Document:

Unassociated Document

    STOCK
PURCHASE AGREEMENT

     

    THIS
STOCK PURCHASE AGREEMENT (this “Agreement”) dated as of March ______, 2009, by
and among Frank Towers (“Shareholder 1”) of Catterall Hall Farm, Catterall Lane,
Preston, Lancashire PR3  0PA, United Kingdom of the First Part; and
Neal John Walmsley of 12 Old Lancaster Road, Catterall, Preston
PR3  0HN, United Kingdom (“Shareholder 2”) of the Second Part; and
Eric Royds of 3 Heath Avenue, Halifax HX3 0EA, United Kingdom (“Shareholder 3”)
of the Third Part; and Farzad Zamanian of 5 Hollingwood Rise, Ilkley LS29 9PW,
United Kingdom of the Fourth Part (“Shareholder 4”), (each a “Shareholder” and
together the  “Shareholders”) AND Technology Alternatives Limited, a
Belizean Company formed under the Laws of Belize with registered office situate
at No. 1 NimLiPunit Street, Belmopan, Cayo District, Belize, Central America
(hereinafter called the “Company”) of the Fifth Part AND Global Clean Energy
Holdings, Inc, a Utah Corporation whose registered office is located
at 6033 W. Century Blvd., Suite 895, Los Angeles, CA 90045 (hereinafter
called the “Buyer”) of
the Sixth Part,:

     

    WITNESSETH:

     

    WHEREAS,
the Shareholders represent the 100% issued and outstanding ordinary shares of
the Company (the “Shares”);

     

    WHEREAS,
Buyer desires to purchase from the Shareholders, and the Shareholders desire to
sell to Buyer, all of the Shares, in exchange for Common Stock; and

     

    WHEREAS,
the parties desire to enter into this Agreement to set forth their mutual
agreements concerning the above matters;

     

    NOW,
THEREFORE, in consideration of the mutual promises of the parties hereto, and
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, it is mutually agreed by and among the parties hereto as
follows:

     

    ARTICLE
1.

     

    SALE AND
TRANSFER OF SHARES; CLOSING

     

    1.1.          Sale of
Shares.  Subject to the terms and conditions of this Agreement,
and in reliance upon the representations, warranties, covenants and agreements
contained herein, at the closing of the transactions contemplated hereby (the
“Closing”), the Shareholders will sell, convey, assign and transfer the Shares
to Buyer, and Buyer will purchase the Shares from the Shareholders based on the
assigned values set out in Appendix 1 attached hereto.  The number of
Shares to be acquired by Buyer from each Shareholder is set forth in
Appendix I attached hereto.  The Shares shall be free and
clear of any claims or Encumbrances (as defined in Section 2.6).

     

    1.2.          Consideration.  In
consideration of the sale, transfer and assignment to Buyer of the Shares, at
the Closing, Buyer shall: (1) issue to the Shareholders shares of Common Stock
from its authorized capital stock in accordance with Appendix 1 attached
hereto.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

     

    1.3.          The
Closing.  The Closing will take place on
March _______, 2009 (the “Closing Date”) at the offices of Global
Clean Energy Holdings, Inc, at 6033 W. Century Blvd, Suite 895, Los Angeles, CA
90045, at 10:00 a.m. (local time) or at some other place mutually agreed by
the parties herein.  As specified in Appendix 1, the Shareholders will
deliver to Buyer: (1) transfer of share instruments executed by each Shareholder
in registerable form together with the certificates representing the
Shares, duly endorsed (or accompanied by duly executed stock powers), for
transfer of the Shares to Buyer  or its nominee(s);
and (2) on the Closing Date, a certified resolution of the board of
directors of the Company appointing new directors nominated by the Buyer
together with the resignations of existing members of the Company’s board (save
and except for shareholder No. 2 Neal Walmsley).  As specified in
Appendix 1, the Buyer will cause its transfer agent to issue to each Shareholder
the duly registered stock certificate(s) representing their individual stock
holding in the Buyer, (B) the original TCT Title with evidence of paid up
taxes.  All costs and expenses associated with the completion of the
transfer of the Shares to the Buyer, inclusive of Stamp Duties shall be
borne by the Shareholder.  All costs and expenses associated with the
completion of the issue of the Buyer’s Common Stock to the Shareholders shall be
borne by the Buyer. The Shares will be delivered to Buyer’s counsel in Belize,
who will hold the Shares until the official permission to transfer the Shares to
Buyer has been received from the Central Bank of Belize.  Buyer will
deliver to Buyer’s counsel in Belize the stock certificates registered in each
Shareholder’s name within five days of the Closing, which stock certificates
Buyer’s counsel will deliver to Shareholders immediately following the receipt
of the permission of the Central Bank of Belize to the transfer of the
Shares.

     

    ARTICLE
2.

     

    REPRESENTATIONS
AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDERS

     

    To induce
Buyer to execute, deliver and perform this Agreement, and in acknowledgement of
Buyer’s reliance on the following representations and warranties, the Company
and the Shareholders hereby jointly and severally represent and warrant to
Buyer   as follows, as of the date hereof (in each case except as
otherwise disclosed in the Financial Statements (as defined below) or the notes
thereto):

     

    
      	
              2.1

            	
              Organization;
      Capitalization.  The Company is a corporation duly
      organized, validly existing and in good standing under the laws of Belize,
      with the power and authority to conduct its business as it is now being
      conducted and to own and lease its properties and assets.  The
      authorized share capital of the Company consists of ten thousand (10,000)
      ordinary shares of which ten thousand (10,000) shares are issued and
      outstanding.  The Shareholders are the legal and beneficial
      owners and holders of 100% of the Shares, free and clear of all
      Encumbrances.  No legend or other reference to any purported
      Encumbrances appears upon any certificate representing equity securities
      of the Company.  There are no other shares of the authorized
      share capital of the Company issued or outstanding.  The
      Company’s outstanding share capital has been duly and validly issued and
      is fully paid and non-assessable.  There are not outstanding any
      warrants, options or other rights to acquire any of the Company’s share
      capital.  The Company’s assets do not include any share capital
      of, or any other equity interest in, or securities convertible into or
      exchangeable for any share capital or other equity interest in, any
      person, or any direct or indirect equity or ownership interest in any
      other business.

            

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

     

    
      	
              2.2

            	
              Power and
      Authority.  The Company and the Shareholders have the
      power and authority to execute, deliver, and perform this Agreement and
      the other agreements and instruments to be executed and delivered by them
      in connection with the transactions contemplated hereby, and the Company
      and the Shareholders have taken all necessary action to authorize the
      execution and delivery of this Agreement and such other agreements and
      instruments and the consummation of the transactions contemplated
      hereby.  This Agreement is, and the other agreements and
      instruments to be executed and delivered by the Shareholders and/or the
      Company in connection with the transactions contemplated hereby, when such
      other agreements and instruments are executed and delivered, shall be, the
      valid and legally binding obligations of the Shareholders and/or the
      Company, as the case may be, enforceable against the Shareholders and/or
      the Company in accordance with their respective
  terms.

            

    

     

    
      	
              2.3

            	
              No
      Conflict.  Neither the execution and delivery of this
      Agreement and the other agreements and instruments to be executed and
      delivered in connection with the transactions contemplated hereby, nor the
      consummation of the transactions contemplated hereby, will violate or
      conflict with: (a) any Belize law, regulation, ordinance, zoning
      requirement, governmental restriction, order, judgment or decree
      applicable to the Shareholders and/or the Company; (b) any provision of
      any charter, bylaw or other governing or organizational instrument or
      agreement of the Company or the Shareholders; or (c) any mortgage,
      indenture, license, instrument, trust, contract, agreement, or other
      commitment or arrangement to which the Shareholders and/or the Company are
      parties or by which the Shareholders and/or the Company are
      bound.

            

    

     

    
      	
              2.4

            	
              Required Government
      Consents, Filings, etc.  Except as have been or, prior to
      the Closing, will be obtained, no approval, authorization, certification,
      consent, variance, permission, license, or permit to or from, or notice,
      filing, or recording to or with, any Belize  governmental authorities
      is necessary for: (a) the execution and delivery of this Agreement and the
      other agreements and instruments to be executed and delivered by the
      Shareholders and/or the Company in connection with the transactions
      contemplated hereby, or the consummation by the Shareholders and/or the
      Company of the transactions contemplated hereby; or (b) the ownership by
      Buyer of the Shares, save and except for the permission of the
      Central Bank of Belize, which will be obtained within 90 days of executing
      this Agreement.  If the approval of the Central Bank of Belize
      is not granted, this Agreement will be null and
  void.

            

    

     

    
      	
              2.5

            	
              Other Required
      Consents, Filings, etc.  Except as have been or, prior to
      the Closing, will be obtained, no approval, authorization, consent,
      permission, or waiver to or from, or notice, filing, or recording to or
      with, any person is necessary for:  (a) the execution and
      delivery of this Agreement and the other agreements and instruments to be
      executed and delivered in connection with the transactions contemplated
      hereby by the Shareholders and/or the Company, or the consummation by the
      Shareholders and/or the Company of the transactions contemplated hereby;
      or (b) the ownership by Buyer of the
Shares.

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

     

    
      	
              2.6

            	
              Title to
      Assets.  The Company has good and marketable title to all
      of its assets, free and clear of any claims or Encumbrances, other than
      the Deed of Legal Mortgage recorded (or to be recorded) on the
      land.   “Encumbrance” means any mortgage, charge (whether
      fixed or floating), security interest, pledge, right of first refusal,
      lien (including any unpaid vendor’s lien), option, hypothecation, title
      retention or conditional sale agreement, lease, option, restriction as to
      transfer or possession, or subordination to any right of any other
      person.

            

    

     

    
      	
              2.7

            	
              Financial
      Statements.  The Company and the Shareholders have
      provided, and at the Closing will provide Buyer with the following
      financial statements (collectively, the “Financial Statements”) with
      respect to the Company: balance sheet, results of operations, statements
      of stockholders’ equity and statement of cash flow, as of and for the
      calendar year ended December 31, 2007, the interim financials as of
      September 30, 2008, and the balance sheet as of the close of business
      immediately preceding the Closing Date (the balance sheet which balance
      sheet is herein referred to as the “Closing Balance
      Sheet”).  The Financial Statements are, and at the Closing will
      be true and correct in every material respect and properly reflect all
      assets and liabilities of the Company as then in existence.  The
      Financial Statements do and will fairly present the results of operations
      and the financial position of the Company as of the dates thereof and the
      periods then ended.

            

    

     

    
      	
              2.8

            	
              Condition and
      Sufficiency of Assets.  The equipment contained in the
      Company’s assets is structurally sound, in good operating condition and
      repair, and adequate for the uses to which it is being put, and none of
      such equipment is in need of maintenance or repairs, except for ordinary,
      routine maintenance and repairs that are not material in nature or
      cost.  The Company’s assets are sufficient for the continued
      conduct of the Company’s business after the Closing in the same manner as
      conducted prior to the Closing.  The Company’s assets are the
      only assets owned directly or indirectly by the Company which are used in
      or relate to the conduct of the Company’s business.  The
      Shareholders do not own an interest in the Real Estate or any of the
      equipment used by the Company and sold
  hereunder.

            

    

     

    
      	
              2.9

            	
              Accounts
      Receivable.  The Company’s accounts receivable represent
      valid obligations arising from sales actually made or services actually
      performed in the ordinary course of business.  The Company’s
      accounts receivable are current and collectible, net of the respective
      reserves shown on the Financial Statements, which reserves are adequate
      and calculated consistent with past practice.  There is no
      contest, claim or right of set-off under any agreement with any obligor of
      an account receivable relating to the amount or validity of such account
      receivable.

            

    

     

    
      	
              2.10

            	
              Intellectual
      Property.

            

    

     

    (a)           The
Company beneficially owns or has the valid right to use all of the Intellectual
Property used in its business as currently conducted or as presently
contemplated to be conducted.  The term “Intellectual Property”
includes all patents and patent applications, trademarks, service marks, and
trademark or service mark registrations and applications, trade names, logos,
designs, domain names, web sites, slogans and general intangibles of like
nature, together with all goodwill relating to the foregoing, copyrights,
copyright registrations, renewals and applications, software, databases,
technology, trade secrets and other confidential information, know-how,
proprietary processes, formulae, algorithms, models and methodologies, drawings,
specifications, plans, proposals, financing and marketing plans, advertiser,
customer and supplier lists and all other information relating to advertisers,
customers and suppliers (whether or not reduced to writing), licenses,
agreements and all other proprietary rights, which relate to the Company’s
business.  The Intellectual Property beneficially owned or used
by the Company is free and clear of all claims or Encumbrances.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

     

    (b)           The
Company takes and has taken reasonable measures to protect the confidentiality
of its trade secrets, know-how or other confidential information material to its
business as currently operated or planned to be operated (together, “Trade
Secrets”).  No Trade Secret has been disclosed or authorized to be
disclosed to any third party, including any employee, agent, contractor or other
person, other than pursuant to a written non-disclosure agreement that
adequately protects the Company’s proprietary interests in and to such Trade
Secrets.  To the best of the Company’s and the Shareholders’
knowledge, no party to any non-disclosure agreement relating to any Trade
Secrets is in breach thereof.

