Document:

Sharper Image Corporation

Sharper Image Corporation

350 The Embarcadero

Sixth Floor

San Francisco, California  94105 

 

December 22, 2006

 

VIA FEDERAL EXPRESS & ELECTRONIC MAIL

Tracy Wan

38 Denise Drive

Hillsborough, CA  94010

Dear Tracy:

This will confirm the agreement (the "Agreement") that has been reached with you in connection with your resignation of employment from Sharper Image Corporation ("Sharper Image" or the "Company").  All capitalized terms not defined herein shall have the meaning ascribed in the Employment Agreement dated as of May 10, 2006 between you and the Company (the "Employment Agreement).

	Termination Date:  Effective as of November 8, 2006 (the "Termination Date"), you have resigned from all positions with the Company, including as President and Chief Operating Officer as well as from any and all other positions currently or previously held by you in the course of your employment with the Company and any of its subsidiary or affiliate entities, and your employment with the Company ceased as of the Termination Date.  A copy of your letter of resignation dated November 8, 2006 is attached hereto as Exhibit A.  You agree to execute any additional documents necessary to effect such resignation. 
	Pay and Benefits Through Termination Date:  You acknowledge that you have been paid through the Termination Date for all accrued salary together with accrued but unused vacation pay, less all applicable Federal, state and local withholding taxes and deductions.  You hereby acknowledge and agree that, other than as specifically set forth in this Agreement, you are not due any compensation from the Company, including compensation for unpaid salary, unpaid bonus, accrued or unused vacation or other paid time off, or in connection with the exercise of stock options.  Other than as expressly set forth herein, your eligibility to participate in the Company's benefit plans and programs terminated as of November 8, 2006.
	 Termination Benefits:  In consideration of your obligations set forth in this Agreement, including but not limited to your consent to the General Release set forth in paragraph 6 below, although you have resigned from employment with the Company without Good Reason, you will be entitled to receive the following termination benefits upon the Effective Date (defined below):

	Severance:  You shall be entitled to receive a severance payment of $32,251.00, payable in a lump sum, less applicable tax withholding and deductions, within thirty (30) days from the Effective Date, but in no event later than January 31, 2007.  This payment is in lieu of any severance payment under Section 4(b) of the Employment Agreement and in full satisfaction of any severance obligation to you by the Company.
	Stock Options:  All of your options to purchase the Company's common shares (the "Options") that are vested and outstanding as of the Termination Date will remain outstanding and shall have their exercise price adjusted as determined by the Board of Directors (or a Committee of a Board of Directors) of the Company (the "Board") in connection with the restatement of the Company's financial statements.  You acknowledge that as of the Termination Date, you held 373,000 vested and outstanding Options (the "Outstanding Options").  The Outstanding Options are set out in detail on Exhibit B hereto.  The Outstanding Options shall remain exercisable until the later of the date that is (i) twelve (12) months following the Termination Date or (ii) thirty (30) days following the date on which the Company first determines that the exercise of the Outstanding Options would no longer violate applicable securities laws (which determination shall be communicated to you in writing by the Company) at the adjusted exercise price determined by the Board.  You acknowledge and agree that you may not exercise the Outstanding Options until you have received written notification of the adjusted exercise price.  In addition, you acknowledge that as of the Termination Date, you held 5,000 unvested Options, all of which terminated and ceased to be exercisable immediately upon the Termination Date.  You further acknowledge that you are not entitled to any award of any additional Options before or after the Effective Date.  

	Health Coverage:  The Company agrees that it shall continue your health coverage in accordance with the letter agreement dated October 20, 2003 between you and the Company (the "Medical Plan Letter"), incorporated herein by this reference, whether or not you sign this Agreement.  A copy of the letter from Aetna Insurance dated October 9, 2006 confirming health coverage is attached hereto as Exhibit C.  Nothing herein shall limit the Company's ability to change health insurance providers in it sole discretion.
	409A Issues and Taxes:  Notwithstanding anything in this Agreement to the contrary, if required by section 409A of the Internal Revenue Code of 1986, as amended, to avoid the imposition of additional taxes, the amounts described in paragraphs 3 and 4 hereof, to the extent required to be paid but not yet paid, shall upon your request be modified to the extent reasonably practicable and necessary to resolve any section 409A issues, provided that there is no increased cost to the Company.  Any and all tax liabilities incurred by you as a result of the payments made or benefits provided under this Agreement, however, shall be your sole responsibility.
	General Release and Waiver:

