Document:

exhibit10_1.htm

     

    Execution
      Copy

     

     

    RICHARD
      M. RIESER

     

    SEPARATION
      AND SETTLEMENT AGREEMENT

     

    AND
      MUTUAL RELEASE

     

    This
      Separation and Settlement Agreement and Mutual Release (this
“Agreement”) is made this 23rd day of October, 2007, by and between
      Richard M. Rieser (the “Executive”) and MB Financial, Inc. (the
“Company”) concerning the Executive’s termination of employment with
      the Company.

     

    WHEREAS,
      the Company and the Executive entered into that certain Employment Agreement
      dated as of August 25, 2006, (the “Employment Agreement”);

     

    WHEREAS,
      the Company and Executive have legitimate disagreements with respect to the
      duties and responsibilities of the Executive and differences of opinion
      regarding the direction of the Company and the parties are hereby entering
      into
      this Agreement as an arm’s length settlement of a bona fide dispute with respect
      to the rights and obligations of the parties, including with respect to the
      terms and conditions of the Employment Agreement; and

     

    WHEREAS,
      the Company and the Executive intend that this Agreement shall be in complete
      settlement of all rights of the Executive under the Employment Agreement or
      otherwise relating to his employment by the Company.

     

    NOW
      THEREFORE, in consideration of the mutual promises and agreements set forth
      below, the Company and the Executive agree as follows:

     

    1.  Termination.  The
      Executive’s employment with the Company will terminate effective as of the close
      of business on October 23, 2007 (the “Termination Date”) and the
      Executive will continue to be paid his current monthly salary, expense
      reimbursements and other employee benefits through the Termination
      Date.

     

    2.  Resignation.  The
      Executive hereby agrees to resign as the Vice Chairman, Executive Vice President
      and Chief Marketing and Legal Strategist of the Company and from all other
      officer, director and other positions with the Company and all of its affiliates
      effective as of the close of business on the Termination
      Date.  Executive agrees to execute a letter of resignation, in the
      form attached hereto as Exhibit A.

     

    3.  Settlement
      Payment.  The Executive shall receive a settlement payment from
      the Company in the aggregate gross amount of Three Million Nine Hundred and
      Sixty-Five Thousand Dollars ($3,965,000.00), to be paid in a single lump sum
      cash payment (the “Settlement Payment”) on April 24, 2008 (the
“Payment Date”).

     

    4.  Restricted
      Stock and Restricted Stock Units.  Effective as of the Termination
      Date, the Executive shall become fully vested in (i) the 5,551 shares of
      Restricted Stock granted on August 25, 2006, and (ii) the 5,604 Restricted
      Stock
      Units granted on August 25, 2007.  The Restricted Stock Units shall be
      settled on the Payment Date in an equal number of shares of unrestricted common
      stock of the Company.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    5.  Stock
      Options.  Effective as of the Termination Date, the Executive
      shall become fully vested in all unvested outstanding stock options awarded
      under any plan or program maintained by the Company or any of its affiliates
      or
      predecessors.  All outstanding options which are vested as of the
      Termination Date shall continue to be exercisable per the terms of the
      applicable plan and award documents; provided, however, that for
      purposes of determining the expiration of such options, the Executive’s
      termination hereunder shall be deemed a “Retirement” per the terms of such
      options.

     

    6.  Supplemental
      Pension Benefit Agreement.  The Company shall honor the terms and
      conditions of the First Oak Brook Bank (“FOBB”) Supplemental Pension
      Benefit Agreement, as required by Section 19 of the Employment
      Agreement.  The estimated benefits thereunder shall be calculated by
      the Company’s independent auditors or actuaries and a report shall be delivered
      to Executive within 5 calendar days of the Termination Date.  In
      calculating the benefits thereunder, (i) the credited years of service shall
      be
      20, (ii) the accrual fraction shall be 100%, (iii) the “Final Base Salary” as
      used therein shall be $775,000, and (iv) the mortality tables and interest
      rates
      described in Code Section 417(e)(3)(A)(ii) shall be used, based on October
      1,
      2007.  The actual benefit shall be based upon the foregoing
      assumptions, but shall use the applicable rate on December 1,
      2007.  The supplemental benefit shall be a monthly life and 15 year
      certain annuity paid on a monthly basis commencing January 1, 2008, subject
      to
      the limitations of Section 22 of this
      Agreement.  To the extent necessary under the transitional guidance
      under Internal Revenue Service (“IRS”) Notice 2007-86, this Agreement
      constitutes an amendment to the Supplemental Pension Benefit Agreement, and
      a
      new election thereunder, to properly modify the time or manner of payment under
      a deferred compensation plan.

     

    7.  Agreement
      Regarding Post-Employment Restrictive Covenants.  The Company and
      the Executive shall honor the terms and conditions of the Agreement Regarding
      Post-Employment Restrictive Covenants, dated October 19, 1994.  The
      restrictive covenants, as provided therein shall lapse on October 24,
      2009.  The payments to be made to the Executive thereunder shall be
      paid on an annual basis commencing November 1, 2007, subject to the limitations
      of Section 22 of this Agreement.  To the
      extent necessary under the transitional guidance under IRS Notice 2007-86,
      this
      Agreement constitutes an amendment to the Agreement Regarding Post-Employment
      Restrictive Covenants, and a new election thereunder, to properly modify the
      time or manner of payment under a deferred compensation plan.

     

    8.  Executive
      Deferred Compensation Plan.   The Company shall honor the
      terms and conditions of the FOBB Executive Deferred Compensation
      Plan.  Subject to the limitations of Section 22 of this Agreement, the distribution of post-2004
      amounts thereunder (amounts subject to Code Section 409A) shall be paid in
      a
      lump within 90 days of the Termination Date.  The distribution of
      pre-2005 amounts thereunder shall be paid in substantially equal monthly
      installments over 5 years, commencing on November 1, 2007, in accordance with
      the elections currently in effect with respect to such amounts.

     

    9.  Medical
      Benefits.  The Company shall provide the “Post-Employment Health
      Benefit” pursuant to Section 5(c) of the Employment Agreement, subject to the
      terms, conditions and limitations stated therein; provided, however,
      that the limitations of subsection (y) thereunder shall only begin to apply
      with
      respect to amounts expended by the Company on and after October 24, 2009, and
      the Company shall bear such costs prior to such date on the same basis as in
      effect immediately prior to the Termination Date, and; provided,
      further, that Executive and his spouse will use best efforts to obtain
      Medicare and Medicare “supplemental coverage” (of their choosing) as soon as
      they are eligible to do so.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    10.  Termination
      of Benefits.  Except as specifically provided in this Agreement
      with respect to plans or arrangements specifically identified in this Agreement,
      the Executive’s continued participation in all compensation plans will cease as
      of the Termination Date.  Nothing contained herein shall limit or
      otherwise impair Executive’s right to receive pension or similar benefit
      payments which are vested as of the Termination Date under any applicable
      pension or other benefit plan (whether or not tax-qualified).

     

    11.  Company
      Stock.  Upon Executive’s written instructions, the Company shall
      use its best efforts to perform all necessary actions required by the Company,
      and shall promptly use its best efforts to cause its transfer agent and legal
      counsel to perform all necessary actions required by them as soon as reasonably
      practicable to effect either (i) the transfer of shares of common stock owned
      of
      record by Executive (or his immediate family members), whether or not held
      in
      certificate form, with or without restrictive legends, to accounts maintained
      by
      a bank or broker for the benefit of the Executive (or such immediate family
      member), where after such transfer(s) no legends or stop order instructions
      shall be attributable to such shares, or (ii) the exchange of certificated
      shares of common stock of the Company held by the Executive (or his immediate
      family members) for replacement certificates with no legends or restrictions
      thereon.  Executive hereby agrees and acknowledges that any sales of
      Company stock must be in compliance with all securities rules and regulations,
      including without limitation, Rules 144 and 145 under the Securities Act of
      1933
      (the “Securities Act”), as may be in effect at the time of sale.  The
      Company hereby represents that it will use its best efforts to maintain current
      filings with the Securities and Exchange Commission, as contemplated by
      paragraph (c)(i) of Rule 144 under the securities Act, during all such periods
      as Executive may be subject to Rule 145 under the Securities Act.

     

    12.  Office
      and Secretarial Support.  In connection with the services the
      Executive is providing pursuant to Section 15 of
      this Agreement, the Company shall continue to provide Executive with his current
      office and secretarial support (or well-qualified replacement), through May
      31,
      2008, including all appropriate office supplies, equipment and services (e.g.,
      computer, scanner, fax, copier, phone, email account, etc.) as if Executive
      were
      employed by the Company.  To the extent that the computer equipment
      and email account provided to Executive are outside and not connected to or
      accessing the Company’s systems, then the Company shall take all reasonable
      steps to ensure that the Executive is immediately forwarded all email
      communications relating to services to be performed by the Executive under
      Section 15 regarding the 60 W. Erie litigation
      matters and, for a period of 30 days following the Termination Date, all
      non-Company related email directed to the Executive.  In addition, the
      Company shall copy and or migrate all of the electronic contact information
      in
      Executive’s computer system to the system he will be provided immediately
      following the Termination Date.

     

    13.  Departure
      Party.  The Company shall provide reasonable funding for a
      departure party for the Executive, with the attendance list and arrangements
      to
      be made by the Executive.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    14.  Releases.  As
      part of this Agreement, and in consideration of the benefits provided hereunder,
      the parties are each required to execute a General Release and Waiver (a
“Release”) and deliver the Release following the Termination
      Date.  This Agreement (including all Exhibits to this Agreement),
      and the commitments and obligations of all parties hereunder:

     

    (a)  shall
      become final and binding on the Termination Date, subject only to Executive’s
      execution and delivery of the Release, in the form set forth at Exhibit B-1,
      to
      the Company on the Termination Date and the expiration of the Executive’s right
      to revoke the execution of the Release in accordance with Section 3(c) of
      the Release; and

     

    (b)  shall
      not
      become final and binding if Executive revokes such execution.

     

    (c)  At
      such
      time as Executive delivers the Release above, the Company shall execute a
      Release, in the form set forth at Exhibit B-2, and shall deliver such Release
      to
      Executive.

     

    15.  Assistance
      with Claims.  Subject to continued indemnification provided in
      Section 23 of this Agreement, the Executive agrees
      to reasonably cooperate with the Company or any affiliate in the prosecution,
      defense or evaluation of any pending or potential claims or proceedings
      involving or affecting the Company or any affiliate with respect to the 60
      W.
      Erie litigation matters; provided, that such activities do not unreasonably
      interfere with Executive’s full-time employment entered into after the
      Termination Date, where such assistance is to be provided in a manner
      substantially similar to such services provided by the Executive prior to the
      Termination Date.  Executive will make himself available for the
      foregoing from time to time as reasonably required or as reasonably requested
      by
      the Company without additional consideration for such
      time.  Consistent with the Company’s policy for Executive’s expense
      reimbursement (as in effect prior to the Termination Date), promptly upon the
      receipt of the Executive’s written request, the Company agrees to reimburse the
      Executive for all reasonable out-of-pocket expenses associated with such
      cooperation, including, without limitation, attorneys fees, meals, lodging,
      air
      travel and ground transportation expenses.