     

    (c)           The
conduct of the Company’s business as currently conducted or planned to be
conducted does not infringe upon (either directly or indirectly) any
Intellectual Property owned or controlled by any third party.  There
are no claims or suits pending or threatened, and neither the Company nor the
Shareholders have received any notice of a third party claim or suit (i)
alleging that any of the Company’s activities or the conduct of its business has
infringed upon or constitutes the unauthorized use of the Intellectual Property
rights of any third party, or (ii) challenging the ownership, use, validity or
enforceability of any Intellectual Property.

     

    (d)           To
the best of the Company’s and Shareholders’ knowledge, no third party is
misappropriating, infringing, diluting, or violating any Intellectual Property
owned by or licensed to the Company, and no such claims are pending against a
third party by the Company.

     

    
      	
              2.11

            	
              Compliance
      with Rules.

            

    

     

    (a)          The
Company and the Shareholders at all times have been and are currently in
compliance with all Rules applicable to the Company and/or its business, except
where such failure to comply would not have a material adverse effect on the
Company or its operations.  “Rule” means any law, statute, rule,
regulation, order, court decision, judgment or decree of any
Belize territorial, provincial or municipal authority.

     

    (b)          The
Company and the Shareholders are in material compliance with, and have obtained
all Permits and other authorizations relating to the Company which are required
by any Rule, which has been enacted to the date of this Agreement, except as
would not have a material adverse effect on the Company or its
operations.  No governmental proceeding is pending or threatened to
cancel, amend, modify or fail to renew any such Permit.  “Permit”
includes any approval, authorization, concession, grant, certificate of
convenience and necessity, qualification, consent, franchise, license, security
clearance, easement, order or other permit issued or granted by any governmental
entity.

     

    (c)          The
Company and/or the Shareholders are not currently in material violation of any
environmental or safety laws nor have the Company and/or the Shareholders
received any notice of any current non-compliance therewith.  There is
no civil, criminal or administrative action, suit, demand, claim, hearing,
notice, investigation or proceeding pending or threatened against the Company
and/or the Shareholders relating in any way to environmental and safety
laws.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

     

    
      	
              2.12

            	
              Tax
      Matters.  All taxes owed by the Company pertaining to the
      Company, its business or its assets (whether or not shown on any tax
      return) have been paid.  The Company is not the beneficiary of
      any extension of time within which to file any tax return.  No
      claim has ever been made by an authority in a jurisdiction where the
      Company does not file tax returns that the Company is or may be subject to
      taxation by that jurisdiction. There are no claims or Encumbrances on any
      of the Company’s assets that arose in connection with any failure (or
      alleged failure) to pay any tax.   The Shareholders assume
      all liabilities whether known or unknown for all taxes and tax filings up
      to the Closing Date.

            

    

     

    
      	
              2.13

            	
              Contracts.  Except
      as would not have a material adverse effect on the Company or its
      operations, there exists no event of default or occurrence, condition or
      act on the part of the Company and/or the Shareholders or, to the best
      knowledge of the Company and the Shareholders, on the part of any other
      party to any contract to which the Company is a party, which constitutes
      or would constitute (with or without notice or lapse of time or both) a
      breach of or default under any of such contracts, or cause or permit
      acceleration of any obligation of the Company or any other
      party.  There are no renegotiations of, attempts to renegotiate
      or outstanding rights to renegotiate any amounts paid or payable to the
      Company under any contract with any person having the contractual or
      statutory right to demand or require such renegotiation and no such person
      has made written demand for such
renegotiation.

            

    

     

    
      	
              2.14

            	
              Litigation.  Except
      as would not have a material adverse effect on the Company or its
      operations and the disclosures made to the Buyer
      about  litigation in the Supreme Court of Belize, there is no
      legal, administrative or other action, claim, proceeding or governmental
      investigation, domestic or foreign (“Litigation”), pending or threatened
      against the Company and/or the Shareholders relating to the Company, its
      business or its assets, or that challenges or reviews the execution,
      delivery or performance of this Agreement by the Company and/or the
      Shareholders or of the consummation of the transactions contemplated
      hereby, or that seeks to enjoin or obtain damages in respect of the
      consummation of any of the transactions contemplated
      hereby.  The Company and/or the Shareholders are not parties to,
      and are not bound by, any order or any ruling or award of any other person
      that has resulted in or could reasonably be expected to result in,
      individually or in the aggregate, a material adverse effect on the Company
      or which could reasonably be expected to materially adversely affect the
      consummation of the transactions contemplated hereby. Any financial
      consideration which may become due to the Company as a result of
       litigation in the Supreme Court of Belize that exists as of the
      Closing Date or that is hereafter filed relating to events arising prior
      to the Closing Date will be borne and paid directly by the
      Shareholders.  Consequently, any monetary award consequent upon
      litigation in the Supreme Court of Belize shall accrue beneficially to the
      Shareholders. All costs of any continued litigation on this matter will be
      borne directly by the shareholder, including any defense of appeal,
      arbitration, additional suit or countersuit. The Buyer will have NO
      liability in this matter.

            

    

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

     

    
      	
              2.15

            	
              Conduct of
      Business.

            

    

     

    
      	
               
      

            	
              (a)

            	
              Ordinary Course of
      Business: No Removal or Disposal of Assets.  Since
      February 20, 2007, the Company has operated its business in the ordinary
      course, and has not removed or disposed of any assets except in the
      ordinary course of business.

            

    

     

    
      	
               
      

            	
              (b)

            	
              No Material Adverse
      Change.  Since February 20, 2007, there has been no
      material adverse change in the Company’s assets or in the financial
      condition, operations, or prospects of its
  business.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Absence of Particular
      Events.  Since February 20, 2007, the Company has
      not:  (i) suffered any damage or destruction adversely affecting
      its business or involving any of the assets used in its
      business;  (ii) incurred any liability or obligation other than
      in the ordinary course of business; (iii) made any change or
      alteration in the manner of keeping the books, accounts or records of its
      business or in the accounting practices therein reflected; (iv) paid,
      loaned, or advanced any monetary amount or other asset to, or sold,
      transferred, or leased any asset to, any employee except for normal
      compensation involving salary and benefits; (v) received any notice of or
      become aware of any loss of any one or more customers representing 3% or
      more of the annualized revenue of its business; (vi)
      entered into or engaged in any transaction in respect of its business
      other than on commercially reasonable terms determined on the basis of the
      facts existing at the time such transaction was entered into or engaged
      in; or (vii) agreed to take or allow any of the foregoing actions
      described in this Section 2.15(c).

            

    

     

    
      	
              2.16

            	
              Broker’s or Finder’s
      Fees.  The Company and/or the Shareholders have not
      authorized any person to act as broker or finder or in any other similar
      capacity in connection with the transactions contemplated by this
      Agreement.

            

    

     

    
      	
              2.17

            	
              Disclosure.  No
      representation, warranty, or statement made by the Company and/or the
      Shareholders in this Agreement or in any document or certificate furnished
      or to be furnished to Buyer pursuant to this Agreement contains or will
      contain any untrue statement or omits or will omit to state any fact
      necessary to make the statements contained herein or therein not
      misleading.  The Company and the Shareholders have disclosed to
      Buyer all facts known or reasonably available to the Company and/or the
      Shareholders that are material to the financial condition, operation, or
      prospects of the Company, its business and/or its
  assets.

            

    

     

    
      	
              2.18

            	
              Investigation of
      Buyer.  The Company and each of the Shareholders hereby
      represent and warrant that they have reviewed reports and documents filed
      by Buyer with the U.S. Securities and Exchange Commission (“SEC”) since
      January 1, 2008 (“Buyer SEC Reports”), including in particular the
      financial statement and the “Risk Factors” contained therein, and that the
      Company and each of the Shareholders are familiar with financial and other
      conditions of Buyer.  The Company and each of the Shareholders
      hereby further represent and warrant that they are aware that Buyer will
      require an infusion of additional funding in order to continue its
      operations, and that Buyer has not secured the necessary additional
      funding. Each of the Shareholders has relied solely upon the
      investigations made by or on behalf of the Shareholder or his
      representative in evaluating the suitability of the investment in the
      common stock issued to the Shareholder under this Agreement, and such
      Shareholder recognizes that an investment in the Buyer’s common stock
      involves a high degree of risk.  Each Shareholder has such
      knowledge and experience in financial and business matters that he is
      capable of evaluating the merits and risks of an investment in
      Buyer.

            

    

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

     

    
      	
              2.19

            	
              Purchase Entirely for
      Own Account.  The shares of Buyer’s common stock to be
      received by such Shareholder hereunder will be acquired for such
      Shareholder’s own account, not as nominee or agent, and not with a view to
      the resale or distribution of any part thereof in violation of the
      Securities Act of 1933, and such Shareholder has no present intention of
      selling, granting any participation in, or otherwise distributing the same
      in violation of the Securities Act of 1933.  Such Shareholder
      understands that the shares of Buyer’s common stock are characterized as
      “restricted securities” under the U.S. federal securities laws inasmuch as
      they are being acquired from Buyer in a transaction not involving a public
      offering and that under such laws and applicable regulations such
      securities may be resold without registration under the Securities Act of
      1933 for at least six months following the Closing
      Date.    After the six month anniversary of the
      Closing Date, the shares of Buyer’s common stock may only be sold in
      compliance with Rule 144 promulgated under the Securities Act of
      1933.

            

    

     

    ARTICLE
3

     

    REPRESENTATIONS
AND WARRANTIES OF BUYER

     

    To induce
the Company and the Shareholders to execute, deliver and perform this Agreement,
and in acknowledgement of the Company’s and the Shareholders’ reliance on the
following representations and warranties, the Buyer hereby represents and
warrants to the Company and the Shareholders individually and
collectively as follows, as of the date hereof:

     

    
      	
              3.1

            	
              Power and
      Authority.  Buyer has the power and authority to execute,
      deliver, and perform this Agreement and the other agreements and
      instruments to be executed and delivered by it in connection with the
      transactions contemplated hereby, and Buyer has taken all necessary action
      to authorize the execution and delivery of this Agreement and such other
      agreements and instruments and the consummation of the transactions
      contemplated hereby.  This Agreement is, and, when such other
      agreements and instruments are executed and delivered, the other
      agreements and instruments to be executed and delivered by Buyer in
      connection with the transactions contemplated hereby shall be, the valid
      and legally binding obligations of Buyer, enforceable in accordance with
      their respective terms.

            

    

     

    
      	
              3.2

            	
              Broker’s or Finder’s
      Fees.  Buyer has not authorized any person to act as
      broker, finder, or in any other similar capacity in connection with the
      transactions contemplated by this
Agreement.

            

    

     

    
      	
              3.3

            	
              No
      Conflict.  Neither the execution and delivery by such
      Buyer of this Agreement and of the other agreements and instruments to be
      executed and delivered by such Buyer in connection with the transactions
      contemplated hereby, nor the consummation by such Buyer of the
      transactions contemplated hereby, will violate or conflict
      with:  (a) any foreign, Federal, state, or local law,
      regulation, ordinance, governmental restriction, order, judgment or decree
      applicable to Buyer; or (b) any provision of any charter, bylaw, or other
      governing or organizational instrument of
Buyer.

            

    

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

     

    
      	
              3.4

            	
              Disclosure.  No
      representation, warranty, or statement made by Buyer in this Agreement or
      in any document or certificate furnished or to be furnished to the
      Shareholders pursuant to this Agreement contains or will contain any
      untrue statement or omits or will omit to state any fact necessary to make
      the statements contained herein or therein not
  misleading.

            

    

     

    
      	
              3.5

            	
              Security for Repayment
      of the Loan Notes (and the Replacement Promissory
      Notes).  The Buyer represents, warrants and agrees to:
      (1) authorize the Company to pay or procure the repayment of the
      replacement Loan Notes in favor of the Shareholders in accordance with
      Appendix II attached hereto; and (2) confirm the repayment of the
      respective amounts due under the replacement Loan Notes by executing with
      the Company, in favor of the Shareholders, a deed of legal mortgage (in
      the format set out in Appendix III attached hereto) charging the real
      property of the Company, as security for the repayment of the Loan
      Notes.

            

    

     

    
      	
              3.6

            	
              Employment of
      Shareholder No. 2.  The Buyer represents, warrants and
      agrees that immediately following the execution of this Agreement it will
      offer a contract of employment to Shareholder No.2 (Neal Walmsley) in
      accordance with terms to be agreed.