	In consideration of the Company's obligations hereunder and acceptance of your resignation, you, your heirs, successors, and assigns, hereby knowingly and voluntarily release and forever discharge the Company and its subsidiaries and affiliates, together with all of their respective current and former officers, directors, consultants, agents, representatives and employees, and each of their predecessors, successors and assigns (collectively, the "Releasees"), from any and all debts, demands, actions, causes of actions, accounts, covenants, contracts, agreements, claims, damages, omissions, promises, and any and all claims and liabilities whatsoever, of every name and nature, known or unknown, suspected or unsuspected, both in law and equity ("Claims"), which you ever had, now have, or may hereafter claim to have against the Releasees by reason of any matter, cause or thing whatsoever arising from the beginning of time to the time you sign this Agreement (the "General Release").  This General Release of Claims shall apply to any Claim of any type, including, without limitation, any and all Claims of any type that you may have arising under the common law, under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act ("ADEA"), the Older Workers Benefit Protection Act, the Americans With Disabilities Act, the Family and Medical Leave Act, the Employee Retirement Income Security Act ("ERISA"), the Sarbanes-Oxley Act of 2002 or the California Fair Employment and Housing Act, the California Family Rights Act, or the California Labor Code section 1400 et seq., each as amended, and any other Federal, state or local statutes, regulations, ordinances or common law, or under any policy, agreement, contract, understanding or promise, written or oral, formal or informal, between any of the Releasees and you, and shall further apply, without limitation, to any and all Claims in connection with, related to or arising out of your employment, or the termination of your employment, with the Company; provided, however, that this General Release shall not apply to or impair (i) any rights you may have arising under or in connection any stock option plan adopted by the Company, as amended and restated, that governs the Options specifically described in paragraph 3(b) of this Agreement; (ii) claims for vested benefits pursuant to any other Company employee benefit plan, as defined in ERISA, in which you were a participant before the Termination Date; (iii) claims for unemployment insurance benefits or workers' compensation benefits applicable to the period through the Termination Date; (iv) any rights to indemnification you may have arising under or in connection with the Indemnification Agreement between you and the Company dated March 18, 2003 (the "Indemnification Agreement"), or any rights to indemnification you may have under the by-laws of the Company or applicable law including California Labor Code Section 2802; or (v) any claims that may arise from any violation of this Agreement.
	For the purpose of implementing a full and complete release, you understand and agree that this Agreement is intended to include all claims, if any, which you may have and which you do not now know or suspect to exist in your favor against the Company or any of the Releasees and that this Agreement extinguishes those claims.  Accordingly, you expressly waive all rights afforded by section 1542 of the Civil Code of the State of California ("Section 1542").  Section 1542 states as follows:  

