Document:

f8k070607ex10i_redrock.htm

    EQUITY
      DISTRIBUTION AGREEMENT

    

    

              THIS
      AGREEMENT dated as of the 6th day of July 2007 (the “Agreement”) between IFG
      Opportunity Fund, LLC., (the “Investor”), and RED ROCK PICTURES HOLDINGS, INC.,
      a corporation organized and existing under the laws of the State of Nevada
      (the
“Company”).

    

              WHEREAS,
      the parties desire that, upon the terms and subject to the conditions contained
      herein, the Company shall issue and sell to the Investor, from time to time
      as
      provided herein, and the Investor shall purchase from the Company up to
      Twenty-five Million Dollars ($25,000,000) of the Company’s common stock, par
      value $0.001 per share (the “Common Stock”); and

    

              WHEREAS,
      such investments will be made in reliance upon the provisions of Regulation
      D
      (“Regulation D”) of the Securities Act of 1933, as amended, and the regulations
      promulgated thereunder (the “Securities Act”), and or upon such other exemption
      from the registration requirements of the Securities Act as may be available
      with respect to any or all of the investments to be made hereunder.

    

              NOW,
      THEREFORE, the parties hereto agree as follows:

     

    ARTICLE
      I.

    Certain
      Definitions

    

    

              Section
      1.1.     “Advance” shall mean the portion of the
      Commitment Amount requested by the Company in the Advance Notice.

    

              Section
      1.2.     “Advance Date” shall mean the first (1st)
      Trading Day after expiration of the applicable Pricing Period for each
      Advance.

    

              Section
      1.3.     “Advance Notice” shall mean a written notice
      in the form of Exhibit A attached hereto to the Investor executed by an officer
      of the Company and setting forth the Advance amount that the Company requests
      from the Investor.

    

              Section
      1.4.     “Advance Notice Date” shall mean each date the
      Company delivers (in accordance with Section 2.2(b) of this Agreement) to the
      Investor an Advance Notice requiring the Investor to advance funds to the
      Company, subject to the terms of this Agreement.  No Advance Notice
      Date shall be less than five (5) Trading Days after the prior Advance Notice
      Date.

    

              Section
      1.5.     “Closing” shall mean one of the closings of a
      purchase and sale of Common Stock pursuant to Section 2.3.

    

              Section
      1.6.     “Commitment Amount” shall mean the aggregate
      amount of up to Twenty-five  Million Dollars ($25,000,000) which the
      Investor has agreed to provide to the Company in order to purchase the Company’s
      Common Stock pursuant to the terms and conditions of this
      Agreement.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

              Section
      1.7.     “Commitment Period” shall mean the period
      commencing on the earlier to occur of (i) the Effective Date, or (ii) such
      earlier date as the Company and the Investor may mutually agree in writing,
      and
      expiring on the earliest to occur of (x) the date on which the Investor shall
      have made payment of Advances pursuant to this Agreement in the aggregate amount
      of the Commitment Amount, (y) the date this Agreement is terminated pursuant
      to
      Section 10.2 or (z) the date occurring thirty (30) months after the Effective
      Date.

    

              Section
      1.8.     “Common Stock” shall mean the Company’s common
      stock, par value $0.001 per share.

    

              Section
      1.9.   “Condition Satisfaction Date” shall have the meaning set
      forth in Section 7.2.

    

              Section
      1.10.   “Damages” shall mean any loss, claim, damage, liability,
      costs and expenses (including, without limitation, reasonable attorney’s fees
      and disbursements and costs and expenses of expert witnesses and
      investigation).

    

              Section
      1.11.   “Effective Date” shall mean the date on which the SEC
      first declares effective a Registration Statement registering the resale of
      the
      Registrable Securities as set forth in Section 7.2(a).

    

              Section
      1.12.   “Exchange Act” shall mean the Securities Exchange Act of
      1934, as amended, and the rules and regulations promulgated
      thereunder.

    

              Section
      1.13.   “Material Adverse Effect” shall mean any condition,
      circumstance, or situation that would prohibit or otherwise materially interfere
      with the ability of the Company to enter into and perform any of its obligations
      under this Agreement or the Registration Rights Agreement in any material
      respect.

    

              Section
      1.14.   “Market Price” shall mean the VWAP of the Common Stock
      during the Pricing Period as defined by Bloomberg.

    

              Section
      1.15.   “Maximum Advance Amount” shall be One Million
      Dollars

    ($1,000,000)
      per Advance Notice, but in no case more than Four Million Dollars ($4,000,000)
      in any thirty-day (30) calendar period.

    

              Section
      1.16.   “NASD” shall mean the National Association of Securities
      Dealers, Inc.

    

              Section
      1.17.   “Person” shall mean an individual, a corporation, a
      partnership, an association, a trust or other entity or organization, including
      a government or political subdivision or an agency or instrumentality
      thereof.

    

              Section
      1.18.   “Pricing Period” shall mean the five (5) consecutive
      Trading Days after the Advance Notice Date subject to any reduction pursuant
      to
      Section 2.2(c).

     

     

    
      
        
        

      

      
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              Section
      1.19.   “Principal Market” shall mean the Nasdaq National Market,
      the Nasdaq Capital Market, the American Stock Exchange, the OTC Bulletin Board
      or the New York Stock Exchange, whichever is at the time the principal trading
      exchange or market for the Common Stock.

    

              Section
      1.20.   “Purchase Price” shall be set at ninety seven percent
      (97%) of the Market Price during the Pricing Period.

    

              Section
      1.21.   “Registrable Securities” shall mean the shares of Common
      Stock to be issued hereunder (i) in respect of which the Registration Statement
      has not been declared effective by the SEC, (ii) which have not been sold under
      circumstances meeting all of the applicable conditions of Rule 144 (or any
      similar provision then in force) under the Securities Act (“Rule 144”) or (iii)
      which have not been otherwise transferred to a holder who may trade such shares
      without restriction under the Securities Act, and the Company has delivered
      a
      new certificate or other evidence of ownership for such securities not bearing
      a
      restrictive legend.

    

              Section
      1.22.   “Registration Rights Agreement” shall mean the
      Registration Rights Agreement dated the date hereof, regarding the filing of
      the
      Registration Statement for the resale of the Registrable Securities, entered
      into between the Company and the Investor.

    

              Section
      1.23.   “Registration Statement” shall mean a registration
      statement on Form S-1 or SB-2 (if use of such form is then available to the
      Company pursuant to the rules of the SEC and, if not, on such other form
      promulgated by the SEC for which the Company then qualifies and which counsel
      for the Company shall deem appropriate, and which form shall be available for
      the resale of the Registrable Securities to be registered thereunder in
      accordance with the provisions of this Agreement and the Registration Rights
      Agreement, and in accordance with the intended method of distribution of such
      securities), for the registration of the resale by the Investor of the
      Registrable Securities under the Securities Act.

    

              Section
      1.24.   “Regulation D” shall have the meaning set forth in the
      recitals of this Agreement.

    

              Section
      1.25.   “SEC” shall mean the United States Securities and
      Exchange Commission.

    

              Section
      1.26.   “Securities Act” shall have the meaning set forth in the
      recitals of this Agreement.

    

              Section
      1.27.   “SEC Documents” shall mean Annual Reports on Form 10-KSB,
      Quarterly Reports on Form 10-QSB, Current Reports on Form 8-K and Proxy
      Statements of the Company as supplemented to the date hereof, filed by the
      Company for a period of at least twelve (12) months immediately preceding the
      date hereof or the Advance Date, as the case may be, until such time as the
      Company no longer has an obligation to maintain the effectiveness of a
      Registration Statement as set forth in the Registration Rights
      Agreement.

     

    
      
        
        

      

      
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              Section
      1.28.   “Trading Day” shall mean any day during which the New
      York Stock Exchange shall be open for business.

    

              Section
      1.29.   “VWAP” shall mean the volume weighted average price of
      the Company’s Common Stock as quoted by Bloomberg, LP.

    

    ARTICLE
      II.

    Advances

     

              Section
      2.1.     Advances.

    

                   Subject
      to the terms and conditions of this Agreement (including, without limitation,
      the provisions of Article VII hereof), the Company, at its sole and exclusive
      option, may issue and sell to the Investor, and the Investor shall purchase
      from
      the Company, shares of the Company’s Common Stock by the delivery, in the
      Company’s sole discretion, of Advance Notices.  The number of shares
      of Common Stock that the Investor shall purchase pursuant to each Advance shall
      be determined by dividing the amount of the Advance by the Purchase Price.
      No
      fractional shares shall be issued. Fractional shares shall be rounded to the
      next higher whole number of shares.  The aggregate maximum amount of
      all Advances that the Investor shall be obligated to make under this Agreement
      shall not exceed the Commitment Amount.

    

              Section
      2.2.     Mechanics.

    

                        (a)         Advance
      Notice.  At any time during the Commitment Period, the Company may
      require the Investor to purchase shares of Common Stock by delivering an Advance
      Notice to the Investor, subject to the conditions set forth in Section 7.2;
      provided, however, the amount for each Advance as designated by the Company
      in
      the applicable Advance Notice shall not be more than the Maximum Advance Amount
      and the aggregate amount of the Advances pursuant to this Agreement shall not
      exceed the Commitment Amount.  The Company acknowledges that the
      Investor may sell shares of the Company’s Common Stock corresponding with a
      particular Advance Notice after the Advance Notice is received by the
      Investor.  There shall be a minimum of five (5) Trading Days between
      each Advance Notice Date.

    

                        (b)         Date
      of Delivery of Advance Notice.  An Advance Notice shall be deemed
      delivered on (i) the Trading Day it is received by facsimile or otherwise by
      the
      Investor if such notice is received prior to 5:00 pm Eastern Time, or (ii)
      the
      immediately succeeding Trading Day if it is received by facsimile or otherwise
      after 5:00 pm Eastern Time on a Trading Day or at any time on a day which is
      not
      a Trading Day.  No Advance Notice may be deemed delivered on a day
      that is not a Trading Day.

    

                        (c)         Minimum
      Acceptable Price.  The lowest closing Bid Price of the Common Stock
      during the Pricing Period (before taking into account any discount used to
      calculate the Purchase Price) for any particular Advance shall, in connection
      with each Advance Notice delivered by the Company, be equal to seventy five
      percent (75%) of the closing Bid Price on the Trading Day immediately preceding
      the Advance Notice Date for such Advance Notice (the “Minimum Acceptable
      Price”).  

     

     

    
      
        
        

      

      
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    Subject
      to the next sentence, upon the issuance by the Company of an Advance Notice
      with
      a Minimum Acceptable Price, if any of the closing Bid Prices during the Pricing
      Period are below the Minimum Acceptable Price (i) the Company shall
      automatically reduce the amount of the Advance set forth in such Advance Notice
      by twenty percent (20%) for each Trading Day during the Pricing Period that
      the
      closing Bid Price of the Common Stock is below the Minimum Acceptable Price
      (each such day, an “Excluded Day”), and (ii) each Excluded Day shall be excluded
      from the Pricing Period for purposes of determining the Market
      Price.  The number of shares of Common Stock to be delivered to the
      Investor at the Closing (in accordance with Section 2.3 of this Agreement)
      shall
      correspond with the Advance Notice amount as reduced pursuant to clause (i)
      above.  The Company, and only the Company, may waive the Minimum
      Acceptable Price with respect to any particular Advance Notice by providing
      the
      Investor with written notice of waiver on or prior to the Advance
      Date.