            

    

     

    
      4.0
ARTICLE

    

     

    
       
COVENANTS
OF THE SHAREHOLDERS AND BUYER FOLLOWING CLOSING

    

     

    
      	
              4.1

            	
              Cooperation.  The
      Shareholders and Buyer shall cooperate fully with each other and their
      respective employees, legal counsel, accountants and other representatives
      and advisers in connection with the steps required to be taken as part of
      their respective obligations under this Agreement; and each of them shall,
      at any time and from time to time after the Closing, upon the request of
      the other, do, execute, acknowledge and deliver, or cause to be done,
      executed, acknowledged and delivered, all such further acts, deeds,
      assignments, transfers, conveyances, receipts, acknowledgments,
      acceptances and assurances as may be reasonably required (without
      incurring unreimbursed expense) to satisfy and perform the obligations of
      such party hereunder, and to allow the Company to operate its business
      after the Closing in the manner in which it was operated before the
      Closing.

            

    

     

    
      	
              4.2

            	
              Further
      Assurances.  Subject to the terms and conditions of this
      Agreement, each party agrees to use all of its reasonable efforts to take,
      or cause to be taken, all actions and to do or cause to be done, all
      things necessary and proper or advisable to consummate and make effective
      the transactions contemplated by this Agreement (including the execution
      and delivery of such further instruments and documents as the other party
      may reasonably request).

            

    

     

    
      	
              4.3

            	
              Funds Received After
      Closing.  Any and all funds received by the Shareholders
      after the Closing in respect of the Company shall be promptly remitted to
      Buyer upon receipt.

            

    

     

    
      	
               4.4

            	
               Change in Buyer’s
      Stock Listing.  Buyer’s share of common stock are
      currently listed for trading on the OTC Bulletin Board.  The
      Buyer agrees that in the event that it becomes listed on any other trading
      system or stock exchange it will take all the necessary steps to cause the
      Shareholders’ Common Stock in the Buyer to become available for trading
      (such to applicable securities laws) on such other trading system or stock
      exchange.

            

    

     

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

     

    ARTICLE
5.

     

    SURVIVAL;
INDEMNITY

     

    
      	
              5.1

            	
              Survival of
      Representations, Warranties, etc.  The representations,
      warranties and covenants given by the Shareholders to Buyer or by Buyer to
      the Shareholders in this Agreement shall survive for a period of 12 months
      following the Closing

            

    

     

    
      	
              5.2

            	
              Indemnification by the
      Shareholders.  The Shareholders shall jointly and
      severally indemnify, defend, and hold harmless Buyer, and Buyer’s
      representatives, stockholders, controlling persons and affiliates, at, and
      at any time after, the Closing up to the end of the indemnification period
      at Article 5.1, from and against any and all demands, claims, actions, or
      causes of action, assessments, losses, damages (including incidental and
      consequential damages), liabilities, costs, and expenses, including
      reasonable fees and expenses of counsel, other expenses of investigation,
      handling, and Litigation, and settlement amounts, together with interest
      and penalties (collectively, a “Loss” or “Losses”), asserted against,
      resulting to, imposed upon, or incurred by Buyer, directly or indirectly,
      by reason of, resulting from, or arising in connection with, any of the
      following:

            

    

     

    
      	
               
      

            	
              (a)

            	
              Breach.  Any
      breach of any representation, warranty, or agreement of the Shareholders
      and/or the Company contained in or made pursuant to this Agreement,
      including the agreements and other instruments contemplated
      hereby;

            

    

     

    
      	
               
      

            	
              (b)

            	
              Brokerage or Finder’s
      Fees.  Any claim by any person for brokerage or finder’s
      fees or commissions or similar payments based upon any agreement or
      understanding alleged to have been made by any such person with the
      Company and/or the Shareholders in connection with this Agreement or any
      of the transactions contemplated
hereby;

            

    

     

    
      	
               
      

            	
              (c)

            	
              Litigation.  Any
      judgment or verdict rendered against the Company or Buyer as a result of
      the pending action brought by Tomas Serrut or as a result of any other
      legal proceeding filed against the Company based on actions or events
      arising prior to the Closing Date;
and

            

    

     

    
      	
               
      

            	
              (d)

            	
              Incidental
      Matters.  To the extent not covered by the foregoing, any
      and all demands, claims, actions or causes of action, assessments, losses,
      damages, liabilities, costs, and expenses, including reasonable fees and
      expenses of counsel, other expenses of investigation, handling, and
      Litigation and settlement amounts, together with interest and penalties,
      incident to the foregoing.

            

    

     

    The
remedies provided in this Section 5.2 will not be exclusive of or limit any
other remedies that may be available to Buyer.

     

    
      	
              5.3

            	
              Indemnification by
      Buyer.  Buyer shall indemnify, defend, and hold harmless
      the Shareholders at, and at any time after, the Closing up to the end of
      the indemnification period at Article 5.1, from and against any and all
      Losses asserted against, resulting to, imposed upon, or incurred by the
      Shareholders, to the extent arising from any of the
    following:

            

    

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

     

    
      	
               
      

            	
              (a)

            	
              Breach.  Any
      breach of any representation, warranty, or agreement of Buyer contained in
      or made pursuant to this Agreement, including the agreements and other
      instruments contemplated hereby;
and

            

    

     

    
      	
               
      

            	
              (a)

            	
              Brokerage or Finder’s
      Fees.  Any claim by any person for brokerage or finder’s
      fees or commissions or similar payments based upon any agreement or
      understanding alleged to have been made by any such person with the Buyer
      in connection with this Agreement or any of the transactions contemplated
      hereby; and

            

    

     

    
      	
               
      

            	
              (a)

            	
              Incidental
      Matters.  To the extent not covered by the foregoing, any
      and all demands, claims, actions or causes of action, assessments, losses,
      damages, liabilities, costs, and expenses, including reasonable fees and
      expenses of counsel, other expenses of investigation, handling, and
      Litigation, and settlement amounts, together with interest and penalties,
      incident to the foregoing.

            

    

     

    The
remedies provided in this Section 5.3 will not be exclusive of or limit any
other remedies that may be available to the Shareholders.

     

    
      	
              5.4

            	
              Procedures; Third
      Party Claims, etc.

            

    

     

    
      	
               
      

            	
              (a)

            	
              A
      person entitled to make a claim of indemnification hereunder shall be
      referred to as an “Indemnified Party.”  A person obligated for
      indemnification hereunder shall be referred to as an “Indemnifying
      Party.”  The Indemnifying Party shall be entitled to defend any
      claim, action, suit or proceeding made by any third party against an
      Indemnified Party; provided, however, that
      the Indemnified Party shall be entitled to participate in such defense
      with counsel of its choice and at its own expense and, if (i) the
      Indemnifying Party is also a party to such claim, action, suit or
      proceeding and the Indemnified Party determines in good faith that joint
      representation would be inappropriate, (ii) the Indemnifying Party does
      not provide a competent and vigorous defense, or (iii) the Indemnifying
      Party agrees, then the Indemnified Party’s participation shall be at the
      expense of the Indemnifying Party.  The Indemnified Party shall
      provide such cooperation and access to its books, records and properties
      as the Indemnifying Party shall reasonably request with respect to such
      matter; and the parties shall cooperate with each other in order to ensure
      the proper and adequate defense thereof.  An Indemnified Party
      shall not settle any claim subject to indemnification hereunder without
      the prior written consent of the Indemnifying Party, which consent shall
      not be unreasonably withheld or
delayed.

            

    

     

    
      	
               
      

            	
              (b)

            	
              With
      regard to claims of third parties for which indemnification is payable
      hereunder, such indemnification shall be paid by the Indemnifying Party
      upon the earliest to occur of: (i) the entry of a judgment against the
      Indemnified Party; (ii) the settlement of the claim; (iii) with respect to
      indemnities for tax liabilities, upon the issuance of any final resolution
      by a taxation authority; or (iv) with respect to claims before any
      administrative or regulatory authority, when the Loss is finally
      determined and not subject to further review or appeal; provided, however, that
      the Indemnifying Party shall pay on the Indemnified Party’s demand any
      cost or expense reasonably incurred by the Indemnified Party in defending
      or otherwise dealing with such
claim.

            

    

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

     

    
      	
               
      

            	
              (c)

            	
              To
      seek indemnification hereunder, an Indemnified Party shall notify the
      other party hereto of any claim for indemnification, specifying in
      reasonable detail the nature of the Loss and the amount or an estimate of
      the amount thereof.  Neither the giving of such notice nor the
      failure to give such notice shall constitute an election of remedies or
      limit an Indemnified Party in any manner in the enforcement of any other
      remedies that may be available to it, including the right to proceed
      against an Indemnifying Party.

            

    

     

    ARTICLE
6.

     

    MISCELLANEOUS

     

    
      	
              6.1

            	
              Entire
      Agreement.  This Agreement, and the other certificates,
      agreements, and other instruments to be executed and delivered by the
      parties in connection with the transactions contemplated hereby,
      constitute the sole understanding of the parties with respect to the
      subject matter hereof.

            

    

     

    
      	
              6.2

            	
              Parties Bound by
      Agreement; Successors and Assigns.  The terms,
      conditions, and obligations of this Agreement shall inure to the benefit
      of and be binding upon the parties hereto and their respective successors
      and assigns.

            

    

     

    
      	
              6.3

            	
              Amendments and
      Waivers.  No modification, termination, extension,
      renewal or waiver of any provision of this Agreement shall be binding upon
      a party unless made in writing and signed by such party.  A
      waiver on one occasion shall not be construed as a waiver of any right on
      any future occasion.  No delay or omission by a party in
      exercising any of its rights hereunder shall operate as a waiver of such
      rights.

            

    

     

    
      	
              6.4

            	
              Severability.  If
      for any reason any term or provision of this Agreement is held to be
      invalid or unenforceable, all other valid terms and provisions hereof
      shall remain in full force and effect, and all of the terms and provisions
      of this Agreement shall be deemed to be severable in
    nature.

            

    

     

    
      	
              6.5

            	
              Attorney’s
      Fees.  Should any party hereto retain counsel for the
      purpose of enforcing, or preventing the breach of, any provision hereof
      including the institution of any action or proceeding, whether by
      arbitration, judicial or quasi-judicial action or otherwise, to enforce
      any provision hereof or for damages for any alleged breach of any
      provision hereof, or for a declaration of such party’s rights or
      obligations hereunder, then, whether such matter is settled by
      negotiation, or by arbitration or judicial determination, the prevailing
      party shall be entitled to be reimbursed by the losing party for all costs
      and expenses incurred thereby, including reasonable attorneys’ fees for
      the services rendered to such prevailing
party.

            

    

     

    
      	
              6.6

            	
              Counterparts.  This
      Agreement may be executed in one or more counterparts, each of which shall
      for all purposes be deemed to be an original and all of which shall
      constitute the same instrument.  Each counterpart including a
      facsimile transmission of this Agreement shall be deemed to be an original
      and shall have the same force and effect as an original.  In the
      event that a facsimile transmission of this Agreement is signed or any
      counterpart is signed and transmitted by facsimile, the hardcopy thereof
      may be signed subsequently but must be dated concurrently with the
      facsimile transmission.

            

    

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

     

    
      	
              6.7

            	
              Headings.  The
      headings of the Sections and paragraphs of this Agreement are inserted for
      convenience only and shall not be deemed to constitute part of this
      Agreement or to affect the construction
hereof.

            

    

     

    
      	
              6.8

            	
              Expenses.  Except
      as specifically provided herein, each of the Shareholders and Buyer shall
      pay all of its own costs and expenses incurred by it or on its behalf in
      connection with this Agreement and the transactions contemplated hereby,
      including fees and expenses of its own financial consultants, accountants,
      and counsel.

            

    

     

    
      	
              6.9

            	
              Notices.  All
      notices, requests, demands, claims, and other communications which are
      required or may be given under this Agreement shall be in writing and
      shall be deemed to have been duly given: when received, if personally
      delivered; when transmitted, if transmitted by telecopy; five business
      days after such notice, request, demand claim or other communication is
      sent, if sent by registered or certified mail, return receipt requested,
      postage prepaid, and addressed to the intended recipient as set forth
      below:

            

    

     

    

     

    
      	
              if
      to the Shareholders to:

               

              Shareholder
      1.

              Frank
      Towers

              Catterall
      Hall Farm

              Catterall
      Lane

              Catterall,
      Preston, PR3 0PA Lancashire UK

              Telephone:
      +44 780 228533

              Email:
      frank@upwoodpark.co.uk

               

              Shareholder
      2.

              Neal
      John Walmsley

              12
      Old Lancaster Rd

              Catterall,
      Preston PR3 OHN, UK

              Phone:
      +44 797 1268059

              Email:
      nw@goots.co.uk

               

              Shareholder
      3.

              Eric
      Royds

              3
      Heath Ave

              Halifax,
      HX3 OEA, UK

              Telephone:
      +44 7800 963453

              Email:
      home@groovers.f9.co.uk

               

               

              Shareholder
      4.