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

	You represent and warrant that you have not filed any complaints or charges with any court or administrative agency against the Company or any of the Releasees, which have not been dismissed, closed, withdrawn or otherwise terminated on or before the date of this Agreement.  You further represent and agree that you have not assigned nor transferred or attempted to assign or transfer, nor will you attempt to assign or transfer, to any person or entity not a party to this Agreement any of this Claims you are releasing in this Agreement.  Furthermore, by signing this General Release of Claims, you represent and agree that you will not be entitled to any personal recovery in any action or proceeding that may be commenced on your behalf arising out of the matters released hereby.
	In consideration of your obligations set forth in this Agreement, including but not limited to your consent to the General Release set forth in paragraph 6(a)-(b) above, the Company hereby knowingly and voluntarily releases and forever discharges you, your heirs, successors, and assigns, from any and all demands, actions, causes of actions, or claims it may have against you that you must repay gains relating to Options granted by the Company to you or exercised by you in or after 1994.
	Confidential Information:  You agree that in the course of your employment with the Company you have had access to confidential and proprietary information ("Confidential Information") relating to the Company, its subsidiaries and affiliates, and their respective businesses, clients, finances, operations, strategic or other plans, employees, trade practices, trade secrets, know how or other matters that are not publicly known outside the Company, which are integral to the operations and success of the Company, and that such Confidential Information has been disclosed to you in confidence and only for the use of the Company.  You understand and agree that (a) you will keep such Confidential Information confidential at all times after your employment with the Company, (b) you will not make use of such Confidential Information on your own behalf, or on behalf of any third party, and (c) you have returned or will return to the Company any and all copies, duplicates, reproduction or excerpts of such Confidential Information within your possession, custody or control.  The provisions of this paragraph 7 are in addition to any other written confidentiality or non-disclosure agreements that you may have with the Company or any of the Releasees, including without limitation the Confidentiality Agreement between you and the Company, and are not meant to and do not excuse any additional obligations that you may have under such agreements.
	Return of Property:  All documents (electronic, paper or otherwise), records (electronic, paper or otherwise), materials, software, equipment, and other physical property, and all copies of the foregoing, whether or not otherwise containing Confidential Information, that have come into your possession or been produced by you in connection with your employment ("Property"), have been and remain the sole property of the Company or its subsidiaries or affiliates, as applicable.  You agree that you have returned all such Property to the Company (or, to the extent that it is later discovered that you have not, you will do so promptly and in no event later than three (3) days after discovering that you retain such Property).
	No Disparagement:  Subject to paragraphs 10 and 11 below, you agree not to take any action or to make any statement, written or oral, that disparages or criticizes the business or management of the Company or any of its subsidiaries or affiliates, or any of their respective directors, officers, agents, or employees.  You further agree not to take any action that is intended to, or that does in fact, damage the business or reputation of the Company or any of its subsidiaries or affiliates, or the personal or business reputations of any of their respective directors, officers, agents, or employees, or that interferes with, impairs or disrupts the normal operations of the Company or any of its subsidiaries or affiliates.
	Truthful Testimony:  Notwithstanding paragraph 9 or anything else in this Agreement, nothing in this Agreement is intended to or shall preclude you from providing truthful testimony in response to a valid subpoena, court order, regulatory request or other judicial, administrative or legal process or otherwise as required by law, in which event you shall notify the Company in writing as promptly as practicable after receiving any such request of the anticipated testimony and at least ten (10) days prior to providing such testimony (or, if such notice is not possible under the circumstances, with as much prior notice as is possible).
	Cooperation in Legal Proceedings:  Notwithstanding paragraph 9 or anything else in this Agreement, you agree to cooperate fully with the Company and its subsidiaries and affiliates concerning requests for information about the business of the Company or its subsidiaries or affiliates or your involvement and participation therein; the defense, prosecution or investigation of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company or its subsidiaries or affiliates which relate to events or occurrences that transpired while you were employed by or acting as a consultant for the Company; and in connection with any investigation or review by any federal, state or local regulatory, quasi-regulatory or self-governing authority (including, without limitation, the Securities and Exchange Commission) as any such investigation or review relates to events or occurrences that transpired while you were employed by or a consultant for the Company.  Your full cooperation shall include, but not be limited to, being available to meet and speak with officers or employees of the Company and/or its counsel at reasonable times and locations, executing accurate and truthful documents, and taking such other actions as may reasonably be requested of you by the Company and/or its counsel to effectuate the foregoing.  In requesting such cooperation, the Company will consider other commitments that you may have at the time of the request.  The Company will reimburse you for any reasonable, out-of-pocket travel, hotel and meal, or similar expenses incurred in connection with your performance of obligations pursuant to this paragraph 11 for which you have obtained prior, written approval from the Company.
	  Directors and Officers Insurance:  For six years, the Company shall not eliminate coverage for you in its directors and officers policies unless the Company determines in its sole discretion that it cannot continue to cover you in such policies on reasonable terms without any increase in cost.
