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		EXHIBIT 10.3

			

		

		
			PLAN AND AGREEMENT OF STOCK EXCHANGE

				

				AMONG

				

				HYBRID DYNAMICS CORPORATION

				

				PUKKA USA, INC.

				

				AND

				

				THE SHAREHOLDERS OF

				FIRE ANT CORPORATION

				

				DATED August 23, 2007

				

				

			

		

		
			TABLE OF CONTENTS

				

				

				PLAN AND AGREEMENT OF REORGANIZATION

				

				

				AGREEMENT

				

				Section 1 - Transfer of Shares

				

				Section 2 - Issuance of EXCHANGE SHARES to OWNERS

				

				Section 3 – Intentionally Left Blank

				

				Section 4 – Closing

				

				Section 5 - Representations and Warranties by ACQUIREE and OWNERS

				

				Section 6 - Representations and Warranties by ACQUIROR

				

				Section 7 - Access and Information

				

				Section 8 - Covenants of ACQUIREE and OWNERS

				

				Section 9 - Covenants of ACQUIROR

				

				Section 10 - Additional Covenants of the Parties

				

				Section 11 - Non-Survival of Representations, Warranties and Covenants

				

				Section 12 - Conditions Precedent to Obligations of Parties

				

				Section 13 - Termination, Amendment, Waiver

				

				Section 14 – Miscellaneous

				

				

				

				

			

		

		

		

		

		

		

		EXHIBIT LIST

		

		Exhibit "A-1"     UNANIMOUS WRITTEN CONSENT OF THE BOARD OF DIRECTORS OF HYBRID DYNAMICS CORPORATION

		

		Exhibit “A-2”     ACTION BY UNANIMOUS WRITTEN CONSENT OF THE SHAREHOLDERS OF PUKKA USA, INC.

		

		Exhibit "B"         ACTION BY UNANIMOUS WRITTEN CONSENT OF THE SHAREHOLDERS OF FIRE ANT CORPORATION

		

		Exhibit “C”        ACQUIREE FINANCIAL STATEMENTS

		

		Exhibit “D”        ACQUIROR FINANCIAL STATEMENTS

		

		Exhibit “E”        ACQUIROR CAPITALIZATION & SHAREHOLDERS

		

		Exhibit “F”        FORM OF INDIVIDUAL OWNER REPRESENTATION LETTER

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		
			PLAN AND AGREEMENT OF STOCK EXCHANGE

				

			

		

		
			This Plan and Agreement of STOCK EXCHANGE ("Agreement") is entered into on this 23rd day of August, 2007 by and between HYBRID DYNAMICS CORPORATION, a Nevada corporation (“HYBRID”), PUKKA USA, INC., a Utah corporation (the "ACQUIROR"), on the one hand and FIRE ANT CORPORATION (the "ACQUIREE”), a Utah corporation and the shareholders of ACQUIREE whose names appear below (the “OWNER” OR “OWNNERS”).

				

			

		

		
			RECITALS:

				

			

		

		
			WHEREAS, the transaction contemplated by this Agreement is intended to be a qualified Type "B" reorganization pursuant to Internal Revenue Code Section 368, and conforming Utah and Nevada law, and

				

				WHEREAS, ACQUIREE is the holder of intellectual technology for a spring-loaded, regenerative braking system for light electric and hybrid vehicles, and

				

				WHEREAS, ACQUIROR intends to acquire: 100% of ACQUIREE’s issued and outstanding capital stock (the “ACQUIREE SHARES”), and 

				

				WHEREAS, the ACQUIREE SHARES are to be acquired in exchange for 2,000,000 shares of the common stock of HYBRID, $0.00015 par value (post 1 for 100 reverse split),  and

				

				WHEREAS, following consummation of the transaction set forth hereinafter, ACQUIROR would hold 100% of the then outstanding common stock of ACQUIREE and the ACQUIREE would become the wholly-owned subsidiary of ACQUIROR.

				

				NOW, THEREFORE, WITNESSETH that in consideration of the mutual promises and covenants hereinafter stipulated and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each of the parties hereto, the parties agree as follows:

				

				

				Section 1

				TRANSFER OF SECURITIES

				

				1.1       OWNERS, as of the date of Closing as such term is defined in Section 4 herein (the "Closing" or the "Closing Date"), shall transfer, assign, convey and deliver to ACQUIROR on the Closing Date, one hundred percent (100%) of ACQUIREE’s issued and outstanding capital stock, consisting of one million (1,000,000) shares of common stock, $0.0001 par value (the “ACQUIREE SHARES”).   The transfer of the ACQUIREE SHARES shall be made free and clear of all liens, mortgages, pledges, encumbrances or charges, whether disclosed or undisclosed, except as OWNERS and ACQUIROR shall have otherwise agreed in writing.

				

				1.2       For purposes hereof, the ACQUIREE SHARES shall include all of the issued and outstanding shares of capital stock of ACQUIREE owned by OWNERS, which shares shall constitute all of the issued and outstanding equity securities of ACQUIREE.  OWNERS and AQUIREE shall represent and warrant that there are no other securities of ACQUIREE issued and outstanding other than the ACQUIREE SHARES being conveyed hereunder.

				

				

				

			

		

		
			

			

			

			

			

			Section 2

			ISSUANCE OF EXCHANGE SHARES TO OWNER

			

			2.1       As consideration for the transfer, assignment, conveyance and delivery of the ACQUIREE SHARES hereunder, ACQUIROR shall, at the Closing, deliver to OWNERS certificates representing two million (2,000,000) post 100-to-1 reverse split shares of HYBRID common stock, $0.00015 par value, (the "EXCHANGE SHARES"), in the number as set forth on opposite the name of each OWNER signatory hereto.  The parties hereto represent, acknowledge and agree that the EXCHANGE SHARES being issued hereunder are being used solely to acquire all of the ACQUIREE SHARES.  (The issuance of the EXCHANGE SHARES in consideration of the ACQUIREE SHARES hereinafter referred to as the “EXCHANGE” or the “EXCHANGE TRANSACTION”).  HYBRID represents that contemporaneously with this transaction, HYBRID’s common stock is in the process of a 100-to-1 reverse stock split, and it is the intention of all parties hereto that the EXCHANGE SHARES being issued hereunder shall be shares of HYBRID common stock issued subsequent to the closing of its aforementioned reverse split.

			

			2.2       The issuance of the EXCHANGE SHARES shall be made free and clear of all liens, mortgages, pledges, encumbrances or charges, whether disclosed or undisclosed, except as OWNERS and ACQUIROR shall have otherwise agreed in writing.

			

			2.3       None of the EXCHANGE SHARES issued to the OWNERS, nor any of ACQUIROR’S shares, at the time of Closing, shall be registered under federal securities laws but, rather, shall be issued pursuant to an exemption there from and be considered "restricted stock" within the meaning of Rule 144 promulgated under the Securities Act of 1933, as amended (the "Act"). All of the respective certificates representing such shares shall bear a legend worded substantially as follows:

		

		
			
				“THESE SECURITIES HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR THE SECURITIES LAWS OF ANY STATE. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER THE ACT AND UNDER SUCH STATE LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION AND QUALIFICATION UNDER THE ACT AND SUCH STATE LAWS IS NOT REQUIRED.”

			

		

		The respective transfer agents of ACQUIROR and ACQUIREE shall annotate their records to reflect the restrictions on transfer embodied in the legend set forth above. There shall be no requirement that ACQUIROR register the OWNERS’ EXCHANGE SHARES under the Act or any state securities laws, nor shall OWNERS or the ACQUIREE be required to register any of the ACQUIREE SHARES under the Act or any state securities laws.

			

			

			Section 3

			Intentionally Left Blank.

			

			

			Section 4

			CLOSING

			

			4.1       Closing of Transaction. Subject to the fulfillment or waiver of the conditions precedent set forth in Sections 3 and 12 hereof, the Closing shall take place on the Closing Date at the offices of ACQUIROR, at 10:00 A.M., 

			

			

			

		

		

		

		

		

		

		local time, or at such other time on the Closing Date as OWNERS and ACQUIROR may mutually agree in writing.

		

		4.2       Closing Date. The Closing Date of the Exchange shall take place on a date chosen by mutual agreement of OWNERS and ACQUIROR within thirty (30) days from the date of this Agreement, but not later than the date set forth in subsection 13.1(b) herein below or such later date upon which OWNERS and ACQUIROR may mutually agree in writing.

		

		4.3       Deliveries at Closing.

		

		(a)       OWNERS shall deliver or cause to be delivered to ACQUIROR at Closing:

		
			(i)       Certificates representing all shares of ACQUIREE’S issued and outstanding capital stock as described in Section 1.1, each endorsed in blank by the registered owner;

		

		(b)       ACQUIREE shall deliver or cause to be delivered to ACQUIROR at Closing:

		

		
			(i)       A copy of a consent of the board of directors of ACQUIREE and copy of a consent of stockholders, if required, authorizing ACQUIREE to take the necessary steps toward Closing the transaction described by this Agreement in the form set forth in Exhibit “B”;

				

				(ii)       A copy of a Certificate of Good Standing for ACQUIREE issued not more than thirty (30) days prior to Closing by the Nevada Secretary of State; and

				

				(iii)       A copy of ACQUIREES Articles of Incorporation and By-Laws certified as of the Closing Date by the Secretary of ACQUIREE.

				

				(iv)       All of ACQUIROR'S corporate records;

				

				(v)       Such other documents, instruments or certificates as shall be reasonably requested by ACQUIROR or its counsel.

		

		(c)       ACQUIROR shall deliver or cause to be delivered to OWNER at Closing:

		

		
			(i)       A copy of a consent of the board of directors of HYBRID and of ACQUIREE authorizing HYBRID and ACQUIROR to take the necessary steps toward Closing the transaction described by this Agreement in the form set forth in Exhibit “A-1” and “A-2”;

				

				(ii)       A copy of a Certificate of Good Standing for ACQUIROR issued not more than thirty (30) days prior to Closing by the Secretary of State of Nevada;

				

				(iii)       Stock certificate(s) or a computer listing from ACQUIROR'S transfer agent representing the EXCHANGE SHARES to be newly issued by ACQUIROR under this Agreement, which certificates shall be in the name of the OWNERS, each in the appropriate denomination as described in Section 2;

				

				(iv)       Articles of Incorporation and Bylaws of ACQUIROR certified as of the Closing Date by the Secretary of ACQUIROR;

				

				(v)       Such other documents, instruments or certificates as shall be reasonably requested by ACQUIREE, OWNERS or their counsel.

		

		

		

		

		

		

		

		

		

		4.4       Filings; Cooperation.

		

		(a)       Prior to the Closing, the parties shall proceed with due diligence and in good faith to make such filings and take such other actions as may be necessary to satisfy the conditions precedent set forth in Section 12 below.

		

		(b)       On and after the Closing Date, ACQUIROR, ACQUIREE and the OWNERS shall, on request and without further consideration, cooperate with one another by furnishing or using their best efforts to cause others to furnish any additional information and/or executing and delivering or using their best efforts to cause others to execute and deliver any additional documents and/or instruments, and doing or using their best efforts to cause others to do any and all such other things as may be reasonably required by the parties or their counsel to consummate or otherwise implement the transactions contemplated by this Agreement.

		

		

		Section 5

		REPRESENTATIONS AND WARRANTIES BY ACQUIREE AND OWNER

		

		5.1       Subject to the schedule of exceptions, attached hereto and incorporated herein by this reference, (which schedule(s) shall be acceptable to ACQUIROR), ACQUIREE and OWNERS represent and warrant to ACQUIROR as follows:

		

		(a)       Organization and Good Standing.

		
			(i)       ACQUIREE. ACQUIREE is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, with the requisite corporate power and authority to enter into this Agreement and consummate the transactions contemplated hereunder and to own and operate its businesses as presently conducted, except where the failure to be or have any of the foregoing would not have a material adverse effect.  ACQUIREE is duly qualified as a foreign company or other entity to do business and is in good standing in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except for such failures to be so qualified or in good standing as would not, individually or in the aggregate, have a material adverse effect. The Articles of Incorporation of ACQUIREE and all Amendments thereto as presently in effect, and the Bylaws of ACQUIREE as presently in effect, both of which shall be certified by the Secretary of ACQUIREE, have been delivered to ACQUIROR and are complete and correct and since the date of such delivery, there has been no amendment, modification or other change thereto.

				

				(ii)       OWNERS. OWNERS are each duly organized, validly existing and in good standing under the laws of the jurisdiction of their respective organization.  OWNERS each have the requisite corporate power and authority to enter into this Agreement and consummate the transactions contemplated hereunder.

		

		(b)       Capitalization.  

		

		
			(i)       ACQUIREE’S authorized capital consists of 1,000,000 shares of common $0.0001 par value and 1,000,000 preferred stock $0.0001 par value of which, as of the date hereof, 1,000,000 shares of common stock and no shares of preferred stock are issued and outstanding and held of record solely by OWNERS. All such outstanding shares are validly issued, fully paid and non-assessable. Except as otherwise described 

		

		

		

		

		

		

		

		

		

		
			herein, there are no other outstanding securities including options and warrants, and the 1,000,000 shares of common stock described above represent all of the ownership equity interests of ACQUIREE.

				

				(ii)       All securities issued by ACQUIREE as of the date of this Agreement have been issued in compliance with all applicable state and federal laws. Except as set forth in the financial statements of ACQUIREE no other equity securities or debt obligations of ACQUIREE are authorized, issued or outstanding.

		

		(c)       Subsidiaries. Except as set forth in the financial statements of ACQUIREE and in this section, ACQUIREE has no subsidiaries and no other investments, directly or indirectly, or other financial interest in any other corporation or business organization, joint venture or partnership of any kind whatsoever.

			

			(d)       Financial Statements. ACQUIREE will deliver to ACQUIROR, prior to Closing, a copy of the unaudited balance sheet and income statement of ACQUIREE for the year ended December 31, 2006 and the six months ended June 30, 2007, as certified by the President and Treasurer of ACQUIREE as true and complete (the “ACQUIREE FINANCIAL STATEMENTS”) and attached hereto and incorporated herein as Exhibit “C.”

			

			(e)       Absence of Undisclosed Liabilities. ACQUIREE has no liabilities which are not adequately reflected or reserved against in the ACQUIREE FINANCIAL STATEMENTS or otherwise reflected in this Agreement and ACQUIREE shall not have as of the Closing Date, any liabilities (secured or unsecured and whether accrued, absolute, direct, indirect or otherwise) which were incurred after the date of this Agreement and would be individually or in the aggregate, material to the results of operations or financial condition of ACQUIREE as of the Closing Date.

			

			(f)       Litigation. Except as disclosed in the ACQUIREE FINANCIAL STATEMENTS, there are no (i) outstanding orders, judgments, injunctions, awards or decrees of any court, governmental or regulatory body or arbitration tribunal against OWNERS, ACQUIREE or their properties, and there are no (ii) actions, suits or proceedings pending, or, to the knowledge of OWNERS or ACQUIREE, threatened against or affecting OWNERS or ACQUIREE, any of their officers, employees or directors relating to their positions as such, or any of their properties, at law or in equity, or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, in connection with the business, operations or affairs of ACQUIREE which might result in any material adverse change in the operations or financial condition of ACQUIREE, or which might prevent or materially impede the consummation of the transactions under this Agreement.

			

			(g)       Compliance with Laws. To the best of their knowledge, the operations and affairs of ACQUIREE do not violate any law, ordinance, rule or regulation currently in effect, or any order, writ, injunction or decree of any court or governmental agency, the violation of which would substantially and adversely affect the business, financial conditions or operations of ACQUIREE.

			

			(h)       Absence of Certain Changes. Except as set forth in the ACQUIREE FINANCIAL STATEMENTS or otherwise disclosed in writing to ACQUIROR, since the date of this Agreement:

		

		
			(i)       ACQUIREE has not entered into any material transaction;

			

		

		

		

		

		

		

		

		

		

		
			(ii)       There has been no change in financial or other condition, business, property, prospects, assets or liabilities of ACQUIREE as shown on the ACQUIREE FINANCIAL STATEMENTS, other than changes that both individually and in the aggregate do not have a consequence that is materially adverse to such condition, business, property, prospects, assets or liabilities;

				

				(iii)       There has been no damage to, destruction of or loss of any of the properties or assets of ACQUIREE (whether or not covered by insurance) materially and adversely affecting the financial or other condition, business, property, prospects, assets or liabilities of ACQUIREE;

				

				(iv)       ACQUIREE has not declared, or paid any dividend or made any distribution on their capital stock or member interests, redeemed, purchased or otherwise acquired any of their capital stock or member interests, granted any options to purchase shares of their stock or member interests, or issued any shares of their capital stock or member interests;

				

				(v)       There has been no material change, except in the ordinary course of business, in the contingent obligations of ACQUIREE by way of guaranty, endorsement, indemnity, and warranty or otherwise;

				

				(vi)       There have been no loans made by ACQUIREE to its employees, officers or directors;

				

				(vii)       There have been no waivers or compromises by ACQUIREE of a valuable right or of a material debt owed to them;

				

				(viii)      There have been no extraordinary increases in the compensation of any of ACQUIREE employees, officers or directors;

				

				(ix)       There has been no agreement or commitment by ACQUIREE to do or perform any of the acts described in this Section 5.1(h); and

				

				(x)       There has been no other event or condition of any character, which might reasonably be expected either to result in a material and adverse change in the condition (financial or otherwise), business, property, prospects, assets or liabilities of ACQUIREE or to impair materially the ability of ACQUIREE to conduct the business now being conducted.

