Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Playbox (US) Inc. - Exhibit 10.20

Exhibit 10.20 

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE “ACT”), AND ARE PROPOSED TO BE ISSUED IN
RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT
PROVIDED BY REGULATION S PROMULGATED UNDER THE ACT. UPON ANY SALE, SUCH
SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO AN
EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY
NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT. 

REGULATION S SUBSCRIPTION AGREEMENT 

(FOR NON-U.S. SUBSCRIBERS) 

THIS AGREEMENT is made effective as of the date of
acceptance set forth on the execution page to this Agreement. 

BETWEEN: 

PLAYBOX (US) INC., a Nevada
corporation 

(hereinafter called the “Company”)

OF THE FIRST PART 

AND: 

THE SUBSCRIBER LISTED ON THE
EXECUTION PAGE TO THIS AGREEMENT 

(hereinafter called the “Subscriber”)

OF THE SECOND PART 

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

ARTICLE 1 
DEFINITIONS 

1.1           
            
Definitions. The following terms will have the following meanings for all
purposes of this Agreement: 

(a)   
         “Agreement” shall mean this
Agreement, and all schedules and amendments to the Agreement; 

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(b)            
“Closing” shall mean the closing of the purchase and sale of the Units in
accordance with the terms and conditions of this Agreement; 

(c)             “Common
Stock” means the Common Stock of the Company with a par value of $0.001 per
share; 

(d)             “Exchange
Act” shall mean the United States Securities Exchange Act of 1934, as amended;

(e)             “Subscriber”
shall mean the Subscriber executing the signature page to this Agreement; 

(f)            
“Offering” shall mean the offering of 320,000 Units by the Company at the
Subscription Price; 

(g)             “SEC”
shall mean the United States Securities and Exchange Commission; 

(h)            
“Securities” shall mean the Units, the Shares, the Warrants and the Warrant
Shares; 

(i)            
“Securities Act” shall mean the United States Securities Act of 1933, as
amended; 

(j)            
"Shares" means those shares of Common Stock to be purchased by the Subscriber
and comprising a portion of the Units;

(k)            
“Subscription Price” means the subscription price of $0.25 per Unit payable by
the Subscriber to the Company in consideration for the purchase and sale of the
Units, in the aggregate amount of $80,000 and in accordance with Section 2.1 of
this Agreement; 

(l)             “Warrant”
means one share purchase warrant, in the form attached as Schedule B to this
Agreement, entitling the Subscriber to purchase one share of Common Stock of the
Company at a price of $0.50 per share for a two year term following the purchase
and sale of the Units; 

(m)            
"Warrants" means those Warrants to be purchased by the Subscriber and comprising
a portion of the Units;

(n)             “Warrant
Shares” means the shares of common stock issuable upon exercise of the
Warrants;

(o)             “Unit”
means a unit consisting of one (1) Share and one (1) whole Warrant; and 

(p)             “Units”
means the aggregate of 320,000 Units to be purchased by the Subscriber from the
Company in accordance with the terms and conditions of this Agreement. 

1.2                        
Schedules. The following schedules are attached to and form part of this
Agreement: 

                               Schedule
A             Definition
of U.S.
Person 
                              
Schedule
B             Form
of Warrant 

1.3                         Currency.
All dollar amounts referred to in this agreement are in United States funds,
unless expressly stated otherwise. 

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ARTICLE 2 
PURCHASE AND SALE OF SHARES 

2.1                        
Agreement to Subscribe. Subject to the terms and conditions of this
Agreement, the Subscriber hereby subscribes for and agrees to purchase from the
Company 320,000 Units at the Subscription Price. Upon execution of this
Agreement, the subscription by the Subscriber will be irrevocable. 

2.2                        
Acceptance by Company. Upon execution of this Agreement by the Company,
the Company agrees to sell the Units to the Subscriber for the Subscription
Price. 

2.3                        
Payment of Subscription Price. The Subscription Price is payable by the
Subscriber to the Company prior to or contemporaneously with the execution of
this Agreement by the Subscriber and will be advanced to the Company or its
solicitors. The Subscriber acknowledges that if the funds are advanced to the
Company’s solicitors, the solicitors shall release such funds to the Company on
confirmation by the Company that it will accept the subscription. 

2.4                        
Loan Pending Closing. Pending acceptance by the Company of the
subscription for the Units, all funds paid by the Subscriber on account of the
Subscription Price shall be deposited by the Company and immediately available
to the Company for its corporate purposes. In the event the Closing is not
completed, the subscription funds will constitute a non-interest bearing demand
loan of the Subscriber to the Company. 

2.5                         Delivery
of Certificates. The Subscriber hereby authorizes and directs the Company to
deliver the securities to be issued to such Subscriber pursuant to this
Agreement to the Subscriber’s address indicated on the signature page of this
Agreement. 

2.6                        
No Minimum Subscription. The Subscriber acknowledges and agrees that the
subscription for the Shares and the Company’s acceptance of the subscription is
not subject to any minimum subscription for the Offering. 

2.7                        
Compliance with Securities Laws. Any acceptance by the Company of the
Subscription is conditional upon compliance with all securities laws and other
applicable laws of the jurisdiction in which the Subscriber is resident. Each
Subscriber will deliver to the Company all other documentation, agreements,
representations and requisite government forms required by the lawyers for the
Company as required to comply with all securities laws and other applicable laws
of the jurisdiction of the Subscriber. 

ARTICLE 3 
AGREEMENTS, REPRESENTATIONS AND
WARRANTIES OF THE SUBSCRIBER 

3.1                        
Exemption from Registration. The Subscriber acknowledges and agrees that
the Securities will be offered and sold to the Subscriber without such offers
and sales being registered under the Securities Act and will be issued to the
Subscriber in an offshore transaction outside of the United States in accordance
with a safe harbour from the registration requirements of the Securities Act
provided by Rule 903 of Regulation S of the Securities Act based on the
representations and warranties of the Subscriber in this Agreement. As such, the
Subscriber further acknowledges and agrees that all Securities will, upon
issuance, be “restricted securities” within the meaning of the Securities Act.

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3.2                        
Resales of Securities. The Subscriber acknowledges that that the
Securities may not be offered, resold, pledged or otherwise transferred except
through an exemption from registration under the Securities Act or pursuant to
an effective registration statement under the Securities Act and in accordance
with all applicable state securities laws and the laws of any other
jurisdiction. The Subscriber agrees to resell the Securities only in accordance
with the provisions of Regulation S of the Securities Act, pursuant to
registration under the Securities Act, or pursuant to an available exemption
from registration pursuant to the Securities Act. The Subscriber agrees that the
Company will refuse to register any transfer of the Securities not made in
accordance with the provisions of Regulation S of the Securities Act, pursuant
to registration under the Securities Act, pursuant to an available exemption
from registration. The Subscriber agrees that the Company may require the
opinion of legal counsel reasonably acceptable to the Company in the event of
any offer, sale, pledge or transfer of any of the Securities by the Subscriber
pursuant to an exemption from registration under the Securities Act.

3.3                         Hedging
Transactions. The Subscriber agrees not to engage in hedging transactions
with regard to the Securities unless in compliance with the Securities Act. 

3.4                        
Share Certificates. The Subscriber acknowledges and agrees that all
certificates representing the Shares and Warrant Shares will be endorsed with
the following legend, or such similar legend as deemed advisable by legal
counsel for the Company, to ensure compliance with Regulation S of the
Securities Act and to reflect the status of the Shares and Warrant Shares as
restricted securities: 

  
    
      “THE SECURITIES REPRESENTED BY THIS CERTIFICATE
        HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"),
        AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
        REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE
        ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE
        TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S,
        PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT TO AN
        AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS
        INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH
        THE ACT.” 

    

  

3.5                        
Warrant Exercises. The Subscriber acknowledge and agree that the Warrants
may only be exercised (i) outside the United States in an offshore transaction
in accordance with Rule 903 of Regulation S, or (ii) within the United States
pursuant to exemption from the registration requirements of the Securities Act.
In order to establish the availability of Rule 903, the Subscriber acknowledges
and agrees that it will not be entitled to exercise the Warrants unless at the
time of such exercise the Subscriber is able to make the representations and
warranties with respect its purchase of the Warrant Shares set forth in the
exercise form attached to the certificate representing the Warrants. If the
Warrants are to be exercised pursuant to an exemption from the registration
requirements of the Securities Act, the Subscriber will be required to deliver a
legal opinion in form and substance satisfactory to the Company to the effect
that the Warrant Shares may be issued pursuant to an exemption from the
registration requirements of the Securities Act. 

3.6                        
Warrant Certificates. The Subscriber acknowledges and agrees that
certificates representing the Warrants will be in the form attached hereto as
Schedule B. The Subscriber further acknowledges and agrees that all certificates
representing the Warrants will be endorsed with the following legend, or such
similar legend as deemed advisable by legal counsel for the Corporation, to 

- 5 - 

ensure compliance with Rule 903 of Regulation S of the
Securities Act and to reflect the status of the Warrants as restricted
securities: 

  
    
      “THIS WARRANT AND THE SHARES TO BE ISSUED UPON
        ITS EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
        (THE "ACT"), AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE
        REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S PROMULGATED
        UNDER THE ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD
        OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION
        S, PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT TO
        AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT. THIS WARRANT MAY
        NOT BE EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF A PERSON IN
        THE UNITED STATES OR A U.S. PERSON UNLESS THE WARRANT AND THE UNDERLYING
        SHARES AND WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT AND
        THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR AN EXEMPTION
        FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. "UNITED STATES" AND
        "U.S. PERSON" ARE AS DEFINED BY REGULATION S UNDER THE SECURITIES ACT.
        HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS
        IN COMPLIANCE WITH THE ACT.” 

    

  

3.7                         Representations
and Warranties of the Subscriber. The Subscriber, represents and warrants to
the Company as follows, and acknowledges that the Company is relying upon such
covenants, representations and warranties in connection with the sale of the
Securities to the Subscriber: 

(a)             The
Subscriber is not a “U.S. Person” as defined by Regulation S of the Securities
Act, as set forth in Schedule A of this Agreement.

(b)             The
Subscriber is not acquiring the Securities for the account or benefit of a U.S.
Person. 

(c)            
The Subscriber was not in the United States at the time the offer to purchase
the Securities was received or at the time this Agreement was executed. 

(d)             The
Subscriber has such knowledge, sophistication and experience in business and
financial matters such that it is capable of evaluating the merits and risks of
the investment in the Securities. The Subscriber has evaluated the merits and
risks of an investment in the Securities. The Subscriber can bear the economic
risk of this investment, and is able to afford a complete loss of this
investment.

(e)            
The Subscriber acknowledges that the Company is in the early stages of
development of its business and the Company’s success is subject to a number of
significant risks, including the risk that the Company will not be able to
finance its plan of operations and that the Company’s business plan will not
succeed. The Subscriber acknowledges that any forward-looking information
provided by the Company to the Subscriber are subject to risks and uncertainties
and that the Company’s actual results may differ materially from the results
anticipated. 

- 6 - 

(f)             The
Securities will be acquired by the Subscriber for investment for the
Subscriber's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that the Subscriber has no
present intention of selling, granting any participation in, or otherwise
distributing the same. The Subscriber does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Securities. 

(g)            
The Subscriber has received or has had full opportunity to review the Company’s
filing with the SEC under the Exchange Act (the “Company’s SEC Filings”). The
Subscriber has had full opportunity to ask questions and receive answers from
representatives of the Company regarding the Company’s SEC Filings, the terms
and conditions of the Offering and the business, properties, prospects and
financial condition of the Company, each as is necessary to evaluate the merits
and risks of investing in the Securities. The Subscriber believes it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Securities. The Subscriber has had full opportunity to
discuss this information with the Subscriber’s legal and financial advisers
prior to execution of this Agreement. 

(h)            
The Subscriber represents that it is familiar with SEC Rule 144, as presently in
effect, and understands the resale limitations imposed thereby and by the
Securities Act. 

(i)            
The Subscriber has satisfied himself or herself as to the full observance of the
laws of his or her jurisdiction in connection with any invitation to subscribe
for the Securities or any use of this Agreement, including (i) the legal
requirements within his jurisdiction for the purchase of the Securities; (ii)
any foreign exchange restrictions applicable to such purchase; (iii) any
governmental or other consents that may need to be obtained; (iv) the income tax
and other tax consequences, if any, that may be relevant to an investment in the
Securities; and (v) any restrictions on transfer applicable to any disposition
of the Securities imposed by the jurisdiction in which the Subscriber is
resident. 