	No Knowledge of Detrimental Conduct:  You hereby represent and warrant that, apart from the issues raised in the course of the ongoing investigation involving the pricing of Company stock options, you are not aware of any actions or omissions by any current or former officer, director, employee, agent, consultant or representative of the Company (including yourself) through the date of the execution of this Agreement that were or have been alleged to be (individually or collectively) in any way harmful or detrimental to the Company, its business and/or its shareholders, including, without limitation, violations of any laws or accounting policies or principles, the taking of unreasonable tax positions, or the furnishing of inaccurate statements, invoices or other reports to any person or entity.
	No Admission of Liability:  You acknowledge that the Company is not entering into this Agreement because it believes you have any cognizable legal claim.  The execution, delivery and performance of this Agreement by the Company and by you  shall not be construed as an admission of liability of any kind on the part of, or as evidence of any unlawful or improper conduct of any kind by, the Company or any of the Releasees or you, and any and all such liability and conduct is expressly denied.  You acknowledge and agree that if you elect not to sign this Agreement, the fact that this Agreement was offered to you will not be understood as an indication that the Company believed you were treated unlawfully or improperly in any respect.
	Knowing and Voluntary Waiver:  The Company advises you to consult with an attorney of your choosing prior to signing this Agreement.  You understand and agree that you have the right and have been given the opportunity to review this Agreement and, specifically, the General Release in paragraph 6 above, with an attorney.  You also understand and agree that the Company is under no obligation to offer you the payments and benefits set forth in paragraph 3 above and that you are under no obligation to consent to the General Release set forth in paragraph 6 above.  You acknowledge and agree that the payments and benefits set forth in paragraph 3 above constitute sufficient consideration to require you to abide with your obligations under this Agreement, including but not limited to the General Release set forth in paragraph 6.  You represent that you have read this Agreement, including the General Release set forth in paragraph 6, that you understand its terms and the fact that it includes a waiver of any rights under the ADEA arising on or prior to the date of this Agreement, and that you enter into this Agreement freely, voluntarily, and without coercion.
	Review and Revocation Rights:  You acknowledge and represent that you have been given at least forty-five (45) days during which to review and consider the provisions of this Agreement and, specifically, the General Release set forth in paragraph 6 above, although you may sign and return it sooner if you so desire.  You further acknowledge and represent that you have been advised by the Company that you have the right to revoke this Agreement for a period of seven (7) days after signing it.  You acknowledge and agree that you have been advised in writing by the Company of the class or group of individuals covered by this termination program, any eligibility factors for the program, the time limits applicable to the program, and the job titles and ages of those in the covered class or group eligible and those not eligible for the program, as reflected in Exhibit D, attached hereto.  You acknowledge and agree that, if you wish to revoke this Agreement, you must do so in a writing, signed by you and received by the Company (sent to my attention) no later than 5:00 p.m. Pacific Time on the seventh (7th) day of the revocation period.  If no such revocation occurs, the General Release and this Agreement shall become effective on the eighth (8th) day following your execution of this Agreement (the "Effective Date").  You further acknowledge and agree that, in the event that you revoke this Agreement, it shall have no force or effect, and you shall have no right to receive any payments or benefits hereunder (with the exception of the benefits under the Medical Plan Letter, which are not dependent on whether or not you sign this Agreement).
	Entire Agreement; Modification:  The terms described in this Agreement set forth the entire agreement and understanding between you and the Company and, except as otherwise provided herein, supersedes all prior agreements, arrangements and understandings, written or oral, between us, other than the Medical Plan Letter and the Indemnification Agreement (other than Section 6 of such agreement which shall not survive), concerning your employment with the Company and the termination thereof, including the Employment Agreement.  You acknowledge and agree that you are not relying on any representations or promises by any representative of the Company concerning the meaning or any aspect of this Agreement.  This Agreement may not be altered or modified other than in writing signed by you and an authorized representative of the Company.
	Severability; Blue Pencil:  It is the desire and intent of the parties hereto that the provisions of this Agreement shall be enforced to the fullest extent permissible under applicable law.  In the event that any one or more of the provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.  Moreover, if any one or more of the provisions contained in this Agreement shall be held to be excessively broad as to duration, scope, activity or subject, such provisions shall be construed by limiting or reducing them so as to be enforceable to the maximum extent compatible with applicable law.
	Waiver:  No waiver by either party of any breach by the other party of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of any other provision or condition at the time or at any prior or subsequent time.  This Agreement and the provisions contained in it shall not be construed or interpreted for or against either party because that party drafted or caused that party's legal representative to draft any of its provisions.
	Arbitration:  Any disputes arising under or in connection with this Agreement shall be resolved by final and binding arbitration in San Francisco, California, using the JAMS judicial arbitration service and in accordance with the commercial arbitration rules of JAMS then in effect.  San Francisco shall be the exclusive venue for such disputes.  The written decision of the arbitrator shall be final and binding upon the parties and in such form that judgment may be entered in and enforced by any court having jurisdiction over the parties.
	Governing Law:  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California, without reference to its choice of law rules.  
	Counterpart Signatures:  This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

