Document:

Unassociated Document

    EXHIBIT
      10.1

    

    

    
 

    SECURITIES
      PURCHASE AGREEMENT

     

    

    dated
      as
      of June 2, 2006,

     

    by
      and
      among

     

    INNOFONE.COM,
      INCORPORATED,

     

    COGENT
      CAPITAL INVESTMENTS LLC

     

    and

    

    COGENT
      CAPITAL FINANCIAL LLC

    

     

    
      
         

      

      
         

        
          

        

      

      
         

        
        

      

    

    Table
      of Contents

    
      Page

      
        	
                SECTION
                  1.

              	
                PURCHASE
                  AND SALE OF SECURITIES

              	
                1

              
	
                SECTION
                  2.

              	
                THE
                  CLOSING

              	
                1

              
	
                2.1.

              	
                The
                  Closing

              	
                1

              
	
                2.2.

              	
                Conditions
                  to Closing

              	
                2

              
	
                SECTION
                  3.

              	
                REPRESENTATIONS,
                  WARRANTIES AND COVENANTS OF THE COMPANY

              	
                3

              
	
                SECTION
                  4.

              	
                REPRESENTATIONS,
                  WARRANTIES AND COVENANTS OF THE PURCHASER

              	
                14

              
	
                4.1.

              	
                Organization

              	
                14

              
	
                4.2.

              	
                Authorization,
                  Enforcement, and Validity

              	
                14

              
	
                4.3.

              	
                Consents
                  and Approvals; No Violation

              	
                14

              
	
                4.4.

              	
                Investment
                  Experience

              	
                15

              
	
                4.5.

              	
                Investment
                  Intent And Limitation On Dispositions

              	
                15

              
	
                4.6.

              	
                Information
                  And Risk

              	
                15

              
	
                4.7.

              	
                Restricted
                  Securities

              	
                16

              
	
                4.8.

              	
                Legends

              	
                16

              
	
                4.9.

              	
                Brokers
                  or Finders

              	
                16

              
	
                4.10.

              	
                Confidential
                  Treatment

              	
                17

              
	
                SECTION
                  5.

              	
                SURVIVAL
                  OF REPRESENTATIONS AND WARRANTIES

              	
                17

              
	
                SECTION
                  6.

              	
                INDEMNIFICATION

              	
                17

              
	
                SECTION
                  7.

              	
                NOTICES

              	
                20

              
	
                SECTION
                  8.

              	
                MISCELLANEOUS.

              	
                20

              
	
                8.1.

              	
                Amendments

              	
                21

              
	
                8.2.

              	
                Headings

              	
                21

              
	
                8.3.

              	
                Severability

              	
                21

              
	
                8.4.

              	
                Governing
                  Law And Forum

              	
                21

              
	
                8.5.

              	
                Counterparts

              	
                21

              

      

       

      
        
           

        

        
          i

          
            

          

        

        
           

        

      

      
        	
                8.6.

              	
                Entire
                  Agreement

              	
                21

              
	
                8.7.

              	
                Expenses

              	
                21

              

      

    

    
      
        	
                Appendix
                  A

              	
                Certificate
                  of Designations for Preferred Stock

              
	
                Appendix
                  B

              	
                Company
                  Counsel Opinion

              
	
                Appendix
                  C

              	
                Disclosure
                  Schedules

              

      
 

    
      
         

      

      
        ii

        
          

        

      

      
         

        
        

      

    

    SECURTIES
      PURCHASE AGREEMENT 

     

    THIS
      SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made as of the 2nd day of
      June 2006 by and among Innofone.com, Incorporated (the “Company”), a Nevada
      corporation, with its principal offices at 1431 Ocean Avenue, Suite 1500 Santa
      Monica, CA 90401, and Cogent Capital Investments LLC, a Delaware limited
      liability company (the “Purchaser”) and Cogent Capital Financial LLC, a Delaware
      limited liability company (“CCF”). 

     

    IN
      CONSIDERATION of the mutual covenants contained in this Agreement, and other
      good and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the Company and the Purchaser hereby agree as follows:

     

    
      	 	
              Section
                1.

            	
              Purchase
                and Sale of Securities

            

    

     

    1.1. Subject
      to the terms and conditions of this Agreement and the Escrow Agreement (as
      defined below), on the Closing Date (as defined herein), the Purchaser agrees
      to
      purchase and the Company agrees to issue and sell to the Purchaser
      (i) 1,850,000 shares (the “Common Shares”) of the Company’s common stock,
      $0. 001 par value (the “Common Stock”) and (ii) 4,815,000 shares (the
“Preferred Shares”) of the Company’s series A convertible preferred stock, $0.
      01 par value (the “Preferred Stock”), at an aggregate purchase price for such
      Common Shares and Preferred Shares of $50,000,000 in the form of the Bonds
      delivered pursuant to Section 1(a) of the Escrow Agreement (as defined below);
      and Cogent Capital Financial LLC (“CCF”) shall receive from the Company, as part
      of the Initial Exchange Amount under the Equity Swap Confirmation (as defined
      below), (x) 5,000,000 shares of Common Stock (the “Exchange Shares”) and (ii)
      a warrant to purchase 5,000,000 shares of Common Stock (the “Warrant”) (the
      Common Shares, Preferred Shares and Exchange Shares are collectively called
      the
“Shares”, and the Shares and the Warrant are collectively called the
“Securities”).

     

    1.2. 
      The
“Transaction Documents” consist of (a) this Agreement, (b) that certain escrow
      agreement, dated as of June 2, 2006, by and among the Company, the Purchaser,
      Cogent Capital Financial LLC (“CCF”) and Investors
      Bank & Trust Company, a Massachusetts trust company (“Escrow Agent”), (c)
      the ISDA Master Agreement, dated as of June 2, 2006, by and between the Company
      and CCF (the “Master Agreement”), including the Schedule thereto, (d) the Equity
      Swap Confirmation, dated June 2, 2006, by and between the Company and CCF (the
      “Equity Swap Confirmation”), (e) the Credit Support Annex (including Paragraph
      13 thereof) to the Master Agreement, dated June 2, 2006, between the Company
      and
      CCF (the “Credit Support Annex”), (f) the registration rights agreement, dated
      as of June 2, 2006, by and among the Company, the Purchaser and CCF, (g) the
      certificate evidencing the Warrant and (h) the certificate of designations
      for
      the Preferred Stock (the “Certificate of Designations”).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	
              Section
                2.

            	
              The
                Closing

            

    

     

    2.1. The
      Closing.

     

    a)
      The
      purchase and sale of the Securities upon the terms and conditions hereof will
      take place at a closing (the “Closing”) to be held at the offices of Morrison
& Foerster LLP, 1290 Avenue of the Americas, New York, NY 10104, or such
      other location as the parties may agree, on the date hereof at the time as
      shall
      be agreed upon by the Company and the Purchaser (the “Closing Date”).

     

    (b) The
      Company shall provide wire transfer instructions for the payment of the Purchase
      Price prior to the Closing.

     

    (c) At
      the
      Closing, the Company and the Purchaser shall satisfy all of the conditions
      set
      forth in Sections 2.2(a) and (b), respectively.

     

    2.2. Conditions
      to Closing

     

    (a) The
      Company's obligation to complete the purchase and sale of the Securities and
      deliver the stock certificates and warrants certificates to the Purchaser is
      subject to:

     

    (i) Delivery
      by the Purchaser of the Purchase Price in the form of Bonds to the Escrow Agent
      in the manner contemplated by Section 1(a) of the Escrow Agreement;

     

    (ii) Delivery
      by the Purchaser of copies of the following agreements duly executed by the
      Purchaser: (1) this Agreement and (2) the Escrow Agreement;

     

    (iii) Delivery
      by CCF of copies of the following agreements duly executed by CCF: (1) the
      Escrow Agreement, (2) the Master Agreement (including the Schedule thereto);
      (3)
      the Equity Swap Confirmation; (4) the Credit Support Annex to the ISDA Master
      Agreement; and (5) the Registration Rights Agreement; and

     

    (iv) the
      accuracy in all material respects of the representations and warranties made
      by
      the Purchaser in Section 4 below as of the Closing Date and the fulfillment
      in
      all material respects of those undertakings of the Purchaser in this Agreement
      to be fulfilled on or prior to the Closing Date. 

