Document:

Exhibit 4.1

    Exhibit
      4.1

    
 

    PURCHASE
      AGREEMENT

     

    THIS
      PURCHASE AGREEMENT (the
      "Agreement"),
      dated
      as
      of April 19, 2007, by and among Mohen, Inc. d/b/a Spiral Frog, a Delaware
      corporation (the "Company"),
      and
      the
investors
      listed on the Schedule of Buyers attached hereto (individually, a "Buyer"
      and
      collectively,
      the "Buyers").

     

    WHEREAS:

     

    A. On
      dates
      beginning on March 13, 2007, certain buyers of the Company’s securities
executed
      written purchase agreements for the purchase thereof and now such buyers wish
      to
amend
      and
      restate such agreements.

     

    B. The
      Company and each Buyer is executing and delivering this Agreement in reliance
      upon
      the
      exemption from securities registration afforded by Section 4(2) of the
      Securities Act of 1933, as amended (the "1933
      Act"), and
      Rule
      506 of Regulation D ("Regulation
      D") as
      promulgated by the United States Securities and Exchange Commission (the
      "SEC")
      under
      the
      1933 Act.

     

    C. The
      Company has authorized a series of senior secured exchangeable notes of the
      Company, which notes shall be exchangeable into the Company's Class A Common
      Stock, par value $0.001 per share (the "Common
      Stock"), in
      accordance with the terms of the Notes (as defined below).

     

    D. Each
      Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
      conditions
      stated in this Agreement that aggregate principal amount of the Notes, in
      substantially the
      form
      attached hereto as Exhibit
      A (the
      "Notes"),
      set
      forth
      opposite such Buyer's name in column
      (3) on the Schedule of Buyers attached hereto (which aggregate amount for all
      Buyers shall
      be
      $5,000,000 (as exchangeable into Common Stock pursuant to the terms of the
      Notes, collectively, the “Exchange
      Shares”).

     

    E. Contemporaneously
      with the execution and delivery of this Agreement, the parties hereto are
      executing and delivering a Registration Rights Agreement, substantially in
      the
      form attach
      hereto as Exhibit
      B (the
      “Registration
      Rights Agreement”) pursuant
      to which the Company
      has agreed to provide certain registration rights with respect to the Exchange
      Shares under
      the
      1933 Act and the rules and regulations promulgated thereunder, and applicable
      state securities laws.

     

    F. The
      Notes
      and the Exchange Shares collectively are referred to herein as the "Securities".

     

    G.
      The
      Notes will rank senior to all future indebtedness of the Company, subject to
      Permitted
      Senior Indebtedness (as defined in the Notes) and will be secured by a perfected
      security
      interest in all of the assets of the Company and each of the Company’s
      subsidiaries, as evidenced
      by the security agreement attached hereto as Exhibit
      C (the
      "Security
      Agreement" and,
      together with the Pledge Agreement attached hereto as Exhibit
      D, and
      any
      ancillary documents
      related thereto, collectively the "Security
      Documents").

     

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    
      H.
        To
        facilitate the Closing (as defined herein), each Buyer shall deposit into
        escrow
        its respective Purchase Price (as defined herein) with Gottbetter &
Partners, LLP (the “Escrow
        Agent”) pursuant
        to an Escrow Agreement, among the parties hereto.

    

     

    NOW,
      THEREFORE, the
      Company and each Buyer hereby agree as follows: 1. PURCHASE
      AND SALE OF NOTES.

     

    (a) Purchase
      of Notes.

     

    (b) Subject
      to the terms of this Agreement and the satisfaction (or waiver) of the
conditions
      set forth in Sections 6 and 7 below, the Company shall issue and sell to each
      Buyer, and
      each
      Buyer severally, but not jointly, shall purchase from the Company, on the
      Closing Date (as
      defined below), a principal amount of Notes as is set forth opposite such
      Buyer's name in column (3) on the Schedule of Buyers (the "Closing").

     

    (i) Closing.
      The
      Closing shall take place at 10:00 a.m., New York City time, at
      the
      offices of Gottbetter & Partners, LLP, 488 Madison Avenue, New York, NY
10022,
      or
      at such other place or time as mutually agreed to by the parties, which shall
      be
no
      later
      than the second business day after the satisfaction (or waiver) of the last
      to
      be satisfied (or waived) of the conditions to the Closing set forth in Sections
      6 and 7 below (other
      than conditions that by their terms are to be satisfied on the Closing Date).
      The date
      on
      which the Closing actually takes place is referred to as the "Closing
      Date."

     

    (ii) Purchase
      Price. The
      aggregate purchase price for the Notes to be purchased
      by each Buyer at the Closing or a Subsequent Closing (as defined below), as
      the
      case
      may be, (the "Purchase
      Price"), shall
      be
      the amount set forth opposite such Buyer's
      name in column (3) of the Schedule of Buyers.

     

    (c) Form
      of Payment. On
      the
      Closing Date, (i) upon receipt of the Joint Written Directions
      (as defined in the Escrow Agreement), the Escrow Agent shall deliver each
      Buyer’s Purchase
      Price to the Company or designated third parties for the Notes to be issued
      and
      sold to such
      Buyer at the Closing by wire transfer of immediately available funds in
      accordance with such
      Joint Written Directions, and (ii) the Company shall deliver to each Buyer
      the
      Notes (in the principal
      amounts as such Buyer shall have requested prior to the Closing) which such
      Buyer is then
      purchasing, in each case duly executed on behalf of the Company and registered
      in the name
      of
      such Buyer or its permitted designee.

     

    (d) Subsequent
      Closing. Subject
      to the terms and conditions of this Agreement, after the Closing and at any
      time
      on or prior to thirty (30) days following the Closing, at a subsequent
closing
      (a “Subsequent
      Closing”), the
      Company may issue and sell to one or more individuals and
      entities approved by the Company’s Board of Directors (each an “Additional
      Buyer” and
      collectively,
      the “Additional
      Buyers”) an
      aggregate principal amount of Notes up to an aggregate
      of $5,000,000, including all previously issued Notes, at the Purchase Price.
      All
Buyers
      at
      previous closings shall be given the option to rescinding their purchase of
      Notes and have
      their money returned by the Company or to have their Notes and other purchase
      documents amended
      to the terms set forth herein and in the Transaction Document contemplated
      hereby. At a
      Subsequent Closing the representations and warranties of the Company set forth
      in Section 3 hereof
      shall speak as of the date of the Subsequent Closing (subject to any updates
      to
      the Disclosure
      Schedules as may be made by the Company), and the representations and warranties
      of
      the
      Additional Buyers shall speak as of the date of the respective Subsequent
      Closing. At a Subsequent Closing, (i) each Additional Buyer and the Company
      shall execute a counterpart signature
      page hereto and to the relevant Transaction Documents, (ii) the Company shall
      cause the
      Schedule of Buyers hereto to be updated to reflect the purchases made by the
      Additional Buyers,
      (iii) each Additional Buyer shall become a “Buyer” hereunder and the Notes
      purchased by
      such
      Additional Buyer shall be deemed “Notes”, for purposes of this Agreement and the
      other Transaction
      Documents, and (iv) subject to the terms and conditions hereof, the Company
      will
deliver
      to each of the Additional Buyers purchasing Notes at a Subsequent Closing the
      applicable Notes
      registered in the name of such Additional Buyer, against payment to the Company
      of the Purchase
      Price therefor in cash by wire transfer, check or other method acceptable to
      the
Company.

    

    
      
        
        

        
        

      

      
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    2.BUYER'S
      REPRESENTATIONS AND WARRANTIES.

     

    As
      a
      material inducement to the Company to enter into this Agreement and sell the
      Notes hereunder,
      each Buyer represents and warrants to the Company with respect to only itself
      as
      of the
      date
      hereof that:

     

    (a) No
      Public Sale or Distribution. Such
      Buyer is acquiring the Notes for its own account and with the present intention
      of holding such securities for the purposes of investment, and
      not
      with a view towards, or for resale in connection with, the public sale or
      distribution thereof,
      except pursuant to sales registered or exempt from registration under the 1933
      Act; provided,
      however, that
      by
      making the representations herein, such Buyer does not agree to hold
any
      of
      the Securities for any minimum or other specific term and reserves the right
      to
      dispose of the
      Securities at any time in accordance with or pursuant to a registration
      statement or an exemption
      from registration under the 1933 Act. Such Buyer does not presently have any
      agreement or understanding, directly or indirectly, with any Person to
      distribute any of the Securities.

     

    (b) Accredited
      Investor Status. Such
      Buyer is an "accredited investor" as that term is defined
      in Rule 501(a) of Regulation D under the 1933 Act. Such Buyer is not a
      registered broker-dealer
      under Section 15 of the 1934 Act (as defined herein) or an entity engaged in
      the
      business of being a broker-dealer and is acquiring the Securities hereunder
      in
      the ordinary course of its business.

     

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

    

    
      
        
           

        

        
        

      

      
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    (d) Information.
      Such
      Buyer and its advisors, if any, have been furnished with all materials relating
      to the business, finances and operations of the Company and materials relating
      to the offer and sale of the Securities which have been requested by such Buyer.
      Such Buyer and its
      advisors, if any, have been afforded the opportunity to ask questions of the
      Company. Neither such
      inquiries nor any other due diligence investigations conducted by such Buyer
      or
      its advisors,
      if any, or its representatives shall modify, amend or affect such Buyer's right
      to rely on the
      Company's representations and warranties contained herein. Such Buyer
      understands that its investment
      in the Securities involves a high degree of risk. Such Buyer has sought such
      accounting,
      legal and tax advice as it has considered necessary to make an informed
      investment decision with respect to its acquisition of the
      Securities.

     

    (e) No
      Governmental Review. Such
      Buyer understands that no United States federal or
      state
      agency or any other government or governmental agency has passed on or made
      any
recommendation
      or endorsement of the Securities or the fairness or suitability of the
      investment in
      the
      Securities nor have such authorities passed upon or endorsed the merits of
      the
      offering of the Securities.

     

    (f) Transfer
      or Resale. Such
      Buyer understands that, except as provided for in the Registration
      Rights Agreement: (i) the Securities have not been and are not being registered
      under
      the
      1933 Act or any state securities laws, and may not be offered for sale, sold,
      assigned or transferred
      unless (A) subsequently registered thereunder, (B) such Buyer shall have
      delivered to the
      Company an opinion of counsel, in a form reasonably acceptable to the Company,
      to the effect
      that such Securities to be sold, assigned or transferred may be sold, assigned
      or transferred (1) pursuant to an exemption from such registration, or (2)
      pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act, as amended
      (or
      any successor rule thereto); (ii) any sale of the Securities
      made in reliance on Rule 144 or Rule 144A may be made only in accordance with
      the terms
      of
      Rule 144 or Rule 144A, respectively, and further, if neither Rule 144 nor Rule
      144A is applicable,
      any resale of the Securities under circumstances in which the seller (or the
      Person (as defined
      in Section 3(o) below) through whom the sale is made) may be deemed to be an
      underwriter (as that term is defined in the 1933 Act) may require compliance
      with some other exemption
      under the 1933 Act or the rules and regulations of the SEC thereunder; and
      (iii)
neither
      the Company nor any other Person is under any obligation to register the
      Securities under the
      1933
      Act or any state securities laws or to comply with the terms and conditions
      of
      any exemption thereunder. The Securities may be pledged in connection with
      a
      bona fide margin account or other loan or financing arrangement secured by
      the
      Securities and such pledge of Securities
      shall not be deemed to be a transfer, sale or assignment of the Securities
      hereunder, and
      no
      Buyer effecting a pledge of Securities shall be required to provide the Company
      with any notice thereof or otherwise make any delivery to the Company pursuant
      to this Agreement or any other
      Transaction Document (as defined in Section 3(b)), including, without
      limitation, this Section
      2(f).

     

    (g) Legends.
      Such
      Buyer understands that the certificates or other instruments representing
      the Notes and the stock certificates representing the Exchange Shares, except
      as
      set forth below, shall bear any legend as required by federal law and the "blue
      sky" laws of any state and
      a
      restrictive legend in substantially the following form (and a stop-transfer
      order may be placed
      against transfer of such stock certificates):

    

    
      
        
        

        
        

      

      
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    NEITHER
      THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
      THE
      SECURITIES INTO WHICH THESE SECURITIES ARE EXCHANGEABLE HAVE BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
      APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
      BE
      OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN
      THE
      ABSENCE OF (I) AN EFFECTIVE REGISTRATION STATEMENT
      FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (II) AN
      OPINION OF COUNSEL, IN A FORM
      REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER
      SAID ACT. NOTWITHSTANDING
      THE FOREGOING, THE SECURITIES MAY BE PLEDGED
      IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
      OTHER
      LOAN OR FINANCING ARRANGEMENT SECURED BY THE
      SECURITIES.

     

    The
      legend set forth above shall be removed and the Company shall issue a
      certificate without such
      legend to the holder of the Securities upon which it is stamped, if, unless
      otherwise required by
      federal or state securities laws, (i) such Securities are transferred through
      a
      registered resale under the 1933 Act, or (ii) in connection with a sale,
      assignment or other transfer, such holder provides
      the Company with an opinion of counsel, in a form reasonably acceptable to
      the
Company,
      to the effect that (A) such sale, assignment or transfer of the Securities
      may
      be made without
      registration under the applicable requirements of the 1933 Act, or (B) that
      the
      Securities can
      be
      sold, assigned or transferred pursuant to Rule 144.