(j)             The
Subscriber has not purchased the Securities as a result of any form of general
solicitation or general advertising, including advertisements, articles, notices
or other communications published in any newspaper, magazine or similar media or
broadcast over radio, television or other form of telecommunications, or any
seminar or meeting whose attendees have been invited by general solicitation or
general advertising. 

(k)             This
Agreement has been duly authorized, validly executed and delivered by the
Subscriber. 

ARTICLE 4 
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY 

4.1                         Representations
and Warranties of the Company. The Company represents and warrants to the
Subscriber and acknowledges that the Subscriber is relying upon such
representations and warranties in connection with the execution, delivery and
performance of this Agreement: 

(a)            
The Company is a corporation duly incorporated and in good standing under the
laws of the State of Nevada, and has the requisite corporate power and authority
to conduct its business as it is currently being conducted, to enter into this
Agreement and to sell the Securities to the Subscriber. 

- 7 - 

(b)             The
execution and delivery by the Company of this Agreement has been duly authorized
by all necessary action on the part of the Company, and no further consent or
action is required by the Company, its board of directors or its
stockholders.

(c)             The
issuance of the Securities has been duly authorized by all necessary corporate
action of the Company.

(d)             The
issuance of the Shares and the Warrants has been duly authorized and, when
issued upon payment thereof in accordance with this Agreement, will have been
validly issued, fully paid and non-assessable. The Warrant Shares have been
authorized and validly reserved for issuance, and when issued upon exercise of
the Warrant in accordance with the terms thereof (and upon payment of the
exercise price therefor), will be validly issued, fully paid and
non-assessable.

(e)            
The existing stockholders of the Company have no pre-emptive or similar rights
to purchase shares of Common Stock from the Company. 

(f)            
The issue and sale of the Securities by the Company does not and will not
conflict with, and does not and will not result in a breach of, any of the terms
of its Articles of Incorporation or Bylaws or any agreement or instrument to
which the Company is a party. 

ARTICLE 5 
MISCELLANEOUS PROVISIONS 

5.1                         Effectiveness
of Representations; Survival. Each party is entitled to rely on the
representations, warranties and agreements of each of the other parties and all
such representation, warranties and agreement will be effective regardless of
any investigation that any party has undertaken or failed to undertake. The
representation, warranties and agreements will survive the purchase and sale of
the Securities. 

5.2                         Further
Assurances. Each of the parties hereto will cooperate with the others and
execute and deliver to the other parties hereto such other instruments and
documents and take such other actions as may be reasonably requested from time
to time by any other party hereto as necessary to carry out, evidence, and
confirm the intended purposes of this Agreement. 

5.3                        
Amendment. This Agreement may not be amended except by an instrument in
writing signed by each of the parties. 

5.4                         Expenses.
Each party to this Agreement will bear its respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the transactions contemplated hereby, including all fees and expenses of
agents, representatives, counsel, and accountants.

5.5                        
Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersede all prior
arrangements and understandings, both written and oral, expressed or implied,
with respect thereto. Any preceding correspondence or offers are expressly
superseded and terminated by this Agreement. 

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5.6                         Severability.
If one or more provisions of this Agreement is held to be unenforceable under
applicable law, such provision will be excluded from this Agreement and the
balance of this Agreement will be enforceable in accordance with its terms. 

5.7                         Notices.
All notices and other communications required or permitted under to this
Agreement must be in writing and will be deemed given if sent by personal
delivery, faxed with electronic confirmation of delivery,
internationally-recognized express courier or registered or certified mail
(return receipt requested), postage prepaid, to the parties at the following
addresses (or at such other address for a party as will be specified by like
notice): 

If to the Investor: 

AT THE ADDRESS SET FORTH ON THE

SIGNATURE PAGE TO THIS AGREEMENT 

If to the Corporation: 

Playbox (US) Inc. 
Suite
5.15, 130 Shaftesbury Avenue, 
London, England W1D 5EU 
Attention:
Robert Burden, Chief Executive Officer 

All such notices and other communications will be deemed to
have been received (a) in the case of personal delivery, on the date of such
delivery, (b) in the case of a fax, when the party sending such fax has received
electronic confirmation of its delivery, (c) in the case of delivery by
internationally-recognized express courier, on the business day following
dispatch and (d) in the case of mailing, on the fifth business day following
mailing. 

5.8                        
Headings. The headings contained in this Agreement are for convenience
purposes only and will not affect in any way the meaning or interpretation of
this Agreement. 

5.9                        
Benefits. This Agreement is and will only be construed as for the benefit
of or enforceable by those persons party to this Agreement. 

5.10                      
Assignment. This Agreement may not be assigned (except by operation of
law) by any party without the consent of the other parties. 

5.11                      
Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Nevada applicable to contracts made and
to be performed therein.

5.12                       Construction.
The language used in this Agreement will be deemed to be the language chosen by
the parties to express their mutual intent, and no rule of strict construction
will be applied against any party.

5.13                      
Electronic Means. Delivery of an executed copy of this Agreement by
electronic facsimile transmission or other means of electronic communication
capable of producing a printed copy will be deemed to be execution and delivery
of this Agreement as of the date of its acceptance by the Company. 

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5.14                      
Schedules and Exhibits. The schedules and exhibits are attached to this
Agreement and incorporated herein. 

5.15                      
Counterparts. This Agreement may be executed in one or more counterparts,
all of which will be considered one and the same agreement and will become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties, it being understood that all parties need
not sign the same counterpart. 

IN WITNESS WHEREOF, this Subscription Agreement is
executed as of the day and year first written above. 

	Number of Units Subscribed for: 	320,000 Units 
	 	 
	Subscription Price (per Unit): 	$0.25 per Unit 
	 	 
	Total Subscription Price: 	$80,000 
	 	 
	Signature of Subscriber or Authorized Signatory 
of
      Subscriber: 	X 
	 	 
	Name of Authorized Signatory of 	X 
	Subscriber (if applicable): 	 
    
	 	 
	Title of Authorized Signatory of 	X 
	Subscriber (if applicable): 	 
    
	 	 
	Name of Subscriber: 	X 
	  	  
	Address of Subscriber: 	X 
	  	  
	 	 
	 	 
	 	 
	  	  
	ACCEPTED BY: 	  
	 	 
	PLAYBOX (US) INC. 	  
	 	 
	Signature of Authorized Signatory: 	 
    
	 	 
	Name of Authorized Signatory: 	Robert
      Burden 
	 	 
	Position of Authorized Signatory: 	CEO
  
	 	 
	Date of Acceptance: 	 
    

- 10 - 

SCHEDULE A 

DEFINITION OF U.S. PERSON 

A “U.S. Person” is defined by Regulation S of the Act to be any
person who is: 

	 	(a) 	
      any natural person resident in the United
  States;

	 	 	 	 
	 	(b) 	
      any partnership or corporation organized or incorporated
      under the laws of the United States;

	 	 	 	 
	 	(c) 	
      any estate of which any executor or administrator is a
      U.S. person;

	 	 	 	 
	 	(d) 	
      any trust of which any trustee is a U.S.
person;

	 	 	 	 
	 	(e) 	
      any agency or branch of a foreign entity located in the
      United States;

	 	 	 	 
	 	(f) 	
      any non-discretionary account or similar account (other
      than an estate or trust) held by a dealer or other fiduciary organized,
      incorporate, or (if an individual) resident in the United States;
    and

	 	 	 	 
	 	(g) 	
      any partnership or corporation if:

	 	 	 	 
	 		(i) 	
      organized or incorporated under the laws of any foreign
      jurisdiction; and

	 	 	 	 
	 		(ii) 	
      formed by a U.S. person principally for the purpose of
      investing in securities not registered under the Act, unless it is
      organized or incorporated, and owned, by accredited Subscribers [as
      defined in Section 230.501(a) of the Act] who are not natural persons,
      estates or trusts.

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SCHEDULE B 

FORM OF WARRANT 

- 12 - 

THIS WARRANT AND THE SHARES TO BE ISSUED UPON ITS EXERCISE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND HAVE
BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE ACT. SUCH SECURITIES MAY
NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE
REGISTRATION UNDER THE ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
REGISTRATION UNDER THE ACT. THIS WARRANT MAY NOT BE EXERCISED IN THE UNITED
STATES OR BY OR ON BEHALF OF A PERSON IN THE UNITED STATES OR A U.S. PERSON
UNLESS THE WARRANT AND THE UNDERLYING SHARES AND WARRANTS HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH
STATE OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. "UNITED
STATES" AND "U.S. PERSON" ARE AS DEFINED BY REGULATION S UNDER THE SECURITIES
ACT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS
IN COMPLIANCE WITH THE ACT. 

PLAYBOX (US) INC. 
A NEVADA
CORPORATION (the “Company”) 
Suite 5.15, 130 Shaftesbury Avenue, London

United Kingdom 

COMMON STOCK PURCHASE WARRANT CERTIFICATE 

[DATE OF ISSUANCE] 

	Warrant Certificate No. 	S-<>

	Name of Holder: 	«NAME» 
	Address of Holder: 	«ADDRESS» 
	Number of Shares: 	320,000 Shares 
	Exercise Price: 	US$0.50 per Share for a period
      of two years from the date of issuance until the Expiry Date
  
	Expiry Date: 	 <> , 2009
  

THIS WARRANT CERTIFIES THAT, for value received, the
above named holder or its registered assigns (the “Holder”), shall have the
right to purchase from the Company the above referenced number of fully paid and
non-assessable shares (the “Shares”) of the Company’s common stock (the “Common
Stock”) at an exercise price equal to the exercise price set forth above (the
"Exercise Price"), subject to further adjustment as set forth in this
Certificate, at any time from the date hereof until 5:00 P.M., Pacific time, on
the expiry date set forth above (the “Expiry Date”). This Warrant is issued
pursuant to the Subscription Agreement between the Company and Holder (the
“Subscription Agreement”) pursuant to which the Holder purchased units
consisting of one share of Common Stock and one warrant to purchase one
additional share of Common Stock. The exercise of this Warrant shall be subject
to the provisions, limitations and restrictions contained herein.

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1.            
Exercise. 

           
  1.1      Procedure for Exercise of Warrant.
  The Holder may exercise this Warrant by delivering the following to the principal
  office of the Company in accordance with Section 5.1 hereof: 

	 	(a) 	
      a duly executed Notice of Exercise in substantially the
      form attached as Schedule A,

	 	 	 
	 	(b) 	
      either (i) a written certification that the Holder is not
      a U.S. person, as defined under Regulation S of the Securities Act, and
      that the Warrant is not being exercised on behalf of a U.S. person, which
      written certificate may be contained in the Notice of Exercise delivered
      pursuant to sub-paragraph (a) above; or (ii) a written opinion of counsel
      to the effect that the Warrant and the Shares have been registered under
      the Securities Act or are exempt from registration thereunder;

	 	 	 
	 	(c) 	
      payment of the Exercise Price then in effect for each of
      the Shares being purchased, as designated in the Notice of Exercise,
      and

	 	 	 
	 	(d) 	
      this Warrant.

Payment of the Exercise Price may be in cash, certified or
official bank check payable to the order of the Company, or wire transfer of
funds to the Company’s account (or any combination of any of the foregoing) in
the amount of the Exercise Price for each share being purchased.

           
  1.2      Delivery of Certificate and New Warrant.
  In the event of any exercise of the rights represented by this Warrant, a certificate
  or certificates for the shares of Common Stock so purchased, registered in the
  name of the Holder, together with any other securities or other property which
  the Holder is entitled to receive upon exercise of this Warrant, shall be delivered
  to the Holder hereof, at the Company’s expense, within a reasonable time,
  not exceeding fifteen (15) calendar days, after the rights represented by this
  Warrant shall have been so exercised; and, unless this Warrant has expired,
  a new Warrant representing the number of Shares (except a remaining fractional
  share), if any, with respect to which this Warrant shall not then have been
  exercised shall also be issued to the Holder hereof within such time. The person
  in whose name any certificate for shares of Common Stock is issued upon exercise
  of this Warrant shall for all purposes be deemed to have become the holder of
  record of such shares on the date on which the Warrant was surrendered and payment
  of the Exercise Price was received by the Company, irrespective of the date
  of delivery of such certificate.