		

		(i)       Employees. There are, except as disclosed in the ACQUIREE FINANCIAL STATEMENTS no collective bargaining, bonus, profit sharing, compensation, or other plans, agreements or arrangements between ACQUIREE and any of its directors, officers or employees. Employee agreements will be supplied at the Closing.

			

			(j)       Assets. All of the assets reflected on the ACQUIREE FINANCIAL STATEMENTS or acquired and held as of the Closing Date, will be owned by ACQUIREE on the Closing Date.  ACQUIREE owns outright and have good and marketable title, or holds valid and enforceable leases, to all of such assets. None of ACQUIREE’s equipment used by ACQUIREE in connection with its business has any material defects and all of them are in all material respects in good operating condition and repair, and are adequate for the uses to which they are being put; none of ACQUIREE’s equipment is in need of maintenance or repairs, except for ordinary, routine maintenance and repair. ACQUIREE represents that, except to the extent disclosed in or reserved against on the 

			

			

			

		

		

		

		

		

		

		ACQUIREE FINANCIAL STATEMENTS, it is not aware of any accounts and contracts receivable existing that, in its judgment, would be uncollectible.

		

		(k)       Tax Matters. All federal, foreign, state and local tax returns, reports and information statements required to be filed by or with respect to the activities of ACQUIREE have been timely filed. On the date of this Agreement, ACQUIREE is not delinquent in the payment of any such tax or assessment, and no deficiencies for any amount of such tax have been proposed or assessed.

		

		(l)       Operating Authorities. To the best knowledge of OWNER and ACQUIREE, ACQUIREE has all material operating authorities, governmental certificates and licenses, permits, authorizations and approvals ("Permits") required to conduct its business as presently conducted.  During the period encompassed by the ACQUIREE FINANCIAL STATEMENTS, there have not been any notice or adverse development regarding such Permits; such Permits are in full force and effect; no material violations are or have been recorded in respect of any permit; and no proceeding is pending or threatened to revoke or limit any Permit.

		

		(m)       Continuation of Key Management. To the best knowledge of ACQUIREE, all key management personnel of ACQUIREE do not intend to continue their employment with ACQUIREE after the Closing.

		

		(n)       Books and Records. The books and records of ACQUIREE are complete and correct, are maintained in accordance with good business practice and accurately present and reflect, in all material respects, all of the transactions therein described, and there have been no transactions involving ACQUIREE which properly should have been set forth therein and which have not been accurately so set forth.

		

		(o)       Authority to Execute Agreement. The Board of Directors of ACQUIREE, pursuant to the power and authority legally vested in them, have duly authorized the execution and delivery by ACQUIREE of this Agreement, and have duly authorized each of the transactions hereby contemplated. ACQUIREE has the power and authority to execute and deliver this Agreement, to consummate the transactions hereby contemplated and to take all other actions required to be taken by it pursuant to the provisions hereof. ACQUIREE has taken all actions required by law, its Articles of Incorporation and By-Laws, as amended, the respective partnership or operating agreements of any joint venture in which ACQUIREE owns an interest, or otherwise to authorize the execution and delivery of this Agreement. This Agreement is valid and binding upon ACQUIREE and the OWNERS in accordance with its terms. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will constitute a violation or breach of the Articles of Incorporation, as amended, or the Bylaws, as amended, or the partnership or operating agreements of any joint venture in which ACQUIREE owns an interest, as the case may be, of ACQUIREE, or any agreement, stipulation, order, writ, injunction, decree, law, rule or regulation applicable to ACQUIREE.

		

		(p)       Finder's Fees. Both ACQUIREE and OWNERS have not paid, and on the Closing Date will not be liable or obligated to pay, any finder's, agent's or broker's fee arising out of or in connection with this Agreement or the transactions contemplated by this Agreement.

		

		5.2       Disclosure. At the date of this Agreement, ACQUIREE and the OWNERS, and at the Closing Date they will have, disclosed all events, conditions and facts materially affecting the business and prospects of ACQUIREE. ACQUIREE and OWNERS have not now and will not have at the Closing Date, withheld

		

		

		

		

		

		

		

		

		knowledge of any such events, conditions or facts which they know, or have reasonable grounds to know, may materially affect ACQUIREE business and prospects. Neither this Agreement nor any certificate, exhibit, schedule or other written document or statement, furnished to ACQUIROR by ACQUIREE and/or by OWNERS in connection with the transactions contemplated by this Agreement contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to be stated in order to make the statements contained herein or therein not misleading.

		

		

		Section 6

		REPRESENTATIONS AND WARRANTIES BY ACQUIROR AND HYBRID

		

		6.1       Subject to the schedule of exceptions, attached hereto and incorporated herein by this reference, (which schedules shall be acceptable to OWNERS), ACQUIROR and HYBRID represent and warrant to ACQUIREE and the OWNERS as follows:

		

		(a)       Organization and Good Standing. ACQUIROR and HYBRID are each currently a corporation duly organized, validly existing and in good standing under the laws of the States of Utah and Nevada, respectively, and have full corporate power and authority to own or lease their properties and to carry on their business as now being conducted and as proposed to be conducted. ACQUIROR and HYBRID are qualified to conduct business as foreign corporations in no other jurisdiction, and the failure to so qualify in any other jurisdiction does not materially, adversely affect the ability of ACQUIROR and HYBRID to carry on their business as most recently conducted. The Articles of Incorporation of ACQUIROR and HYBRID and all amendments thereto as presently in effect, and the Bylaws of ACQUIROR and HYBRID as presently in effect, both of which shall be certified by the Secretary of ACQUIROR and HYBRID. respectively, have been delivered to OWNERS and are complete and correct and since the date of such delivery, there has been no amendment, modification or other change thereto.

		

		(b)       Capitalization. HYBRID'S authorized capital stock consists of (i) 99,000,000 shares of $0.00015 par value common stock of which 257,933 are outstanding as of the date of this Agreement, (ii) 340,000 shares of $0.0001 par value preferred stock of which no shares are issued and outstanding and (iii) 660,000 shares of Series A Preferred Stock of which no shares are issued and outstanding as of the date of this Agreement. No other equity securities or debt obligations of HYBRID are authorized, issued or outstanding. The EXCHANGE SHARES are free and clear of all liens, charges, claims, pledges, restrictions and encumbrances whatsoever of any kind or nature that would inhibit, prevent or otherwise interfere with the transactions contemplated hereby. All of the outstanding shares of HYBRID’s common stock are validly issued, fully paid and non-assessable and there are no voting trust agreements or other contracts, agreements or arrangements restricting or affecting voting or dividend rights or transferability with respect to the outstanding shares of HYBRID.

		

		(c)       Issuance of EXCHANGE SHARES. All of the EXCHANGE SHARES to be issued to or transferred to OWNERS pursuant to this Agreement, when issued, transferred and delivered as provided herein, will be duly authorized, validly issued, fully paid and non-assessable, and will be free and clear of all liens, charges, claims, pledges, restrictions and encumbrances whatsoever of any kind or nature, except those restrictions imposed by State or Federal corporate and securities regulations.

		

		

		

		

		

		

		

		

		(d)       No Violation. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby nor compliance by ACQUIROR with any of the provisions hereof will:

		
			(i)       Violate or conflict with, or result in a breach of any provisions of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, any of the terms, conditions or provisions of the Articles of Incorporation or Bylaws of ACQUIROR or HYBRID or any note, bond, mortgage, indenture, deed of trust, license, agreement or other instrument to which ACQUIROR or HYBRID is a party, or by which they or their properties or assets may be bound or affected; or

				

				(ii)       Violate any order, writ, injunction or decree, or any statute, rule, permit, or regulation applicable to ACQUIROR or HYBRID or any of their properties or assets.

		

		(e)       Subsidiaries. ACQUIROR has one subsidiary, Red Iron Group, LLC, a Utah limited liability company.

			

			(f)       Absence of Certain Changes. Since June 30, 2007, there has been no material change in either ACQUIROR's or HYBRID’s financial conditions, assets or liabilities.

			

			(g)       Absence of Undisclosed Liabilities. Neither ACQUIROR nor HYBRID had, as of the Closing Date, any liabilities (secured or unsecured and whether accrued, absolute, direct, indirect or otherwise) which were incurred after June 30, 2007 and would be individually or in the aggregate, material to the results of operation or financial condition of ACQUIROR or HYBRID.

			

			(h)       Litigation. There are no outstanding orders, judgments, injunctions, awards or decrees of any court, governmental or regulatory body or arbitration tribunal against ACQUIROR or HYBRID or their properties. There are no actions, suits or proceedings pending, or, to the knowledge of ACQUIROR or HYBRID, threatened against or relating to ACQUIROR or HYBRID. ACQUIROR is not, and on the Closing Date will not be, in default under or with respect to any judgment, order, writ, injunction or decree of any court or of any federal, state, municipal or other governmental authority, department, commission, board, agency or other instrumentality; and ACQUIROR and HYBRID have, and on the Closing Date will have, complied in all material respects with all laws, rules, regulations and orders applicable to them, if any.

			

			(i)       Contracts. Neither ACQUIROR nor HYBRID is not a party to any written or oral commitment for capital expenditures except as contemplated by this Agreement. Neither ACQUIROR nor HYBRID is not a party to, nor is its property bound by any written or oral, express or implied, agreement, contract or other contractual obligation including, without limitation, any real or personal property leases, any employment agreements, any consulting agreements any personal services agreements or any other agreements that require ACQUIROR or HYBRID to pay any money or deliver any assets or services. ACQUIROR and HYBRID have in all material respects performed all obligations required to be performed by them to date and are not in default in any material respect under any agreements or other documents to which they are a party.

			

			(j)       Tax Matters. All federal, foreign, state and local tax returns, reports and information statements required to be filed by or with respect to the activities of ACQUIROR and HYBRID have been filed for all the years and 

			

			

			

		

		

		

		

		

		

		periods for which such returns and statements were due, including extensions thereof. Such returns, reports and information statements are true and correct in all material respects insofar as they relate to the activities of ACQUIROR and HYBRID. On the date of this Agreement, ACQUIROR and HYBRID are not delinquent in the payment of any such tax or assessment, and no deficiencies for any amount of such tax have been proposed or assessed. Any tax sharing agreement among or between ACQUIROR, HYBRID and any affiliate thereof shall be terminated as of the Closing Date.

		

		(k)       Authority to Execute Agreement. The Boards of Directors of ACQUIROR and HYBRID, pursuant to the power and authority legally vested in them, have duly authorized the execution and delivery by ACQUIROR and HYBRID of this Agreement and the EXCHANGE SHARES, and have duly authorized each of the transactions hereby contemplated. ACQUIROR and HYBRID have the power and authority to execute and deliver this Agreement, to consummate the transactions hereby contemplated and to take all other actions required to be taken by them pursuant to the provisions hereof. ACQUIROR and HYBRID have taken all the actions required by law, their Certificates of Incorporation, as amended, their Bylaws, as amended, applicable state law or otherwise to authorize the execution and delivery of the EXCHANGE SHARES pursuant to the provisions hereof. This Agreement is valid and binding upon ACQUIROR and HYBRID in accordance with its terms.

		

		(l)       Finder's Fees. ACQUIROR and HYBRID are not, and on the Closing Date, will not be liable or obligated to pay any finder's, agent's or broker's fee arising out of or in connection with this Agreement or the transactions contemplated by this Agreement.

		

		(m)       Books and Records. The books and records of ACQUIROR and HYBRID are complete and correct, are maintained in accordance with good business practice and accurately present and reflect in all material respects, all of the transactions therein described and there have been no transactions involving ACQUIROR or HYBRID which properly should have been set forth therein and which have not been accurately so set forth.

		

		6.2       Disclosure. ACQUIROR and HYBRID have and at the Closing Date it will have, disclosed all events, conditions and facts materially affecting the business and prospects of ACQUIROR and HYBRID. ACQUIROR and HYBRID have not now and will not have at the Closing Date, withheld knowledge of any such events, conditions and facts which it knows, or has reasonable grounds to know, may materially affect ACQUIROR's or HYBRID’s business and prospects. Neither this Agreement, nor any certificate, exhibit, schedule or other written document or statement, furnished to ACQUIREE or the OWNERS by ACQUIROR in connection with the transactions contemplated by this Agreement contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to be stated in order to make the statements contained herein or therein not misleading.

		

		

		Section 7

		ACCESS AND INFORMATION

		

		7.1       As to ACQUIREE. Subject to the confidentiality protections provided by subsection 10.4 herein, ACQUIREE shall give to ACQUIROR and to ACQUIROR'S counsel, accountants and other representatives full access during normal business hours throughout the period prior to the Closing, to all of ACQUIREE properties, books, contracts, commitments, and records, including information concerning products and customer base, and patents held by, or assigned to,

		

		

		

		

		

		

		

		

		ACQUIREE, and furnish ACQUIROR during such period with all such information concerning ACQUIREE affairs as ACQUIROR reasonably may request.

		

		7.2       As to ACQUIROR. Subject to the confidentiality protections provided by subsection 10.4 herein, ACQUIROR shall give to ACQUIREE, the OWNERS and their counsel, accountants and other representatives, full access, during normal business hours throughout the period prior to the Closing, to all of ACQUIROR's properties, books, contracts, commitments, and records, if any, and shall furnish ACQUIREE and the OWNERS during such period with all such information concerning ACQUIROR's affairs as ACQUIREE and the OWNERS reasonably may request.

		

		

		Section 8

		COVENANTS OF ACQUIREE AND OWNER

		

		8.1       No Solicitation. For a period of ninety (90) days from the date of this Agreement, ACQUIREE and the OWNERS will use their best efforts to cause their respective officers, employees, agents and representatives not, directly or indirectly, to solicit, encourage, or initiate any discussions with, or indirectly to solicit, encourage, or initiate any discussions with, to, any person or entity other than ACQUIROR and its officers, employees, and agents, concerning any merger, sale of substantial assets, or similar transaction involving ACQUIREE, or any sale of any of their common stock or member interests or of the common stock or member interests held by such OWNERS except as otherwise disclosed in this Agreement. ACQUIREE will notify ACQUIROR immediately upon receipt of an inquiry, offer, or proposal relating to any of the foregoing. None of the foregoing shall prohibit providing information to others in a manner in keeping with the ordinary conduct of ACQUIREE business, or providing information to government authorities.

		

		8.2       Conduct of Business Pending the Transaction. ACQUIREE and the OWNERS, to the extent within their control, covenant and agree with ACQUIROR that, prior to the consummation of the transaction called for by this Agreement, and Closing, or the termination of this Agreement pursuant to its terms, unless ACQUIROR shall otherwise consent in writing, and except as otherwise contemplated by this Agreement, ACQUIREE and the OWNERS, to the extent within their control, will comply with each of the following:

		

		(a)       ACQUIREE’S business shall be conducted only in the ordinary and usual course. ACQUIREE shall use reasonable efforts to keep intact their business organization and good will, keep available the services of their respective officers and employees, and maintain good relations with suppliers, creditors, employees, customers, and others having business or financial relationships with them, and they shall immediately notify ACQUIROR of any event or occurrence which is material to, and not in the ordinary and usual course of business of ACQUIREE.

		

		(b)       They shall not (i) amend the ACQUIREE’S Articles of Incorporation or Bylaws, (ii) split, combine, or reclassify any of ACQUIREE’S outstanding securities, or declare, set aside, or pay any dividend or other distribution on, or make or agree or commit to make any exchange for or redemption of any such securities payable in cash, stock or property.

		

		(c)       ACQUIREE shall not (i) issue or agree to issue any additional securities or rights of any kind to acquire any securities, or (ii) enter into any contract, agreement, commitment, or arrangement with respect to any of the foregoing, except as set forth in this Agreement.

		

		

		

		

		

		

		

		

		(d)       ACQUIREE shall not create, incur, or assume any long-term or short-term indebtedness for money borrowed or make any capital expenditures or commitment for capital expenditures, except in the ordinary course of business and consistent with past practice.

		

		(e)       ACQUIREE shall not (i) adopt, enter into, or amend any bonus, profit sharing, compensation, stock option, warrant, pension, retirement, deferred compensation, employment, severance, termination or other employee benefit plan, agreement, trust fund, or arrangement for the benefit or welfare of any officer, director, or employee, or (ii) agree to any material (in relation to historical compensation) increase in the compensation payable or to become payable to, or any increase in the contractual term of employment of, any officer, director or employee except, with respect to employees who are not officers or directors, in the ordinary course of business in accordance with past practice, or with the written approval of ACQUIROR.

