’s other available remedies,
the Company shall pay to a Purchaser, in cash, as partial liquidated damages and
not as a penalty, by reason of any such delay in or reduction of its ability to
sell the Securities, an amount in cash equal to two percent (2.0%) of the
aggregate Subscription Amount of such Purchaser’s Securities on the day of a
Public Information Failure and on every thirtieth (30th) day
(pro rated for periods totaling less than thirty days) thereafter until the
earlier of (a) the date such Public Information Failure is cured and (b) such
time that such public information is no longer required  for the Purchasers
to transfer the Underlying Shares pursuant to Rule 144.  The payments to
which a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred
to herein as “Public
Information Failure Payments.”  Public Information Failure Payments shall be paid
on the earlier of (i) the last day of the calendar month during which such
Public Information Failure Payments are incurred
and (ii) the third (3rd)
Business Day after the event or failure giving rise to the Public Information
Failure Payments is
cured.  In the event the Company fails to make Public Information
Failure Payments in
a timely manner, such Public Information Failure Payments shall bear
interest at the rate of 1.5% per month (pro rated for partial months) until paid
in full. Nothing herein shall limit such Purchaser’s right to pursue actual
damages for the Public Information Failure, and such Purchaser shall have the
right to pursue all remedies available to it at law or in equity including,
without limitation, a decree of specific performance and/or injunctive
relief.

       

      4.4          Integration.  The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities to the
Purchasers in a manner that would require the registration under the Securities
Act of the sale of the Securities to the Purchasers or that would be integrated
with the offer or sale of the Securities for purposes of the rules and
regulations of any Trading Market.

       

      4.5          Conversion and Exercise
Procedures.  Each of the form of Notice of Exercise included in
the Warrants and the form of Notice of Conversion included in the
Debentures set
forth the totality of the procedures required of the Purchasers in order to
exercise the Warrants or convert the Debentures.  No additional legal
opinion, other information or instructions shall be required of the Purchasers
to exercise their Warrants or convert their Debentures.  The Company
shall honor exercises of the Warrants and conversions of the Debentures and
shall deliver Underlying Shares in accordance with the terms, conditions and
time periods set forth in the Transaction Documents.

      
        
           

        

        
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      4.6          
Securities Laws
Disclosure; Publicity.  The Company shall, by 8:30 a.m. (New
York City time) on or before the 4th Trading
Day following the date hereof, issue a Current Report on Form 8-K disclosing the
material terms of the transactions contemplated hereby and attaching the
Transaction Documents as exhibits thereto.  The Company and each
Purchaser shall consult with each other in issuing any other press releases with
respect to the transactions contemplated hereby, and neither the Company nor any
Purchaser shall issue any such press release or otherwise make any such public
statement without the prior consent of the Company, with respect to any press
release of any Purchaser, or without the prior consent of each Purchaser, with
respect to any press release of the Company, which consent shall not
unreasonably be withheld or delayed, except if such disclosure is required by
federal securities law, in which case the disclosing party shall promptly
provide the other party with prior notice of such public statement or
communication.  Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Purchaser, or include the name of any
Purchaser in any filing with the Commission or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (i) as
required by law in connection with (A) any registration statement contemplated
by the Registration Rights Agreement and (B) the filing of final Transaction
Documents (including signature pages thereto) with the Commission and (ii) to
the extent such disclosure is required by law or Trading Market regulations, in
which case the Company shall provide the Purchasers with prior notice of such
disclosure permitted under this clause (ii).

       

      4.7          Shareholder Rights
Plan.  No claim will be made or enforced by the Company or,
with the consent of the Company, any other Person, that any Purchaser is an
“Acquiring Person” under any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or similar
anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of any such plan
or arrangement, by virtue of receiving Securities under the Transaction
Documents or under any other agreement between the Company and the
Purchasers.

       

      4.8          Non-Public
Information.  Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the
Company covenants and agrees that neither it nor any other Person acting on its
behalf will provide any Purchaser or its agents or counsel with any information
that the Company believes constitutes material non-public information, unless
prior thereto such Purchaser shall have executed a written agreement regarding
the confidentiality and use of such information.  The Company
understands and confirms that each Purchaser shall be relying on the foregoing
covenant in effecting transactions in securities of the Company.