     

    16.  Non-Vilification.  The
      Executive agrees that on and after the date of this Agreement, he will not
      make
      any vilifying statement about the Company, its officers (limited to “Section 16”
officers of the Company) and directors and the Company, its officers (limited
      to
“Section 16” officers of the Company) and directors agree not to make any
      vilifying statement about the Executive or Executive’s employment with the
      Company; provided, however,  that the provisions of this
      Section 16 shall not apply to testimony as a
      witness, any disclosure required by law to be made by the Company or the
      Executive, the assertion of or defense against any claim of breach of this
      Agreement and shall not require either party to make false statements or
      disclosures.  Notwithstanding the foregoing, upon a breach of this
      provision by either party, the non-breaching party shall thereafter be released
      from the constraints of this Section 16 and any
      otherwise vilifying statement made by the non-breaching party after such breach
      shall not constitute a breach of this Agreement.  The non-breaching
      party shall be entitled to seek all legal remedies available with respect to
      such breach and any failure to do so shall not limit or otherwise waive any
      rights with respect to any subsequent breach.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    17.  Withholding
      for Taxes.  All benefits and payments provided to the Executive
      pursuant to this Agreement which are required to be treated as compensation
      shall be subject to all applicable withholding and reporting
      requirements.

     

    18.  Settlement
      of Disputes.  The “Legal Fees” provisions set forth in
      Section 10(ii) of the Employment Agreement are hereby incorporated by
      reference and are made part of this Agreement and shall be applicable for all
      disputes as may arise hereunder (with the specific exclusion of disputes arising
      under Section 16 of this Agreement),
      notwithstanding that the Employment Agreement is no longer in full force and
      effect.

     

    19.  Attorneys’
      Fees.  The Company shall pay legal fees for the drafting and
      negotiating of this Agreement, in an amount of $25,000, directly to the law
      firm
      of Barack Ferrazzano Kirschbaum & Nagelberg, LLP (the “Firm”), with such
      payment to be made within 15 calendar days of the Termination
      Date.  The payment of such fees shall be reflected on an IRS Form 1009
      designating the Firm as the payee and the Company as the payor.

     

    20.  Miscellaneous.

     

    (a)  Binding
      Effect.  This Agreement shall be binding upon each of the parties
      and upon their respective heirs, administrators, representatives, executors,
      successors and assigns, and shall inure to the benefit of each party and to
      their heirs, administrators, representatives, executors, successors, and
      assigns.

     

    (b)  Applicable
      Law.  This Agreement shall be construed in accordance with the
      laws of the State of Illinois, without regard to the conflict of law provisions
      of any jurisdiction.

     

    (c)  Entire
      Agreement.  This Agreement reflects the entire agreement between
      the Executive and the Company and, except as specifically provided herein,
      supersedes all prior agreements and understandings, written or oral relating
      to
      the subject matter hereof (specifically including the Employment
      Agreement).  To the extent that the terms of this Agreement (including
      Exhibits to this Agreement) are to be determined under, or are to be
      subject to, the terms or provisions of any other document, this Agreement
      (including Exhibits to this Agreement) shall be deemed to incorporate
      by reference such terms or provisions of such other documents.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    (d)  Notices.  Any
      notice pertaining to this Agreement shall be in writing and shall be deemed
      to
      have been effectively given on the earliest of (a) when received,
      (b) upon personal delivery to the party notified, (c) one business day
      after delivery via facsimile with electronic confirmation of successful
      transmission, (d) one business day after delivery via an overnight courier
      service or (e) five days after deposit with the United Postal Service, and
      addressed as follows:

     

    
      	
                               to
                the Executive
                at:

               

                              Mr. Richard
                M. Rieser

                              1342
                Hillside Road

                              Northbrook,
                Illinois  60062

               

                              Or
                such
                other address as Executive duly notifies the Company.

               

                              with
                a
                copy to:

               

                              Donald
                L. Norman, Jr., Esq.

                              Barack
                Ferrazzano Kirschbaum Nagelberg, LLP

                              200
                West Madison Street

                              Chicago,
                IL  60601

                              Fax:  (312)
                984-3150

               

            
	
                              to
                the
                Company at:

               

                              MB
                Financial, Inc.

                              800
                West Madison Street

                              Chicago,
                IL  60607

                              Attn:  Mitchell
                Feiger – President and Chief Executive Officer

               

                              with
                a
                copy to:

               

                              Barry
                Taff, Esq.

                              Silver,
                Freedman & Taff, L.L.P.

                              3299
                K
                Street N.W., Suite 100

                              Washington
                DC  20007

                              Fax:  (202)
                337-5502

            

    

    

    (e)  Waiver
      of Breach.  The waiver by either party to this Agreement of a
      breach of any provision of this Agreement shall not operate as or be deemed a
      waiver of any subsequent breach by such party.

     

    (f)  Amendment.  This
      Agreement may not be modified or amended except by a writing signed by the
      parties to this Agreement.

     

    (g)  Counterparts.  This
      Agreement may be signed in multiple counterparts, each of which shall be deemed
      an original.  Any executed counterpart returned by facsimile shall be
      deemed an original executed counterpart.

     

    (h)  No
      Third Party Beneficiaries.  Unless specifically provided herein,
      the provisions of this Agreement are for the sole benefit of the parties to
      this
      Agreement and are not intended to confer upon any person not a party to this
      Agreement any rights hereunder.

     

    (i)  Terms
      and Construction.  Each party has cooperated in the drafting and
      preparation of this Agreement and each party has had the opportunity to
      obtain the advice of legal counsel to review and comment upon the
      Agreement.  The language in all parts of this Agreement shall be in
      all cases construed according to its fair meaning and not strictly for or
      against either party.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    (j)  Admissions.  Nothing
      in this Agreement is intended to be, or will be deemed to be, an admission
      of
      liability by Executive or the Company to each other, or an admission that they
      or any of their agents, affiliates, or employees have violated any state,
      federal or local statute, regulation or ordinance or any principle of common
      law
      of any jurisdiction, or that they have engaged in any wrongdoing towards each
      other.

     

    21.  Tax
      Gross Up Agreement.  The Company shall continue to honor the terms
      and conditions of the Tax Gross Up Agreement, dated August 25, 2006, and the
      Executive’s termination of employment hereunder shall be treated as an
“Involuntary Termination” under Section 1(a)(ii) thereof.

     

    22.  Code
      Section 409A.

     

    (a)  Specified
      Employee.  The parties agree and acknowledge that the Executive is a
“specified employee” as that term is used in Code Section 409A(a)(2)(B), and
      therefore all payments to Executive that constitute deferred compensation,
      as
      defined under Code section 409A, shall be deferred for a period of six months
      from the Termination Date.  For purposes of Code Section 409A, all
      payments of deferred compensation made hereunder or pursuant to another plan
      or
      arrangement, shall be deemed to be separate payments and, accordingly, the
      aforementioned deferral shall only apply to separate payments which would occur
      during the six month deferral period and all other payments shall be
      unaffected.  All payments deferred pursuant to this Section 22, shall be paid in full on April 24,
      2008.

     

    (b)  Compliance
      and Indemnification.  It is intended that the provisions of this
      Agreement, and all compensation plans and programs sponsored by the Company
      in
      which Executive participates, comply with, or remain exempt from, Code Section
      409A, and all provisions of this Agreement shall be construed and interpreted
      in
      a manner consistent with such intentions.  From and after the
      Termination Date, (a) the Company shall administer and operate this
      Agreement and any “nonqualified deferred compensation plan” (as defined in Code
      Section 409A) (and any other arrangement that could reasonably be expected
      to
      constitute such a plan) in which the Executive participates and the Executive’s
      rights and benefits hereunder and thereunder in compliance with Code Section
      409A and any rules, regulations or other guidance promulgated thereunder as
      in
      effect from time to time, (b) in the event that the Company determines that
      any provision of this Agreement or any such plan or arrangement does not comply
      with Code Section 409A or any such rules, regulations or guidance and that
      the
      Executive may become subject to an additional tax under Code Section 409A (a
      “Section 409A Tax”), the Company shall amend or modify such provision to avoid
      the application of the Section 409A Tax, and (c) in the event that,
      notwithstanding the foregoing, the Executive is subject to a Section 409A Tax
      with respect to any such provision, the Company shall indemnify and hold the
      Executive harmless against all taxes (and any interest or penalties imposed
      with
      respect to such taxes) imposed as a result of the Company’s failure to comply
      with the preceding clause (a) of this Section 22.

     

    (c)  The
      Company and Executive hereby agree to execute all forms and amendments
      reasonably necessary to ensure that any deferred compensation plans, programs
      or
      arrangements properly comply with the requirements of Code Section 409A,
      provided such amendments reasonably reflect the spirit and intent of the
      provisions of this Agreement and do not reduce or compromise any rights and
      benefits of the Executive  or the Company pursuant to such
      arrangements.

     

    23.  Indemnification.  The
      Company shall continue to indemnify and hold Executive harmless as provided
      in
      Section 11 of the Employment Agreement to the maximum extent permitted by
      applicable law.  To the extent possible, the Company shall continue to
      cover Executive as an insured under its policy of directors and officers
      liability insurance for the duration of all statutes of limitations and any
      other period during which any action may be brought against Executive respecting
      his acts or omissions during his service as an officer or director with the
      Company, to the same extent as the Company covers its former officers and
      directors.  In addition to the foregoing, regardless of the
      applicability of any coverage by directors and officers liability insurance,
      the
      Company shall continue to indemnify and hold harmless Executive with respect
      to
      the services rendered by Executive pursuant to Section 15 of this Agreement to the same extent as if
      Executive were then an active officer of the Company providing such services
      and
      Section 11 of the Employment Agreement continued to apply.

     

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                            Execution
            Copy              

           
    

      

    

    IN
      WITNESS WHEREOF, this Separation and Settlement Agreement and Mutual Release
      has
      been duly executed as of the Termination Date.

     

    
       

    

     

    
      	
               

              /s/
                Richard M. Rieser

              Richard
                M. Rieser

            	
               

               

              Date:10/23/07

            
	
               

               

              MB
                Financial, Inc.

               

              /s/
                Mitchell Feiger

                

              

              By:     Mitchell
                Feiger

              Title:  President
                and Chief Executive Officer

            	
               

               

               

               

               

               

               

              Date:10/23/07

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    Exhibit A

     

    LETTER
      OF RESIGNATION

     

    October
      23, 2007

     

    Board
      of
      Directors

    MB
      Financial, Inc.

    800
      West
      Madison Street

    Chicago,
      IL  60607

    

     

    Dear
      Sirs:

     

    Subject
      to the effectiveness, terms and conditions of the Separation and Settlement
      Agreement and Mutual Release, dated October 23, 2007, I hereby resign as Vice
      Chairman, Executive Vice President and Chief Marketing and Legal Strategist
      of
      MB Financial, Inc. (the “Company”) and each other officer, director and other
      position with the Company and all of its related entities, effective
      immediately.

     

                                        Very
      truly
      yours,

     

                                                                        /s/
      Richard M. Rieser

                                        Richard
      M.
      Rieser

     

    

     

    

     

    Resignation
      acknowledged and accepted:

     

    MB
      Financial, Inc.