     

    (h) Authorization;
      Enforcement; Validity. Such
      Buyer has the requisite power and authority
      to enter into and perform its obligations under this Agreement and each of
      the
      other Transaction
      Documents (as defined below) to which it is a party. This Agreement and each
      of
      the other
      Transaction Documents (as defined below) to which Buyer is a party has been
      duly
      and validly
      authorized, executed and delivered on behalf of such Buyer, and constitute
      the
      legal, valid
      and
      binding obligations of such Buyer enforceable against such Buyer in accordance
      with their
      respective terms, except as such enforceability may be limited by general
      principles of equity
      or
      to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
      and other similar
      laws relating to, or affecting generally, the enforcement of applicable
      creditors' rights and remedies.

     

    (i) No
      Conflicts. The
      execution, delivery and performance by such Buyer of this Agreement
      and the other Transaction Documents to which such Buyer is a party and the
      consummation by such Buyer of the transactions contemplated hereby and thereby
      will not (i) result in a violation of the organizational documents of such
      Buyer
      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 such Buyer is a party,
      or
      (iii) result
      in
      a violation of any law, rule, regulation, order, judgment or decree (including
      federal and state
      securities laws) applicable to such Buyer, except in the case of clauses (ii)
      and (iii) above, for
      such
      conflicts, defaults, rights or violations which would not, individually or
      in
      the aggregate, reasonably
      be expected to have a material adverse effect on the ability of such Buyer
      to
      perform its obligations hereunder.

    
      
        
           

        

        
        

      

      
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    (j) Residency.
      Such
      Buyer is a resident of that jurisdiction specified below its address
      on the Schedule of Buyers.

     

    (k) Independent
      Investment Decision. Such
      Buyer has independently evaluated the merits
      of
      its decision to purchase the Securities pursuant to the Transaction Documents,
      and such Buyer
      confirms that it has not relied on the advice of any other Buyers’ business
      and/or legal counsel in making such decision.

     

    (l) [Reserved]
      

     

    (m) General
      Solicitation. Such
      Buyer is not purchasing the Securities as a result of any advertisement,
      article, notice or other communication regarding the Securities published in
      any
      newspaper, magazine or similar media or broadcast over television or radio
      or
      presented at any seminar.

     

    (n)
      Organization;
      Authority. Such
      Buyer is an entity duly organized, validly existing and
      in
      good standing under the laws of the jurisdiction of its organization with the
      requisite corporate
      or partnership or other entity power and authority to enter into and to
      consummate the transactions
      contemplated by the Transaction Documents to which it shall be a party and
      otherwise
      to carry out its obligations thereunder.

     

    3.REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY.

     

    As
      a
      material inducement to each Buyer to enter into this Agreement and purchase
      the
Notes
      hereunder, the Company represents and warrants to each of the Buyers as of
      the
      date hereof
      that, except as set forth in the Disclosure Schedule attached hereto (the
      "Disclosure
      Schedule"):

     

    (a)
      Organization
      and Qualification. The
      Company is a corporation duly organized and
      validly existing in good standing under the laws of the jurisdiction in which
      it
      is formed, and has
      the
      requisite power and authority to own its properties and to carry on its business
      as now being
      conducted. The Company is duly qualified as a foreign entity to do business
      and
      is in good
      standing in every jurisdiction in which its ownership of property or 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.
      As
      used in this
      Agreement, "Material
      Adverse Effect" means
      any
      material adverse effect on the business, properties,
      assets, operations, results of operations, condition (financial or otherwise)
      or
      prospects of the Company, or on the transactions contemplated hereby and by
      the
      other Transaction
      Documents or by the agreements and instruments to be entered into in connection
      herewith or therewith, or on the authority or ability of the Company to perform
      its obligations under
      the
      Transaction Documents (as defined below). The Company has no
      subsidiaries.

     

    
      
        
        

      

      
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    (b) Authorization;
      Enforcement; Validity. Except
      as
      set forth in Schedule
      3(b), the
      Company
      has the requisite power and authority to enter into and perform its obligations
      under this
      Agreement, the Notes, the Security Documents, the Irrevocable Transfer Agent
      Instructions (in the form of Exhibit E annexed hereto), and each of the other
      agreements entered into by the Company
      in connection with the transactions contemplated by this Agreement
      (collectively, the "Transaction
      Documents") and
      to
      issue the Securities in accordance with the terms hereof and thereof.
      The execution and delivery of this Agreement and the other Transaction Documents
      by the
      Company and the issuance of the Notes has been, and the consummation by the
      Company of the
      transactions contemplated hereby and thereby, including, without limitation,
      the
      issuance of the Notes, the reservation for issuance and the issuance of the
      Exchange Shares issuable upon exchange of the Notes and the granting of a
      security interest in the Collateral (as defined in the Security
      Documents), will be prior to Closing, duly authorized by the Company's Board
      of
Directors
      and (other than (i) the filing of appropriate UCC financing statements with
      the
appropriate
      states and other authorities pursuant to the Security Agreement, and (ii) the
      filing of a
      Form D
      under Regulation D of the 1933 Act) no further filing, consent, or authorization
      is required
      by the Company, its Board of Directors or its stockholders. This Agreement
      and
      each of
      the
      other Transaction Documents of even date herewith has been duly executed and
      delivered by the Company and constitutes the legal, valid and binding obligation
      of the Company enforceable
      against the Company in accordance with its terms, except as such enforceability
      may be
      limited by general principles of equity or to applicable bankruptcy, insolvency,
      reorganization,
      moratorium, liquidation and other similar laws relating to, or affecting
      generally, the
      enforcement of applicable creditors' rights and remedies.

     

    (c) Issuance
      of Securities. The
      Notes
      are duly authorized and are free from all taxes, liens
      and
      charges with respect to the issue thereof. A number of shares of Common Stock
      has been
      duly
      authorized and reserved for issuance which equals 200% of the maximum number
      of
shares
      Common Stock issuable upon exchange of the Notes. Upon exchange in accordance
      with the
      Notes, the Exchange Shares will be validly issued, fully paid and nonassessable
      and free from all preemptive or similar rights, taxes, liens and charges with
      respect to the issue thereof, with the holders being entitled to all rights
      accorded to a holder of Common Stock. Assuming the
      truth
      and accuracy of the Buyers’ representations and warranties in this Agreement,
      the offer to
      the
      Buyers and issuance by the Company of the Securities is exempt from registration
      under the
      1933
      Act.

     

    (d)
      No
      Conflicts. The
      execution, delivery and performance of this Agreement and the other
      Transaction Documents by the Company and the consummation by the Company of
      the
      transactions contemplated hereby and thereby (including, without limitation,
      the
      issuance of the Notes,
      the granting of a security interest in the Collateral and, reservation for
      issuance and issuance
      of the Exchange Shares) will not (i) result in a violation of its Certificate
      of
Incorporation,
      any capital stock or bylaws of the Company (provided that it will not be a
      breach of this subsection until a judgment against the Company is obtained)
      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 is a party,
      or
      (iii) assuming
      the truth and accuracy of the Buyers’ representations and warranties in this
      Agreement, result
      in
      a violation of any law, rule, regulation, order, judgment or decree (including
      federal and state
      securities laws applicable to the Company or by which any property or asset
      of
      the Company is bound or affected) except, in the cases of clause (ii) and (iii)
      above, for such conflicts,
      defaults, rights or violations which would not, individually or in the
      aggregate, reasonably be expected to have a Material Adverse
      Effect.

     

    
      
        
        

        
        

      

      
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    (e) Consents.
      The
      Company is not required to obtain any consent, authorization or order
      of,
      or make any filing or registration with, any court, governmental agency or
      any
regulatory
      or self-regulatory agency or any other Person in order for it to execute,
      deliver or perform
      any of its obligations under or contemplated by this Agreement or the other
      Transaction Documents,
      in each case 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 Closing
      Date, and the Company
      is unaware of any facts or circumstances which might prevent the Company from
      obtaining
      or effecting any of the registration, application or filings pursuant to the
      preceding sentence.

     

    (f) Acknowledgment
      Regarding Buyer's Purchase of Securities. The
      Company acknowledges and agrees that each Buyer is acting solely in the capacity
      of an arm's length purchaser
      with respect to this Agreement and the other Transaction Documents and the
      transactions
      contemplated hereby and thereby, and that no Buyer is (i) an officer or director
      of the
      Company, (ii) to the knowledge of the Company, an "affiliate" of the Company
      (as
      defined in Rule
      144,
      an "Affiliate")
      or
      (iii)
      to the knowledge of the Company, a "beneficial owner" of more than
      10%
      of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the
      Securities
      Exchange Act of 1934, as amended (the "1934
      Act")). The
      Company further acknowledges
      that no Buyer is acting as a financial advisor or fiduciary of the Company
      (or
      in any
      similar capacity) with respect to this Agreement and the other Transaction
      Documents and the
      transactions contemplated hereby and thereby, and any advice given by a Buyer
      or
      any of its representatives
      or agents in connection with this Agreement and the other Transaction
Documents
      and the transactions contemplated hereby and thereby is merely incidental to
      such Buyer's purchase of the Securities. The Company further represents to
      each
      Buyer that the Company’s decision to enter into the Transaction Documents has
      been based solely on the independent evaluation by the Company and its
      representatives.

     

    (g)
      No
      General Solicitation. None
      of
      the Company, its Affiliates, nor, to the Company’s
      knowledge, 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) in
      connection with the offer or sale of the Securities. The Company shall be
      responsible for the payment of any placement agent’s fees, financial advisory
      fees, consultancy fees or brokers’ commissions (other
      than for persons engaged by any Buyer or its investment advisor) relating to
      or
      arising out of
      the
      transactions contemplated hereby. The Company shall pay, and hold each Buyer
      harmless against,
      any liability, loss or expense (including, without limitation, reasonable
      attorney’s fees and
      out-of-pocket expenses) arising in connection with any such claim (including
      any
      claim from the Consultant (as defined below)). The Company acknowledges that
      it
      has engaged a consultant as
      set
      out in Schedule 3(g) (the “Consultant”)
      in
      connection with the sale of the Securities. Other
      than the Consultant, the Company has not engaged any placement agent, consultant
      or other
      agent in connection with the sale of the Securities.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

     

     

    (h) No
      Integrated Offering. None
      of
      the Company, its respective Affiliates nor any Person acting on its or their
      behalf has, directly or indirectly, made any offers or sales of any security,
      or
      solicited any offers to buy any security, under circumstances that would require
      registration
      of any of the Securities under the 1933 Act or cause this offering of the
      Securities to be
      integrated with prior offerings by the Company for purposes of the 1933 Act
      or
      any applicable stockholder
      approval provisions, including, without limitation, under the rules and
      regulations of any
      exchange or automated quotation system on which any of the securities of the
      Company are listed
      or
      designated. None of the Company, its Affiliates or any Person acting on its
      or
      their behalf
      will take any action or steps referred to in the preceding sentence that would
      require registration
      of any of the Securities under the 1933 Act or cause the offering of the
      Securities to be
      integrated with other offerings in a manner that would require such
      registration.

     

    (i) Dilutive
      Effect. The
      Company understands and acknowledges that the number of Exchange
      Shares issuable upon exchange of the Notes will increase in certain
      circumstances. The
      Company further acknowledges that its obligation to issue Exchange Shares upon
      exchange of
      the
      Notes in accordance with this Agreement and the Notes in accordance with this
      Agreement,
      is absolute and unconditional regardless of the dilutive effect that such
      issuance may have
      on
      the ownership interests of other stockholders of the Company.

     

    (j) Financial
      Statements. Except
      as
      disclosed in Schedule
      3(j), the
      financial statements
      of the Company annexed hereto as Schedule 3(j), were 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).
      The Company does not have any material liability other than as set forth in
      the
financial
      statements, incurred in the ordinary course of business, or as set forth on
      Schedule 3(j).

     

    (k) Conduct
      of Business; Regulatory Permits. Except
      as
      set forth in Schedule
      3(k), the
      Company (i) is not in violation of any term of or in default under its Articles
      of Incorporation or
      Bylaws
      or (ii) is not in violation of any judgment, decree or order or any law,
      statute, ordinance,
      rule or regulation applicable to the Company. The Company possesses all
certificates,
      authorizations and permits issued by the appropriate regulatory authorities
      necessary to conduct its business, except where the failure to possess such
      certificates, authorizations or permits would not have, individually or in
      the
      aggregate, a Material Adverse Effect, and the Company
      has not received any written notice of proceedings relating to the revocation
      or
modification
      of any such certificate, authorization or permit.

     

    (l) Foreign
      Corrupt Practices. None
      of
      the Company, nor, to the knowledge of the Company,
      any director, officer, agent, or employee, in the course of its actions for,
      or
      on behalf of,
      the
      Company (i) used any corporate funds for any unlawful contribution, gift,
      entertainment or
      other
      unlawful expenses relating to political activity; (ii) made any direct or
      indirect unlawful payment to any foreign or domestic government official or
      employee from corporate funds of the Company;
      (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt
      Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate,
      payoff, influence payment, kickback
      or other unlawful payment to any foreign or domestic government official or
      employee.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (m) Transactions
      With Affiliates. Other
      than the transactions disclosed on Schedule
      3(m), none
      of
      the officers, directors or employees of the Company is presently a party to
      any
transaction
      with the Company (other than for ordinary course services as employees, officers
      or directors),
      including any contract, agreement, loans or other arrangement providing for
      the
furnishing
      of services to or by, providing for rental of real or personal property to
      or
      from, including
      obligations to pay back pay, salaries, bonuses, etc. or otherwise requiring
      payments to or from any such officer, director or employee or, to the knowledge
      of the Company, any corporation, partnership, trust or other entity in which
      any
      such officer, director, or employee has a substantial interest or is an officer,
      director, trustee or partner.