       

      4.9          Use of
Proceeds.  Except as set forth on Schedule 4.9 attached
hereto, the Company shall use the net proceeds from the sale of the Securities
hereunder for working capital purposes, and shall not use such proceeds for (i)
the satisfaction of any portion of the Company’s debt (other than payment of
trade payables in the ordinary course of the Company’s business and prior
practices), (ii) the redemption of any Common Stock or Common Stock Equivalents
or (iii) the settlement of any outstanding litigation.

      
        
           

        

        
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      4.10          Indemnification of
Purchasers.   Subject to the provisions of this Section
4.10, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other
Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
“Purchaser
Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against a
Purchaser, or any of them or their respective Affiliates, by any stockholder of
the Company who is not an Affiliate of such Purchaser, with respect to any of
the transactions contemplated by the Transaction Documents (unless such action
is based upon a breach of such Purchaser’s representations, warranties or
covenants under the Transaction Documents or any agreements or understandings
such Purchaser may have with any such stockholder or any violations by the
Purchaser of state or federal securities laws or any conduct by such Purchaser
which constitutes fraud, gross negligence, willful misconduct or
malfeasance).  If any action shall be brought against any Purchaser
Party in respect of which indemnity may be sought pursuant to this Agreement,
such Purchaser Party shall promptly notify the Company in writing, and the
Company shall have the right to assume the defense thereof with counsel of its
own choosing reasonably acceptable to the Purchaser Party.  Any
Purchaser Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Purchaser Party except to the extent
that (i) the employment thereof has been specifically authorized by the Company
in writing, (ii) the Company has failed after a reasonable period of time to
assume such defense and to employ counsel or (iii) in such action there is, in
the reasonable opinion of such separate counsel, a material conflict on any
material issue between the position of the Company and the position of such
Purchaser Party, in which case the Company shall be responsible for the
reasonable fees and expenses of no more than one such separate
counsel.  The Company will not be liable to any Purchaser Party under
this Agreement (i) for any settlement by a Purchaser Party effected without the
Company’s prior written consent, which shall not be unreasonably withheld or
delayed; or (ii) to the extent, but only to the extent that a loss, claim,
damage or liability is attributable to any Purchaser Party’s breach of any of
the representations, warranties, covenants or agreements made by such Purchaser
Party in this Agreement or in the other Transaction Documents.

       

      4.11         Reservation and Listing of
Securities.

       

      (a)           The
Company shall maintain a reserve from its duly authorized shares of Common Stock
for issuance pursuant to the Transaction Documents at least equal to the
Required Minimum as of such date.

      
        
           

        

        
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      (b)           If,
on any date after the date hereof, the number of authorized but unissued (and
otherwise unreserved) shares of Common Stock is less than the Required Minimum
on such date, then the Board of Directors shall use commercially reasonable
efforts to amend the Company’s certificate or articles of incorporation to
increase the number of authorized but unissued shares of Common Stock to at
least the Required Minimum at such time, as soon as possible and in any event
not later than the 75th day after such date.

       

      (c)           The
Company shall, if applicable: (i) in the time and manner required by the
principal Trading Market, prepare and file with such Trading Market an
additional shares listing application covering a number of shares of Common
Stock at least equal to the Required Minimum on the date of such application,
(ii) take all steps necessary to cause such shares of Common Stock to be
approved for listing or quotation on such Trading Market as soon as possible
thereafter, (iii) provide to the Purchasers evidence of such listing or
quotation, and (iv) maintain the listing or quotation of such Common Stock on
any date at least equal to the Required Minimum on such date on such Trading
Market or another Trading Market.

      

      4.12         Participation in Future
Financing.

       

      (a)           From
the date hereof until the date that the Debentures are no longer outstanding,
upon any issuance by the Company or any of its Subsidiaries of Common Stock or
Common Stock Equivalents (a “Subsequent
Financing”), each Purchaser shall have the right to participate in up to
an amount of the Subsequent Financing equal to 100% of the Subsequent Financing
(the “Participation
Maximum”) on the same terms, conditions and price provided for in the
Subsequent Financing.