     

     

    By:
      /s/
      Mitchell Feiger
      
        

      
        Mitchell
      Feiger

     

    Its:  President
      and Chief
      Executive Officer

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit B-1

     

    GENERAL
      RELEASE AND WAIVER

     

    1.  This
      document is attached to, is incorporated into, and forms a part of, a Separation
      and Settlement Agreement and Mutual Release dated October 23, 2007 (the
“Agreement”) by and between MB Financial, Inc. (the
“Company”) and Richard M. Rieser (the
“Executive”).  Except for (i) a Claim based upon a breach
      of the Agreement, (ii) a Claim which is expressly preserved by the
      Agreement, (iii) a Claim duly filed pursuant to the group welfare and retirement
      plans of the Company, and (iv) a Claim with respect to Executive’s standing as a
      shareholder of the Company, the Executive, on behalf of himself and the other
      Executive Releasors, releases and forever discharges the Company and the other
      Company Releasees from any and all Claims which the Executive now has or claims,
      or might hereafter have or claim, whether known or unknown, suspected or
      unsuspected (or the other Executive Releasors may have, to the extent that
      it is
      derived from a Claim which the Executive may have), against the Company
      Releasees based upon or arising out of any matter or thing whatsoever, from
      the
      beginning of time to the date affixed beneath Executive’s signature on this
      General Release and Waiver and shall include Claims (other than those
      specifically excepted above) arising out of or related to the Executive’s
      employment with the Company, or its predecessors, or the Employment Agreement
      dated August 25, 2006, including Claims arising under (or alleged to have arisen
      under) (a) the Age Discrimination in Employment Act of 1967, as
      amended; (b) Title VII of the Civil Rights Act of 1964, as amended;
      (c) The Civil Rights Act of 1991; (d) Section 1981 through 1988
      of Title 42 of the United States Code, as amended; (e) the Executive
      Retirement Income Security Act of 1974, as amended; (f) The Immigration
      Reform Control Act, as amended; (g) The Americans with Disabilities Act of
      1990, as amended; (h) The National Labor Relations Act, as amended;
      (i) The Fair Labor Standards Act, as amended; (j) The Occupational
      Safety and Health Act, as amended; (k) The Family and Medical Leave Act of
      1993; (l) any state antidiscrimination law; (m) any state wage and
      hour law; (n) any other local, state or federal law, regulation or
      ordinance; (o) any public policy, contract, tort, or common law; or
      (p) any allegation for costs, fees, or other expenses including attorneys’
fees incurred in these matters referred to in (a) through (o)
      above.

     

    2.  For
      purposes of this General Release and Waiver, the terms set forth below shall
      have the following meanings:

     

    (a)  The
      term
“Agreement” shall include the Agreement and the
      Exhibits thereto.

     

    (b)  The
      term
“Claims” shall include any and all rights, claims, demands, debts, dues,
      sums of money, accounts, attorneys’ fees, experts’ fees, complaints, judgments,
      executions, actions and causes of action of any nature whatsoever, cognizable
      at
      law or equity.

     

    (c)  The
      term
“Company Releasees” shall include the Company and its affiliates and
      their respective officers, directors, trustees, members, employees, attorneys,
      agents, representatives, shareholders, partners, assigns, predecessors,
      successors and administrators under any employee benefit plan of the Company
      and
      of any affiliate, and insurers, and their predecessors and
      successors.

     

    (d)  The
      term
“Executive Releasors” shall include the Executive, and his heirs,
      executors, representatives, agents, insurers, administrators, successors,
      assigns, and any other person claiming through the Executive.

     

    3.  The
      following provisions are applicable to and made a part of the Agreement and
      this
      General Release and Waiver:

     

    (a)  In
      exchange for this General Release and Waiver, the Executive hereby acknowledges
      that he has received separate consideration beyond that to which he is otherwise
      entitled under the Company’s policies, under contract, or under applicable
      law.

     

    (b)  The
      Executive has consulted with an attorney of his choosing prior to executing
      the
      Agreement and this General Release and Waiver.

     

    (c)  The
      Executive has up to twenty-one (21) days from the date of presentment to
      consider whether or not to execute the Agreement and this General Release and
      Waiver which right the Executive has chosen to waive with the advice of
      counsel.  In the event of such execution, the Executive has a further
      period of seven (7) days from the date of said execution in which to revoke
      said execution.  The Agreement and this General Release and Waiver
      will not become effective until expiration of such revocation
      period.

     

    4.  The
      Agreement (including this General Release and Waiver and all other
      Exhibits to the Agreement), and the commitments and obligations of all
      parties thereunder:

     

    (a)  shall
      become final and binding immediately following the expiration of the Executive’s
      right to revoke the execution of the Agreement in accordance with Section
      3(c) of this Exhibit B-1;

     

    (b)  shall
      not
      become final and binding until the expiration of such right to revoke;
provided, however, that nothing contained herein shall confer any
      right upon the Company to revoke the Agreement; and

     

    (c)  shall
      not
      become final and binding if the Executive revokes such execution in accordance
      with Section 3(c) of this Exhibit B-1.

     

    *
      * * * *
      * *

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
      Executive hereby acknowledges that he has carefully read and understands the
      terms of the Agreement and this General Release and Waiver and each of his
      rights as set forth therein.

     

    
      	 	
              /s/ Richard M. Rieser

                

              

              Richard
                M. Rieser

               

              Date:

              10/23/07

              
                

              

                                                                              

            
	
              State
                of _________Illinois__________

              County
                of ____Cook_____________

              Subscribed
                Before Me This

              __23rd___
                Day of __October_______, 2007

               

              /s/ 
                Doria L. Koros

                

              

              Notary
                Public

            	 

    

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit B-2

     

    GENERAL
      RELEASE AND WAIVER

     

    1.  This
      document is attached to, is incorporated into, and forms a part of, a Separation
      and Settlement Agreement and Mutual Release dated October 23, 2007 (the
“Agreement”) by and between MB Financial, Inc. (the
“Company”) and Richard M. Rieser (the
“Executive”).  Except for (i) a Claim based upon a breach of
      the Agreement or (ii) a Claim which is expressly preserved in the Agreement,
      the
      Company, on behalf of itself and the other Company Releasors, releases and
      forever discharges the Executive and the other Executive Releasees from any
      and
      all Claims related to the Executive’s employment with the Company, or its
      predecessors, or the Employment Agreement dated August 25, 2006, which the
      Company now has or claims, or might hereafter have or claim, whether known
      or
      unknown, suspected or unsuspected (or the other Company Releasors may have,
      to
      the extent that it is derived from a Claim which the Company may have), against
      the Executive Releasees based upon or arising out of any matter or thing
      whatsoever, from the beginning of time to the date affixed beneath the Company’s
      signature on this General Release and Waiver and shall include, without
      limitation, Claims under any other local, state or federal law, regulation
      or
      ordinance; any public policy, contract, tort, or common law; or any allegation
      for costs, fees, or other expenses including attorneys’ fees incurred in these
      matters.

     

    2.  For
      purposes of this General Release and Waiver, the terms set forth below shall
      have the following meanings:

     

    (a)  The
      term
“Agreement” shall include the Agreement and the
      Exhibits thereto.

     

    (b)  The
      term
“Claims” shall include any and all rights, claims, demands, debts, dues,
      sums of money, accounts, attorneys’ fees, experts’ fees, complaints, judgments,
      executions, actions and causes of action of any nature whatsoever, cognizable
      at
      law or equity.

     

    (c)  The
      term
“Executive Releasees” shall include the Executive and his heirs,
      executors, representatives, agents, administrators, successors, assigns, and
      any
      other person claiming through the Executive.

     

    (d)  The
      term
“Company Releasors” shall include the Company and its affiliates and
      their successors and assigns.

     

    3.  The
      following provision are applicable to and made a part of the Agreement and
      this
      General Release and Waiver: In exchange for this General Release and Waiver,
      the
      Company hereby acknowledges that it has received separate consideration beyond
      that to which it is otherwise entitled under the Company’s policies, under
      contract, or under applicable law.

     

    4.  The
      Agreement (including this General Release and Waiver and all other
      Exhibits to the Agreement), and the commitments and obligations of all
      parties thereunder:

     

    (a)  shall
      become final and binding immediately following the expiration of the Executive’s
      right to revoke the execution of the Agreement in accordance with Section
      3(c) of Exhibit B-1;

     

    (b)  shall
      not
      become final and binding until the expiration of such right to revoke;
provided, however, that nothing contained herein shall confer any
      right upon the Company to revoke the Agreement; and

     

    (c)  shall
      not
      become final and binding if the Executive revokes such execution in accordance
      with Section 3(c) of Exhibit B-1.

     

    *
      * * * *
      * *

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
      Company hereby acknowledges that it has carefully read and understands the
      terms
      of the Agreement and this General Release and Waiver and each of its rights
      as
      set forth therein.

     

    
      	 	
              MB
                Financial, Inc.

               

              By:
                Mitchell Feiger
                

              

               Mitchell
                Feiger

              Its:
                President and Chief Executive Officer

               

              Date:     10/23/07

              
                
                                                           

            
	
              State
                of ____Illinois_______________

              County
                of ___Cook______________

              Subscribed
                Before Me This

              ____23rd_
                Day of __October_______, 2007

               

              /s/
                Doria L. Koros

              
                

              

              Notary
                PublicSECURITIES
      PURCHASE AGREEMENT

     

    SECURITIES
      PURCHASE AGREEMENT (this “Agreement”),
      dated
      as of September 21, 2007, by and among Innofone.com., Inc., a Nevada
      corporation, with headquarters located at 3470 Onley-Laytonsville Road, Suite
      118, Olney, MD 20832 (the “Company”),
      and
      each of the purchasers set forth on the signature pages hereto (the
“Buyers”).

     

    WHEREAS:
      

     

    A. The
      Company and the Buyers are executing and delivering this Agreement in reliance
      upon the exemption from securities registration afforded by the rules and
      regulations as promulgated by the United States Securities and Exchange
      Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933
      Act”);

     

    B. Buyers
      desire to purchase and the Company desires to issue and sell, upon the terms
      and
      conditions set forth in this Agreement (i) 8%
      secured convertible notes of the Company, in the form attached hereto as
Exhibit
      “A”,
      in the
      aggregate principal amount of Two Hundred Thousand Dollars ($200,000) (together
      with any note(s) issued in replacement thereof or as a dividend thereon or
      otherwise with respect thereto in accordance with the terms thereof, the
“Notes”),
      convertible into shares of common stock, par value $.001 per share, of the
      Company (the “Common
      Stock”),
      upon
      the terms and subject to the limitations and conditions set forth in such Notes
      and (ii) warrants,
      in the form attached hereto as Exhibit
      “B”,
      to
      purchase 5,000,000 shares of Common Stock (the “Warrants”).

     

    C. Each
      Buyer wishes to purchase, upon the terms and conditions stated in this
      Agreement, such principal amount of Notes and number of Warrants as is set
      forth
      immediately below its name on the signature pages hereto; and

     

    D. Contemporaneous
      with the execution and delivery of this Agreement, the parties hereto are
      executing and delivering a Registration Rights Agreement, in the form attached
      hereto as Exhibit
      “C”
      (the
“Registration
      Rights Agreement”),
      pursuant to which the Company has agreed to provide certain registration rights
      under the 1933 Act and the rules and regulations promulgated thereunder, and
      applicable state securities laws.

     

    NOW
      THEREFORE,
      the
      Company and each of the Buyers severally (and not jointly) hereby agree as
      follows:

     

    1. PURCHASE
      AND SALE OF NOTES AND WARRANTS.

     

    a. Purchase
      of Notes and Warrants.
      On the
      Closing Date (as defined below), the Company shall issue and sell to each Buyer
      and each Buyer severally agrees to purchase from the Company such principal
      amount of Notes and number of Warrants as is set forth immediately below such
      Buyer’s name on the signature pages hereto.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    b. Form
      of Payment.
      On the
      Closing Date (as defined below), (i) each
      Buyer shall pay the purchase price for the Notes and the Warrants to be issued
      and sold to it at the Closing (as defined below) (the “Purchase
      Price”)
      by
      wire transfer of immediately available funds to the Company, in accordance
      with
      the Company’s written wiring instructions, against delivery of the Notes in the
      principal amount equal to the Purchase Price and the number of Warrants as
      is
      set forth immediately below such Buyer’s name on the signature pages hereto, and
(ii) the
      Company shall deliver such Notes and Warrants duly executed on behalf of the
      Company, to such Buyer, against delivery of such Purchase Price. 