     

            (d)                           Floor
      Price.  The Company at its option may select a Floor Price for any
      Put, which the Company will not put shares to Investor under that Floor
      Price.

    

    

              Section
      2.3.     Closings.  Within two (2) Trading
      Days of  each Advance Date (i) the Company shall deliver to the
      Investor such number of shares of the Common Stock registered in the name of
      the
      Investor as shall equal (x) the amount of the Advance specified in such Advance
      Notice pursuant to Section 2.1 herein, divided by (y) the Purchase Price and
      (ii) upon receipt of such shares, the Investor shall deliver to the Company
      the
      amount of the Advance specified in the Advance Notice by wire transfer of
      immediately available funds.  In addition, on or prior to the Advance
      Date, each of the Company and the Investor shall deliver to the other all
      documents, instruments and writings required to be delivered by either of them
      pursuant to this Agreement in order to implement and effect the transactions
      contemplated herein.  To the extent the Company has not paid the fees,
      expenses, and disbursements of the Investor in accordance with Section 12.4,
      the
      amount of such fees, expenses, and disbursements may be deducted by the Investor
      (and shall be paid to the relevant party) directly out of the proceeds of the
      Advance with no reduction in the amount of shares of the Company’s Common Stock
      to be delivered on such Advance Date.

    

                        (a)  Company’s
      Obligations Upon Closing.

    

                                  (i)         The
      Company shall deliver to the Investor the shares of Common Stock applicable
      to
      the Advance in accordance with Section 2.3.  The certificates
      evidencing such shares shall be free of restrictive legends.

    

                                  (ii)         the
      Company’s Registration Statement with respect to the resale of the shares of
      Common Stock delivered in connection with the Advance shall have been declared
      effective by the SEC;

    

                                  (iii)        the
      Company shall have obtained all material permits and qualifications required
      by
      any applicable state for the offer and sale of the Registrable Securities,
      or
      shall have the availability of exemptions therefrom.  The sale and
      issuance of the Registrable Securities shall be legally permitted by all laws
      and regulations to which the Company is subject;

     

    
      
        
        

      

      
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                                  (iv)        the
      Company shall have filed with the SEC in a timely manner all reports, notices
      and other documents required of a “reporting company” under the Exchange Act and
      applicable Commission regulations;

    

                                  
      (v)         the fees as set forth
      in Section 12.4 below shall have been paid or can be withheld as provided in
      Section 2.3; and

     

             
      (vi)        the Company’s
      transfer agent shall be DWAC eligible.

    

                        (b)     Investor’s
      Obligations Upon Closing.     Upon receipt of the
      shares referenced in Section 2.3(a)(i) above and provided the Company is in
      compliance with its obligations in Section 2.3, the Investor shall deliver
      to
      the Company the amount of the Advance specified in the Advance Notice by wire
      transfer of immediately available funds.

    

    

    ARTICLE
      III.

    Representations
      and Warranties of Investor

    

    

              Investor
      hereby represents and warrants to, and agrees with, the Company
      that the following are true and correct as of the date hereof and as of
each
      Advance Date:

    

              Section
      3.1.     Organization and Authorization.  The
      Investor is duly incorporated or organized and validly existing in the
      jurisdiction of its incorporation or organization and has all requisite power
      and authority to purchase and hold the securities issuable
      hereunder.  The decision to invest and the execution and delivery of
      this Agreement by such Investor, the performance by such Investor of its
      obligations hereunder and the consummation by such Investor of the transactions
      contemplated hereby have been duly authorized and requires no other proceedings
      on the part of the Investor.  The undersigned has the right, power and
      authority to execute and deliver this Agreement and all other instruments
      (including, without limitations, the Registration Rights Agreement), on behalf
      of the Investor.  This Agreement has been duly executed and delivered
      by the Investor and, assuming the execution and delivery hereof and acceptance
      thereof by the Company, will constitute the legal, valid and binding obligations
      of the Investor, enforceable against the Investor in accordance with its
      terms.

    

              Section
      3.2.     Evaluation of Risks.  The Investor
      has such knowledge and experience in financial, tax and business matters as
      to
      be capable of evaluating the merits and risks of, and bearing the economic
      risks
      entailed by, an investment in the Company and of protecting its interests in
      connection with this transaction.  It recognizes that its investment
      in the Company involves a high degree of risk.

    

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

     

    
      
        
        

      

      
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              Section
      3.4.     Investment Purpose. The securities are being
      purchased by the Investor for its own account, and for investment
      purposes.  The Investor agrees not to assign or in any way transfer
      the Investor’s rights to the securities or any interest therein and acknowledges
      that the Company will not recognize any purported assignment or transfer except
      in accordance with applicable Federal and state securities laws.  No
      other person has or will have a direct or indirect beneficial interest in the
      securities.  The Investor agrees not to sell, hypothecate or otherwise
      transfer the Investor’s securities unless the securities are registered under
      Federal and applicable state securities laws or unless, in the opinion of
      counsel satisfactory to the Company, an exemption from such laws is
      available.

    

              Section
      3.5.     Accredited Investor.  The Investor
      is an “Accredited Investor” as that term is defined in Rule 501(a)(3) of
      Regulation D of the Securities Act.

    

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

    

              Section
      3.7.     Receipt of Documents. The Investor and its
      counsel have received and read in their entirety:  (i) this Agreement
      and the Exhibits annexed hereto; (ii) all due diligence and other information
      necessary to verify the accuracy and completeness of such representations,
      warranties and covenants; (iii) the Company’s Form 10-KSB for the year ended
      August  31, 2006 and Form 10-QSB for the period ended November 30,
      2006; and (iv) answers to all questions the Investor submitted to the Company
      regarding an investment in the Company; and the Investor has relied on the
      information contained therein and has not been furnished any other documents,
      literature, memorandum or prospectus.

    

              Section
      3.8.     Registration Rights Agreement.  The
      parties have entered into the Registration Rights Agreement dated the date
      hereof.

    

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

     

    
      
        
        

      

      
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              Section
      3.10.   Not an Affiliate.  The Investor is not an
      officer, director or a person that directly, or indirectly through one or more
      intermediaries, controls or is controlled by, or is under common control with
      the Company or any “Affiliate” of the Company (as that term is defined in Rule
      405 of the Securities Act).

    

              Section
      3.11.   Trading Activities.  The Investor’s trading
      activities with respect to the Company’s Common Stock shall be in compliance
      with all applicable federal and state securities laws, rules and regulations
      and
      the rules and regulations of the Principal Market on which the Company’s Common
      Stock is listed or traded. Neither the Investor nor its affiliates has an open
      short position in the Common Stock of the Company, the Investor agrees that
      it
      shall not, and that it will cause its affiliates not to, engage in any short
      sales of or hedging transactions with respect to the Common Stock.

    

    

    ARTICLE
      IV.

    Representations
      and Warranties of the Company

    

    

              Except
      as stated below, on the disclosure schedules attached hereto or in the SEC
      Documents (as defined herein), the Company hereby represents and warrants to,
      and covenants with, the Investor that the following are true and correct as
      of
      the date hereof:

    

              Section
      4.1.     Organization and Qualification.  The
      Company is duly incorporated or organized and validly existing in the
      jurisdiction of its incorporation or organization and has all requisite
      corporate power to own its properties and to carry on its business as now being
      conducted.  Each of the Company and its subsidiaries is duly qualified
      as a foreign corporation to do business and is in good standing in every
      jurisdiction in which the nature of the business conducted by it makes such
      qualification necessary, except to the extent that the failure to be so
      qualified or be in good standing would not have a Material Adverse Effect on
      the
      Company and its subsidiaries taken as a whole.

    

              Section
      4.2.     Authorization, Enforcement, Compliance with
      Other Instruments.  (i) The Company has the requisite corporate power
      and authority to enter into and perform this Agreement, the Registration Rights
      Agreement, the Placement Agent Agreement and any related agreements, in
      accordance with the terms hereof and thereof, (ii) the execution and delivery
      of
      this Agreement, the Registration Rights Agreement, the Placement Agent Agreement
      and any related agreements by the Company and the consummation by it of the
      transactions contemplated hereby and thereby, have been duly authorized by
      the
      Company’s Board of Directors and no further consent or authorization is required
      by the Company, its Board of Directors or its stockholders, (iii) this
      Agreement, the Registration Rights Agreement, the Placement Agent Agreement
      and
      any related agreements have been duly executed and delivered by the Company,
      (iv) this Agreement, the Registration Rights Agreement, the Placement Agent
      Agreement and assuming the execution and delivery thereof and acceptance by
      the
      Investor and any related agreements constitute the valid and binding obligations
      of the Company enforceable against the Company in accordance with their terms,
      except as such enforceability may be limited by general principles of equity
      or
      applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
      or
      similar laws relating to, or affecting generally, the enforcement of creditors’
rights and remedies.

     

    
      
        
        

      

      
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              Section
      4.3.     Capitalization.  The authorized
      capital stock of the Company consists of 75,000,000 shares of Common Stock
      and
      5,000,000 shares of Preferred Stock, $0.001 par value per share (“Preferred
      Stock”), of which 61,910,000 shares of Common Stock and no shares of Preferred
      Stock are issued and outstanding.  All of such outstanding shares have
      been validly issued and are fully paid and nonassessable.  Except as
      disclosed in the SEC Documents, no shares of Common Stock are subject to
      preemptive rights or any other similar rights or any liens or encumbrances
      suffered or permitted by the Company.  Except as disclosed in the SEC
      Documents, as of the date hereof, (i) there are no outstanding options,
      warrants, scrip, rights to subscribe to, calls or commitments of any character
      whatsoever relating to, or securities or rights convertible into, any shares
      of
      capital stock of the Company or any of its subsidiaries, or contracts,
      commitments, understandings or arrangements by which the Company or any of
      its
      subsidiaries is or may become bound to issue additional shares of capital stock
      of the Company or any of its subsidiaries or options, warrants, scrip, rights
      to
      subscribe to, calls or commitments of any character whatsoever relating to,
      or
      securities or rights convertible into, any shares of capital stock of the
      Company or any of its subsidiaries, (ii) there are no outstanding debt
      securities (iii) there are no outstanding registration statements other than
      on
      Form S-8 and (iv) there are no agreements or arrangements under which the
      Company or any of its subsidiaries is obligated to register the sale of any
      of
      their securities under the Securities Act (except pursuant to the Registration
      Rights Agreement).  There are no securities or instruments containing
      anti-dilution or similar provisions that will be triggered by this Agreement
      or
      any related agreement or the consummation of the transactions described herein
      or therein.  The Company has furnished to the Investor true and
      correct copies of the Company’s Certificate of Incorporation, as amended and as
      in effect on the date hereof (the “Certificate of Incorporation”), and the
      Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the
      terms of all securities convertible into or exercisable for Common Stock and
      the
      material rights of the holders thereof in respect thereto.