		

		(f)       ACQUIREE shall not sell lease, mortgage, encumber, or otherwise dispose of or grant any interest in any of its assets or properties except for: (i) sales, encumbrances, and other dispositions or grants in the ordinary course of business and consistent with past practice; (ii) liens for taxes not yet due; (iii) liens or encumbrances that are not material in amount or effect and do not impair the use of the property, or (iv) as specifically provided for or permitted in this Agreement.

		

		(g)       ACQUIREE shall not enter into any agreement, commitment, or understanding, whether in writing or otherwise, with respect to any of the matters referred to in subparagraphs (a) through (f) above.

		

		(h)       ACQUIREE will continue properly and promptly to file when due all federal, state, local, foreign, and other tax returns, reports, and declarations required to be filed by it, and will pay, or make full and adequate provision for the payment of, all taxes and governmental charges due from or payable by it.

		

		(i)       ACQUIREE will comply with all laws and regulations applicable to it and its operations.

		

		

		Section 9

		COVENANTS OF ACQUIROR AND HYBRID

		

		9.1       No Solicitation. For a period of ninety (90) days from the date of this Agreement, ACQUIROR will not discuss or negotiate with any other corporation, firm or other person or entertain or consider any inquiries or proposals relating to the possible disposition of its shares of capital stock, or its assets, and will conduct business only in the ordinary course. Notwithstanding the foregoing, ACQUIROR shall be free to engage in activities mentioned in the preceding sentence, which are designed to further the mutual interests of the parties to this Agreement.

		

		9.2       Conduct of ACQUIROR Pending Closing. ACQUIROR and HYBRID covenant and agree with OWNERS that, prior to the consummation of the transactions called for by this Agreement, and Closing, or the termination of this Agreement pursuant to its terms, unless OWNERS shall otherwise consent in writing, and except as otherwise contemplated by this Agreement, ACQUIROR and HYBRID will comply with each of the following.

		

		(a)       No change will be made in ACQUIROR's or HYBRID’s Articles of Incorporation or Bylaws, except for a name change, or in ACQUIROR's or

		

		

		

		

		

		

		

		

		HYBRID’s authorized or issued shares of stock, except as contemplated in this Agreement or as may be first approved in writing by ACQUIREE.

		

		(b)       No dividends shall be declared, no stock options granted and no employment agreements shall be entered into with officers or directors in ACQUIROR or HYBRID, except as may be first approved in writing by ACQUIREE.

		

		(c)       They shall not (i) issue or agree to issue any additional shares of, or rights of any kind to acquire any shares of their capital stock of any class, or (ii) enter into any contract, agreement, commitment, or arrangement with respect to any of the foregoing, except as set forth in this Agreement.

		

		(d)       They shall not create, incur, or assume any long-term or short-term indebtedness for money borrowed or make any capital expenditures or commitment for capital expenditures, except in the ordinary course of business and consistent with past practice.

		

		(e)       They shall not (i) adopt, enter into, or amend any bonus, profit sharing, compensation, stock option, warrant, pension, retirement, deferred compensation, employment, severance, termination or other employee benefit plan, agreement, trust fund, or arrangement for the benefit or welfare of any officer, director, or employee, or (ii) agree to any material (in relation to historical compensation) increase in the compensation payable or to become payable to, or any increase in the contractual term of employment of, any officer, director or employee except, with respect to employees who are not officers or directors, in the ordinary course of business in accordance with past practice, or with the written approval of ACQUIREE.

		

		(f)       They shall not sell lease, mortgage, encumber, or otherwise dispose of or grant any interest in any of their assets or properties except for: (i) sales, encumbrances, and other dispositions or grants in the ordinary course of business and consistent with past practice; (ii) liens for taxes not yet due; (iii) liens or encumbrances that are not material in amount or effect and do not impair the use of the property, or (iv) as specifically provided for or permitted in this Agreement.

		

		(g)       They shall not enter into any agreement, commitment, or understanding, whether in writing or otherwise, with respect to any of the matters referred to in subparagraphs (a) through (f) above.

		

		(h)       They will continue properly and promptly to file when due all federal, state, local, foreign, and other tax returns, reports, and declarations required to be filed by them, and will pay, or make full and adequate provision for the payment of, all taxes and governmental charges due from or payable by them.

		

		(i)       They will comply with all laws and regulations applicable to them and their operations.

		

		

		Section 10

		ADDITIONAL COVENANTS OF THE PARTIES

		

		10.1      Cooperation. Each of OWNERS, ACQUIREE, HYBRID and ACQUIROR will cooperate with each other and their respective counsel, accountants and agents in carrying out the transaction contemplated by this Agreement, and in delivering all documents and instruments deemed reasonably necessary or useful by the other party.

		

		

		

		

		

		

		

		

		10.2      Expenses. Each of the parties hereto shall pay all of its respective costs and expenses (including attorneys' and accountants' fees, costs and expenses) incurred in connection with this Agreement and the consummation of the transactions contemplated herein.

		

		10.3      Publicity. Prior to the Closing, any written news releases or public disclosure by either party pertaining to this Agreement shall be submitted to the other party for its review and approval prior to such release or disclosure, provided, however, that (a) such approval shall not be unreasonably withheld, and (b) such review and approval shall not be required of disclosures required to comply, in the judgment of counsel, with federal or state securities or corporate laws or policies.

		

		10.4      Confidentiality. While each party is obligated to provide access to and furnish information in accordance with Section 6 herein, it is understood and agreed that such disclosure and information subsequently obtained as a result of such disclosures are proprietary and confidential in nature.  Each party agrees to hold such information in confidence and not to reveal any such information to any person who is not a party to this Agreement, or an officer, director or key employee thereof, and not to use the information obtained for any purpose other than assisting in its due diligence inquiry in conjunction with the transaction contemplated by this Agreement. Upon request of any party, a confidentiality agreement, acceptable to the disclosing party, will be executed by any person selected to receive such proprietary information, prior to receipt of such information.

		

		

		Section 11

		NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS

		

		11.1      None of the representations, warranties, covenants and other agreements in this Agreement or in any instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such representations, warranties, covenants, agreements and other provisions, shall survive the Closing, except for those covenants, agreements and other provisions contained herein that by their terms apply or are to b performed in whole or in part after the Closing and this Section 11.

		

		

		Section 12

		CONDITIONS PRECEDENT TO OBLIGATIONS OF PARTIES

		

		12.1      Conditions to Obligations of the Parties. The obligations of ACQUIROR, ACQUIREE and OWNERS under this Agreement shall be subject to the fulfillment, on or prior to the Closing, of all conditions elsewhere herein set forth, including, but not limited to, receipt by the appropriate party of all deliveries required by Sections 4.3(a), (b) and (c) herein, and fulfillment, prior to Closing, of each of the following conditions:

		

		(a)       All representations and warranties made by ACQUIREE, OWNERS and ACQUIROR in this Agreement shall be true and correct in all material respects on and as of the Closing Date with the same effect as if such representations and warranties had been made on and as of the Closing Date.

		

		(b)       ACQUIREE, OWNERS and ACQUIROR shall have performed or complied with all covenants, agreements and conditions contained in this Agreement on their part required to be performed or complied with at or prior to the Closing.

		

		

		

		

		

		

		

		

		(c)       All material authorizations, consents or approvals of any and all governmental regulatory authorities necessary in connection with the consummation of the transactions contemplated by this Agreement shall have been obtained and be in full force and effect.

		

		(d)       The Closing shall not violate any permit or order, decree or judgment of any court or governmental body having competent jurisdiction and there shall not have been instituted any legal or administrative action or proceeding to enjoin the transaction contemplated hereby or seeking damages from any party with respect thereto.

		

		12.2      Conditions to Obligations of ACQUIROR. The obligations of ACQUIROR to consummate the transactions contemplated herein are subject to satisfaction (or waiver by it) of the following conditions:

		

		(a)       OWNERS will be required, at Closing, to submit an agreement confirming that all the EXCHANGE SHARES received will be acquired for investment and not with a view to, or for sale in connection with, any distribution thereof, and agreeing not to transfer any of the EXCHANGE SHARES for a period of two years from the date of the Closing, except for those transfers falling within the exemption from registration under the Securities Act of 1933 and any applicable state securities laws, which transfers do not constitute a public distribution of securities, and in which the transferees execute an investment letter in form and substance as set forth on Exhibit “F” hereto. The foregoing provision shall not prohibit the registration of those shares at any time following the Closing. OWNERS will be required to transfer to ACQUIROR at the Closing their respective ACQUIREE SHARES Stock Certificate(s), free and clear of all liens, mortgages, pledges, encumbrances or changes, whether disclosed or undisclosed.

		

		(b)       All schedules, prepared by ACQUIREE shall be current or updated as necessary as of the Closing Date.

		

		(c)       ACQUIREE shall have provided to ACQUIROR the ACQUIREE FINANCIAL STATEMENTS together with an update on any material change in the aforementioned financial statements.

		

		(d)       Each party shall have satisfied itself that since the date of this Agreement the business of the other party has been conducted in the ordinary course. In addition, each party shall have satisfied itself that no withdrawals of cash or other assets have been made and no indebtedness has been incurred since the date of this Agreement, except in the ordinary course of business or with respect to services rendered or expenses incurred in connection with the Closing of this Agreement, unless said withdrawals or indebtedness were either authorized by the terms of this Agreement or subsequently consented to in writing by the parties.

		

		(e)       Each party covenants that, to the best of its knowledge, it has complied or will comply in all material respects with all applicable laws, orders and regulations of federal, state, municipal and/or other governments and/or any instrumentality thereof, domestic or foreign, applicable to their assets, to the business conducted by them and to the transactions contemplated by this Agreement.

		

		12.3     Conditions to Obligation of ACQUIREE and OWNERS.  The obligations of ACQUIREE and OWNER to consummate the transactions contemplated herein are subject to satisfaction (or waiver by them) of the following conditions:

		

		

		

		

		

		

		

		

		(a)       ACQUIROR shall have provided to ACQUIREE through June 30, 2007, all unaudited financial statements prepared in accordance with generally accepted accounting principles of ACQUIROR and HYBRID together with an update on any material change in the aforementioned financial statements.

		

		(b)       Each party shall have granted to the other party (acting through its management personnel, counsel, accountants or other representatives designated by it) full opportunity to examine its books and records, properties, plants and equipment, proprietary rights and other instruments, rights and papers of all kinds, and each party shall be satisfied to proceed with the transactions contemplated by this Agreement upon completion of such examination and investigation.

		

		(c)       ACQUIROR and ACQUIREE shall agree to indemnify each other party against any liability to any broker or finder to which that party may become obligated.

		

		(d)       The EXCHANGE shall be approved by the Board of Directors of each of OWNERS, ACQUIREE, HYBRID and ACQUIROR. Furthermore, the EXCHANGE shall be approved by the shareholders of OWNERS and of ACQUIROR, if deemed necessary or appropriate by counsel for the same, within sixty (60) days following execution of this Agreement. If such a meeting is deemed necessary, the management of OWNERS and ACQUIROR agree to recommend approval to their respective Shareholders and to solicit proxies in support of the same.

		

		(e)       ACQUIROR and OWNERS and their respective legal counsel shall have received copies of all such certificates, opinions and other documents and instruments as each party or its legal counsel may reasonably request pursuant to this Agreement or otherwise in connection with the consummation of the transactions contemplated hereby, and all such certificates, opinions and other documents and instruments received by each party shall be reasonably satisfactory, in form and substance, to each party and its legal counsel.

		

		(f)       Both ACQUIROR and OWNERS shall have the right to waive any or all of the conditions precedent to their obligations hereunder not otherwise legally required; provided, however, that no waiver by a party of any condition precedent to its obligations hereunder shall constitute a waiver by such party of any other condition.

		

		

		Section 13

		TERMINATION, AMENDMENT, WAIVER

		

		13.1     This Agreement may be terminated at any time prior to the Closing, and the contemplated transactions abandoned, without liability to either party, except with respect to the obligations of ACQUIROR, ACQUIREE and OWNERS under Section 10.4 hereof:

		

		(a)       By mutual agreement of ACQUIROR and OWNERS;

		

		(b)       If the Closing (as defined in Section 4) has not have taken place on or prior to August 31, 2007, this Agreement can be terminated upon written notice given by ACQUIROR or OWNERS which is not in material default;

		

		(c)       By ACQUIROR, if in its reasonable belief there has been a material misrepresentation or breach of warranty on the part of any OWNER in the representations and warranties set forth in the Agreement.

		

		

		

		

		

		

		

		

		(d)       By OWNERS if, in the reasonable belief of OWNERS there has been a material misrepresentation or breach of warranty on the part of ACQUIROR in the representations and warranties set forth in the Agreement;

		

		(e)       By ACQUIROR if, in its opinion or that of its counsel, the EXCHANGE does not qualify for exemption from registration under applicable federal and state securities laws, or qualification, if obtainable, cannot be accomplished in ACQUIROR'S opinion or that of its counsel, without unreasonable expense or effort;

		

		(f)       By ACQUIROR or by OWNERS if either party shall determine in its sole discretion that the EXCHANGE has become inadvisable or impracticable by reason of the institution or threat by state, local or federal governmental authorities or by any other person of material litigation or proceedings against any party (it being understood and agreed that a written request by a governmental authority for information with respect to the Exchange, which information could be used in connection with such litigation or proceedings, may be deemed to be a threat of material litigation or proceedings regardless of whether such request is received before or after the signing of this Agreement);

		

		(g)       By ACQUIROR if the business or assets or financial condition of ACQUIREE, taken as a whole, has been materially and adversely affected, whether by the institution of litigation or by reason of changes or developments or in operations in the ordinary course of business or otherwise; or, by OWNERS if the business or assets or financial condition of ACQUIROR and/or HYBRID, taken as a whole, has been materially and adversely affected, whether by the institution of litigation or by reason of changes or developments or in operations in the ordinary course of business or otherwise;

		

		(h)       By ACQUIROR or OWNERS if, in the opinion of ACQUIROR'S independent accountants, it should appear that the combined entity will not be auditable to SEC accounting standards;

		

		(i)       By OWNERS if ACQUIROR fails to perform material conditions set forth in sub-Section 12.1 and 12.3 herein;

		

		(j)       By OWNERS if examination of ACQUIROR's and/or HYBRID’s books and records pursuant to Section 6 herein uncovers a material deficiency;

		

		(k)       By ACQUIROR if either ACQUIREE or OWNERS fail to perform material conditions set forth in Sub-Section 12.1 and 12.2 herein; and

		

		(l)       By ACQUIROR if examination of ACQUIREE’S books and records pursuant to Section 5 herein uncovers a material deficiency.

		

		13.2    No modification or amendment of any provision of this Agreement shall be effective unless specifically made in writing and duly signed by the party to be bound.

		

		13.3     In the event of termination of this Agreement by either ACQUIROR or OWNERS as provided in Section 13.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of any of the parties or their respective officers or directors except with respect to Section 10, which provisions shall survive such termination, and except that, notwithstanding anything to the contrary contained in this Agreement, neither ACQUIROR nor OWNERS shall be relieved or released from any liabilities or damages arising out of its willful and material breach of this Agreement.

		

		

		

		

		

		

		

		

		

		Section 14

		MISCELLANEOUS

		

		14.1     Entire Agreement. This Agreement (including the Exhibits and Schedules hereto) contains the entire agreement between the parties with respect to  the transactions contemplated hereby, and supersedes all negotiations, representations, warranties, commitments, offers, contracts, and writings prior to the date hereof. No waiver and no modification or amendment of any provision of this Agreement shall be effective unless specifically made in writing and duly signed by the party to be bound thereby.

		

		14.2     Binding Agreement.

		

		(a)       This Agreement shall become binding upon the parties when, but only when, it shall have been signed on behalf of all parties.

		

		(b)       Subject to the condition stated in subsection (a), above, this Agreement shall be binding upon, and inure to the benefit of, the respective parties and their legal representatives, successors and assigns.

		

		14.3     Counterparts. This Agreement may be executed in one or more counterparts, each of which may be deemed an original, but all of which together, shall constitute one and the same instrument.

		

		14.4     Severability. If any provisions hereof are to be held invalid or unenforceable by any court of competent jurisdiction or as a result of future legislative action, such holding or action shall be strictly construed and shall not affect the validity or effect or any other provision hereof.

		

		14.5     Assignability. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto; provided that neither this Agreement nor any right hereunder shall be assignable by ACQUIREE or ACQUIROR without prior written consent of the other party.

		

		14.6     Captions. The captions of the various Sections of this Agreement have been inserted only for convenience of reference and shall not be deemed to modify, explain, enlarge or restrict any of the provisions of this Agreement.

		

		14.7     Governing Law. The validity, interpretation and effect of this Agreement shall be governed exclusively by the laws of the State of Nevada.

		

		14.8     Jurisdiction and Venue. Each party hereto irrevocably consents to the jurisdiction and venue of the state or federal courts located in the State of Nevada in connection with any action, suit, proceeding or claim to enforce the provisions of this Agreement, to recover damages for breach of or default under this Agreement, or otherwise arising under or by reason of this Agreement. The prevailing party may recover costs and reasonable attorney's fees.

		

		14.9     Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and delivered in person or sent by certified mail, postage prepaid and properly addressed as follows:

		

		

		

		

		

		

		

		

		

		

			
					IF TO ACQUIROR:

					
					IF TO ACQUIREE:

				
	
					Pukka USA, Inc.