           
  1.3      Restrictive Legend. This Warrant and
  the Shares have not been registered under the Securities Act of 1933, as amended,
  (the "Securities Act") and the Warrants have been and the Shares, upon exercise
  of the Warrants, will be issued pursuant to exemptions from the registration
  requirements of the Securities Act. Neither this Warrant nor any of the Shares
  or any other security issued or issuable upon exercise of this Warrant may be
  sold, transferred, pledged or hypothecated in the absence of an effective registration
  statement under the Act relating to such security or an exemption from the registration
  requirements of the Securities Act. Each certificate for the Warrant, the Shares
  and any other security issued or issuable upon exercise of this Warrant shall
  contain a legend on the face thereof, in form and substance satisfactory to
  counsel for the Company, setting forth the restrictions on transfer contained
  in this Section. The Holder understands that this Warrant constitutes and the
  Shares upon issuance will constitute “restricted securities” under
  the Securities Act. The holder acknowledges and agrees that all certificates
  representing the Shares will be endorsed with the following legend: 

- 14 - 

  
    “THE SECURITIES REPRESENTED BY THIS CERTIFICATE
      HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND
      HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
      OF THE ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE ACT. SUCH SECURITIES
      MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT
      IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE
      REGISTRATION UNDER THE ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION
      UNDER THE ACT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE
      CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.” 

  

           
  1.4      Fractional Shares. No fractional Shares
  shall be issuable upon exercise or conversion of the Warrant and the number
  of Shares to be issued shall be rounded down to the nearest whole Share. If
  a fractional share interest arises upon any exercise or conversion of the Warrant,
  the Company shall eliminate such fractional share interest by paying to Holder
  an amount computed by multiplying the fractional interest by the current market
  price of a full Share.

2.            
Covenants of the Company. 

           
2.1      Authorized Shares. The Company
covenants and agrees that the Company will at all times have authorized and
reserved, free from pre-emptive rights, a sufficient number of shares of Common
Stock to provide for the exercise in full of the rights represented by this
Warrant.

           
2.2      Issuance of Shares. The Company
covenants and agrees that all shares of Common Stock that may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be
validly issued, fully paid and non-assessable, and free from all transfer taxes,
liens and charges with respect to the issue thereof.

3.            
Transfer and Replacement.

           
(a)      Subject to compliance with any applicable
securities laws and the conditions set forth herein, this Warrant and all rights
hereunder are transferable, in whole or in part, upon surrender of this Warrant
at the principal office of the Company, together with a written assignment of
this Warrant substantially in the form attached hereto duly executed by the
Holder or its agent or attorney and funds sufficient to pay any transfer taxes
payable upon the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Shares without having a new
Warrant issued.

           
(b)      The Company agrees to maintain, at its
aforesaid office, books for the registration and the registration of transfer of
the Warrants. 

             (c)    
 If, at the time of the surrender of this Warrant in connection with any
transfer of this Warrant, the transfer of this Warrant shall not be registered
pursuant to an effective registration statement under the Securities Act and
under applicable state securities or blue sky laws, the Company may require, as
a condition of allowing such transfer that (i) the Holder or transferee of this
Warrant, as the case may be, furnish to the Company a written opinion of counsel
(which opinion shall be in form, substance and 

- 15 - 

scope customary for opinions of counsel in comparable
transactions) to the effect that such transfer may be made without registration
under the Securities Act and under applicable state securities or blue sky laws,
and (ii) that the holder or transferee execute and deliver to the Company such
documentation as is necessary to establish that the shares are being transferred
pursuant to an exemption from the registration requirements of the Securities
Act and applicable state securities laws or in an offshore transaction pursuant
to and in accordance with Rule 904 of Regulation S of the Securities Act. 

           
(d)      The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to
the Shares, and in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it (which, in the case of the Warrant, shall not
include the posting of any bond), and upon surrender and cancellation of such
Warrant or stock certificate, if mutilated, the Company will make and deliver a
new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate. 

4.            
Adjustments of Exercise Price and/or Number of
Shares.

           
  4.1      Subdivision or Combination of Shares.
  The number and kind of securities purchasable upon the exercise of this Warrant
  and the Exercise Price shall be subject to adjustment from time to time upon
  the happening of any of the following. In case the Company shall (i) pay a dividend
  in shares of Common Stock or make a distribution in shares of Common Stock to
  holders of its outstanding Common Stock, (ii) subdivide its outstanding shares
  of Common Stock into a greater number of shares, (iii) combine its outstanding
  shares of Common Stock into a smaller number of shares of Common Stock, or (iv)
  issue any shares of its capital stock in a reclassification of the Common Stock,
  then the number of Shares purchasable upon exercise of this Warrant immediately
  prior thereto shall be adjusted so that the Holder shall be entitled to receive
  the kind and number of Shares or other securities of the Company which it would
  have owned or have been entitled to receive had such Warrant been exercised
  in advance thereof. Upon each such adjustment of the kind and number of Shares
  or other securities of the Company which are purchasable hereunder, the Holder
  shall thereafter be entitled to purchase the number of Shares or other securities
  resulting from such adjustment at an Exercise Price per Warrant Share or other
  security obtained by multiplying the Exercise Price in effect immediately prior
  to such adjustment by the number of Shares purchasable pursuant hereto immediately
  prior to such adjustment and dividing by the number of Shares or other securities
  of the Company resulting from such adjustment. An adjustment made pursuant to
  this paragraph shall become effective immediately after the effective date of
  such event retroactive to the record date, if any, for such event. 

           
  4.2      Reorganization, Reclassification, Consolidation,
  Merger or Sale. If any recapitalization, reclassification or reorganization
  of the share capital of the Company, or any consolidation or merger of the Company
  with another Company, or the sale of all or substantially all of its shares
  and/or assets or other transaction (including, without limitation, a sale of
  substantially all of its assets followed by a liquidation) shall be effected
  in such a way that holders of Common Stock shall be entitled to receive shares,
  securities or other assets or property, then, as a condition of such recapitalizations,
  reclassifications, reorganizations, consolidations, mergers or sales, lawful
  and adequate provisions shall be made by the Company whereby the Holder hereof
  shall thereafter have the right to purchase and receive (in lieu of the Common
  Stock of the Company immediately theretofore purchasable and receivable upon
  the exercise of the rights represented hereby) such shares, securities or other
  assets or property as may be issued or payable with respect to or in exchange
  for the number of outstanding Common Stock which such Holder would have been
  entitled to receive had such Holder exercised this Warrant immediately prior
  to the consummation of such recapitalizations, reclassifications, reorganizations,
  consolidations, mergers or sales. The Company or its successor shall promptly
  issue to Holder a new Warrant for such new securities or other property. The
  new Warrant shall provide for 

- 16 - 

adjustments which shall be as nearly equivalent as may be
practicable to give effect to the adjustments provided for in this Section 4
including, without limitation, adjustments to the Exercise Price and to the
number of securities or property issuable upon exercise of the new Warrant. The
provisions of this Section 4.2 shall similarly apply to successive
recapitalizations, reclassifications, reorganizations, consolidations, mergers
or sales.

           
4.3      Notice of Adjustment. Whenever
the number of Shares or number or kind of securities or other property
purchasable upon the exercise of this Warrant or the Exercise Price is adjusted,
as herein provided, the Company shall give notice thereof to the Holder, which
notice shall state the number of Shares (and other securities or property)
purchasable upon the exercise of this Warrant and the Exercise Price of such
Shares (and other securities or property) after such adjustment, setting forth a
brief statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made. 

5.            
Miscellaneous Provisions. 

           
  5.1      Notices. Any notice or other document
  required or permitted to be given or delivered to the Holder shall be delivered
  or forwarded to the Holder at the address for Holder provide on the first page
  of this Warrant or to such other address or number as shall have been furnished
  to the Company in writing by the Holder. Any notice or other document required
  or permitted to be given or delivered to the Company shall be delivered or forwarded
  to the Company at Suite 5.15, 130 Shaftesbury Avenue, London, United Kingdom,
  W1D 5EU, Attention: Robert Burden or to such other address or number as shall
  have been furnished to Holder in writing by the Company. All notices, requests
  and approvals required by this Warrant shall be in writing and shall be conclusively
  deemed to be given (a) when hand-delivered to the other party, (b) when received
  if sent by facsimile at the address and number set forth above; provided that
  notices given by facsimile shall not be effective, unless either (i) a duplicate
  copy of such facsimile notice is promptly given by depositing the same in the
  mail, postage prepaid and addressed to the party as set forth below or (ii)
  the receiving party delivers a written confirmation of receipt for such notice
  by any other method permitted under this paragraph; and further provided that
  any notice given by facsimile received after 5:00 p.m. (recipient’s time)
  or on a non-business day shall be deemed received on the next business day;
  (c) five (5) business days after deposit in the United States mail, certified,
  return receipt requested, postage prepaid, and addressed to the party as set
  forth below; or (d) the next business day after deposit with an international
  overnight delivery service, postage prepaid, addressed to the party as set forth
  below with next business day delivery guaranteed; provided that the sending
  party receives confirmation of delivery from the delivery service provider.

           
  5.2      Limitation of Liability. No provision
  hereof, in the absence of affirmative action by the Holder to purchase shares
  of Common Stock, and no mere enumeration herein of the rights or privileges
  of the Holder, shall give rise to any liability of the Holder for the Exercise
  Price hereunder or as a stockholder of the Company, whether such liability is
  asserted by the Company or by creditors of the Company.

           
  5.3      No Rights as Stockholder. This Warrant
  shall not entitle the Holder to any of the rights of a stockholder of the Company
  except upon exercise in accordance with the terms hereof.

           
  5.4      Governing Law. This Warrant shall be
  governed by and construed in accordance with the laws of the State of Nevada
  as applied to agreements among Nevada residents made and to be performed entirely
  within the State of Nevada, without giving effect to the conflict of law principles
  thereof.

           
  5.5      Waiver, Amendments and Headings. This
  Warrant and any provision hereof may be changed, waived, discharged or terminated
  only by an instrument in writing signed by both parties (either 

- 17 - 

generally or in a particular instance and either retroactively
or prospectively). The headings in this Warrant are for purposes of reference
only and shall not affect the meaning or construction of any of the provisions
hereof.

IN WITNESS WHEREOF, the Company has caused this Warrant
to be signed by its duly authorized officer effective as of the _____ day of
_________, 2007.

	  	PLAYBOX (US) INC. 
	 	 
	  	Per: 
	Signature of Authorized Signatory: 	 
    
	 	 
	Name of Authorized Signatory: 	ROBERT
      BURDEN 
	 	 
	Position of Authorized Signatory: 	CEO
  

SCHEDULE A 

FORM OF NOTICE OF EXERCISE

TO:      PLAYBOX (US) INC. 

The undersigned hereby exercises the right to purchase the
number of shares of common stock of Playbox (US) Inc. (the "Company") set forth
below (the "Shares") pursuant to the Warrant to Purchase Common Stock issued by
the Company and dated [DATE OF ISSUANCE]. In accordance with the
provisions of the Warrant, the undersigned hereby tenders the following
concurrently with the delivery of this Notice of Exercise (i) payment of the
Exercise Price payable by the undersigned for the Shares (the “Purchase Price”)
in effect for each of the Shares being purchased, and (ii) the original Warrant.

	Number of Shares Purchased: 	Shares 
	 	 
	Aggregate Purchase Price: 	$ 

The undersigned represents and warrants to and agrees with the
Company that: 

	1. 	
      It has such knowledge and experience in financial and
      business matters as to be capable of evaluating the merits and risks of an
      investment in the Shares and it is able to bear the economic risk of loss
      of its entire investment.

	 	 
	2. 	
      The Company has provided to it the opportunity to ask
      questions and receive answers concerning the terms and conditions of the
      offering and it has had access to such information concerning the Company
      as it has considered necessary or appropriate in connection with its
      investment decision to acquire the Shares.

	 	 
	3. 	
      It is acquiring the Shares for its own account, for
      investment purposes only and not with a view to any resale, distribution
      or other disposition of the Shares in violation of the United States
      securities laws.

	 	 
	4. 	
      It understands the Shares have not been and will not be
      registered under the United States Securities Act of 1933, as amended (the
      "1933 Act") or the securities laws of any state of the United States and
      that the sale contemplated hereby is being made in reliance on a
      safe-harbour from such registration requirements.