              Farzad
      Zamanian

              5
      Hollingwood Rise

              Ilkley
      LS29 9PW, UK

              Telephone:
      +44 776 4404915

              Email:
      farzadzamanian@aol.com

            

    

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    
      	 
      
	
              if to the Company
      to:

               

              Technology
      Alternatives Ltd.

              c/o
      Arguelles & Company LLC

              Attorneys-at-Law

              35
      New Road

               

              Belize,
      Central America

               

              Attention:
      Emil Arguelles

              Facsimile:
      501-223-6403

               

            
	
              if to Buyer
      to:

               

              Global
      Clean Energy Holdings, Inc.

              6033
      W. Century Blvd, Suite 895

              Los
      Angeles, CA 90045

               

              Attention:
      Richard Palmer

              Facsimile:
      (310)641-4230

            

    

     

    Any party
may send any notice, request, demand, claim, or other communication hereunder to
the intended recipient at the address set forth above using any other means, but
no such notice, request, demand, claim, or other communication shall be deemed
to have been duly given unless and until it actually is received by the intended
recipient. Any party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other parties notice in the manner herein set forth.

     

    
      	
              6.10

            	
              Governing
      Law.  This Agreement shall be construed in accordance
      with and governed by the laws of Belize without giving effect to the
      principles of choice of law
thereof.

            

    

     

    
      	
              6.11

            	
              Remedies. In
      the event of a dispute between the parties, each party shall be entitled
      to pursue all remedies available at law or in equity and may institute any
      and all legal proceedings against the offending party to enforce any and
      all rights which they may have or become entitled to under and by virtue
      of this Agreement.

            

    

     

    
      	
              6.12

            	
              Waiver of Certain
      Damages.  Except as prohibited by law, each party hereby
      waives any right it may have to claim or recover any special, exemplary,
      punitive or consequential damages other than, or in addition to, actual
      damages in connection with any dispute arising under or in connection with
      any matter related to this Agreement or any related
    agreement.

            

    

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    

     

    
      	
              6.13

            	
                 References,
      etc.

            

    

     

    
      	
               
      

            	
              (a)

            	
              Whenever
      reference is made in this Agreement to any Article, Section, paragraph,
      Schedule or Exhibit, such reference shall be deemed to apply to the
      specified Article, Section or paragraph of this Agreement or the specified
      Schedule or Exhibit attached to this
Agreement.

            

    

     

    
      	
               
      

            	
              (a)

            	
              The
      word “including” when used herein is not intended to be exclusive and
      means “including, without
limitation.”

            

    

     

    
      	
              6.14

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

            

    

     

    

    

    

    

    [Signature
page follows.]

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of
the date first indicated above.

     

    
      	
              SHAREHOLDER
      1:

            
	 
      
	 
      
	   
      
	
              Frank
      Towers

            
	 
      
	 
      
	
              SHAREHOLDER
      2:

            
	 
      
	 
      
	 
        
	
              Neal
      John Walmsley

            
	 
      
	 
      
	
              SHAREHOLDER
      3:

            
	 
      
	 
      
	 
         
	
              Eric
      Royds

            
	 
      
	 
      
	
              SHAREHOLDER
      4:

            
	 
      
	 
      
	  
    
	
              Farzad
      Zamanian

            
	 
      

    

    

    
      	 
      	
              COMPANY:

            
	 
      	
              Technology
      Alternatives Limited

            
	 
      	 
      	 
      
	 
      	
              By:

            	
                
      

            
	 
      	
              Name:    Neal
      Walmsley

            
	 
      	
              Position:
      Director

            

    

    

    

    

    

    
      	 
      	
              BUYER:

            
	 
      	
              Global
      Clean Energy Holdings, Inc.

            
	 
      	 
      	 
      
	 
      	
              By:

            	
               
      

            
	 
      	
              Name:
      Richard Palmer

            
	 
      	
              Title:
      Chief Executive Officer

            

    

    

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    APPENDIX
I

     

    SHARES
OF THE COMPANY BEING SOLD

     

    
      	
              Buyer

            	
              Number
      of Shares of the 

              Company
      Being 

              Acquired

            	
              Number
      of Shares of the 

              BUYER’S
      Common 

              Stock  Issued

            
	
              Shareholder
      1

            	
              2,387

            	
              2,126,391

            
	
              Shareholder
      2

            	
              2,600

            	
              2,316,136

            
	
              Shareholder
      3

            	
              3,581

            	
              3,190,032

            
	
              Shareholder
      4

            	
              1,432

            	
              1,320,198

            

    

    

    Share Transfer:
Share transfer will occur at closing with share registration taking place
in Belize within 90 days of the Closing Date.

    

    Common
Stock Issuance: Buyer will
immediately issue at closing, Common Stock to the Shareholders based upon the
total asset book value of the Company established based on the Closing Balance
Sheet divided by Buyer’s closing share price at the last business day before the
execution of this Agreement.

    

    

    

     

    

    
      
         

      

      
        17Unassociated Document

    

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

    

    Original
Issue Date: May 14, 2009

    Original
Conversion Price (subject to adjustment herein): $3.10

    

    $_______________

     

    ORIGINAL
ISSUE DISCOUNT CONVERTIBLE DEBENTURE

    DUE
MAY 14, 2012

    

    THIS ORIGINAL ISSUE DISCOUNT
CONVERTIBLE DEBENTURE is one of a series of duly authorized and validly issued
Original Issue Discount Convertible Debentures of Octavian Global Technologies,
Inc., a Delaware corporation, (the “Company”), having its
principal place of business at 1-3 Bury Street Guildford Surrey, GU2 4AW, United
Kingdom, designated as its Original Issue Discount Convertible Debenture due May
14, 2012 (this debenture, the “Debenture” and,
collectively with the other debentures of such series, the “Debentures”).

    

    FOR VALUE
RECEIVED, the Company promises to pay to ________________________ or its
registered assigns (the “Holder”), or shall
have paid pursuant to the terms hereunder, the principal sum of $_______________
on May 14, 2012 (the “Maturity Date”) or
such earlier date as this Debenture is required or permitted to be repaid as
provided hereunder, and to pay interest to the Holder on the aggregate
unconverted and then outstanding principal amount of this Debenture in
accordance with the provisions hereof.  This Debenture is subject to
the following additional provisions:

    

    Section
1.             Definitions.  For
the purposes hereof, in addition to the terms defined elsewhere in this
Debenture, (a) capitalized terms not otherwise defined herein shall have the
meanings set forth in the Purchase Agreements, as applicable and (b) the
following terms shall have the following meanings:

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    “Alternate
Consideration” shall have the meaning set forth in Section
5(e).

    

    “Bankruptcy Event”
means any of the following events: (a) the Company or any Significant Subsidiary
(as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a
case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or
similar law of any jurisdiction relating to the Company or any Significant
Subsidiary thereof, (b) there is commenced against the Company or any
Significant Subsidiary thereof any such case or proceeding that is not dismissed
within 60 days after commencement, (c) the Company or any Significant Subsidiary
thereof is adjudicated insolvent or bankrupt or any order of relief or other
order approving any such case or proceeding is entered, (d) the Company or any
Significant Subsidiary thereof suffers any appointment of any custodian or the
like for it or any substantial part of its property that is not discharged or
stayed within 60 calendar days after such appointment, (e) the Company or any
Significant Subsidiary thereof makes a general assignment for the benefit of
creditors, (f) the Company or any Significant Subsidiary thereof calls a meeting
of its creditors with a view to arranging a composition, adjustment or
restructuring of its debts or (g) the Company or any Significant Subsidiary
thereof, by any act or failure to act, expressly indicates its consent to,
approval of or acquiescence in any of the foregoing or takes any corporate or
other action for the purpose of effecting any of the foregoing.

    

    “Base Conversion
Price” shall have the meaning set forth in Section 5(b).

    

    “Beneficial Ownership
Limitation” shall have the meaning set forth in Section
4(c).

    

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

    

    “Buy-In” shall have
the meaning set forth in Section 4(d)(v).

    

    “Change of Control
Transaction” means the occurrence after the date hereof of any of (a) an
acquisition after the date hereof by an individual or legal entity or “group”
(as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital
stock of the Company, by contract or otherwise) of in excess of 45% of the
voting securities of the Company (other than by means of conversion or exercise
of the Debentures and Warrants and the Securities issued together with the
Debentures), (b) the Company merges into or consolidates with any other Person,
or any Person merges into or consolidates with the Company and, after giving
effect to such transaction, the stockholders of the Company immediately prior to
such transaction own less than 55% of the aggregate voting power of the Company
or the successor entity of such transaction, or (c) the Company sells or
transfers all or substantially all of its assets to another Person and the
stockholders of the Company immediately prior to such transaction own less than
55% of the aggregate voting power of the acquiring entity immediately after the
transaction, (d) a replacement at one time or within a two year period of more
than one-half of the members of the Board of Directors which is not approved by
a majority of those individuals who are members of the Board of Directors on the
date hereof (or by those individuals who are serving as members of the Board of
Directors on any date whose nomination to the Board of Directors was approved by
a majority of the members of the Board of Directors who are members on the date
hereof), or (e) the execution by the Company of an agreement to which the
Company  is a party or by which it is bound, providing for any of the
events set forth in clauses (a) through (d) above.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    “Conversion” shall
have the meaning ascribed to such term in Section 4.

    

    “Conversion Date”
shall have the meaning set forth in Section 4(a).

    

    “Conversion Price”
shall have the meaning set forth in Section 4(b).

    

    “Conversion Schedule”
means the Conversion Schedule in the form of Schedule 1 attached
hereto.

    

    “Conversion Shares”
means, collectively, the shares of Common Stock issuable upon conversion of this
Debenture in accordance with the terms hereof.

    

    “Debenture Register”
shall have the meaning set forth in Section 2(c).

    

    “Dilutive Issuance”
shall have the meaning set forth in Section 5(b).

    

    “Dilutive Issuance
Notice” shall have the meaning set forth in Section 5(b).

    

    “Equity Conditions”
means, during the period in question, (a) the Company shall have duly honored
all conversions and redemptions scheduled to occur or occurring by virtue of one
or more Notices of Conversion of the Holder, if any, (b) the Company shall have
paid all liquidated damages and other amounts owing to the Holder in respect of
this Debenture, (c)(i) there is an effective Registration Statement
pursuant to which the Holder is permitted to utilize the prospectus thereunder
to resell all of the shares of Common Stock issuable pursuant to the Transaction
Documents (and the Company believes, in good faith, that such effectiveness will
continue uninterrupted for the foreseeable future) or (ii) all of the Conversion
Shares issuable pursuant to the Transaction Documents may be resold pursuant to
Rule 144 without volume or manner-of-sale restrictions or current public
information requirements, (d) the Common Stock is trading on a Trading Market
and all of the shares issuable pursuant to the Transaction Documents are listed
or quoted for trading on such Trading Market (and the Company believes, in good
faith, that trading of the Common Stock on a Trading Market will continue
uninterrupted for the foreseeable future), (e) there is a sufficient number of
authorized but unissued and otherwise unreserved shares of Common Stock for the
issuance of all of the shares issuable pursuant to the Transaction Documents,
(f) there is no existing Event of Default or no existing event which, with the
passage of time or the giving of notice, would constitute an Event of Default,
(g) the issuance of the shares in question (or, in the case of an Optional
Redemption, the shares issuable upon conversion in full of the Optional
Redemption Amount) to
the Holder would not violate the limitations set forth in Section 4(c) herein,
(h) there has been no public announcement of a pending or proposed Fundamental
Transaction or Change of Control Transaction that has not been consummated, (i)
the Holder is not in possession of any information provided by the Company that
constitutes, or may constitute, material non-public information and (j) for each
Trading Day in a period of 20 consecutive Trading Days prior to the applicable
date in question, the average daily trading volume for the Common Stock on the
principal Trading Market exceeds, (1) as to securities issuable pursuant to
Section 2, $25,000 and (2) as to securities issuable pursuant to Section 6(a),
$50,000.

     

    
      
         

      

      
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    “Event of Default”
shall have the meaning set forth in Section 8(a).

    

    “Fundamental
Transaction” shall have the meaning set forth in Section
5(e).

    

    “Interest Conversion
Rate” means 100% of the lesser of (i) the average of the VWAPs for the 20
consecutive Trading Days ending on the Trading Day that is immediately prior to
the applicable Interest Payment Date or (ii) the average of the VWAPs for the 20
consecutive Trading Days ending on the Trading Day that is immediately prior to
the date the applicable Interest Conversion Shares are issued and delivered if
such delivery is after the Interest Payment Date.

    

    “Interest Conversion
Shares” shall have the meaning set forth in Section 2(a).

    

    “Interest Notice
Period” shall have the meaning set forth in Section 2(a).

    

    “Interest Payment
Date” shall have the meaning set forth in Section 2(a).

    

    “Interest Share
Amount” shall have the meaning set forth in Section 2(a).

    

    “Late Fees” shall have
the meaning set forth in Section 2(d).