					
					Fire Ant Corporation

				
	
					892 North 340 East

					
					942 North 240 East

				
	
					American Fork, UT 84003

					
					American Fork, Utah 84003

				
	
					  

					
					

				
	
					IF TO HYBRID:

					
					IF TO OWNERS:

				
	
					Hybrid Dynamics Corporation

					
					To the address set forth in the

				
	
					892 North 340 East

					
					Respective Exhibit F for each Owner

				
	
					American Fork, UT 84003

					
					

				

		

		Any party may from time to time change its address for the purpose of notices to that party by a similar notice specifying a new address, but no such change shall be considered to have been given until it is actually received by the respective party hereto.

		

		All notices and other communications required or permitted under this Agreement which are addressed as provided in this Section 13.9 if delivered personally, shall be effective upon delivery; and, if delivered by mail, shall be effective three days following deposit in the United States mail, postage prepaid.

		

		IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date last written below.

		

			
					ACQUIROR:

							

						PUKKA USA, INC.

					

					
					

				
	
					

					
					

				
	
					By: /s/ Paul Ressler                                             

					
					August 23, 2007

				
	
					Name:  Paul Ressler

					
					Date

				
	
					Title: President

					
					

				
	
					  

					
					

				
	
					HYBRID:

							

						HYBRID DYNAMICS CORPORATION

					

					
					

				
	
					

					
					

				
	
					By: /s/ Paul Ressler                                             

					
					August 23, 2007

				
	
					Name:  Paul Ressler

					
					Date

				
	
					Title: President

					
					

				
	
					  

					
					

				
	
					ACQUIREE:

					

					
					

				
		
	
					FIRE ANT CORPORATION

					
					

				
	
					  

					
					

				
	
					By: /s/ Leonard DuCharme                                 

					
					August 23, 2007

				
	
					Name:  Leonard DuCharme

					
					Date

				
	
					Title: President

					
					

				

		

		

		

		

		

		

		

		

		

		

			
					OWNERS:

							

						Leonard A. DuCharme

					

					
					

					
					

				
	
					

					
					

					
					

				
	
					By: /s/ Leonard A. DuCharme                     

					
					August 23, 2007

					
					
						750,000 shares

					

				
	
					Name:  Leonard A. DuCharme

					
					Date

					
					
						Exchange Shares

					

				
	
					Title: Individual

					
					

					
					
						

					

				
	
					 

					
					

					
					
						

					

				
	  		
	
					Paul Ressler

					
					

					
					
						

					

				
	
					  

					
					

					
					
						

					

				
	
					By: /s/ Paul Ressler                                     

					
					August 23, 2007

					
					
						750,000 shares

					

				
	
					Name:  Paul Ressler

					
					Date

					
					
						Exchange Shares

					

				
	
					Title: Individual

					
					

					
					
						

					

				
	
					  

					
					

					
					
						

					

				
	  		
	
					Darren Jensen

					
					

					
					
						

					

				
	
					  

					
					

					
					
						

					

				
	
					By: /s/ Darren Jensen                                  

					
					August 23, 2007

					
					
						500,000 shares

					

				
	
					Name:  Darren Jensen

					
					Date

					
					
						Exchange Shares

					

				
	
					Title: Individual

					
					

					
					
						

					

				

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		EXHIBIT LIST

		

		Exhibit "A-1"     UNANIMOUS WRITTEN CONSENT OF THE BOARD OF DIRECTORS OF HYBRID DYNAMICS CORPORATION.

		

		Exhibit “A-2”     UNANIMOUS WRITTEN CONSENT OF THE BOARD OF DIRECTORS OF PUKKA USA, INC.

		

		Exhibit "B"         ACTION BY UNANIMOUS WRITTEN CONSENT OF THE BOARD OF DIRCTORS OF FIRE ANT CORPORATION.

		

		Exhibit “C”        ACQUIREE FINANCIAL STATEMENTS

		

		Exhibit “D”        ACQUIROR FINANCIAL STATEMENTS

		

		Exhibit “E”        ACQUIROR CAPITALIZATION & SHAREHOLDERS

		

		Exhibit “F”        FORM OF INDIVIDUAL OWNER REPRESENTATION LETTEREXHIBIT 99.1

                              INVESTMENT AGREEMENT

INVESTMENT  AGREEMENT  (this  "AGREEMENT"),  dated  as of August 20, 2007 by and
between Global Wataire, Inc., a Nevada corporation (the "Company"), and Dutchess
Private Equities Fund, Ltd., a Cayman Islands exempted company (the "Investor").

WHEREAS,  the  parties desire that, upon the terms and subject to the conditions
contained  herein,  the  Investor  shall  invest  up  to  Ten  Million  dollars
($10,000,000)  to purchase the Company's Common Stock, $.001 par value per share
(the  "Common  Stock");

WHEREAS,  such  investments  will  be  made  in  reliance upon the provisions of
Section 4(2) under the Securities Act of 1933, as amended (the "1933 Act"), Rule
506  of  Regulation  D,  and  the  rules and regulations promulgated thereunder,
and/or  upon such other exemption from the registration requirements of the 1933
Act  as may be available with respect to any or all of the investments in Common
Stock  to  be  made  hereunder;  and

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

NOW  THEREFORE,  in  consideration  of  the  foregoing  recitals, which shall be
considered  an integral part of this Agreement, the covenants and agreements set
forth  hereafter,  and  other  good  and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Investor hereby
agree  as  follows:

SECTION  1.  DEFINITIONS.

     As  used  in  this  Agreement, the following terms shall have the following
meanings  specified  or  indicated  below,  and  such  meanings shall be equally
applicable  to  the  singular  and  plural  forms  of  such  defined  terms.

     "1933  Act"  shall  have  the  meaning  set  forth  in the preamble of this
      ---------
agreement.
      -

     "1934  Act"  shall  mean  the Securities Exchange Act of 1934, as it may be
      ---------
amended.

     "Affiliate"  shall  have  the  meaning  specified  in  Section 5(H), below.
      ---------

     "Agreement"  shall  mean  this  Investment  Agreement.
      ---------

                                        1
<PAGE>
     "Best  Bid"  shall  mean  the  highest posted bid price of the Common Stock
      ----------
during  a  given  period  of  time.

     "By-laws"  shall  have  the  meaning  specified  in  Section  4(C).
      -------

     "Certificate  of Incorporation" shall have the meaning specified in Section
      -----------------------------
4(C).

     "Closing"  shall  have  the  meaning  specified  in  Section  2(G).
      -------

     "Closing Date" shall mean no more than seven (7) Trading Days following the
      ------------
Put  Notice  Date.

     "Common  Stock"  shall  have  the meaning set forth in the preamble of this
      -------------
Agreement.

     "Control"  or  "Controls" shall have the meaning specified in Section 5(H).
      -------        --------

     "Effective  Date"  shall mean the date the SEC declares effective under the
      ---------------
1933  Act  the  Registration  Statement  covering  the  Securities.

     "Environmental  Laws"  shall  have  the  meaning specified in Section 4(M).
      -------------------

     "Equity  Line  Transaction  Documents"  shall  mean  this Agreement and the
     -------------------------------------
Registration  Rights Agreement between the Company and the Investor of even date
herewith.

     "Execution  Date"  shall  mean  the  date indicated in the preamble to this
      ---------------
Agreement.

     "Indemnities"  shall  have  the  meaning  specified  in  Section  11.
      -----------

     "Indemnified  Liabilities"  shall have the meaning specified in Section 11.
      ------------------------

     "Ineffective  Period"  shall  mean any period of time that the Registration
      -------------------
Statement  or  any  Supplemental  Registration  Statement  (as  defined  in  the
Registration  Rights  Agreement  between  the  parties)  becomes  ineffective or
unavailable  for use for the sale or resale, as applicable, of any or all of the
Registrable Securities (as defined in the Registration Rights Agreement) for any
reason  (or in the event the prospectus under either of the above is not current
and  deliverable)  during any time period required under the Registration Rights
Agreement.

     "Investor"  shall  have  the  meaning  indicated  in  the  preamble of this
      --------
Agreement.

     "Material Adverse Effect" shall have the meaning specified in Section 4(A).
      -----------------------

                                        2
<PAGE>
     "Maximum Common Stock Issuance" shall have the meaning specified in Section
      -----------------------------
2(H).

     "Minimum  Acceptable  Price" with respect to any Put Notice Date shall mean
      --------------------------
seventy-five  percent  (75%)  of  the lowest closing bid prices for the ten (10)
Trading  Day  period  immediately  preceding  each  Put  Notice  Date.

     "Open Market Adjustment Amount" shall have the meaning specified in Section
      -----------------------------
2(I).

     "Open  Market  Purchase"  shall  have the meaning specified in Section 2(I)
      ----------------------

     "Open  Market  Share  Purchase" shall have the meaning specified in Section
      -----------------------------
2(I).

     "Open  Period" shall mean the period beginning on and including the Trading
      ------------
Day  immediately following the Effective Date and ending on the earlier to occur
of (i) the date which is thirty-six (36) months from the Effective Date; or (ii)
termination  of  the  Agreement  in  accordance  with  Section  9,  below.

     "Pricing Period" shall mean the period beginning on the Put Notice Date and
      --------------
ending  on  and  including the date that is five (5) Trading Days after such Put
Notice  Date.

     "Principal  Market"  shall  mean  the  American  Stock  Exchange, Inc., the
      -----------------
National  Association  of  Securities  Dealers,  Inc.  Over-the-Counter Bulletin
Board,  the  NASDAQ  National  Market  System  or  the  NASDAQ  SmallCap Market,
whichever  is  the  principal  market  on  which  the  Common  Stock  is listed.

     "Prospectus"  shall  mean  the  prospectus,  preliminary  prospectus  and
      ----------
supplemental  prospectus  used  in  connection  with the Registration Statement.

     "Purchase Amount" shall mean the total amount being paid by the Investor on
      ---------------
a  particular  Closing  Date  to  purchase  the  Securities.

     "Purchase  Price"  shall  mean  ninety-three  percent  (93%)  of the lowest
      ---------------
closing  Best  Bid  price  of  the  Common  Stock  during  the  Pricing  Period.

     "Put"  shall  have  the  meaning  set  forth  in  Section  2(B)(1)  hereof.
      ---

     "Put  Amount"  shall  have the meaning set forth in Section 2(B)(1) hereof.
      -----------

     "Put  Notice"  shall  mean  a  written  notice  sent to the Investor by the
      -----------
Company  stating  the  Put Amount in U.S. dollars the Company intends to sell to
the  Investor  pursuant  to  the  terms of the Agreement and stating the current
number  of  Shares  issued  and  outstanding  on  such  date.

                                        3
<PAGE>
     "Put  Notice  Date"  shall  mean  the  Trading  Day,  as  set  forth below,
      -----------------
immediately  following  the  day  on  which  the Investor receives a Put Notice,
however  a  Put  Notice  shall  be deemed delivered on (a) the Trading Day it is
received  by  facsimile  or otherwise by the Investor if such notice is received
prior  to 9:00 am Eastern Time, or (b) the immediately succeeding Trading Day if
it is received by facsimile or otherwise after 9:00 am Eastern Time on a Trading
Day.  No  Put Notice may be deemed delivered on a day that is not a Trading Day.

     "Put  Restriction" shall mean the days between the beginning of the Pricing
      ----------------
Period and Closing Date.  During this time, the Company shall not be entitled to
deliver  another  Put  Notice.

     "Put  Shares  Due"  shall  have  the  meaning  specified  in  Section 2(I).
      ----------------

     "Registration  Period"  shall  have  the meaning specified in Section 5(C),
      --------------------
below.

     "Registration  Rights  Agreement"  shall  have the meaning set forth in the
      -------------------------------
recitals,  above.

     "Registration  Statement"  means  the registration statement of the Company
      -----------------------
filed  under  the  1933  Act  covering  the  Common  Stock  issuable  hereunder.

     "Related  Party"  shall  have  the  meaning  specified  in  Section  5(H).
      --------------

     "Resolution"  shall  have  the  meaning  specified  in  Section  8(E).
      ----------

     "SEC"  shall  mean  the  U.S.  Securities  &  Exchange  Commission.
      ---

     "SEC  Documents"  shall  have  the  meaning  specified  in  Section  4(F).
      --------------

     "Securities"  shall  mean the shares of Common Stock issued pursuant to the
      ----------
terms  of  the  Agreement.

     "Shares"  shall  mean  the  shares  of  the  Company's  Common  Stock.
      ------

     "Subsidiaries"  shall  have  the  meaning  specified  in  Section  4(A).
      ------------

     "Trading  Day"  shall  mean  any  day on which the Principal Market for the
      ------------
Common  Stock  is  open  for  trading,  from the hours of 9:30 am until 4:00 pm.

SECTION  2.  PURCHASE  AND  SALE  OF  COMMON  STOCK.

(A)  PURCHASE  AND SALE OF COMMON STOCK. Subject to the terms and conditions set
forth  herein,  the  Company  shall  issue  and  sell  to  the  Investor,  and

                                        4
<PAGE>
the Investor shall purchase from the Company, up to that number of Shares having
an  aggregate  Purchase  Price  of  Ten  Million  dollars  ($10,000,000).

(B)  DELIVERY  OF  PUT  NOTICES.

(I)  Subject  to  the  terms  and  conditions  of  the  Equity  Line Transaction
Documents, and from time to time during the Open Period, the Company may, in its
sole  discretion,  deliver  a Put Notice to the Investor which states the dollar
amount  (designated  in  U.S.  Dollars)  (the  "Put  Amount"), which the Company
intends  to  sell  to the Investor on a Closing Date (the "Put"). The Put Notice
shall  be  in  the  form attached hereto as Exhibit C and incorporated herein by
reference.  The amount that the Company shall be entitled to Put to the Investor
(the "Put Amount") shall be equal to, at the Company's election, either: (A) Two
Hundred  percent  (200%)  of  the average daily volume (U.S. market only) of the
Common  Stock  for  the Ten (10) Trading Days prior to the applicable Put Notice
Date,  multiplied  by  the  average  of  the  three (3) daily closing bid prices
immediately  preceding  the  Put Date, or (B) two hundred fifty thousand dollars
($250,000).  During the Open Period, the Company shall not be entitled to submit
a  Put  Notice until after the previous Closing has been completed. The Purchase
Price  for  the  Common  Stock  identified  in  the Put Notice shall be equal to
ninety-three  percent  (93%)  of the lowest closing Best Bid price of the Common
Stock  during  the  Pricing  Period.

(C)  COMPANY'S RIGHT TO WITHDRAWAL. The Company shall reserve the right, but not
the  obligation,  to  withdraw that portion of the Put that is below the Minimum
Acceptable  Price, by submitting to the Investor, in writing, a notice to cancel
that  portion  of the Put.  Any shares above the Minimum Acceptable price due to
the  Investor  shall  be  carried  out  by  the  Company under the terms of this
Agreement.

(D)  INTENTIONALLY  OMITTED

(E)  CONDITIONS  TO  INVESTOR'S  OBLIGATION  TO PURCHASE SHARES. Notwithstanding
anything to the contrary in this Agreement, the Company shall not be entitled to
deliver  a  Put  Notice  and the Investor shall not be obligated to purchase any
Shares  at  a  Closing (as defined in Section 2(G)) unless each of the following
conditions  are  satisfied:

     (I)  a  Registration Statement shall have been declared effective and shall
remain  effective and available for the resale of all the Registrable Securities
(as defined in the Registration Rights Agreement) at all times until the Closing
with  respect  to  the  subject  Put  Notice;

     (II)  at  all  times  during the period beginning on the related Put Notice
Date  and  ending  on  and  including the related Closing Date, the Common Stock
shall have been listed on the Principal Market and shall not have been suspended
from trading thereon for a period of two (2) consecutive Trading Days during the

                                        5
<PAGE>
Open  Period  and  the  Company  shall  not have been notified of any pending or
threatened  proceeding  or  other  action  to  suspend the trading of the Common
Stock;

     (III) the Company has complied with its obligations and is otherwise not in
breach of or in default under, this Agreement, the Registration Rights Agreement
or  any other agreement executed in connection herewith which has not been cured
prior  to  delivery  of  the  Investor's  Put  Notice  Date;

     (IV)  no  injunction  shall have been issued and remain in force, or action
commenced  by  a  governmental authority which has not been stayed or abandoned,
prohibiting  the  purchase  or  the  issuance  of  the  Securities;  and

     (V)  the  issuance  of  the  Securities  will  not  violate any shareholder
approval  requirements  of  the  Principal  Market.

If  any of the events described in clauses (I) through (V) above occurs during a
Pricing  Period,  then the Investor shall have no obligation to purchase the Put
Amount  of  Common  Stock  set  forth  in  the  applicable  Put  Notice.