     

    (n) Equity
      Capitalization. As
      of
      immediately prior to Closing, the authorized capital stock
      of
      the Company consists of (i) 48 million shares of Common Stock, of which as
      of
      the date hereof,
      8,417,200 shares are issued and outstanding, and (ii) 36 million shares of
      Preferred Stock,
      of
      which as of the date hereof (A) 12 million are classified as Series A Preferred
      Stock, of which
      as
      of the date hereof, 9,440,200 are issued and outstanding and (B) 24 million
      are
classified
      as Series B Preferred Stock, of which as of the date hereof 10,414,653.9423
      are
      issued and
      outstanding. All currently issued and outstanding shares of Common Stock have
      been, or upon
      issuance will be, validly issued and are fully paid and nonassessable. Except
      as
      disclosed herein or as disclosed in Schedule
      3(n): (i)
      none
      of the Company's capital stock is subject to preemptive rights or any other
      similar rights or any liens or encumbrances suffered or permitted by
      the
      Company; (ii) there are no outstanding options, warrants, scrip, rights to
      subscribe to, calls
      or
      commitments of any character whatsoever relating to, or securities or rights
      convertible into, or exercisable or exchangeable for, any capital stock of
      the
      Company, or contracts, commitments,
      understandings or arrangements by which the Company is or may become bound
      to
      issue
      additional capital stock of the Company or options, warrants, scrip, rights
      to
      subscribe to,
      calls
      or commitments of any character whatsoever relating to, or securities or rights
      convertible
      into, or exercisable or exchangeable for, any capital stock of the Company;
      (iii) there are
      no
      outstanding debt securities, notes, credit or loan agreements, credit facilities
      or other agreements,
      documents or instruments evidencing Indebtedness (as defined below) of the
      Company
      or by which the Company is bound or may be affected; (iv) there are no financing
      statements
      securing obligations in any material amounts, either singly or in the aggregate,
      filed in connection
      with the Company; (v) there are no agreements or arrangements under which the
      Company is obligated to register the sale of any of their securities under
      the
      1933 Act; (vi) there are no outstanding securities or instruments of the Company
      which contain any redemption or similar provisions, and there are no contracts,
      commitments, understandings or arrangements by which
      the
      Company is or may become bound to purchase, repurchase, retire or redeem a
      security of
      the
      Company; (vii) there are no securities or instruments containing anti-dilution
      or similar provisions
      or reset provisions that will be triggered by the issuance of the Securities;
      and (viii) the
      Company does not have any stock appreciation rights or "phantom stock" plans
      or
agreements
      or any similar plan or agreement. The Company has furnished to the Buyer true,
      correct
      and complete copies of the Company's Articles of Incorporation, as amended
      and
      as in effect on the date hereof (the "Articles
      of Incorporation"), and
      the
      Company's Bylaws, as amended and as in effect on the date hereof (the
      "Bylaws"),
      and
      the
      terms of all securities convertible
      into, or exercisable or exchangeable for, shares of Common Stock and the
      material rights
      of
      the holders thereof.

    

    
      
        
        

        
        

      

      
        10

        
          

        

      

      
        
        

        
        

      

    

     

    (o)
      Indebtedness
      and Other Contracts. Except
      as
      disclosed in Schedule
      3(o), the
      Company
      (i) has no outstanding Indebtedness (as defined below), (ii) is not a party
      to
      any contract,
      agreement or instrument, the violation of which, or default under which, by
      the
      other party(ies)
      to such contract, agreement or instrument would result in a Material Adverse
      Effect, (iii)
      is
      not in violation of any term of or in default under any contract, agreement
      or
      instrument relating to any Indebtedness, except where such violations and
      defaults would not result, individually
      or in the aggregate, in a Material Adverse Effect, or (iv) is not a party to
      any
contract,
      agreement or instrument relating to any Indebtedness, the performance of which,
      in the judgment
      of the Company's officers, has or is expected to have a Material Adverse Effect.
      Schedule
      3(p) provides
      a detailed description of the material terms of any such outstanding
Indebtedness.
      For purposes of this Agreement: (x) "Indebtedness"
      of
      any
      Person means, without
      duplication (A) all indebtedness for borrowed money, (B) all obligations issued,
      undertaken
      or assumed as the deferred purchase price of property or services including
      (without limitation)
      "Capital Leases" in accordance with generally accepted accounting principles
      (other than
      trade payables entered into in the ordinary course of business), (C) all
      reimbursement or payment obligations with respect to letters of credit, surety
      bonds and other similar instruments, (D) all obligations evidenced by notes,
      bonds, debentures or similar instruments, including obligations
      so evidenced incurred in connection with the acquisition of property, assets
      or
businesses,
      (E) all indebtedness created or arising under any conditional sale or other
      title retention
      agreement, or incurred as financing, in either case with respect to any property
      or assets acquired
      with the proceeds of such indebtedness (even though the rights and remedies
      of
      the seller
      or
      bank under such agreement in the event of default are limited to repossession
      or
      sale of such
      property), (F) all monetary obligations under any leasing or similar arrangement
      which, in connection
      with generally accepted accounting principles, consistently applied for the
      periods covered thereby, is classified as a capital lease, (G) all indebtedness
      referred to in clauses (A) through
      (F) above secured by (or for which the holder of such Indebtedness has an
      existing right, contingent
      or otherwise, to be secured by) any mortgage, lien, pledge, charge, security
      interest or other
      encumbrance upon or in any property or assets (including accounts and contract
      rights) owned
      by
      any Person, even though the Person which owns such assets or property has not
      assumed
      or become liable for the payment of such indebtedness, and (H) all Contingent
      Obligations
      in respect of indebtedness or obligations of others of the kinds referred to
      in
      clauses (A)
      through (G) above; (y) "Contingent
      Obligation" means,
      as
      to any Person, any direct or indirect
      liability, contingent or otherwise, of that Person with respect to any
      indebtedness, lease, dividend
      or other obligation of another Person if the primary purpose or intent of the
      Person incurring
      such liability, or the primary effect thereof, is to provide assurance to the
      obligee of such
      liability that such liability will be paid or discharged, or that any agreements
      relating thereto will be complied with, or that the holders of such liability
      will be protected (in whole or in part) against loss with respect thereto;
      and
      (z) "Person"
      means
      an
      individual, a limited liability company,
      a partnership, a joint venture, a corporation, a trust, an unincorporated
      organization and
      a
      government or any department or agency thereof.

    

    
      
        
        

        
        

      

      
        11

        
          

        

      

      
        
        

        
        

      

    

     

    (p) Absence
      of Litigation. There
      is
      no action, suit, proceeding, inquiry or investigation before or by any court,
      public board, government agency, self-regulatory organization
      or body pending or, to the knowledge of the Company, threatened against or
      affecting the Company, the Common Stock or any of the or any of the Company's
      officers or directors, except as set forth in Schedule
      3(p).

     

    (q) Insurance.
      The
      Company is insured by insurers of recognized financial responsibility
      against such losses and risks and in such amounts as management of the Company
      believes
      to be prudent and customary in the businesses in which the Company is engaged.
      The Company has not, within the past two (2) years, been refused any insurance
      coverage sought or applied for.

     

    (r)Employee
      Relations.

     

    (i) The
      Company is not a party to any collective bargaining agreement and does
not
      employ any member of a union. Except as disclosed in Schedule 3(r), no executive
      officer of the
      Company (as defined in Rule 501(f) of the 1933 Act) has notified the Company
      that such officer
      intends to leave the Company or otherwise terminate such officer's employment
      with the Company.
      No executive officer of the Company, to the knowledge of the Company, is in
      violation
      of any material term of any employment contract, confidentiality, disclosure
      or
proprietary
      information agreement, non-competition agreement, or any other contract or
      agreement
      or any restrictive covenant, and the continued employment of each such executive
      officer
      does not subject the Company to any liability with respect to any of the
      foregoing matters.

     

    (ii) The
      Company is in compliance with all federal, state, local and foreign laws
and
      regulations respecting labor, employment and employment practices and benefits,
      terms and conditions
      of employment and wages and hours, except where failure to be in compliance
      would not,
      either individually or in the aggregate, reasonably be expected to result in
      a
      Material Adverse
      Effect.

     

    (s)
      Title.
      Except
      as
      disclosed in Schedule
      3(s), the
      Company has good and marketable
      title in fee simple to all real property owned by it and good and marketable
      title to all personal
      property owned by it which is, in each case, material to the business of the
      Company, free
      and
      clear of all liens, encumbrances and defects except such as do not materially
      affect the value
      of
      such property and do not interfere with the use made and proposed to be made
      of
      such property by the Company. Any real property and facilities held under lease
      by the Company is 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 facilities by the Company.

     

    (t)
      Intellectual
      Property Rights. The
      Company owns or possesses adequate rights or licenses
      to use all trademarks, trade names, service marks, service mark registrations,
      service names, patents, patent rights, copyrights, inventions, licenses,
      approvals, governmental authorizations,
      trade secrets and other intellectual property rights necessary to conduct its
      business
      as now conducted and as proposed to be conducted ("Intellectual
      Property Rights"), provided,
      that
      the
      representation in this sentence shall not apply to mechanical publishing rights.
      Except
      as
      set forth in Schedule
      3(t), none
      of
      the Company's Intellectual Property Rights have expired
      or terminated, or are expected to expire or terminate, within three years from
      the date of this
      Agreement. The Company does not have any knowledge of any infringement by the
      Company
      of Intellectual Property Rights of others. There is no claim, action or
      proceeding being made
      or
      brought or, to the knowledge of the Company, being threatened, against the
      Company regarding its Intellectual Property Rights. The Company (x) is unaware
      of any facts or circumstances
      which might give rise to any of the foregoing infringements or claims, actions
      or proceeding,
      except as set forth in the proviso to the first sentence of this Section and
      (y)
      has taken
      reasonable security measures to protect the secrecy, confidentiality and value
      of all of its Intellectual Property Rights.

    

    
      
        
        

        
        

      

      
        12

        
          

        

      

      
        
        

        
        

      

    

     

    (u) Environmental
      Laws. The
      Company (i) is in compliance with any and all Environmental Laws (as hereinafter
      defined), (ii) has received all permits, licenses or other approvals required
      of
      them under applicable Environmental Laws to conduct its respective businesses
      and (iii) is in compliance with all terms and conditions of any such permit,
      license or approval
      where, in each of the foregoing clauses (i), (ii) and (iii), the failure to
      so
      comply could be
      reasonably expected to have, individually or in the aggregate, a Material
      Adverse Effect. The term
      "Environmental
      Laws" means
      all
      federal, state, local or foreign laws relating to pollution or
      protection of human health or the environment (including, without limitation,
      ambient air, surface
      water, groundwater, land surface or subsurface strata), including, without
      limitation, laws relating
      to emissions, discharges, releases or threatened releases of chemicals,
      pollutants, contaminants, or toxic or hazardous substances or wastes
      (collectively, "Hazardous
      Materials") into
      the
      environment, or otherwise relating to the manufacture, processing, distribution,
      use, treatment, storage, disposal, transport or handling of Hazardous Materials,
      as well as all authorizations,
      codes, decrees, demands or demand letters, injunctions, judgments, licenses,
      notices
      or notice letters, orders, permits, plans or regulations issued, entered,
      promulgated or approved thereunder.

     

    (v) Investment
      Company. The
      Company is not, and is not an Affiliate of, an "investment
      company" within the meaning of the Investment Company Act of 1940, as
      amended.

     

    (w)
      Tax
      Status. Except
      as
      disclosed on Schedule
      3(w), the
      Company (i) has made or filed
      all
      foreign, federal and state income and all other tax returns, reports and
      declarations required
      by any jurisdiction to which it is subject, (ii) 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 (iii)
      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. Except as
      disclosed on Schedule
      3(w), 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. Except as disclosed on Schedule
      3(w), no
      liens
      have been filed and no claims are being asserted by or against
      the Company with respect to any taxes (other than liens for taxes not yet due
      and payable).
      The Company has not received notice of assessment or proposed assessment of
      any
taxes
      of
      a material amount claimed to be owed by it or any other Person on its behalf.
      Except as disclosed on Schedule
      3(w), the
      Company is not a party to any tax sharing or tax indemnity agreement
      or any other agreement of a similar nature that remains in effect. Except as
      disclosed on
      Schedule
      3(w), the
      Company has complied in all material respects with all applicable legal
requirements
      relating to the payment and withholding of taxes and, within the time and in
      the
manner
      prescribed by law, has withheld from wages, fees and other payments and paid
      over to the
      proper governmental or regulatory authorities all amounts
      required.

    

    
      
        
        

        
        

      

      
        13

        
          

        

      

      
        
        

        
        

      

    

     

    (x) Ranking
      of Notes. Except
      as
      set forth on Schedule
      3(x), no
      Indebtedness of the Company
      is senior to or ranks pari
      passu with
      the
      Notes in right of payment, whether with respect
      of payment of redemptions, interest, damages or upon liquidation or dissolution
      or otherwise.

     

    (y) Transfer
      Taxes. On
      the
      Closing Date, all stock transfer or other taxes (other than income
      or
      similar taxes) which are required to be paid in connection with the sale and
      transfer of the
      Securities to be sold to each Buyer hereunder will be, or will have been, fully
      paid or provided
      for by the Company, and all laws imposing such taxes will be or will have been
      complied
      with.

     

    (z)
      U.S.
      Real Property Holding Corporation. The
      Company is not, nor has ever been, a
      U.S.
      real property holding corporation within the meaning of Section 897 of the
      Internal Revenue
      Code of 1986, as amended, and the Company shall so certify upon Buyer's
      request.