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (b) The
      Purchaser's obligation to complete the purchase and sale of the Securities
      is
      subject to: 

     

    (i) Delivery
      by the Company of each of the items referred to in Section 1(b) of the Escrow
      Agreement in the manner contemplated thereby, with all certificates evidencing
      any Securities included therein having been duly executed by the
      Company;

     

    (ii) Delivery
      by the Company of the following agreements duly executed by the Company: (1)
      this Agreement, (2) the Escrow Agreement, (3) the Master Agreement (including
      the Schedule thereto); (4) the Credit Support Annex to the ISDA Master Agreement
      and (5) the Registration Rights Agreement;

     

    (iii) Delivery
      by the Company of confirmation that the Certificate of Designations in the
      form
      of Appendix A hereto has been duly filed with the Secretary of State of the
      State of Delaware;

     

    (iv) the
      filing of UCC-1 financing statements with respect to the Collateral Account
      established under the Escrow Agreement and the items credited
      thereto;

     

    (v) the
      accuracy in all material respects of the representations and warranties made
      by
      the Company in Section 3 below as of the Closing Date and the fulfillment in
      all
      material respects of those undertakings of the Company in this Agreement to
      be
      fulfilled on or prior to the Closing Date; and

     

    (vi) delivery
      by the Company to the Purchaser of an opinion, dated as of the Closing Date,
      from Gersten Savage, LLP, counsel to the Company, in the form attached as
      Appendix B hereto.

     

    
      
        Section
          3.     Representations,
          Warranties and Covenants of the Company.  
          Except as set forth on the corresponding sections of the Company's disclosure
          schedule attached hereto as Appendix C, or as specifically contemplated
          by this
          Agreement, the Company hereby represents and warrants to, and covenants
          with,
          the Purchaser and CCF as of the Closing Date (or the other date specified
          below)
          as follows:

      

    

     

    3.1
      The
      entirety of the Transaction Documents do not as of the date hereof, and will
      not
      as of the Closing Date, contain any untrue statement of a material fact or
      omit
      to state any material fact required to be stated therein or necessary in order
      to make the statements therein, in light of the circumstances in which they
      were
      made, not misleading.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    3.2
      (a)
      The Transaction Documents referenced in Section 1.2 above, at the time they
      became effective or were filed with the Securities and Exchange Commission
      (the
“Commission”), as the case may be, complied in all material respects with the
      requirements of the Securities Act of 1933, as amended (the “Securities Act”) or
      the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as
      applicable, and the rules and regulations of the Commission hereunder (the
      “Rules”), and none of the documents as of such time contained an untrue
      statement of a material fact or omitted to state a material fact required to
      be
      stated therein or necessary in order to make the statements therein, in the
      light of the circumstances under which they were made, not misleading, and
      any
      further documents so filed and referenced in the Transaction Documents, when
      the
      documents become effective or are filed with the Commission, as the case may
      be,
      will conform in all material respects to the requirements of the Securities
      Act
      or the Exchange Act, as applicable, and the Rules and as of such time will
      not
      contain an untrue statement of a material fact or omit to state a material
      fact
      required to be stated therein or necessary to make the statements therein,
      in
      light of the circumstances under which they are made, not
      misleading.

     

    (b)
      In
      the past 9 calendar months, the Company has filed all documents required to
      be
      filed by it prior to the date hereof with the Commission pursuant to the
      reporting requirements of the Exchange Act.

     

    3.3
      The
      financial statements of the Company (including all notes and schedules thereto)
      included or incorporated by reference in the Company’s filings under the
      Exchange Act (the “Exchange Act Filings”) present fairly the financial position
      of the Company and its consolidated subsidiaries at the dates indicated and
      the
      statement of operations, stockholders' equity and cash flows of the Company
      and
      its consolidated subsidiaries for the periods specified; and the financial
      statements and related schedules and notes thereto, and the unaudited financial
      information included or incorporated by reference in the Exchange Act Filings
      have been prepared in conformity with generally accepted accounting principles,
      consistently applied throughout the periods involved.
      The summary and selected financial data included in the Exchange Act Filings
      present fairly the information shown therein as at the respective dates and
      for
      the respective periods specified and have been presented on a basis consistent
      with the consolidated financial statements set forth in the Exchange Act Filings
      and other financial information.

     

    3.4
      DeJoya Griffith & Company, LLC (the “Auditor”) whose reports are filed with
      the Commission as a part of the information included or incorporated by
      reference in the Exchange Act Filings, are and, during the periods covered
      by
      their reports, were independent public accountants as required by the Securities
      Act and the Rules.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    3.5
      The
      Company and each of its subsidiaries, including each entity (corporation,
      partnership, joint venture, association or other business organization)
      controlled directly or indirectly by the Company, is duly organized, validly
      existing and in good standing under the laws of their respective jurisdictions
      of incorporation or organization. The Company and each of its subsidiaries
      is
      duly qualified to do business and is in good standing as a foreign corporation
      in each jurisdiction in which the nature of the business conducted by it or
      location of the assets or properties owned, leased or licensed by it requires
      the qualification, except for the jurisdictions where the failure to so qualify
      individually or in the aggregate would not have a material adverse effect on
      the
      assets, properties, condition, financial or otherwise, or in the results of
      operations, business affairs or business prospects of the Company and its
      subsidiaries considered as a whole (a "Material Adverse Effect"); and to the
      Company's knowledge, no proceeding has been instituted in any jurisdiction
      revoking, limiting or curtailing, or seeking to revoke, limit or curtail, the
      power and authority or qualification. 

     

    3.6
      The
      Company and each of its subsidiaries has all requisite corporate power and
      authority, and all necessary authorizations, approvals, consents, orders,
      licenses, certificates and permits of and from all governmental or regulatory
      bodies or any other person or entity (collectively, the "Permits"), to own,
      lease and license its assets and properties and conduct its business, all of
      which are valid and in full force and effect, except where the lack of the
      Permits, individually or in the aggregate, would not have a Material Adverse
      Effect. The Company and each of its subsidiaries has fulfilled and performed
      in
      all material respects all of its material obligations with respect to the
      Permits and no event has occurred that allows, or after notice or lapse of
      time
      would allow, revocation or termination thereof or results in any other material
      impairment of the rights of the Company hereunder. Except as may be required
      under the Securities Act and state and foreign Blue Sky laws, no other Permits
      are required to enter into, deliver and perform this Agreement and to issue
      and
      sell the Securities.