       

      (b)           At
least 5 Trading Days prior to the closing of the Subsequent Financing, the
Company shall deliver to each Purchaser a written notice of its intention to
effect a Subsequent Financing (“Pre-Notice”), which
Pre-Notice shall ask such Purchaser if it wants to review the details of such
financing (such additional notice, a “Subsequent Financing
Notice”).  Upon the request of a Purchaser, and only upon a
request by such Purchaser, for a Subsequent Financing Notice, the Company shall
promptly, but no later than 1 Trading Day after such request, deliver a
Subsequent Financing Notice to such Purchaser.  The Subsequent
Financing Notice shall describe in reasonable detail the proposed terms of such
Subsequent Financing, the amount of proceeds intended to be raised thereunder
and the Person or Persons through or with whom such Subsequent Financing is
proposed to be effected and shall include a term sheet or similar document
relating thereto as an attachment.

       

      (c)           Any
Purchaser desiring to participate in such Subsequent Financing must provide
written notice to the Company by not later than 5:30 p.m. (New York City time)
on the 5th Trading
Day after all of the Purchasers have received the Pre-Notice that the Purchaser
is willing to participate in the Subsequent Financing, the amount of the
Purchaser’s participation, and that the Purchaser has such funds ready, willing,
and available for investment on the terms set forth in the Subsequent Financing
Notice.  If the Company receives no notice from a Purchaser as of such
5th
Trading Day, such Purchaser shall be deemed to have notified the Company that it
does not elect to participate.

      
        
           

        

        
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      (d)           If
by 5:30 p.m. (New York City time) on the 5th Trading
Day after all of the Purchasers have received the Pre-Notice, notifications by
the Purchasers of their willingness to participate in the Subsequent Financing
(or to cause their designees to participate) is, in the aggregate, less than the
total amount of the Subsequent Financing, then the Company may effect the
remaining portion of such Subsequent Financing on the terms and with the Persons
set forth in the Subsequent Financing Notice.

       

      (e)           If
by 5:30 p.m. (New York City time) on the 5th Trading
Day after all of the Purchasers have received the Pre-Notice, the Company
receives responses to a Subsequent Financing Notice from Purchasers seeking to
purchase more than the aggregate amount of the Participation Maximum, each such
Purchaser shall have the right to purchase its Pro Rata Portion (as defined
below) of the Participation Maximum.  “Pro Rata Portion”
means the ratio of (x) the Subscription Amount of Securities purchased on the
Closing Date by a Purchaser participating under this Section 4.12 and (y) the
sum of the aggregate Subscription Amounts of Securities purchased on the Closing
Date by all Purchasers participating under this Section 4.12.

       

      (f)           The
Company must provide the Purchasers with a second Subsequent Financing Notice,
and the Purchasers will again have the right of participation set forth above in
this Section 4.12, if the Subsequent Financing subject to the initial Subsequent
Financing Notice is not consummated for any reason on the terms set forth in
such Subsequent Financing Notice within 60 Trading Days after the date of the
initial Subsequent Financing Notice.

       

      (g)           Notwithstanding
the foregoing, this Section 4.12 shall not apply in respect of (i) an Exempt
Issuance or (ii) an underwritten public offering of Common Stock.

       

      4.13         Subsequent Equity
Sales.

       

      (a)           From
the date hereof until the earlier of (i) 90 days after the Effective Date or
(ii) 12 months after the Closing Date, neither the Company nor any Subsidiary
shall issue shares of Common Stock or Common Stock Equivalents without the prior
written consent from the Purchasers holding at least 60% in interest of the then
outstanding Securities; provided, however, the 90 day
period set forth in this Section 4.13 shall be extended for the number of
Trading Days during such period in which (i) trading in the Common Stock is
suspended by any Trading Market, or (ii) following the Effective Date, the
Registration Statement is not effective or the prospectus included in the
Registration Statement may not be used by the Purchasers for the resale of the
Underlying Shares.

      
        
           

        

        
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      (b)           From
the date hereof until such time as the date the Debentures and Warrants are no
longer outstanding, the Company shall be prohibited from effecting or entering
into an agreement to effect any Subsequent Financing involving a Variable Rate
Transaction. “Variable
Rate Transaction” means a transaction in which the Company issues or
sells (i) any debt or equity securities that are convertible into, exchangeable
or exercisable for, or include the right to receive additional shares of Common
Stock either (A) at a conversion, exercise or exchange rate or other price that
is based upon and/or varies with the trading prices of or quotations for the
shares of Common Stock at any time after the initial issuance of such debt or
equity securities, or (B) with a conversion, exercise or exchange price that is
subject to being reset at some future date after the initial issuance of such
debt or equity security or upon the occurrence of specified or contingent events
directly or indirectly related to the business of the Company or the market for
the Common Stock or (ii) enters into any agreement, including, but not limited
to, an equity line of credit, whereby the Company may sell securities at a
future determined price.