    

              Section
      4.4.     No Conflict.  The execution,
      delivery and performance of this Agreement by the Company and the consummation
      by the Company of the transactions contemplated hereby will not (i) result
      in a
      violation of the Certificate of Incorporation, any certificate of designations
      of any outstanding series of preferred stock of the Company or By-laws or (ii)
      conflict with or constitute a default (or an event which with notice or lapse
      of
      time or both would become a default) under, or give to others any rights of
      termination, amendment, acceleration or cancellation of, any agreement,
      indenture or instrument to which the Company or any of its subsidiaries is
      a
      party, or result in a violation of any law, rule, regulation, order, judgment
      or
      decree (including federal and state securities laws and regulations and the
      rules and regulations of the Principal Market on which the Common Stock is
      quoted) applicable to the Company or any of its subsidiaries or by which any
      material property or asset of the Company or any of its subsidiaries is bound
      or
      affected and which would cause a Material Adverse Effect.  Except as
      disclosed in the SEC Documents, neither the Company nor its subsidiaries is
      in
      violation of any term of or in default under its Articles of Incorporation
      or
      By-laws or their organizational charter or by-laws, respectively, or any
      material contract, agreement, mortgage, indebtedness, indenture, instrument,
      judgment, decree or order or any statute, rule or regulation applicable to
      the
      Company or its subsidiaries.  

     

    
      
        
        

      

      
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    The
      business of the Company and its subsidiaries is not being conducted in violation
      of any material law, ordinance, regulation of any governmental
      entity.  Except as specifically contemplated by this Agreement and as
      required under the Securities Act and any applicable state securities laws,
      the
      Company is not required to obtain any consent, authorization or order of, or
      make any filing or registration with, any court or governmental agency in order
      for it to execute, deliver or perform any of its obligations under or
      contemplated by this Agreement or the Registration Rights Agreement in
      accordance with the terms hereof or thereof.  All consents,
      authorizations, orders, filings and registrations which the Company is required
      to obtain pursuant to the preceding sentence have been obtained or effected
      on
      or prior to the date hereof.  The Company and its subsidiaries are
      unaware of any fact or circumstance which might give rise to any of the
      foregoing.

    

              Section
      4.5.     SEC Documents; Financial
      Statements.  The Company has filed all reports, schedules, forms,
      statements and other documents required to be filed by it with the SEC under
      the
      Exchange Act since November 5, 2005.  The Company has delivered to the
      Investor or its representatives, or made available through the SEC’s website at
      http://www.sec.gov, true and complete copies of the SEC Documents.  As
      of their respective dates, the financial statements of the Company disclosed
      in
      the SEC Documents (the “Financial Statements”) complied as to form in all
      material respects with applicable accounting requirements and the published
      rules and regulations of the SEC with respect thereto.  Such financial
      statements have been prepared in accordance with generally accepted accounting
      principles, consistently applied, during the periods involved (except (i) as
      may
      be otherwise indicated in such financial statements or the notes thereto, or
      (ii) in the case of unaudited interim statements, to the extent they may exclude
      footnotes or may be condensed or summary statements) and, fairly present in
      all
      material respects the financial position of the Company as of the dates thereof
      and the results of its operations and cash flows for the periods then ended
      (subject, in the case of unaudited statements, to normal year-end audit
      adjustments).  No other information provided by or on behalf of the
      Company to the Investor which is not included in the SEC Documents contains
      any
      untrue statement of a material fact or omits to state any material fact
      necessary in order to make the statements therein, in the light of the
      circumstances under which they were made, not misleading.

    

              Section
      4.6.     10b-5.  The SEC Documents do not
      include any untrue statements of material fact, nor do they omit to state any
      material fact required to be stated therein necessary to make the statements
      made, in light of the circumstances under which they were made, not
      misleading.

    

              Section
      4.7.     No Default.  Except as disclosed in
      the SEC Documents, the Company is not in default in the performance or
      observance of any material obligation, agreement, covenant or condition
      contained in any indenture, mortgage, deed of trust or other material instrument
      or agreement to which it is a party or by which it is or its property is bound
      and neither the execution, nor the delivery by the Company, nor the performance
      by the Company of its obligations under this Agreement or any of the exhibits
      or
      attachments hereto will conflict with or result in the breach or violation
      of
      any of the terms or provisions of, or constitute a default or result in the
      creation or imposition of any lien or charge on any assets or properties of
      the
      Company under its Certificate of Incorporation, By-Laws, any material indenture,
      mortgage, deed of trust or other material agreement applicable to the Company
      or
      instrument to which the Company is a party or by which it is bound, or any
      statute, or any decree, judgment, order, rules or regulation of any court or
      governmental agency or body having jurisdiction over the Company or its
      properties, in each case which default, lien or charge is likely to cause a
      Material Adverse Effect on the Company’s business or financial
      condition.

     

    
      
        
        

      

      
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              Section
      4.8.     Absence of Events of
      Default.  Except for matters described in the SEC Documents and/or
      this Agreement, no Event of Default, as defined in the respective agreement
      to
      which the Company is a party, and no event which, with the giving of notice
      or
      the passage of time or both, would become an Event of Default (as so defined),
      has occurred and is continuing, which would have a Material Adverse Effect
      on
      the Company’s business, properties, prospects, financial condition or results of
      operations.

    

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

    

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

    

              Section
      4.11.     Environmental Laws.  The Company
      and its subsidiaries are (i) in compliance with any and all applicable material
      foreign, federal, state and local laws and regulations relating to the
      protection of human health and safety, the environment or hazardous or toxic
      substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii)
      have received all permits, licenses or other approvals required of them under
      applicable Environmental Laws to conduct their respective businesses and (iii)
      are in compliance with all terms and conditions of any such permit, license
      or
      approval.

    

              Section
      4.12.     Title.  Except as set forth in the
      SEC Documents, the Company has good and marketable title to its properties
      and
      material assets owned by it, free and clear of any pledge, lien, security
      interest, encumbrance, claim or equitable interest other than such as are not
      material to the business of the Company.  Any real property and
      facilities held under lease by the Company and its subsidiaries are held by
      them
      under valid, subsisting and enforceable leases with such exceptions as are
      not
      material and do not interfere with the use made and proposed to be made of
      such
      property and buildings by the Company and its subsidiaries.

     

    
      
        
        

      

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

    

              Section
      4.14.     Regulatory Permits.  The Company
      and its subsidiaries possess all material certificates, authorizations and
      permits issued by the appropriate federal, state or foreign regulatory
      authorities necessary to conduct their respective businesses, and neither the
      Company nor any such subsidiary has received any notice of proceedings relating
      to the revocation or modification of any such certificate, authorization or
      permit.

    

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

    

              Section
      4.16.     No Material Adverse Breaches,
      etc.  Except as set forth in the SEC Documents, neither the Company
      nor any of its subsidiaries is subject to any charter, corporate or other legal
      restriction, or any judgment, decree, order, rule or regulation which in the
      judgment of the Company’s officers has or is expected in the future to have a
      Material Adverse Effect on the business, properties, operations, financial
      condition, results of operations or prospects of the Company or its
      subsidiaries.  Except as set forth in the SEC Documents, neither the
      Company nor any of its subsidiaries is in breach of any contract or agreement
      which breach, in the judgment of the Company’s officers, has or is expected to
      have a Material Adverse Effect on the business, properties, operations,
      financial condition, results of operations or prospects of the Company or its
      subsidiaries.

    

              Section
      4.17.     Absence of Litigation.  Except as
      set forth in the SEC Documents, there is no action, suit, proceeding, inquiry
      or
      investigation before or by any court, public board, government agency,
      self-regulatory organization or body pending against or affecting the Company,
      the Common Stock or any of the Company’s subsidiaries, wherein an unfavorable
      decision, ruling or finding would (i) have a Material Adverse Effect on the
      transactions contemplated hereby (ii) adversely affect the validity or
      enforceability of, or the authority or ability of the Company to perform its
      obligations under, this Agreement or any of the documents contemplated herein,
      or (iii) except as expressly disclosed in the SEC Documents, have a Material
      Adverse Effect on the business, operations, properties, financial condition
      or
      results of operation of the Company and its subsidiaries taken as a
      whole.

     

    
      
        
        

      

      
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              Section
      4.18.     Subsidiaries.  Except as disclosed
      in the SEC Documents, the Company does not presently own or control, directly
      or
      indirectly, any interest in any other corporation, partnership, association
      or
      other business entity.

    

              Section
      4.19.     Tax Status.  Except as disclosed in
      the SEC Documents, the Company and each of its subsidiaries has made or filed
      all federal and state income and all other tax returns, reports and declarations
      required by any jurisdiction to which it is subject and (unless and only to
      the
      extent that the Company and each of its subsidiaries has set aside on its books
      provisions reasonably adequate for the payment of all unpaid and unreported
      taxes) has paid all taxes and other governmental assessments and charges that
      are material in amount, shown or determined to be due on such returns, reports
      and declarations, except those being contested in good faith and has set aside
      on its books provision reasonably adequate for the payment of all taxes for
      periods subsequent to the periods to which such returns, reports or declarations
      apply.  There are no unpaid taxes in any material amount claimed to be
      due by the taxing authority of any jurisdiction, and the officers of the Company
      know of no basis for any such claim.

    

              Section
      4.20.     Certain Transactions.  Except as
      set forth in the SEC Documents none of the officers, directors, or employees
      of
      the Company is presently a party to any transaction with the Company (other
      than
      for services as employees, officers and directors), including any contract,
      agreement or other arrangement providing for the furnishing of services to
      or
      by, providing for rental of real or personal property to or from, or otherwise
      requiring payments to or from any officer, director or such employee or, to
      the
      knowledge of the Company, any corporation, partnership, trust or other entity
      in
      which any officer, director, or any such employee has a substantial interest
      or
      is an officer, director, trustee or partner.

    

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

    

              Section
      4.22.     Use of Proceeds.  The Company shall
      use the net proceeds from this offering for general corporate purposes,
      including, without limitation, the payment of loans incurred by the
      Company.  However, in no event shall the Company use the net proceeds
      from this offering for the payment (or loan to any such person for the payment)
      of any judgment, or other liability, incurred by any executive officer, officer,
      director or employee of the Company, except for any liability owed to such
      person for services rendered, or if any judgment or other liability is incurred
      by such person originating from services rendered to the Company, or the Company
      has indemnified such person from liability.

    

              Section
      4.23.    Further Representation and Warranties of the
      Company.  For so long as any securities issuable hereunder held by the
      Investor remain outstanding, the Company acknowledges, represents, warrants
      and
      agrees that it will maintain the listing of its Common Stock on the Principal
      Market.

     

    
      
        
        

      

      
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              Section
      4.24.    Opinion of Counsel.  Investor shall
      receive an opinion letter from counsel to the Company on the date
      hereof.

    

              Section
      4.25.     Opinion of Counsel.  The Company
      will obtain for the Investor, at the Company’s expense, any and all opinions of
      counsel which may be reasonably required in order to sell the securities
      issuable hereunder without restriction.