     

    3.7
      The
      Company and each of its subsidiaries owns or possesses legally enforceable
      rights to use all patents, patent rights, inventions, trademarks, trademark
      applications, trade names, service marks, copyrights, copyright applications,
      licenses, know-how and other similar rights and proprietary knowledge, if any,
      and only as disclosed in its filings with the Commission (collectively,
      "Intangibles") necessary for the conduct of its business. Neither the Company
      nor any of its subsidiaries has received any notice of, or is not aware of,
      any
      infringement of or conflict with asserted rights of others with respect to
      any
      Intangibles.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    3.8 
      The
      Company and each of its subsidiaries has good and marketable title to all
      personal property owned by it, in each case free and clear of all liens,
      encumbrances, claims, security interests and defects, except as do not
      materially affect the value of the property and do not materially interfere
      with
      the use made or proposed to be made of the property by the Company and its
      subsidiaries. All property held under lease by the Company and its subsidiaries
      is held by them under valid, existing and enforceable leases, free and clear
      of
      all liens, encumbrances, claims, security interests and defects, except those
      that are not material and do not materially interfere with the use made or
      proposed to be made of the property by the Company and its subsidiaries. Since
      the date of the most recent financial statements of the Company as filed with
      the Commission (i) there has not been any change in the capital stock or
      long-term debt of the Company or any of its subsidiaries, or any dividend or
      distribution of any kind declared, set aside for payment, paid or made by the
      Company on any class of capital stock, or any material adverse change, or any
      development involving a prospective material adverse change, in or affecting
      the
      business, properties, management, financial position, stockholders’ equity,
      results of operations or prospects of the Company and its subsidiaries taken
      as
      a whole other than those issuances of stock to certain contractors and Company
      employees in aggregate of no greater than a total 1,000,000 shares of restricted
      common shares; and (ii) neither the Company nor any of its subsidiaries has
      sustained any material loss or interference with its business from fire,
      explosion, flood or other calamity, whether or not covered by insurance, or
      from
      any labor disturbance or dispute or any action, order or decree of any court
      or
      arbitrator or governmental or regulatory authority. Since the date of the latest
      quarterly report filed by the Company with the Commission and other than those
      agreements made as disclosed under the Company’s recent 8-K filings with the
      Commission regarding its certain acquisitions of Mobile Technology Group, LLC
      and InfoWeapons, Inc., neither the Company nor its subsidiaries has (A) issued
      or agreed to issue any securities or incurred any liability or obligation,
      direct or contingent, for borrowed money, except the liabilities or obligations
      incurred in the ordinary course of business or (B) entered into any transaction
      not in the ordinary course of business. 

     

    3.9  Neither
      the Company nor any of its subsidiaries is in violation of any term or provision
      of its charter or by-laws or of any franchise, license, permit, judgment,
      decree, order, statute, rule or regulation, where the consequences of the
      violation, individually or in the aggregate, would have a Material Adverse
      Effect. Neither the Company nor any of its subsidiaries, if a subsidiary is
      a
      party, nor to the Company's knowledge, any other party is in default in the
      observance or performance of any term or obligation to be performed by it under
      any the agreement, and no event has occurred which with notice or lapse of
      time
      or both would constitute the a default, in any such case which default or event,
      individually or in the aggregate, would have a Material Adverse Effect.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    3.10
      Each
      of this Agreement and the other Transaction Documents has been duly authorized,
      executed and delivered by the Company and constitutes the legal, valid and
      binding obligation of the Company, enforceable in accordance with its
      terms.

     

    3.11
      Neither the execution, delivery and performance of this Agreement or the other
      Transaction Documents by the Company nor the consummation of any of the
      transactions contemplated hereby or thereby (including, without limitation,
      the
      issuance and sale by the Company of the Securities) will give rise to a right
      to
      terminate or accelerate the due date of any payment due under, or conflict
      with
      or result in the breach of any term or provision of, or constitute a default
      (or
      an event which with notice or lapse of time or both would constitute a default)
      under, or require any consent or waiver under, or result in the execution or
      imposition of any lien, charge or encumbrance upon any properties or assets
      of
      the Company or its subsidiaries pursuant to the terms of, any indenture,
      mortgage, deed of trust or other agreement or instrument to which the Company
      or
      any of its subsidiaries is a party or by which either the Company or its
      subsidiaries or any of their properties or businesses is bound, or any
      franchise, license, permit, judgment, decree, order, statute, rule or regulation
      applicable to the Company or any of its subsidiaries or violate any provision
      of
      the charter or by-laws of the Company or any of its subsidiaries, except for
      the
      consents or waivers which have already been obtained and are in full force
      and
      effect. 

     

    3.12
      Other than accounting for those issuance in the normal course of business since
      the Company’s last quarterly report filing with the Commission and other than
      the adjustments to certain warrants issued to N.I.R. Group as disclosed in
      the
      Company’s Form 8-K filings on or about June 2, 2006, the Company has authorized
      and outstanding capital stock as set forth in its recent quarterly report filed
      with the Commission. The certificates evidencing the Securities are in due
      and
      proper legal form and have been duly authorized for issuance by the Company.
      All
      of the issued and outstanding shares of Common Stock and preferred stock have
      been duly and validly issued and are fully paid and nonassessable. There are
      no
      statutory preemptive or other similar rights to subscribe for or to purchase
      or
      acquire any shares of Common Stock of the Company or any of its subsidiaries
      or
      any such rights pursuant to its Articles of Incorporation or by-laws or any
      agreement or instrument to or by which the Company or any of its subsidiaries
      is
      a party or bound. The Securities, when sold pursuant to this Agreement, will
      be
      duly and validly issued, fully paid and nonassessable, will be issued free
      and
      clear of any security interests, liens, encumbrances, equities or claims. and
      none of them will be issued in violation of any preemptive or other similar
      right. The Company has reserved from its duly authorized capital stock the
      maximum number of shares of Common Stock issuable pursuant to the Warrants
      (the
“Warrant Shares”). The Warrant Shares, when issued and delivered upon exercise
      of the Warrants in accordance with their terms, will be duly authorized, validly
      issued, fully paid and nonassessable and will be issued free and clear of any
      security interests, liens, encumbrances, equities or claims. All outstanding
      shares of capital stock of each of the Company's subsidiaries have been duly
      authorized and validly issued, and are fully paid and nonassessable and are
      owned directly by the Company or by another wholly-owned subsidiary of the
      Company free and clear of any security interests, liens, encumbrances, equities
      or claims.

     

    
      
         

      

      
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    3.13
      Other than (a) that certain Registration Agreement entered between the Company
      and N.I.R. Group for the piggyback registration of shares underlying the warrant
      to purchase 750,000 shares of Company common stock at a period no sooner than
      180 days subsequent to May 25, 2006 and (b) other than that certain piggyback
      registration right relating to 750,000 common stock shares validly issued to
      Gerard N. Casale under his Employment Agreement with the Company; and (c) other
      than those certain piggyback registration rights granted under that certain
      Binding Term Sheet entered by and between the Company and the owners of Mobile
      Technology Group, LLC in connection with the Company’s acquisition of Mobile
      Technology Group, LLC, no holder of any security of the Company has any right,
      which has not been waived, to have any security owned by the holder included
      in
      any registration statement contemplated by the Transaction Documents (each,
      a
“Registration Statement”) or to demand registration of any security owned by the
      holder for a period of 180 days after the date of this Agreement.

     

    3.14
      There are no legal or governmental proceedings pending to which the Company
      or
      any of its subsidiaries is a party or of which any property of the Company
      or
      any of its subsidiaries is the subject which, if determined adversely to the
      Company or any of its subsidiaries could individually or in the aggregate have
      a
      Material Adverse Effect; and to the knowledge of the Company, no the proceedings
      are threatened or contemplated by governmental authorities or threatened by
      others.

     

    3.15
      All
      necessary corporate action has been duly and validly taken by the Company and
      to
      authorize the execution, delivery and performance of this Agreement and the
      issuance and sale of the Securities by the Company. 

     

    3.16
      Neither the Company nor any of its subsidiaries is involved in any labor dispute
      nor, to the knowledge of the Company, is any the dispute threatened, which
      dispute would have a Material Adverse Effect. The Company is not aware of any
      existing or imminent labor disturbance by the employees of any of its principal
      suppliers or contractors which would have a Material Adverse Effect. The Company
      is not aware of any threatened or pending litigation between the Company or
      its
      subsidiaries and any of its executive officers which, if adversely determined,
      could have a Material Adverse Effect and has no reason to believe that the
      officers will not remain in the employment of the Company. 

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    3.17
      The
      Company has not taken, nor will it take, directly or indirectly, any action
      designed to or which might reasonably be expected to cause or result in, or
      which has constituted or which might reasonably be expected to constitute,
      the
      stabilization or manipulation of the price of the Common Stock or any security
      of the Company to facilitate the sale or resale of any of the
      Securities.