       

      (c)           Notwithstanding
the foregoing, this Section 4.13 shall not apply in respect of an Exempt
Issuance, except that no Variable Rate Transaction shall be an Exempt
Issuance.

       

      4.14         Equal Treatment of
Purchasers.  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 is also offered to
all of the parties to the Transaction Documents. Further, the Company shall not
make any payment of principal on the Debentures in amounts which are
disproportionate to the respective principal amounts outstanding on the
Debentures at any applicable time.  For clarification purposes, this
provision constitutes a separate right granted to each Purchaser by the Company
and negotiated separately by each Purchaser, and is intended for the Company to
treat the Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.

       

      4.15         Short Sales and
Confidentiality After The Date Hereof. Each Purchaser severally and not
jointly with the other Purchasers covenants that neither it nor any Affiliate
acting on its behalf or pursuant to any understanding with it will execute any
Short Sales during the period commencing at the Discussion Time and ending at
the time that the transactions contemplated by this Agreement are first publicly
announced as described in Section 4.6 of this Agreement.  Each
Purchaser, severally and not jointly with the other Purchasers, covenants that
until such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company as described in Section 4.6 of this Agreement, such
Purchaser will maintain the confidentiality of all disclosures made to it in
connection with this transaction (including the existence and terms of this
transaction).   Notwithstanding the foregoing, no Purchaser makes
any representation, warranty or covenant hereby that it will not engage in Short
Sales in the
securities of the Company after the time that the transactions contemplated by
this Agreement are first publicly announced as described in Section 4.6 of this
Agreement.  Notwithstanding the foregoing, in the case of a Purchaser
that is a multi-managed investment vehicle whereby separate portfolio managers
manage separate portions of such Purchaser's assets and the portfolio managers
have no direct knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser's assets, the covenant set
forth above shall only apply with respect to the portion of assets managed by
the portfolio manager that made the investment decision to purchase the
Securities covered by this Agreement.

      
        
           

        

        
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      4.16         Form D; Blue Sky
Filings.  The Company agrees to timely file a Form D with
respect to the Securities as required under Regulation D and to provide a copy
thereof, promptly upon request of any Purchaser. The Company shall 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 Purchasers at
the Closing under applicable securities or “Blue Sky” laws of the states of the
United States, and shall provide evidence of such actions promptly upon request
of any Purchaser.

       

      4.17         Capital
Changes.  Until the one year anniversary of the Effective Date,
the Company shall not undertake a reverse or forward stock split or
reclassification of the Common Stock without the prior written consent of the
Purchasers holding 30% or more of the then outstanding principal amount of the
Debentures.

       

      4.18         Certain
Subsidiaries.  As of the date hereof, the following
Subsidiaries of the Company are inactive and do not conduct any operations or
own any assets that are material to the value or operation of the Company (on a
consolidated basis):  Celsia Technologies Korea, Inc., a Korean
corporation and Celsia Technologies UK Limited, a UK corporation (each, a “Dormant
Subsidiary”).   Within 90 calendar days following the date
hereof, the Company shall take all action reasonably necessary to formally
dissolve and wind up the operations of each Dormant Subsidiary.  Such
Dormant Subsidiaries shall not be required to execute and deliver the Security
Agreement and Subsidiary Guarantee at the Closing, nor shall the Company be
required to cause such Dormant Subsidiaries to comply with the May Purchasers
Intercreditor Agreement, however, in the event that any Dormant Subsidiary
commences or intends to commence operations of any nature (other than taking any
action necessary in connection with the winding up of its affairs), the Company
shall immediately cause such Dormant Subsidiary to execute and deliver each
Purchaser the Subsidiary Guarantee (in addition to complying with the
requirements of the Security Agreement and May Purchasers Intercreditor
Agreement).  In addition, the Company shall cause each of its
Subsidiaries formed or acquired on or subsequent to the date hereof, in addition
to complying with the requirements under the Security Agreement, to execute and
deliver each Purchaser the Subsidiary Guarantee.