(F)  RESERVED

(G)  MECHANICS OF PURCHASE OF SHARES BY INVESTOR. Subject to the satisfaction of
the  conditions set forth in Sections 2(E), 7 and 8, the closing of the purchase
by  the  Investor  of  Shares  (a "Closing") shall occur on the date which is no
later than seven (7) Trading Days following the applicable Put Notice Date (each
a  "Closing Date"). Prior to each Closing Date, (I) the Company shall deliver to
the Investor pursuant to this Agreement, certificates representing the Shares to
be  issued  to  the  Investor  on  such  date  and registered in the name of the
Investor;  and (II) the Investor shall deliver to the Company the Purchase Price
to  be paid for such Shares, determined as set forth in Section 2(B). In lieu of
delivering  physical  certificates representing the Securities and provided that
the  Company's  transfer  agent  then  is  participating in The Depository Trust
Company  ("DTC")  Fast  Automated  Securities  Transfer  ("FAST")  program, upon
request  of  the  Investor,  the  Company  shall use all commercially reasonable
efforts to cause its transfer agent to electronically transmit the Securities by
crediting  the  account  of  the  Investor's  prime  broker (as specified by the
Investor  within  a  reasonably  in  advance  of the Investor's notice) with DTC
through  its  Deposit  Withdrawal  Agent  Commission  ("DWAC")  system.

The  Company  understands  that a delay in the issuance of Securities beyond the
Closing  Date  could  result  in  economic  damage  to  the  Investor. After the
Effective  Date,  as  compensation  to  the  Investor for such loss, the Company
agrees  to  make  late  payments to the Investor for late issuance of Securities
(delivery  of  Securities  after the applicable Closing Date) in accordance with
the  following  schedule  (where  "No. of Days Late" is defined as the number of
trading  days  beyond  the  Closing  Date,  with the Amounts being cumulative.):

                                        6
<PAGE>
     LATE PAYMENT FOR EACH
     NO. OF DAYS LATE         $10,000 WORTH OF COMMON STOCK

          1                     $100
          2                     $200
          3                     $300
          4                     $400
          5                     $500
          6                     $600
          7                     $700
          8                     $800
          9                     $900
          10                    $1,000
          Over  10              $1,000 + $200 for each Business
                                Day late beyond 10 days

The  Company  shall make any payments incurred under this Section in immediately
available  funds  upon  demand  by  the Investor. Nothing herein shall limit the
Investor's right to pursue actual damages for the Company's failure to issue and
deliver  the  Securities  to  the Investor, except that such late payments shall
offset  any  such  actual  damages incurred by the Investor, and any Open Market
Adjustment  Amount,  as  set  forth  below.

(H)  OVERALL  LIMIT ON COMMON STOCK ISSUABLE. Notwithstanding anything contained
herein  to the contrary, if during the Open Period the Company becomes listed on
an  exchange that limits the number of shares of Common Stock that may be issued
without  shareholder approval, then the number of Shares issuable by the Company
and  purchasable  by the Investor, shall not exceed that number of the shares of
Common  Stock  that  may  be issuable without shareholder approval (the "Maximum
Common  Stock Issuance"). If such issuance of shares of Common Stock could cause
a  delisting  on  the  Principal  Market, then the Maximum Common Stock Issuance
shall  first  be  approved  by  the  Company's  shareholders  in accordance with
applicable  law  and  the  By-laws  and  Amended  and  Restated  Certificate  of
Incorporation  of  the Company, if such issuance of shares of Common Stock could
cause a delisting on the Principal Market. The parties understand and agree that
the  Company's  failure  to seek or obtain such shareholder approval shall in no
way adversely affect the validity and due authorization of the issuance and sale
of  Securities  or  the  Investor's  obligation in accordance with the terms and
conditions  hereof  to  purchase  a  number of Shares in the aggregate up to the
Maximum  Common  Stock Issuance limitation, and that such approval pertains only
to the applicability of the Maximum Common Stock Issuance limitation provided in
this  Section  2(H).

(I)  If,  by  the  third  (3rd) business day after the Closing Date, the Company
fails  to deliver any portion of the shares of the Put to the Investor (the "Put
Shares  Due")  and  the  Investor  purchases,  in  an open market transaction or
otherwise,  shares  of  Common  Stock necessary to make delivery of shares which
would  have  been  delivered if the full amount of the shares to be delivered to
the  Investor  by  the  Company  (the  "Open  Market Share Purchase") , then the
Company  shall  pay  to

                                        7
<PAGE>
the  Investor,  in addition to any other amounts due to Investor pursuant to the
Put,  and  not  in  lieu  thereof, the Open Market Adjustment Amount (as defined
below).  The  "Open Market Adjustment Amount" is the amount equal to the excess,
if  any,  of  (x)  the  Investor's  total  purchase  price  (including brokerage
commissions,  if  any)  for  the  Open  Market  Share Purchase minus (y) the net
proceeds (after brokerage commissions, if any) received by the Investor from the
sale  of  the  Put  Shares Due. The Company shall pay the Open Market Adjustment
Amount  to  the Investor in immediately available funds within five (5) business
days  of  written  demand  by  the  Investor.  By way of illustration and not in
limitation  of  the  foregoing, if the Investor purchases shares of Common Stock
having  a  total  purchase price (including brokerage commissions) of $11,000 to
cover an Open Market Purchase with respect to shares of Common Stock it sold for
net  proceeds  of  $10,000, the Open Market Purchase Adjustment Amount which the
Company  will  be  required  to  pay  to  the  Investor  will  be  $1,000.

(J)  LIMITATION ON AMOUNT OF OWNERSHIP. Notwithstanding anything to the contrary
in  this  Agreement, in no event shall the Investor be entitled to purchase that
number  of Shares, which when added to the sum of the number of shares of Common
Stock  beneficially  owned (as such term is defined under Section 13(d) and Rule
13d-3  of  the  1934  Act), by the Investor, would exceed 4.99% of the number of
shares  of  Common  Stock  outstanding  on  the  Closing  Date, as determined in
accordance  with  Rule  13d-1(j)  of  the  1934  Act.

SECTION  3.  INVESTOR'S  REPRESENTATIONS,  WARRANTIES  AND  COVENANTS.

The  Investor  represents  and  warrants  to  the  Company, and covenants, that:

(A)  SOPHISTICATED  INVESTOR.  The  Investor  has, by reason of its business and
financial experience, such knowledge, sophistication and experience in financial
and  business matters and in making investment decisions of this type that it is
capable  of  (I)  evaluating  the  merits  and  risks  of  an  investment in the
Securities  and  making an informed investment decision; (II) protecting its own
interest;  and  (III)  bearing  the  economic  risk  of  such  investment for an
indefinite  period  of  time.

(B)  AUTHORIZATION;  ENFORCEMENT.  This  Agreement  has  been  duly  and validly
authorized,  executed and delivered on behalf of the Investor and is a valid and
binding agreement of the Investor enforceable against the Investor in accordance
with its terms, subject as to enforceability to general principles of equity and
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)  SECTION  9 OF THE 1934 ACT. During the term of this Agreement, the Investor
will  comply  with  the  provisions  of Section 9 of the 1934 Act, and the rules
promulgated  thereunder,  with  respect  to  transactions  involving  the Common

                                        8
<PAGE>
Stock.  The  Investor  agrees  not  to  sell  the  Company's stock short, either
directly  or  indirectly  through  its  affiliates,  principals or advisors, the
Company's  common  stock  during  the  term  of  this  Agreement.

(D)  ACCREDITED  INVESTOR.  Investor is an "Accredited Investor" as that term is
defined  in  Rule  501(a)  of  Regulation  D  of  the  1933  Act.

(E)  NO  CONFLICTS.  The  execution, delivery and performance of the Transaction
Documents  by  the  Investor  and  the  consummation  by  the  Investor  of  the
transactions  contemplated  hereby and thereby will not result in a violation of
Partnership  Agreement  or  other  organizational  documents  of  the  Investor.

(F)  OPPORTUNITY TO DISCUSS. The Investor has received all materials relating to
the  Company's  business,  finance  and  operations  which it has requested. The
Investor  has  had  an  opportunity  to  discuss  the  business,  management and
financial  affairs  of  the  Company  with  the  Company's  management.

(G)  INVESTMENT  PURPOSES. The Investor is purchasing the Securities for its own
account  for  investment  purposes  and not with a view towards distribution and
agrees  to  resell  or  otherwise dispose of the Securities solely in accordance
with  the  registration  provisions of the 1933 Act (or pursuant to an exemption
from  such  registration  provisions).

(H) NO REGISTRATION AS A DEALER. The Investor is not and will not be required to
be  registered  as  a  "dealer"  under  the  1934 Act, either as a result of its
execution  and performance of its obligations under this Agreement or otherwise.

(I)  GOOD  STANDING.  The  Investor  is  a  Limited Partnership, duly organized,
validly  existing  and  in  good  standing  in  the  Cayman  Islands.

(J)  TAX LIABILITIES. The Investor understands that it is liable for its own tax
liabilities.

(K) REGULATION M. The Investor will comply with Regulation M under the 1934 Act,
if  applicable.

SECTION  4.  REPRESENTATIONS  AND  WARRANTIES  OF  THE  COMPANY.

Except  as  set  forth  in the Schedules attached hereto, or as disclosed on the
Company's  SEC  Documents,  the  Company represents and warrants to the Investor
that:

(A)  ORGANIZATION AND QUALIFICATION. The Company is a corporation duly organized
and validly existing in good standing under the laws of the State of Nevada, and
has the requisite corporate power and authorization to own its properties and to
carry  on  its  business  as  now  being  conducted.  Both  the

                                        9
<PAGE>
Company  and  the  companies  it  owns  or  controls  ("Subsidiaries")  are duly
qualified to do business and are 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,
financial  condition  or  prospects of the Company and its Subsidiaries, if any,
taken  as  a  whole,  or  on  the  transactions  contemplated  hereby  or by the
agreements  and instruments to be entered into in connection herewith, or on the
authority  or ability of the Company to perform its obligations under the Equity
Line  Transaction  Documents  (as  defined  in  Section  1  and  4(B),  below).

(B)  AUTHORIZATION;  ENFORCEMENT;  COMPLIANCE  WITH  OTHER  INSTRUMENTS.

     (I)  The  Company  has the requisite corporate power and authority to enter
into and perform this Investment Agreement and the Registration Rights Agreement
(collectively,  the  "Equity  Line  Transaction  Documents"),  and  to issue the
Securities  in  accordance  with  the  terms  hereof  and  thereof.

     (II) The execution and delivery of the Equity Line Transaction Documents by
the  Company  and the consummation by it of the transactions contemplated hereby
and  thereby,  including without limitation the reservation for issuance and the
issuance  of  the  Securities  pursuant  to  this  Agreement, have been duly and
validly authorized by the Company's Board of Directors and no further consent or
authorization  is  required  by  the  Company,  its  Board  of Directors, or its
shareholders.

     (III)  The  Equity  Line  Transaction  Documents have been duly and validly
executed  and  delivered  by  the  Company.

     (IV) The Equity Line Transaction Documents constitute the valid and binding
obligations  of  the  Company enforceable against the Company in accordance with
their  terms, except as such enforceability may be limited by general principles
of  equity  or  applicable  bankruptcy,  insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement
of  creditors'  rights  and  remedies.

(C)  CAPITALIZATION.  As of the date hereof, the authorized capital stock of the
Company  consists  of  800,000,000  shares  of Common Stock, $.001 par value per
share,  of  which  as  of  the  date  hereof,  15,839,360  shares are issued and
14,439,360  shares  are  outstanding;  50,000 shares of Class B Common Stock are
authorized  with  no  shares  issued or outstanding; 1,000,000 shares of Class A
Preferred  Stock  authorized  with  66,000  shares  issued  and  100,000  shares
outstanding;  5,000,000  shares  of  Class  B  Preferred  Stock  authorized with
1,000,000  shares  issued  and  outstanding;  15,000,000  shares  of  Class  C

                                       10
<PAGE>
Preferred  Stock authorized with no shares issued or outstanding; and 13,000,000
shares  of  Class  D  Preferred  Stock  authorized  with  no  shares  issued  or
outstanding,  as  of  May  31,  2007, and 3,000,000 shares reserved for issuance
pursuant  to  options,  warrants  and  other convertible securities. All of such
outstanding  shares  have been, or upon issuance will be, validly issued and are
fully  paid  and  nonassessable.

Except  as  disclosed  in the Company's publicly available filings with the SEC:

(I) no shares of the Company's capital stock are 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 debt securities; (III) there are no
outstanding  shares  of  capital  stock,  options,  warrants,  scrip,  rights to
subscribe  to,  calls or commitments of any character whatsoever relating to, or
securities  or  rights  convertible  into,  any  shares  of capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements  by  which  the Company or any of its Subsidiaries is or may become
bound  to  issue additional shares of capital stock of the Company or any of its
Subsidiaries  or  options,  warrants,  scrip,  rights  to subscribe to, calls or
commitments  of  any  character  whatsoever relating to, or securities or rights
convertible  into,  any  shares  of  capital  stock of the Company or any of its
Subsidiaries;  (IV)  there  are  no  agreements  or arrangements under which the
Company  or  any of its Subsidiaries is obligated to register the sale of any of
their  securities under the 1933 Act (except the Registration Rights Agreement);
(V)  there  are  no  outstanding  securities  of  the  Company  or  any  of  its
Subsidiaries  which  contain any redemption or similar provisions, and there are
no  contracts,  commitments, understandings or arrangements by which the Company
or  any  of  its Subsidiaries is or may become bound to redeem a security of the
Company  or any of its Subsidiaries; (VI) there are no securities or instruments
containing  anti-dilution  or  similar  provisions that will be triggered by the
issuance  of  the  Securities  as described in this Agreement; (VII) the Company
does  not  have  any  stock  appreciation  rights  or  "phantom  stock" plans or
agreements  or  any similar plan or agreement; and (VIII) there is no dispute as
to  the  classification  of  any  shares  of  the  Company's  capital  stock.

     The  Company  has furnished to the Investor, or the Investor has had access
through  EDGAR to, true and correct copies of the Company's Amended and Restated
Certificate  of Incorporation, as in effect on the date hereof (the "Certificate
of  Incorporation"),  and the Company's By-laws, as in effect on the date hereof
(the "By-laws"), and the terms of all securities convertible into or exercisable
for  Common  Stock  and  the  material  rights of the holders thereof in respect
thereto.

(D)  ISSUANCE  OF SHARES. The Company has reserved 4,000,000 Shares for issuance
pursuant  to  this Agreement, which have been duly authorized and reserved those
Shares  for  issuance  (subject to adjustment pursuant to the Company's covenant
set  forth  in  Section  5(F)  below)  pursuant  to  this  Agreement.

                                       11
<PAGE>
Upon  issuance in accordance with this Agreement, the Securities will be validly
issued,  fully  paid  for  and non-assessable and free from all taxes, liens and
charges  with  respect  to  the  issue  thereof. In the event the Company cannot
register  a sufficient number of Shares for issuance pursuant to this Agreement,
the  Company will use its best efforts to authorize and reserve for issuance the
number  of  Shares required for the Company to perform its obligations hereunder
as  soon  as  reasonably  practicable.

(E)  NO  CONFLICTS.  The  execution, delivery and performance of the Equity Line
Transaction  Documents by the Company and the consummation by the Company of the
transactions  contemplated hereby and thereby will not (I) result in a violation
of  the  Certificate  of  Incorporation,  any  Certificate  of  Designations,
Preferences  and  Rights  of  any  outstanding  series of preferred stock of the
Company  or the By-laws; or (II) conflict with, or constitute a material default
(or  an event which with notice or lapse of time or both would become a material
default)  under,  or  give  to  others  any  rights  of  termination, amendment,
acceleration  or  cancellation  of,  any material agreement, contract, indenture
mortgage,  indebtedness  or  instrument  to  which  the  Company  or  any of its
Subsidiaries  is a party, or to the Company's knowledge result in a violation of
any  law,  rule,  regulation, order, judgment or decree (including United States
federal  and state securities laws and regulations and the rules and regulations
of  the  Principal  Market or principal securities exchange or trading market on
which  the Common Stock is traded or listed) applicable to the Company or any of
its  Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected. Except as disclosed in Schedule 4(e), neither
the  Company  nor its Subsidiaries is in violation of any term of, or in default
under,  the  Certificate  of  Incorporation,  any  Certificate  of Designations,
Preferences  and  Rights  of  any  outstanding  series of preferred stock of the
Company or the By-laws or their organizational charter or by-laws, respectively,
or  any  contract,  agreement,  mortgage,  indebtedness,  indenture, instrument,
judgment,  decree  or order or any statute, rule or regulation applicable to the
Company  or  its  Subsidiaries,  except  for  possible  conflicts,  defaults,
terminations, amendments, accelerations, cancellations and violations that would
not  individually  or  in  the  aggregate  have or constitute a Material Adverse
Effect. The business of the Company and its Subsidiaries is not being conducted,
and  shall  not be conducted, in violation of any law, statute, ordinance, rule,
order  or  regulation  of  any  governmental  authority or agency, regulatory or
self-regulatory  agency,  or court, except for possible violations the sanctions
for  which  either  individually  or  in the aggregate would not have a Material
Adverse  Effect.  Except  as  specifically contemplated by this Agreement and as
required  under  the  1933  Act  or  any  securities  laws of any states, to the
Company's  knowledge,  the  Company  is  not  required  to  obtain  any consent,
authorization,  permit  or  order of, or make any filing or registration (except
the  filing  of  a registration statement as outlined in the Registration Rights
Agreement  between  the  Parties)  with,  any  court,  governmental authority or
agency,  regulatory  or self-regulatory agency or other third party in order for
it  to execute, deliver or perform any of its obligations under, or contemplated
by,  the  Equity  Line  Transaction  Documents  in

                                       12
<PAGE>
accordance  with  the  terms  hereof  or  thereof. All consents, authorizations,
permits,  orders,  filings  and  registrations  which the Company is required to
obtain  pursuant  to the preceding sentence have been obtained or effected on or
prior to the date hereof and are in full force and effect as of the date hereof.
Except  as  disclosed  in  Schedule  4(e),  the Company and its Subsidiaries are
unaware  of  any  facts  or  circumstances  which  might give rise to any of the
foregoing.  The  Company  is  not,  and will not be, in violation of the listing
requirements of the Principal Market as in effect on the date hereof and on each
of  the  Closing Dates and is not aware of any facts which would reasonably lead
to  delisting  of  the  Common  Stock by the Principal Market in the foreseeable
future.