     

    c. Closing
      Date.
      Subject
      to the satisfaction (or written waiver) of the conditions thereto set forth
      in
      Section 6 and Section 7 below, the date and time of the issuance and sale of
      the
      Notes and the Warrants pursuant to this Agreement (the “Closing
      Date”)
      shall
      be 12:00 noon, Eastern Standard Time on September 21, 2007, or such other
      mutually agreed upon time. The closing of the transactions contemplated by
      this
      Agreement (the “Closing”)
      shall
      occur on the Closing Date at such location as may be agreed to by the
      parties.

     

    2. BUYERS’
      REPRESENTATIONS AND WARRANTIES.
      Each
      Buyer severally (and not jointly) represents and warrants to the Company solely
      as to such Buyer that:

     

    a. Investment
      Purpose.
      As of
      the date hereof, the Buyer is purchasing the Notes and the shares of Common
      Stock issuable upon conversion of or otherwise pursuant to the Notes (including,
      without limitation, such additional shares of Common Stock, if any, as are
      issuable (i) on
      account of interest on the Notes, (ii) as
      a result of the events described in Sections 1.3 and 1.4(g) of the Notes and
      Section 2(c) of the Registration Rights Agreement or (iii) in
      payment of the Standard Liquidated Damages Amount (as defined in Section 2(f)
      below) pursuant to this Agreement, such shares of Common Stock being
      collectively referred to herein as the “Conversion
      Shares”)
      and
      the Warrants and the shares of Common Stock issuable upon exercise thereof
      (the
“Warrant
      Shares”
and,
      collectively with the Notes, Warrants and Conversion Shares, the “Securities”)
      for
      its own account and not with a present view towards the public sale or
      distribution thereof, except pursuant to sales registered or exempted from
      registration under the 1933 Act; provided,
      however,
      that by
      making the representations herein, the Buyer does not agree to hold any of
      the
      Securities for any minimum or other specific term and reserves the right to
      dispose of the Securities at any time in accordance with or pursuant to a
      registration statement or an exemption under the 1933 Act.

     

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

     

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

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    d. Information.
      The
      Buyer and its advisors, if any, have been, and for so long as the Notes and
      Warrants remain outstanding will continue to be, furnished with all materials
      relating to the business, finances and operations of the Company and materials
      relating to the offer and sale of the Securities which have been requested
      by
      the Buyer or its advisors. The Buyer and its advisors, if any, have been, and
      for so long as the Notes and Warrants remain outstanding will continue to be,
      afforded the opportunity to ask questions of the Company. Notwithstanding the
      foregoing, the Company has not disclosed to the Buyer any material nonpublic
      information and will not disclose such information unless such information
      is
      disclosed to the public prior to or promptly following such disclosure to the
      Buyer. Neither such inquiries nor any other due diligence investigation
      conducted by Buyer or any of its advisors or representatives shall modify,
      amend
      or affect Buyer’s right to rely on the Company’s representations and warranties
      contained in Section 3 below. The Buyer understands that its investment in
      the
      Securities involves a significant degree of risk.

     

    e. Governmental
      Review.
      The
      Buyer understands that no United States federal or state agency or any other
      government or governmental agency has passed upon or made any recommendation
      or
      endorsement of the Securities.

     

    f. Transfer
      or Re-sale.
      The
      Buyer understands that (i) except
      as provided in the Registration Rights Agreement, the sale or re-sale of the
      Securities has not been and is not being registered under the 1933 Act or any
      applicable state securities laws, and the Securities may not be transferred
      unless (a) the
      Securities are sold pursuant to an effective registration statement under the
      1933 Act, (b) the
      Buyer shall have delivered to the Company an opinion of counsel that shall
      be in
      form, substance and scope customary for opinions of counsel in comparable
      transactions to the effect that the Securities to be sold or transferred may
      be
      sold or transferred pursuant to an exemption from such registration, which
      opinion shall be accepted by the Company, (c) the
      Securities are sold or transferred to an “affiliate” (as defined in Rule 144
      promulgated under the 1933 Act (or a successor rule) (“Rule
      144”))
      of
      the Buyer who agrees to sell or otherwise transfer the Securities only in
      accordance with this Section 2(f) and who is an Accredited Investor,
(d) the
      Securities are sold pursuant to Rule 144, or (e) the
      Securities are sold pursuant to Regulation S under the 1933 Act (or a successor
      rule) (“Regulation
      S”),
      and
      the Buyer shall have delivered to the Company an opinion of counsel that shall
      be in form, substance and scope customary for opinions of counsel in corporate
      transactions, which opinion shall be accepted by the Company; (ii) any sale
      of
      such Securities made in reliance on Rule 144 may be made only in accordance
      with
      the terms of said Rule and further, if said Rule is not applicable, any re-sale
      of such 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 1933 Act) may require compliance with some other exemption
      under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii)
      neither the Company nor any other person is under any obligation to register
      such Securities under the 1933 Act or any state securities laws or to comply
      with the terms and conditions of any exemption thereunder (in each case, other
      than pursuant to the Registration Rights Agreement). Notwithstanding the
      foregoing or anything else contained herein to the contrary, the Securities
      may
      be pledged as collateral in connection with a bona fide
      margin
      account or other lending arrangement. In the event that the Company does not
      accept the opinion of counsel provided by the Buyer with respect to the transfer
      of Securities pursuant to an exemption from registration, such as Rule 144
      or
      Regulation S, within three (3) business days of delivery of the opinion to
      the
      Company, the Company shall pay to the Buyer liquidated damages of three percent
      (3%) of the outstanding amount of the Notes per month plus accrued and unpaid
      interest on the Notes, prorated for partial months, in cash or shares at the
      option of the Company (“Standard
      Liquidated Damages Amount”).
      If
      the Company elects to be pay the Standard Liquidated Damages Amount in shares
      of
      Common Stock, such shares shall be issued at the Conversion Price at the time
      of
      payment.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    g. Legends.
      The
      Buyer understands that the Notes and the Warrants and, until such time as the
      Conversion Shares and Warrant Shares have been registered under the 1933 Act
      as
      contemplated by the Registration Rights Agreement or otherwise may be sold
      pursuant to Rule 144 or Regulation S without any restriction as to the number
      of
      securities as of a particular date that can then be immediately sold, the
      Conversion Shares and Warrant Shares may bear a restrictive legend in
      substantially the following form (and a stop-transfer order may be placed
      against transfer of the certificates for such Securities):

     

    “The
      securities represented by this certificate have not been registered under the
      Securities Act of 1933, as amended. The securities may not be sold, transferred
      or assigned in the absence of an effective registration statement for the
      securities under said Act, or an opinion of counsel, in form, substance and
      scope customary for opinions of counsel in comparable transactions, that
      registration is not required under said Act or unless sold pursuant to Rule
      144
      or Regulation S under said Act.”

     

    The
      legend set forth above shall be removed and the Company shall issue a
      certificate without such legend to the holder of any Security upon which it
      is
      stamped, if, unless otherwise required by applicable state securities laws,
      (a)
      such Security is registered for sale under an effective registration statement
      filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or
      Regulation S without any restriction as to the number of securities as of a
      particular date that can then be immediately sold, or (b) such holder provides
      the Company with an opinion of counsel, in form, substance and scope customary
      for opinions of counsel in comparable transactions, to the effect that a public
      sale or transfer of such Security may be made without registration under the
      1933 Act, which opinion shall be accepted by the Company so that the sale or
      transfer is effected or (c) such holder provides the Company with reasonable
      assurances that such Security can be sold pursuant to Rule 144 or Regulation
      S.
      The Buyer agrees to sell all Securities, including those represented by a
      certificate(s) from which the legend has been removed, in compliance with
      applicable prospectus delivery requirements, if any.

     

    h. Authorization;
      Enforcement.
      This
      Agreement and the Registration Rights Agreement have been duly and validly
      authorized. This Agreement has been duly executed and delivered on behalf of
      the
      Buyer, and this Agreement constitutes, and upon execution and delivery by the
      Buyer of the Registration Rights Agreement, such agreement will constitute,
      valid and binding agreements of the Buyer enforceable in accordance with their
      terms.

     

    i. Residency.
      The
      Buyer is a resident of the jurisdiction set forth immediately below such Buyer’s
      name on the signature pages hereto. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    3. REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY.
      The
      Company represents and warrants to each Buyer that:

     

    a. Organization
      and Qualification.
      The
      Company and each of its Subsidiaries (as defined below), if any, is a
      corporation duly organized, validly existing and in good standing under the
      laws
      of the jurisdiction in which it is incorporated, with full power and authority
      (corporate and other) to own, lease, use and operate its properties and to
      carry
      on its business as and where now owned, leased, used, operated and conducted.
      Schedule
      3(a)
      sets
      forth a list of all of the Subsidiaries of the Company and the jurisdiction
      in
      which each is incorporated. The Company and each of its Subsidiaries is duly
      qualified as a foreign corporation to do business and is in good standing in
      every jurisdiction in which its ownership or use of property or the nature
      of
      the business conducted by it makes such qualification necessary except where
      the
      failure to be so qualified or in good standing would not have a Material Adverse
      Effect. “Material
      Adverse Effect”
means
      any of (i) a material and adverse effect on the legality, validity or
      enforceability of any document executed in connection with this financing,
      (ii)
      a material and adverse effect on the results of operations, assets, prospects,
      business or condition (financial or otherwise) of the Company and the
      Subsidiaries, taken as a whole, or (iii) an adverse impairment to the Company’s
      ability to perform under any of the documents executed in connection with this
      financing. “Subsidiaries”
means
      any corporation or other organization, whether incorporated or unincorporated,
      in which the Company owns, directly or indirectly, any equity or other ownership
      interest.

     

    b. Authorization;
      Enforcement.
      (i) The
      Company has all requisite corporate power and authority to enter into and
      perform this Agreement, the Registration Rights Agreement, the Notes and the
      Warrants and to consummate the transactions contemplated hereby and thereby
      and
      to issue the Securities, in accordance with the terms hereof and thereof, (ii)
      the execution and delivery of this Agreement, the Registration Rights Agreement,
      the Notes and the Warrants by the Company and the consummation by it of the
      transactions contemplated hereby and thereby (including without limitation,
      the
      issuance of the Notes and the Warrants and the issuance and reservation for
      issuance of the Conversion Shares and Warrant Shares issuable upon conversion
      or
      exercise thereof) have been duly authorized by the Company’s Board of Directors
      and no further consent or authorization of the Company, its Board of Directors,
      or its shareholders is required, (iii) this Agreement has been duly executed
      and
      delivered by the Company by its authorized representative, and such authorized
      representative is the true and official representative with authority to sign
      this Agreement and the other documents executed in connection herewith and
      bind
      the Company accordingly, and (iv) this Agreement constitutes, and upon execution
      and delivery by the Company of the Registration Rights Agreement, the Notes
      and
      the Warrants, each of such instruments will constitute, a legal, valid and
      binding obligation of the Company enforceable against the Company in accordance
      with its terms.