     

    3.18
      The
      Company and each of its subsidiaries has filed all Federal, state, local and
      foreign tax returns which are required to be filed through the date hereof,
      which returns are true and correct in all material respects or has received
      timely extensions thereof, and has paid all taxes shown on the returns and
      all
      assessments received by it to the extent that the same are material and have
      become due. There are no tax audits or investigations pending, which if
      adversely determined would have a Material Adverse Effect; nor are there any
      material proposed additional tax assessments against the Company or any of
      its
      subsidiaries.

     

    3.19
      The
      Company has taken no action designed to, or likely to have the effect of,
      terminating the registration of the Common Stock under the OTC Bulletin
      Board.

     

    3.20
      The
      books, records and accounts of the Company and its subsidiaries accurately
      and
      fairly reflect, in reasonable detail, the transactions in, and dispositions
      of,
      the assets of, and the results of operations of, the Company and its
      subsidiaries. The Company and each of its subsidiaries maintains a system of
      internal accounting controls sufficient to provide reasonable assurances 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 accordance with generally accepted
      accounting principles and to maintain asset accountability, (iii) access to
      assets is permitted only in accordance with management's general or specific
      authorization and (iv) the recorded accountability for assets is compared with
      the existing assets at reasonable intervals and appropriate action is taken
      with
      respect to any differences.

     

    3.21
      The
      Company has established and maintains disclosure controls and procedures (as
      the
      term is defined in Rule 13a-15 under the Exchange Act), which: (i) are designed
      to ensure that material information relating to the Company is made known to
      the
      Company’s principal executive officer and its principal financial officer by
      others within the Company, particularly during the periods in which the periodic
      reports required under the Exchange Act are required to be prepared; (ii)
      provide for the periodic evaluation of the effectiveness of the disclosure
      controls and procedures at the end of the periods in which the periodic reports
      are required to be prepared; and (iii) are effective in all material respects
      to
      perform the functions for which they were established. 

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    3.22
      Based on the evaluation of its disclosure controls and procedures, the Company
      is not aware of (i) any significant deficiency in the design or operation of
      internal controls which could adversely affect the Company’s ability to record,
      process, summarize and report financial data or any material weaknesses in
      internal controls; or (ii) any fraud, whether or not material, that involves
      management or other employees who have a role in the Company’s internal
      controls. 

     

    3.23
      The
      Auditor has not been engaged by the Company to perform any “prohibited
      activities” (as defined in Section 10A of the Exchange Act).

     

    3.24
      There are no material off-balance sheet arrangements (as defined in Item 303
      of
      Regulation S-B) that have or are reasonably likely to have a material current
      or
      future effect on the Company’s financial condition, revenues or expenses,
      changes in financial condition, results of operations, liquidity, capital
      expenditures or capital resources. 

     

    3.25
      The
      Company and its subsidiaries are insured by insurers of recognized financial
      responsibility against the losses and risks and in the amounts as are customary
      in the businesses in which they are engaged or propose to engage after giving
      effect to the transactions described in the Company’s filings with the
      Commission for the past 9 months; all policies of insurance and fidelity or
      surety bonds insuring the Company or any of its subsidiaries or the Company's
      or
      its subsidiaries' respective businesses, assets, employees, officers and
      directors are in full force and effect; the Company and each of its subsidiaries
      are in compliance with the terms of the policies and instruments in all material
      respects; and neither the Company nor any subsidiary of the Company has any
      reason to believe that it will not be able to renew its existing insurance
      coverage as and when the coverage expires or to obtain similar coverage from
      similar insurers as may be necessary to continue its business at a cost that
      is
      not materially greater than the current cost. Neither the Company nor any of
      its
      subsidiaries has been denied any insurance coverage which it has sought or
      for
      which it has applied.

     

    3.26
      Each
      approval, consent, order, authorization, designation, declaration or filing
      of,
      by or with any regulatory, administrative or other governmental body necessary
      in connection with the execution and delivery by the Company of this Agreement
      and the consummation of the transactions herein contemplated required to be
      obtained or performed by the Company. 

     

    3.27
      The
      Company is not and, after giving effect to the offering and sale of the
      Securities and the application of proceeds thereof, will not be an "investment
      company" within the meaning of the Investment Company Act of 1940, as amended
      (the "Investment Company Act").

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    3.28
      The
      Company or any other person associated with or acting on behalf of the Company
      including, without limitation, any director, officer, agent or employee of
      the
      Company or its subsidiaries, has not, directly or indirectly, while acting
      on
      behalf of the Company or its subsidiaries (i) used any corporate funds for
      unlawful contributions, gifts, entertainment or other unlawful expenses relating
      to political activity; (ii) made any unlawful payment to foreign or
      domestic government officials or employees or to foreign or domestic political
      parties or campaigns from corporate funds; (iii) violated any provision of
      the
      Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any other
      unlawful payment.

     

    3.29
      The
      operations of the Company and its subsidiaries are and have been conducted
      at
      all times in compliance with applicable financial recordkeeping and reporting
      requirements of the Currency and Foreign Transactions Reporting Act of 1970,
      as
      amended, the money laundering statutes of all jurisdictions, the rules and
      regulations hereunder and any related or similar rules, regulations or
      guidelines, issued, administered or enforced by any governmental agency
      (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by
      or before any court or governmental agency, authority or body or any arbitrator
      involving the Company or any of it subsidiaries with respect to the Money
      Laundering Laws is pending, or to the best knowledge of the Company,
      threatened.

     

    3.30
      Neither the Company nor any of its subsidiaries nor, to the knowledge of the
      Company, any director, officer, agent, employee or affiliate of the Company
      or
      any of its subsidiaries is currently subject to any U.S. sanctions administered
      by the Office of Foreign Assets Control of the U.S. Treasury Department
      (“OFAC”); and the Company will not directly or indirectly use the proceeds of
      the offering, or lend, contribute or otherwise make available the proceeds
      to
      any subsidiary, joint venture partner or other person or entity, for the purpose
      of financing the activities of any person currently subject to any U.S.
      sanctions administered by OFAC.

     

    3.31
       The
      Company has fulfilled its obligations, if any, under the minimum funding
      standards of Section 302 of the U.S. Employee Retirement Income Security Act
      of
      1974 ("ERISA") and the regulations and published interpretations hereunder
      with
      respect to each "plan" as defined in Section 3(3) of ERISA and the regulations
      and published interpretations in which its employees are eligible to participate
      and each such plan is in compliance in all material respects with the presently
      applicable provisions of ERISA and the regulations and published
      interpretations. No "Reportable Event" (as defined in 12 ERISA) has occurred
      with respect to any "Pension Plan" (as defined in ERISA) for which the Company
      could have any liability.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    3.32
      Each
      of
      the Company, its directors and officers has not distributed and will not
      distribute prior to the Closing Date, any offering material in connection with
      the offering and sale of the Securities other than the Transaction
      Documents.

     

    3.33No
      broker, investment banker, financial advisor or other individual, corporation,
      general or limited partnership, limited liability company, firm, joint venture,
      association, enterprise, joint securities company, trust, unincorporated
      organization or other entity (each a “Person”), other than the Placement Agent,
      the fees and expenses of which will be paid by the Company, is entitled to
      any
      broker's, finder's, financial advisor's or other similar fee or commission
      in
      connection with the transactions contemplated by this Agreement based upon
      arrangements made by or on behalf of the Company.

     

      3.34The
      Company intends to use the net proceeds from the sale of the Securities for
      working capital purposes.