(F)  SEC DOCUMENTS; FINANCIAL STATEMENTS. As of the date hereof, the Company has
filed  all reports, schedules, forms, statements and other documents required to
be  filed  by it with the SEC pursuant to the reporting requirements of the 1934
Act  (all  of  the  foregoing  filed  prior  to the date hereof and all exhibits
included  therein  and  financial statements and schedules thereto and documents
incorporated  by  reference  therein  being  hereinafter referred to as the "SEC
Documents").  The  Company has delivered to the Investor or its representatives,
or  they  have  had access through EDGAR to, true and complete copies of the SEC
Documents.  As  of  their respective filing dates, the SEC Documents complied in
all  material  respects  with the requirements of the 1934 Act and the rules and
regulations  of  the SEC promulgated thereunder applicable to the SEC Documents,
and  none  of  the  SEC  Documents,  at  the  time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact  required to be stated therein or necessary to make the statements therein,
in  light of the circumstances under which they were made, not misleading. As of
their  respective dates, the financial statements of the Company included in the
SEC  Documents  complied  as  to  form  in all material respects with applicable
accounting  requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance with
generally  accepted  accounting  principles,  by  a firm that is a member of the
Public  Companies  Accounting  Oversight  Board  ("PCAOB") consistently applied,
during  the  periods  involved (except (I) as may be otherwise indicated in such
financial  statements  or  the  notes  thereto, or (II) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the financial
position  of  the  Company  as  of  the  dates  thereof  and  the results of its
operations  and  cash  flows for the periods then ended (subject, in the case of
unaudited  statements,  to  normal year-end audit adjustments). No other written
information provided by or on behalf of the Company to the Investor which is not
included  in  the  SEC  Documents,  including,  without  limitation, information
referred  to in Section 4(D) of this Agreement, contains any untrue statement of
a  material  fact  or  omits  to  state  any material fact necessary to make the
statements  therein,  in  the  light of the circumstance under which they are or
were  made,  not  misleading. Neither the Company nor any of its Subsidiaries or
any of their officers, directors, employees or agents have provided the Investor
with  any  material,  nonpublic  information  which  was

                                       13
<PAGE>
not  publicly  disclosed  prior  to  the date hereof and any material, nonpublic
information  provided  to the Investor by the Company or its Subsidiaries or any
of  their  officers,  directors,  employees  or agents prior to any Closing Date
shall  be  publicly  disclosed  by  the  Company  prior  to  such  Closing Date.

(G)  ABSENCE  OF  CERTAIN  CHANGES.  Except  as  otherwise  set forth in the SEC
Documents,  the Company does not intend to change the business operations of the
Company  in  any material way. The Company has not taken any steps, and does not
currently  expect  to  take  any  steps,  to  seek  protection  pursuant  to any
bankruptcy  law  nor  does the Company or its Subsidiaries have any knowledge or
reason  to  believe that its creditors intend to initiate involuntary bankruptcy
proceedings.

(H)  ABSENCE OF LITIGATION AND/OR REGULATORY PROCEEDINGS. Except as set forth in
the  SEC  Documents,  there  is  no  action,  suit,  proceeding,  inquiry  or
investigation  before  or  by  any  court,  public  board,  government  agency,
self-regulatory  organization  or  body  pending  or,  to  the  knowledge of the
executive  officers of Company or any of its Subsidiaries, threatened against or
affecting  the Company, the Common Stock or any of the Company's Subsidiaries or
any  of  the  Company's  or the Company's Subsidiaries' officers or directors in
their  capacities  as  such,  in which an adverse decision could have a Material
Adverse  Effect.

(I)  ACKNOWLEDGMENT  REGARDING  INVESTOR'S  PURCHASE  OF  SHARES.  The  Company
acknowledges and agrees that the Investor is acting solely in the capacity of an
arm's  length  purchaser  with  respect  to  the  Transaction  Documents and the
transactions  contemplated  hereby and thereby. The Company further acknowledges
that  the  Investor  is  not  acting  as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to the Equity Line Transaction
Documents  and  the  transactions contemplated hereby and thereby and any advice
given  by  the  Investor  or  any of its respective representatives or agents in
connection  with  the  Equity  Line  Transaction  Documents and the transactions
contemplated  hereby and thereby is merely incidental to the Investor's purchase
of  the  Securities,  and  is  not  being  relied on by the Company. The Company
further represents to the Investor that the Company's decision to enter into the
Equity  Line  Transaction  Documents  has  been  based solely on the independent
evaluation  by  the  Company  and  its  representatives.

(J) NO UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR CIRCUMSTANCES. Except as
set  forth  in  the  SEC  Documents, as of the date hereof, no event, liability,
development  or  circumstance  has  occurred  or  exists,  or  to  the Company's
knowledge  is  contemplated  to  occur,  with  respect  to  the  Company  or its
Subsidiaries  or  their  respective  business,  properties,  assets,  prospects,
operations or financial condition, that would be required to be disclosed by the
Company  under  applicable  securities  laws  on  a  registration

                                       14
<PAGE>
statement  filed with the SEC relating to an issuance and sale by the Company of
its  Common  Stock  and  which  has  not  been  publicly  announced.

(K)  EMPLOYEE  RELATIONS.  Neither  the  Company  nor any of its Subsidiaries is
involved  in any union labor dispute nor, to the knowledge of the Company or any
of its Subsidiaries, is any such dispute threatened. Neither the Company nor any
of  its  Subsidiaries  is  a party to a collective bargaining agreement, and the
Company  and  its  Subsidiaries  believe that relations with their employees are
good.  No  executive  officer  (as  defined  in Rule 501(f) of the 1933 Act) has
notified  the Company that such officer intends to leave the Company's employ or
otherwise  terminate  such  officer's  employment  with  the  Company.

(L)  INTELLECTUAL  PROPERTY  RIGHTS.  The  Company  and  its Subsidiaries own or
possess  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  rights  necessary  to  conduct  their respective businesses as now
conducted.  Except  as  set  forth  in  the SEC Documents, none of the Company's
trademarks,  trade  names,  service  marks,  service mark registrations, service
names,  patents,  patent  rights,  copyrights,  inventions, licenses, approvals,
government  authorizations,  trade secrets or other intellectual property rights
necessary  to  conduct  its  business as now or as proposed to be conducted have
expired  or  terminated,  or  are expected to expire or terminate within two (2)
years  from  the date of this Agreement. The Company and its Subsidiaries do not
have  any  knowledge  of  any infringement by the Company or its Subsidiaries of
trademark,  trade  name  rights, patents, patent rights, copyrights, inventions,
licenses, service names, service marks, service mark registrations, trade secret
or  other  similar  rights  of  others, or of any such development of similar or
identical  trade  secrets  or technical information by others and, except as set
forth  in  the SEC Documents, there is no claim, action or proceeding being made
or brought against, or to the Company's knowledge, being threatened against, the
Company  or  its  Subsidiaries  regarding trademark, trade name, patents, patent
rights,  invention,  copyright,  license,  service names, service marks, service
mark  registrations, trade secret or other infringement; and the Company and its
Subsidiaries  are unaware of any facts or circumstances which might give rise to
any  of  the foregoing. The Company and its Subsidiaries have taken commercially
reasonable  security  measures to protect the secrecy, confidentiality and value
of  all  of  their  intellectual  properties.

(M)  ENVIRONMENTAL  LAWS.  The  Company  and  its  Subsidiaries  (I) are, to the
knowledge  of  the management and directors of the Company and its Subsidiaries,
in compliance with any and all applicable foreign, federal, state and local laws
and  regulations  relating  to  the  protection  of human health and safety, the
environment  or  hazardous  or  toxic  substances  or  wastes,  pollutants  or
contaminants  ("Environmental  Laws");  (II)  have,  to  the  knowledge  of  the
management and directors of the Company, received all permits, licenses or other
approvals  required  of  them  under  applicable  Environmental  Laws  to

                                       15
<PAGE>
conduct  their  respective  businesses;  and  (III)  are  in  compliance, to the
knowledge  of  the  management  and directors of the Company, with all terms and
conditions  of  any such permit, license or approval where, in each of the three
(3) foregoing cases, the failure to so comply would have, individually or in the
aggregate,  a  Material  Adverse  Effect.

(N)  TITLE.  The  Company and its Subsidiaries have good and marketable title to
all  personal  property  owned  by them which is material to the business of the
Company  and  its  Subsidiaries,  in  each  case  free  and  clear of all liens,
encumbrances  and  defects  except such as are described in the SEC Documents or
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 or any
of  its  Subsidiaries.  Any real property and facilities held under lease by the
Company  or any of its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with  the use made and proposed to be made of such property and buildings by the
Company  and  its  Subsidiaries.

(O)  INSURANCE.  Each  of  the Company's Subsidiaries are insured by insurers of
recognized  financial  responsibility  against such losses and risks and in such
amounts  as  management  of  the  Company  reasonably believes to be prudent and
customary  in  the  businesses  in  which  the  Company and its Subsidiaries are
engaged.  Neither  the  Company nor any of its Subsidiaries has been refused any
insurance  coverage  sought  or  applied  for  and  neither  the Company nor its
Subsidiaries  has  any  reason  to believe that it will not be able to renew its
existing  insurance  coverage  as  and  when  such coverage expires or to obtain
similar  coverage  from  similar  insurers  as  may be necessary to continue its
business  at  a  cost  that  would  not  have  a  Material  Adverse  Effect.

(P)  REGULATORY PERMITS. The Company and its Subsidiaries have in full force and
effect  all  certificates,  approvals,  authorizations  and  permits  from  the
appropriate  federal,  state,  local  or  foreign  regulatory  authorities  and
comparable foreign regulatory agencies, necessary to own, lease or operate their
respective  properties  and  assets and conduct their respective businesses, and
neither  the  Company  nor  any  such  Subsidiary  has  received  any  notice of
proceedings  relating to the revocation or modification of any such certificate,
approval,  authorization  or  permit,  except  for such certificates, approvals,
authorizations  or  permits  which  if  not  obtained,  or  such  revocations or
modifications  which,  would  not  have  a  Material  Adverse  Effect.

(Q)  INTERNAL  ACCOUNTING  CONTROLS.  The  Company  and each of its Subsidiaries
maintain  a  system  of  internal  accounting  controls  sufficient  to  provide
reasonable  assurance  that  (I)  transactions  are  executed in accordance with
management's  general or specific authorizations; (II) transactions are recorded
as  necessary  to  permit preparation of financial statements in conformity with
generally  accepted accounting principles by a firm with membership to the PCAOB
and  to  maintain  asset  accountability;  (III)  access  to assets is permitted

                                       16
<PAGE>
only in accordance with management's general or specific authorization; and (IV)
the  recorded  accountability for assets is compared with the existing assets at
reasonable  intervals  and  appropriate  action  is  taken  with  respect to any
differences.

(R)  NO  MATERIALLY  ADVERSE  CONTRACTS, ETC. Neither the Company nor any of its
Subsidiaries is subject to any charter, corporate or other legal restriction, or
any  judgment,  decree,  order,  rule or regulation which in the judgment of the
Company's  officers  has or is expected in the future to have a Material Adverse
Effect.  Neither  the  Company  nor  any  of  its Subsidiaries is a party to any
contract  or agreement which in the judgment of the Company's officers has or is
expected  to  have  a  Material  Adverse  Effect.

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

(T)  CERTAIN  TRANSACTIONS.  Except  as  set forth in the SEC Documents filed at
least  ten  (10)  days  prior  to  the  date  hereof and except for arm's length
transactions pursuant to which the Company makes payments in the ordinary course
of  business  upon  terms  no  less favorable than the Company could obtain from
disinterested  third parties and other than the grant of stock options disclosed
in  the  SEC  Documents,  none  of  the officers, directors, or employees of the
Company  is  presently a party to any transaction with the Company or any of its
Subsidiaries  (other  than  for  services as employees, officers and directors),
including  any  contract,  agreement  or  other  arrangement  providing  for the
furnishing  of  services  to  or  by,  providing  for rental of real or personal
property  to  or  from,  or otherwise requiring payments to or from any officer,
director  or such employee or, to the knowledge of the Company, any corporation,
partnership,  trust  or other entity in which any officer, director, or any such
employee  has  a  substantial  interest  or  is an officer, director, trustee or
partner.

(U) DILUTIVE EFFECT. The Company understands and acknowledges that the number of
shares  of  Common Stock issuable upon purchases pursuant to this Agreement will
increase in certain circumstances including, but not necessarily limited to, the
circumstance  wherein  the trading price of the Common Stock declines during the
period  between  the  Effective  Date  and  the  end  of  the  Open

                                       17
<PAGE>
Period.  The  Company's  executive officers and directors have studied and fully
understand  the  nature  of  the transactions contemplated by this Agreement and
recognize  that they have a potential dilutive effect on the shareholders of the
Company.  The Board of Directors of the Company has concluded, in its good faith
business  judgment,  and  with full understanding of the implications, that such
issuance  is  in  the  best  interests  of the Company. The Company specifically
acknowledges that, subject to such limitations as are expressly set forth in the
Equity  Line  Transaction  Documents,  its  obligation to issue shares of Common
Stock  upon  purchases  pursuant to this Agreement is absolute and unconditional
regardless  of  the dilutive effect that such issuance may have on the ownership
interests  of  other  shareholders  of  the  Company.

(V)  LOCK-UP.  The  Company  shall  cause its officers, insiders, directors, and
affiliates  or  other  related  parties under control of the Company, to refrain
from  selling  Common  Stock  during  each  Pricing  Period.

(W) NO GENERAL SOLICITATION. Neither the Company, nor any of its affiliates, nor
any person acting on its 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  Common  Stock  to be offered as set forth in this
Agreement.

(X)  NO  BROKERS, FINDERS OR FINANCIAL ADVISORY FEES OR COMMISSIONS. No brokers,
finders  or  financial  advisory  fees  or  commissions  will  be payable by the
Company,  its  agents  or  Subsidiaries,  with  respect  to  the  transactions
contemplated by this Agreement, except as otherwise disclosed in this Agreement.

SECTION  5.  COVENANTS  OF  THE  COMPANY

(A)  BEST  EFFORTS. The Company shall use all commercially reasonable efforts to
timely  satisfy each of the conditions set forth in Section 7 of this Agreement.

(B) BLUE SKY. The Company shall, at its sole cost and expense, on or before each
of the Closing Dates, take such action as the Company shall reasonably determine
is  necessary  to  qualify  the  Securities  for,  or  obtain  exemption for the
Securities  for,  sale  to the Investor at each of the Closings pursuant to this
Agreement  under  applicable securities or "Blue Sky" laws of such states of the
United  States,  as  reasonably  specified  by  the  Investor, and shall provide
evidence  of any such action so taken to the Investor on or prior to the Closing
Date.

(C)  REPORTING STATUS. Until one of the following occurs, the Company shall file
all  reports required to be filed with the SEC pursuant to the 1934 Act, and the
Company  shall  not  terminate its status, or take an action or fail to take any
action,  which  would terminate its status as a reporting company under the 1934
Act:  (i)  this  Agreement terminates pursuant to Section 9 and the Investor has
the

                                       18
<PAGE>
right to sell all of the Securities without restrictions pursuant to Rule 144(k)
promulgated  under  the 1933 Act, or such other exemption (ii) the date on which
the  Investor has sold all the Securities and this Agreement has been terminated
pursuant  to  Section  9.

(D)  USE  OF  PROCEEDS.  The  Company will use the proceeds from the sale of the
Shares  (excluding  amounts  paid  by  the  Company for fees as set forth in the
Equity  Line  Transaction  Documents)  for general corporate and working capital
purposes  and  acquisitions  or  assets,  businesses  or operations or for other
purposes  that  the Board of Directors, in its good faith deem to be in the best
interest  of  the  Company.