     

    c. Capitalization.
      As of
      the date hereof, the authorized capital stock of the Company consists of (i)
      [          ] shares of Common
      Stock, par value $.001 per share, of which 16,369,484 shares are issued and
      outstanding, and [          ]
      shares are reserved for issuance, and
      [                    
] shares are reserved for issuance upon conversion of the Notes and exercise
      of
      the Warrants; and (ii)
      [            ]
      shares of preferred stock, of which 0 shares are issued and outstanding. All
      of
      such outstanding shares of capital stock are, or upon issuance will be, duly
      authorized, validly issued, fully paid and nonassessable. No shares of capital
      stock of the Company are subject to preemptive rights or any other similar
      rights of the shareholders of the Company or any liens or encumbrances imposed
      through the actions or failure to act of the Company. Except as disclosed in
      Schedule
      3(c),
      as of
      the effective date of this Agreement, (i) there are no outstanding options,
      warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal,
      agreements, understandings, claims or other commitments or rights of any
      character whatsoever relating to, or securities or rights convertible into
      or
      exchangeable for any shares of capital stock of the Company or any of its
      Subsidiaries, or arrangements by which the Company or any of its Subsidiaries
      is
      or may become bound to issue additional shares of capital stock of the Company
      or any of its Subsidiaries, (ii) there are no agreements or arrangements under
      which the Company or any of its Subsidiaries is obligated to register the sale
      of any of its or their securities under the 1933 Act (except the Registration
      Rights Agreement) and (iii) there are no anti-dilution or price adjustment
      provisions contained in any security issued by the Company (or in any agreement
      providing rights to security holders) that will be triggered by the issuance
      of
      the Notes, the Warrants, the Conversion Shares or Warrant Shares. The Company
      has furnished to the Buyer true and correct copies of the Company’s Certificate
      of Incorporation as in effect on the date hereof (“Certificate
      of Incorporation”),
      the
      Company’s By-laws, as in effect on the date hereof (the “By-laws”),
      and
      the terms of all securities convertible into or exercisable for Common Stock
      of
      the Company and the material rights of the holders thereof in respect thereto.
      The Company shall provide the Buyer with a written update of this representation
      signed by the Company’s Chief Executive or Chief Financial Officer on behalf of
      the Company as of the Closing Date.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    d. Issuance
      of Shares.
      The
      Conversion Shares and Warrant Shares are duly authorized and reserved for
      issuance and, upon conversion of the Notes and exercise of the Warrants in
      accordance with their respective terms, will be validly issued, fully paid
      and
      non-assessable, and free from all taxes, liens, claims and encumbrances with
      respect to the issue thereof and shall not be subject to preemptive rights
      or
      other similar rights of shareholders of the Company and will not impose personal
      liability upon the holder thereof.

     

    e. Acknowledgment
      of Dilution.
      The
      Company understands and acknowledges the potentially dilutive effect to the
      Common Stock upon the issuance of the Conversion Shares and Warrant Shares
      upon
      conversion of the Note or exercise of the Warrants. The Company further
      acknowledges that its obligation to issue Conversion Shares and Warrant Shares
      upon conversion of the Notes or exercise of the Warrants in accordance with
      this
      Agreement, the Notes and the Warrants is absolute and unconditional regardless
      of the dilutive effect that such issuance may have on the ownership interests
      of
      other shareholders of the Company.

     

    f. No
      Conflicts.
      The
      execution, delivery and performance of this Agreement, the Registration Rights
      Agreement, the Notes and the Warrants by the Company and the consummation by
      the
      Company of the transactions contemplated hereby and thereby (including, without
      limitation, the issuance and reservation for issuance of the Conversion Shares
      and Warrant Shares) will not (i) conflict with or result in a violation of
      any
      provision of the Certificate of Incorporation or By-laws or (ii) violate or
      conflict with, or result in a breach of any provision of, or constitute a
      default (or an event which with notice or lapse of time or both could become
      a
      default) under, or give to others any rights of termination, amendment,
      acceleration or cancellation of, any agreement, indenture, patent, patent
      license 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 federal and state securities laws and regulations
      and regulations of any self-regulatory organizations to which the Company or
      its
      securities are subject) 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 for such conflicts, defaults, terminations,
      amendments, accelerations, cancellations and violations as would not,
      individually or in the aggregate, have a Material Adverse Effect). Neither
      the
      Company nor any of its Subsidiaries is in violation of its Certificate of
      Incorporation, By-laws or other organizational documents and neither the Company
      nor any of its Subsidiaries is in default (and no event has occurred which
      with
      notice or lapse of time or both could put the Company or any of its Subsidiaries
      in default) under, and neither the Company nor any of its Subsidiaries has
      taken
      any action or failed to take any action that would 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 by which any property or assets of the Company or any of its
      Subsidiaries is bound or affected, except for possible defaults as would not,
      individually or in the aggregate, have a Material Adverse Effect. The businesses
      of the Company and its Subsidiaries, if any, are not being conducted, and shall
      not be conducted so long as a Buyer owns any of the Securities, in violation
      of
      any law, ordinance or regulation of any governmental entity. Except as
      specifically contemplated by this Agreement and as required under the 1933
      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, governmental agency, regulatory agency, self regulatory organization
      or stock market or any third party in order for it to execute, deliver or
      perform any of its obligations under this Agreement, the Registration Rights
      Agreement, the Notes or the Warrants in accordance with the terms hereof or
      thereof or to issue and sell the Notes and Warrants in accordance with the
      terms
      hereof and to issue the Conversion Shares upon conversion of the Notes and
      the
      Warrant Shares upon exercise of the Warrants. Except as disclosed in
Schedule
      3(f),
      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 is not in violation of
      the
      quotation requirements of the Over-the-Counter Bulletin Board (the “OTCBB”)
      and
      does not reasonably anticipate that the Common Stock will be delisted by the
      OTCBB in the foreseeable future. The Company and its Subsidiaries are unaware
      of
      any facts or circumstances which might give rise to any of the foregoing.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    g. SEC
      Documents; Financial Statements.
      Except
      as disclosed in Schedule
      3(g),
      the
      Company has timely filed all reports, schedules, forms, statements and other
      documents required to be filed by it with the SEC pursuant to the reporting
      requirements of the Securities Exchange Act of 1934, as amended (the
“1934
      Act”)
      (all
      of the foregoing filed prior to the date hereof and all exhibits included
      therein and financial statements and schedules thereto and documents (other
      than
      exhibits to such documents) incorporated by reference therein, being hereinafter
      referred to herein as the “SEC
      Documents”).
      The
      Company has delivered to each Buyer true and complete copies of the SEC
      Documents, except for such exhibits and incorporated documents. As of their
      respective dates, the SEC Documents complied in all material respects with
      the
      requirements of the 1934 Act and the rules and regulations of the SEC
      promulgated thereunder applicable to the SEC Documents, and none of the SEC
      Documents, at the time they were filed with the SEC, contained any untrue
      statement of a material fact or omitted to state a material fact required to
      be
      stated therein or necessary in order to make the statements therein, in light
      of
      the circumstances under which they were made, not misleading. None of the
      statements made in any such SEC Documents is, or has been, required to be
      amended or updated under applicable law (except for such statements as have
      been
      amended or updated in subsequent filings prior the date hereof). 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
      United States 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 not include footnotes or may be
      condensed or summary statements) and fairly present in all material respects
      the
      consolidated financial position of the Company and its consolidated Subsidiaries
      as of the dates thereof and the consolidated results of their operations and
      cash flows for the periods then ended (subject, in the case of unaudited
      statements, to normal year-end audit adjustments). Except as set forth in the
      financial statements of the Company included in the SEC Documents, the Company
      has no liabilities, contingent or otherwise, other than (i) liabilities incurred
      in the ordinary course of business subsequent to October 31, 2004 and (ii)
      obligations under contracts and commitments incurred in the ordinary course
      of
      business and not required under generally accepted accounting principles to
      be
      reflected in such financial statements, which, individually or in the aggregate,
      are not material to the financial condition or operating results of the
      Company.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    h. Absence
      of Certain Changes.
      Since
      October 31, 2004, there has been no material adverse change and no material
      adverse development in the assets, liabilities, business, properties,
      operations, financial condition, results of operations or prospects of the
      Company or any of its Subsidiaries.

     

    i. Absence
      of Litigation.
      There
      is no action, suit, claim, proceeding, inquiry or investigation before or by
      any
      court, public board, government agency, self-regulatory organization or body
      pending or, to the knowledge of the Company or any of its Subsidiaries,
      threatened against or affecting the Company or any of its Subsidiaries, or
      their
      officers or directors in their capacity as such, that could have a Material
      Adverse Effect. Schedule
      3(i)
      contains
      a complete list and summary description of any pending or threatened proceeding
      against or affecting the Company or any of its Subsidiaries, without regard
      to
      whether it would have a Material Adverse Effect. The Company and its
      Subsidiaries are unaware of any facts or circumstances which might give rise
      to
any of the foregoing.

     

    j. Patents,
      Copyrights, etc.
      The
      Company and each of its Subsidiaries owns or possesses the requisite licenses
      or
      rights to use all patents, patent applications, patent rights, inventions,
      know-how, trade secrets, trademarks, trademark applications, service marks,
      service names, trade names and copyrights (“Intellectual
      Property”)
      necessary to enable it to conduct its business as now operated (and, except
      as
      set forth in Schedule
      3(j)
      hereof,
      to the best of the Company’s knowledge, as presently contemplated to be operated
      in the future); there is no claim or action by any person pertaining to, or
      proceeding pending, or to the Company’s knowledge threatened, which challenges
      the right of the Company or of a Subsidiary with respect to any Intellectual
      Property necessary to enable it to conduct its business as now operated (and,
      except as set forth in Schedule
      3(j) hereof,
      to the best of the Company’s knowledge, as presently contemplated to be operated
      in the future); to the best of the Company’s knowledge, the Company’s or its
      Subsidiaries’ current and intended products, services and processes do not
      infringe on any Intellectual Property or other rights held by any person; and
      the Company is unaware of any facts or circumstances which might give rise
      to
      any of the foregoing. The Company and each of its Subsidiaries have taken
      reasonable security measures to protect the secrecy, confidentiality and value
      of their Intellectual Property.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    k. No
      Materially Adverse Contracts, 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. Neither the Company nor any of its
      Subsidiaries is a party to any contract or agreement which in the judgment
      of
      the Company’s officers has or is expected to have a Material Adverse
      Effect.

     

    l. Tax
      Status.
      Except
      as set forth on Schedule
      3(l),
      the
      Company and each of its Subsidiaries has made or filed all federal, state and
      foreign income and all other tax returns, reports and declarations required
      by
      any jurisdiction to which it is subject (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) and
      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 provisions 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. The Company has not executed a waiver with respect
      to
      the statute of limitations relating to the assessment or collection of any
      foreign, federal, state or local tax. Except as set forth on Schedule
      3(l),
      none of
      the Company’s tax returns is presently being audited by any taxing
      authority.

     

    m. Certain
      Transactions.
      Except
      as set forth on Schedule
      3(m)
      and
      except for arm’s length transactions pursuant to which the Company or any of its
      Subsidiaries makes payments in the ordinary course of business upon terms no
      less favorable than the Company or any of its Subsidiaries could obtain from
      third parties and other than the grant of stock options disclosed on
Schedule
      3(c),
      none of
      the officers, directors, or employees of the Company is presently a party to
      any
      transaction with the Company or any of its Subsidiaries (other than for 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.

     

    n. Disclosure.
      All
      information relating to or concerning the Company or any of its Subsidiaries
      set
      forth in this Agreement and provided to the Buyers pursuant to Section 2(d)
      hereof and otherwise in connection with the transactions contemplated hereby
      is
      true and correct in all material respects and the Company has not omitted to
      state any material fact necessary in order to make the statements made herein
      or
      therein, in light of the circumstances under which they were made, not
      misleading. No event or circumstance has occurred or exists with respect to
      the
      Company or any of its Subsidiaries or its or their business, properties,
      prospects, operations or financial conditions, which, under applicable law,
      rule
      or regulation, requires public disclosure or announcement by the Company but
      which has not been so publicly announced or disclosed (assuming for this purpose
      that the Company’s reports filed under the 1934 Act are being incorporated into
      an effective registration statement filed by the Company under the 1933
      Act).