    

    “Mandatory Default
Amount”  means the sum of (a) the greater of (i) the
outstanding principal amount of this Debenture, plus all accrued and unpaid
interest hereon, divided by the Conversion Price on the date the Mandatory
Default Amount is either (A) demanded (if demand or notice is required to create
an Event of Default) or otherwise due or (B) paid in full, whichever has a lower
Conversion Price, multiplied by the VWAP on the date the Mandatory Default
Amount is either (x) demanded or otherwise due or (y) paid in full, whichever
has a higher VWAP, or (ii) 100% of the outstanding principal amount of this
Debenture, plus 100% of accrued and unpaid interest hereon, and (b) all other
amounts, costs, expenses and liquidated damages due in respect of this
Debenture.  Notwithstanding anything herein to the contrary, clause
(a)(i) above shall only be available to the Holder if the Holder has used
commercially reasonable efforts to mitigate the Event of Default by recovering
principal via conversions and sales of Conversion Shares.

     

    
      
         

      

      
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    “May 2009 Purchase
Agreement” means the Securities Purchase Agreement, dated as of May 14,
2009 among the Company and the original Holders, as amended, modified or
supplemented from time to time in accordance with its terms.

    

    “New York Courts”
shall have the meaning set forth in Section 9(d).

    

    “Notice of Conversion”
shall have the meaning set forth in Section 4(a).

    

    “October 2008 Purchase
Agreement” means the Securities Purchase Agreement, dated as of October
30, 2008 among the Company and the original Holders, as amended, modified or
supplemented from time to time in accordance with its terms.

    

    “Optional Redemption”
shall have the meaning set forth in Section 6(a).

    

    “Optional Redemption
Amount” means the sum of (a) 118% of the then outstanding principal
amount of the Debenture, (b) accrued but unpaid interest and (c) all liquidated
damages and other amounts due in respect of the
Debenture.  Additionally, the Company shall issue to the Holder a
common stock purchase warrant, in the form of the Warrant, with a term of
exercise of 7 years and an exercise price equal to the then Conversion Price,
for up to a number of shares of Common Stock equal to 50% of the Conversion
Shares underlying the portion of this Debenture being redeemed.

    

    “Optional Redemption
Date” shall have the meaning set forth in Section 6(a).

    

    “Optional Redemption
Notice” shall have the meaning set forth in Section 6(a).

    

    “Optional Redemption Notice
Date” shall have the meaning set forth in Section 6(a).

    

    “Optional Redemption
Period” shall
have the meaning set forth in Section 6(a).

    

    “Original Issue Date”
means the date of the first issuance of the Debentures, regardless of any
transfers of any Debenture and regardless of the number of instruments which may
be issued to evidence such Debentures.

    

    “Permitted
Indebtedness” means (a) the indebtedness evidenced by the Debentures
(including any debentures issued pursuant to the definition of Exempt Issuance
in Section 1 of the Purchase Agreements, as applicable), (b) the Indebtedness
existing on the Original Issue Date and set forth on the Disclosure Schedules
attached to the Purchase Agreements, as applicable, (c) lease obligations and
purchase money indebtedness incurred in connection with the acquisition of
capital assets and lease obligations with respect to newly acquired or leased
assets, (d) debt financings incurred in a special purpose vehicle or Subsidiary
provided that any Lien is limited to newly acquired assets in such special
purpose vehicle or Subsidiary, (e) indebtedness that (i) is expressly
subordinate to the Debentures pursuant to a written subordination agreement with
the Purchasers that is acceptable to each Purchaser in its sole and absolute
discretion and (ii) matures at a date later than the 91st day
following the Maturity Date and (f) the incurrence of indebtedness pursuant to
which, as a closing condition thereof, the proceeds thereof shall be used to
repay in full the Debentures.

     

    
      
         

      

      
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    “Permitted Lien” means
the individual and collective reference to the following: (a) Liens for taxes,
assessments and other governmental charges or levies not yet due or Liens for
taxes, assessments and other governmental charges or levies being contested in
good faith and by appropriate proceedings for which adequate reserves (in the
good faith judgment of the management of the Company) have been established in
accordance with GAAP; (b) Liens imposed by law which were incurred in the
ordinary course of the Company’s business, such as carriers’, warehousemen’s and
mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in
the ordinary course of the Company’s business, and which (x) do not individually
or in the aggregate materially detract from the value of such property or assets
or materially impair the use thereof in the operation of the business of the
Company and its consolidated Subsidiaries or (y) are being contested in good
faith by appropriate proceedings, which proceedings have the effect of
preventing for the foreseeable future the forfeiture or sale of the property or
asset subject to such Lien; (c) Liens incurred in connection with Permitted
Indebtedness under clauses (a), (b) and (d) thereunder; and (d) Liens incurred
in connection with Permitted Indebtedness under clause (c) thereunder, provided
that such Liens are not secured by assets of the Company or its Subsidiaries
other than the assets so acquired or leased.

     

    “Purchase Agreements”
means the May 2009 Purchase Agreement and the October 2008 Purchase
Agreement.

    

    “Registration
Statement” means a registration statement that registers the resale of
all Conversion Shares and Interest Conversion Shares of the Holder and names the
Holder as a “selling stockholder” therein.

    

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

    

    “Share Delivery Date”
shall have the meaning set forth in Section 4(d)(ii).

    

    “Subsidiary” shall
have the meaning set forth in the Purchase Agreements, as
applicable.

    

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

    

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

    

    
      
         

      

      
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    “Transaction
Documents” shall have the meaning set forth in the Purchase Agreements,
as applicable.

    

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

    

    Section
2.             Interest.

    

    a)           Payment of Interest in Cash
or Kind.  The Company shall not pay any interest, and interest
shall not accrue, on the Debentures prior to May 14, 2009.  Commencing
on May 14, 2009, the Company shall pay interest to the Holder on the aggregate
unconverted and then outstanding principal amount of this Debenture at the rate
of 10% annum, payable semi annually on January 1 and July 1, beginning on
January 1, 2010, on each Conversion Date (as to that principal amount then being
converted), on each Optional Redemption Date (as to that principal amount then
being redeemed) and on the Maturity Date (each such date, an “Interest Payment
Date”) (if any Interest Payment Date is not a Business Day, then the
applicable payment shall be due on the next succeeding Business Day), in cash
or, at the Company’s option, in duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock equal to the amount of interest to be paid
on the Interest Payment Date divided by the Interest Conversion Rate (the dollar
amount to be paid in shares, the “Interest Share
Amount”) or a combination thereof; provided, however, that payment
in shares of Common Stock may only occur if (i) all of the Equity Conditions
have been met (unless waived by the Holder in writing) during the 20 Trading
Days immediately prior to the applicable Interest Payment Date (the “Interest Notice
Period”) and through and including the date such shares of Common Stock
are actually issued to the Holder, (ii) the Company shall have given the Holder
notice in accordance with the notice requirements set forth below and (iii) as
to such Interest Payment Date, prior to such Interest Notice Period (but not
more than five (5) Trading Days prior to the commencement of such Interest
Notice Period), the Company shall have delivered to the Holder’s account with
The Depository Trust Company a number of shares of Common Stock to be applied
against such Interest Share Amount equal to the quotient of (x) the applicable
Interest Share Amount divided by (y) the lesser of the Interest Conversion Rate
assuming for such purposes that the Interest Payment Date is the Trading Day
immediately prior to the commencement of the Interest Notice Period (the “Interest Conversion
Shares”).

     

    
      
         

      

      
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    b)           Company’s Election to Pay
Interest in Cash or Shares of Common Stock.  Subject to the
terms and conditions herein, the decision whether to pay interest hereunder in
cash, shares of Common Stock or a combination thereof shall be at the sole
discretion of the Company.  Prior to the commencement of any Interest
Notice Period, the Company shall deliver to the Holder a written notice of its
election to pay interest hereunder on the applicable Interest Payment Date
either in cash, shares of Common Stock or a combination thereof and the Interest
Share Amount as to the applicable Interest Payment Date, provided that the
Company may indicate in such notice that the election contained in such notice
shall apply to future Interest Payment Dates until revised by a subsequent
notice.  During any Interest Notice Period, the Company’s election
(whether specific to an Interest Payment Date or continuous) shall be
irrevocable as to such Interest Payment Date.  Subject to the
aforementioned conditions, failure to timely deliver such written notice to the
Holder shall be deemed an election by the Company to pay the interest on such
Interest Payment Date in cash.  At any time the Company delivers a
notice to the Holder of its election to pay the interest in shares of Common
Stock, the Company shall timely file a prospectus supplement pursuant to Rule
424 disclosing such election.  The aggregate number of shares of
Common Stock otherwise issuable to the Holder on an Interest Payment Date shall
be reduced by the number of Interest Conversion Shares previously issued to the
Holder in connection with such Interest Payment Date.

    

    c)           Interest
Calculations. Interest shall be calculated on the basis of a 360-day
year, consisting of twelve 30 calendar day periods, and shall accrue daily
commencing on the Original Issue Date until payment in full of the outstanding
principal, together with all accrued and unpaid interest, liquidated damages and
other amounts which may become due hereunder, has been made.  Payment
of interest in shares of Common Stock (other than the Interest Conversion Shares
issued prior to an Interest Notice Period) shall otherwise occur pursuant to
Section 4(d)(ii) herein and, solely for purposes of the payment of interest in
shares, the Interest Payment Date shall be deemed the Conversion
Date.  Interest shall cease to accrue with respect to any principal
amount converted, provided that, the Company actually delivers the Conversion
Shares within the time period required by Section 4(d)(ii)
herein.  Interest hereunder will be paid to the Person in whose name
this Debenture is registered on the records of the Company regarding
registration and transfers of this Debenture (the “Debenture Register”).
Except as otherwise provided herein, if at any time the Company pays interest
partially in cash and partially in shares of Common Stock to the holders of the
Debentures, then such payment of cash shall be distributed ratably among the
holders of the then-outstanding Debentures based on their (or their
predecessor’s) initial purchases of Debentures pursuant to the May 2009 Purchase
Agreement.

    

    d)           Late
Fee.  All overdue accrued and unpaid interest to be paid
hereunder shall entail a late fee at an interest rate equal to the lesser of 18%
per annum or the maximum rate permitted by applicable law (the “Late Fees”) which
shall accrue daily from the date such interest is due hereunder through and
including the date of actual payment in full. Notwithstanding anything to the
contrary contained herein, if, on any Interest Payment Date the Company has
elected to pay accrued interest in the form of Common Stock but the Company is
not permitted to pay accrued interest in Common Stock because it fails to
satisfy the conditions for payment in Common Stock set forth in Section 2(a)
herein, then, at the option of the Holder, the Company, in lieu of delivering
either shares of Common Stock pursuant to this Section 2 or paying the regularly
scheduled interest payment in cash, shall deliver, within three (3) Trading Days
of each applicable Interest Payment Date, an amount in cash equal to the product
of (x) the number of shares of Common Stock otherwise deliverable to the Holder
in connection with the payment of interest due on such Interest Payment Date
multiplied by (y) the highest VWAP during the period commencing on the Interest
Payment Date and ending on the Trading Day prior to the date such payment is
actually made.  If any Interest Conversion Shares are issued to the
Holder in connection with an Interest Payment Date and are not applied against
an Interest Share Amount, then the Holder shall promptly return such excess
shares to the Company.

     

    
      
         

      

      
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    e)           Prepayment.  Except
as otherwise set forth in this Debenture, the Company may not prepay any portion
of the principal amount of this Debenture without the prior written consent of
the Holder.

    

    Section
3.             Registration of Transfers
and Exchanges.

    

    a)           Different
Denominations. This Debenture is exchangeable for an equal aggregate
principal amount of Debentures of different authorized denominations, as
reasonably requested by the Holder surrendering the same.  No service
charge will be payable for such registration of transfer or
exchange.

    

    b)           Investment
Representations. This Debenture has been issued subject to certain
investment representations of the original Holder set forth in the May 2009
Purchase Agreement and may be transferred or exchanged only in compliance with
the May 2009 Purchase Agreement and applicable federal and state securities laws
and regulations.

    

    c)           Reliance on Debenture
Register. Prior to due presentment for transfer to the Company of this
Debenture, the Company and any agent of the Company may treat the Person in
whose name this Debenture is duly registered on the Debenture Register as the
owner hereof for the purpose of receiving payment as herein provided and for all
other purposes, whether or not this Debenture is overdue, and neither the
Company nor any such agent shall be affected by notice to the
contrary.

    

    Section
4.             Conversion.