     

    3.35
      Neither the Company nor any Person acting on its behalf, (i) has engaged in
      any
      form of general solicitation or general advertising (within the meaning of
      Regulation D under the Securities Act) in connection with the offer or sale
      of
      the Securities, (ii) has, directly or indirectly, made any offer or sale of
      any
      security or solicited any offer to buy any security, under any circumstances
      that would require registration of the Securities under the Securities Act
      or
      (iii) has issued any shares of Common Stock or shares of any series of preferred
      stock or other securities or instruments convertible into, exchangeable for
      or
      otherwise entitling the holder thereof to acquire shares of Common Stock which
      would be integrated with the sale of the Securities to the Purchaser for
      purposes of the Securities Act or of any applicable stockholder approval
      provisions, including, without limitation, under the rules and regulations
      of
      the Nasdaq National Market, nor will the Company or any of its subsidiaries
      or
      affiliates take any action or steps that would require registration of any
      of
      the Securities under the Securities Act or cause the offering of the Securities
      to be integrated with other offerings. Assuming the accuracy of the
      representations and warranties of Purchasers contained herein, the offer and
      sale of the Securities by the Company to the Purchasers pursuant to the Stock
      Purchase Agreements will be exempt from the registration requirements of the
      Securities Act.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    3.36
      The
      subsidiaries of the Company are not currently prohibited, directly or
      indirectly, under any agreement or other instrument to which any such subsidiary
      is a party or is subject, from paying any dividends to the Company, from making
      any other distribution on the subsidiary’s capital stock, from repaying to the
      Company any loans or advances to the subsidiary from the Company or from
      transferring any of the subsidiary’s properties or assets to the
      Company.

     

    3.37
      No
      person has the right, which right has not been waived, to require the Company
      or
      its subsidiaries to register any securities for sale under the Securities Act
      by
      reason of the filing of the Registration Statement with the Commission or the
      issuance and sale of the Securities.

     

    3.38
      The
      Company shall file with the SEC a current report on Form 8-K under the Exchange
      Act describing the transactions contemplated hereby and attaching as exhibits
      thereto all material documents relating to the transactions contemplated
      hereby.

     

    
      	 	
              Section
                4.

            	
              Representations,
                Warranties And Covenants Of the
                Purchaser.

            

    

     

    Each
      of
      the Purchaser and CCF hereby represents and warrants to, and covenants with,
      the
      Company as of the Closing Date (or the other date specified below) as
      follows:

     

    4.1. Organization. 
      Each of the Purchaser and CCF is an entity duly organized and validly existing
      in good standing (to the extent such concepts are applicable) under the laws
      of
      its jurisdiction of organization. Each of the Purchaser and CCF has all
      requisite corporate power and authority and all necessary governmental approvals
      to carry on its business as now being conducted, except as would not result
      in a
      Material Adverse Effect on the Purchaser's or CCF’s ability to consummate the
      transactions contemplated by this Agreement.

     

    4.2. Authorization,
      Enforcement, and Validity. 
      Each of the Purchaser and CCF has the requisite power and authority to enter
      into this Agreement and to consummate the transactions contemplated hereby.
      Each
      of the Purchaser and CCF has taken all necessary action to authorize the
      execution, delivery and performance of this Agreement. Upon the execution and
      delivery of this Agreement, this Agreement shall constitute a valid and binding
      obligation of the Purchaser and CCF enforceable in accordance with its terms,
      except as enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium or similar laws affecting creditors' and contracting
      parties' rights generally and except as enforceability may be subject to general
      principles of equity. 

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    4.3. Consents
      and Approvals; No Violation.
      The execution, delivery and performance of this Agreement by the Purchaser
      and
      CCF and the consummation by the Purchaser and CCF of the transactions
      contemplated hereby will not (i) result in a violation of the Purchaser's and
      CCF’s organizational documents; (ii) conflict with, or constitute a default or
      give to others any rights of termination, amendment, acceleration or
      cancellation of, any material agreement, indenture or instrument to which the
      Purchaser or CCF is a party (except for the conflicts, defaults, terminations,
      amendments, accelerations, cancellations and violations as would not,
      individually or in the aggregate, result in a Material Adverse Effect on the
      Purchaser's or CCF’s ability to consummate the transactions contemplated by this
      Agreement); or (iii) result in a violation of any law, rule, regulation, order,
      judgment or decree applicable to the Purchaser or CCF or any of their its
      Subsidiaries, except for the violations as would not, individually or in the
      aggregate, result in a Material Adverse Effect on the Purchaser's ability to
      consummate the transactions contemplated by this Agreement. Each of the
      Purchaser and CCF is not required to obtain any consent, authorization or order
      of, or make any filing or registration with, any court or governmental agency
      or
      any regulatory or self-regulatory agency in order for it to execute, deliver
      or
      perform any of its obligations under or contemplated by this Agreement, except
      where the failure to obtain such consents, authorization or orders or to make
      such filings or registrations would not, individually or in the aggregate,
      result in a Material Adverse Effect on the Purchaser's or CCF’s ability to
      consummate the transactions contemplated by this Agreement. 

     

    4.4. Investment
      Experience.
      Each of the Purchaser and CCF is an accredited investor within the meaning
      of
      Rule 501 of Regulation D promulgated under the Securities Act, is knowledgeable,
      sophisticated and experienced in making, and is qualified to make, decisions
      with respect to investments in shares representing an investment decision like
      that involved in the purchase of the Securities.

     

    4.5. Investment
      Intent And Limitation On Dispositions.
       Each of the Purchaser and CCF is acquiring Securities for its own
      account for investment only and has no intention of selling or distributing
      any
      of the Securities or any arrangement or understanding with any other Persons
      regarding the sale or distribution of the Securities except in accordance with
      the provisions of Section 4.7 and except as would not result in a violation
      of
      the Securities Act. The Purchaser and CCF will not, directly or indirectly,
      offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers
      to
      buy, purchase or otherwise acquire or take a pledge of) any of the Securities
      except in accordance with the provisions of Section 4.7 or pursuant to and
      in
      accordance with the Securities Act.

     

    4.6. Information
      And Risk.
      Each of
      the Purchaser and CCF acknowledges that each of the Purchaser and CCF is a
      sophisticated investor, has such knowledge and experience in financial and
      business matters in general and has full familiarity with the current business
      and future business prospects of the Company and the financial and other affairs
      of the Company and acknowledges that it has had access to and has received
      sufficient information about the Company, including any and all such information
      requested by the Purchaser and CCF in order to make an informed decision as
      to
      the sale of the Securities to the Purchaser and CCF and the transactions
      contemplated hereby. In addition, the Purchaser and CCF acknowledge that each
      has had access to the officers, directors and employees of the Company to
      discuss the business, affairs and prospects of the Company and has had the
      opportunity to obtain additional information necessary to evaluate the merits
      and the risks of engaging in the transactions contemplated by this
      Agreement.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    4.7. Restricted
      Securities.   Each of the Purchaser and CCF understands and
      acknowledges that the sale of the Shares has not been registered under the
      Act,
      or the securities laws of any state or any analogous securities laws of any
      applicable foreign jurisdiction (collectively, "Applicable Laws") and have
      been
      issued in reliance upon an exemption from the Act for non-public or limited
      offerings. Each of the Purchaser and CCF understands that the Shares are
      "restricted securities" and must be held indefinitely unless the sale or other
      transfer thereof is subsequently registered pursuant to any Applicable Laws
      or
      an exemption from such registration is available at that time, and each of
      the
      Purchaser and CCF agrees to comply with all Applicable Laws in connection with
      listing or qualification of the Shares thereunder.

     

    4.8. Legends.
      Certificates for the Securities shall contain a restrictive legend substantially
      in the following form:

     

    THE
      SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT”), OR ANY OTHER
      APPLICABLE SECURITIES LAWS, INCLUDING THE SECURITIES LAWS OF ANY APPLICABLE
      FOREIGN JURISDICTION, AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM
      THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES
      LAWS, IF APPLICABLE. NEITHER THESE SECURITIES NOR ANY INTEREST OR PARTICIPATION
      HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED,
      HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE
      REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH OTHER SECURITIES LAWS
      OR
      PURSUANT TO A TRANSACTION THAT IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
      REGISTRATION REQUIREMENTS.