    

              Section
      4.26.     Dilution.  The Company is aware and
      acknowledges that issuance of shares of the Company’s Common Stock could cause
      dilution to existing shareholders and could significantly increase the
      outstanding number of shares of Common Stock.

     

    ARTICLE
      V.

    Indemnification

    

    

              The
      Investor and the Company represent to the other the following with respect
      to
      itself:

    

              Section
      5.1.     Indemnification.

    

                        (a)         In
      consideration of the Investor’s execution and delivery of this Agreement, and in
      addition to all of the Company’s other obligations under this Agreement, the
      Company shall defend, protect, indemnify and hold harmless the Investor, and
      all
      of its officers, directors, partners, employees and agents (including, without
      limitation, those retained in connection with the transactions contemplated
      by
      this Agreement) (collectively, the “Investor Indemnitees”) from and against any
      and all actions, causes of action, suits, claims, losses, costs, penalties,
      fees, liabilities and damages, and expenses in connection therewith
      (irrespective of whether any such Investor Indemnitee is a party to the action
      for which indemnification hereunder is sought), and including reasonable
      attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by
      the Investor Indemnitees or any of them as a result of, or arising out of,
      or
      relating to (a) any misrepresentation or breach of any representation or
      warranty made by the Company in this Agreement or the Registration Rights
      Agreement or any other certificate, instrument or document contemplated hereby
      or thereby, (b) any breach of any covenant, agreement or obligation of the
      Company contained in this Agreement or the Registration Rights Agreement or
      any
      other certificate, instrument or document contemplated  hereby or
      thereby, or (c) any cause of action, suit or claim brought or made against
      such
      Investor Indemnitee not arising out of any action or inaction of an Investor
      Indemnitee, and arising out of or resulting from the execution, delivery,
      performance or enforcement of this Agreement or any other instrument, document
      or agreement executed pursuant hereto by any of the Investor
      Indemnitees.  To the extent that the foregoing undertaking by the
      Company may be unenforceable for any reason, the Company shall make the maximum
      contribution to the payment and satisfaction of each of the Indemnified
      Liabilities, which is permissible under applicable law.

     

    
      
        
        

      

      
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                        (b)         In
      consideration of the Company’s execution and delivery of this Agreement, and in
      addition to all of the Investor’s other obligations under this Agreement, the
      Investor shall defend, protect, indemnify and hold harmless the Company and
      all
      of its officers, directors, shareholders, employees and agents (including,
      without limitation, those retained in connection with the transactions
      contemplated by this Agreement) (collectively, the “Company Indemnitees”) from
      and against any and all Indemnified Liabilities incurred by the Company
      Indemnitees or any of them as a result of, or arising out of, or relating to
      (a)
      any misrepresentation or breach of any representation or warranty made by the
      Investor in this Agreement, the Registration Rights Agreement, or any instrument
      or document contemplated hereby or thereby executed by the Investor, (b) any
      breach of any covenant, agreement or obligation of the Investor(s) contained
      in
      this Agreement,  the Registration Rights Agreement or any other
      certificate, instrument or document contemplated hereby or thereby executed
      by
      the Investor, or (c) any cause of action, suit or claim brought or made against
      such Company Indemnitee based on  misrepresentations or due to
      a  breach by the Investor and arising out of or resulting from the
      execution, delivery, performance or enforcement of this Agreement or any other
      instrument, document or agreement executed pursuant hereto by any of the Company
      Indemnitees.  To the extent that the foregoing undertaking by the
      Investor may be unenforceable for any reason, the Investor shall make the
      maximum contribution to the payment and satisfaction of each of the Indemnified
      Liabilities, which is permissible under applicable law.

    

                        (c)         The
      obligations of the parties to indemnify or make contribution under this Section
      5.1 shall survive termination.

    

    

    ARTICLE
      VI.

    Covenants
      of the Company

    

    

              Section
      6.1.     Registration Rights.  The Company
      shall cause the Registration
      Rights Agreement to remain in full force and effect and the Company shall
      comply in all material respects with the terms thereof.

    

              Section
      6.2.     Listing of Common Stock.  The
      Company shall maintain the
      Common Stock’s authorization for quotation on the Principal Market.

    

              Section
      6.3.     Exchange Act Registration.  The
      Company will cause its Common Stock to continue to be registered under Section
      12(g) of the Exchange Act, will file in a timely manner all reports and other
      documents required of it as a reporting company under the Exchange Act and
      will
      not take any action or file any document (whether or not permitted by Exchange
      Act or the rules thereunder) to terminate or suspend such registration or to
      terminate or suspend its reporting and filing obligations under said Exchange
      Act.

    

              Section
      6.4.    Transfer Agent Instructions.  Upon
      effectiveness of the Registration Statement the Company shall deliver
      instructions to its transfer agent to issue shares of Common Stock to the
      Investor free of restrictive legends on or before each Advance
      Date.

     

    
      
        
        

      

      
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              Section
      6.5.     Corporate Existence.  The Company
      will take all steps necessary to preserve and continue the corporate existence
      of the Company.

    

              Section
      6.6.     Notice of Certain Events Affecting
      Registration; Suspension of Right to Make an Advance.  The Company
      will immediately notify the Investor upon its becoming aware of the occurrence
      of any of the following events in respect of a registration statement or related
      prospectus relating to an offering of Registrable Securities: (i) receipt of
      any
      request for additional information by the SEC or any other Federal or state
      governmental authority during the period of effectiveness of the Registration
      Statement for amendments or supplements to the registration statement or related
      prospectus; (ii) the issuance by the SEC or any other Federal or state
      governmental authority of  any stop order suspending the effectiveness
      of the Registration Statement or the initiation of any proceedings for that
      purpose; (iii) receipt of any notification with respect to the suspension of
      the
      qualification or exemption from qualification of any of the Registrable
      Securities for sale in any jurisdiction or the initiation or threatening of
      any
      proceeding for such purpose; (iv) the happening of any event that makes any
      statement made in the Registration Statement or related prospectus of any
      document incorporated or deemed to be incorporated therein by reference untrue
      in any material respect or that requires the making of any changes in the
      Registration Statement, related prospectus or documents so that, in the case
      of
      the Registration Statement, it will not contain any untrue statement of a
      material fact or omit to state any material fact required to be stated therein
      or necessary to make the statements therein not misleading, and that in the
      case
      of the related prospectus, it will not contain any untrue statement of a
      material fact or omit to state any material fact required to be stated therein
      or necessary to make the statements therein, in the light of the circumstances
      under which they were made, not misleading; and (v) the Company’s reasonable
      determination that a post-effective amendment to the Registration Statement
      would be appropriate; and the Company will promptly make available to the
      Investor any such supplement or amendment to the related
      prospectus.  The Company shall not deliver to the Investor any Advance
      Notice during the continuation of any of the foregoing events.

    

              Section
      6.7.     Issuance of the Company’s Common
      Stock.  The sale of the shares of Common Stock shall be made in
      accordance with the provisions and requirements of Regulation D and any
      applicable state securities law.

    

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

    

              Section
      6.9.    Market Activities.  The Company will not,
      directly or indirectly, (i) take any action designed to cause or result in,
      or
      that constitutes or might reasonably be expected to constitute, the
      stabilization or manipulation of the price of any security of the Company to
      facilitate the sale or resale of the Common Stock or (ii) sell, bid for or
      purchase the Common Stock, or pay anyone any compensation for soliciting
      purchases of the Common Stock, except for Red Rock Trading Partners, LLC in
      connection herewith.

    
 

    
      
        
        

      

      
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    ARTICLE
      VII.

    Conditions
      for Advance and Conditions to Closing

     

              Section
      7.1.     Conditions Precedent to the Obligations of the
      Company.  The obligation hereunder of the Company to issue and sell
      the shares of Common Stock to the Investor incident to each Closing is subject
      to the satisfaction, or waiver by the Company, at or before each such Closing,
      of each of the conditions set forth below.

    

                        (a)         Accuracy
      of the Investor’s Representations and Warranties.  The representations
      and warranties of the Investor shall be true and correct in all material
      respects.

    

                        (b)         Performance
      by the Investor.  The Investor shall have performed, satisfied and
      complied in all respects with all covenants, agreements and conditions required
      by this Agreement and the Registration Rights Agreement to be performed,
      satisfied or complied with by the Investor at or prior to such
      Closing.

    

              Section
      7.2.     Conditions Precedent to the Right of the
      Company to Deliver an Advance Notice.  The right of the Company to
      deliver an Advance Notice is subject to the fulfillment by the Company, on
      such
      Advance Notice (a “Condition Satisfaction Date”), of each of the following
      conditions:

    

                        (a)         Registration
      of the Common Stock with the SEC.  The Company shall have filed with
      the SEC a Registration Statement with respect to the resale of the Registrable
      Securities in accordance with the terms of the Registration Rights
      Agreement.  As set forth in the Registration Rights Agreement, the
      Registration Statement shall have previously become effective and shall remain
      effective on each Condition Satisfaction Date and (i) neither the Company nor
      the Investor shall have received notice that the SEC has issued or intends
      to
      issue a stop order with respect to the Registration Statement or that the SEC
      otherwise has suspended or withdrawn the effectiveness of the Registration
      Statement, either temporarily or permanently, or intends or has threatened
      to do
      so (unless the SEC’s concerns have been addressed and the Investor is reasonably
      satisfied that the SEC no longer is considering or intends to take such action),
      and (ii) no other suspension of the use or withdrawal of the effectiveness
      of
      the Registration Statement or related prospectus shall exist.  The
      Registration Statement must have been declared effective by the SEC prior to
      the
      first Advance Notice Date.

    

                        (b)         Authority.  The
      Company shall have obtained all permits and qualifications required by any
      applicable state in accordance with the Registration Rights Agreement for the
      offer and sale of the shares of Common Stock, or shall have the availability
      of
      exemptions therefrom.  The sale and issuance of the shares of Common
      Stock shall be legally permitted by all laws and regulations to which the
      Company is subject.

     

    
      
        
        

      

      
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                        (c)         Fundamental
      Changes. There shall not exist any fundamental changes to the information set
      forth in the Registration Statement which would require the Company to file
      a
      post-effective amendment to the Registration Statement.

    

                        (d)         Performance
      by the Company.  The Company shall have performed, satisfied and
      complied in all material respects with all covenants, agreements and conditions
      required by this Agreement and the Registration Rights Agreement to be
      performed, satisfied or complied with by the Company at or prior to each
      Condition Satisfaction Date.

    

                        (e)         No
      Injunction.  No statute, rule, regulation, executive order, decree,
      ruling or injunction shall have been enacted, entered, promulgated or endorsed
      by any court or governmental authority of competent jurisdiction that prohibits
      or directly and adversely affects any of the transactions contemplated by this
      Agreement, and no proceeding shall have been commenced that may have the effect
      of prohibiting or adversely affecting any of the transactions contemplated
      by
      this Agreement.