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    o. Acknowledgment
      Regarding Buyers’ Purchase of Securities.
      The
      Company acknowledges and agrees that the Buyers are acting solely in the
      capacity of arm’s length purchasers with respect to this Agreement and the
      transactions contemplated hereby. The Company further acknowledges that no
      Buyer
      is acting as a financial advisor or fiduciary of the Company (or in any similar
      capacity) with respect to this Agreement and the transactions contemplated
      hereby and any statement made by any Buyer or any of their respective
      representatives or agents in connection with this Agreement and the transactions
      contemplated hereby is not advice or a recommendation and is merely incidental
      to the Buyers’ 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 of the Company and its
      representatives.

     

    p. 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 in any security
      or
      solicited any offers to buy any security under circumstances that would require
      registration under the 1933 Act of the issuance of the Securities to the Buyers.
      The issuance of the Securities to the Buyers will not be integrated with any
      other issuance of the Company’s securities (past, current or future) for
      purposes of any shareholder approval provisions applicable to the Company or
      its
      securities.

     

    q. No
      Brokers.
      Except
      as set forth in Schedule
      3(q),
      the
      Company has taken no action which would give rise to any claim by any person
      for
      brokerage commissions, transaction fees or similar payments relating to this
      Agreement or the transactions contemplated hereby. 

     

    r. Permits;
      Compliance.
      The
      Company and each of its Subsidiaries is in possession of all franchises, grants,
      authorizations, licenses, permits, easements, variances, exemptions, consents,
      certificates, approvals and orders necessary to own, lease and operate its
      properties and to carry on its business as it is now being conducted
      (collectively, the “Company
      Permits”),
      and
      there is no action pending or, to the knowledge of the Company, threatened
      regarding suspension or cancellation of any of the Company Permits. Neither
      the
      Company nor any of its Subsidiaries is in conflict with, or in default or
      violation of, any of the Company Permits, except for any such conflicts,
      defaults or violations which, individually or in the aggregate, would not
      reasonably be expected to have a Material Adverse Effect. Since October 31,
      2004, neither the Company nor any of its Subsidiaries has received any
      notification with respect to possible conflicts, defaults or violations of
      applicable laws, except for notices relating to possible conflicts, defaults
      or
      violations, which conflicts, defaults or violations would not have a Material
      Adverse Effect.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    s. Environmental
      Matters.

     

    (i) Except
      as
      set forth in Schedule
      3(s),
      there
      are, to the Company’s knowledge, with respect to the Company or any of its
      Subsidiaries or any predecessor of the Company, no past or present violations
      of
      Environmental Laws (as defined below), releases of any material into the
      environment, actions, activities, circumstances, conditions, events, incidents,
      or contractual obligations which may give rise to any common law environmental
      liability or any liability under the Comprehensive Environmental Response,
      Compensation and Liability Act of 1980 or similar federal, state, local or
      foreign laws and neither the Company nor any of its Subsidiaries has received
      any notice with respect to any of the foregoing, nor is any action pending
      or,
      to the Company’s knowledge, threatened in connection with any of the foregoing.
      The term “Environmental
      Laws”
means
      all federal, state, local or foreign laws relating to pollution or protection
      of
      human health or the environment (including, without limitation, ambient air,
      surface water, groundwater, land surface or subsurface strata), including,
      without limitation, laws relating to emissions, discharges, releases or
      threatened releases of chemicals, pollutants contaminants, or toxic or hazardous
      substances or wastes (collectively, “Hazardous
      Materials”)
      into
      the environment, or otherwise relating to the manufacture, processing,
      distribution, use, treatment, storage, disposal, transport or handling of
      Hazardous Materials, as well as all authorizations, codes, decrees, demands
      or
      demand letters, injunctions, judgments, licenses, notices or notice letters,
      orders, permits, plans or regulations issued, entered, promulgated or approved
      thereunder.

     

    (ii) Other
      than those that are or were stored, used or disposed of in compliance with
      applicable law, no Hazardous Materials are contained on or about any real
      property currently owned, leased or used by the Company or any of its
      Subsidiaries, and no Hazardous Materials were released on or about any real
      property previously owned, leased or used by the Company or any of its
      Subsidiaries during the period the property was owned, leased or used by the
      Company or any of its Subsidiaries, except in the normal course of the Company’s
      or any of its Subsidiaries’ business.

     

    (iii) Except
      as
      set forth in Schedule
      3(s),
      there
      are no underground storage tanks on or under any real property owned, leased
      or
      used by the Company or any of its Subsidiaries that are not in compliance with
      applicable law. 

     

    t. Title
      to Property.
      The
      Company and its Subsidiaries have good and marketable title in fee simple to
      all
      real property and good and marketable title to all personal property owned
      by
      them which is material to the business of the Company and its Subsidiaries,
      in
      each case free and clear of all liens, encumbrances and defects except such
      as
      are described in Schedule
      3(t)
      or such
      as would not have a Material Adverse Effect. Any 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 would not
      have
      a Material Adverse Effect.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    u. Insurance.
      The
      Company and each of its Subsidiaries are insured by insurers of recognized
      financial responsibility against such losses and risks and in such amounts
      as
      management of the Company believes to be prudent and customary in the businesses
      in which the Company and its Subsidiaries are engaged. Neither the Company
      nor
      any such Subsidiary has 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 have a Material Adverse Effect. The Company
      has provided to Buyer true and correct copies of all policies relating to
      directors’ and officers’ liability coverage, errors and omissions coverage, and
      commercial general liability coverage.

     

    v. Internal
      Accounting Controls.
      The
      Company and each of its Subsidiaries maintain a system of internal accounting
      controls sufficient, in the judgment of the Company’s board of directors, 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, (iii) access to assets is permitted only in accordance with
      management’s general or specific authorization and (iv) the recorded
      accountability for assets is compared with the existing assets at reasonable
      intervals and appropriate action is taken with respect to any
      differences.

     

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

     

    x. Solvency.
      The
      Company (after giving effect to the transactions contemplated by this Agreement)
      is solvent (i.e.,
      its
      assets have a fair market value in excess of the amount required to pay its
      probable liabilities on its existing debts as they become absolute and matured)
      and currently the Company has no information that would lead it to reasonably
      conclude that the Company would not, after giving effect to the transaction
      contemplated by this Agreement, have the ability to, nor does it intend to
      take
      any action that would impair its ability to, pay its debts from time to time
      incurred in connection therewith as such debts mature. The Company did not
      receive a qualified opinion from its auditors with respect to its most recent
      fiscal year end and, after giving effect to the transactions contemplated by
      this Agreement, does not anticipate or know of any basis upon which its auditors
      might issue a qualified opinion in respect of its current fiscal
      year.

     

    y. No
      Investment Company.
      The
      Company is not, and upon the issuance and sale of the Securities as contemplated
      by this Agreement will not be an “investment company” required to be registered
      under the Investment Company Act of 1940 (an “Investment
      Company”).
      The
      Company is not controlled by an Investment Company.

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    z. Breach
      of Representations and Warranties by the Company.
      If the
      Company breaches any of the representations or warranties set forth in this
      Section 3, and in addition to any other remedies available to the Buyers
      pursuant to this Agreement, the Company shall pay to the Buyer the Standard
      Liquidated Damages Amount in cash or in shares of Common Stock at the option
      of
      the Company, until such breach is cured. If the Company elects to pay the
      Standard Liquidated Damages Amounts in shares of Common Stock, such shares
      shall
      be issued at the Conversion Price at the time of payment.

     

    4. COVENANTS.

     

    a. Best
      Efforts.
      The
      parties shall use their best efforts to satisfy timely each of the conditions
      described in Section 6 and 7 of this Agreement. 

     

    b. Form
      D; Blue Sky Laws.
      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
      for sale to the Buyers at the applicable closing pursuant to this Agreement
      under applicable securities or “blue sky” laws of the states of the United
      States (or to obtain an exemption from such qualification), and shall provide
      evidence of any such action so taken to each Buyer on or prior to the Closing
      Date.

     

    c. Reporting
      Status; Eligibility to Use Form S-3, SB-2 or Form S-1. The
      Company’s Common Stock is registered under Section 12(g) of the 1934 Act. The
      Company represents and warrants that it meets the requirements for the use
      of
      Form S-3 (or if the Company is not eligible for the use of Form S-3 as of the
      Filing Date (as defined in the Registration Rights Agreement), the Company
      may
      use the form of registration for which it is eligible at that time) for
      registration of the sale by the Buyer of the Registrable Securities (as defined
      in the Registration Rights Agreement). So long as the Buyer beneficially owns
      any of the Securities, the Company shall timely file all reports required to
      be
      filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate
      its status as an issuer required to file reports under the 1934 Act even if
      the
      1934 Act or the rules and regulations thereunder would permit such termination.
      The Company further agrees to file all reports required to be filed by the
      Company with the SEC in a timely manner so as to become eligible, and thereafter
      to maintain its eligibility, for the use of Form S-3. The Company shall issue
      a
      press release describing the material terms of the transaction contemplated
      hereby as soon as practicable following the Closing Date but in no event more
      than two (2) business days of the Closing Date, which press release shall be
      subject to prior review by the Buyers. The Company agrees that such press
      release shall not disclose the name of the Buyers unless expressly consented
      to
      in writing by the Buyers or unless required by applicable law or regulation,
      and
      then only to the extent of such requirement.

     

    d. Use
      of Proceeds.
      The
      Company shall use the net proceeds from the sale of the Notes and the Warrants
      in the manner set forth in Schedule
      4(d)
      attached
      hereto and made a part hereof and shall not, directly or indirectly, use such
      proceeds for (i) any loan to or investment in any other corporation,
      partnership, enterprise or other person (except in connection with its currently
      existing direct or indirect Subsidiaries); (ii) the satisfaction of any portion
      of the Company’s debt (other than payment of trade payables and accrued expenses
      in the ordinary course of the Company’s business and consistent with prior past
      practices), or (iii) the redemption of any Common Stock.

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    e. Future
      Offerings.
      Subject
      to the exceptions described below, the Company will not, without the prior
      written consent of a majority-in-interest of the Buyers, negotiate or contract
      with any party to obtain additional equity financing (including debt financing
      with an equity component) that involves (A) the issuance of Common Stock at
      a
      discount to the market price of the Common Stock on the date of issuance (taking
      into account the value of any warrants or options to acquire Common Stock issued
      in connection therewith) or (B) the issuance of convertible securities that
      are
      convertible into an indeterminate number of shares of Common Stock or (C) the
      issuance of warrants during the period (the “Lock-up
      Period”)
      beginning on the Closing Date and ending on the later of (i) two hundred seventy
      (270) days from the Closing Date and (ii) one hundred eighty (180) days from
      the
      date the Registration Statement (as defined in the Registration Rights
      Agreement) is declared effective (plus any days in which sales cannot be made
      thereunder). In addition, subject to the exceptions described below, the Company
      will not conduct any equity financing (including debt with an equity component)
      (“Future
      Offerings”)
      during
      the period beginning on the Closing Date and ending two (2) years after the
      end
      of the Lock-up Period unless it shall have first delivered to each Buyer, at
      least twenty (20) business days prior to the closing of such Future Offering,
      written notice describing the proposed Future Offering, including the terms
      and
      conditions thereof and proposed definitive documentation to be entered into
      in
      connection therewith, and providing each Buyer an option during the fifteen
      (15)
      day period following delivery of such notice to purchase its pro rata share
      (based on the ratio that the aggregate principal amount of Notes purchased
      by it
      hereunder bears to the aggregate principal amount of Notes purchased hereunder)
      of the securities being offered in the Future Offering on the same terms as
      contemplated by such Future Offering (the limitations referred to in this
      sentence and the preceding sentence are collectively referred to as the
“Capital
      Raising Limitations”). 
      In the
      event the terms and conditions of a proposed Future Offering are amended in
      any
      respect after delivery of the notice to the Buyers concerning the proposed
      Future Offering, the Company shall deliver a new notice to each Buyer describing
      the amended terms and conditions of the proposed Future Offering and each Buyer
      thereafter shall have an option during the fifteen (15) day period following
      delivery of such new notice to purchase its pro rata share of the securities
      being offered on the same terms as contemplated by such proposed Future
      Offering, as amended. The foregoing sentence shall apply to successive
      amendments to the terms and conditions of any proposed Future Offering. The
      Capital Raising Limitations shall not apply to any transaction involving (i)
      issuances of securities in a firm commitment underwritten public offering
      (excluding a continuous offering pursuant to Rule 415 under the 1933 Act, an
      equity line of credit or similar financing arrangement) resulting in net
      proceeds to the Company of in excess of $15,000,000, or (ii) issuances of
      securities as consideration for a merger, consolidation or purchase of assets,
      or in connection with any strategic partnership or joint venture (the primary
      purpose of which is not to raise equity capital), or in connection with the
      disposition or acquisition of a business, product or license by the Company.
      The
      Capital Raising Limitations also shall not apply to the issuance of securities
      upon exercise or conversion of the Company’s options, warrants or other
      convertible securities outstanding as of the date hereof or to the grant of
      additional options or warrants, or the issuance of additional securities, under
      any Company stock option or restricted stock plan approved by the shareholders
      of the Company. Notwithstanding anything in this section 4(e) to the contrary,
      in the event the Company’s Board of Directors decides, in good faith, to enter
      into a transaction or relationship in which the Company issues shares of Common
      Stock or other securities of the Company to a person or any entity which is,
      itself or through its subsidiaries, an operating company in a business
      synergistic with the business of the Company and in which the Company received
      benefits in addition to the investment of funds, but shall not include a
      transaction in which the Company is issuing securities primarily for the purpose
      of raising capital or to an entity whose business is investing in securities,
      the Company shall be permitted to do so.