     

    4.COVENANTS.

     

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

     

    (b) Form
      D
      and Blue Sky. The
      Company agrees to file a Form D with respect to the Securities
      as required under Regulation D and to provide a copy thereof to each Buyer
      promptly after
      such filing. The Company shall make all filings and reports relating to the
      offer and sale of the
      Securities required under applicable securities or “Blue Sky” laws of the states
      of the United States,
      whether before or after the Closing Date.

     

    (c)
      Reporting
      Status. After
      the
      date on which the Company is required to file periodic
      reports with the SEC pursuant to the 1934 Act and until the date on which the
      Holders shall
      have sold a sufficient number of shares such that, collectively, they own less
      than 5% of the total
      outstanding shares of common stock of the Company (the "Reporting
      Period"), the
      Company
      shall file all reports, schedules, forms, statements and other documents
      required to be filed
      by
      it with the SEC pursuant to the reporting requirements of the 1934 Act (all
      of
      the foregoing
      filed prior to the date hereof and all exhibits included therein and financial
      statements, notes
      and
      schedules thereto and documents incorporated by reference therein being
      hereinafter referred
      to as the "SEC
      Documents") and
      the
      Company shall not terminate its status as an issuer required
      to file reports under the 1934 Act even if the 1934 Act or the rules and
      regulations thereunder would otherwise permit such termination.

    

    
      
        
        

        
        

      

      
        14

        
          

        

      

      
        
        

        
        

      

    

    (d) Use
      of
      Proceeds. The
      Company will use the proceeds from the sale of the Securities
      as set forth on Schedule
      4(d).

     

    (e) Transfer
      Agent Instructions. The
      Company shall file a Form 10SB (or similar form)
      within 45 days following the Closing and shall use its best efforts to have
      it
      declared effective
      as soon as possible. Upon the earlier of effectiveness of such Form 1 0SB or
      sixty (60) days
      following its filing with the SEC, the Company shall employ the services of
      Continental Stock Transfer and Trust Co. as its designated transfer agent
(“Transfer
      Agent”) and
      execute and
      cause
      it to execute the Irrevocable Transfer Agent Instructions in substantially
      similar form to
      Exhibit
      E, attached
      hereto.

     

    (f) [
      Reserved. ]

     

    (g) Fees.
      The
      Company shall pay (i) to Gottbetter & Partners, LLP (“G&P”),
      an
      hourly
      fee for the preparation of the Transaction Documents; (ii) to G&P, $5,000
      plus its usual hourly
      rates for serving as escrow agent, and (iii) to Gottbetter Capital Finance,
      LLC., $10,000 for
      serving as Collateral Agent, all plus reasonable expenses which shall be
      withheld by such Buyer from its Purchase Price at the Closing. The Company
      shall
      be responsible for the payment of any placement agent's fees, financial advisory
      fees, consultancy fees or broker's commissions (other than for Persons engaged
      by any Buyer) relating to or arising out of the transactions contemplated
      by the Transaction Documents including, without limitation, any fees or
commission
      payable to the Consultant. The Company shall pay, and hold each Buyer harmless
      against,
      any liability, loss or expense (including, without limitation, reasonable
      attorney's fees and
      out-of-pocket expenses) arising in connection with any claim against a Buyer
      relating to any such
      payment. Except as otherwise set forth in the Transaction Documents, each party
      to this Agreement
      shall bear its own expenses in connection with the sale of the Securities to
      the
Buyers.

     

    (h) Pledge
      of Securities. The
      Company acknowledges and agrees that the Securities may
      be
      pledged by a Buyer in connection with a bona fide margin agreement or other
      loan
      or financing arrangement that is secured by the Securities. The pledge of
      Securities shall not be deemed to be a transfer, sale or assignment of the
      Securities hereunder, and no Buyer effecting a pledge
      of
      Securities shall be required to provide the Company with any notice thereof
      or
otherwise
      make any delivery to the Company pursuant to this Agreement or any other
Transaction
      Document, including, without limitation, Section 2(f) hereof; provided that
      a
      Buyer and
      its
      pledgee shall be required to comply with the provisions of Section 2(f) hereof
      in order to effect
      a
      sale, transfer or assignment of Securities to such pledgee. The Company hereby
      agrees to
      execute and deliver such documentation as a pledgee of the Securities may
      reasonably request in connection with a pledge of the Securities to such pledgee
      by a Buyer.

     

    (i) [
      Reserved. ] 

     

    (j)
      Restriction
      on Redemption and Cash Dividends. So
      long
      as any Notes are outstanding,
      the Company shall not, directly or indirectly, redeem, or declare or pay any
      cash dividend or distribution on, the Common Stock without the prior express
      written consent of the Required Holders (as defined in the Notes).

    

    
      
        
        

        
        

      

      
        15

        
          

        

      

      
        
        

        
        

      

    

    (k) Additional
      Notes; Variable Securities; Dilutive Issuances. So
      long
      as any Buyer beneficially
      owns any Securities, the Company will not issue any Notes (other than as
      contemplated hereby) and the Company shall not issue any other securities that
      would cause a breach
      or
      default under the Notes. For so long as any Notes remain outstanding, the
      Company shall
      not, in any manner, issue or sell any rights, warrants or options to subscribe
      for or purchase Common
      Stock or other securities directly or indirectly convertible into or
      exchangeable or exercisable for Common Stock at a price which varies or may
      vary
      with the market price of the Common
      Stock, including by way of one or more reset(s) to any fixed price unless the
      conversion,
      exchange or exercise price of any such security cannot be less than the then
      applicable Exchange Price (as defined in the Notes) with respect to the Common
      Stock into which any Note is exchangeable. For so long as any Notes remain
      outstanding, the Company shall
      not, in any manner, enter into or affect any Dilutive Issuance (as defined
      in
      the Notes) if the effect
      of
      such Dilutive Issuance is to cause the Company to be required to issue upon
      exchange of
      any
      Note any shares of Common Stock in excess of that number of shares of Common
      Stock which
      the
      Company has authorized and reserved for purposes of such exchanges or exercises
      or which the Company may issue upon exchange of the Notes.

     

    (l) Corporate
      Existence. So
      long
      as any Buyer beneficially owns any Securities, the Company shall not be party
      to
      any Fundamental Transaction (as defined in the Notes) unless the Company
      is in compliance with the applicable provisions governing Fundamental
      Transactions set
      forth
      in the Notes.

     

    (m) Reservation
      of Shares. So
      long
      as any Buyer owns any Securities, the Company shall take all action necessary
      to
      at all times have authorized, and reserved for the purpose of issuance,
      no less than 200% of the number of shares of Common Stock issuable upon exchange
      of
      all of
      the Notes then outstanding (without taking into account any limitations on
      the
      exchange of the Notes).

     

    (n) [
      Reserved. ]

     

    (o) Additional
      Issuances of Securities.

     

    (i) For
      purposes of this Section 4(o), the following definitions shall
      apply.

     

    (1) "Convertible
      Securities" means
      any
      stock or securities (other than Options)
      convertible into or exercisable or exchangeable for shares of Common
      Stock.

     

    (2) "Options"
      means
      any
      rights, warrants or options to subscribe for or
      purchase shares of Common Stock or Convertible Securities.

     

    (3) "Common
      Stock Equivalents" means,
      collectively, Options and

     

    Convertible
      Securities.

     

    (ii)
      From
      the date hereof until the date that is one year after the Company is
required
      to file reports with the SEC (the "Trigger
      Date"), and
      except with respect to any transaction
      described in Schedule
      4(o) or
      with
      respect to any issuance to an officer, director
      or employee pursuant to an employee or director stock incentive plan or with
      respect
      to an issuance of Excluded Securities (as defined in the Notes), the Company
      will not,
      directly or indirectly, offer, sell, grant any option to purchase, or otherwise
      dispose of (or announce any offer, sale, grant or any option to purchase or
      other disposition of) any
      of
      its equity or equity equivalent securities, including without limitation any
      debt, preferred
      stock or other instrument or security that is, at any time during its life
      and
      under any
      circumstances, convertible into or exchangeable or exercisable for shares of
      Common Stock
      or
      Common Stock Equivalents (any such offer, sale, grant, disposition or
announcement
      being referred to as a "Subsequent
      Placement"), unless
      the Company shall
      have complied with Section 4(o)(iii).

    

    
      
        
        

        
        

      

      
        16

        
          

        

      

      
        
        

        
        

      

    

     

    (iii)
      Prior to the Trigger Date, the Company will not, directly or indirectly,
effect
      any Subsequent Placement unless the Company shall have first complied with
      this
      Section 4(o)(iii).

     

    (1) The
      Company shall deliver to each Buyer who still holds Notes a written
      notice (the "Offer
      Notice") of
      any
      proposed or intended issuance or sale or
      exchange (the "Offer")
      of
      the
      securities being offered (the "Offered
      Securities")
      in
      a
      Subsequent Placement, which Offer Notice shall (w) identify and
      describe the Offered Securities, (x) describe the price and other terms upon
      which they are to be issued, sold or exchanged, and the number or amount of
      the
Offered
      Securities to be issued, sold or exchanged, (y) identify the persons or
entities
      (if known) to which or with which the Offered Securities are to be offered,
      issued, sold or exchanged and (z) offer to issue and sell to or exchange
with
      such
      Buyers all of the Offered Securities, allocated among such Buyers (a)
based
      on
      such Buyer's pro rata portion of the aggregate principal amount of Notes
purchased
      hereunder (the "Basic
      Amount"), and
      (b)
      with respect to each Buyer that
      elects to purchase its Basic Amount, any additional portion of the Offered
      Securities attributable to the Basic Amounts of other Buyers as such Buyer
      shall
      indicate it will purchase or acquire should the other Buyers subscribe for
      less
      than their Basic Amounts (the "Undersubscription
      Amount").

     

    (2) To
      accept
      an Offer, in whole or in part, such Buyer must deliver a written notice to
      the
      Company prior to the end of the tenth (10th)
      day
      after such Buyer's
      receipt of the Offer Notice (the "Offer
      Period"), setting
      forth the portion of
      such
      Buyer's Basic Amount that such Buyer elects to purchase and, if such Buyer
      shall
      elect to purchase all of its Basic Amount, the Undersubscription Amount,
      if any, that such Buyer elects to purchase (in either case, the "Notice
      of Acceptance").
      If
      the
      Basic Amounts subscribed for by all Buyers are less than the
      total
      of all of the Basic Amounts, then each Buyer who has set forth an Undersubscription
      Amount in its Notice of Acceptance shall be entitled to purchase,
      in addition to the Basic Amounts subscribed for, the Undersubscription Amount
      it
      has subscribed for; provided,
      however, that
      if
      the Undersubscription Amounts subscribed for exceed the difference between
      the
      total of all the Basic Amounts
      and the Basic Amounts subscribed for (the "Available
      Undersubscription
      Amount"), each
      Buyer who has subscribed for any Undersubscription
      Amount shall be entitled to purchase only that portion of the Available
      Undersubscription Amount as the Basic Amount of such Buyer bears to the
      total
      Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts,
      subject to rounding by the Company to the extent its deems reasonably
necessary.

    
      
        
        

        
        

      

      
        17

        
          

        

      

      
        
        

        
        

      

    

     

    (3) The
      Company shall have thirty (30) Business Days from the expiration
      of the Offer Period above to offer, issue, sell or exchange all or any
part
      of
      such Offered Securities as to which a Notice of Acceptance has not been
given
      by
      the Buyers (the "Refused
      Securities"), but
      only
      to the offerees described in
      the
      Offer Notice (if so described therein) or any investor introduced to the
Company
      by a placement agent described in the Offer Notice and only upon terms
and
      conditions (including, without limitation, unit prices and interest rates)
      that
are
      not
      more favorable to the acquiring person or persons or less favorable to the
      Company
      than those set forth in the Offer Notice.

     

    (4) In
      the
      event the Company shall propose to sell less than all the Refused
      Securities (any such sale to be in the manner and on the terms specified
in
      Section 4(o)(iii)(3) above), then each Buyer may, at its sole option and in
      its
      sole discretion, reduce the number or amount of the Offered Securities specified
      in
      its
      Notice of Acceptance to an amount that shall be not less than the number or
      amount of the Offered Securities that such Buyer elected to purchase pursuant
      to
Section
      4(o)(iii)(2) above multiplied by a fraction, (i) the numerator of which
shall
      be
      the number or amount of Offered Securities the Company actually proposes
      to issue, sell or exchange (including Offered Securities to be issued or
sold
      to
      Buyers pursuant to Section 4(o)(iii)(3) above prior to such reduction) and
      (ii)
      the
      denominator of which shall be the original amount of the Offered Securities.
      In the event that any Buyer so elects to reduce the number or amount
of
      Offered Securities specified in its Notice of Acceptance, the Company may not
      issue, sell or exchange more than the reduced number or amount of the Offered
      Securities
      unless and until such securities have again been offered to the Buyers
in
      accordance with Section 4(o)(iii)(1) above.

     

    (5) Upon
      the
      closing of the issuance, sale or exchange of all or less than all of the Refused
      Securities, the Buyers shall acquire from the Company, and
      the
      Company shall issue to the Buyers, the number or amount of Offered Securities
      specified in the Notices of Acceptance, as reduced pursuant to Section
4(o)(iii)(3)
      above if the Buyers have so elected, upon the terms and conditions specified
      in the Offer Notice. The purchase by the Buyers of any Offered Securities
      is subject in all cases to the preparation, execution and delivery by the
Company
      and the Buyers of a purchase agreement relating to such Offered Securities
      reasonably satisfactory in form and substance to the Buyers and their respective
      counsel and to the Company and its counsel.