    

                        (f)         No
      Suspension of Trading in or Delisting of Common Stock.  The trading of
      the Common Stock is not suspended by the SEC or the Principal Market (if the
      Common Stock is traded on a Principal Market).  The issuance of shares
      of Common Stock with respect to the applicable Closing, if any, shall not
      violate the shareholder approval requirements of the Principal Market (if the
      Common Stock is traded on a Principal Market).  The Company shall not
      have received any notice threatening the continued listing of the Common Stock
      on the Principal Market (if the Common Stock is traded on a Principal
      Market).

     

              
      (g)          Not used

     

                        (h)         No
      Knowledge.  The Company has no knowledge of any event which would be
      more likely than not to have the effect of causing such Registration Statement
      to be suspended or otherwise ineffective.

    

                        (i)         Executed
      Advance Notice.  The Investor shall have received the Advance Notice
      executed by an officer of the Company and the representations contained in
      such
      Advance Notice shall be true and correct as of each Condition Satisfaction
      Date.

    

    ARTICLE
      VIII.

    Due
      Diligence Review; Non-Disclosure of Non-Public Information

    

              Section
      8.1.     Non-Disclosure of Non-Public
      Information.

    

                        (a)         The
      Company covenants and agrees that it shall refrain from disclosing, and shall
      cause its officers, directors, employees and agents to refrain from disclosing,
      any material non-public information to the Investor without also disseminating
      such information to the public, unless prior to disclosure of such information
      the Company identifies such information as being material non-public information
      and provides the Investor with the opportunity to accept or refuse to accept
      such material non-public information for review.

     

    
      
        
        

      

      
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                        (b)         Nothing
      herein shall require the Company to disclose non-public information to the
      Investor or its advisors or representatives, and the Company represents that
      it
      does not disseminate non-public information to any investors who purchase stock
      in the Company in a public offering, to money managers or to securities
      analysts, provided, however, that notwithstanding anything herein to the
      contrary, the Company will, as hereinabove provided, immediately notify the
      advisors and representatives of the Investor and, if any, underwriters, of
      any
      event or the existence of any circumstance (without any obligation to disclose
      the specific event or circumstance) of which it becomes aware, constituting
      non-public information (whether or not requested of the Company specifically
      or
      generally during the course of due diligence by such persons or entities),
      which, if not disclosed in the prospectus included in the Registration Statement
      would cause such prospectus to include a material misstatement or to omit a
      material fact required to be stated therein in order to make the statements,
      therein, in light of the circumstances in which they were made, not
      misleading.  Nothing contained in this Section 8.2 shall be construed
      to mean that such persons or entities other than the Investor (without the
      written consent of the Investor prior to disclosure of such information) may
      not
      obtain non-public information in the course of conducting due diligence in
      accordance with the terms of this Agreement and nothing herein shall prevent
      any
      such persons or entities from notifying the Company of their opinion that based
      on such due diligence by such persons or entities, that the Registration
      Statement contains an untrue statement of material fact or omits a material
      fact
      required to be stated in the Registration Statement or necessary to make the
      statements contained therein, in light of the circumstances in which they were
      made, not misleading.

    

    ARTICLE
      IX.

    Choice
      of
      Law/Jurisdiction

     

              Section
      9.1.     Governing Law.  This Agreement shall
      be governed by and interpreted in accordance with the laws of the State
      of  California without regard to the principles of conflict of
      laws.  The parties further agree that any action between them shall be
      heard in Los Angeles, California, and expressly consent to the jurisdiction
      and
      venue of the Superior Court of Los Angeles County, sitting in  Los
      Angeles, California, and the United States District Court of Los Angeles County,
      sitting in  Los Angeles, California,  for the adjudication
      of any civil action asserted pursuant to this paragraph.

     

    ARTICLE
      X.

    Assignment;
      Termination

     

              Section
      10.1.   Assignment.  Neither this Agreement nor any
      rights of the Company hereunder may be assigned to any other
      Person.

    

              Section
      10.2.   Termination.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    
 

                        (a)         The
      obligations of the Investor to make Advances under Article II hereof shall
      terminate thirty (30) months after the Effective Date.

    

                        (b)         The
      obligation of the Investor to make an Advance to the Company pursuant to this
      Agreement shall terminate permanently (including with respect to an Advance
      Date
      that has not yet occurred) in the event that (i) there shall occur any stop
      order or suspension of the effectiveness of the Registration Statement for
      an
      aggregate of fifty (50) Trading Days, other than due to the acts of the
      Investor, during the Commitment Period, or (ii) the Company shall at any time
      fail materially to comply with the requirements of Article VI and such failure
      is not cured within thirty (30) days after receipt of written notice from the
      Investor, provided, however, that this termination provision shall not apply
      to
      any period commencing upon the filing of a post-effective amendment to such
      Registration Statement and ending upon the date on which such post effective
      amendment is declared effective by the SEC.

    

                        (c)         The
      Company may terminate this Agreement by providing the Investor thirty (30)
      days
      (the “Notice Period”) advance written notice.   The Investor
      shall not be obligated to accept any Advance Notices during the Notice
      Period.   Upon termination of this Agreement the Company shall
      have no further obligations to the Investor under this Agreement or the
      Registration Rights Agreement, provided however the Company shall remain
      obligated to Comply with its obligations under Section 3 of the Registration
      Rights Agreement and any and all related obligations during such time as the
      Investor has sold all of the Registrable Securities, as this term is defined
      in
      the Registration Rights Agreement.

    

    ARTICLE
      XI.

    Notices

     

              Section
      11.1.    Notices.  Any notices, consents, waivers,
      or other communications required or permitted to be given under the terms of
      this Agreement must be in writing and will be deemed to have been delivered
      (i)
      upon receipt, when delivered personally; (ii) upon receipt, when sent by
      facsimile, provided a copy is mailed by U.S. certified mail, return receipt
      requested; (iii) three (3) days after being sent by U.S. certified mail, return
      receipt requested, or (iv) one (1) day after deposit with a nationally
      recognized overnight delivery service, in each case properly addressed to the
      party to receive the same.  The addresses and facsimile numbers for
      such communications shall be:

     

    
      
        	
                If
                  to the Company, to:

              	
                Red
                  Rock Pictures Holdings, Inc.

              
	 	
                8228
                  Sunset Blvd. – First Floor

              
	 	
                Los
                  Angeles, CA 90046

              
	 	
                Attention:     Robert
                  Levy

              
	 	
                Telephone:   310-474-5252

              
	 	
                Facsimile:    310-
                  474-1219

                 

              

      

    

     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    

    
      
        	
                With
                  a copy to:

              	
                Anslow
                  & Jaclin, LLP

              
	 	
                195
                  Route 9 South, Suite 204

              
	 	
                Manalapan,
                  NJ 07725

              
	 	
                Attention:      Gregg
                  Jaclin, Esq.

              
	 	
                Telephone:     (732)
                  409-1212

              
	 	
                Facsimile:        (732)
                  577-1188

              
	 	 
	
                If
                  to the Investor(s):

              	 
	 	
                IFG
                  Opportunity Fund, LLC

              
	 	
                PO
                  Box 1142

              
	 	
                Roswell,
                  GA 30077

              
	 	
                Attention:  Anthony
                  Gentile

              
	 	
                Portfolio
                  Manager

              
	 	
                Telephone:  (770)
                  587-5969

              
	 	
                Facsimile:    
                  (770) 518-7432

              
	 	 
	
                With
                  a Copy to:

              	
                Feldman
                  Weinstein & Smith LLP

              
	 	
                420
                  Lexington Avenue

              
	 	
                New
                  York, NY 10170

              
	 	
                Attention:     Joseph
                  A. Smith

              
	 	
                Telephone:    (212)
                  869-7000

              
	 	
                Facsimile:       (212)
                  997-4242

              

      

    

     

    Each
      party shall provide five (5) days’ prior written notice to the other party
of
      any
      change in address or facsimile number.

     

    ARTICLE
      XII.

    Miscellaneous

     

              Section
      12.1.    Counterparts.  This Agreement may be
      executed in two or more identical counterparts, all of which shall be considered
      one and the same agreement and shall become effective when counterparts have
      been signed by each party and delivered to the other party.  In the
      event any signature page is delivered by facsimile transmission, the party
      using
      such means of delivery shall cause four (4) additional original executed
      signature pages to be physically delivered to the other party within five (5)
      days of the execution and delivery hereof, though failure to deliver such copies
      shall not affect the validity of this Agreement.

    

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

    

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

        Section
      12.3.    PLACEMENT AGENT. The Company agrees to retain a
      registered broker-dealer prior to the filing of the registration statement
      as
      required pursuant to the Transaction Documents and agrees to pay all fees of
      such broker-dealer in connection with the registration of the common stock
      hereunder. Investor shall have no obligation with respect to any fees or with
      respect to any claims made by or on behalf of other persons or entities for
      fees
      of a type contemplated in this Section that may be due in connection with the
      transactions contemplated by the Transaction Documents. The Company shall
      indemnify and hold harmless the Investor, their employees, officers, directors,
      agents, and partners, and their respective affiliates, from and against all
      claims, losses, damages, costs (including the costs of preparation and
      attorney's fees) and expenses incurred in respect of any such claimed or
      existing fees, as such fees and expenses are incurred.

     

              Section
      12.3.    Reporting Entity for the Common
      Stock.  The reporting entity relied upon for the determination of the
      trading price or trading volume of the Common Stock on any given Trading Day
      for
      the purposes of this Agreement shall be Bloomberg, L.P. or any successor
      thereto.  The written mutual consent of the Investor and the Company
      shall be required to employ any other reporting entity.

    

              Section
      12.4.    Fees and Expenses.  The Company hereby
      agrees to pay the following fees:

     

    
      
        	
                (a)  

              	
                Expense
                  Reimbursement Fee.  Each of the parties shall pay its own fees
                  and expenses (including the fees of any attorneys, accountants,
                  appraisers
                  or others engaged by such party) in connection with this Agreement
                  and the
                  transactions contemplated hereby, except that the Company shall
                  pay an
                  Expense Reimbursement Fee of Ten Thousand Dollars ($10,000) to
                  the
                  Investor.

              

      

      
        	
                (b)  

              	
                Company
                  shall issue to Investor One hundred Thousand shares of Common Stock
                  on the
                  day of closing. Common stock referenced herein shall have piggyback
                  registration rights.

              

        	(c)  	Commitment
                Fees.

     

    

                                                  (i)         On
      each Advance Date the Company shall pay to the Investor, directly out of the
      gross proceeds of each Advance, an amount equal to three percent (3%) of the
      amount of each Advance.  The Company hereby agrees that if such
      payment, as is described above, is not made by the Company on the Advance Date,
      such payment shall be made as outlined and mandated by Section 2.3 of this
      Agreement.

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    

              Section
      12.5.    Confidentiality.  If for any reason the
      transactions contemplated by this Agreement are not consummated, each of the
      parties hereto shall keep confidential any information obtained from any other
      party (except information publicly available or in such party’s domain prior to
      the date hereof, and except as required by court order) and shall promptly
      return to the other parties all schedules, documents, instruments, work papers
      or other written information without retaining copies thereof, previously
      furnished by it as a result of this Agreement or in connection
      herein.

    

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    

    

    

    

    

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    

     

    

    

              IN
      WITNESS WHEREOF, the parties hereto have caused this Standby Equity Distribution
      Agreement to be executed by the undersigned, thereunto duly authorized,
      as of the date first set forth above.