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    f. Expenses.
      At the
      Closing, the Company shall reimburse Buyers $50,000 for expenses incurred by
      them in connection with the negotiation, preparation, execution, delivery and
      performance of this Agreement and the other agreements to be executed in
      connection herewith (“Documents”), including, without limitation, attorneys’ and
      consultants’ fees and expenses, transfer agent fees, fees for stock quotation
      services, fees relating to any amendments or modifications of the Documents
      or
      any consents or waivers of provisions in the Documents, fees for the preparation
      of opinions of counsel, escrow fees, and costs of restructuring the transactions
      contemplated by the Documents. When possible, the Company must pay these fees
      directly, otherwise the Company must make immediate payment for reimbursement
      to
      the Buyers for all fees and expenses immediately upon written notice by the
      Buyer or the submission of an invoice by the Buyer If the Company fails to
      reimburse the Buyer in full within three (3) business days of the written notice
      or submission of invoice by the Buyer, the Company shall pay interest on the
      total amount of fees to be reimbursed at a rate of 15% per annum.

     

    g. Financial
      Information.
      The
      Company agrees to send the following reports to each Buyer until such Buyer
      transfers, assigns, or sells all of the Securities: (i) within
      ten (10) days after the filing with the SEC, a copy of its Annual Report on
      Form
      10-KSB its Quarterly Reports on Form 10-QSB and any Current Reports on Form
      8-K;
(ii) within
      one (1) day after release, copies of all press releases issued by the Company
      or
      any of its Subsidiaries; and (iii) contemporaneously
      with the making available or giving to the shareholders of the Company, copies
      of any notices or other information the Company makes available or gives to
      such
      shareholders.

     

    h. Authorization
      and Reservation of Shares.
      The
      Company shall at all times have authorized, and reserved for the purpose of
      issuance, a sufficient number of shares of Common Stock to provide for the
      full
      conversion or exercise of the outstanding Notes and Warrants and issuance of
      the
      Conversion Shares and Warrant Shares in connection therewith (based on the
      Conversion Price of the Notes or Exercise Price of the Warrants in effect from
      time to time) and as otherwise required by the Notes. The Company shall not
      reduce the number of shares of Common Stock reserved for issuance upon
      conversion of Notes and exercise of the Warrants without the consent of each
      Buyer. The Company shall at all times maintain the number of shares of Common
      Stock so reserved for issuance at an amount (“Reserved
      Amount”)
      equal
      to no less than two (2) times the number that is then actually issuable upon
      full conversion of the Notes and Additional Notes and upon exercise of the
      Warrants and the Additional Warrants (based on the Conversion Price of the
      Notes
      or the Exercise Price of the Warrants in effect from time to time). If at any
      time the number of shares of Common Stock authorized and reserved for issuance
      (“Authorized
      and Reserved Shares”)
      is
      below the Reserved Amount, the Company will promptly take all corporate action
      necessary to authorize and reserve a sufficient number of shares, including,
      without limitation, calling a special meeting of shareholders to authorize
      additional shares to meet the Company’s obligations under this Section 4(h), in
      the case of an insufficient number of authorized shares, obtain shareholder
      approval of an increase in such authorized number of shares, and voting the
      management shares of the Company in favor of an increase in the authorized
      shares of the Company to ensure that the number of authorized shares is
      sufficient to meet the Reserved Amount. If the Company fails to obtain such
      shareholder approval within thirty (30) days following the date on which the
      number of Reserved Amount exceeds the Authorized and Reserved Shares, the
      Company shall pay to the Borrower the Standard Liquidated Damages Amount, in
      cash or in shares of Common Stock at the option of the Buyer. If the Buyer
      elects to be paid the Standard Liquidated Damages Amount in shares of Common
      Stock, such shares shall be issued at the Conversion Price at the time of
      payment. In order to ensure that the Company has authorized a sufficient amount
      of shares to meet the Reserved Amount at all times, the Company must deliver
      to
      the Buyer at the end of every month a list detailing (1) the current amount
      of
      shares authorized by the Company and reserved for the Buyer; and (2) amount
      of
      shares issuable upon conversion of the Notes and upon exercise of the Warrants
      and as payment of interest accrued on the Notes for one year. If the Company
      fails to provide such list within five (5) business days of the end of each
      month, the Company shall pay the Standard Liquidated Damages Amount, in cash
      or
      in shares of Common Stock at the option of the Buyer, until the list is
      delivered. If the Buyer elects to be paid the Standard Liquidated Damages Amount
      in shares of Common Stock, such shares shall be issued at the Conversion Price
      at the time of payment.

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    i. Listing.
      The
      Company shall promptly secure the listing or quotation, as the case may be,
      of
      the Conversion Shares and Warrant Shares upon each national securities exchange
      or automated quotation system, if any, upon which shares of Common Stock are
      then listed or quoted, as the case may be, (subject to official notice of
      issuance) and, so long as any Buyer owns any of the Securities, shall maintain,
      so long as any other shares of Common Stock shall be so listed or quoted, as
      the
      case may be, such listing or quotation, as the case may be, of all Conversion
      Shares and Warrant Shares from time to time issuable upon conversion of the
      Notes or exercise of the Warrants. The Company will obtain and, so long as
      any
      Buyer owns any of the Securities, maintain the listing or quotation, as the
      case
      may be, and trading of its Common Stock on the OTCBB or any equivalent
      replacement exchange, the Nasdaq National Market (“Nasdaq”),
      the
      Nasdaq SmallCap Market (“Nasdaq
      SmallCap”),
      the
      New York Stock Exchange (“NYSE”),
      or
      the American Stock Exchange (“AMEX”)
      and
      will comply in all respects with the Company’s reporting, filing and other
      obligations under the bylaws or rules of the National Association of Securities
      Dealers (“NASD”)
      and
      such exchanges, as applicable. The Company shall promptly provide to each Buyer
      copies of any notices it receives from the OTCBB and any other exchanges or
      quotation systems on which the Common Stock is then listed or quoted, as the
      case may be, regarding the continued eligibility of the Common Stock for listing
      or quotation, as the case may be, on such exchanges and quotation
      systems.

     

    j. Corporate
      Existence.
      So long
      as a Buyer beneficially owns any Notes or Warrants, the Company shall maintain
      its corporate existence and shall not sell all or substantially all of the
      Company’s assets, except in the event of a merger or consolidation or sale of
      all or substantially all of the Company’s assets, where the surviving or
      successor entity in such transaction (i) assumes the Company’s obligations
      hereunder and under the agreements and instruments entered into in connection
      herewith and (ii) is a publicly traded corporation whose Common Stock is listed
      for trading on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or
      AMEX.

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    k. No
      Integration.
      The
      Company shall not make any offers or sales of any security (other than the
      Securities) under circumstances that would require registration of the
      Securities being offered or sold hereunder under the 1933 Act or cause the
      offering of the Securities to be integrated with any other offering of
      securities by the Company for the purpose of any stockholder approval provision
      applicable to the Company or its securities.

     

    l. Key
      Man Insurance.
      The
      Company shall use its best efforts to obtain, on or before five (5) business
      days from the date hereof, key man life insurance on Alex Lightman.

     

    m. Breach
      of Covenants.
      If the
      Company breaches any of the covenants set forth in this Section 4, and in
      addition to any other remedies available to the Buyers pursuant to this
      Agreement, the Company shall pay to the Buyers the Standard Liquidated Damages
      Amount, in cash or in shares of Common Stock at the option of the Company,
      until
      such breach is cured. If the Company elects to pay the Standard Liquidated
      Damages Amount in shares, such shares shall be issued at the Conversion Price
      at
      the time of payment.

     

    5. TRANSFER
      AGENT INSTRUCTIONS.
      The
      Company shall issue irrevocable instructions to its transfer agent to issue
      certificates, registered in the name of each Buyer or its nominee, for the
      Conversion Shares and Warrant Shares in such amounts as specified from time
      to
      time by each Buyer to the Company upon conversion of the Notes or exercise
      of
      the Warrants in accordance with the terms thereof (the “Irrevocable
      Transfer Agent Instructions”).
      Prior
      to registration of the Conversion Shares and Warrant Shares under the 1933
      Act
      or the date on which the Conversion Shares and Warrant Shares may be sold
      pursuant to Rule 144 without any restriction as to the number of Securities
      as
      of a particular date that can then be immediately sold, all such certificates
      shall bear the restrictive legend specified in Section 2(g) of this Agreement.
      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(f) hereof (in the case of the Conversion Shares
      and
      Warrant Shares, prior to registration of the Conversion Shares and Warrant
      Shares under the 1933 Act or the date on which the Conversion Shares and Warrant
      Shares may be sold pursuant to Rule 144 without any restriction as to the number
      of Securities as of a particular date that can then be immediately sold), 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 Registration Rights Agreement.
      Nothing in this Section shall affect in any way the Buyer’s obligations and
      agreement set forth in Section 2(g) hereof to comply with all applicable
      prospectus delivery requirements, if any, upon re-sale of the Securities. If
      a
      Buyer provides the Company with (i) an opinion of counsel in form, substance
      and
      scope customary for opinions in comparable transactions, to the effect that
      a
      public sale or transfer of such Securities may be made without registration
      under the 1933 Act and such sale or transfer is effected or (ii) the Buyer
      provides reasonable assurances that the Securities can be sold pursuant to
      Rule
      144, the Company shall permit the transfer, and, in the case of the Conversion
      Shares and Warrant Shares, promptly instruct its transfer agent to issue one
      or
      more certificates, free from restrictive legend, in such name and in such
      denominations as specified by such Buyer. The Company acknowledges that a breach
      by it of its obligations hereunder will cause irreparable harm to the Buyers,
      by
      vitiating the intent and purpose of the transactions contemplated hereby.
      Accordingly, the Company acknowledges that the remedy at law for a breach of
      its
      obligations under this Section 5 may be inadequate and agrees, in the event
      of a
      breach or threatened breach by the Company of the provisions of this Section,
      that the Buyers shall be entitled, in addition to all other available remedies,
      to an injunction restraining any breach and requiring immediate transfer,
      without the necessity of showing economic loss and without any bond or other
      security being required.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    6. CONDITIONS
      TO THE COMPANY’S OBLIGATION TO SELL.
      The
      obligation of the Company hereunder to issue and sell the Notes and Warrants
      to
      a Buyer at the Closing is subject to the satisfaction, at or before the Closing
      Date of each of the following conditions thereto, 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. The
      applicable Buyer shall have executed this Agreement and the Registration Rights
      Agreement, and delivered the same to the Company.