     

    (6) Any
      Offered Securities not acquired by the Buyers or other persons in
      accordance with Section 4(o)(iii)(3) above may not be issued, sold or exchanged
      until they are again offered to the Buyers under the procedures specified
      in this Agreement.

    

    
      
        
        

        
        

      

      
        18

        
          

        

      

      
        
        

        
        

      

    

     

    (iv)
      The
      restrictions contained in subsections (ii) and (iii) of this Section 4(o)
shall
      not
      apply in connection with the issuance of any Excluded Securities (as defined
      in
      the Notes).

     

    (p) Additional
      Registration Statements. Until
      the
      Effective Date (as defined in the Registration
      Rights Agreement), the Company will not file a registration statement under
      the
1933
      Act
      relating to securities that are not the Securities.

     

    (q) No
      Short Position. For
      so
      long as the Notes remain outstanding, none of the

     

    Buyers
      or
      any of its Affiliates shall have an open short position in the Common
      Stock.

     

    (r) [reserved]

     

    (s) Transactions
      With Affiliates. So
      long
      as any Note is outstanding, the Company shall
      not
      enter into, amend, modify or supplement any agreement, transaction, commitment,
      or arrangement with any of its officers, directors, persons who were officers
      or
      directors as of the Issue
      Date, stockholders who beneficially own five percent (5%) or more of the Common
      Stock, or
      Affiliates (as defined below), or with any individual related by blood,
      marriage, or adoption to any
      such
      individual or with any entity in which any such entity or individual owns a
      five
      percent (5%)
      or
      more beneficial interest (each a "Related
      Party"), except
      (a) for customary employment arrangements
      and benefit programs on reasonable terms, or (b) relating to the transactions
      described
      in Schedule
      4(s). For
      purposes of this Section 4(s) only, "Affiliate" means, with respect
      to any person or entity, another person or entity that, directly or indirectly,
      (i) has a ten percent (10%) or more equity interest in that person or entity,
      (ii) has ten percent (10%) or more common ownership with that person or entity,
      (iii) controls that person or entity, or (iv) shares common
      control with that person or entity. "Control" or "controls" for purposes hereof
      means that
      a
      person or entity has the power, direct or indirect, to conduct or govern the
      policies of another
      person or entity.

     

    (t)
      Collateral
      Agent. 

     

    (i)
      Each
      Buyer hereby (a) appoints Gottbetter Capital Finance, LLC as the
      collateral agent hereunder and under the other Security Documents (in such
      capacity, the “Collateral
      Agent”), and
      (b)
      authorizes the Collateral Agent (and its officers, directors, employees
      and agents) to take such action on such Buyer’s behalf in accordance with the
      terms hereof and thereof. The Collateral Agent shall not have, by reason hereof
      or any of the other Security
      Documents, a fiduciary relationship in respect of any Buyer. Neither the
      Collateral Agent
      nor
      any of its officers, directors, employees and agents shall have any liability
      to
      any Buyer
      for
      any action taken or omitted to be taken in connection hereof or any other
      Security Document
      except to the extent caused by its own gross negligence or willful misconduct,
      and each
      Buyer agrees to defend, protect, indemnify and hold harmless the Collateral
      Agent and all of
      its
      officers, directors, employees and agents (collectively, the “Collateral
      Agent Indemnitees”)
      from
      and
      against any losses, damages, liabilities, obligations, penalties, actions,
      judgments,
      suits, fees, costs and expenses (including, without limitation, reasonable
      attorneys’ fees,
      costs and expenses) incurred by such Collateral Agent Indemnitee, whether
      direct, indirect or
      consequential, arising from or in connection with the performance by such
      Collateral Agent Indemnitee
      of the duties and obligations of Collateral Agent pursuant hereto or any of
      the
Security
      Documents.

    

    
      
        
        

        
        

      

      
        19

        
          

        

      

      
        
        

        
        

      

    

     

    (ii) The
      Collateral Agent shall be entitled to rely upon any written notices,
      statements, certificates, orders or other documents believed by it in good
      faith
      to be genuine and correct and to have been signed, sent or made by the proper
      Person, and with respect to
      all
      matters pertaining to this Agreement or any of the other Transaction Documents
      and its duties
      hereunder or thereunder, upon advice of counsel selected by it.

     

    (iii) The
      Collateral Agent may resign from the performance of all its functions and duties
      hereunder and under the Notes and the Security Documents at any time by
giving
      at
      least ten (10) Business Days prior written notice to the Company and each holder
      of the Notes.
      Such resignation shall take effect upon the acceptance by a successor Collateral
      Agent of appointment
      as provided below. Upon any such notice of resignation, the holders of a
      majority of
      the
      outstanding principal under the Notes shall appoint a successor Collateral
      Agent. Upon the
      acceptance of the appointment as Collateral Agent, such successor Collateral
      Agent shall succeed to and become vested with all the rights, powers, privileges
      and duties of the retiring Collateral
      Agent, and the retiring Collateral Agent shall be discharged from its duties
      and
obligations
      under this Agreement, the Notes and the other Security Documents. After any
      Collateral
      Agent’s resignation hereunder, the provisions of this Section 4(t) shall inure
      to its benefit.
      If a successor Collateral Agent shall not have been so appointed within said
      ten
      (10) Business
      Day period, the retiring Collateral Agent shall then appoint a successor
      Collateral Agent
      who
      shall serve until such time, if any, as the holders of a majority of the
      outstanding principal under the Notes appoint a successor Collateral Agent
      as
      provided above.

     

    (u) Appointment
      of Directors. So
      long
      as any of the Notes remain outstanding or the original
      purchasers of the Notes beneficially own at least 5% of the Common Stock of
      the
Company,
      calculated in accordance with Section 13(d) of the 1934 Act and Regulation
      13D-G
      thereunder, the Required Holders (as defined in the Notes) shall have the right
      to nominate two individuals to the Company’s Board of Directors, the initial
      nominees being Scott A. Stagg and Amir Khan. The Company shall use its best
      efforts to cause such nominees to be elected to the Board
      of
      Directors of the Company. Such nominees agree to resign as directors when none
      of the
      Notes
      remain outstanding and the original purchasers of the Notes beneficially own
      less than 5%
      of the
      Common Stock of the Company calculated in accordance with Section 13(d) of
      the
1934
      Act
      and Regulation 13D-G thereunder.

     

    (v) Proxy
      and Voting. Buyers
      agree that in connection with meetings of stockholders,
      they shall grant the Company a proxy, on a pro rata basis based upon the total
      number
      of
      shares owned, to vote any shares owned by them in excess of 20%, collectively,
      of the total
      outstanding shares of voting stock of the Company.

     

    5. [
      Reserved. ]

     

    
      
        
        

        
        

      

      
        20

        
          

        

      

      
        
        

        
        

      

    

     

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

     

    The
      obligation of the Company hereunder to issue and sell the Notes to each Buyer
      and to otherwise
      cause the transactions contemplated by this Agreement to be consummated is
      subject to the satisfaction, at or before the Closing Date, of each of the
      following conditions, provided that
      these conditions are for the Company's sole benefit and may be waived by the
      Company at any time in its sole discretion by providing each Buyer with prior
      written notice thereof:

     

    (i) Such
      Buyer and each other Buyer shall have executed each of the Transaction
      Documents to which it is a party and delivered the same to the
      Company.

     

    (ii) Such
      Buyer and each other Buyer shall have delivered to the Company the Purchase
      Price less any amount withheld in satisfaction of the Company's obligations
      pursuant to Section 4(g) for the Notes being purchased by such Buyer at the
      Closing or Subsequent
      Closing by wire transfer of immediately available funds pursuant to the wire
      instructions
      provided by the Company.

     

    (iii) The
      representations and warranties of each Buyer shall be true and correct
with
      respect to those matters that are qualified by material adverse effect or by
      any
      other materiality
      standard and shall be true and correct in all material respects with respect
      to
all
      matters that are not so qualified, in each case as of the date hereof and as
      of
      the Closing
      Date as though made at that time (except to the extent any such representation
      or warranty
      expressly speaks as of an earlier date, in which case such representation and
      warranty
      shall be true and correct or true and correct in all material respects, as
      applicable,
      as of such earlier date), and each Buyer shall have performed, satisfied and
      complied in all material respects with the covenants, agreements and conditions
      required by the Transaction Documents to be performed, satisfied or complied
      with by such Buyer at or prior to the Closing Date.

     

    (iv) The
      Company shall have obtained all governmental, regulatory or third party
      consents and approvals, if any, necessary for the sale of the
      Securities.

     

    (v) No
      temporary restraining order, preliminary or permanent injunction or other order
      preventing the consummation of the transaction contemplated by this Agreement
      shall have been issued by any court of competent jurisdiction or other
government
      body and remain in effect, and there shall not be any legal requirement
enacted
      or deemed applicable to the transactions contemplated hereby that makes the
      consummation of such transactions illegal.

     

    (vi) Each
      Buyer shall have delivered to the Company such other documents relating
      to the transactions contemplated by this Agreement as the Company or its
counsel
      may reasonably request.

     

    7.
      CONDITIONS
      TO EACH BUYER'S OBLIGATION TO PURCHASE.

     

    The
      obligation of each Buyer hereunder to purchase the Notes at the Closing is
      subject to the
      satisfaction, at or before the Closing Date, of each of the following
      conditions, provided that these conditions are for each Buyer's sole benefit
      and
      may be waived by such Buyer at any time in
      its
      sole discretion by providing the Company with prior written notice
      thereof:

    

    
      
        
        

        
        

      

      
        21

        
          

        

      

      
        
        

        
        

      

    

     

    (i) The
      Company shall have executed and delivered to such Buyer (A) each of
      the
      Transaction Documents and (B) the Notes (in such principal amounts as such
      Buyer
      shall request) being purchased by such Buyer at the Closing pursuant to this
      Agreement;

     

    (ii) The
      Company shall have delivered to such Buyer a certificate, executed by the
      Corporate Secretary of the Company and dated as of the Closing Date, as to
      (i)
      the resolutions
      consistent with Section 3(b), including the election of Scott A. Stagg and
      Amir
      Khan
      to the Board of Directors of the Company in a form reasonably acceptable to
      such
      Buyer, (ii) the Certificate of Incorporation and (iii) the Bylaws, each as
      in
      effect at the
      Closing, in the form attached hereto as Exhibit
      F.

     

    (iii) The
      representations and warranties of the Company shall be true and correct
      in all material respects (other than representations and warranties that are
      already qualified
      by materiality or Material Adverse Effect which shall be true and correct in
      all
respects)
      as of the date when made and as of the Closing Date as though made at that
      time
      (except for representations and warranties that speak as of a specific date)
      and
      the Company
      shall have performed, satisfied and complied in all respects with the covenants,
      agreements
      and conditions required by the Transaction Documents to be performed, satisfied
      or complied with by the Company at or prior to the Closing Date. Such Buyer
      shall have received a certificate, executed by the Corporate Secretary of the
      Company, dated
      as
      of the Closing Date, to the foregoing effect and as to such other matters as
      may
be
      reasonably requested by such Buyer.

     

    (iv) The
      Company shall have obtained all governmental, regulatory or third party
      consents and approvals, if any, necessary for the sale of the
      Securities.

     

    (vii) The
      following persons shall have pledged and delivered the following number
      of
      shares of Common Stock or shares convertible into Common Stock as existing
      on
      or
      before February 14, 2007 to Gottbetter Capital Finance, LLC, as collateral
      agent
under
      one
      Pledge Agreement:

     

    
      	
              Julie
                Ackerman

            	
              120,000

            
	
              John
                Boehmer

            	
              120,000

            
	
              Bob
                Gordon

            	
              50,000

            
	
              Orville
                Hagler

            	
              200,000

            
	
              Christopher
                LoPresti

            	
              150,000

            
	
              Joseph
                T. Mohen

            	
              3,381,000

            

    

    

     

    (viii) Prior
      to
      Closing, the Company shall have delivered or caused to be delivered
      to each Buyer (A) true copies of UCC search results, listing all effective
      financing statements
      which name the Company as debtor filed in the prior five years to perfect an
      interest in
      any
      assets thereof, together with copies of such financing statements, none of
      which, except as otherwise
      agreed in writing by the Buyers, shall cover any Collateral (as defined in
      the
      Security

    

    
      
        
        

        
        

      

      
        22

        
          

        

      

      
        
        

        
        

      

    

    Documents)
      and the results of searches for any tax lien and judgment lien filed against
      the
      Company or its property, which results, except as otherwise agreed to in writing
      by the Buyers, shall not show any such Liens (as defined in the Security
      Documents).

     

    8. TERMINATION.

     

    This
      Agreement may be terminated prior to the Closing Date by mutual written consent
      of
      the
      Company and each Buyer. If this Agreement is terminated pursuant to this Section
      8, the Company
      shall remain obligated to reimburse the non-breaching Buyers for the expenses
      described
      in Section 4(g) above.

     

    9. MISCELLANEOUS.

     

    (a) Governing
      Law; Jurisdiction; Jury Trial. All
      questions concerning the construction,
      validity, enforcement and interpretation of this Agreement shall be governed
      by
      the internal
      laws of the State of New York, without giving effect to any choice of law or
      conflict of law provision or rule (whether of the State of New York or any
      other
      jurisdictions) that would cause
      the
      application of the laws of any jurisdictions other than the State of New York.
      Each party hereby irrevocably submits to the exclusive jurisdiction of the
      state
      and federal courts sitting
      in The City of New York, Borough of Manhattan, 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.
      Nothing contained
      herein shall be deemed to limit in any way any right to serve process in any
      manner permitted by law. 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 WITH OR ARISING OUT OF THIS AGREEMENT
      OR ANY TRANSACTION CONTEMPLATED HEREBY.