If the above sets forth our agreement as you understand it and consent to it, please so signify by signing the enclosed copy of this letter and return it to me at the address above.
Very truly yours,

Sharper Image Corporation

/s/ Jerry W. Levin

By:Jerry W. Levin

Title:Chairman, Board of Directors and Interim
Chief Executive Officer

Agreed to and Accepted:

/s/ Tracy Wan

Tracy Wan

Dated: December 22, 2006Interest Bearing Demand Line of Credit Promissory Note

 INTEREST BEARING 
 DEMAND LINE OF CREDIT PROMISSORY NOTE 
  

			
	 $290,500.00
	  	Kingsport, Tennesse
		  	Effective: September 30, 2006

 FOR VALUE RECEIVED, the undersigned (the “Maker”) promises to pay to the
order of Larry N. Lunan or his assigns (the “Holder”), the principal sum of Two Hundred Ninety Thousand and Five Hundred and 00/100 Dollars ($290,500.00) or so much thereof as shall be advanced and outstanding from time to
time during the pendency of this note, up to One Million and 00/100 Dollars ($1,000,000.00) together with applicable interest thereon. The rights, claims, duties and liabilities of the parties hereto are subject to and controlled by the following
terms and conditions: 
 1. Method and Place of Payment. 
 Payments of principal and interest shall be made in lawful money of the United States of America at the principal place of business of the Holder as specified below, or at such other location as he may hereafter
designate. 
 2. Principal and Interest Payments. 
 As of September 30, 2006, Holder has advanced to Maker the sums set forth on Schedule “A” attached hereto, which include accrued unpaid interest, the aggregate of which equals $290,500.00. It is
the intent of this note to memorialize those advances and any future advances made by Holder to Maker. The entire principal amount of this note, or so much thereof as shall then be advanced by Holder and outstanding, together with all unpaid accrued
interest, shall be paid on demand of the Holder. Interest on such principal amount (or any balance thereof outstanding from time to time) shall begin to accrue on the effective date hereof and shall accrue at an annual rate of ten (10%) percent
per annum, and shall be payable each fiscal quarter, with the first payment of interest being due on December 31, 2006. The Holder shall memorialize advances, repayments or partial repayments under this note by executing and delivering to Maker
a statement in the form of Schedule “A” hereto, including a notation as to the amount of such advance, repayment or partial repayment, and upon delivery to a representative of the Maker, and the failure by the Maker to object in
writing within five (5) business days of the delivery of such statement, the principal amount of this note shall be increased or decreased in accordance with such notation. 
 Nothing herein, nor any transaction related hereto, shall be construed to operate so as to require the Maker to pay interest at a greater rate than shall
be lawful. Should any interest or other charges paid by the Maker in connection with the loan evidenced by this note result in computation or earning of interest in excess of the maximum contract rate of interest which is legally permitted under
applicable Florida law or federal preemption statute, then any and all such excess is hereby waived by the Holder and shall be automatically credited against and in reduction of the balance due hereunder, and any portion which exceeds such balance
shall be paid by the Holder to the Maker. Anything contained herein to the contrary notwithstanding, if for any reason the effective rate of interest on this note should exceed the maximum lawful rate, the effective rate shall be deemed reduced to
and shall be such maximum lawful rate. 
 3. Prepayment. 
 The Maker shall have the privilege and option, without penalty or forfeiture, to pay the entire principal amount of this note or any part thereof at any time prior to the Holder’s furnishing of demand.