(E)  FINANCIAL  INFORMATION.  During the Open Period, the Company agrees to make
available  to  the  Investor  via  EDGAR or other electronic means the following
documents  and  information  on the forms set forth: (I) within five (5) Trading
Days after the filing thereof with the SEC, a copy of its Annual Reports on Form
10-KSB,  its  Quarterly  Reports on Form 10-QSB, any Current Reports on Form 8-K
and  any  Registration  Statements or amendments filed pursuant to the 1933 Act;
(II)  copies of any notices and other information made available or given to the
shareholders  of  the  Company  generally,  contemporaneously  with  the  making
available  or  giving  thereof  to  the  shareholders;  and (III) within two (2)
calendar days of filing or delivery thereof, copies of all documents filed with,
and all correspondence sent to, the Principal Market, any securities exchange or
market,  or  the  National  Association of Securities Dealers, Inc., unless such
information  is  material  nonpublic  information.

(F) RESERVATION OF SHARES. The Company shall take all action necessary to at all
times  have  authorized,  and reserved for the purpose of issuance, a sufficient
number  of  shares of Common Stock to provide for the issuance of the Securities
to  the Investor as required hereunder. In the event that the Company determines
that  it  does not have a sufficient number of authorized shares of Common Stock
to  reserve  and  keep available for issuance as described in this Section 5(F),
the Company shall use all commercially reasonable efforts to increase the number
of  authorized  shares  of  Common Stock by seeking shareholder approval for the
authorization  of  such  additional  shares.

(G)  LISTING.  The Company shall promptly secure and maintain the listing of all
of  the Registrable Securities (as defined in the Registration Rights Agreement)
on  the  Principal  Market  and  each  other  national  securities  exchange and
automated  quotation  system, if any, upon which shares of Common Stock are then
listed (subject to official notice of issuance) and shall maintain, such listing
of  all Registrable Securities from time to time issuable under the terms of the
Equity  Line  Transaction  Documents.  Neither  the  Company  nor  any  of  its
Subsidiaries  shall take any action which would be reasonably expected to result
in  the  delisting  or  suspension  of  the Common Stock on the Principal Market
(excluding  suspensions  of  not  more  than  one (1) trading day resulting from
business  announcements  by  the  Company).  The  Company  shall  promptly

                                       19
<PAGE>
provide  to  the  Investor  copies of any notices it receives from the Principal
Market  regarding  the  continued eligibility of the Common Stock for listing on
such  automated  quotation  system or securities exchange. The Company shall pay
all  fees  and expenses in connection with satisfying its obligations under this
Section  5(G).

(H) TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall cause each of
its  Subsidiaries not to, enter into, amend, modify or supplement, or permit any
Subsidiary  to  enter  into,  amend,  modify  or  supplement,  any  agreement,
transaction,  commitment  or  arrangement  with  any  of its or any Subsidiary's
officers,  directors,  persons who were officers or directors at any time during
the  previous two (2) years, shareholders who beneficially own 5% or more of the
Common Stock, or Affiliates 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  5%  or  more  beneficial interest (each a "Related Party"),
except  for  (I)  customary  employment  arrangements  and  benefit  programs on
reasonable  terms, (II) any agreement, transaction, commitment or arrangement on
an arms-length basis on terms no less favorable than terms which would have been
obtainable  from  a  disinterested third party other than such Related Party, or
(III) any agreement, transaction, commitment or arrangement which is approved by
a  majority  of the disinterested directors of the Company. For purposes hereof,
any  director  who  is  also  an officer of the Company or any Subsidiary of the
Company  shall  not  be  a  disinterested  director  with  respect  to  any such
agreement,  transaction,  commitment  or  arrangement.  "Affiliate" for purposes
hereof  means,  with  respect  to any person or entity, another person or entity
that,  directly  or  indirectly,  (I)  has  a 5% or more equity interest in that
person  or  entity,  (II)  has  5%  or more common ownership with that person or
entity,  (III)  controls  that person or entity, or (IV) is under common control
with  that  person  or entity. "Control" or "Controls" for purposes hereof means
that  a  person  or  entity has the power, directly or indirectly, to conduct or
govern  the  policies  of  another  person  or  entity.

(I)  FILING  OF  FORM  8-K. On or before the date which is four (4) Trading Days
after  the  Execution  Date, the Company shall file a Current Report on Form 8-K
with  the SEC describing the terms of the transaction contemplated by the Equity
Line  Transaction Documents in the form required by the 1934 Act, if such filing
is  required.

(J)  CORPORATE  EXISTENCE.  The  Company  shall  use all commercially reasonable
efforts  to  preserve  and  continue  the  corporate  existence  of the Company.

(K) NOTICE OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF RIGHT TO MAKE
A PUT. The Company shall promptly notify the Investor upon the occurrence of any
of  the  following  events  in  respect  of  a Registration Statement or related
prospectus  in  respect  of  an  offering  of the Securities: (I) receipt of any
request  for  additional  information  by  the  SEC  or  any

                                       20
<PAGE>
other federal or state governmental authority during the period of effectiveness
of  the Registration Statement for amendments or supplements to the Registration
Statement  or  related  prospectus;  (II)  the  issuance by the SEC or any other
federal  or  state  governmental  authority  of  any  stop  order suspending the
effectiveness of any Registration Statement or the initiation of any proceedings
for  that  purpose;  (III)  receipt  of  any  notification  with  respect to the
suspension  of  the  qualification or exemption from qualification of any of the
Securities  for  sale  in  any  jurisdiction  or the initiation or notice of any
proceeding  for  such  purpose;  (IV)  the happening of any event that makes any
statement  made  in  such  Registration  Statement  or related prospectus or any
document  incorporated  or deemed to be incorporated therein by reference untrue
in  any  material  respect  or  that  requires  the making of any changes in the
Registration  Statement, related prospectus or documents so that, in the case of
a Registration Statement, it will not contain any untrue statement of a material
fact  or  omit  to  state  any  material  fact  required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the  related  prospectus, it will not contain any untrue statement of a material
fact  or  omit  to  state  any  material  fact  required to be stated therein or
necessary  to  make  the  statements  therein, in the light of the circumstances
under  which  they  were  made, not misleading; and (V) the Company's reasonable
determination  that  a  post-effective  amendment  to the Registration Statement
would  be appropriate, and the Company shall promptly make available to Investor
any  such  supplement  or amendment to the related prospectus. The Company shall
not  deliver  to  Investor  any Put Notice during the continuation of any of the
foregoing  events  in  this  Section  5(K).

(L)  REIMBURSEMENT.  If (I) the Investor becomes involved in any capacity in any
action,  proceeding  or investigation brought by any shareholder of the Company,
in  connection  with  or  as  a  result  of the consummation of the transactions
contemplated  by  the  Equity  Line Transaction Documents, or if the Investor is
impleaded  in  any such action, proceeding or investigation by any person (other
than  as  a  result of a breach of the Investor's representations and warranties
set  forth  in  this  Agreement);  or  (II) the Investor becomes involved in any
capacity  in  any action, proceeding or investigation brought by the SEC against
or  involving  the  Company  or  in  connection  with  or  as  a  result  of the
consummation  of  the  transactions  contemplated by the Equity Line Transaction
Documents  (other than as a result of a breach of the Investor's representations
and warranties set forth in this Agreement), or if this Investor is impleaded in
any  such  action,  proceeding  or investigation by any person, then in any such
case, the Company will reimburse the Investor for its reasonable legal and other
expenses  (including  the cost of any investigation and preparation) incurred in
connection  therewith,  as  such  expenses are incurred. In addition, other than
with  respect  to any matter in which the Investor is a named party, the Company
will  pay to the Investor the charges, as reasonably determined by the Investor,
for  the  time of any officers or employees of the Investor devoted to appearing
and  preparing  to  appear  as witnesses, assisting in preparation for hearings,
trials  or  pretrial  matters,  or otherwise with respect to inquiries, hearing,
trials,  and other proceedings relating to the subject matter of this Agreement.
The  reimbursement

                                       21
<PAGE>
obligations  of  the  Company  under  this  section  shall be in addition to any
liability which the Company may otherwise have, shall extend upon the same terms
and conditions to any affiliates of the Investor that are actually named in such
action, proceeding or investigation, and partners, directors, agents, employees,
attorneys,  accountants,  auditors and controlling persons (if any), as the case
may  be, of Investor and any such affiliate, and shall be binding upon and inure
to  the  benefit  of  any  successors  of the Company, the Investor and any such
affiliate  and  any  such  person.

(M) TRANSFER AGENT. Upon effectiveness of the Registration Statement, and for so
long  as  the  Registration  Statement  is effective,  the Company shall deliver
instructions  to  its  transfer  agent  to issue Shares to the Investor that are
covered  for  resale  by the Registration Statement free of restrictive legends.

(N)  ACKNOWLEDGEMENT OF TERMS. The Company hereby represents and warrants to the
Investor  that:  (i)  it  is voluntarily entering into this Agreement of its own
freewill,  (ii)  it  is not entering this Agreement under economic duress, (iii)
the terms of this Agreement are reasonable and fair to the Company, and (iv) the
Company  has  had  independent  legal  counsel  of  its own choosing review this
Agreement,  advise the Company with respect to this Agreement, and represent the
Company  in  connection  with  this  Agreement.

SECTION  6.  INTENTIONALLY  OMITTED

SECTION  7.  CONDITIONS  OF  THE  COMPANY'S  OBLIGATION  TO  SELL.

The  obligation hereunder of the Company to issue and sell the Securities to the
Investor is further subject to the satisfaction, at or before each Closing Date,
of  each  of  the following conditions set forth below. These conditions are for
the  Company's  sole benefit and may be waived by the Company at any time in its
sole  discretion.

(A)  The Investor shall have executed this Agreement and the Registration Rights
Agreement  and  delivered  the  same  to  the  Company.

(B)  The Investor shall have delivered to the Company the Purchase Price for the
Securities being purchased by the Investor between the end of the Pricing Period
and  the Closing Date via a Put Settlement Sheet (hereto attached as Exhibit D).
After  receipt  of  confirmation of delivery of such Securities to the Investor,
the  Investor,  by  wire transfer of immediately available funds pursuant to the
wire  instructions  provided by the Company will disburse the funds constituting
the  Purchase  Amount.

(C)  No statute, rule, regulation, executive order, decree, ruling or injunction
shall  have  been  enacted,  entered,  promulgated  or  endorsed by any court or
governmental  authority  of  competent  jurisdiction  which  prohibits  the
consummation  of  any  of  the  transactions  contemplated  by  this  Agreement.

                                       22
<PAGE>
SECTION  8.  FURTHER  CONDITIONS  OF  THE  INVESTOR'S  OBLIGATION  TO  PURCHASE.

The  obligation  of  the Investor hereunder to purchase Shares is subject to the
satisfaction,  on  or  before  each  Closing  Date,  of  each  of  the following
conditions  set  forth  below.

(A)  The  Company  shall have executed the Equity Line Transaction Documents and
delivered  the  same  to  the  Investor.

(B)  The  Common Stock shall be authorized for quotation on the Principal Market
and  trading  in the Common Stock shall not have been suspended by the Principal
Market  or  the  SEC,  at  any time beginning on the date hereof and through and
including  the  respective  Closing Date (excluding suspensions of not more than
one  (1)  Trading  Day  resulting  from  business  announcements by the Company,
provided  that such suspensions occur prior to the Company's delivery of the Put
Notice  related  to  such  Closing).

(C)  The representations and warranties of the Company shall be true and correct
as of the date when made and as of the applicable Closing Date as though made at
that  time and the Company shall have performed, satisfied and complied with the
covenants,  agreements  and  conditions  required by the Equity Line Transaction
Documents  to  be  performed,  satisfied  or  complied with by the Company on or
before  such Closing Date. The Investor may request an update as of such Closing
Date  regarding  the  representation  contained  in  Section  4(C)  above.

(D)  The  Company  shall  have  executed  and  delivered  to  the  Investor  the
certificates  representing,  or have executed electronic book-entry transfer of,
the  Securities  (in  such  denominations  as  the Investor shall request) being
purchased  by  the  Investor  at  such  Closing.

(E)  The  Board  of  Directors  of  the  Company  shall have adopted resolutions
consistent  with Section 4(B)(II) above (the "Resolutions") and such Resolutions
shall  not  have  been  amended  or  rescinded  prior  to  such  Closing  Date.

(F)  Reserved

(G)  No statute, rule, regulation, executive order, decree, ruling or injunction
shall  have  been  enacted,  entered,  promulgated  or  endorsed by any court or
governmental  authority  of  competent  jurisdiction  which  prohibits  the
consummation  of  any  of  the  transactions  contemplated  by  this  Agreement.

(H)  The  Registration  Statement shall be effective on each Closing Date and no
stop  order  suspending the effectiveness of the Registration statement shall be
in  effect  or  to  the  Company's  knowledge  shall  be  pending or threatened.
Furthermore, on each Closing Date (I) neither the Company nor the Investor shall

                                       23
<PAGE>
have  received  notice  that the SEC has issued or intends to issue a stop order
with  respect  to  such  Registration  Statement  or  that the SEC otherwise has
suspended  or withdrawn the effectiveness of such Registration Statement, either
temporarily  or  permanently,  or intends or has threatened to do so (unless the
SEC's concerns have been addressed and Investor is reasonably satisfied that the
SEC  no longer is considering or intends to take such action), and (II) no other
suspension  of  the  use or withdrawal of the effectiveness of such Registration
Statement  or  related  prospectus  shall  exist.

(I)  At  the  time  of  each  Closing,  the  Registration  Statement  (including
information  or  documents incorporated by reference therein) and any amendments
or supplements thereto shall not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make  the  statements  therein  not  misleading  or  which  would require public
disclosure  or  an  update  supplement  to  the  prospectus.

(J)  If  applicable,  the  shareholders  of  the Company shall have approved the
issuance  of  any  Shares  in  excess  of  the  Maximum Common Stock Issuance in
accordance  with  Section  2(H)  or  the Company shall have obtained appropriate
approval  pursuant  to the requirements of Nevada law and the Company's Articles
of  Incorporation  and  By-laws.

(K)  The  conditions  to  such Closing set forth in Section 2(E) shall have been
satisfied  on  or  before  such  Closing  Date.

(L)  The  Company  shall  have certified to the Investor the number of Shares of
Common  Stock  outstanding  when  a  Put  Notice  is given to the Investor.  The
Company's  delivery  of  a  Put Notice to the Investor constitutes the Company's
certification of the existence of the necessary number of shares of Common Stock
reserved  for  issuance.

SECTION 9. TERMINATION. This Agreement shall terminate upon any of the following
events:

(I)  when  the  Investor  has  purchased  an  aggregate  of  Ten Million dollars
($10,000,000) in the Common Stock of the Company pursuant to this Agreement; or,

(II)  on  the date which is thirty-six (36) months after the Effective Date; or,

(III)  upon  written notice of the Company to the Investor.  Any and all shares,
or  penalties, if any, due under this Agreement shall be immediately payable and
due  upon  termination  of  the  Line.

SECTION  10.  SUSPENSION

                                       24
<PAGE>
This  Agreement  shall  be suspended upon any of the following events, and shall
remain  suspended  until  such  event  is  rectified:

     (I)  the trading of the Common Stock is suspended by the SEC, the Principal
Market  or  the NASD for a period of two (2) consecutive Trading Days during the
Open  Period;  or,

     (II)  The Common Stock ceases to be registered under the 1934 Act or listed
or  traded  on  the Principal Market.  Immediately upon the occurrence of one of
the  above-described events, the Company shall send written notice of such event
to  the  Investor.

SECTION  11.  INDEMNIFICATION.

In  consideration of the parties mutual obligations set forth in the Transaction
Documents, each of the parties (in such capacity, an "Indemnitor") shall defend,
protect,  indemnify  and  hold  harmless  the other and all of the other party's
shareholders,  officers,  directors,  employees, counsel, 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 reasonable expenses in
connection  therewith (irrespective of whether any such Indemnitee is a party to
the  action  for  which  indemnification  hereunder  is  sought),  and including
reasonable  attorneys'  fees  and disbursements (the "Indemnified Liabilities"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (I)
any  misrepresentation  or  breach of any representation or warranty made by the
Indemnitor  or any other certificate, instrument or document contemplated hereby
or  thereby;  (II)  any  breach  of any covenant, agreement or obligation of the
Indemnitor  contained  in  the  Equity  Line  Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby; or (III) any
cause  of  action,  suit  or  claim brought or made against such Indemnitee by a
third  party  and  arising  out  of  or  resulting from the execution, delivery,
performance or enforcement of the Equity Line Transaction Documents or any other
certificate,  instrument  or  document  contemplated  hereby  or thereby, except
insofar  as  any such misrepresentation, breach or any untrue statement, alleged
untrue  statement,  omission or alleged omission is made in reliance upon and in
conformity  with  information  furnished  to  Indemnitor  which  is specifically
intended  for  use  in  the  preparation  of  any  such  Registration Statement,
preliminary  prospectus,  prospectus  or  amendments  to  the prospectus. To the
extent that the foregoing undertaking by the Indemnitor may be unenforceable for
any  reason,  the  Indemnitor shall make the maximum contribution to the payment
and  satisfaction  of  each  of the Indemnified Liabilities which is permissible
under  applicable  law.  The  indemnity  provisions contained herein shall be in
addition  to  any cause of action or similar rights Indemnitor may have, and any
liabilities  the  Indemnitor  or  the  Indemnitees  may  be  subject  to.