     

    (b) Counterparts.
      This
      Agreement may be executed in two or more identical counterparts, all of which
      shall be considered one and the same agreement and shall become effective when
      counterparts have been signed by each party and delivered to the other party;
      provided that a facsimile signature shall be considered due execution and shall
      be binding upon the signatory thereto with the same force and effect as if
      the
      signature were an original, not a facsimile signature.

     

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

     

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

    

    
      
        
        

        
        

      

      
        23

        
          

        

      

      
        
        

        
        

      

    

     

    (e) Entire
      Agreement; Amendments. This
      Agreement and the other Transaction Documents
      supersede all other prior oral or written agreements between the Buyers, the
      Company,
      their Affiliates and Persons acting on their behalf with respect to the matters
      discussed herein,
      and this Agreement, the other Transaction Documents and the instruments
      referenced herein and therein contain the entire understanding of the parties
      with respect to the matters covered herein and therein and, except as
      specifically set forth herein or therein, neither the Company
      nor any Buyer makes any representation, warranty, covenant or undertaking with
      respect
      to such matters. No provision of this Agreement may be amended other than by
      an
      instrument in writing signed by the Company and the Required Holders, and any
      amendment to this
      Agreement made in conformity with the provisions of this Section 9(e) shall
      be
      binding on all
      Buyers and holders of securities, as applicable. No provision hereof may be
      waived other than
      by
      an instrument in writing signed by the party against whom enforcement is sought.
      No such
      amendment shall be effective to the extent that it applies to less than all
      of
      the holders of the applicable
      Securities then outstanding. 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 the
      Transaction Documents
      unless the same consideration also is offered to all of the parties to the
      Transaction Documents,
      holders of Notes. The Company has not, directly or indirectly, made any
agreements
      with any Buyers relating to the terms or conditions of the transactions
      contemplated by the Transaction Documents except as set forth in the Transaction
      Documents.

     

    (f) Notices.
      Any
      notices, consents, waivers or other communications required or permitted
      to be given under the terms of this Agreement must be in writing and will be
      deemed to
      have
      been delivered: (i) upon receipt, when delivered personally; (ii) upon 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
      an
      overnight courier 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:

    Mohen,
      Inc. d/b/a Spiral Frog

    95
      Morton
      Street

    Ground
      Fl.

    New
      York,
      NY 10014

    Attention: Chief
      Executive Officer

    With
      a
      copy to: 

    Gottbetter
      & Partners, LLP

    488
      Madison Avenue, New
      York,
      NY 10022

    Attention: D.
      Morgan
      Burkett, Esq.

    Telephone: (212)
      400-6900

    Facsimile: (212)
      400-6901

     

    If
      to a
      Buyer, to its address and facsimile number set forth on the Schedule of Buyers,
      with copies to such Buyer's representatives as set forth
      on
      the Schedule of Buyers

    
      
        
        

        
        

      

      
        24

        
          

        

      

      
        
        

        
        

      

    

     

    If
      to the
      Collateral Agent:

    Gottbetter
      Capital Finance, LLC 

    488
      Madison Avenue 12th
      Floor

    New
      York,
      New York 10022

    Attention: Jason
      M.
      Rimland

    Telephone: (212)
      400-6990

    Facsimile: (212)
      400-6999

     

    or
      to
      such other address and/or facsimile number and/or to the attention of such
      other
      Person as the
      recipient party has specified by written notice given to each other party five
      (5) 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 an overnight
      courier service
      shall be rebuttable evidence of personal service, receipt by facsimile or
      receipt from an overnight courier service in accordance with clause (i), (ii)
      or
      (iii) above, respectively.

     

    (g) Successors
      and Assigns. This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective successors and assigns, including any purchasers of the Notes.
      The Company shall not assign this Agreement or any rights or obligations
      hereunder without
      the prior written consent of the Required Holders (unless the Company is in
      compliance with
      the
      applicable provisions governing Fundamental Transactions set forth in the
      Notes). A Buyer
      may
      assign some or all of its rights hereunder without the consent of the Company,
      in which
      event such assignee shall be deemed to be a Buyer hereunder with respect to
      such
assigned
      rights; provided that such assignee agrees in writing to be bound by all of
      the
      provisions contained
      herein.

     

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

     

    (i) Survival.
      Unless
      this Agreement is terminated under Section 8, (x) the representations
      and warranties of the Buyers contained in Section 2, (y) the representations
      and
warranties
      of the Company contained in Section 3, and (z) the covenants and agreements
      of
      the parties contained in Sections 4 and 9 shall survive for so long as any
      of
      the Notes remain outstanding
      or the original purchasers of the Notes beneficially own at least 5% of the
      Common Stock
      of
      the Company, calculated in accordance with Section 13(d) of the 1934 Act and
      Regulation 1 3D-G thereunder. Each Buyer shall be responsible for its own
      representations, warranties, agreements and covenants hereunder.

     

    (j) Further
      Assurances. Each
      party shall do and perform, or cause to be done and performed,
      all such further acts and things, and shall execute and deliver all such other
      agreements,
      certificates, instruments and documents, as any 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.

    
      
        
        

        
        

      

      
        25

        
          

        

      

      
        
        

        
        

      

    

     

    (k) Indemnification.
      In
      consideration of each Buyer’s execution and delivery of the Transaction
      Documents and acquiring the Securities thereunder, and in addition to all of
      the
Company’s
      other obligations under the Transaction Documents, the Company shall defend,
      protect, indemnify and hold harmless each Buyer and all of their stockholders,
      partners, members,
      officers, directors, employees and direct or indirect investors and any of
      the
      foregoing Person’s
      agents or other representatives (including, without limitation, those retained
      in connection with the transactions contemplated by this Agreement)
      (collectively, the "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,
      and including
      reasonable attorneys' fees and disbursements (the "Indemnified
      Liabilities"), incurred
      by
      any
      Indemnitee 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 the Transaction Documents
      or any
      other
      certificate, instrument or document contemplated hereby or thereby, (b) any
      breach of any covenant, agreement or obligation of the Company contained in
      the
      Transaction Documents or any other certificate, instrument or document
      contemplated hereby or thereby or (c) any cause of
      action, suit or claim brought or made against such Indemnitee by a third party
      (including for these
      purposes a derivative action brought on behalf of the Company) and arising
      out
      of or resulting
      from (i) the execution, delivery, performance or enforcement of the Transaction
      Documents
      or any other certificate, instrument or document contemplated hereby or thereby,
      (ii) any
      transaction financed or to be financed in whole or in part, directly or
      indirectly, with the proceeds
      of the issuance of the Securities, or (iii) the status of such Buyer or holder
      of the Securities
      as an investor in the Company pursuant to the transactions contemplated by
      the
Transaction
      Documents. 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. Except as otherwise set forth herein, the mechanics and procedures with
      respect to
      the
      rights and obligations under this Section 9(k) shall be the same as those set
      forth in Section 6 of the Registration Rights Agreement.

     

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

     

    (m)
      Remedies.
      Each
      Buyer and each holder of the Securities shall have all rights and remedies
      set forth in the Transaction Documents and all rights and remedies which such
      holders have
      been
      granted at any time under any other agreement or contract and all of the rights
      which such holders have under any law. Any Person having any rights under any
      provision of this Agreement shall be entitled to enforce such rights
      specifically (without posting a bond or other security),
      to recover damages by reason of any breach of any provision of this Agreement
      and to exercise
      all other rights granted by law. Furthermore, the Company recognizes that in
      the
      event that it fails to perform, observe, or discharge any or all of its
      obligations under the Transaction Documents,
      any remedy at law may prove to be inadequate relief to the Buyers. The Companyt
      herefore agrees that the Buyers shall be entitled to seek temporary and
      permanent injunctive relief
      in
      any such case without the necessity of proving actual damages and without
      posting a bond
      or
      other security.

    

    
      
        
        

        
        

      

      
        26

        
          

        

      

      
        
        

        
        

      

    

     

    (n) Rescission
      and Withdrawal Right. Notwithstanding
      anything to the contrary contained
      in (and without limiting any similar provisions of) the Transaction Documents,
      whenever
      any Buyer exercises a right, election, demand or option under a Transaction
      Document and
      the
      Company does not timely perform its related obligations within the periods
      therein provided,
      then such Buyer may rescind or withdraw, in its sole discretion from time to
      time upon written
      notice to the Company, any relevant notice, demand or election in whole or
      in
      part without
      prejudice to its future actions and rights.

     

    (o) Payment
      Set Aside. To
      the
      extent that the Company makes a payment or payments
      to the Buyers hereunder or pursuant to any of the other Transaction Documents
      or
      the Buyers
      enforce or exercise their rights hereunder or thereunder, and such payment
      or
      payments or
      the
      proceeds of such enforcement or exercise or any part thereof are subsequently
      invalidated, declared
      to be fraudulent or preferential, set aside, recovered from, disgorged by or
      are
      required to
      be
      refunded, repaid or otherwise restored to the Company, a trustee, receiver
      or
      any other Person
      under any law (including, without limitation, any bankruptcy law, foreign,
      state
      or federal law,
      common law or equitable cause of action), then to the extent of any such
      restoration the obligation or part thereof originally intended to be satisfied
      shall be revived and continued in full force and effect as if such payment
      had
      not been made or such enforcement or setoff had not occurred.

     

    (p) Independent
      Nature of Buyers' Obligations and Rights. The
      obligations of each Buyer
      under any Transaction Document are several and not joint with the obligations
      of
      any other
      Buyer, and no Buyer shall be responsible in any way for the performance of
      the
      obligations of
      any
      other Buyer under any Transaction Document. Nothing contained herein or in
      any
      other Transaction Document, and no action taken by any Buyer pursuant hereto
      or
      thereto, shall be deemed
      to
      constitute the Buyers as a partnership, an association, a joint venture or
      any
      other kind of
      entity, or create a presumption that the Buyers are in any way acting in concert
      or as a group with
      respect to such obligations or the transactions contemplated by the Transaction
      Documents and
      the
      Company acknowledges that to its knowledge the Buyers are not acting in concert
      or as a group, and the Company will not assert any such claim, with respect
      to
      such obligations or the transactions contemplated by the Transaction Documents.
      Each Buyer confirms that it has independently participated in the negotiation
      of
      the transaction contemplated hereby with the advice
      of
      its own counsel and advisors. Each Buyer shall be entitled to independently
      protect and enforce its rights, including, without limitation, the rights
      arising out of this Agreement or out
      of
      any other Transaction Documents, and it shall not be necessary for any other
      Buyer to be joined as an additional party in any proceeding for such
      purpose.

     

    (q) Litigation
      Expenses. In
      the
      event of any judgment of a court or arbitration body on
      any
      dispute hereunder or in connection herewith or with any transaction contemplated
      hereby or discussed herein that is not appealed within thirty (30) days of
      such
      judgment, the prevailing party
      in
      such judgment may recover its reasonable expenses in obtaining such judgment
      (including
      without limitation amounts paid in settlement, interest, court costs, costs
      of
investigators, fees and expenses of attorneys, accountants,
      financial advisors and other experts, and
      other
      expenses of litigation), provided that if such prevailing party prevails on
      several motions
      in the judgment and does not prevail on others, it shall be in the discretion
      of
      a court or arbitration
      body to determine what percentage of such reasonable expenses the prevailing
      party is
      entitled to receive.

     

     

    [Signature
      Page Follows]

    

    
      
        
        

        
        

      

      
        27

        
          

        

      

      
        
        

        
        

      

    

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

     

    
      	 	 	 
	 	MOHEN, INC.
	 
 	 
 	 
 
	
            	By:  	/s/ Orville
              Hagler
	 	
              
Orville
              Hagler
	 	Corporate
              Secretary

    

    

    
      
        
        

        
        

      

      
        28

        
          

        

      

      
        
        

        
        

      

    

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

     

    BUYERS:

     

    _______________________________________

    Name:

    _______________________________________

    Name:

    _______________________________________

    Name:

    _______________________________________

    Name:

    

    
      
        
        

        
        

      

      
        29

        
          

        

      

      
        
        

        
        

      

    

    SCHEDULE
      OF BUYERS

     

    
      	
              (1)

            	
              (2)

            	
              (3)

            	
              (4)

            
	 	 	 	
              Legal
                Representative’s

            
	 	
              Address
                and

            	
              Aggregate

            	
              Address
                and

            
	
              Buyer

            	
              Facsimile
                Number

            	
              Purchase
                Price

            	
              Facsimile
                Number

            
	
              Golden
                Den Corp.