	 	 
	5. 	
      The undersigned is not a “U.S. Person” as defined by
      Regulation S of the Securities Act and is not acquiring the Shares for the
      account or benefit of a U.S. Person.

A “U.S. Person” is defined by
Regulation S of the Act to be any person who is: 

	 	(h) 	
      any natural person resident in the United
      States;

	 	 	 
	 	(i) 	
      any partnership or corporation organized or
      incorporated under the laws of the United States;

	 	 	 
	 	(j) 	
      any estate of which any executor or administrator is a
      U.S. person;

- 2 - 

	 	(k) 	
      any trust of which any trustee is a U.S.
      person;

	 	 	 	 
	 	(l) 	
      any agency or branch of a foreign entity located in
      the United States;

	 	 	 	 
	 	(m) 	
      any non-discretionary account or similar account
      (other than an estate or trust) held by a dealer or other fiduciary
      organized, incorporate, or (if an individual) resident in the United
      States; and

	 	 	 	 
	 	(n) 	
      any partnership or corporation if:

	 	 	 	 
	 		(i) 	
      organized or incorporated under the laws of any
      foreign jurisdiction; and

	 	 	 	 
	 		(ii) 	
      formed by a U.S. person principally for the purpose of
      investing in securities not registered under the Act, unless it is
      organized or incorporated, and owned, by accredited Subscribers [as
      defined in Section 230.501(a) of the Act] who are not natural persons,
      estates or trusts.

	6. 	
      The undersigned was not in the United States at the time
      the offer to purchase the Shares was received and the Subscriber was not
      in the United States at the time these Warrants were exercised.

	 	 
	7. 	
      The undersigned acknowledges that the Shares are
      “restricted securities” within the meaning of the Securities Act and will
      be issued to the Subscriber in accordance with Regulation S of the
      Securities Act without registration under the Securities Act.

	 	 
	8. 	
      The undersigned agrees to resell the Shares only in
      accordance with the provisions of Regulation S of the Securities Act,
      pursuant to registration under the Securities Act, or pursuant to an
      available exemption from registration pursuant to the Securities
    Act.

	 	 
	9. 	
      The undersigned agrees not to engage in hedging
      transactions with regard to the Shares unless in compliance with the
      Securities Act.

	 	 
	10. 	
      The Subscriber acknowledges and agrees that all
      certificates representing the Shares will be endorsed with the following
      legend in accordance with Regulation S of the Securities
  Act:

“THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT"), AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE ACT. SUCH
SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO AN
EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY
NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.” 

- 3 - 

	11. 	
      The Subscriber and the Company agree that the Company
      will refuse to register any transfer of the Shares not made in accordance
      with the provisions of Regulation S of the Securities Act, pursuant to
      registration under the Securities Act, pursuant to an available exemption
      from registration, or pursuant to this
Agreement.

	Date of Execution: 	 
	 	 
	Signature of Purchaser or Authorized Signatory 	 
	of Purchaser (if the Purchaser is not an 	 
	individual): 	 
	 	 
	Name of Authorized Signatory of 	 
	Purchaser(if the Purchaser is not an individual): 	 
	 	 
	Title of Authorized Signatory of 	 
	Purchaser(if the Purchaser is not an individual): 	 
	 	 
	Name of Purchaser: 	 
	 	 
	Address of Purchaser:Filed by Automated Filing Services Inc. (604) 609-0244 - Global Energy, Inc. - Exhibit 10.1

SECURITIES PURCHASE AGREEMENT 

          THIS
SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of July
6, 2007, by and among GLOBAL ENERGY, INC., a Nevada corporation (the
“Company”), and the Buyers listed on Schedule I attached hereto
(individually, a “Buyer” or collectively “Buyers”). 

WITNESSETH

          WHEREAS,
the Company and the Buyer(s) are executing and delivering this Agreement in
reliance upon an exemption from securities registration pursuant to Section 4(2)
and/or Rule 506 of Regulation D (“Regulation D”) as promulgated by the
U.S. Securities and Exchange Commission (the “SEC”) under the Securities
Act of 1933, as amended (the “Securities Act”); 

          WHEREAS,
the parties desire that, upon the terms and subject to the conditions contained
herein, the Company shall issue and sell to the Buyer(s), as provided herein,
and the Buyer(s) shall purchase (i) up to Four Million Dollars ($4,000,000) of
secured convertible debentures in the form attached hereto as “Exhibit A”
(the “Convertible Debentures”), which shall be convertible into shares of
the Company’s common stock, par value $0.001 (the “Common Stock”) (as
converted, the “Conversion Shares”), and (ii) warrants substantially in
the form attached hereto as “Exhibit B” (the “Warrants”), to
acquire up to that number of additional shares of Common Stock set forth
opposite such Buyer’s name in column (5) of the Schedule I (as exercised, the
“Warrant Shares”) of which Five Hundred Thousand Dollars ($500,000) shall
be funded within three (3) business days following the date hereof, (the
“First Closing”), One Million Five Hundred Thousand Dollars ($1,500,000)
shall be funded within three (3) business day following the date the Buyer’s
consultant completes its independent due diligence report (the “Second
Closing”), One Million Dollars ($1,000,000) shall be funded on the date the
registration statement (the “Registration Statement”) is filed, pursuant
to the Registration Rights Agreement dated the date hereof, with the SEC (the
“Third Closing”), and One Million Dollars ($1,000,000) shall be funded
within three (3) business days after the date the Registration Statement is
declared effective by the SEC (the “Fourth Closing”) (individually
referred to as a “Closing” collectively referred to as the
“Closings”), for a total purchase price of up to Four Million Dollars
($4,000,000), (the “Purchase Price”) in the respective amounts set forth
opposite each Buyer(s) name on Schedule I (the “Subscription
Amount”);

          WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the parties
hereto are executing and delivering a Registration Rights Agreement (the
“Registration Rights Agreement”) pursuant to which the Company has
agreed to provide certain registration rights under the Securities Act and the
rules and regulations promulgated there under, and applicable state securities
laws;

          WHEREAS,
the Convertible Debentures are secured by a security interest in all of the
assets of the Company and all of its subsidiaries as evidenced by the security
agreement of even date herewith (the “Security Agreement”);

          WHEREAS,
within thirty (30) calendar days of the execution and delivery of this
Agreement, the parties hereto will execute and deliver Irrevocable Transfer
Agent Instructions (the “Irrevocable Transfer Agent Instructions”); and

          WHEREAS,
the Convertible Debentures, the Conversion Shares, the Warrants, and the
Warrants Shares collectively are referred to herein as the
“Securities”).

          NOW,
THEREFORE, in consideration of the mutual covenants and other agreements
contained in this Agreement the Company and the Buyer(s) hereby agree as
follows: 

                    1.     
PURCHASE AND SALE OF CONVERTIBLE DEBENTURES. 

                                   (a)     
Purchase of Convertible Debentures. Subject to the satisfaction (or
waiver) of the terms and conditions of this Agreement, each Buyer agrees,
severally and not jointly, to purchase at each Closing and the Company agrees to
sell and issue to each Buyer, severally and not jointly, at each Closing,
Convertible Debentures in amounts corresponding with the Subscription Amount set
forth opposite each Buyer’s name on Schedule I hereto and the Warrants to
acquire up that number of Warrant Shares as set forth opposite such Buyer’s name
in column (5) on Schedule I .

                                   (b)      Closing
Dates. The First Closing of the purchase and sale of the Convertible
Debentures and Warrants shall take place at 10:00 a.m. Eastern Standard Time on
the third (3rd) business day following the date hereof, subject to notification
of satisfaction of the conditions to the First Closing set forth herein and in
Sections 6 and 7 below (or such later date as is mutually agreed to by the
Company and the Buyer(s)) (the “First Closing Date”), the Second Closing
of the purchase and sale of the Convertible Debentures shall take place at 4:00
p.m. Eastern Standard Time within three (3) business days after the date the
Buyer’s consultant completes its independent due diligence report , subject to
notification of satisfaction of the conditions to the Second Closing set forth
herein and in Sections 6 and 7 below (or such later date as is mutually agreed
to by the Company and the Buyer(s)) (the “Second Closing Date”), the
Third Closing of the purchase and sale of the Convertible Debentures shall take
place at 4:00 p.m. Eastern Standard Time on the date the Registration Statement
is filed with the SEC, subject to notification of satisfaction of the conditions
to the Third Closing set forth herein and in Sections 6 and 7 below (or such
later date as is mutually agreed to by the Company and the Buyer(s)) (the
“Third Closing Date”), and the Fourth Closing of the purchase and sale of
the Convertible Debentures shall take place at 10:00 a.m. Eastern Standard Time
on the third (3rd) business day immediately following the date the Registration
Statement is declared effective by the SEC, subject to notification of
satisfaction of the conditions to the Fourth Closing set forth herein and in
Sections 6 and 7 below (or such earlier date as is mutually agreed to by the
Company and the Buyer(s)) (the “Fourth Closing Date”) (collectively
referred to as the “Closing Dates”). The Closings shall occur on
the respective Closing Dates at the offices of Yorkville Advisors, LLC, 3700
Hudson Street, Suite 3700, Jersey City, New Jersey 07302 (or such other place as
is mutually agreed to by the Company and the Buyer(s)).

                                   (c)     
Form of Payment. Subject to the satisfaction of the terms and conditions
of this Agreement, on each Closing Date, (i) the Buyers shall deliver to the
Company such aggregate proceeds for the Convertible Debentures and Warrants to
be issued and sold to 

such Buyer at such Closing, minus the fees to be paid directly
from the proceeds of such Closing as set forth herein, and (ii) the Company
shall deliver to each Buyer, Convertible Debentures and Warrants which such
Buyer is purchasing at such Closing in amounts indicated opposite such Buyer’s
name on Schedule I, duly executed on behalf of the Company. 

               2.     
BUYER’S REPRESENTATIONS AND WARRANTIES. 

          Each
Buyer represents and warrants, severally and not jointly, that: 

                              (a)      Investment
Purpose. Each Buyer is acquiring the Securities for its own account for
investment only and not with a view towards, or for resale in connection with,
the public sale or distribution thereof, except pursuant to sales registered or
exempted under the Securities Act; provided, however, that by making the
representations herein, such Buyer reserves the right to dispose of the
Securities at any time in accordance with or pursuant to an effective
registration statement covering such Securities or an available exemption under
the Securities Act. Such Buyer does not presently have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the
Securities.

                              (b)      Accredited
Investor Status. Each Buyer is an “Accredited Investor” as
that term is defined in Rule 501(a)(3) of Regulation D. 

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

                              (d)      Information.
Each Buyer and its advisors (and his or, its counsel), if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and information he deemed material to making an informed
investment decision regarding his purchase of the Securities, which have been
requested by such Buyer. Each Buyer and its advisors, if any, have been afforded
the opportunity to ask questions of the Company and its management. Neither such
inquiries nor any other due diligence investigations conducted by such Buyer or
its advisors, if any, or its representatives shall modify, amend or affect such
Buyer’s right to rely on the Company’s representations and warranties contained
in Section 3 below. Each Buyer understands that its investment in the Securities
involves a high degree of risk. Each Buyer is in a position regarding the
Company, which, based upon employment, family relationship or economic
bargaining power, enabled and enables such Buyer to obtain information from the
Company in order to evaluate the merits and risks of this investment. Each Buyer
has sought such accounting, legal and tax advice, as it has considered necessary
to make an informed investment decision with respect to its acquisition of the
Securities. 

                              (e)     
No Governmental Review. Each Buyer understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities, or the
fairness or suitability of the 

investment in the Securities, nor have such authorities passed
upon or endorsed the merits of the offering of the Securities. 

                              (f)      Transfer
or Resale. Each Buyer understands that except as provided in the
Registration Rights Agreement: (i) the Securities have not been and are not
being registered under the Securities Act or any state securities laws, and may
not be offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) such Buyer shall have delivered to the Company an
opinion of counsel, in a generally acceptable form, to the effect that such
Securities to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration requirements, or (C)
such Buyer provides the Company with reasonable assurances (in the form of
seller and broker representation letters) that such Securities can be sold,
assigned or transferred pursuant to Rule 144, Rule 144(k), or Rule 144A
promulgated under the Securities Act, as amended (or a successor rule thereto)
(collectively, “Rule 144”), in each case following the applicable holding
period set forth therein; (ii) any sale of the Securities made in reliance on
Rule 144 may be made only in accordance with the terms of Rule 144 and further,
if Rule 144 is not applicable, any resale of the Securities under circumstances
in which the seller (or the person through whom the sale is made) may be deemed
to be an underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register the Securities under the Securities
Act or any state securities laws or to comply with the terms and conditions of
any exemption thereunder.