    

              COMPANY:

              Red
      Rock
      Pictures Holdings, Inc.

    

              By:

    

              Name:      Robert
      Levy

              Title:     CEO

    

    

              INVESTOR:  IFG
      Opportunity Fund, LLC

     

          
By:

    

    Name:   Anthony
      Gentile

    Title:     Portfolio
      Manager

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    
 

    EXHIBIT
      A

    ADVANCE
      NOTICE

    RED
      ROCK
      PICTURES HOLDINGS, INC.

    

    

              The
      undersigned, _______________________ hereby certifies, with respect to the
      sale
      of shares of Common Stock of RED ROCK PICTURES HOLDINGS, INC. (the “Company”)
      issuable in connection with this Advance Notice, delivered pursuant to the
      Standby Equity Distribution Agreement (the “Agreement”), as
      follows:

    

              1.         The
      undersigned is the duly elected ______________ of the Company.

    

              2.         There
      are no fundamental changes to the information set forth in the Registration
      Statement which would require the Company to file a post effective amendment
      to
      the Registration Statement.

    

              3.         The
      Company has performed in all material respects all covenants and agreements
      to
      be performed by the Company and has complied in all material respects with
      all
      obligations and conditions contained in the Agreement on or prior to the Advance
      Notice Date, and shall continue to perform in all material respects all
      covenants and agreements to be performed by the Company through the applicable
      Advance Date.  All conditions to the delivery of this Advance Notice
      are satisfied as of the date hereof.

    

              4.         The
      undersigned hereby represents, warrants and covenants that it has made all
      filings (“SEC Filings”) required to be made by it pursuant to applicable
      securities laws (including, without limitation, all filings required under
      the
      Securities Exchange Act of 1934, which include Forms 10-Q or 10-QSB, 10-K or
      10-KSB, 8-K, etc.).  All SEC Filings and other public disclosures made
      by the Company, including, without limitation, all press releases, analysts
      meetings and calls, etc. (collectively, the “Public Disclosures”), have been
      reviewed and approved for release by the Company’s attorneys and, if containing
      financial information, the Company’s independent certified public
      accountants.  None of the Company’s Public Disclosures contain any
      untrue statement of a material fact or omit to state any material fact required
      to be stated therein or necessary to make the statements therein, in the light
      of the circumstances under which they were made, not misleading.

    

              5.         The
      Advance requested is _____________________.

    

              The
      undersigned has executed this Certificate this ____ day of  _________________.

    

    

             RED
      ROCK PICTURES HOLDINGS, INC.

    

    

             By:

    

             Name:

    

             Title:

     

    If
      Returning This Advance Notice via Facsimile Please Send To:  (___)
      ___-____

    

    If
      by
      Mail, via Federal Express To:

    

            ______________________________________f8k070607ex10ii_redrock.htm

    

     

    REGISTRATION
      RIGHTS AGREEMENT

     

    REGISTRATION
      RIGHTS AGREEMENT (this “Agreement”), dated as of July 6, 2007,
      by and between RED ROCK PICTURES HOLDINGS, INC., a Nevada
      corporation (the “Company”), and IFG
      OPPORTUNITY FUND, LLC, (the
“Investor”).

     

    WHEREAS:

     

    A.           In
      connection with the Equity Distribution Agreement by and between the parties
      hereto of even date herewith (the “Equity Distribution Agreement”), the
      Company has agreed, upon the terms and subject to the conditions of the Equity
      Distribution Agreement, to issue and sell to the Investor that number of shares
      of the Company’s common stock, par value $0.001 per share (the “Common
      Stock”), which can be purchased pursuant to the terms of the Equity
      Distribution Agreement for an aggregate purchase price of up to Twenty Five
      Million  Dollars ($25,000,000).  Capitalized terms not
      defined herein shall have the meaning ascribed to them in the Equity
      Distribution Agreement.

     

    B.           To
      induce the Investor to execute and deliver the Equity Distribution Agreement,
      the Company has agreed to provide certain registration rights under the
      Securities Act of 1933, as amended, and the rules and regulations thereunder,
      or
      any similar successor statute (collectively, the “Securities Act”), and
      applicable state securities laws.

     

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

     

    1.  DEFINITIONS.

     

    As
      used
      in this Agreement, the following terms shall have the following
      meanings:

     

    a.  “Person”
      means a corporation, a limited liability company, an association, a partnership,
      an organization, a business, an individual, a governmental or political
      subdivision thereof or a governmental agency.

     

    b.  “Register,”
      “registered,” and “registration” refer to a registration effected
      by preparing and filing one or more Registration Statements (as defined below)
      in compliance with the Securities Act and pursuant to Rule 415 under the
      Securities Act or any successor rule providing for offering securities on a
      continuous or delayed basis (“Rule 415”), and the declaration or ordering
      of effectiveness of such Registration Statement(s) by the United States
      Securities and Exchange Commission (the “SEC”).

     

    c.  “Registrable
      Securities” means the Investor’s Shares, as defined in the Equity
      Distribution Agreement and shares of Common Stock issuable to Investors pursuant
      to the Equity Distribution Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    d.  “Registration
      Statement” means a registration statement under the Securities Act which
      covers the Registrable Securities.

     

    2.  REGISTRATION.

     

    a.  Mandatory
      Registration.  The Company shall prepare and file with the SEC a
      Registration Statement on Form S-1, SB-2 or on such other form as is available,
      no later than sixty (60) calendar days from the date hereof (the “Scheduled
      Filing Deadline”).  The Company shall cause such Registration
      Statement to be declared effective by the SEC prior to the first sale to the
      Investor of the Company’s Common Stock pursuant to the Equity Distribution
      Agreement but in no event later than one hundred twenty (180) calendar days
      from
      the date hereof (the “Scheduled Effective Deadline”).  The
      Company shall cause the Registration Statement to remain effective until the
      full completion of the Commitment Period (as such term is defined in the Equity
      Distribution Agreement).

     

    b.  Sufficient
      Number of Shares Registered.  In the event the number of shares
      available under a Registration Statement filed pursuant to Section 2(a) is
      insufficient to cover all of the Registrable Securities pursuant to the Equity
      Distribution Agreement, the Company shall amend the Registration Statement,
      or
      file a new Registration Statement (on the short form available therefore, if
      applicable), or both, so as to cover all of such Registrable Securities pursuant
      to the Equity Distribution Agreement as soon as practicable, but in any event
      not later than sixty (60) days after the necessity therefore
      arises.  The Company shall use it best efforts to cause such amendment
      and/or new Registration Statement to become effective as soon as practicable
      following the filing thereof.  For purposes of the foregoing
      provision, the number of shares available under a Registration Statement shall
      be deemed “insufficient to cover all of the Registrable Securities” if at any
      time the number of Registrable Securities issuable on an Advance Notice Date
      is
      greater than the number of shares available for resale under such Registration
      Statement.

     

    c.  Additional
      Shares to be Registered.   Except as set forth on Schedule
      2(c), the Company agrees not to include any other securities in the Registration
      Statement covering the Registrable Securities without Investor’s prior written
      consent which Investor may withhold in its sole discretion.

     

    3.  RELATED
      OBLIGATIONS.

     

    a.  The
      Company shall keep the Registration Statement effective pursuant to Rule 415
      at
      all times until the completion of the Commitment Period (as such term is defined
      in the Equity Distribution Agreement) (the “Registration Period”), which
      Registration Statement (including any amendments or supplements thereto and
      prospectuses contained therein) shall not contain any untrue statement of a
      material fact or omit to state a material fact required to be stated therein,
      or
      necessary to make the statements therein, in light of the circumstances in
      which
      they were made, not misleading.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

    b.  The
      Company shall prepare and file with the SEC such amendments (including
      post-effective amendments) and supplements to a Registration Statement and
      the
      prospectus used in connection with such Registration Statement, which prospectus
      is to be filed pursuant to Rule 424 promulgated under the Securities Act, as
      may
      be necessary to keep such Registration Statement effective at all times during
      the Registration Period, and, during such period, comply with the provisions
      of
      the Securities Act with respect to the disposition of all Registrable Securities
      of the Company covered by such Registration Statement until such time as all
      of
      such Registrable Securities shall have been disposed of in accordance with
      the
      intended methods of disposition by the seller or sellers thereof as set forth
      in
      such Registration Statement.  In the case of amendments and
      supplements to a Registration Statement which are required to be filed pursuant
      to this Agreement (including pursuant to this Section 3(b)) by reason of the
      Company’s filing a report on Form 10-KSB, Form 10-QSB or Form 8-K or any
      analogous report under the Securities Exchange Act of 1934, as amended (the
      “Exchange Act”), the Company shall have incorporated such report by
      reference into the Registration Statement, if applicable, or shall file such
      amendments or supplements with the SEC on the same day on which the Exchange
      Act
      report is filed which created the requirement for the Company to amend or
      supplement the Registration Statement.

     

    c.  The
      Company shall furnish to the Investor without charge, (i) at least one copy
      of
      such Registration Statement as declared effective by the SEC and any
      amendment(s) thereto, including financial statements and schedules, all
      documents incorporated therein by reference, all exhibits and each preliminary
      prospectus, (ii) ten (10) copies of the final prospectus included in such
      Registration Statement and all amendments and supplements thereto (or such
      other
      number of copies as such Investor may reasonably request) and (iii) such other
      documents as such Investor may reasonably request from time to time in order
      to
      facilitate the disposition of the Registrable Securities owned by such
      Investor.

     

    d.  The
      Company shall use its best efforts to (i) register and qualify the Registrable
      Securities covered by a Registration Statement under such other securities
      or
“blue sky” laws of such jurisdictions in the United States as the Investor
      reasonably requests, (ii) prepare and file in those jurisdictions, such
      amendments (including post-effective amendments) and supplements to such
      registrations and qualifications as may be necessary to maintain the
      effectiveness thereof during the Registration Period, (iii) take such other
      actions as may be necessary to maintain such registrations and qualifications
      in
      effect at all times during the Registration Period, and (iv) take all other
      actions reasonably necessary or advisable to qualify the Registrable Securities
      for sale in such jurisdictions; provided, however, that the Company shall not
      be
      required in connection therewith or as a condition thereto to (w) make any
      change to its certificate of incorporation or by-laws, (x) qualify to do
      business in any jurisdiction where it would not otherwise be required to qualify
      but for this Section 3(d), (y) subject itself to general taxation in any such
      jurisdiction, or (z) file a general consent to service of process in any such
      jurisdiction.  The Company shall promptly notify the Investor of the
      receipt by the Company of any notification with respect to the suspension of
      the
      registration or qualification of any of the Registrable Securities for sale
      under the securities or “blue sky” laws of any jurisdiction in the United States
      or its receipt of actual notice of the initiation or threat of any proceeding
      for such purpose.