     

    b. The
      applicable Buyer shall have delivered the Purchase Price in accordance with
      Section 1(b) above.

     

    c. The
      representations and warranties of the applicable Buyer shall be true and correct
      in all material respects as of the date when made and as of the Closing Date
      as
      though made at that time (except for representations and warranties that speak
      as of a specific date), and the applicable Buyer 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 applicable Buyer at or prior to the Closing Date. 

     

    d. No
      litigation, statute, rule, regulation, executive order, decree, ruling or
      injunction shall have been enacted, entered, promulgated or endorsed by or
      in
      any court or governmental authority of competent jurisdiction or any
      self-regulatory organization having authority over the matters contemplated
      hereby which prohibits the consummation of any of the transactions contemplated
      by this Agreement.

     

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

     

    a. The
      Company shall have executed this Agreement and the Registration Rights
      Agreement, and delivered the same to the Buyer.

     

    b. The
      Company shall have delivered to such Buyer duly executed Notes (in such
      denominations as the Buyer shall request) and Warrants in accordance with
      Section 1(b) above.

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    c. The
      Irrevocable Transfer Agent Instructions, in form and substance satisfactory
      to a
      majority-in-interest of the Buyers, shall have been delivered to and
      acknowledged in writing by the Company’s Transfer Agent.

     

    d. The
      representations and warranties of the Company shall be true and correct in
      all
      material respects as of the date when made and as of the Closing Date as though
      made at such 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 Closing Date. The Buyer shall have received a certificate or
      certificates, executed by the chief executive officer of the Company, dated
      as
      of the Closing Date, to the foregoing effect and as to such other matters as
      may
      be reasonably requested by such Buyer including, but not limited to certificates
      with respect to the Company’s Certificate of Incorporation, By-laws and Board of
      Directors’ resolutions relating to the transactions contemplated
      hereby.

     

    e. No
      litigation, statute, rule, regulation, executive order, decree, ruling or
      injunction shall have been enacted, entered, promulgated or endorsed by or
      in
      any court or governmental authority of competent jurisdiction or any
      self-regulatory organization having authority over the matters contemplated
      hereby which prohibits the consummation of any of the transactions contemplated
      by this Agreement.

     

    f. No
      event
      shall have occurred which could reasonably be expected to have a Material
      Adverse Effect on the Company.

     

    g. The
      Conversion Shares and Warrant Shares shall have been authorized for quotation
      on
      the OTCBB and trading in the Common Stock on the OTCBB shall not have been
      suspended by the SEC or the OTCBB.

     

    h. The
      Buyer
      shall have received an opinion of the Company’s counsel, dated as of the Closing
      Date, in form, scope and substance reasonably satisfactory to the Buyer and
      in
      substantially the same form as Exhibit
      “D”
      attached
      hereto.

     

    i. The
      Buyer
      shall have received an officer’s certificate described in Section 3(c) above,
      dated as of the Closing Date.

     

    8. GOVERNING
      LAW; MISCELLANEOUS.
      

     

    a. Governing
      Law.
      THIS
      AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
      LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
      ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF
      LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
      UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT TO
      ANY
      DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION
      HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES
      IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
      SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS
      UPON
      A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
      SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN
      SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
      BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH
      SUIT
      OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS
      BY
      SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT
      PREVAIL IN ANY DISPUTE ARISING UNDER THIS AGREEMENT SHALL BE RESPONSIBLE FOR
      ALL
      FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY
      IN CONNECTION WITH SUCH DISPUTE.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    b. Counterparts;
      Signatures by Facsimile.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original but all of which shall constitute one and the same agreement
      and shall become effective when counterparts have been signed by each party
      and
      delivered to the other party. This Agreement, once executed by a party, may
      be
      delivered to the other party hereto by facsimile transmission of a copy of
      this
      Agreement bearing the signature of the party so delivering this
      Agreement.

     

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

     

    d. Severability.
      In the
      event that any provision of this Agreement is invalid or unenforceable under
      any
      applicable statute or rule of law, then such provision shall be deemed
      inoperative to the extent that it may conflict therewith and shall be deemed
      modified to conform with such statute or rule of law. Any provision hereof
      which
      may prove invalid or unenforceable under any law shall not affect the validity
      or enforceability of any other provision hereof.

     

    e. Entire
      Agreement; Amendments.
      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
      the
      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 required or permitted to be given under the terms of this Agreement
      shall be sent by certified or registered mail (return receipt requested) or
      delivered personally or by courier (including a recognized overnight delivery
      service) or by facsimile and shall be effective five days after being placed
      in
      the mail, if mailed by regular United States mail, or upon receipt, if delivered
      personally or by courier (including a recognized overnight delivery service)
      or
      by facsimile, in each case addressed to a party. The addresses for such
      communications shall be:

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    If
      to the
      Company:

     

    Innofone.com,
      Inc.

    3470
      Olney-Laytonsville Road, Suite 118

    Olney,
      MD
      20832

    Attention:
      Chief Executive Officer

    Telephone:
      (301) 774-8294 

    Facsimile: 

     

    With
      a
      copy to:

     

    Gersten,
      Savage, Kaplowitz, Wolf & Marcus, LLP

    600
      Lexington Avenue

    New
      York,
      New York 10022

    Attention:    Arthur
      S. Marcus, Esq.

    Telephone:  (212)
      752-9700

    Facsimile:    (212)
      980-5192

     

    If
      to a
      Buyer: To the address set forth immediately below such Buyer’s name on the
      signature pages hereto.

     

    With
      copy
      to:

    

    Ballard
      Spahr Andrews & Ingersoll, LLP

    1735
      Market Street

    51st
      Floor

    Philadelphia,
      Pennsylvania 19103

    Attention:    Gerald
      J. Guarcini, Esq.

    Telephone:  215-864-8625

    Facsimile:    215-864-8999

    

    Each
      party shall provide notice to the other party of any change in
      address.

     

    g. Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their 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. Notwithstanding the foregoing, subject to
      Section 2(f), any Buyer may assign its rights hereunder to any person that
      purchases Securities in a private transaction from a Buyer or to any of its
      “affiliates,” as that term is defined under the 1934 Act, without the consent of
      the Company.

     

    h. 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.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    i. Survival.
      The
      representations and warranties of the Company and the agreements and covenants
      set forth in Sections 3, 4, 5 and 8 shall survive the closing hereunder
      notwithstanding any due diligence investigation conducted by or on behalf of
      the
      Buyers. The Company agrees to indemnify and hold harmless each of the Buyers
      and
      all their officers, directors, employees and agents for loss or damage arising
      as a result of or related to any breach or alleged breach by the Company of
      any
      of its representations, warranties and covenants set forth in Sections 3 and
      4
      hereof or any of its covenants and obligations under this Agreement or the
      Registration Rights Agreement, including advancement of expenses as they are
      incurred.

     

    j. Publicity.
      The
      Company and each of the Buyers shall have the right to review a reasonable
      period of time before issuance of any press releases, SEC, OTCBB or NASD
      filings, or any other public statements with respect to the transactions
      contemplated hereby; provided,
      however,
      that
      the Company shall be entitled, without the prior approval of each of the Buyers,
      to make any press release or SEC, OTCBB (or other applicable trading market)
      or
      NASD filings with respect to such transactions as is required by applicable
      law
      and regulations (although each of the Buyers shall be consulted by the Company
      in connection with any such press release prior to its release and shall be
      provided with a copy thereof and be given an opportunity to comment
      thereon).

     

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

     

    m. Remedies.
      The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to the Buyers 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 Agreement will be
      inadequate and agrees, in the event of a breach or threatened breach by the
      Company of the provisions of this Agreement, that the Buyers shall be entitled,
      in addition to all other available remedies at law or in equity, and in addition
      to the penalties assessable herein, to an injunction or injunctions restraining,
      preventing or curing any breach of this Agreement and to enforce specifically
      the terms and provisions hereof, without the necessity of showing economic
      loss
      and without any bond or other security being required.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      undersigned Buyers and the Company have caused this Agreement to be duly
      executed as of the date first above written.

     

    
      	
              INNOFONE.COM,
                INC.

            
	 
	 
	
              Alex
                Lightman

            
	
              Chief
                Executive Officer

            
	 
	
              AJW
                PARTNERS, LLC

            
	
              By:   SMS
                Group, LLC

            
	 
	 
	
              Corey
                S. Ribotsky

            
	
              Manager

            

    

     

    
      	
              RESIDENCE:
                

            	
                Delaware

            
	 	 
	
              ADDRESS:

            	
              1044
                Northern Boulevard

            
	 	
              Suite
                302

            
	 	
              Roslyn,
                New York 11576

            
	 	
              Facsimile:   (516)
                739-7115

            
	 	
              Telephone: (516)
                739-7110

            

    

    

    AGGREGATE
      SUBSCRIPTION AMOUNT:

    

    
      	
              Aggregate
                Principal Amount of Notes:

            	 	
              $

            	
              ________

            	 
	
              Number
                of Warrants:

            	 	 	
              ________

            	 
	
              Aggregate
                Purchase Price:

            	 	
              $

            	
              ________

            	 

    

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    

    
      	
              AJW
                MASTER FUND, LTD.

            
	
              By:
                First Street Manager II, LLC

            
	 
	 
	
              Corey
                S. Ribotsky

            
	
              Manager

            

    

    

    

    
      	
              RESIDENCE:

            	
                   Cayman
                Islands

            
	 	 
	
              ADDRESS:

            	
              AJW
                Offshore, Ltd.

            
	 	
              P.O.
                Box 32021 SMB

            
	 	
              Grand
                Cayman, Cayman Island, B.W.I.

            

    

    

    AGGREGATE
      SUBSCRIPTION AMOUNT:

    

    
      	
              Aggregate
                Principal Amount of Notes:

            	 	
              $

            	
              _______

            	 
	
              Number
                of Warrants:

            	 	 	
              _______

            	 
	
              Aggregate
                Purchase Price:

            	 	
              $

            	
              _______

            	 

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    

    
      	
              NEW
                MILLENNIUM CAPITAL PARTNERS II, LLC

            
	
              By:
                First Street Manager II, LLP

            
	
               

            
	
              Corey
                S. Ribotsky 

            
	
              Manager

            

    

     

    
      	
              RESIDENCE:

            	
                   New
                York

            
	 	 
	
              ADDRESS:

            	
              1044
                Northern Boulevard

            
	 	
              Suite
                302

            
	 	
              Roslyn,
                New York 11576

            
	 	
              Facsimile:      (516)
                739-7115

            
	 	
              Telephone:   (516)
                739-7110

            

    

     

    AGGREGATE
      SUBSCRIPTION AMOUNT:

    

    
      	
              Aggregate
                Principal Amount of Notes:

            	 	
              $

            	
              ______

            	 
	
              Number
                of Warrants:

            	 	 	
              ______

            	 
	
              Aggregate
                Purchase Price:

            	 	
              $

            	
              ______

            	 

    

     

    
      
        
        

      

      
        25

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00131-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00131-of-00352.parquet"}]]