                              (g)     
Legends. Each Buyer agrees to the imprinting, so long as is required by
this Section 2(g), of a restrictive legend in substantially the following form:

  
    
      
        THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
          NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
          APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED
          SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND
          MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE
          OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
          SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS,
          OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION
          IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.

      

    

  

Certificates evidencing the Conversion Shares or Warrant Shares
shall not contain any legend (including the legend set forth above), (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 Conversion Shares or Warrant Shares pursuant to Rule 144, (iii)
if such Conversion Shares or Warrant Shares are eligible for sale under Rule
144(k), 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
SEC). The Company shall cause its counsel to issue a legal opinion to the
Company’s transfer agent promptly after the effective date (the “Effective
Date”) of a Registration Statement if required by the Company’s transfer
agent to effect the removal of the legend hereunder. If all or any portion of
the Convertible Debentures or Warrants are exercised by a Buyer that is not an
Affiliate of the Company (a “Non-Affiliated Buyer”) at a time when there
is an effective registration statement to cover the resale of the Conversion
Shares or the Warrant Shares, such Conversion Shares or Warrant 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 2(g), it
will, no later than three (3) Trading Days following the delivery by a
Non-Affiliated Buyer to the Company or the Company’s transfer agent of a
certificate representing Conversion Shares or Warrant Shares, as the case may
be, issued with a restrictive legend (such third Trading Day, the “Legend
Removal Date”), deliver or cause to be delivered to such
Non-Affiliated Buyer 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 any transfer agent of the Company that enlarge
the restrictions on transfer set forth in this Section. Each Buyer acknowledges
that the Company’s agreement hereunder to remove all legends from Conversion
Shares or Warrant Shares is not an affirmative statement or representation that
such Conversion Shares or Warrant Shares are freely tradable. Each Buyer,
severally and not jointly with the other Buyers, agrees that the removal of the
restrictive legend from certificates representing Securities as set forth in
this Section 3(g) is predicated upon the Company’s reliance that the buyer 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. 

                              (h)     
Authorization, Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of such Buyer and is a valid and
binding agreement of such Buyer enforceable in accordance with its terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies. 

                              (i)      Receipt
of Documents. Each Buyer and his or its counsel has received and read in
their entirety: (i) this Agreement and each representation, warranty and
covenant set forth herein and the Transaction Documents (as defined herein);
(ii) all due diligence and other information necessary to verify the accuracy
and completeness of such representations, warranties and covenants; (iii) the
Company’s Form 10-KSB for the fiscal year ended December 31, 2006; (iv) the
Company’s Form 10-QSB for the fiscal quarter ended March 31, 2007 and (v)
answers to all questions each Buyer submitted to the Company regarding an
investment in the Company; and each Buyer has relied on the information
contained therein and has not been furnished any other documents, literature,
memorandum or prospectus. 

                              (j)     
Due Formation of Corporate and Other Buyers. If the Buyer(s) is a
corporation, trust, partnership or other entity that is not an individual
person, it has been formed and validly exists and has not been organized for the
specific purpose of purchasing the Securities and is not prohibited from doing
so. 

                              (k)      No
Legal Advice From the Company. Each Buyer acknowledges, that it had the
opportunity to review this Agreement and the transactions contemplated by this
Agreement with his or its own legal counsel and investment and tax advisors.
Each Buyer is relying solely on such counsel and advisors and not on any
statements or representations of the Company or any of its representatives or
agents for legal, tax or investment advice with respect to this investment, the
transactions contemplated by this Agreement or the securities laws of any
jurisdiction.

               3.      REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. 

          Except
as set forth under the corresponding section of the Disclosure Schedules which
Disclosure Schedules shall be deemed a part hereof and to qualify any
representation or warranty otherwise made herein to the extent of such
disclosure, the Company hereby makes the representations and warranties set
forth below to each Buyer:

                              (a)      Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on
Schedule 3(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 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 its subsidiaries are corporations duly
organized and validly existing in good standing under the laws of the
jurisdiction in which they are incorporated, and have the requisite corporate
power to own their properties and to carry on their business as now being
conducted. Each of the Company and its subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not have 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.. 

                              (c)     
Authorization, Enforcement, Compliance with Other Instruments. (i) The
Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement, the Convertible Debentures, the
Warrants, the Security Agreement, the Registration Rights Agreement, the
Irrevocable Transfer Agent Instructions, and each of the other agreements
entered into by the parties hereto in connection with the transactions
contemplated by this Agreement (collectively the “Transaction Documents”)
and to issue the Securities in accordance with the terms hereof and thereof,
(ii) the execution and delivery of the Transaction Documents by the Company and
the consummation by it of the transactions contemplated hereby and thereby,
including, without limitation, the issuance of the 

Securities, the reservation for issuance and the issuance of
the Conversion Shares, and the reservation for issuance and the issuance of the
Warrant Shares, have been duly authorized by the Company’s Board of Directors
and no further consent or authorization is required by the Company, its Board of
Directors or its stockholders, (iii) the Transaction Documents have been duly
executed and delivered by the Company, (iv) the Transaction Documents constitute
the valid and binding obligations of the Company enforceable against the Company
in accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors’ rights and remedies. The
authorized officer of the Company executing the Transaction Documents knows of
no reason why the Company cannot file the Registration Statement as required
under the Registration Rights Agreement or perform any of the Company’s other
obligations under the Transaction Documents.

                              (d)     
Capitalization. The authorized capital stock of the Company consists of
250,000,000 shares of Common Stock of which as of May 25, 2007 63,187,764 shares
of Common Stock were issued and outstanding. 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. Except as disclosed
in Schedule 3(d): (i) none of the Company's capital stock is subject to
preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company; (ii) there are no outstanding options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable
or exchangeable for, any capital stock of the Company or any of its
subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its subsidiaries is or may become bound to issue
additional capital stock of the Company or any of its subsidiaries or options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable
or exchangeable for, any capital stock of the Company or any of its
subsidiaries; (iii) there are no outstanding debt securities, notes, credit
agreements, credit facilities or other agreements, documents or instruments
evidencing indebtedness of the Company or any of its subsidiaries or by which
the Company or any of its subsidiaries is or may become bound; (iv) there are no
financing statements securing obligations in any material amounts, either singly
or in the aggregate, filed in connection with the Company or any of its
subsidiaries; (v) there are no outstanding securities or instruments of the
Company or any of its subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its subsidiaries is or may become
bound to redeem a security of the Company or any of its subsidiaries; (vi) there
are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by the issuance of the Securities; (vii) the Company does
not have any stock appreciation rights or "phantom stock" plans or agreements or
any similar plan or agreement; and (viii) the Company and its subsidiaries have
no liabilities or obligations required to be disclosed in the SEC Documents but
not so disclosed in the SEC Documents, other than those incurred in the ordinary
course of the Company's or its subsidiaries' respective businesses and which,
individually or in the aggregate, do not or would not have a Material Adverse
Effect. The Company has furnished to the Buyers true, correct and complete
copies of the Company's Certificate of Incorporation, as amended and 

as in effect on the date hereof (the “Certificate of
Incorporation”), and the Company's Bylaws, as amended and as in effect on
the date hereof (the “Bylaws”), and the terms of all securities
convertible into, or exercisable or exchangeable for, shares of Common Stock and
the material rights of the holders thereof in respect thereto. 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.

                              (e)     
Issuance of Securities. The issuance of the Convertible Debentures and
the Warrants is duly authorized and free from all taxes, liens and charges with
respect to the issue thereof. Upon conversion in accordance with the terms of
the Convertible Debentures or exercise in accordance with the Warrants, as the
case may be, the Conversion Shares and Warrant Shares, respectively, when issued
will be validly issued, fully paid and nonassessable, free from all taxes, liens
and charges with respect to the issue thereof. The Company has reserved from its
duly authorized capital stock the appropriate number of shares of Common Stock
as set forth in this Agreement.

                              (f)      No
Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance of
the Convertible Debentures and the Warrants, and reservation for issuance and
issuance of the Conversion Shares and the Warrant Shares) will not (i) result in
a violation of any certificate of incorporation, certificate of formation, any
certificate of designations or other constituent documents of the Company or any
of its subsidiaries, any capital stock of the Company or any of its subsidiaries
or bylaws of the Company or any of its subsidiaries or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) in any respect under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its subsidiaries is a
party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including foreign, federal and state securities laws and
regulations and the rules and regulations of the National Association of
Securities Dealers Inc.’s OTC Bulletin Board) applicable to the Company or any
of its subsidiaries or by which any property or asset of the Company or any of
its subsidiaries is bound or affected; except in the case of each of clauses
(ii) and (iii), such as could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect. The business of
the Company and its subsidiaries is not being conducted, and shall not be
conducted in violation of any material law, ordinance, or regulation of any
governmental entity. Except as specifically contemplated by this Agreement and
as required under the Securities Act and any applicable state securities laws,
the Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court or governmental agency in order
for it to execute, deliver or perform any of its obligations under or
contemplated by this Agreement or the Registration Rights Agreement in
accordance with the terms hereof or thereof. All consents, authorizations,
orders, filings and registrations which the Company is required to obtain
pursuant to the preceding sentence have been obtained or effected on or prior to
the date hereof. The Company and its subsidiaries are unaware of any facts or
circumstance, which might give rise to any of the foregoing. 

                              (g)     
SEC Documents; Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), 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) (all of
the foregoing filed prior to the date hereof or amended after the date hereof
and all exhibits included therein and financial statements and schedules thereto
and documents incorporated by reference therein, being hereinafter referred to
as the “SEC Documents”) on timely basis or has received a valid extension
of such time of filing and has filed any such SEC Document prior to the
expiration of any such extension. The Company has delivered to the Buyers or
their representatives, or made available through the SEC’s website at
http://www.sec.gov., true and complete copies of the SEC Documents. As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. As of
their respective dates, the financial statements of the Company included in the
SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance with
generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to the Buyers which is not
included in the SEC Documents, including, without limitation, information
referred to in Section 2(i) of this Agreement, contains any untrue statement of
a material fact or omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstance under which they are or
were made and not misleading.

                              (h)      10(b)-5.
The SEC Documents do not include any untrue statements of material fact, nor do
they omit to state any material fact required to be stated therein necessary to
make the statements made, in light of the circumstances under which they were
made, not misleading. 

                              (i)     
Absence of Litigation. There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending against or affecting the Company,
the Common Stock or any of the Company’s subsidiaries, wherein an unfavorable
decision, ruling or finding would (i) have a Material Adverse Effect. 

                              (j)     
Acknowledgment Regarding Buyer’s Purchase of the Convertible
Debentures. The Company acknowledges and agrees that each Buyer is acting
solely in the capacity of an arm’s length purchaser with respect to this
Agreement and the transactions contemplated hereby. The Company further
acknowledges that each Buyer is not acting as a 

financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to this Agreement and the transactions
contemplated hereby and any advice given by each Buyer or any of their
respective representatives or agents in connection with this Agreement and the
transactions contemplated hereby is merely incidental to such Buyer’s purchase
of the Securities. The Company further represents to each Buyer that the
Company’s decision to enter into this Agreement has been based solely on the
independent evaluation by the Company and its representatives. 

                              (k)      No
General Solicitation. Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D under
the Securities Act) in connection with the offer or sale of the Securities. 

                              (l)      No
Integrated Offering. Neither the Company, nor any of its affiliates, nor any
person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security,
under circumstances that would require registration of the Securities under the
Securities Act or cause this offering of the Securities to be integrated with
prior offerings by the Company for purposes of the Securities Act. 

                              (m)     
Employee Relations. Neither the Company nor any of its subsidiaries is
involved in any labor dispute or, to the knowledge of the Company or any of its
subsidiaries, is any such dispute threatened. None of the Company’s or its
subsidiaries’ employees is a member of a union and the Company and its
subsidiaries believe that their relations with their employees are good. 