     

    e.  The
      Company shall use its best efforts either to cause all the Registrable
      Securities covered by a Registration Statement (i) to be listed on each
      securities exchange on which securities of the same class or series issued
      by
      the Company are then listed, if any, if the listing of such Registrable
      Securities is then permitted under the rules of such exchange or to secure
      the
      inclusion for quotation on the National Association of Securities Dealers,
      Inc.
      OTC Bulletin Board for such Registrable Securities.  The Company shall
      pay all fees and expenses in connection with satisfying its obligation under
      this Section.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

    f.  The
      Company shall cooperate with the Investor to the extent applicable, to
      facilitate the timely preparation and delivery of certificates (not bearing
      any
      restrictive legend) representing the Registrable Securities to be offered
      pursuant to a Registration Statement and enable such certificates to be in
      such
      denominations or amounts, as the case may be, as the Investor may reasonably
      request and registered in such names as the Investor may request.

     

    g.  The
      Company shall use its best efforts to cause the Registrable Securities covered
      by the applicable Registration Statement to be registered with or approved
      by
      such other governmental agencies or authorities as may be necessary to
      consummate the disposition of such Registrable Securities.

     

    h.  The
      Company shall otherwise use its best efforts to comply with all applicable
      rules
      and regulations of the SEC in connection with any registration
      hereunder.

     

    i.  Within
      two (2) business days after a Registration Statement which covers Registrable
      Securities is ordered effective by the SEC, the Company shall deliver, and
      shall
      cause legal counsel for the Company to deliver, to the transfer agent for such
      Registrable Securities (with copies to the Investor) confirmation that such
      Registration Statement has been declared effective by the SEC in the form
      attached hereto as Exhibit A.

     

    j.  The
      Company shall take all other reasonable actions necessary to expedite and
      facilitate disposition by the Investor of Registrable Securities pursuant to
      a
      Registration Statement.

     

    4.  EXPENSES
      OF REGISTRATION.

     

    All
      expenses incurred in connection with registrations, filings or qualifications
      pursuant to Sections 2 and 3, including, without limitation, all registration,
      listing and qualifications fees, printers, legal and accounting fees shall
      be
      paid by the Company.

     

    5.  INDEMNIFICATION.

     

    With
      respect to Registrable Securities which are included in a Registration Statement
      under this Agreement:

     

    a.  To
      the
      fullest extent permitted by law, the Company will, and hereby does, indemnify,
      hold harmless and defend the Investor, the directors, officers, partners,
      employees, agents, representatives of, and each Person, if any, who controls
      the
      Investor within the meaning of the Securities Act or the Exchange Act (each,
      an
“Indemnified Person”), against any losses, claims, damages, liabilities,
      judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts
      paid in settlement or expenses, joint or several (collectively, “Claims”)
      incurred in investigating, preparing or defending any action, claim, suit,
      inquiry, proceeding, investigation or appeal taken from the foregoing by or
      before any court or governmental, administrative or other regulatory agency,
      body or the SEC, whether pending or threatened, whether or not an indemnified
      party is or may be a party thereto (“Indemnified Damages”), to which any
      of them may become subject insofar as such Claims (or actions or proceedings,
      whether commenced or threatened, in respect thereof) arise out of or are based
      upon: 

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

       

      (i)
        any
        untrue statement or alleged untrue statement of a material fact in a
        Registration Statement or any post-effective amendment thereto or in any
        filing
        made in connection with the qualification of the offering under the securities
        or other “blue sky” laws of any jurisdiction in which Registrable Securities are
        offered (“Blue Sky Filing”), or the omission or alleged omission to
        state a material fact required to be stated therein or necessary to make
        the
        statements therein not misleading; (ii) any untrue statement or alleged
        untrue statement of a material fact contained in any final prospectus (as
        amended or supplemented, if the Company files any amendment thereof or
        supplement thereto with the SEC) or the omission or alleged omission to state
        therein any material fact necessary to make the statements made therein,
        in
        light of the circumstances under which the statements therein were made,
        not
        misleading; or (iii) any violation or alleged violation by the Company of
        the
        Securities Act, the Exchange Act, any other law, including, without limitation,
        any state securities law, or any rule or regulation there under relating
        to the
        offer or sale of the Registrable Securities pursuant to a Registration Statement
        (the matters in the foregoing clauses (i) through (iii) being, collectively,
        “Violations”).  The Company shall reimburse the Investor and
        each such controlling person promptly as such expenses are incurred and are
        due
        and payable, for any legal fees or disbursements or other reasonable expenses
        incurred by them in connection with investigating or defending any such
        Claim.  Notwithstanding anything to the contrary contained herein, the
        indemnification agreement contained in this Section 6(a): (x) shall not apply
        to
        a Claim by an Indemnified Person arising out of or based upon a Violation
        which
        occurs in reliance upon and in conformity with information furnished in writing
        to the Company by such Indemnified Person expressly for use in connection
        with
        the preparation of the Registration Statement or any such amendment thereof
        or
        supplement thereto; (y) shall not be available to the extent such Claim is
        based
        on a failure of the Investor to deliver or to cause to be delivered the
        prospectus made available by the Company, if such prospectus was timely made
        available by the Company pursuant to Section 3(e); and (z) shall not apply
        to
        amounts paid in settlement of any Claim if such settlement is effected without
        the prior written consent of the Company, which consent shall not be
        unreasonably withheld.  Such indemnity shall remain in full force and
        effect regardless of any investigation made by or on behalf of the Indemnified
        Person.

    

     

    b.  In
      connection with a Registration Statement, the Investor agrees to indemnify,
      hold
      harmless and defend, to the same extent and in the same manner as is set forth
      in Section 6(a), the Company, each of its directors, each of its officers who
      signs the Registration Statement and each Person, if any, who controls the
      Company within the meaning of the Securities Act or the Exchange Act (each
      an
“Indemnified Party”), against any Claim or Indemnified Damages to which
      any of them may become subject, under the Securities Act, the Exchange Act
      or
      otherwise, insofar as such Claim or Indemnified Damages arise out of or is
      based
      upon any Violation, in each case to the extent, and only to the extent, that
      such Violation occurs in reliance upon and in conformity with written
      information furnished to the Company by the Investor expressly for use in
      connection with such Registration Statement; and, subject to Section 6(d),
      the
      Investor will reimburse any legal or other expenses reasonably incurred by
      them
      in connection with investigating or defending any such Claim; provided, however,
      that the indemnity agreement contained in this Section 6(b) and the agreement
      with respect to contribution contained in Section 7 shall not apply to amounts
      paid in settlement of any Claim if such settlement is effected without the
      prior
      written consent of the Investor, which consent shall not be unreasonably
      withheld; provided, further, however, that the Investor shall be liable under
      this Section 6(b) for only that amount of a Claim or Indemnified Damages as
      does
      not exceed the net proceeds to the Investor as a result of the sale of
      Registrable Securities pursuant to such Registration
      Statement.  

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

       

      Such
        indemnity shall remain in full force and effect regardless of any investigation
        made by or on behalf of such Indemnified Party.  Notwithstanding
        anything to the contrary contained herein, the indemnification agreement
        contained in this Section 6(b) with respect to any prospectus shall not inure
        to
        the benefit of any Indemnified Party if the untrue statement or omission
        of
        material fact contained in the prospectus was corrected and such new prospectus
        was delivered to the Investor prior to the Investor’s use of the prospectus to
        which the Claim relates.

    

     

    c.  Promptly
      after receipt by an Indemnified Person or Indemnified Party under this Section
      6
      of notice of the commencement of any action or proceeding (including any
      governmental action or proceeding) involving a Claim, such Indemnified Person
      or
      Indemnified Party shall, if a Claim in respect thereof is to be made against
      any
      indemnifying party under this Section 6, deliver to the indemnifying party
      a
      written notice of the commencement thereof, and the indemnifying party shall
      have the right to participate in, and, to the extent the indemnifying party
      so
      desires, jointly with any other indemnifying party similarly noticed, to assume
      control of the defense thereof with counsel mutually satisfactory to the
      indemnifying party and the Indemnified Person or the Indemnified Party, as
      the
      case may be; provided, however, that an Indemnified Person or Indemnified Party
      shall have the right to retain its own counsel with the fees and expenses of
      not
      more than one counsel for such Indemnified Person or Indemnified Party to be
      paid by the indemnifying party, if, in the reasonable opinion of counsel
      retained by the indemnifying party, the representation by such counsel of the
      Indemnified Person or Indemnified Party and the indemnifying party would be
      inappropriate due to actual or potential differing  interests between
      such Indemnified Person or Indemnified Party and any other party represented
      by
      such counsel in such proceeding. The Indemnified Party or Indemnified Person
      shall cooperate fully with the indemnifying party in connection with any
      negotiation or defense of any such action or claim by the indemnifying party
      and
      shall furnish to the indemnifying party all information reasonably available
      to
      the Indemnified Party or Indemnified Person which relates to such action or
      claim.  The indemnifying party shall keep the Indemnified Party or
      Indemnified Person fully apprised at all times as to the status of the defense
      or any settlement negotiations with respect thereto.  No indemnifying
      party shall be liable for any settlement of any action, claim or proceeding
      effected without its prior written consent, provided, however, that the
      indemnifying party shall not unreasonably withhold, delay or condition its
      consent.  No indemnifying party shall, without the prior written
      consent of the Indemnified Party or Indemnified Person, consent to entry of
      any
      judgment or enter into any settlement or other compromise which does not include
      as an unconditional term thereof the giving by the claimant or plaintiff to
      such
      Indemnified Party or Indemnified Person of a release from all liability in
      respect to such claim or litigation.  Following indemnification as
      provided for hereunder, the indemnifying party shall be subrogated to all rights
      of the Indemnified Party or Indemnified Person with respect to all third
      parties, firms or corporations relating to the matter for which indemnification
      has been made.  The failure to deliver written notice to the
      indemnifying party within a reasonable time of the commencement of any such
      action shall not relieve such indemnifying party of any liability to the
      Indemnified Person or Indemnified Party under this Section 6, except to the
      extent that the indemnifying party is prejudiced in its ability to defend such
      action.

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    d.  The
      indemnification required by this Section 6 shall be made by periodic payments
      of
      the amount thereof during the course of the investigation or defense, as and
      when bills are received or Indemnified Damages are incurred.

     

    e.  The
      indemnity agreements contained herein shall be in addition to (i) any cause
      of
      action or similar right of the Indemnified Party or Indemnified Person against
      the indemnifying party or others, and (ii) any liabilities the indemnifying
      party may be subject to pursuant to the law.

     

    6.  CONTRIBUTION.

     

    To
      the
      extent any indemnification by an indemnifying party is prohibited or limited
      by
      law, the indemnifying party agrees to make the maximum contribution with respect
      to any amounts for which it would otherwise be liable under Section 6 to the
      fullest extent permitted by law; provided, however, that: (i) no seller of
      Registrable Securities guilty of fraudulent misrepresentation (within the
      meaning of Section 11(f) of the Securities Act) shall be entitled to
      contribution from any seller of Registrable Securities who was not guilty of
      fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
      Securities shall be limited in amount to the net amount of proceeds received
      by
      such seller from the sale of such Registrable Securities.