  

 4. Conversion into Common Stock. 
 Upon written notice from Holder to Maker, the outstanding principal amount of this note and any accrued unpaid interest may be converted by Holder into
shares of Maker’s common stock (the “Common Stock”), par value $.001, according to the following terms and conditions: 
 a. Conversion Price. The outstanding principal amount of this note and any accrued unpaid interest shall be convertible into Common Stock of Maker at the Conversion Price, as that term is defined herein. The “Conversion
Price” shall be $0.10 per share of Common Stock. Conversions shall first reduce any accrued, unpaid interest under this note before reducing principal amounts due under this note. 
 b. Manner of Conversion. To convert this note, Holder shall surrender this note to Maker, accompanied by written notice of election to convert
this note. With respect to partial conversions of this note, the Maker shall reflect the amount of the note that is converted under this Section 4 on Schedule A as a repayment. As soon as practicable after the surrender of this note,
Maker shall issue and deliver a certificate for the number shares of Common Stock issuable upon conversion. 
 c. Reservation of Shares of
Common Stock. Maker shall take or has taken all steps necessary to reserve a number of Common Stock of Maker sufficient to enable it to deliver the Common Stock contemplated herein upon conversion of this note pursuant to this paragraph 4.

 5. Default; Acceleration of Obligation; Interest. 
 In the event of a failure by the Maker to fully satisfy (a) the outstanding principal balance of this note within a period of five (5) days following the date upon which the Holder properly furnishes notice
of demand for such payment, or (b) any accrued interest payment within five (5) days of its due date, the obligation of the Maker shall be in default, the unpaid principal and interest balances shall be immediately due and payable and
interest on the principal balance shall thereafter accrue at the maximum annual rate allowable by law. 
 6. Collection. 

Should it become necessary to collect this note through an attorney, the Maker shall pay all costs incurred by or accruing to the Holder in making such
collection, including a reasonable attorneys’ fee. 
 7. Waiver. 
 The Maker and any guarantor, surety or endorser of this note, as well as any other person or entity who shall become liable for the payment hereof, each
expressly waives presentment for payment, notice of non-payment, protest and notice of protest, and any other notice which might otherwise be required in connection with the delivery, acceptance, performance, default or enforcement of the payment of
this note. The Holder shall not be deemed by any act or omission to have waived any right or remedy hereunder unless and only to the extent expressed in a written instrument dated subsequent to the date hereof and executed by the Holder, and any
such waiver so expressed with respect to a particular event shall not be interpreted as having a continuing effect on or as a waiver of any right or remedy with respect to any subsequent event. 
  

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 8. Notices. 
 All notices or other communications required or permitted to be given pursuant to this note shall be in writing and shall be considered properly given or made if hand delivered, mailed from within the United States by
certified mail, or sent by telecopier or e-mail: 
  

	 	a.	if to the Holder: 

 Larry N. Lunan

 2344 Woodridge Avenue 
 Kingsport, TN 37664 
 Facsimile: (423) 247-7629 
 E-Mail: badtoys@badtoys.net 
  

	 	b.	if to the Maker: 

 Southland Health
Services, Inc. 
 Attn: T. Alan Walls, Chief Financial Officer 
 2344 Woodridge Avenue 
 Kingsport, TN 37664 
 Facsimile: (423) 247-7629 
 E-Mail: badtoys@badtoys.net 
 or to such
other address as either party shall have furnished to the other. All notices, except of change of address, shall be deemed given when mailed and notices of change of address shall be deemed given when received. 
 9. Entire Agreement. 
 This note
constitutes the entire understanding of the parties with respect to the subject matter hereof, and no amendment, modification or alteration of the terms hereof shall be binding unless the same be in writing, dated subsequent to the date hereof and
duly approved and executed by the Maker and the Holder. 
 10. Governing Law. 
 The Maker acknowledges and agrees that irrespective of where executed, this note shall be construed in accordance with the laws of the State of Tennessee.

  

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 IN WITNESS WHEREOF, the undersigned Maker has executed this note as of December 28, 2006.

  

			
	SOUTHLAND HEALTH SERVICES, INC.,
	a Florida corporation
		
	By:	 	 /s/ T. Alan Walls, CFO

		 	T. Alan Walls, Chief Financial Officer

 [SIGNATURE PAGE TO INTEREST BEARING DEMAND LINE OF CREDIT PROMISSORY NOTE] 
  

 - 4 - 

 SCHEDULE A 
  

												
	 Date
	  	 Advance
 Amount
	  	 Accrued
 Interest
	  	Repayments	  	Outstanding
Balance
	 September 30, 2006
	  	$	290,500.00	  	 	N/A	  	______	  	$	290,500.00
					
	 Balance as of September 30, 2006
	  	$	290,500.00	  	$	            	  	______	  	$	290,500.00

  

 - 5 -

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