                              (n)      Intellectual
Property Rights. The Company and its subsidiaries own or possess adequate
rights or licenses to use all trademarks, trade names, service marks, service
mark registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and
rights necessary to conduct their respective businesses as now conducted. The
Company and its subsidiaries do not have any knowledge of any infringement by
the Company or its subsidiaries of trademark, trade name rights, patents, patent
rights, copyrights, inventions, licenses, service names, service marks, service
mark registrations, trade secret or other similar rights of others, and, to the
knowledge of the Company there is no claim, action or proceeding being made or
brought against, or to the Company’s knowledge, being threatened against, the
Company or its subsidiaries regarding trademark, trade name, patents, patent
rights, invention, copyright, license, service names, service marks, service
mark registrations, trade secret or other infringement; and the Company and its
subsidiaries are unaware of any facts or circumstances which might give rise to
any of the foregoing. 

                              (o)     
Environmental Laws. The Company and its subsidiaries are (i) in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (ii) except as disclosed in Schedule
3(o), have received all permits, licenses or other approvals required of 

them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval. 

                              (p)     
Title. All real property and facilities held under lease by the Company
and its subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by the Company
and its subsidiaries. 

                              (q)     
Insurance. Except as disclosed in Schedule 3(q), the Company and each of
its subsidiaries is insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as management of the Company
believes to be prudent and customary in the businesses in which the Company and
its subsidiaries are engaged. Neither the Company nor any such subsidiary has
been refused any insurance coverage sought or applied for and neither the
Company nor any such subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely affect
the condition, financial or otherwise, or the earnings, business or operations
of the Company and its subsidiaries, taken as a whole. 

                              (r)     
Regulatory Permits. Except as disclosed in Schedule 3(r), the Company and
its subsidiaries possess all material certificates, authorizations and permits
issued by the appropriate federal, state or foreign regulatory authorities
necessary to conduct their respective businesses, and neither the Company nor
any such subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit.

                              (s)      Internal
Accounting Controls. The Company and each of its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability, and (iii)
the recorded amounts for assets are compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. 

                              (t)     
No Material Adverse Breaches, etc. Neither the Company nor any of its
subsidiaries is subject to any charter, corporate or other legal restriction, or
any judgment, decree, order, rule or regulation which in the judgment of the
Company’s officers has or is expected in the future to have a Material Adverse
Effect on the business, properties, operations, financial condition, results of
operations or prospects of the Company or its subsidiaries. Neither the Company
nor any of its subsidiaries is in breach of any contract or agreement which
breach, in the judgment of the Company’s officers, has or is expected to have a
Material Adverse Effect on the business, properties, operations, financial
condition, results of operations or prospects of the Company or its
subsidiaries. 

                              (u)     
Tax Status. The Company and each of its subsidiaries has made and filed
all federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject and (unless and only to the
extent that the Company and 

each of its subsidiaries has set aside on its books provisions
reasonably adequate for the payment of all unpaid and unreported taxes) has paid
all taxes and other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and has set aside on its books
provision reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know of no basis
for any such claim. 

                              (v)      Certain
Transactions. Except for arm’s length transactions pursuant to which the
Company makes payments in the ordinary course of business upon terms no less
favorable than the Company could obtain from third parties and other than the
grant of stock options disclosed in the SEC Documents, none of the officers,
directors, or employees of the Company is presently a party to any transaction
with the Company (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 corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner. 

                              (w)      Fees
and Rights of First Refusal. The Company is not obligated to offer the
securities offered hereunder on a right of first refusal basis or otherwise to
any third parties including, but not limited to, current or former shareholders
of the Company, underwriters, brokers, agents or other third parties. 

                              (x)     
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. 

                              (y)      Registration
Rights. Other than each of the Buyers, no Person has any right to cause the
Company to effect the registration under the Securities Act of any securities of
the Company. There are no outstanding registration statements not yet declared
effective and there are no outstanding comment letters from the SEC or any other
regulatory agency. 

                              (z)     
Private Placement. Assuming the accuracy of the Buyers’ representations
and warranties set forth in Section 2, no registration under the Securities Act
is required for the offer and sale of the Securities by the Company to the
Buyers as contemplated hereby. The issuance and sale of the Securities hereunder
does not contravene the rules and regulations of the Primary Market. 

                              (aa)     
Listing and Maintenance Requirements. The Company’s Common Stock is
registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to terminate, or which to its knowledge is
likely to have the effect of, 

terminating the registration of the Common Stock under the
Exchange Act nor has the Company received any notification that the SEC is
contemplating terminating such registration. The Company has not, in the twelve
(12) months preceding the date hereof, received notice from any Primary 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 Primary Market. 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. 

                              (bb)     
Manipulation of Price. The Company has not, and to its knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities, (ii) 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. 

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

               4.      COVENANTS.

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

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

                              (c)      Reporting
Status. Until the earlier of (i) the date as of which the Buyer(s) may sell
all of the Securities without restriction pursuant to Rule 144(k) promulgated
under the Securities Act (or successor thereto), or (ii) the date on which (A)
the Buyers shall have sold all the Securities and (B) none of the Convertible
Debentures or Warrants are outstanding (the “Registration Period”), the
Company shall file in a timely manner all reports required to be filed with the
SEC pursuant to the Exchange Act and the regulations of the SEC thereunder, and
the Company shall not terminate its status as an issuer required to file reports

under the Exchange Act even if the Exchange Act or the rules
and regulations thereunder would otherwise permit such termination. 

                              (d)     
Use of Proceeds. The Company will use the proceeds from the sale of the
Convertible Debentures for general corporate and working capital purposes. 

                              (e)      Reservation
of Shares. On the date hereof, the Company shall reserve for issuance to the
Buyers at least 6,600,000 shares for issuance upon conversions of the
Convertible Dentures and exercise of the Warrants (the “Share Reserve”).
The Company represents that it has sufficient authorized and unissued shares of
Common Stock available to create the Share Reserve after considering all other
commitments that may require the issuance of Common Stock. The Company shall
take all action reasonably necessary to at all times have authorized, and
reserved for the purpose of issuance, such number of shares of Common Stock as
shall be necessary to effect the full conversion of the Convertible Debentures
and the full exercise of the Warrants. If at any time the Share Reserve is
insufficient to effect the full conversion of the Convertible Debentures or the
full exercise of the Warrants, the Company shall increase the Share Reserve
accordingly. If the Company does not have sufficient authorized and unissued
shares of Common Stock available to increase the Share Reserve, the Company
shall call and hold a special meeting of the shareholders within thirty (30)
days of such occurrence, for the sole purpose of increasing the number of shares
authorized. The Company’s management shall recommend to the shareholders to vote
in favor of increasing the number of shares of Common Stock authorized.
Management shall also vote all of its shares in favor of increasing the number
of authorized shares of Common Stock. 

                              (f)     
Listings or Quotation. The Company’s Common Stock shall be listed or
quoted for trading on any of (a) the American Stock Exchange, (b) New York Stock
Exchange, (c) the Nasdaq Global Market, (d) the Nasdaq Capital Market, or (e)
the Nasdaq OTC Bulletin Board (“OTCBB”) (each, a “Primary
Market”). The Company shall promptly secure the listing of all of the
Registrable Securities (as defined in the Registration Rights Agreement) upon
each national securities exchange and automated quotation system, if any, upon
which the Common Stock is then listed (subject to official notice of issuance)
and shall maintain such listing of all Registrable Securities from time to time
issuable under the terms of the Transaction Documents.

                              (g)      Fees
and Expenses. Each of the Company and the Buyer(s) shall pay all costs and
expenses incurred by such party in connection with the negotiation,
investigation, preparation, execution and delivery of the Transaction Documents.
The Company shall pay Yorkville Advisors, LLC a fee equal to seven percent (7%)
of the Purchase Price which shall be paid pro rata directly from the gross
proceeds of each Closing.

Furthermore the Company shall pay to Yorkville Advisors, LLC a
structuring fee of Twenty Thousand Dollars ($20,000) directly from the gross
proceeds of the First Closing. 

                              (h)      Corporate
Existence. So long as any of the Convertible Debentures remain outstanding,
the Company shall not directly or indirectly consummate any merger,
reorganization, restructuring, reverse stock split consolidation, sale of all or
substantially all of the Company’s assets or any similar transaction or related
transactions (each such 

transaction, an “Organizational Change”) unless, prior
to the consummation an Organizational Change, the Company obtains the written
consent of each Buyer. In any such case, the Company will make appropriate
provision with respect to such holders’ rights and interests to insure that the
provisions of this Section 4(h) will thereafter be applicable to the Convertible
Debentures. 

                              (i)      Transactions
With Affiliates. So long as any Convertible Debentures are outstanding, the
Company shall not, and shall cause each of its subsidiaries not to, enter into,
amend, modify or supplement, or permit any subsidiary to enter into, amend,
modify or supplement any agreement, transaction, commitment, or arrangement with
any of its or any subsidiary’s officers, directors, person who were officers or
directors at any time during the previous two (2) years, stockholders who
beneficially own five percent (5%) or more of the Common Stock, or Affiliates
(as defined below) or with any individual related by blood, marriage, or
adoption to any such individual or with any entity in which any such entity or
individual owns a five percent (5%) or more beneficial interest (each a
“Related Party”), except for (a) customary employment arrangements and
benefit programs on reasonable terms, (b) any investment in an Affiliate of the
Company, (c) any agreement, transaction, commitment, or arrangement on an
arms-length basis on terms no less favorable than terms which would have been
obtainable from a person other than such Related Party, (d) any agreement,
transaction, commitment, or arrangement which is approved by a majority of the
disinterested directors of the Company; for purposes hereof, any director who is
also an officer of the Company or any subsidiary of the Company shall not be a
disinterested director with respect to any such agreement, transaction,
commitment, or arrangement. “Affiliate” for purposes hereof means, with
respect to any person or entity, another person or entity that, directly or
indirectly, (i) has a ten percent (10%) or more equity interest in that person
or entity, (ii) has ten percent (10%) or more common ownership with that person
or entity, (iii) controls that person or entity, or (iv) shares common control
with that person or entity. “Control” or “controls” for purposes
hereof means that a person or entity has the power, direct or indirect, to
conduct or govern the policies of another person or entity. 

                              (j)      Transfer
Agent. The Company covenants and agrees that, in the event that the
Company’s agency relationship with the transfer agent should be terminated for
any reason prior to a date which is two (2) years after the Closing Date, the
Company shall immediately appoint a new transfer agent and shall require that
the new transfer agent execute and agree to be bound by the terms of the
Irrevocable Transfer Agent Instructions (as defined herein). 

                              (k)     
Subsequent Offerings.

                                             (i)     
Except as permitted pursuant to Section 4(k)(iii), without the written consent
of the Buyer so long as any portion of the Convertible Debentures are
outstanding the Company shall not (a) grant, issue or sell any Common Stock or
other equity securities, any securities convertible into or exchangeable for any
Common Stock or other equity securities or take any other action that may result
in the issuance of any of the foregoing, other than to issue options or similar
rights to purchase Common Stock granted pursuant to compensation, benefit,
severance or similar plans or employment agreements of the Company as in effect
on the date of this Agreement, or (b) file any registration statement on Form
S-8. 

                                             (ii)      Except
as permitted pursuant to Section 4(k)(iii), without the written consent of the
Buyer so long as any portion of the Convertible Debentures are outstanding the
Company shall not consummate any merger, reorganization, restructuring, reverse
stock split consolidation, sale of all or substantially all of the Company’s
assets or any similar transaction or related transactions, or take any other
action that may result in any of the foregoing, except that any wholly-owned
subsidiary of the Company may merge with the Company, provided that the Company
shall be the continuing or surviving entity.

                                             (iii)     
Notwithstanding the restrictions set forth in Section 4(k)(i) and Section
4(k)(ii) above, the Company may issue securities of the Company provided that
(a) any such issuance is for consideration per share not less than ninety
percent (90%) of the bid price of the Common Stock determined immediately prior
to its issuance and (b) the Company has provided Buyer with at least 10 days
prior written notice of such issuance. 

                              (l)      Neither
the Buyer(s) nor any of its affiliates have an open short position in the Common
Stock of the Company, and the Buyer(s) agrees that it shall not, and that it
will cause its affiliates not to, engage in any short sales of or hedging
transactions with respect to the Common Stock as long as any Convertible
Debentures shall remain outstanding.