    

    a)           Voluntary Conversion.
At any time after the Original Issue Date until this Debenture is no longer
outstanding, this Debenture shall be convertible, in whole or in part, into
shares of Common Stock at the option of the Holder, at any time and from time to
time (subject to the conversion limitations set forth in Section 4(c)
hereof).  The Holder shall effect conversions by delivering to the
Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a
“Notice of
Conversion”), specifying therein the principal amount of this Debenture
to be converted and the date on which such conversion shall be effected (such
date, the “Conversion
Date”).  If no Conversion Date is specified in a Notice of
Conversion, the Conversion Date shall be the date that such Notice of Conversion
is deemed delivered hereunder.  To effect conversions hereunder, the
Holder shall not be required to physically surrender this Debenture to the
Company unless the entire principal amount of this Debenture, plus all accrued
and unpaid interest thereon, has been so converted. Conversions hereunder shall
have the effect of lowering the outstanding principal amount of this Debenture
in an amount equal to the applicable conversion.  The Holder and the
Company shall maintain records showing the principal amount(s) converted and the
date of such conversion(s).  The Company may deliver an objection to
any Notice of Conversion within 1 Business Day of delivery of such Notice of
Conversion.  In the event of any dispute or discrepancy, the records
of the Holder shall be controlling and determinative in the absence of manifest
error.  The Holder,
and any assignee by acceptance of this Debenture, acknowledge and agree that, by
reason of the provisions of this paragraph, following conversion of a portion of
this Debenture, the unpaid and unconverted principal amount of this Debenture
may be less than the amount stated on the face hereof.

     

    
      
         

      

      
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    b)           Conversion
Price.  The conversion price in effect on any Conversion Date
shall be equal to $3.10,
subject to adjustment herein (the “Conversion
Price”).

    

    c)           Holder’s Restriction on
Conversion. The Company shall not effect any conversion of this
Debenture, and a Holder shall not have the right to convert any portion of this
Debenture, to the extent that after giving effect to the conversion set forth on
the applicable Notice of Conversion, the Holder (together with the Holder’s
Affiliates, and any other person or entity acting as a group together with the
Holder or any of the Holder’s Affiliates) would beneficially own in excess of
the Beneficial Ownership Limitation (as defined below).  For purposes of
the foregoing sentence, the number of shares of Common Stock beneficially owned
by the Holder and its Affiliates shall include the number of shares of Common
Stock issuable upon conversion of this Debenture with respect to which such
determination is being made, but shall exclude the number of shares of Common
Stock which are issuable upon (A) conversion of the remaining, unconverted
principal amount of this Debenture beneficially owned by the Holder or any of
its Affiliates and (B) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company  subject to a
limitation on conversion or exercise analogous to the limitation contained
herein (including, without limitation, any other Debentures or the Warrants)
beneficially owned by the Holder or any of its Affiliates.  Except as set
forth in the preceding sentence, for purposes of this Section 4(c), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder.  To the
extent that the limitation contained in this Section 4(c) applies, the
determination of whether this Debenture is convertible (in relation to other
securities owned by the Holder together with any Affiliates) and of which
principal amount of this Debenture is convertible shall be in the sole
discretion of the Holder, and the submission of a Notice of Conversion shall be
deemed to be the Holder’s determination of whether this Debenture may be
converted (in relation to other securities owned by the Holder together with any
Affiliates) and which principal amount of this Debenture is convertible, in each
case subject to the Beneficial Ownership Limitation. To ensure compliance with
this restriction, the Holder will be deemed to represent to the Company each
time it delivers a Notice of Conversion that such Notice of Conversion has not
violated the restrictions set forth in this paragraph and the Company shall have
no obligation to verify or confirm the accuracy of such
determination.  In addition, a determination as to any group status as
contemplated above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated
thereunder.   For purposes of this Section 4(c), in determining
the number of outstanding shares of Common Stock, the Holder may rely on the
number of outstanding shares of Common Stock as stated in the most recent of the
following: (A) the Company’s most recent periodic or annual report, as the case
may be; (B) a more recent public announcement by the Company; or (C) a more
recent notice by the Company or the Company’s transfer agent setting forth the
number of shares of Common Stock outstanding.  Upon the written or oral
request of a Holder, the Company shall within two Trading Days confirm orally
and in writing to the Holder the number of shares of Common Stock then
outstanding.  In any case, the number of outstanding shares of Common Stock
shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Debenture, by the Holder or its
Affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. The “Beneficial Ownership
Limitation” shall be 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon conversion of this Debenture held by the
Holder.  The Holder, upon not less than 61 days’ prior notice to the
Company, may increase or decrease the Beneficial Ownership Limitation provisions
of this Section 4(c), provided that the Beneficial Ownership Limitation in no
event exceeds 9.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock upon
conversion of this Debenture held by the Holder and the Beneficial Ownership
Limitation provisions of this Section 4(c) shall continue to
apply.  Any such increase or decrease will not be effective until the
61st
day after such notice is delivered to the Company.  The
Beneficial Ownership Limitation provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity with the terms
of this Section 4(c) to correct this paragraph (or any portion hereof) which may
be defective or inconsistent with the intended Beneficial Ownership Limitation
contained herein or to make changes or supplements necessary or desirable to
properly give effect to such limitation. The limitations contained in this
paragraph shall apply to a successor holder of this Debenture.

     

    
      
         

      

      
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              d)

            	
              Mechanics of
      Conversion.

            

    

    

    i.           Conversion Shares Issuable
Upon Conversion of Principal Amount.  The number of Conversion
Shares issuable upon a conversion hereunder shall be determined by the quotient
obtained by dividing (x) the outstanding principal amount of this Debenture to
be converted by (y) the Conversion Price.

     

    
      
         

      

      
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    ii.           Delivery of Certificate Upon
Conversion. Not later than five Trading Days after each Conversion Date
(the “Share Delivery
Date”), the Company shall deliver, or cause to be delivered, to the
Holder (A) a certificate or certificates representing the Conversion Shares
representing the number of Conversion Shares being acquired upon the conversion
of this Debenture (including, if the Company has given continuous notice
pursuant to Section 2(b) for payment of interest in shares of Common Stock at
least 20 Trading Days prior to the date on which the Notice of Conversion is
delivered to the Company, shares of Common Stock representing the payment of
accrued interest otherwise determined pursuant to Section 2(a) but assuming that
the Interest Notice Period is the 20 Trading Days period immediately prior to
the date on which the Notice of Conversion is delivered to the Company and
excluding for such issuance the condition that the Company deliver Interest
Conversion Shares as to such interest payment) and (B) a bank check in the
amount of accrued and unpaid interest (if the Company has elected or is required
to pay accrued interest in cash). On or after the Effective Date, the Company
shall use its best efforts to deliver any certificate or certificates required
to be delivered by the Company under this Section 4(d) electronically through
the Depository Trust Company or another established clearing corporation
performing similar functions.

    

    iii.           Failure to Deliver
Certificates.  If in the case of any Notice of Conversion such
certificate or certificates are not delivered to or as directed by the
applicable Holder by the fifth Trading Day after the Share Delivery Date, the
Holder shall be entitled to elect by written notice to the Company at any time
on or before its receipt of such certificate or certificates, to rescind such
Conversion, in which event the Company shall promptly return to the Holder any
original Debenture delivered to the Company and the Holder shall promptly return
to the Company the Common Stock certificates representing the principal amount
of this Debenture unsuccessfully tendered for conversion to the
Company.

    

    iv.           Obligation Absolute; Partial
Liquidated Damages.  The Company’s obligations to issue and
deliver the Conversion Shares upon conversion of this Debenture in accordance
with the terms hereof are absolute and unconditional, irrespective of any action
or inaction by the Holder to enforce the same, any waiver or consent with
respect to any provision hereof, the recovery of any judgment against any Person
or any action to enforce the same, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the Holder or any
other Person of any obligation to the Company or any violation or alleged
violation of law by the Holder or any other Person, and irrespective of any
other circumstance which might otherwise limit such obligation of the Company to
the Holder in connection with the issuance of such Conversion Shares; provided, however, that such
delivery shall not operate as a waiver by the Company of any such action the
Company may have against the Holder.  If the Company fails for any
reason to deliver to the Holder such certificate or certificates pursuant to
Section 4(d)(ii) by the second (2nd)
Trading Day following the Share Delivery Date, the Company shall pay to the
Holder, in cash, as liquidated damages and not as a penalty, for each $2,000 of
principal amount being converted, $10 per Trading Day for each Trading Day
(increasing to $20 per Trading Day on the fifth (5th)
Trading day after such liquidated damages have begun to accrue) after such
second (2nd)
Trading Day following the Share Delivery Date until such certificates are
delivered.    Nothing herein shall limit a Holder’s right to
pursue actual damages or declare an Event of Default pursuant to Section 8
hereof for the Company’s failure to deliver Conversion Shares within the period
specified herein and the Holder shall have the right to pursue all remedies
available to it hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief.  The exercise
of any such rights shall not prohibit the Holder from seeking to enforce damages
pursuant to any other Section hereof or under applicable law.

     

    
      
         

      

      
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    v.           Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Conversion. In addition to
any other rights available to the Holder, if the Company fails for any reason to
deliver to the Holder such certificate or certificates by the 5th Trading
Day following the Share Delivery Date pursuant to Section 4(d)(ii), and if after
such 5th Trading
Day after the Share Delivery Date the Holder is required by its brokerage firm
to purchase (in an open market transaction or otherwise), or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Conversion Shares which the Holder
was entitled to receive upon the conversion relating to such Share Delivery Date
(a “Buy-In”),
then the Company shall (A) pay in cash to the Holder (in addition to any other
remedies available to or elected by the Holder) the amount by which (x) the
Holder’s total purchase price (including any brokerage commissions) for the
Common Stock so purchased exceeds (y) the product of (1) the aggregate number of
shares of Common Stock that the Holder was entitled to receive from the
conversion at issue multiplied by (2) the actual sale price at which the sell
order giving rise to such purchase obligation was executed (including any
brokerage commissions) and (B) at the option of the Holder, either reissue (if
surrendered) this Debenture in a principal amount equal to the principal amount
of the attempted conversion or deliver to the Holder the number of shares of
Common Stock that would have been issued if the Company had timely complied with
its delivery requirements under Section 4(d)(ii).  For example, if the
Holder purchases Common Stock having a total purchase price of $11,000 to cover
a Buy-In with respect to an attempted conversion of this Debenture with respect
to which the actual sale price of the Conversion Shares (including any brokerage
commissions) giving rise to such purchase obligation was a total of $10,000
under clause (A) of the immediately preceding sentence, the Company shall be
required to pay the Holder $1,000.  The Holder shall provide the
Company written notice indicating the amounts payable to the Holder in respect
of the Buy-In and, upon request of the Company, evidence of the amount of such
loss.  Nothing herein shall limit a Holder’s right to pursue any other
remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver certificates representing
shares of Common Stock upon conversion of this Debenture as required pursuant to
the terms hereof.  Notwithstanding anything herein to the contrary, in
the event that the Company has accrued liquidated damages pursuant to Section
4(d)(iv) and Section 4(d)(v) and has the right to accelerate this Debenture
pursuant to Section 8, the Holder, at its election, may only avail itself of one
such remedy.  Once the Holder has elected such remedy under this
Debenture, it shall not be permitted to seek either of the other two remedies
for the same breach.

     

    
      
         

      

      
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    vi.           Reservation of Shares
Issuable Upon Conversion. The Company covenants that it will at all times
reserve and keep available out of its authorized and unissued shares of Common
Stock for the sole purpose of issuance upon conversion of this Debenture and
payment of interest on this Debenture, each as herein provided, free from
preemptive rights or any other actual contingent purchase rights of Persons
other than the Holder (and the other holders of the Debentures), not less than
such aggregate number of shares of the Common Stock as shall (subject to the
terms and conditions set forth in the May 2009 Purchase Agreement) be issuable
(taking into account the adjustments and restrictions of Section 5) upon the
conversion of the outstanding principal amount of this Debenture and payment of
interest hereunder.  The Company covenants that all shares of Common
Stock that shall be so issuable shall, upon issue, be duly authorized, validly
issued, fully paid and nonassessable and, if the Registration Statement is then
effective under the Securities Act, shall be registered for public sale in
accordance with such Registration Statement.

    

    vii.           Fractional Shares. No
fractional shares or scrip representing fractional shares shall be issued upon
the conversion of this Debenture.  As to any fraction of a share which
Holder would otherwise be entitled to purchase upon such conversion, the Company
shall at its election, either pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the Conversion Price
or round up to the next whole share.

    

    viii.           Transfer
Taxes.  The issuance of certificates for shares of the Common
Stock on conversion of this Debenture shall be made without charge to the Holder
hereof for any documentary stamp or similar taxes that may be payable in respect
of the issue or delivery of such certificates, provided that, the Company shall
not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate upon conversion in
a name other than that of the Holder of this Debenture so converted and the
Company shall not be required to issue or deliver such certificates unless or
until the person or persons requesting the issuance thereof shall have paid to
the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid.

     

    
      
         

      

      
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    Section
5.             Certain
Adjustments.

    

    a)           Stock Dividends and Stock
Splits.  If the Company, at any time while this Debenture is
outstanding: (i) pays a stock dividend or otherwise makes a distribution or
distributions payable in shares of Common Stock on shares of Common Stock or any
Common Stock Equivalents (which, for avoidance of doubt, shall not include any
shares of Common Stock issued by the Company upon conversion of, or payment of
interest on, the Debentures), (ii) subdivides outstanding shares of Common Stock
into a larger number of shares, (iii) combines (including by way of a reverse
stock split) outstanding shares of Common Stock into a smaller number of shares
or (iv) issues, in the event of a reclassification of shares of the Common
Stock, any shares of capital stock of the Company, then the Conversion Price
shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock (excluding any treasury shares of the Company)
outstanding immediately before such event and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after such
event.  Any adjustment made pursuant to this Section shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or re-classification.