    

    4.9. Brokers
      or Finders. 
      No broker, investment banker, financial advisor or other Person is entitled
      to
      any broker's, finder's, financial advisor's or other similar fee or commission
      in connection with the transactions contemplated hereby based upon arrangements
      made by or on behalf of the Purchaser.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    4.10. Confidential
      Treatment. The Purchaser and CCF shall hold in strict confidence all
      information concerning this Agreement and the offering of the Securities until
      the earlier of the time as the Company has made a public announcement concerning
      this Agreement or the offering of the Securities.

     

    4.11. The
      Purchaser and CCF or any other person associated with or acting on behalf of
      the
      Purchaser and CCF including, without limitation, any director, officer, agent
      or
      employee of the Purchaser and CCF or their subsidiaries, has not, directly
      or
      indirectly, while acting on behalf of the Purchaser and CCF or their
      subsidiaries (i) used any corporate funds for unlawful contributions, gifts,
      entertainment or other unlawful expenses relating to political activity;
      (ii) made any unlawful payment to foreign or domestic government officials
      or employees or to foreign or domestic political parties or campaigns from
      corporate funds; (iii) violated any provision of the Foreign Corrupt Practices
      Act of 1977, as amended; or (iv) made any other unlawful payment.

     

    4.12. The
      operations of the Purchaser and CCF and their subsidiaries are and have been
      conducted at all times in compliance with applicable financial recordkeeping
      and
      reporting requirements of the Currency and Foreign Transactions Reporting Act
      of
      1970, as amended, the money laundering statutes of all jurisdictions, the rules
      and regulations hereunder and any related or similar rules, regulations or
      guidelines, issued, administered or enforced by any governmental agency
      (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by
      or before any court or governmental agency, authority or body or any arbitrator
      involving the Purchaser or CCF or any of it subsidiaries with respect to the
      Money Laundering Laws is pending, or to the best knowledge of the Purchasers
      or
      CCF, threatened.

     

    4.13. The
      Purchaser and CCF and any of their subsidiaries , to the knowledge of the
      Purchaser and CCF, any director, officer, agent, employee or affiliate of the
      Purchasers and CCF or any of their subsidiaries is not currently subject to
      any
      U.S. sanctions administered by OFAC. 

     

    
      	 	
              Section
                5.

            	
              Survival
                of Representations and
                Warranties.

            

    

     

    Notwithstanding
      any investigation made by any party to this Agreement, all representations
      and
      warranties made by the Company and the Purchaser and CCF herein shall survive
      for a period of one (1) year following the Closing Date.

     

    
      	 	
              Section
                6.

            	
              Indemnification.

            

    

     

    (a) For
      purposes of this Section 6: 

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    (i) the
      term
“Purchaser” shall include the Purchaser and any affiliate (as the term is
      defined pursuant to Rule 12b-2 promulgated under the Exchange Act) of the
      Purchaser, including CCF; 

     

    (ii) the
      term
“Prospectus” shall mean the prospectus and any amendment or supplement thereto
      in the form first filed with the Commission pursuant to Rule 424(b) promulgated
      under the Securities Act or, if no Rule 424(b) filing is required, filed as
      part
      of the Registration Statement at the time of effectiveness, as supplemented
      or
      amended from time to time; and 

     

    (iii) the
      term
“Registration Statement” shall include any final prospectus, exhibit, supplement
      or amendment included in or relating to the Registration Statement.

    

     

    (b) The
      Company agrees to indemnify and hold harmless each of the Purchaser and each
      Person, if any, who controls the Purchaser within the meaning of the Securities
      Act, against any losses, claims, damages, liabilities or expenses, joint or
      several, to which the Purchaser or the controlling Person may become subject,
      under the Securities Act, the Exchange Act, or any other federal or state
      statutory law or regulation, or at common law or otherwise (including in
      settlement of any litigation, if the settlement is effected with the written
      consent of the Company), insofar as the losses, claims, damages, liabilities
      or
      expenses (or actions in respect thereof as contemplated below) arise out of
      or
      are based upon any untrue statement or alleged untrue statement of any material
      fact contained in the Registration Statement or Prospectus, or arise out of
      or
      are based upon the omission or alleged omission to state therein a material
      fact
      required to be stated therein or necessary to make the statements therein,
      in
      light of the circumstances in which they were made, not misleading, or arise
      out
      of or are based in whole or in part on any inaccuracy in the representations
      and
      warranties of the Company contained in this Agreement, or any failure of the
      Company to perform its obligations hereunder, and will reimburse the Purchaser
      and each such controlling Person for any legal and other expenses reasonably
      incurred as the expenses are reasonably incurred by the Purchaser or the
      controlling Person in connection with investigating, defending, settling,
      compromising or paying any such loss, claim, damage, liability, expense or
      action; provided, however, that the Company will not be liable in any such
      case
      to the extent that any such loss, claim, damage, liability or expense arises
      out
      of or is based upon (i) an untrue statement or alleged untrue statement or
      omission or alleged omission made in the Registration Statement or Prospectus
      in
      reliance upon and in conformity with written information furnished to the
      Company by or on behalf of the Purchaser expressly for use therein, (ii) the
      failure of the Purchaser to comply with the covenants and agreements contained
      in Section 4.7 above respecting sale of the Securities, (iii) the inaccuracy
      of
      any representations made by the Purchaser herein or (iv) any statement or
      omission in any Prospectus that is corrected in any subsequent Prospectus that
      was delivered to the Purchaser a reasonable time prior to the pertinent sale
      or
      sales by the Purchaser, and provided that the Purchaser has been notified by
      the
      Company that the earlier Prospectus should no longer be delivered by the
      Purchaser. 

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    

     

    (c) Each
      Purchaser will severally, and not jointly, indemnify and hold harmless the
      Company, each of its directors, each of its officers who signed the Registration
      Statement and each Person, if any, who controls the Company within the meaning
      of the Securities Act, against any losses, claims, damages, liabilities or
      expenses to which the Company, each of its directors, each of its officers
      who
      signed the Registration Statement or controlling Person may become subject,
      under the Securities Act, the Exchange Act, or any other federal or state
      statutory law or regulation, or at common law or otherwise (including in
      settlement of any litigation, if the settlement is effected with the written
      consent of the Purchaser) insofar as the losses, claims, damages, liabilities
      or
      expenses (or actions in respect thereof as contemplated below) arise out of
      or
      are based upon (i) any failure by the Purchaser to comply with the covenants
      and
      agreements contained in Section 4.7 above respecting the sale of the Securities,
      (ii) the inaccuracy of any representation made by the Purchaser herein or (iii)
      any untrue or alleged untrue statement of any material fact contained in the
      Registration Statement or the Prospectus, or the omission or alleged omission
      to
      state therein a material fact required to be stated therein or necessary to
      make
      the statements therein, in light of the circumstances in which they were made,
      not misleading, in each case to the extent, but only to the extent, that the
      untrue statement or alleged untrue statement or omission or alleged omission
      was
      made in the Registration Statement or Prospectus in reliance upon and in
      conformity with written information furnished to the Company by or on behalf
      of
      the Purchaser expressly for use therein, and will reimburse the Company, each
      of
      its directors, each of its officers who signed the Registration Statement or
      controlling Person for any legal and other expense reasonably incurred, as
      the
      expenses are reasonably incurred by the Company, each of its directors, each
      of
      its officers who signed the Registration Statement or controlling Person in
      connection with investigating, defending, settling, compromising or paying
      any
      the loss, claim, damage, liability, expense or action; provided, however, that
      the aggregate liability of any Purchaser hereunder shall not exceed the Purchase
      Price paid by the Purchaser to the Company on the Closing Date. No Purchaser
      shall be liable for the indemnification obligations of any other
      Purchaser.