            	
              RDR
                Group

            	
              50,000

            	 
	 	
              2000
                E. Winston Road

            	 	 
	 	
              Anaheim,
                CA 92806

            	 	 

    

    

    
      
        
        

        
        

      

      
        30

        
          

        

      

      
        
        

        
        

      

    

    EXHIBITS

     

    Exhibit
      A Form
      of
      Notes

    Exhibit
      B Registration
      Rights Agreement

    Exhibit
      C Form
      of
      Security Agreement

    Exhibit
      D Form
      of
      Pledge Agreement

    Exhibit
      E Irrevocable
      Transfer Agent Instructions

    Exhibit
      F Form
      of
      Resolutions, Articles of Incorporation and By-Laws

     

    SCHEDULES

     

    Schedule
      3(a) Qualification

    Schedule
      3(b) Authorization,
      Enforcement, Validity

    Schedule
      3(d) No
      Conflicts

    Schedule
      3(e) Consents

    Schedule
      3(g) Consultant

    Schedule
      3(j) Financial
      Statements

    Schedule
      3(k) Conduct
      of Business; Regulatory Permits

    Schedule
      3(m) Transactions
      with Affiliates

    Schedule
      3(n) Equity
      Capitalization

    Schedule
      3(o) Indebtedness
      and Other Contracts

    Schedule
      3(p) Absence
      of Litigation

    Schedule
      3(r) Employee
      Relations

    Schedule
      3(s) Title

    Schedule
      3(t) Intellectual
      Property Rights

    Schedule
      3(w) Tax
      Status

    Schedule
      3(x) Ranking
      of Notes

    Schedule
      4(d) Use
      of
      Proceeds

    Schedule
      4(o) Additional
      Issuances of Securities

    Schedule
      4(s) Transactions
      with AffiliatesExhibit 4.2

    Exhibit
      4.2

     

     

    ESCROW
      AGREEMENT 

     

    THIS
      ESCROW AGREEMENT (this
      “Agreement”)
      is
      made
      and entered into as of April
      19,
      2007 by and between Mohen, Inc. d/b/a Spiral Frog (the “Company”),
      the
      Buyer(s) listed
      on
      the Purchase Agreement, dated the date hereof (also referred to as the
“Investor(s)”),
      and
      Gottbetter & Partners, LLP, as Escrow Agent hereunder (“Escrow
      Agent”).

     

    BACKGROUND
      

     

    WHEREAS,
      the
      Company and the Investor(s) have entered into a Purchase Agreement (the
      “Purchase
      Agreement”), dated
      as
      of the date hereof, pursuant to which the Investors shall purchase
      secured exchangeable Notes (the “Exchangeable
      Notes”; the
      “Offering”)
      at
      one or
      more closings
      (as described in the Purchase Agreement) which shall be exchangeable into the
      Company’s
      Class A Common Stock (the “Common
      Stock”) for
      the
      Purchase Price, as that term is defined in the Purchase Agreement. The Purchase
      Agreement provides that the Investor(s) shall
      deposit the purchase amount in an escrow account to be held by Escrow Agent
      in
      order to effectuate a disbursement to the Company at a closing to be held as
      set
      forth in the Purchase Agreement (the “Closing”);

     

    WHEREAS,
      Escrow
      Agent has agreed to accept, hold, and disburse the funds deposited with
      it
      in accordance with the terms of this Agreement; and

     

    WHEREAS,
      in
      order
      to establish the escrow of funds and to effect the provisions of the Purchase
      Agreement, the parties hereto have entered into this Agreement;

     

    NOW
      THEREFORE, in
      consideration of the foregoing, it is hereby agreed as follows:

     

            1.
Definitions.
      The
      following terms shall have the following meanings when used
      herein:

     

    “Escrow
      Funds” shall
      mean the funds deposited with Escrow Agent pursuant to this Agreement.

     

    “Joint
      Written Direction” shall
      mean a written direction executed by the Investor(s) and the
      Company directing Escrow Agent to disburse all or a portion of the Escrow Funds,
      to file the applicable
      UCC-3 termination statements and UCC-1 financing statements or to take or
      refrain from taking any action pursuant to this Agreement.

     

    “Escrow
      Period” shall
      begin with the date hereof and shall terminate upon the earlier to occur
      of
      the following dates:

     

                     (i) The
      date
      upon which Escrow Agent confirms that it has received
      in the Escrow Account proceeds of the sale of the Exchangeable
      Notes;

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    (ii)  The
      expiration of five (5) business days from the date hereof
      (unless extended by mutual written agreement between the Company and the
      Investor(s) with a copy of such extension to Escrow Agent); or

     

    (iii)  The
      date
      upon which a determination is made by the Company and the Investor(s) to
      terminate the Offering prior to the sale of all the Exchangeable
      Notes.

     

    During
      the Escrow Period, the Company and the Investor(s) are aware that they are
      not
entitled
      to any funds received into escrow and no amounts deposited in the Escrow Account
      shall become
      the property of the Company or the Investor(s) or any other entity, or be
      subject to the debts of the Company or the Investor(s) or any other
      entity.

     

    2.  Appointment
      of and Acceptance by Escrow Agent. The
      Investor(s) and the Company
      hereby appoint Escrow Agent to serve as escrow agent hereunder. Escrow Agent
      hereby
      accepts such appointment and, upon receipt by wire transfer of the Escrow Funds
      in accordance with Section 3 below, agrees to hold, invest and disburse the
      Escrow Funds in accordance with this Agreement.

     

    3.  Creation
      of Escrow Funds. The
      Investor(s) will wire funds to the account of

     

    Escrow
      Agent as follows:

     

     

    
      	Bank: 	Citibank, N.A	 	 
	Routing #:	021000089	 	 
	Account #: 	
              49061322

            	 	 
	Name on Account:	Gottbetter & Partners, LLP
              Trust Account	 
	Reference: 	Mohen, Inc.	 	 

    

     

    4.  Deposits
      into the Escrow Account. The
      Investor(s) agree(s) that they shall promptly
      deliver funds for the payment of the Exchangeable Notes to Escrow Agent for
      deposit in
      the
      Escrow Account.

     

    5.  Disbursements
      from the Escrow Account.

     

    (a)  Escrow
      Agent will continue to hold such funds until the Investor(s) and Company
execute
      a
      Joint Written Direction directing Escrow Agent to disburse the Escrow Funds
      pursuant to Joint Written Direction signed by the Company and the Investor(s).
      In disbursing such funds, Escrow
      Agent is authorized to rely upon such Joint Written Direction from the Company
      and the Investor(s) and may accept any signatory from the Company listed on
      the
      signature page to this Agreement
      and any signature from the Investor(s) that Escrow Agent already has on
      file.

     

    (b)  In
      the
      event that at the expiration of the Escrow Period Escrow Agent has not
received
      an amount of Escrow Funds from an Investor equal to the Purchase Price set
      forth
      opposite such Investor’s name in the Purchase Agreement, Escrow Agent shall
      notify the Company
      and the Investor(s). Following such notice, (i) upon receipt of payment
      instructions from
      the
      Company, Escrow Agent shall refund to each Investor without interest the amount
      received
      from each Investor(s), without deduction, penalty, or expense to the Investor(s)
      and (ii) upon
      receipt of payment instructions from an Investor, Escrow Agent shall refund
      to
      such Investor
      without interest the amount received from such Investor, without deduction,
      penalty, or expense
      to such Investor. The purchase money returned to each Investor shall be free
      and
      clear of
      any
      and all claims of the Company, the Investor(s) or any of their
      creditors.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (c)
      In
      the event Escrow Agent does receive the amount of the Escrow Funds prior to
      expiration of the Escrow Period, in no event will the Escrow Funds be released
      to the Company until
      such amount is received by Escrow Agent in collected funds. For purposes of
      this
Agreement,
      the term “collected funds” shall mean all funds received by Escrow Agent which
have
      cleared normal banking channels and are in the form of cash.

     

    6.  Collection
      Procedure. Escrow
      Agent is hereby authorized to deposit the

     

    proceeds
      of each wire in the Escrow Account.

     

    7.  Suspension
      of Performance: Disbursement Into Court.

     

    (a)
      If at
      any time, there shall exist any dispute between the Company and the Investor(s)
      with respect to holding or disposition of any portion of the Escrow Funds or
      any
      other obligations of Escrow Agent hereunder, or if at any time Escrow Agent
      is
      unable to determine, to Escrow
      Agent’s sole satisfaction, the proper disposition of any portion of the Escrow
      Funds or Escrow Agent’s proper actions with respect to its obligations
      hereunder, or if the parties have not within
      thirty (30) days of the furnishing by Escrow Agent of a notice of resignation
      pursuant to Section
      9
      hereof, appointed a successor Escrow Agent to act hereunder, then Escrow Agent
      may, in its sole discretion, take either or both of the following
      actions:

     

    (1)  Suspend
      the performance of any of its obligations (including without limitation
      any disbursement obligations) under this Escrow Agreement until such dispute
      or
uncertainty
      shall be resolved to the sole satisfaction of Escrow Agent or until a successor
      Escrow Agent
      shall be appointed (as the case may be); provided
      however, Escrow
      Agent shall continue to
      invest
      the Escrow Funds in accordance with Section 8 hereof; and/or

     

    (2)  Petition
      (by means of an interpleader action or any other appropriate method) any court
      of competent jurisdiction in any venue convenient to Escrow Agent, for
instructions
      with respect to such dispute or uncertainty, and to the extent required by
      law,
      pay into
      such
      court, for holding and disposition in accordance with the instructions of such
      court, all funds
      held by it in the Escrow Funds, after deduction and payment to Escrow Agent
      of
      all fees and
      expenses (including court costs and attorneys’ fees) payable to, incurred by, or
      expected to be
      incurred by Escrow Agent in connection with performance of its duties and the
      exercise of its rights
      hereunder.

     

    (b)
      Escrow Agent shall have no liability to the Company, the Investor(s), or any
      person
      with respect to any such suspension of performance or disbursement into court,
      specifically including any liability or claimed liability that may arise, or
      be
      alleged to have arisen,
      out of or as a result of any delay in the disbursement of funds held in the
      Escrow Funds or any
      delay
      in with respect to any other action required or requested of Escrow Agent except
      in the case
      of
      the Escrow Agent’s willful misconduct or gross negligence.

    
 

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    8.  Investment
      of Escrow Funds. Escrow
      Agent shall deposit the Escrow Funds in
      a
      non-interest bearing account.

     

    If
      Escrow
      Agent has not received a Joint Written Direction at any time that an investment
      decision
      must be made, Escrow Agent shall maintain the Escrow Funds, or such portion
      thereof, as to which no Joint Written Direction has been received, in a
      non-interest bearing account.

     

    9.  Resignation
      and Removal of Escrow Agent. Escrow
      Agent may resign from
      the
      performance of its duties hereunder at any time by giving thirty (30) days
      prior
      written notice
      to
      the parties or may be removed, with or without cause, by the parties, acting
      jointly, by furnishing
      a Joint Written Direction to Escrow Agent, at any time by the giving of ten
      (10)
      days prior written notice to Escrow Agent as provided herein below. Upon any
      such notice of resignation
      or removal, the representative of the Company identified in Section 1 3b(iv),
      below, shall
      appoint a successor Escrow Agent hereunder, which shall be a commercial bank,
      trust company
      or other financial institution with a combined capital and surplus in excess
      of
      $10 million.
      Upon the acceptance in writing of any appointment of Escrow Agent hereunder
      by a
successor
      Escrow Agent, such successor Escrow Agent shall thereupon succeed to and become
      vested with all the rights, powers, privileges and duties of the retiring Escrow
      Agent, and the retiring Escrow Agent shall be discharged from its duties and
      obligations under this Escrow Agreement, but shall not be discharged from any
      liability for actions taken as Escrow Agent hereunder
      prior to such succession. After any retiring Escrow Agent’s resignation or
      removal, the
      provisions of this Escrow Agreement shall inure to its benefit as to any actions
      taken or omitted to be taken by it while it was Escrow Agent under this Escrow
      Agreement. The retiring Escrow Agent shall transmit all records pertaining
      to
      the Escrow Funds and shall pay all funds held
      by
      it in the Escrow Funds to the successor Escrow Agent, after making copies of
      such records
      as the retiring Escrow Agent deems advisable and after deduction and payment
      to
      the retiring
      Escrow Agent of all fees and expenses (including court costs and attorneys’
fees) payable
      to, incurred by, or expected to be incurred by the retiring Escrow Agent in
      connection with the performance of its duties and the exercise of its rights
      hereunder.

     

    10.Liability
      of Escrow Agent.

     

    Escrow
      Agent shall have no liability or obligation with respect to the Escrow Funds
      except for Escrow
      Agent’s willful misconduct or gross negligence. Escrow Agent’s sole
      responsibility shall
      be
      for the safekeeping, investment, and disbursement of the Escrow Funds in
      accordance with
      the
      terms of this Agreement. Escrow Agent shall have no implied duties or
      obligations and shall
      not
      be charged with knowledge or notice or any fact or circumstance not specifically
      set forth
      herein. Escrow Agent may rely upon any instrument, not only as to its due
      execution, validity
      and effectiveness, but also as to the truth and accuracy of any information
      contained herein,
      which Escrow Agent shall in good faith believe to be genuine, to have been
      signed or presented by the person or parties purporting to sign the same and
      conform to the provisions of this Agreement. In no event shall Escrow Agent
      be
      liable for incidental, indirect, special, and consequential or punitive damages.
      Escrow Agent shall not be obligated to take any legal action or commence any
      proceeding in connection with the Escrow Funds, any account in which Escrow
      Funds are deposited, this Agreement or the Purchase Agreement, or to appear
      in,
      prosecute or defend any such legal action or proceeding. Escrow Agent may
      consult legal counsel
      selected by it in any event of any dispute or question as to construction of
      any
      of the provisions
      hereof or of any other agreement or its duties hereunder, or relating to any
      dispute involving
      any party hereto, and shall incur no liability and shall be fully indemnified
      from any liability
      whatsoever in acting in accordance with the opinion or instructions of such
      counsel. The Company
      and the Investor(s) jointly and severally shall promptly pay, upon demand,
      the
      reasonable fees and expenses of any such counsel.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    Escrow
      Agent is hereby authorized, in its sole discretion, to comply with orders issued
      or process entered
      by any court with respect to the Escrow Funds, without determination by Escrow
      Agent of
      such
      court’s jurisdiction in the matter. If any portion of the Escrow Funds is at any
      time attached, garnished or levied upon under any court order, or in case the
      payment, assignment, transfer,
      conveyance or delivery of any such property shall be stayed or enjoined by
      any
      court order,
      or
      in any case any order judgment or decree shall be made or entered by any court
      affecting
      such property or any part thereof, then and in any such event, Escrow Agent
      is
authorized,
      in its sole discretion, to rely upon and comply with any such order, writ
      judgment or decree
      which it is advised by legal counsel selected by it, binding upon it, without
      the need for appeal
      or
      other action; and if Escrow Agent complies with any such order, writ, judgment
      or decree,
      it shall not be liable to any of the parties hereto or to any other person
      or
      entity by reason of such compliance even though such order, writ judgment or
      decree may be subsequently reversed, modified, annulled, set aside or
      vacated.