       

      ARTICLE
V.

      MISCELLANEOUS

       

      5.1          Termination. 
This Agreement may be terminated by any Purchaser, as to such Purchaser’s
obligations hereunder only and without any effect whatsoever on the obligations
between the Company and the other Purchasers, by written notice to the other
parties, if the Closing has not been consummated on or before January 31, 2009;
provided, however, that such
termination will not affect the right of any party to sue for any breach by the
other party (or parties).

      
        
           

        

        
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      5.2          Fees and
Expenses.  At the Closing, the Company has agreed to reimburse
(i) Midsummer Capital, LLC (“Midsummer”) the
non-accountable sum of $25,000, for its legal fees and expenses and (ii)
Harborview Master Fund LP the non-accountable sum of $5,000 for its legal fees
and expenses, none of which has been paid prior to the Closing.  The
Company shall deliver to each Purchaser, prior to the Closing, a completed and
executed copy of the Closing Statement attached hereto as Annex
A.  Except as expressly set forth in the Transaction Documents
to the contrary, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement.  The Company shall pay all transfer
agent fees, stamp taxes and other taxes and duties levied in connection with the
delivery of any Securities to the Purchasers.

       

      5.3          Entire
Agreement.  The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.

       

      5.4          Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto on a day that is not a Trading Day
or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (d) upon actual receipt by the party to whom such
notice is required to be given.  The address for such notices and
communications shall be as set forth on the signature pages attached
hereto.

       

      5.5          Amendments;
Waivers.  No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and the Purchasers holding at least 60% in
interest of the then outstanding Securities or, in the case of a waiver, by the
party against whom enforcement of any such waived provision is
sought.  No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right.

       

      5.6          Headings.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.

       

      5.7          Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted
assigns.  The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of each Purchaser (other
than by merger).  Any Purchaser may assign any or all of its rights
under this Agreement to any Person to whom such Purchaser assigns or transfers
any Securities, provided that such transferee agrees in writing to be bound,
with respect to the transferred Securities, by the provisions of the Transaction
Documents that apply to the “Purchasers.”

      
        
           

        

        
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      5.8          No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.10.

       

      5.9          Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law
thereof.  Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City 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 (including with respect to the enforcement of any of the
Transaction Documents), 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
improper or is an inconvenient venue for such proceeding.  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
via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner
permitted by law.   If either party shall commence an action or
proceeding to enforce any provisions of the Transaction Documents, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its reasonable attorneys’ fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.

       

      5.10          Survival.  The
representations and warranties contained herein shall survive the Closing and
the delivery of the Securities for the applicable statute of
limitations.

       

      5.11          Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together 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, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original
thereof.

      
        
           

        

        
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      5.12          Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

       

      5.13          Rescission and Withdrawal
Right.  Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) any of the other Transaction
Documents, whenever any Purchaser exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights; provided, however, that in the
case of a rescission of a conversion of a Debenture or exercise of a Warrant,
the Purchaser shall be required to return any shares of Common Stock delivered
in connection with any such rescinded conversion or exercise
notice.

       

      5.14          Replacement of
Securities.  If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction.  The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Securities.

       

      5.15          Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of the Purchasers and the Company will
be entitled to specific performance under the Transaction
Documents.  The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agrees to waive
and not to assert in any action for specific performance of any such obligation
the defense that a remedy at law would be adequate.

       

      5.16          Payment Set Aside. To
the extent that the Company makes a payment or payments to any Purchaser
pursuant to any Transaction Document or a Purchaser enforces or exercises its
rights 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, state or 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.

      
        
           

        