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    (d) Promptly
      after receipt by an indemnified party under this Section 6 of notice of the
      threat or commencement of any action, the indemnified party will, if a claim
      in
      respect thereof is to be made against an indemnifying party under this Section
      6, promptly notify the indemnifying party in writing thereof, but the omission
      so to notify the indemnifying party will not relieve it from any liability
      which
      it may have to any indemnified party hereunder or otherwise to the extent it
      is
      not prejudiced as a result of the failure. In case any the action is brought
      against any indemnified party and the indemnified party seeks or intends to
      seek
      indemnity from an indemnifying party, the indemnifying party will be entitled
      to
      participate in, and, to the extent that it may wish, jointly with all other
      indemnifying parties similarly notified, to assume the defense thereof with
      counsel reasonably satisfactory to the indemnified party; provided, however,
      if
      the defendants in any such action include both the indemnified party and the
      indemnifying party and the indemnified party shall have reasonably concluded
      that there may be a conflict between the positions of the indemnifying party
      and
      the indemnified party in conducting the defense of any such action or that
      there
      may be legal defenses available to it and/or other indemnified parties which
      are
      different from or additional to those available to the indemnifying party,
      the
      indemnified party or parties shall have the right to select separate counsel
      to
      assume the legal defenses and to otherwise participate in the defense of the
      action on behalf of the indemnified party or parties. Upon receipt of notice
      from the indemnifying party to the indemnified party of its election to assume
      the defense of the action and approval by the indemnified party of counsel,
      the
      indemnifying party will not be liable to the indemnified party under this
      Section 6 for any legal or other expenses subsequently incurred by the
      indemnified party in connection with the defense thereof unless (i) the
      indemnified party shall have employed the counsel in connection with the
      assumption of legal defenses in accordance with the proviso to the preceding
      sentence (it being understood, however, that the indemnifying party shall not
      be
      liable for the expenses of more than one separate counsel, reasonably
      satisfactory to the indemnifying party, representing the indemnified parties
      who
      are parties to the action) or (ii) the indemnified party shall not have employed
      counsel reasonably satisfactory to the indemnified party to represent the
      indemnified party within a reasonable time after notice of commencement of
      action, in each of which cases the reasonable fees and expenses of counsel
      shall
      be at the expense of the indemnifying party.

     

    
      	 	
              Section
                7.

            	
              Notices.

            

    

     

    (a) All
      notices, requests, consents and other communications hereunder shall be in
      writing, shall be mailed by first-class registered or certified airmail,
      confirmed facsimile or nationally recognized overnight express courier postage
      prepaid, and shall be as addressed as follows: 

     

    
      	 	 if
              to the Company, to:
	 	 	 
	 	 	
              Alex
                Lightman

            
	 	 	
              CEO
                

            
	 	 	
              Innofone.com,
                Incorporated

            
	 	 	
              1431
                Ocean Avenue, Suite 1500

            
	 	 	
              Santa
                Monica, CA 90401

            
	 	 	 
	 	 	
              Telephone
                No.: (310) 458-3233

            
	 	 	
              Telecopy
                No.: (310) 458-2844

            
	 	 	 

    

    
 

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    

    
      	 	 with
              a copy to:
	 	 	 
	 	 	
              Gersten
                Savage LLP

            
	 	 	
              600
                Lexington Avenue

            
	 	 	
              9th
                Floor

            
	 	 	
              New
                York, New York, 10022

            
	 	 	
              Attention:
                Arthur Marcus

            
	 	 	 
	 	 	
              Telephone
                No.: (212) 752-9700

            
	 	 	
              Telecopy
                No.: (212) 980-5192

            

    

    

    and
      if to
      the Purchaser or CCF, at its address as set forth in Escrow Agreement, or at
      the
      other address or addresses as may have been previously furnished to the Company
      in writing in accordance with this Section 7. 

     

    (b) The
      notices or other communications shall be deemed delivered upon receipt, in
      the
      case of overnight delivery, personal delivery, facsimile transmission (as
      evidenced by the confirmation thereof), or mail. 

     

    
      	 	
              Section
                8.

            	
              Miscellaneous.
                

            

    

     

    8.1. Amendments.
      Any
      term of this Agreement may be amended and the observance of any term of this
      Agreement may be waived (either generally or in a particular instance and either
      retroactively or prospectively) only with the written consent of the Company,
      the Purchaser or CCF. Any amendment or waiver effected in accordance with this
      Section 8.1 shall be binding upon each holder of any securities purchased under
      this Agreement at the time outstanding (including securities into which the
      securities are convertible), each future holder of all the securities, and
      the
      Company. 

     

    8.2. Headings.
      The headings of the various sections of this Agreement are for convenience
      of
      reference only and shall not be deemed to be part of this Agreement.

     

    8.3. Severability.
      In the
      event that any provision in this Agreement is held to be invalid, illegal or
      unenforceable in any respect, the validity, legality and enforceability of
      the
      remaining provisions contained herein shall not in any way be affected or
      impaired thereby. 

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    

     

    8.4. Governing
      Law And Forum.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York applicable to agreements made and to be fully performed
      therein. The parties hereto agree to submit to the exclusive jurisdiction of
      the
      federal and state courts of the State of New York with respect to the
      interpretation of this Agreement or for the purposes of any action arising
      out
      of or related to this Agreement. 

     

    8.5. Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      constitute an original, and all of which together shall constitute one and
      the
      same instrument. In the event that any signature is delivered via facsimile
      transmission, the signature shall create a valid and binding obligation of
      the
      party executing (or on whose behalf the signature is executed) the same with
      the
      same force and effect as if the facsimile signature page were an original
      hereof. 

     

    8.6. Entire
      Agreement.
      This
      Agreement contains the entire understanding of the parties with respect to
      the
      matters covered herein, supersede all prior agreements and understandings with
      respect to the matters and executed by and among the Company and any of the
      Purchasers, and, except as specifically set forth herein or therein, neither
      the
      Company nor the Purchasers make any representation, warranty, covenant or
      undertaking with respect to the matters. 

     

    8.7. Expenses.
      Each
      party hereto shall pay all costs and expenses incurred by it in connection
      with
      the execution and delivery of this Agreement, and all the transactions
      contemplated thereby, including fees of legal counsel. 

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
      and delivered by their duly authorized representatives as of the day and year
      first above written. 

    
 

     

    
      	 	INNOFONE.COM,
              INCORPORATED
	 	 
	 	
              By:
                /s/
                Alex Lightman  

            
	 	Name: Alex
              Lightman
	 	
              Title: Chief
                Executive Officer

               

               

            
	 	
              COGENT
                CAPITAL INVESTMENTS LLC

               

               

            
	 	
              By:
                /s/
                Greg Kofford 

            
	 	
              Name:
                Greg Kofford

              Title:
                Senior Principal

            
	 	 
	 	 
	 	
              COGENT
                CAPITAL FINANCIAL LLC

               

               

            
	 	
              By:/s/
                Greg Kofford 

            
	 	
              Name:
                Greg Kofford

              Title:
                Senior Principal

            

    

    

    

     

    
      
         

      

      
        22

        
          

        

      

      
         

        
        

      

    

    APPENDIX
      A

     

    FORM
      OF
      CERTIFICATE OF DESIGNATIONS

    

     

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

        
        

      

    

    APPENDIX
      B

     

    FORM
      OF
      COMPANY COUNSEL OPINION

     

    

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

        
        

      

    

    APPENDIX
      C

     

    DISCLOSURE
      SCHEDULES

     

    

    

    

    [To
      Come]Unassociated Document

    ESCROW
      AGREEMENT

    

    This
      Escrow Agreement, dated as of June 2, 2006 (“Escrow Agreement”), is entered into
      by and among Cogent Capital Investments LLC, a Delaware Limited Liability
      Company (“Cogent”), Cogent Capital Financial LLC, a Delaware Limited Liability
      Company (“CCF”), Innofone.com, Incorporated, a Nevada corporation (“INFN”) and
      Investors Bank & Trust Company, a Massachusetts trust company (“Escrow
      Agent”).