                              (m)      Rights
of First Refusal. For a period of 18 months from the date hereof, if the
Company intends to raise additional capital by the issuance or sale of capital
stock of the Company, including without limitation shares of any class of common
stock, any class of preferred stock, options, warrants or any other securities
convertible or exercisable into shares of common stock (whether the offering is
conducted by the Company, underwriter, placement agent or any third party) the
Company shall be obligated to offer to the Buyers such issuance or sale of
capital stock, by providing in writing the principal amount of capital it
intends to raise and outline of the material terms of such capital raise, prior
to the offering such issuance or sale of capital stock to any third parties
including, but not limited to, current or former officers or directors, current
or former shareholders and/or investors of the obligor, underwriters, brokers,
agents or other third parties. The Buyers shall have five (5) business days from
receipt of such notice of the sale or issuance of capital stock to accept or
reject all or a portion of such capital raising offer.

                              (n)      Lock
Up Agreements. On the date hereof, the Company shall obtain from each
officer and director a lock up agreement in the form attached hereto as
Exhibit C. 

                              (o)      Additional
Registration Statements. Until the effective date of the initial
Registration Statement, the Company will not file a registration statement under
the Securities Act relating to securities that are not the Securities. 

                              (p)      Review
of Public Disclosures. All SEC filings (including, without limitation, all
filings required under the Exchange Act, which include Forms 10-Q and 10-QSB,
10-K and 10K-SB, 8-K, etc) and other public disclosures made by the Company,
including, without limitation, all press releases, investor relations materials,
and scripts of analysts meetings and calls, shall be reviewed and approved for
release by the Company’s attorneys and, if containing financial information, the
Company’s independent certified public accountants. 

                              (q)      Disclosure
of Transaction. Within four Business Day following the date of this
Agreement, the Company shall file a Current Report on Form 8-K describing the
terms of the transactions contemplated by the Transaction Documents in the form
required by the Exchange Act and attaching the material Transaction Documents
(including, without limitation, this Agreement, the form of the Convertible
Debenture, the form of Warrant and the form of the Registration Rights
Agreement) as exhibits to such filing. 

                              (r)     
Due Diligence Report. The Company agrees and acknowledges that the Buyer
shall retain a consultant (the “Consultant”) to prepare a due diligence
report (the “Report”) concerning the technical and economic feasibility
of the Company’s diesel production plans. The Company shall provide the
Consultant with reasonable access to its officers as well as use its best
efforts to provide the Consultant with reasonable access to Dr, Christopher Koch
and at least one working diesel production facility. The Company further agrees
that it shall reimburse the Buyer its actual costs incurred to the Consultant in
connection with the Report in an amount not to exceed $30,000, which shall be
withheld from the gross proceeds of the Second Closing. In the event that the
Second Closing does not occur, the Buyer shall bear these costs and the Company
shall not be liable to reimburse the Buyer. The Buyer expects that the Report
will be completed within 14 days of the date hereof a copy of which shall be
provided to the Company.

                              (s)      Transfer
Agent. Within thirty (30) calendar days from the date hereof the Company
shall engage Worldwide Stock Transfer LLC as the Company’s transfer agent and
deliver fully executed Irrevocable Transfer Agent Instructions in form
acceptable to the Buyer. 

               5.      TRANSFER
AGENT INSTRUCTIONS. 

                              (a)      The
Company shall issue the Irrevocable Transfer Agent Instructions to its transfer
agent, and any subsequent transfer agent, irrevocably appointing David Gonzalez,
Esq. as the Company’s agent for purpose instructing its transfer agent to issue
certificates or credit shares to the applicable balance accounts at The
Depository Trust Company (“DTC”), registered in the name of each Buyer or
its respective nominee(s), for the Conversion Shares and the Warrant Shares
issued upon conversion of the Convertible Debentures or exercise of the Warrants
as specified from time to time by each Buyer to the Company upon conversion of
the Convertible Debentures or exercise of the Warrants. The Company shall not
change its transfer agent without the express written consent of the Buyers,
which may be withheld by the Buyers in their sole discretion. The Company
warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5, and stop transfer instructions to
give effect to Section 2(g) hereof (in the case of the Conversion Shares or
Warrant Shares prior to registration of such shares under the Securities Act)
will be given by the Company to its transfer agent, and that the Securities
shall otherwise be freely transferable on the books and records of the Company
as and to the extent provided in this Agreement and the other Transaction
Documents. If a Buyer effects a sale, assignment or transfer of the Securities
in accordance with Section 2(f), the Company shall promptly instruct its
transfer agent to issue one or more certificates or credit shares to the
applicable balance accounts at DTC in such name and in such denominations as
specified by such Buyer to effect such sale, transfer or assignment and, with
respect to any transfer, shall permit the transfer. In the event that such sale,
assignment or 

transfer involves Conversion Shares or Warrant Shares sold,
assigned or transferred pursuant to an effective registration statement or
pursuant to Rule 144, the transfer agent shall issue such Securities to the
Buyer, assignee or transferee, as the case may be, without any restrictive
legend. Nothing in this Section 5 shall affect in any way the Buyer’s
obligations and agreement to comply with all applicable securities laws upon
resale of Conversion Shares. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Buyer by vitiating the
intent and purpose of the transaction contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Section 5 will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Section 5, that the
Buyer(s) shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other
security being required. 

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

          The
obligation of the Company hereunder to issue and sell the Convertible Debentures
to the Buyer(s) at the Closings is subject to the satisfaction, at or before the
Closing Dates, of each of the following conditions, provided that these
conditions are for the Company’s sole benefit and may be waived by the Company
at any time in its sole discretion: 

                              (a)      Each
Buyer shall have executed the Transaction Documents and delivered them to the
Company. 

                              (b)      The
Buyer(s) shall have delivered to the Company the Purchase Price for the
Convertible Debentures and Warrants in the respective amounts as set forth next
to each Buyer as set forth on Schedule I attached hereto, minus any fees to be
paid directly from the proceeds the Closings as set forth herein, by wire
transfer of immediately available U.S. funds pursuant to the wire instructions
provided by the Company. 

                              (c)      The
representations and warranties of the Buyer(s) shall be true and correct in all
material respects as of the date when made and as of the Closing Dates as though
made at that time (except for representations and warranties that speak as of a
specific date), and the Buyer(s) shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by the Buyer(s) at or
prior to the Closing Dates.

               7.      CONDITIONS
TO THE BUYER’S OBLIGATION TO PURCHASE. 

                              (a)     
The obligation of the Buyer(s) hereunder to purchase the Convertible Debentures
at the First Closing is subject to the satisfaction, at or before the First
Closing Date, of each of the following conditions: 

                                             (i)      The
Company shall have executed the Transaction Documents and delivered the same to
the Buyers. 

                                             (ii)     
The Common Stock shall be authorized for quotation or trading on the Primary
Market, trading in the Common Stock shall not have been suspended for 

any reason, and all the Conversion Shares issuable upon the
conversion of the Convertible Debentures shall be approved for listing or
trading on the Primary Market.

                                             (iii)      The
representations and warranties of the Company shall be true and correct in all
material respects (except to the extent that any of such representations and
warranties is already qualified as to materiality in Section 3 above, in which
case, such representations and warranties shall be true and correct without
further qualification) as of the date when made and as of the First Closing Date
as though made at that time (except for representations and warranties that
speak as of a specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Company at or prior to the First Closing Date 

                                             (iv)      The
Company shall have executed and delivered to the Buyer(s) the Convertible
Debentures and Warrants in the respective amounts set forth opposite each
Buyer’s name on Schedule I attached hereto. 

                                             (v)     
The Buyers shall have received an opinion of counsel from counsel to the Company
in a form satisfactory to the Buyers. 

                                             (vi)      The
Company shall have provided to the Buyers a true copy of a certificate of good
standing evidencing the formation and good standing of the Company from the
secretary of state (or comparable office) from the jurisdiction in which the
Company is incorporated, as of a date within 10 days of the First Closing Date.

                                             (vii)     
The Company shall have delivered to the Buyers a certificate, executed by the
Secretary of the Company and dated as of the First Closing Date, as to (i) the
resolutions consistent with Section 3(c) as adopted by the Company's Board of
Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate of
Incorporation and (iii) the Bylaws, each as in effect at the First Closing. 

                                             (viii)      The
Company or the Buyer shall have filed a form UCC-1, or such other forms as may
be required to perfect the Buyer’s interest in the Pledged Property as detailed
in the Security Agreement dated the date hereof and provided proof of such
filing to the Buyer including all filings required to perfect the Buyer’s
security interest in Israel as well as execute the Asset Pledge Agreement as
required under Israeli law in order to perfect such security interest. 

                                             (ix)     
The Company shall have provided to the Buyer an acknowledgement, to the
satisfaction of the Buyer, from the Company’s independent certified public
accountants as to its ability to provide all consents required in order to file
a registration statement in connection with this transaction. 

                                             (x)      The
Company shall have created the Share Reserve.

                              (b)      The
obligation of the Buyer(s) hereunder to accept the Convertible Debentures at the
Second Closing is subject to the satisfaction, at or before the Second Closing
Date, of each of the following conditions: 

                                             (i)     
The Common Stock shall be authorized for quotation or trading on the Primary
Market, trading in the Common Stock shall not have been suspended for any
reason, and all the Conversion Shares issuable upon the conversion of the
Convertible Debentures shall be approved for listing or trading on the Primary
Market.

                                             (ii)      All
conditions to the prior Closings shall have been satisfied.

                                             (iii)      The
representations and warranties of the Company shall be true and correct in all
material respects (except to the extent that any of such representations and
warranties is already qualified as to materiality in Section 3 above, in which
case, such representations and warranties shall be true and correct without
further qualification) as of the date when made and as of the Second Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Company at or prior to the Second Closing Date.

                                             (iv)      The
Company shall have executed and delivered to the Buyers the Convertible
Debentures in the respective amounts set forth opposite each Buyers name on
Schedule I attached hereto. 

                                             (v)      The
Report of the Consultant shall have concluded that the Company’s diesel
production plans are economically and technically feasible. The Buyer shall have
the sole discretion in determining whether this condition has been satisfied and
shall be under no obligation to purchase the Convertible Debentures at the
Second Closing or any subsequent Closing if it determines that the conclusion of
this Report is unsatisfactory.

                                             (vi)      The
Company shall have engaged Worldwide Stock Transfer LLC as the Company’s
transfer agent. 

                                             (vii)      The
Irrevocable Transfer Agent Instructions, in form and substance satisfactory to
the Buyer, shall have been delivered to and acknowledged in writing by the
Company and Worldwide Stock Transfer, LLC as the Company’s transfer agent. 

                              (c)     
The Company shall have certified, in a certificate executed by two officers of
the Company and dated as of the Second Closing Date, that all conditions to the
Second Closing have been satisfied. The obligation of the Buyers hereunder to
accept the Convertible Debentures at the Third Closing is subject to the
satisfaction, at or before the Third Closing Date, of each of the following
conditions: 

                                             (i)      The
Common Stock shall be authorized for quotation or trading on the Primary Market,
trading in the Common Stock shall not have been suspended for any reason, and
all the Conversion Shares issuable upon the conversion of the Convertible
Debentures shall be approved for listing or trading on the Primary Market.

                                             (ii)      All
conditions to the prior Closings shall have been satisfied.

                                             (iii)      The
representations and warranties of the Company shall be true and correct in all
material respects (except to the extent that any of such representations and
warranties is already qualified as to materiality in Section 3 above, in which
case, such representations and warranties shall be true and correct without
further qualification) as of the date when made and as of the Third Closing Date
as though made at that time (except for representations and warranties that
speak as of a specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Company at or prior to the Third Closing Date.

                                             (iv)      The
Company shall have executed and delivered to the Buyers the Convertible
Debentures in the respective amounts set forth opposite each Buyers name on
Schedule I attached hereto. 

                                             (v)      The
Company shall have filed, or certify that it will file on the Third Closing
Date, the Registration Statement with the SEC materially in compliance with the
rules and regulations promulgated by the SEC for filing thereof. 

                                             (vi)      The
Company shall have certified, in a certificate executed by two officers of the
Company and dated as of the Third Closing Date, that all conditions to the Third
Closing have been satisfied. 