        
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      5.17          Usury.  To
the extent it may lawfully do so, the Company hereby agrees not to insist upon
or plead or in any manner whatsoever claim, and will resist any and all efforts
to be compelled to take the benefit or advantage of, usury laws wherever
enacted, now or at any time hereafter in force, in connection with any claim,
action or proceeding that may be brought by any Purchaser in order to enforce
any right or remedy under any Transaction Document.  Notwithstanding
any provision to the contrary contained in any Transaction Document, it is
expressly agreed and provided that the total liability of the Company under the
Transaction Documents for payments in the nature of interest shall not exceed
the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and,
without limiting the foregoing, in no event shall any rate of interest or
default interest, or both of them, when aggregated with any other sums in the
nature of interest that the Company may be obligated to pay under the
Transaction Documents exceed such Maximum Rate.  It is agreed that if
the maximum contract rate of interest allowed by law and applicable to the
Transaction Documents is increased or decreased by statute or any official
governmental action subsequent to the date hereof, the new maximum contract rate
of interest allowed by law will be the Maximum Rate applicable to the
Transaction Documents from the effective date forward, unless such application
is precluded by applicable law.  If under any circumstances
whatsoever, interest in excess of the Maximum Rate is paid by the Company to any
Purchaser with respect to indebtedness evidenced by the Transaction Documents,
such excess shall be applied by such Purchaser to the unpaid principal balance
of any such indebtedness or be refunded to the Company, the manner of handling
such excess to be at such Purchaser’s election.

       

      5.18          Independent Nature of
Purchasers’ Obligations and Rights.  The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document.  Nothing contained herein or
in any other Transaction Document, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.  Each Purchaser
has been represented by its own separate legal counsel in their review and
negotiation of the Transaction Documents.  For reasons of
administrative convenience only, Purchasers and their respective counsel have
chosen to communicate with the Company through FWS.  FWS does not
represent all of the Purchasers but only Midsummer.  The Company has
elected to provide all Purchasers with the same terms and Transaction Documents
for the convenience of the Company and not because it was required or requested
to do so by the Purchasers.

       

      5.19          Liquidated
Damages.  The Company’s obligations to pay any partial
liquidated damages or other amounts owing under the Transaction Documents is a
continuing obligation of the Company and shall not terminate until all unpaid
partial liquidated damages and other amounts have been paid notwithstanding the
fact that the instrument or security pursuant to which such partial liquidated
damages or other amounts are due and payable shall have been
canceled.

      
        
           

        

        
          36

          
            

          

        

        
           

        

      

      5.20          Saturdays, Sundays,
Holidays, etc. If the last or appointed day for the taking of any action
or the expiration of any right required or granted herein shall not be a
Business Day, then such action may be taken or such right may be exercised on
the next succeeding Business Day.

       

      5.21          Construction. The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction
Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common
Stock that occur after the date of this Agreement.

       

      5.22          WAIVER OF
JURY TRIAL.  IN ANY ACTION, SUIT, OR
PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY
APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY.

       

       (Signature
Pages Follow)

      
        
           

        

        
          37

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            CELSIA TECHNOLOGIES, INC.
      

                                          	 
      	
                                            Address for Notice:

                                          
	 	 	 	 
	
                                            By:

                                          	
                                            /s/
      Jorge Fernandez

                                          	  
      	1395 Brickell Avenue, Suite
      800
	 
      	
                                            Name:
      Jorge Fernandez

                                            Title:
      CFO

                                          	 
      	
                                            Miami,
      Florida 33131

                                            Facsimile:
      305-359-9698

                                          

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      

      With a
copy to (which shall not constitute notice):

      

      Marjorie
Sybul Adams, Esq.

      DLA Piper
LLP (US)

      1251
Avenue of the Americas

      New York,
New York 10020

      Facsimile:
212-884-8517

      

      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

      SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

      
        
           

        

        
          38

          
            

          

        

        
           

        

      

      [PURCHASER
SIGNATURE PAGES TO CSAT SECURITIES PURCHASE AGREEMENT]

      

      IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.

       

      Name of
Purchaser: ________________________________________________________

       

      Signature of Authorized Signatory of
Purchaser: __________________________________

       

      Name of
Authorized Signatory:
____________________________________________________

       

      Title of
Authorized Signatory:
_____________________________________________________

       

      Email
Address of Purchaser:
________________________________________________

       

      Facsimile
Number of Purchaser:
________________________________________________

      

      Address
for Notice of Purchaser:

      

      Address
for Delivery of Securities for Purchaser (if not same as above):

      

      Subscription
Amount: _____________

      

      Principal
Amount (Subscription Amount multiplied by 1.315789):

      

      Warrant
Shares: _________________

      

      :
__________________

      

      EIN
Number:  [PROVIDE
THIS UNDER SEPARATE COVER]

      

      [SIGNATURE
PAGES CONTINUE]

      
        
           

        

        
          39

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