                                       25
<PAGE>
SECTION  12.  GOVERNING  LAW;  DISPUTES  SUBMITTED  TO  ARBITRATION.

     All  disputes  arising  under  this  agreement  shall  be  governed  by and
interpreted  in  accordance  with the laws of the Commonwealth of Massachusetts,
without regard to principles of conflict of laws.  The parties to this agreement
will  submit all disputes arising under this agreement to arbitration in Boston,
Massachusetts before a single arbitrator of the American Arbitration Association
("AAA").  The  arbitrator  shall  be selected by application of the rules of the
AAA, or by mutual agreement of the parties, except that such arbitrator shall be
an  attorney  admitted to practice law in the Commonwealth of Massachusetts.  No
party  to  this agreement will challenge the jurisdiction or venue provisions as
provided  in  this  section.  No  party  to  this  agreement  will challenge the
jurisdiction or venue provisions as provided in this section.  Nothing contained
herein  shall  prevent  the  party  from  obtaining  an  injunction.

(B)  LEGAL  FEES;  AND  MISCELLANEOUS FEES. Except as otherwise set forth in the
Equity Line Transaction Documents, each party shall pay the fees and expenses of
its  advisers, counsel, the accountants and other experts, if any, and all other
expenses  incurred  by  such  party  incident  to  the negotiation, preparation,
execution,  delivery  and performance of this Agreement. Any attorneys' fees and
expenses  incurred  by either the Company or the Investor in connection with the
preparation,  negotiation,  execution  and  delivery  of  any amendments to this
Agreement  or  relating to the enforcement of the rights of any party, after the
occurrence  of any breach of the terms of this Agreement by another party or any
default  by another party in respect of the transactions contemplated hereunder,
shall  be  paid  on  demand  by  the  party  which breached the Agreement and/or
defaulted,  as  the case may be. The Company shall pay all stamp and other taxes
and  duties  levied  in  connection  with  the  issuance  of  any  Securities.

(C)  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 signature.

(D)  HEADINGS;  SINGULAR/PLURAL.  The  headings  of  this  Agreement  are  for
convenience  of  reference  and  shall  not  form  part  of,  or  affect  the
interpretation  of,  this  Agreement.  Whenever  required by the context of this
Agreement, the singular shall include the plural and masculine shall include the
feminine.

(E)  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.

                                       26
<PAGE>
(F)  ENTIRE AGREEMENT; AMENDMENTS. This Agreement is the FINAL AGREEMENT between
the  Company and the Investor with respect to the terms and conditions set forth
herein,  and, the terms of this Agreement may not be contradicted by evidence of
prior,  contemporaneous,  or  subsequent  oral  agreements  of  the  Parties. No
provision  of  this  Agreement  may  be  amended  other than by an instrument in
writing  signed  by the Company and the Investor, and no provision hereof may be
waived  other  than by an instrument in writing signed by the party against whom
enforcement is sought. The execution and delivery of the Equity Line Transaction
Documents  shall  not alter the force and effect of any other agreements between
the  Parties,  and  the  obligations  under  those  agreements.

(G)  NOTICES.  Any  notices  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  (1)  day  after  deposit  with a nationally recognized overnight
delivery  service,  in  each case properly addressed to the party to receive the
same.  The  addresses  and  facsimile  numbers for such communications shall be:

IF  TO  THE  COMPANY:

Global Wartaire, Inc.
534 Delaware Avenue, Suite 412
Buffalo, NY 14202
Telephone: (910) 616-0077
Facsimile: (716) 332-7170

IF  TO  THE  INVESTOR:

Dutchess Private Equities Fund, Ltd.,
50 Commonwealth Avenue, Suite 2
Boston, MA 02116
Telephone: 617-301-4700
Facsimile: 617-249-0947

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

(H)  NO  ASSIGNMENT.  This  Agreement  may  not  be  assigned.

(I)  NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of
the  parties  hereto and is not for the benefit of, nor may any provision hereof
be  enforced  by,  any  other  person,  except  that  the  Company

                                       27
<PAGE>
acknowledges  that  the  rights  of  the Investor may be enforced by its general
partner.

(J) SURVIVAL. The representations and warranties of the Company and the Investor
contained  in  Sections  2  and  3,  the  agreements  and covenants set forth in
Sections  4  and  5, and the indemnification provisions set forth in Section 11,
shall  survive  each  of  the  Closings  and  the termination of this Agreement.

(K)  PUBLICITY.  The  Company  and the Investor shall consult with each other in
issuing any press releases or otherwise making public statements with respect to
the  transactions  contemplated  hereby  and no party shall issue any such press
release or otherwise make any such public statement without the prior consent of
the  other  party,  which consent shall not be unreasonably withheld or delayed,
except that no prior consent shall be required if such disclosure is required by
law,  in which such case the disclosing party shall provide the other party with
prior  notice  of  such  public  statement.  Notwithstanding  the foregoing, the
Company  shall  not publicly disclose the name of the Investor without the prior
consent  of  the  Investor,  except  to the extent required by law. The Investor
acknowledges  that this Agreement and all or part of the Equity Line Transaction
Documents  may  be  deemed to be "material contracts" as that term is defined by
Item  601(b)(10)  of  Regulation  S-B,  and  that  the  Company may therefore be
required  to  file  such  documents  as  exhibits  to  reports  or  registration
statements  filed  under  the  1933  Act  or the 1934 Act.  The Investor further
agrees  that  the  status  of such documents and materials as material contracts
shall  be  determined  solely  by the Company, in consultation with its counsel.

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

(M)  PLACEMENT  AGENT.  If  so  required, the Company agrees to pay a registered
broker dealer, to act as placement agent, a percentage of the Put Amount on each
draw  toward  the fee as outlined in the Placement Agent Agreement. The Investor
shall  have no obligation with respect to any fees or with respect to any claims
made  by  or  on  behalf  of  other  persons  or  entities  for  fees  of a type
contemplated in this Section that may be due in connection with the transactions
contemplated  by  the  Equity  Line  Transaction  Documents.  The  Company shall
indemnify  and hold harmless the Investor, their employees, officers, directors,
agents,  and  partners,  and  their  respective affiliates, from and against all
claims,  losses,  damages,  costs  (including  the  costs  of  preparation  and
attorney's  fees)  and  expenses  incurred  in  respect  of  any such claimed or
existing  fees,  as  such  fees  and  expenses  are  incurred.

                                       28
<PAGE>
(N)  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, as the parties
mutually  agree  that  each  has  had a full and fair opportunity to review this
Agreement  and  seek  the  advice  of  counsel  on  it.

(O)  REMEDIES. The Investor shall have all rights and remedies set forth in this
Agreement  and  the  Registration  Rights  Agreement 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 the Investor has by 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 default or breach of any provision of this Agreement,
including  the  recovery of reasonable attorneys fees and costs, and to exercise
all  other  rights  granted  by  law.

(P)  PAYMENT  SET  ASIDE.  To  the  extent  that  the Company makes a payment or
payments to the Investor hereunder or under the Registration Rights Agreement or
the  Investor enforces or exercises its 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, 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.

(Q)  PRICING  OF  COMMON STOCK. For purposes of this Agreement, the bid price of
the  Common  Stock  shall  be  as  reported  on  Bloomberg.

SECTION  13.  NON-DISCLOSURE  OF  NON-PUBLIC  INFORMATION.

(a)  The  Company shall not disclose non-public information to the Investor, its
advisors,  or  its  representatives.

(b)  Nothing herein shall require the Company to disclose non-public information
to  the  Investor or its advisors or representatives, and the Company represents
that  it  does  not  disseminate  non-public  information  to  any investors who
purchase  stock  in  the  Company  in a public offering, to money managers or to
securities  analysts, provided, however, that notwithstanding anything herein to
the  contrary, the Company will, as hereinabove provided, immediately notify the
advisors  and  representatives of the Investor and, if any, underwriters, of any
event  or  the existence of any circumstance (without any obligation to disclose
the  specific  event  or  circumstance)  of which it becomes aware, constituting
non-public  information (whether or not requested of the Company specifically or

                                       29
<PAGE>
generally  during  the  course  of  due  diligence by such persons or entities),
which, if not disclosed in the prospectus included in the Registration Statement
would  cause  such  prospectus  to  include a material misstatement or to omit a
material  fact  required  to  be stated therein in order to make the statements,
therein,  in light of the circumstances in which they were made, not misleading.
Nothing  contained  in  this  Section  13  shall  be construed to mean that such
persons  or entities other than the Investor (without the written consent of the
Investor  prior  to  disclosure  of  such information) may not obtain non-public
information  in  the  course  of conducting due diligence in accordance with the
terms  of  this  Agreement  and nothing herein shall prevent any such persons or
entities  from  notifying  the  Company  of their opinion that based on such due
diligence  by such persons or entities, that the Registration Statement contains
an  untrue  statement  of  material fact or omits a material fact required to be
stated  in  the  Registration  Statement  or  necessary  to  make the statements
contained  therein,  in  light of the circumstances in which they were made, not
misleading.

ARTICLE  14  ACKNOWLEDGEMENTS  OF  THE  PARTIES.

Notwithstanding  anything  in this Agreement to the contrary, the parties hereto
hereby  acknowledge  and  agree  to  the  following:  (i)  the Investor makes no
representations  or  covenants  that  it  will  not  engage  in  trading  in the
securities  of  the  Company,  other  than  the Investor will not sell short the
Company's  common  stock  at  any  time  during this Agreement; (ii) the Company
shall,  by  8:30  a.m. Boston Time on the trading day following the date hereof,
file  a  current  report  on  Form  8-K  disclosing  the  material  terms of the
transactions  contemplated  hereby  and  in  the  other  Equity Line Transaction
Documents;  (iii)  the Company has not and shall not provide material non-public
information  to  the  Investor  unless  prior  thereto  the  Investor shall have
executed  a  written  agreement  regarding  the  confidentiality and use of such
information;  and  (iv)  the  Company understands and confirms that the Investor
will  be  relying on the acknowledgements set forth in clauses (i) through (iii)
above if the Investor effects any transactions in the securities of the Company.

                                       30
<PAGE>
SIGNATURE  PAGE  OF  INVESTMENT  AGREEMENT

Your  signature  on  this Signature Page evidences your agreement to be bound by
the terms and conditions of the Investment Agreement and the Registration Rights
Agreement  as  of  the  date  first  written  above.

The  undersigned signatory hereby certifies that he has read and understands the
Investment  Agreement,  and  the representations made by the undersigned in this
Investment Agreement are true and accurate, and agrees to be bound by its terms.

DUTCHESS PRIVATE EQUITIES FUND, LTD.

By:
   -----------------------------------
   Douglas H. Leighton, Director

GLOBAL WARTAIRE, INC.

By:
   -----------------------------------
   Sydney Harland, CEO

                                       31
<PAGE>
LIST  OF  EXHIBITS
------------------

EXHIBIT A     Registration Rights Agreement
EXHIBIT B     Opinion of Company's Counsel
EXHIBIT C     Put Notice
EXHIBIT D     Put Settlement Sheet

                                       32
<PAGE>
LIST  OF  SCHEDULES
-------------------

SCHEDULE  4(A)  SUBSIDIARIES

                                       33
<PAGE>
--------------------------------------------------------------------------------
EXHIBIT  A

                                       34
<PAGE>
--------------------------------------------------------------------------------
EXHIBIT  B

FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
                                                            Date:____________

[TRANSFER AGENT]

          Re:   Global Wartaire, Inc.
                --------------------

Ladies and Gentlemen:

     We  are  counsel  to  Global  Wartaire,  Inc.,  a  Nevada  corporation (the
                           ------------------------
"Company"),  and  have  represented  the Company in connection with that certain
Investment  Agreement (the "Investment Agreement") entered into by and among the
Company  and  _________________________  (the  "Investor") pursuant to which the
Company  has  agreed  to  issue  to  the Investor shares of the Company's common
stock,  $.001  par  value  per  share  (the  "Common  Stock")  on  the terms and
conditions  set  forth  in  the Investment Agreement. Pursuant to the Investment
Agreement,  the  Company  also  has entered into a Registration Rights Agreement
with  the  Investor  (the "Registration Rights Agreement") pursuant to which the
Company  agreed,  among other things, to register the Registrable Securities (as
defined  in  the  Registration Rights Agreement), including the shares of Common
Stock issued or issuable under the Investment Agreement under the Securities Act
of  1933,  as  amended  (the  "1933  Act").  In  connection  with  the Company's
obligations  under the Registration Rights Agreement, on ____________ ___, 2006,
the  Company  filed  a  Registration  Statement  on  Form  S-  ___  (File  No.
333-________)  (the  "Registration  Statement") with the Securities and Exchange
Commission  (the  "SEC")  relating to the Registrable Securities which names the
Investor  as  a  selling  shareholder  thereunder.

     In connection with the foregoing, we advise you that [a member of the SEC's
staff  has  advised  us by telephone that the SEC has entered an order declaring
the  Registration  Statement  effective]  [the Registration Statement has become
                                       =========================================
effective] under the 1933 Act at [enter the time of effectiveness] on [enter the
=========                         -------------------------------      ---------
date  of  effectiveness]  and  to  the  best  of our knowledge, after telephonic
-----------------------
inquiry  of  a  member  of  the  SEC's  staff,  no  stop  order  suspending  its
effectiveness  has  been  issued and no proceedings for that purpose are pending
before,  or  threatened by, the SEC and the Registrable Securities are available
for  resale  under  the  1933  Act  pursuant  to  the  Registration  Statement.

                                          Very  truly  yours,

                                          [Company  Counsel]

                                       35
<PAGE>
--------------------------------------------------------------------------------
EXHIBIT  C

Date:

RE:  Put Notice Number __

Dear Mr. Leighton,

This  is  to  inform  you  that  as  of  today,  Global Wartaire, Inc., a Nevada
corporation (the "Company"), hereby elects to exercise its right pursuant to the
Investment Agreement to require Dutchess Private Equities Fund, Ltd. to purchase
shares  of  its  common  stock.  The  Company  hereby  certifies  that:

The amount of this put is $__________.

The Pricing Period runs from ________ until _______.

The current number of shares issued and outstanding as of the Company are:

           __________________________________________________________

The number of shares currently available for issuance on the SB-2 for the Equity
Line  are:

__________________________________

Regards,
        _________________________________________

__________________________
Sydney  Harland,  CEO
Global  Wartaire,  Inc.

                                       36
<PAGE>
--------------------------------------------------------------------------------
EXHIBIT  D
PUT SETTLEMENT SHEET

Date:

Dear Mr. Harland,

Pursuant to the Put given by Global Wartaire, Inc., to Dutchess Private Equities
Fund, Ltd. on _________________ 200_, we are now submitting the amount of common
shares  for  you  to  issue  to  Dutchess.

Please  have  a  certificate  bearing  no restrictive legend totaling __________
shares  issued  to Dutchess Private Equities Fund, Ltd. immediately and send via
DWAC  to  the  following  account:

XXXXXX

If not DWAC eligible, please send FedEx Priority Overnight to:

XXXXXX

Once  these  shares  are  received  by  us,  we will have the funds wired to the
Company.

Regards,

Douglas  H.  Leighton

                                       37
<PAGE>
          DATE . . . . . . . . . . .PRICE

          Date of Day 1 . . . . . . Closing Bid of Day 1
          Date of Day 2 . . . . . . Closing Bid of Day 2
          Date of Day 3 . . . . . . Closing Bid of Day 3
          Date of Day 4 . . . . . . Closing Bid of Day 4
          Date of Day 5 . . . . . . Closing Bid of Day 5

          LOWEST 1 (ONE) CLOSING BID IN PRICING PERIOD

                             ----------

          PUT AMOUNT

                             ----------

          AMOUNT WIRED TO COMPANY

                             ----------

          PURCHASE PRICE (93)% (NINETY-THREE PERCENT))

                             ----------

          AMOUNT OF SHARES DUE

                             ----------

The  undersigned has completed this Put as of this ___th day of _________, 200_.

GLOBAL  WARTAIRE,  INC.

__________________________________

Sydney  Harland,  CEO

                                       38
<PAGE>
--------------------------------------------------------------------------------
SCHEDULE  4(c)  CAPITALIZATION

                                       39
<PAGE>
--------------------------------------------------------------------------------
SCHEDULE  4(e)  CONFLICTS

                                       40
<PAGE>
--------------------------------------------------------------------------------
SCHEDULE  4(g)  MATERIAL  CHANGES

                                       41
<PAGE>
--------------------------------------------------------------------------------
SCHEDULE  4(h)  LITIGATION

                                       42
<PAGE>
--------------------------------------------------------------------------------
SCHEDULE  4(l)  INTELLECTUAL  PROPERTY

                                       43
<PAGE>
--------------------------------------------------------------------------------
SCHEDULE  4(n)  LIENS

                                       44
<PAGE>
--------------------------------------------------------------------------------
SCHEDULE  4(t)  CERTAIN  TRANSACTIONS

                                       45

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