                              (d)      The
obligation of the Buyers hereunder to accept the Convertible Debentures at the
Fourth Closing is subject to the satisfaction, at or before the Fourth Closing
Date, of each of the following conditions: 

                                             (i)      The
Common Stock shall be authorized for quotation or trading on the Primary Market,
trading in the Common Stock shall not have been suspended for any reason, and
all the Conversion Shares issuable upon the conversion of the Convertible
Debentures shall be approved for listing or trading on the Primary Market.

                                             (ii)      All
conditions to the prior Closings shall have been satisfied.

                                             (iii)     
The representations and warranties of the Company shall be true and correct in
all material respects (except to the extent that any of such representations and
warranties is already qualified as to materiality in Section 3 above, in which
case, such representations and warranties shall be true and correct without
further qualification) as of the date when made and as of the Fourth Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Company at or prior to the Fourth Closing Date.

                                             (iv)      The
Company shall have executed and delivered to the Buyers the Convertible
Debentures in the respective amounts set forth opposite each Buyers name on
Schedule I attached hereto. 

                                             (v)      The
Registration Statement shall have been declared effective by the SEC.

                                             (vi)      The
Company shall have certified, in a certificate executed by two officers of the
Company and dated as of the Fourth Closing Date, that all conditions to the
Fourth Closing have been satisfied. 

               8.     
INDEMNIFICATION. 

                              (a)      In
consideration of the Buyer’s execution and delivery of this Agreement and
acquiring the Convertible Debentures and the Conversion Shares hereunder, and in
addition to all of the Company’s other obligations under this Agreement, the
Company shall defend, protect, indemnify and hold harmless the Buyer(s) and each
other holder of the Convertible Debentures and the Conversion Shares, and all of
their officers, directors, employees and agents (including, without limitation,
those retained in connection with the transactions contemplated by this
Agreement) (collectively, the “Buyer Indemnitees”) from and against any
and all actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Buyer Indemnitee is a party to the action for
which indemnification hereunder is sought), and including reasonable attorneys’
fees and disbursements (the “Indemnified Liabilities”), incurred by the
Buyer Indemnitees or any of them as a result of, or arising out of, or relating
to (a) any misrepresentation or breach of any representation or warranty made by
the Company in this Agreement, the Convertible Debentures or the other
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (b) any breach of any covenant, agreement or
obligation of the Company contained in this Agreement, or the other Transaction
Documents or any other certificate, instrument or document contemplated hereby
or thereby, or (c) any cause of action, suit or claim brought or made against
such Buyer Indemnitee and arising out of or resulting from the execution,
delivery, performance or enforcement of this Agreement or any other instrument,
document or agreement executed pursuant hereto by any of the parties hereto, any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Convertible Debentures or
the status of the Buyer or holder of the Convertible Debentures the Conversion
Shares, as a Buyer of Convertible Debentures in the Company. To the extent that
the foregoing undertaking by the Company may be unenforceable for any reason,
the Company shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities, which is permissible under applicable
law. 

                              (b)      In
consideration of the Company’s execution and delivery of this Agreement, and in
addition to all of the Buyer’s other obligations under this Agreement, the Buyer
shall defend, protect, indemnify and hold harmless the Company and all of its
officers, directors, employees and agents (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Company Indemnitees”) from and against any and all
Indemnified Liabilities incurred by the Indemnitees or any of them as a result
of, or arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Buyer(s) in this Agreement, instrument or
document contemplated hereby or thereby executed by the Buyer, (b) any breach of
any covenant, agreement or obligation of the Buyer(s) contained in this
Agreement, the Transaction 

Documents or any other certificate, instrument or document
contemplated hereby or thereby executed by the Buyer, or (c) any cause of
action, suit or claim brought or made against such Company Indemnitee based on
material misrepresentations or due to a material breach and arising out of or
resulting from the execution, delivery, performance or enforcement of this
Agreement, the Transaction Documents or any other instrument, document or
agreement executed pursuant hereto by any of the parties hereto. To the extent
that the foregoing undertaking by each Buyer may be unenforceable for any
reason, each Buyer shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities, which is permissible under
applicable law. 

               9.      GOVERNING
LAW: MISCELLANEOUS. 

                              (a)     
Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New Jersey without regard to the
principles of conflict of laws. The parties further agree that any action
between them shall be heard in Hudson County, New Jersey, and expressly consent
to the jurisdiction and venue of the Superior Court of New Jersey, sitting in
Hudson County and the United States District Court for the District of New
Jersey sitting in Newark, New Jersey for the adjudication of any civil action
asserted pursuant to this Paragraph. 

                              (b)      Counterparts.
This Agreement may be executed in two or more identical counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other
party. In the event any signature page is delivered by facsimile transmission,
the party using such means of delivery shall cause four (4) additional original
executed signature pages to be physically delivered to the other party within
five (5) days of the execution and delivery hereof. 

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

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

                              (e)      Entire
Agreement, Amendments. This Agreement supersedes all other prior oral or
written agreements between the Buyer(s), the Company, their affiliates and
persons acting on their behalf with respect to the matters discussed herein, and
this Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor any Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be
waived or amended other than by an instrument in writing signed by the party to
be charged with enforcement. 

                              (f)      Notices.
Any notices, consents, waivers, or other communications required or permitted to
be given under the terms of this Agreement must be in writing and will 

be deemed to have been delivered (i) upon receipt, when
delivered personally; (ii) upon confirmation of receipt, when sent by facsimile;
(iii) three (3) days after being sent by U.S. certified mail, return receipt
requested, or (iv) one (1) day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be: 

	If to the Company, to: 	Global Energy, Inc. 
	  	Migdal Aviv 
	  	7 Abba Hilel Street 
	  	Ramat Gan, 52520 
	  	Israel 
	  	Telephone:      011 972 3
      5913952 
	  	Facsimile:         011
      +972 9 955 0454 
	  	 
	With a copy to: 	Clark Wilson LLP 
	  	 
	  	800 – 885 West Georgia Street 
	  	Vancouver, BC Canada 
	  	V6M 3R9 
	  	Attention: Bernard Pinsky 
	  	Telephone:      604.687.5700
  
	  	Facsimile:        
      604.687.6314 

          If
to the Buyer(s), to its address and facsimile number on Schedule I, with copies
to the Buyer’s counsel as set forth on Schedule I. Each party shall provide five
(5) days’ prior written notice to the other party of any change in address or
facsimile number. 

                              (g)      Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit
of the parties and their respective successors and assigns. Neither the Company
nor any Buyer shall assign this Agreement or any rights or obligations hereunder
without the prior written consent of the other party hereto. 

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

                              (i)     
Survival. Unless this Agreement is terminated under Section 9(l), the
representations and warranties of the Company and the Buyer(s) contained in
Sections 2 and 3, the agreements and covenants set forth in Sections 4, 5 and 9,
and the indemnification provisions set forth in Section 8, shall survive the
Closing for a period of two (2) years following the date on which the
Convertible Debentures are converted in full. The Buyer(s) shall be responsible
only for its own representations, warranties, agreements and covenants
hereunder. 

                              (j)     
Publicity. The Company and the Buyer(s) shall have the right to approve,
before issuance any press release or any other public statement with respect to
the 

transactions contemplated hereby made by any party; provided,
however, that the Company shall be entitled, without the prior approval of the
Buyer(s), to issue any press release or other public disclosure with respect to
such transactions required under applicable securities or other laws or
regulations (the Company shall use its best efforts to consult the Buyer(s) in
connection with any such press release or other public disclosure prior to its
release and Buyer(s) shall be provided with a copy thereof upon release
thereof). 

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

                              (l)      Termination.
In the event that the First Closing shall not have occurred with respect to the
Buyers on or before five (5) business days from the date hereof due to the
Company’s or the Buyer’s failure to satisfy the conditions set forth in Sections
6 and 7 above (and the non-breaching party’s failure to waive such unsatisfied
condition(s)), the non-breaching party shall have the option to terminate this
Agreement with respect to such breaching party at the close of business on such
date without liability of any party to any other party; provided, however, that
if this Agreement is terminated by the Company pursuant to this Section 9(l),
the Company shall remain obligated to reimburse the Buyer(s) for the expenses of
Yorkville Advisors LLC described in Section 4(g) above. 

                              (m)      Brokerage.
The Company represents that no broker, agent, finder or other party has been
retained by it in connection with the transactions contemplated hereby and that
no other fee or commission has been agreed by the Company to be paid for or on
account of the transactions contemplated hereby.

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

[REMAINDER PAGE INTENTIONALLY LEFT BLANK] 

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

COMPANY: 
GLOBAL ENERGY,
INC.

By: /s/ Asi Shalgi 
Name:
Asi Shalgi 
Title: CEO 

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

BUYERS: 
CORNELL CAPITAL
PARTNERS, L.P.

By: Yorkville Advisors, LLC 
Its:
Investment Manger 

By: /s/ Mark Angelo 
Name:
Mark Angelo 
Its: Portfolio Manager 

SCHEDULE I 

SCHEDULE OF BUYERS

  	(1) 	(2) 	(3) 	(4) 	  	(5) 	(8) 
	Buyer 	 Subscription Amount  	Number of 	Legal Representative’s 
	  	  	  	  	  	Warrant Shares 	Address and Facsimile 
	  	  	  	  	  	  	Number 
	  	First Closing 	Second Closing 	Third Closing 	Fourth Closing 	First Closing 	  
	  	  	  	  	  	  	  
	Cornell Capital Partners, L.P. 	$500,000 	         $1,500,000
      	$1,000,000 	$1,000,000 	300,000 Shares at an 	David Gonzalez, Esq. 
	  	  	  	  	  	Exercise Price of 	101 Hudson Street, Suite 3700 
	101 Hudson Street, Suite 3700 	  	  	  	  	$2.35 	Jersey City, New Jersey 07302 
	Jersey City, NJ 07303 	  	  	  	  	  	Telephone: (201) 985-8300 
	Attention: Mark Angelo 	  	  	  	  	300,000 Shares at an 	Facsimile: (201) 985-8266 
	Telephone: (201) 985-8300 	  	  	  	  	Exercise Price of 	  
	Facsimile: (201) 985-8266 	  	  	  	  	$2.50 	  
	Residence: Cayman Islands 	  	  	  	  	  	  

DISCLOSURE SCHEDULE 

 

3(a). Subsidiaries:

3(d) Options, Warrants and other rights to purchase
stock: 

3(o) Environmental Permits: The Company has not yet
applied for environmental permits for its intended business.

3(q) Insurance: The Company has not yet applied for
policies of insurance.

3(r) Permits: The Company has not yet applied for any
permits to conduct it intended business.

EXHIBIT A 

FORM OF CONVERTIBLE DEBENTURE 

EXHIBIT B 

FORM OF WARRANT

EXHIBIT C 

LOCK UP AGREEMENT 

          The
undersigned hereby agrees that for a period commencing on June ___, 2007 and
expiring on the date thirty (30) days after the date that all amounts owed to
Cornell Capital Partners, LP (the “Buyer”), under the Secured Convertible
Debentures issued to the Buyer pursuant to the Securities Purchase Agreement
between Global Energy, Inc. (the “Company”) and the Buyer dated June ___,
2007 have been paid (the “Lock-up Period”), he, she or it will not,
directly or indirectly, without the prior written consent of the Buyer, issue,
offer, agree or offer to sell, sell, grant an option for the purchase or sale
of, transfer, pledge, assign, hypothecate, distribute or otherwise encumber or
dispose of any securities of the Company, including common stock or options,
rights, warrants or other securities underlying, convertible into, exchangeable
or exercisable for or evidencing any right to purchase or subscribe for any
common stock (whether or not beneficially owned by the undersigned), or any
beneficial interest therein (collectively, the “Securities”) except in
accordance with the volume limitations set forth in Rule 144(e) of the General
Rules and Regulations under the Securities Act of 1933, as amended. 

          In
order to enable the aforesaid covenants to be enforced, the undersigned hereby
consents to the placing of legends and/or stop-transfer orders with the transfer
agent of the Company’s securities with respect to any of the Securities
registered in the name of the undersigned or beneficially owned by the
undersigned, and the undersigned hereby confirms the undersigned’s investment in
the Company. 

Dated: _______________, 2007 

Signature 

___________________________________________
Name:
______________________________________
Address:
____________________________________
City, State, Zip Code:
___________________________

 

___________________________________________
Print Social
Security Number or Taxpayer I.D. Number

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