    

    b)           EBITDA Reset and Subsequent
Sales.

     

    (i)              EBITDA
Reset.  If EBITDA (as defined below) is less than $8.0 million
and the average of the 22 VWAPs immediately prior to December 31, 2009 (the
“Market Price”)
is less than the then Conversion Price, then the Conversion Price shall be
reduced to equal the greater of (1) the product of (A) the fraction obtained by
dividing the EBIDTA by $8.0 million and (B) $3.10, subject to adjustment for
reverse and forward stock splits and the like, and (2) the Market
Price.  “EBITDA” means, for
the fiscal year ended December 31, 2009, earnings before interest, taxes,
depreciation and amortization of the Company and its consolidated Subsidiaries
(including, but not limited to, its majority owned Italian subsidiary,
determined in accordance with GAAP, consistently applied, plus (i) any provision
for (or less any benefit from) income taxes, (ii) any deduction for interest
expense, net of interest income, and (iii) depreciation and amortization
expense.  All determinations of the components of EBITDA shall be
derived from the Company’s Form 10-K for the fiscal year ended December 31, 2009
(“2009
10-K”).

     

    (ii)              Subsequent Equity
Sales.  If, at any time while this Debenture is
outstanding,  the Company or any Subsidiary, as applicable, sells or
grants any option to purchase or sells or grants any right to reprice, or
otherwise disposes of or issues (or announces any sale, grant or any option to
purchase or other disposition), any Common Stock or Common Stock Equivalents
entitling any Person to acquire shares of Common Stock at an effective price per
share that is lower than the then Conversion Price (such lower price, the “Base Conversion
Price” and such issuances, collectively, a “Dilutive Issuance”)
(if the holder of the Common Stock or Common Stock Equivalents so issued shall
at any time, whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices or otherwise, or
due to warrants, options or rights per share which are issued in connection with
such issuance, be entitled to receive shares of Common Stock at an effective
price per share that is lower than the Conversion Price, such issuance shall be
deemed to have occurred for less than the Conversion Price on such date of the
Dilutive Issuance), then the Conversion Price shall be reduced to equal the Base
Conversion Price.  Such adjustment shall be made whenever such Common
Stock or Common Stock Equivalents are issued.  Notwithstanding the
foregoing, no adjustment will be made under this Section 5(b)(ii) in respect of
an Exempt Issuance.  If the Company enters into a Variable Rate
Transaction, despite the prohibition set forth in the Purchase Agreements, as
applicable, the Company shall be deemed to have issued Common Stock or Common
Stock Equivalents at the lowest possible conversion price at which such
securities may be converted or exercised. The Company shall notify the Holder in
writing, no later than 1 Business Day following the issuance of any Common Stock
or Common Stock Equivalents subject to this Section 5(b)(ii), indicating therein
the applicable issuance price, or applicable reset price, exchange price,
conversion price and other pricing terms (such notice, the “Dilutive Issuance
Notice”).  For purposes of clarification, whether or not the
Company provides a Dilutive Issuance Notice pursuant to this Section 5(b)(ii),
upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive
a number of Conversion Shares based upon the Base Conversion Price on or after
the date of such Dilutive Issuance, regardless of whether the Holder accurately
refers to the Base Conversion Price in the Notice of Conversion.

     

    
      
         

      

      
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    c)           Subsequent Rights
Offerings.  If the Company, at any time while the Debenture is
outstanding, shall issue rights, options or warrants to all holders of Common
Stock (and not to Holders) entitling them to subscribe for or purchase shares of
Common Stock at a price per share that is lower than the VWAP on the record date
referenced below, then the Conversion Price shall be multiplied by a fraction of
which the denominator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of additional shares of Common Stock offered for subscription or purchase, and
of which the numerator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of shares which the aggregate offering price of the total number of shares so
offered (assuming delivery to the Company in full of all consideration payable
upon exercise of such rights, options or warrants) would purchase at such
VWAP.  Such adjustment shall be made whenever such rights or warrants
are issued, and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights, options or
warrants.

     

    
      
         

      

      
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    d)           Pro Rata
Distributions. If the Company, at any time while this Debenture is
outstanding, distributes to all holders of Common Stock (and not to the Holders)
evidences of its indebtedness or assets (including cash and cash dividends) or
rights or warrants to subscribe for or purchase any security (other than the
Common Stock, which shall be subject to Section 5(b)), then in each such case
the Conversion Price shall be adjusted by multiplying such Conversion Price in
effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution by a fraction of which the
denominator shall be the VWAP determined as of the record date mentioned above,
and of which the numerator shall be such VWAP on such record date less the then
fair market value at such record date of the portion of such assets or evidence
of indebtedness so distributed applicable to 1 outstanding share of the Common
Stock as determined by the Board of Directors of the Company in good
faith.  In either case the adjustments shall be described in a
statement delivered to the Holder describing the portion of assets or evidences
of indebtedness so distributed or such subscription rights applicable to 1 share
of Common Stock.  Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the record
date mentioned above.

    

    e)           Fundamental
Transaction. If, at any time while this Debenture is outstanding, (i) the
Company effects any merger or consolidation of the Company with or into another
Person, (ii) the Company effects any sale of all or substantially all of its
assets in one transaction or a series of related transactions, (iii) any tender
offer or exchange offer (whether by the Company or another Person) is completed
pursuant to which holders of Common Stock are permitted to tender or exchange
their shares for other securities, cash or property, or (iv) the Company effects
any reclassification of the Common Stock or any compulsory share exchange
pursuant to which the Common Stock is effectively converted into or exchanged
for other securities, cash or property (in any such case, a “Fundamental
Transaction”), then, upon any subsequent conversion of this Debenture,
the Holder shall have the right to receive, for each Conversion Share that would
have been issuable upon such conversion immediately prior to the occurrence of
such Fundamental Transaction, the same kind and amount of securities, cash or
property as it would have been entitled to receive upon the occurrence of such
Fundamental Transaction if it had been, immediately prior to such Fundamental
Transaction, the holder of 1 share of Common Stock (the “Alternate
Consideration”).  For purposes of any such conversion, the
determination of the Conversion Price shall be appropriately adjusted to apply
to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of 1 share of Common Stock in such Fundamental Transaction,
and the Company shall apportion the Conversion Price among the Alternate
Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration.  If holders of
Common Stock are given any choice as to the securities, cash or property to be
received in a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any conversion of this
Debenture following such Fundamental Transaction.  To the extent
necessary to effectuate the foregoing provisions, any successor to the Company
or surviving entity in such Fundamental Transaction shall issue to the Holder a
new debenture consistent with the foregoing provisions and evidencing the
Holder’s right to convert such debenture into Alternate Consideration. The terms
of any agreement pursuant to which a Fundamental Transaction is effected shall
include terms requiring any such successor or surviving entity to comply with
the provisions of this Section 5(e) and insuring that this Debenture (or any
such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.

     

    
      
         

      

      
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    f)           Calculations.  All
calculations under this Section 5 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be.  For purposes of this
Section 5, the number of shares of Common Stock deemed to be issued and
outstanding as of a given date shall be the sum of the number of shares of
Common Stock (excluding any treasury shares of the Company) issued and
outstanding.

    

    g)           Notice to the
Holder.

    

    i.           Adjustment to Conversion
Price.  Whenever the Conversion Price is adjusted pursuant to
any provision of this Section 5, the Company shall promptly deliver to each
Holder a notice setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such
adjustment.

    

    ii.           Notice to Allow Conversion
by Holder.  If (A) the Company shall declare a dividend (or any
other distribution in whatever form) on the Common Stock, (B) the Company shall
declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common
Stock of rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights, (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property or (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company, then, in each case, the Company shall cause to be filed at each office
or agency maintained for the purpose of conversion of this Debenture, and shall
cause to be delivered to the Holder at its last address as it shall appear upon
the Debenture Register, at least twenty (20) calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange, provided that the
failure to deliver such notice or any defect therein or in the delivery thereof
shall not affect the validity of the corporate action required to be specified
in such notice.  The Holder is entitled to convert this Debenture
during the 20-day period commencing on the date of such notice through the
effective date of the event triggering such notice.

     

    
      
         

      

      
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    Section
6.             Redemption and Forced
Conversion.

    

    a)           Optional Redemption at
Election of Company.  Subject to the provisions of this Section
6(a)(i), at any time after the Effective Date, the Company may deliver a notice
to the Holder (an “Optional Redemption
Notice” and the date such notice is deemed delivered hereunder, the
“Optional Redemption
Notice Date”) of its irrevocable election to redeem some or all of the
then outstanding principal amount of this Debenture for cash in an amount equal
to the Optional Redemption Amount on the 20th Trading
Day following the Optional Redemption Notice Date (such date, the “Optional Redemption
Date”, such 20 Trading Day period, the “Optional Redemption
Period” and such redemption, the “Optional
Redemption”).  The Optional Redemption Amount is payable in
full on the Optional Redemption Date.  The Company may only effect an
Optional Redemption if each of the Equity Conditions shall have been met (unless
waived in writing by the Holder) on each Trading Day during the period
commencing on the Optional Redemption Notice Date through to the Optional
Redemption Date and through and including the date payment of the Optional
Redemption Amount is actually made in full.  If any of the Equity
Conditions shall cease to be satisfied at any time during the Optional
Redemption Period, then the Holder may elect to nullify the Optional Redemption
Notice by notice to the Company within 3 Trading Days after the first day on
which any such Equity Condition has not been met (provided that if, by a
provision of the Transaction Documents, the Company is obligated to notify the
Holder of the non-existence of an Equity Condition, such notice period shall be
extended to the third Trading Day after proper notice from the Company) in which
case the Optional Redemption Notice shall be null and void, ab initio.  The
Company covenants and agrees that it will honor all Notices of Conversion
tendered from the time of delivery of the Optional Redemption Notice through the
date all amounts owing thereon are due and paid in full. The Company’s
determination to pay an Optional Redemption in cash shall be applied ratably to
all of the holders of the then outstanding Debentures based on their (or their
predecessor’s) initial purchases of Debentures pursuant to the May 2009 Purchase
Agreement.

    

    (a)           Redemption
Procedure.  The payment of cash or issuance of Common Stock, as
applicable, pursuant to an Optional Redemption shall be payable on the Optional
Redemption Date.  If any portion of the payment pursuant to an
Optional Redemption shall not be paid by the Company by the applicable due date,
interest shall accrue thereon at an interest rate equal to the lesser of 18% per
annum or the maximum rate permitted by applicable law until such amount is paid
in full.  Notwithstanding anything herein contained to the contrary,
if any portion of the Optional Redemption Amount remains unpaid after such date,
the Holder may elect, by written notice to the Company given at any time
thereafter, to invalidate such Optional Redemption, ab initio, and, with
respect to the Company’s failure to honor the Optional Redemption, the Company
shall have no further right to exercise such Optional
Redemption.  Notwithstanding anything to the contrary in this Section
6, the Company’s determination to redeem in cash or its elections under Section
6(b) shall be applied ratably among the Holders of Debentures. The Holder may
elect to convert the outstanding principal amount of the Debenture pursuant to
Section 4 prior to actual payment in cash for any redemption under this Section
6 by the delivery of a Notice of Conversion to the Company.

     

    
      
         

      

      
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    Section
7.             Negative Covenants.
As long as any portion of this Debenture remains outstanding, unless the holders
of at least 67% in principal amount of the then outstanding Debentures shall
have otherwise given prior written consent, the Company shall not, and shall not
permit any of its subsidiaries (whether or not a Subsidiary on the Original
Issue Date) to, directly or indirectly:

    

    a)           other
than Permitted Indebtedness, enter into, create, incur, assume, guarantee or
suffer to exist any Indebtedness for borrowed money of any kind, including, but
not limited to, a guarantee, on or with respect to any of its property or assets
now owned or hereafter acquired or any interest therein or any income or profits
therefrom;

    

    b)           other
than Permitted Liens, enter into, create, incur, assume or suffer to exist any
Liens of any kind, on or with respect to any of its property or assets now owned
or hereafter acquired or any interest therein or any income or profits
therefrom;

    

    c)           amend
its charter documents, including, without limitation, its certificate of
incorporation and bylaws, in any manner that materially and adversely affects
any rights of the Holder (but not including reverse or forward stock splits or
an increased in the authorized share capital of the Company);

    

    d)           repay,
repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of
shares of its Common Stock or Common Stock Equivalents other than as to (i) the
Conversion Shares or Warrant Shares as permitted or required under the
Transaction Documents and (ii) repurchases of Common Stock or Common Stock
Equivalents of departing officers and directors of the Company, provided that
such repurchases shall not exceed an aggregate of $100,000 for all officers and
directors during the term of this Debenture;

     

    
      
         

      

      
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    e)           other
than Permitted Indebtedness, repay, repurchase or offer to repay, repurchase or
otherwise acquire any Indebtedness, other than the Debentures if on a pro-rata
basis;

    

    f)           pay
cash dividends or distributions on any equity securities of the Company;
or

    

    g)           enter
into any agreement with respect to any of the foregoing.