     

    11.
      Indemnification
      of Escrow Agent. From
      and
      at all times after the date of this
      Agreement, the parties jointly and severally, shall, to the fullest extent
      permitted by law and to
      the
      extent provided herein, indemnify and hold harmless Escrow Agent and each
      director, officer,
      employee, attorney, agent and affiliate of Escrow Agent (collectively, the
      “Indemnified
      Parties”)
      against
      any and all actions, claims (whether or not valid), losses, damages,
      liabilities, costs
      and
      expenses of any kind or nature whatsoever (including, without limitation,
      reasonable attorneys’
      fees, costs and expenses) incurred by or asserted against any of the Indemnified
      Parties
      from and after the date hereof, whether direct, indirect or consequential,
      as a
      result of or arising
      from or in any way relating to any claim, demand, suit, action, or proceeding
      (including any
      inquiry or investigation) by any person, including, without limitation, the
      parties to this Agreement, whether threatened or initiated, asserting a claim
      for any legal or equitable remedy against any person under any statute or
      regulation, including, but not limited to, any federal or state
      securities laws, or under any common law or equitable cause or otherwise,
      arising from or in
      connection with the negotiation, preparation, execution, performance or failure
      of performance of
      this
      Agreement or any transaction contemplated herein, whether or not any such
      Indemnified Party
      is
      a party to any such action or proceeding, suit or the target of any such inquiry
      or investigation;
      provided,
      however, that
      no
      Indemnified Party shall have the right to be indemnified
      hereunder for liability finally determined by a court of competent jurisdiction,
      subject
      to no further appeal, to have resulted from the gross negligence or willful
      misconduct of such Indemnified Party. If any such action or claim shall be
      brought or asserted against any Indemnified
      Party, such Indemnified Party shall promptly notify the Company and the
Investor(s)
      hereunder in writing, and the Investor(s) and the Company shall assume the
      defense thereof,
      including the employment of counsel and the payment of all expenses. Such
Indemnified
      Party shall, in its sole discretion, have the right to employ separate counsel
      (who may
      be
      selected by such Indemnified Party in its sole discretion) in any such action
      and to participate
      in the defense thereof, and the fees and expenses of such counsel shall be
      paid
      by such
      Indemnified Party, except that the Investor(s) and/or the Company shall be
      required to pay such fees and expense of one counsel for the Indemnified Parties
      if (a) the Investor(s) or the Company
      agree to pay such fees and expenses, or (b) the Investor(s) and/or the Company
      shall fail
      to
      assume the defense of such action or proceeding or shall fail, in the sole
      discretion of such Indemnified
      Party, to employ counsel reasonably satisfactory to the Indemnified Party in
      any
      such action or proceeding, (c) the Investor(s) and the Company are the plaintiff
      in any such action
      or
      proceeding or (d) the named or potential parties to any such action or
      proceeding (including any potentially impleaded parties) include both the
      Indemnified Party, the Company and/or
      the Investor(s) and the Indemnified Party shall have been advised by counsel
      that there may
      be
      one or more legal defenses available to it which are different from or
      additional to those available
      to the Company or the Investor(s). The Investor(s) and the Company shall be
      jointly and severally liable to pay fees and expenses of counsel pursuant to
      the
      preceding sentence, except
      that any obligation to pay under clause (a) shall apply only to the party so
      agreeing. All such
      fees
      and expenses payable by the Company and/or the Investor(s) pursuant to the
      foregoing sentence
      shall be paid from time to time as incurred, both in advance of and after the
      final disposition
      of such action or claim. The obligations of the parties under this section
      shall
      survive any
      termination of this Agreement, and resignation or removal of Escrow Agent and
      shall be independent
      of any obligation of Escrow Agent.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    The
      parties agree that neither payment by the Company or the Investor(s) of any
      claim by Escrow
      Agent for indemnification hereunder shall impair, limit, modify, or affect,
      as
      between the Investor(s)
      and the Company, the respective rights and obligations of Investor(s), on the
      one hand,
      and
      the Company, on the other hand.

     

    12.  Expenses
      of Escrow Agent. Except
      as
      set forth in Section 11, Company and the
      Buyers shall each reimburse Escrow Agent for half of its reasonable
      out-of-pocket expenses, including
      attorneys fees, travel expenses, telephone and facsimile transmission costs,
      postage (including
      express mail and overnight delivery charges), copying charges and the like
      as
      set forth in
      the
      Joint Written Instructions.

     

    13.  Warranties.

     

         (a)The
      Investor(s) makes the following representations and warranties to Escrow
Agent:

     

            (i)  The
      Investor(s) has full power and authority to execute and deliver this
      Agreement and to perform its obligations hereunder.

     

            (ii)  This
      Agreement has been duly approved by all necessary action of the
      Investor(s), including any necessary approval of the limited partner of the
      Investor(s)
      or necessary corporate approval, as applicable, has been executed by
duly
      authorized officers of the Investor(s), enforceable in accordance with its
      terms.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

            (iii)  The
      execution, delivery, and performance of the Investor(s) of this Agreement
      will not violate, conflict with, or cause a default under any agreement
of
      limited partnership of Investor(s) or the articles of incorporation or bylaws
      of
the
      Investor(s) (as applicable), any applicable law or regulation, any court order
      or administrative
      ruling or degree to which the Investor(s) is a party or any of its property
      is
      subject, or any agreement, contract, indenture, or other binding
      arrangement.

     

            (iv)  No
      party
      other than the parties hereto and the Investor(s) has/have, or shall have,
      any
      lien, claim or security interest in the Escrow Funds or any part thereof. No
      financing statement under the Uniform Commercial Code is on file in any
      jurisdiction claiming a security interest in or describing (whether specifically
      or
      generally) the Escrow Funds or any part thereof.

     

            (v)
      All of the
      representations and warranties of the Investor(s) contained
      herein are true and complete as of the date hereof and will be true and complete
      at the time of any disbursement from the Escrow Funds.

     

        (b)The
      Company makes the following representations and warranties to Escrow Agent:

     

    (i)  The
      Company is a corporation duly organized, validly existing, and
      in
      good standing under the laws of the State of Delaware and has full power
and
      authority to execute and deliver this Agreement and to perform its obligations
      hereunder.

     

    (ii)  This
      Agreement has been duly approved by all necessary corporate action
      of
      the Company, including any necessary shareholder approval, has been executed
      by
      duly authorized officers of the Company, enforceable in accordance with its
      terms.

     

    (iii)  The
      execution, delivery, and performance by the Company of this Agreement
      is in accordance with the Purchase Agreement and will not violate, conflict
      with, or cause a default under the articles of incorporation or bylaws of
the
      Company, any applicable law or regulation, any court order or administrative
      ruling
      or
      decree to which the Company is a party or any of its property is subject,
or
      any
      agreement, contract, indenture, or other binding arrangement, including without
      limitation the Purchase Agreement, to which the Company is a party.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (iv)  Joe
      Mohen
      has been duly appointed to act as the representative of the
      Company hereunder and has full power and authority to execute, deliver, and
      perform
      this Agreement, to execute and deliver any Joint Written Direction, to amend,
      modify or waive any provision of this Agreement and to take all other
actions
      as the Company’s representative under this Agreement, all without further
consent
      or direction from, or notice to, the Company or any other party.

     

    (v) No
      party
      other than the parties hereto and the Investor(s) have, or

     

    shall
      have, any lien, claim or security interest in the Escrow Funds or any part
      thereof.
      No financing statement under the Uniform Commercial Code is on file in
any
      jurisdiction claiming a security interest in or describing (whether specifically
      or generally) the Escrow Funds or any part thereof.

     

    (vi)
      All
      of
      the representations and warranties of the Company contained
      herein are true and complete as of the date hereof.

     

    14.  Consent
      to Jurisdiction and Venue; Governing Law. This
      Agreement shall be construed and interpreted in accordance with the internal
      laws of the State of New York without
      giving effect to the conflict of laws principles thereof. In the event that
      any
      party hereto commences
      a lawsuit or other proceeding relating to or arising from this Agreement, the
      parties hereto
      agree that the United States District Court for the Southern District of New
      York shall have
      the
      sole and exclusive jurisdiction over any such proceeding. If all such courts
      lack federal subject
      matter jurisdiction, the parties agree that the Supreme Court of State of New
      York, of and for
      the
      County of New York shall have sole and exclusive jurisdiction. Any of these
      courts shall be proper venue for any such lawsuit or judicial proceeding and
      the
      parties hereto waive any objection to such venue. The parties hereto consent
      to
      and agree to submit to the jurisdiction of any of the courts specified herein
      and agree to accept the service of process to vest personal jurisdiction over
      them in any of these courts.

     

    15.  Notice.
      All
      notices and other communications hereunder shall be in writing and
      shall
      be deemed to have been validly served, given or delivered: five (5) days after
      deposit in the
      United States mails, by certified mail with return receipt requested and postage
      prepaid; when
      delivered personally; one (1) day after being delivered to any overnight
      courier; or when transmitted
      by facsimile transmission and upon confirmation of receipt and addressed to
      the
party
      to
      be notified as follows:

     

    If
      to
      Investor(s), to its address for notices as set forth in the Purchase Agreement,
      with a copy as set
      forth
      therein.

     

    Gottbetter
      & Partners, LLP

    If
      to
      Escrow Agent, to:              
      488
      Madison Avenue

    New
      York,
      NY 10022

    Attention: Jason
      M.
      Rimland, Esq.

    Telephone: (212)
      400-6900

    Facsimile: (212)
      400-6901

     

    Mohen,
      Inc. d/b/a Spiral Frog

    If
      to the
      Company, to:                
      95
      Morton
      Street

    Ground
      Fl.

    New
      York,
      NY 10014

    Attention:Joe
      Mohen

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    With
      a
      copy to:                    
      Gottbetter
      & Partners, LLP

    488
      Madison Avenue

    New
      York,
      NY 10022

    Attention: D.
      Morgan
      Burkett, Esq.

    Telephone: (212)
      400-6900

    Facsimile: (212)
      400-6901

     

    Or
      to
      such other address as each party may designate for itself by like
      notice.

     

    16.  Amendments
      or Waiver. This
      Agreement may be changed, waived, discharged
      or terminated only by a writing signed by the parties hereto. No delay or
      omission by any
      party
      in exercising any right with respect hereto shall operate as waiver. A waiver
      on
      any one
      occasion shall not be construed as a bar to, or waiver of, any right or remedy
      on any future occasion.

     

    17.  Severability.
      To
      the
      extent any provision of this Agreement is prohibited by or
      invalid under applicable law, such provision shall be ineffective to the extent
      of such prohibition,
      or invalidity, without invalidating the remainder of such provision or the
      remaining provisions
      of this Agreement.

     

    18.  Entire
      Agreement. This
      Agreement constitutes the entire agreement between the
      parties relating to the holding, investment, and disbursement of the Escrow
      Funds and sets forth
      in
      their entirety the obligations and duties of Escrow Agent with respect to the
      Escrow Funds.

     

    19.  Binding
      Effect. All
      of
      the terms of this Agreement, as amended from time to time,
      shall be binding upon, inure to the benefit of and be enforceable by the
      respective heirs, successors and assigns of the Investor(s), the Company, or
      Escrow Agent.

     

    20.  Execution
      of Counterparts. This
      Agreement and any Joint Written Direction
      may be executed in counter parts, which when so executed shall constitute one
      and same
      agreement or direction.

     

    21.  Termination.
      Upon
      the
      first to occur of the disbursement of all amounts in the
      Escrow Funds pursuant to Joint Written Directions or the disbursement of all
      amounts in the Escrow
      Funds into court pursuant to Section 7 hereof, this Agreement shall terminate
      and Escrow
      Agent shall have no further obligation or liability whatsoever with respect
      to
      this Agreement or the Escrow Funds.

     

    [
      SIGNATURE PAGE FOLLOWS ]

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF the
      parties have hereunto set their hands and seals the day and
      year
      above set forth.

    
      	 	 	 
	 	
              MOHEN,
                INC.

            
	 
 	 
 	 
 
	 	By:  	/s/ Orville
              Hagler
	 	
              
Name:
              Orville Hagler
	 	Title:
              Corporate Secretary

    

    
      	 	 	 
	 	
              BUYER

            
	 
 	 
 	 
 
	 	  	 
	 	
              
Print
              name:
	 	 

    

     

    
      	 	 	 
	 	
              ESCROW
                AGENT

            
	 	 
	 	Gottbetter & Partners, LLP
	 
 	 
 	 
 
	 	By:  	/s/ Adam
              Gottbetter 
	 	
              
Name:
              Adam Gottbetter 
	 	Title 

    

     

     

     

    10

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