     

    7.  REPORTS
      UNDER THE EXCHANGE ACT.

     

    With
      a
      view to making available to the Investor the benefits of Rule 144 promulgated
      under the Securities Act or any similar rule or regulation of the SEC that
      may
      at any time permit the Investors to sell securities of the Company to the public
      without registration (“Rule 144”) the Company agrees to:

     

    a.  make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144;

     

    b.  file
      with
      the SEC in a timely manner all reports and other documents required of the
      Company under the Securities Act and the Exchange Act so long as the Company
      remains subject to such requirements (it being understood that nothing herein
      shall limit the Company’s obligations under Section 6.3 of the Equity
      Distribution Agreement) and the filing of such reports and other documents
      is
      required for the applicable provisions of Rule 144; and

     

    c.  furnish
      to the Investor so long as the Investor owns Registrable Securities, promptly
      upon request, (i) a written statement by the Company that it has complied with
      the reporting requirements of Rule 144, the Securities Act and the Exchange
      Act,
      (ii) a copy of the most recent annual or quarterly report of the Company and
      such other reports and documents so filed by the Company, and (iii) such other
      information as may be reasonably requested to permit the Investor to sell such
      securities pursuant to Rule 144 without registration.

     

    8.  AMENDMENT
      OF REGISTRATION RIGHTS.

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Provisions
      of this Agreement may be amended and the observance thereof may be waived
      (either generally or in a particular instance and either retroactively or
      prospectively), only by a written agreement between the Company and the
      Investor.  Any amendment or waiver effected in accordance with this
      Section 9 shall be binding upon the Investor and the Company.  No
      consideration shall be offered or paid to any Person to amend or consent to
      a
      waiver or modification of any provision of any of this Agreement unless the
      same
      consideration also is offered to all of the parties to this
      Agreement.

     

    9.  MISCELLANEOUS.

     

    a.  A
      Person
      is deemed to be a holder of Registrable Securities whenever such Person owns
      or
      is deemed to own of record such Registrable Securities.  If the
      Company receives conflicting instructions, notices or elections from two or
      more
      Persons with respect to the same Registrable Securities, the Company shall
      act
      upon the basis of instructions, notice or election received from the registered
      owner of such Registrable Securities.

     

    b.  The
      Company is hereby permitted to include 1,000,000 shares of common stock held
      by
      National Lampoon, Inc. for registration in the Registration
      Statement.

     

    c.  Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms of this Agreement must be in writing and will be deemed
      to
      have been delivered:  (i) upon receipt, when delivered personally;
      (ii) upon receipt, when sent by facsimile (provided confirmation of transmission
      is mechanically or electronically generated and kept on file by the sending
      party); or (iii) one business day after deposit with a nationally recognized
      overnight delivery service, in each case properly addressed to the party to
      receive the same.  The addresses and facsimile numbers for such
      communications shall be:

     

    
      
        	
                If
                  to the Company, to:

              	
                Red
                  Rock Pictures Holdings, Inc.

              
	 	
                8228
                  Sunset Blvd. – First Floor

              
	 	
                Los
                  Angeles, CA 90046

              
	 	
                Attention:     Robert
                  Levy

              
	 	
                Telephone:   (301) 
                  474-1219

              
	 	
                Facsimile:

              
	 	 
	
                With
                  a copy to:

              	
                Anslow
                  & Jaclin, LLP

              
	 	
                195
                  Route 9 South, Suite 204

              
	 	
                Manalapan,
                  NJ 07725

              
	 	
                Attention:   Greg
                  Jaclin, Esq.

              
	 	
                Telephone:  (732)
                  409-1212

              
	 	
                Facsimile:     (732)
                  577-1188

              
	 	 

      

    

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      
        	
                If
                  to the Investor, to:

              	
                IFG
                  Opportunity Fund, LLC.

              
	 	
                PO
                  Box 1142

                Roswell,
                  GA 30077

                Attention:  Anthony
                  Gentile

                Portfolio
                  Manager

              
	 	
                Telephone:  (770)
                  587-5969

              
	 	
                Facsimile:   (770)
                  518-7432

              
	 	 
	
                With
                  a Copy to:

              	
                Feldman
                  Weinstein & Smith LLP

                420
                  Lexington Avenue

                New
                  York, NY 10170

                Attention:      Joseph
                  A. Smith

                Telephone:    (212)
                  869-7000

                Facsimile:      (212)
                  997-4242

              

      

    

     

    Any
      party
      may change its address by providing written notice to the other parties hereto
      at least five days prior to the effectiveness of such change.  Written
      confirmation of receipt (A) given by the recipient of such notice, consent,
      waiver or other communication, (B) mechanically or electronically generated
      by
      the sender’s facsimile machine containing the time, date, recipient facsimile
      number and an image of the first page of such transmission or (C) provided
      by a
      courier or overnight courier service shall be rebuttable evidence of personal
      service, receipt by facsimile or receipt from a nationally recognized overnight
      delivery service in accordance with clause (i), (ii) or (iii) above,
      respectively.

     

    d.  Failure
      of any party to exercise any right or remedy under this Agreement or otherwise,
      or delay by a party in exercising such right or remedy, shall not operate as
      a
      waiver thereof.

     

    e.  The
      corporate laws of the State of New Jersey shall govern all issues concerning
      the
      relative rights of the Company and the Investor.  All other questions
      concerning the construction, validity, enforcement and interpretation of this
      Agreement shall be governed by the internal laws of the State of New Jersey,
      without giving effect to any choice of law or conflict of law provision or
      rule
      (whether of the State of New Jersey or any other jurisdiction) that would cause
      the application of the laws of any jurisdiction other than the State of New
      Jersey.  Each party hereby irrevocably submits to the non-exclusive
      jurisdiction of the Superior Courts of the State of New Jersey, sitting in
      Hudson County, New Jersey and the Federal District Court for the District of
      New
      Jersey sitting in Newark, New Jersey, for the adjudication of any dispute
      hereunder or in connection herewith or with any transaction contemplated hereby
      or discussed herein, and hereby irrevocably waives, and agrees not to assert
      in
      any suit, action or proceeding, any claim that it is not personally subject
      to
      the jurisdiction of any such court, that such suit, action or proceeding is
      brought in an inconvenient forum or that the venue of such suit, action or
      proceeding is improper.  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 to such party at the address for such
      notices to it under this Agreement and agrees that such service shall constitute
      good and sufficient service of process and notice
      thereof.  

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

       

       

      Nothing
        contained herein shall be deemed to limit in any way any right to serve process
        in any manner permitted by law.  If any provision of this Agreement
        shall be invalid or unenforceable in any jurisdiction, such invalidity or
        unenforceability shall not affect the validity or enforceability of the
        remainder of this Agreement in that jurisdiction or the validity or
        enforceability of any provision of this Agreement in any other
        jurisdiction.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
        HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
        DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT
        OR
        ANY TRANSACTION CONTEMPLATED HEREBY.

    

     

    f.  This
      Agreement and the Equity Distribution Agreement constitute the entire agreement
      among the parties hereto with respect to the subject matter hereof and
      thereof.  There are no restrictions, promises, warranties or
      undertakings, other than those set forth or referred to herein and
      therein.  This Agreement and the Equity Distribution Agreement
      supersede all prior agreements and understandings among the parties hereto
      with
      respect to the subject matter hereof and thereof.

     

    g.  This
      Agreement shall inure to the benefit of and be binding upon the permitted
      successors and assigns of each of the parties hereto.

     

    h.  The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof.

     

    i.  This
      Agreement may be executed in identical counterparts, each of which shall be
      deemed an original but all of which shall constitute one and the same
      agreement.  This Agreement, once executed by a party, may be delivered
      to the other party hereto by facsimile transmission of a copy of this Agreement
      bearing the signature of the party so delivering this Agreement.

     

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

     

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

     

    l.  This
      Agreement is intended for the benefit of the parties hereto and their respective
      permitted successors and assigns, and is not for the benefit of, nor may any
      provision hereof be enforced by, any other Person.

     

    

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    

    IN
      WITNESS WHEREOF, the parties have caused this Registration Rights
      Agreement to be duly executed as of day and year first above
      written.

     

    
      	 	
              Red
                Rock Pictures Holdings, Inc.

            
	 	 
	 	
              By:    ____________________________________                                                            

            
	 	
              Name:

            
	 	
              Title:

            
	 	 
	 	 
	 	
              IFG
                OPPORTUNITY FUND, LLC

            
	 	 
	 	 
	 	
              By:   _____________________________________                                                             

            
	 	
              Name:

            
	 	
              Title:

            
	 	 

    

    

    

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

    FORM
      OF NOTICE OF EFFECTIVENESS

     

    OF
      REGISTRATION STATEMENT

     

    

    

    Attention:

    

    Re:           RED
      ROCK PICTURES HOLDINGS, INC.

    

    Ladies
      and Gentlemen:

    

    We
      are
      counsel to Red Rock Pictures Holdings, Inc. (the “Company”), and have
      represented the Company in connection with that certain Equity Distribution
      Agreement (the “Equity Distribution Agreement”) entered into by and
      between the Company and IFG Opportunity Fund, LLC (the “Investor”)
      pursuant to which the Company issued to the Investor shares of its Common Stock,
      par value $0.001 per share (the “Common Stock”).  Pursuant to
      the Equity Distribution Agreement, the Company also has entered into a
      Registration Rights Agreement with the Investor (the “Registration Rights
      Agreement”) pursuant to which the Company agreed, among other things, to
      register the Registrable Securities (as defined in the Registration Rights
      Agreement) under the Securities Act of 1933, as amended (the “Securities
      Act”).  In connection with the Company’s obligations under the
      Registration Rights Agreement, on ____________ ____, the Company filed a
      Registration Statement on Form ________ (File No. 333-_____________) (the
“Registration Statement”) with the Securities and Exchange Commission
      (the “SEC”) relating to the Registrable Securities which names the
      Investor as a selling stockholder thereunder.

     

    In
      connection with the foregoing, we advise you that a member of the SEC’s staff
      has advised us by telephone that the SEC has entered an order declaring the
      Registration Statement effective under the Securities Act at [ENTER TIME
      OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and
      we have no knowledge, after telephonic inquiry of a member of the SEC’s staff,
      that any stop order suspending its effectiveness has been issued or that any
      proceedings for that purpose are pending before, or threatened by, the SEC
      and
      the Registrable Securities are available for resale under the Securities Act
      pursuant to the Registration Statement.

     

    Very
      truly yours,

    

    

    

    By: ___________________________________                                                               

    

    cc:           IFG
      Opportunity Fund, LLC

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

     

    EXHIBIT
      2C

    ADDITIONAL
      SHARES TO BE REGISTERED

     

    

    

    
      	
              Holder

            	 	
              Shares

            	 
	
              National
                Lampoon

            	 	 	
              1,000,000

            	 
	
              N.
                Williams Family Investments, L.P.

            	 	 	
              260,933

            	 
	
              Dan
                Laikin -

            	 	 	
              260,933

            	 
	
              Cornell
                Capital

            	 	 	
              108,745

            	 
	
              Cornell
                Capital

            	 	 	56,247	*
	
              Newbridge
                Securities Corporation 

            	 	 	
              3,750

            	 
	 	 	 	 	 

    

    

    

    

    *These
      shares underlying warrants.

    

    13

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