    

    Section
8.             Events of
Default.

    

    a)           “Event of Default”
means, wherever used herein, any of the following events (whatever the reason
for such event and whether such event shall be voluntary or involuntary or
effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental
body):

    

    i.           any
material default in the payment of (A) the principal amount of any Debenture or
(B) interest, liquidated damages and other amounts owing to a Holder on any
Debenture, as and when the same shall become due and payable (whether on a
Conversion Date or the Maturity Date or by acceleration or otherwise) which
default, solely in the case of an interest payment or other default under clause
(B) above, is not cured within 10 Trading Days;

    

    ii.           the
Company shall materially fail to observe or perform any other material covenant
or agreement contained in the Debentures which failure is not cured, if possible
to cure, within the earlier to occur of (A) 10 Trading Days after notice of such
failure sent by the Holder or by any other Holder to the Company and (B) 20
Trading Days after the Company has become or should have become aware of such
failure;

    

    iii.           a
material default or event of default (subject to any grace, cure or waiver
period provided in the applicable agreement or agreed to by the parties,
document or instrument) shall occur under (A) any of the Transaction Documents
or (B) any other material agreement, lease, document or instrument to which the
Company or any Subsidiary is obligated (and not covered by clause (vi)
below);

    

    iv.           any
representation or warranty made in this Debenture, any other Transaction
Documents, any written statement pursuant hereto or thereto or any other report,
financial statement or certificate made or delivered to the Holder or any other
Holder shall be untrue or incorrect in any material respect as of the date when
made or deemed made;

     

    
      
         

      

      
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    v.           the
Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w)
of Regulation S-X)  shall be subject to a Bankruptcy
Event;

    

    vi.           the
Company or any Subsidiary shall materially default on any of its obligations
under any mortgage, credit agreement or other facility, indenture agreement,
factoring agreement or other instrument under which there may be issued, or by
which there may be secured or evidenced, any indebtedness for borrowed money or
money due under any long term leasing or factoring arrangement that (a) involves
an obligation greater than $150,000, whether such indebtedness now exists or
shall hereafter be created, and (b) results in such indebtedness becoming or
being declared due and payable prior to the date on which it would otherwise
become due and payable;

    

    vii.           the
Common Stock shall not be eligible for listing or quotation for trading on a
Trading Market and shall not be eligible to resume listing or quotation for
trading thereon within five Trading Days;

    

    viii.           the
Company shall be a party to any Change of Control Transaction or Fundamental
Transaction or shall agree to sell or dispose of all or in excess of 45% of its
assets in one transaction or a series of related transactions (whether or not
such sale would constitute a Change of Control Transaction);

    

    ix.           any
monetary judgment, writ or similar final process shall be entered or filed
against the Company, any subsidiary or any of their respective property or other
assets for more than $5,000,000, and such judgment, writ or similar final
process shall remain unvacated, unbonded or unstayed for a period of 45 calendar
days, other than if such claim is fully covered by an effective insurance
policy;

    

    x.           the
Company shall fail for any reason to deliver certificates to a Holder prior to
the tenth Trading Day after a Conversion Date pursuant to Section 4(d) or the
Company shall provide at any time notice to the Holder, including by way of
public announcement, of the Company’s intention to not honor requests for
conversions of any Debentures in accordance with the terms hereof;
or

    

    xi.           any
Person shall breach any agreement delivered to the initial Holders pursuant to
Section 2.2 of the October 2008 Purchase Agreement.

    

    b)           Remedies Upon Event of
Default. If any Event of Default occurs and is then uncured, the Holder
shall have the right to declare an Event of Default, in which case the
Debentures subject to such declaration, plus accrued but unpaid interest,
liquidated damages and other amounts owing in respect thereof through the date
of acceleration, shall become, at the Holder’s election, immediately due and
payable in cash at the Mandatory Default Amount.  Commencing 5 days
after the occurrence of any Event of Default that results in the eventual
acceleration of this Debenture, the interest rate on this Debenture shall accrue
at an interest rate equal to the lesser of 18% per annum or the maximum rate
permitted under applicable law.  Upon the payment in full of the
Mandatory Default Amount, the Holder shall promptly surrender this Debenture to
or as directed by the Company.  In connection with such acceleration
described herein, the Holder need not provide, and the Company hereby waives,
any presentment, demand, protest or other notice of any kind, and the Holder may
immediately and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available to it under
applicable law.  Such acceleration may be rescinded and annulled by
Holder at any time prior to payment hereunder and the Holder shall have all
rights as a holder of the Debenture until such time, if any, as the Holder
receives full payment pursuant to this Section 8(b).  No such
rescission or annulment shall affect any subsequent Event of Default or impair
any right consequent thereon.

     

    
      
         

      

      
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    Section
9.             Miscellaneous.

    

    a)           Notices.  Any
and all notices or other communications or deliveries to be provided by the
Holder hereunder, including, without limitation, any Notice of Conversion, shall
be in writing and delivered personally, by facsimile, or sent by a nationally
recognized overnight courier service, addressed to the Company, at the address
set forth above, or such other facsimile number or address as the Company may
specify for such purpose by notice to the Holder delivered in accordance with
this Section 9(a).  Any and all notices or other communications or
deliveries to be provided by the Company hereunder shall be in writing and
delivered personally, by facsimile, or sent by a nationally recognized overnight
courier service addressed to each Holder at the facsimile number or address of
the Holder appearing on the books of the Company, or if no such facsimile number
or address appears, at the principal place of business of the
Holder.  Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified on the signature page prior to 5:30 p.m. (New York
City time), (ii) the date immediately following the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified on the signature page between 5:30 p.m. (New York City time) and 11:59
p.m. (New York City time) on any date, (iii) the second Business Day following
the date of mailing, if sent by nationally recognized overnight courier service
or (iv) upon actual receipt by the party to whom such notice is required to be
given.

    

    b)           Absolute Obligation.
Except as expressly provided herein, no provision of this Debenture shall alter
or impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of, liquidated damages and accrued interest, as applicable, on
this Debenture at the time, place, and rate, and in the coin or currency, herein
prescribed.  This Debenture is a direct debt obligation of the
Company.  This Debenture ranks pari passu with all other
Debentures now or hereafter issued under the terms set forth
herein.

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    

    c)           Lost or Mutilated
Debenture.  If this Debenture shall be mutilated, lost, stolen
or destroyed, the Company shall execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated Debenture, or in lieu of
or in substitution for a lost, stolen or destroyed Debenture, a new Debenture
for the principal amount of this Debenture so mutilated, lost, stolen or
destroyed, but only upon receipt of evidence of such loss, theft or destruction
of such Debenture, and of the ownership hereof, reasonably satisfactory to the
Company.

    

    d)           Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Debenture shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflict of laws
thereof.  Each party agrees that all legal proceedings concerning the
interpretation, enforcement and defense of the transactions contemplated by any
of the Transaction Documents (whether brought against a party hereto or its
respective Affiliates, directors, officers, shareholders, employees or agents)
shall be commenced in the state and federal courts sitting in the City of New
York, Borough of Manhattan (the “New York
Courts”).  Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of any of
the Transaction Documents), and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such New York Courts, or such New York Courts are
improper or inconvenient venue for such proceeding.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Debenture
and agrees that such service shall constitute good and sufficient service of
process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve process in any other manner permitted by
applicable law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Debenture or the
transactions contemplated hereby. If either party shall commence an action or
proceeding to enforce any provisions of this Debenture, then the prevailing
party in such action or proceeding shall be reimbursed by the other party for
its attorneys fees and other costs and expenses incurred in the investigation,
preparation and prosecution of such action or proceeding.

    

    e)           Waiver and
Amendments.  Any waiver by the Company or the Holder of a
breach of any provision of this Debenture shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any
other provision of this Debenture.  The failure of the Company or the
Holder to insist upon strict adherence to any term of this Debenture on one or
more occasions shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Debenture.  This Debenture may be modified or amended or the
provisions hereof waived with the written consent of the Company and Holders
holding a principal amount of Debentures at least equal to 51% of the Debentures
then outstanding.

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    

    f)           Severability.  If
any provision of this Debenture is invalid, illegal or unenforceable, the
balance of this Debenture shall remain in effect, and if any provision is
inapplicable to any Person or circumstance, it shall nevertheless remain
applicable to all other Persons and circumstances.  If it shall be
found that any interest or other amount deemed interest due hereunder violates
the applicable law governing usury, the applicable rate of interest due
hereunder shall automatically be lowered to equal the maximum rate of interest
permitted under applicable law. The Company covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law or other law which would prohibit or forgive the Company from
paying all or any portion of the principal of or interest on this Debenture as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this indenture, and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefits or advantage of any such law, and covenants that it will not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Holder, but will suffer and permit the execution of every such as
though no such law has been enacted.

    

    g)           Next Business
Day.  Whenever any payment or other obligation hereunder shall
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day.

    

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

    

    i)           Assumption.  Any
successor to the Company or any surviving entity in a Fundamental Transaction
shall (i) assume, prior to such Fundamental Transaction, all of the obligations
of the Company under this Debenture and the other Transaction Documents pursuant
to written agreements in form and substance satisfactory to the Holder (such
approval not to be unreasonably withheld or delayed) and (ii) issue to the
Holder a new debenture of such successor entity evidenced by a written
instrument substantially similar in form and substance to this Debenture,
including, without limitation, having a principal amount and interest rate equal
to the principal amount and the interest rate of this Debenture and having
similar ranking to this Debenture, which shall be satisfactory to the Holder
(any such approval not to be unreasonably withheld or delayed).  The
provisions of this Section 9(i) shall apply similarly and equally to successive
Fundamental Transactions and shall be applied without regard to any limitations
of this Debenture.

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    

    j)           May 2009 Purchase
Agreement. If there is any conflict between the Purchase Agreements with
respect to any term, provision, covenant, condition or restriction of this
Debenture, the terms of the May 2009 Purchase Agreement shall govern and
control.

    

    *********************

     

    (Signature
Pages Follow)

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by a
duly authorized officer as of the date first above indicated.

     

    
      
        	 	OCTAVIAN
      GLOBAL TECHNOLOGIES, INC.	 
	 	 	 	 
	
              	
                By:
      

              	  	 
	 	 	Name:
      Harmen Brenninkmeijer	 
	 	 	Title:
      Chief Executive Officer	 
	 	Facsimile
      No. for delivery of Notices: ___________________	 

      

    

    

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    

    ANNEX
A

    

    NOTICE
OF CONVERSION

     

    The undersigned hereby elects to
convert principal under the Original Issue Discount Convertible Debenture due
May 14, 2012 of Octavian Global Technologies, Inc., a Delaware corporation (the
“Company”),
into shares of common stock (the “Common Stock”), of
the Company according to the conditions hereof, as of the date written
below.  If shares of Common Stock are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto and is delivering herewith such certificates and
opinions as reasonably requested by the Company in accordance
therewith.  No fee will be charged to the holder for any conversion,
except for such transfer taxes, if any.

    

    By the delivery of this Notice of
Conversion the undersigned represents and warrants to the Company that its
ownership of the Common Stock does not exceed the amounts specified under
Section 4 of this Debenture, as determined in accordance with Section 13(d) of
the Exchange Act.

    

    The undersigned agrees to comply with
the prospectus delivery requirements under the applicable securities laws in
connection with any transfer of the aforesaid shares of Common
Stock.

    

    Conversion
calculations:

     

    Date to
Effect Conversion:

    

    Principal
Amount of Debenture to be Converted:

    

    Payment
of Interest in Common Stock __ yes  __ no

    If yes,
$_____ of Interest Accrued on Account of Conversion at Issue.

    

    Number of
shares of Common Stock to be issued:

    

    Signature:

    

    Name:

    

    Address
for Delivery of Common Stock Certificates:

    

    Or

    

    DWAC Instructions:

    

    Broker
No: ______________________

     

    Account No:
____________________

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    

    Schedule
1

    

    CONVERSION
SCHEDULE

    

    The
Original Issue Discount Convertible Debentures due on May 14, 2012 in the
aggregate principal amount of $____________ are issued by Octavian Global
Technologies, Inc., a Delaware corporation.  This Conversion Schedule
reflects conversions made under Section 4 of the above referenced
Debenture.

    

    Dated:

    

    
      	
              Date
      of Conversion

              (or
      for first entry, Original Issue Date)

            	 	
              Amount
      of Conversion

            	 	
              Aggregate
      Principal Amount Remaining Subsequent to Conversion

              (or
      original Principal Amount)

            	 	
              Company
      Attest

            
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      

    

     

    
      
         

      

      
        29

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