    

    Whereas,
      Cogent and INFN are parties to a Securities Purchase Agreement, dated as of
      June
      2, 2006; and

    

    Whereas,
      CCF and INFN are parties to the ISDA Master Agreement (the “Master Agreement”),
      the Equity Swap Confirmation, and the ISDA Credit Support Annex, each dated
      June
      2, 2006 (collectively the “Swap Agreements”); and

    

    Whereas,
      the Securities Purchase Agreement provides for the delivery of certain
      consideration and property to effect the transactions contemplated thereby;
      and

    

    Whereas,
      the Swap Agreements provide for the delivery of the “Initial Exchange Amount” at
      the inception of the transactions contemplated thereby, which consists of (i)
      $1,375,000, of which $568,750 is due on closing and the balance of which is
      due
      on a deferred basis, (ii) 5,000,000 shares of INFN common stock and (iii) a
      warrant to purchase 5,000,000 shares of INFN common stock, during a 5-year
      term,
      at an initial exercise price per share of $1.20 (the “Warrant”);
      and

    

    Whereas,
      Escrow Agent has agreed to serve as Escrow Agent pursuant to the terms set
      forth
      herein.

    

    Now,
      therefore, the parties hereto agree to the following terms:

    

    1. Deliveries
      in Escrow.
      On or
      before June 2, 2006 or, if the Extension (as defined below) has occurred, June
      9, 2006 (the “Delivery Date”), Cogent and INFN shall deliver or deposit with the
      Escrow Agent according to the delivery instructions as outlined in Exhibit
“B”
the following (collectively the “Deliveries”): 

    

    
      	 	
              (a)

            	
              By
                Cogent, US Treasury Notes and Strips with a market value on the date
                immediately preceding the date of delivery to the Escrow Agent of
                at least
                $50,000,000 based on current market quote at the time of delivery,
                together with a schedule listing for each Note and Strip the exact
                amount,
                maturity, and CUSIP number (the “Bonds”);
                and

            

    

    

    
      	 	
              (b)

            	
              By
                INFN,

            

    

    

    
      	 	
              (i)

            	
              1,850,000
                shares of INFN common stock, par value $0.001 per share, CUSIP number
                45768R305, in one certificate with standard restrictions as defined
                in the
                Securities Purchase Agreement issued in the name of Cogent (the “Common
                Shares”); and

            

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    
      	 	
              (ii)

            	
              4,815,000
                shares of INFN non-voting convertible redeemable preferred stock,
                par
                value $0.001 per share (each of which shares being initially convertible
                into 10 shares of Common Stock), in one certificate with standard
                restrictions as defined in the Securities Purchase Agreement issued
                in the
                name of Cogent (the “Preferred Shares”);

            

    

    

    
      	 	
              (iii)

            	
              the
                Initial Exchange Amount, consisting of (i) $568,750, (ii) 5,000,000
                shares
                of Common Stock, CUSIP number 45768R305, in one certificate with
                standard
                restrictions as defined in the Securities Purchase Agreement issued
                in the
                name of CCF and (iii) the Warrant to purchase 5,000,000 shares of
                Common
                Stock (CUSIP number 45768R305), during a 5-year term, at an initial
                exercise price per share of $1.20, in one certificate with standard
                restrictions as defined in the Securities Purchase Agreement issued
                in the
                name of CCF; and

            

    

    

    
      	 	
              (iv)

            	
              $181,250
                interest impound.

            

    

    

    If
      all of
      the foregoing Deliveries are not received by the Escrow Agent on or before
      the
      Delivery Date or either of the Additional Conditions (as defined below) has
      not
      been satisfied on or before the Delivery Date, then the Escrow Agent shall
      be
      directed by either Cogent or INFN to terminate the Escrow Agreement and to
      return to Cogent and INFN their respective Deliveries, if any, made to the
      Escrow Agent on or before that date. An “Extension” shall occur if the Company
      shall pay to CCF and CCF shall receive, by no later than 5:00 p.m., New York
      time, on June 5, 2006, the sum of $250,000 (the “Extension Fee”), which shall be
      made in accordance with the wire transfer instructions set forth in Section
      2(d)
      below and shall in all circumstances be non-refundable. If the Extension Fee
      is
      so received in a timely manner, Cogent and CCF shall promptly notify the Escrow
      Agent in writing of that an Extension has occurred. If an Extension occurs,
      the
      Delivery Date shall thereafter refer to June 9, 2006.

    

    2. Disbursement
      of Deliveries.
      If the
      Escrow Agent receives all of the Deliveries on or before the Delivery Date
      and
      both of the Additional Conditions have been satisfied on or before the Delivery
      Date, then within three business days following the Delivery Date the Escrow
      Agent will be directed by Cogent or INFN to disburse the Deliveries as
      follows:

    

    
      	 	
              (a)

            	
              The
                Bonds will
                be
                transferred to account number 4739766 at
                Escrow Agent titled “Cogent Capital Financial for the benefit of
                Innofone.com” (the “Collateral
                Account”);

            

    

    

    
      	 	
              (b)

            	
              The
                Common Shares will be transferred to account number 4739699 at
                the Escrow Agent;

            

    

    

    
      	 	
              (c)

            	
              The
                Preferred Shares will be transferred to account number 4739699 at
                the Escrow Agent;

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    

    
      	 	
              (d)

            	
              The
                5,000,000 shares of Common Stock and the Warrant included in the
                Initial
                Exchange Amount will be transferred to account number 4739698
                at
                the Escrow Agent. The $1,375,000 included in the Initial Exchange
                Amount
                shall be paid by wire transfer to Cogent’s account in accordance with the
                following instructions: Cogent
                Capital Financial account number 4739698
                at
                Escrow Agent [(ABA no. 011001438; Short Name: Investors Bk Bos; ABA
                Lookup: Investors Bank & Trust Co., Boston, MA; Beneficiary’s Bank:
                569530395; Beneficiary: 4739698; Reference for Beneficiary: Cogent
                Capital
                Financial)];

            

    

    

    
      	 	
              (e)

            	
              The
                interest impound will be transferred to account number 4739765 at
                Escrow Agent.

            

    

    

    3. Collateral
      Account.

    

    (a)
      CCF
      and INFN are parties to that certain ISDA Master Agreement, dated as of June
      2,
      2006 (the “Master Agreement”) and the Credit Support Annex thereto (the “CSA”),
      and have executed one Confirmation, dated as of June 2, 2006, evidencing the
      Transaction that is subject to the Master Agreement. CCF and INFN hereby notify
      the Escrow Agent that pursuant to the CSA and the Confirmation INFN has granted
      CCF a security interest in the Collateral Account and all financial assets
      and
      other items therein. The Escrow Agent acknowledges being so notified and
      confirms that it has no actual knowledge or notice of any restraint, security
      interest, lien or other adverse claim in or to the Collateral Account or any
      item therein. All items in the Collateral Account shall be treated as “financial
      assets” within the meaning of the New York Uniform Commercial Code (the
“Code”).

    

    (b)
      The
      Escrow Agent shall comply with all withdrawal, transfer, payment and redemption
      instructions, and all other entitlement orders (as defined in the Code)
      (collectively, “orders”) received from CCF (without further consent from INFN)
      concerning the Collateral Account. The Escrow Agent shall not honor any orders
      from INFN with respect to the Collateral Account, unless otherwise authorized
      to
      do so pursuant to written instructions from CCF. The Escrow Agent shall not
      change the name or account number of the Collateral Account without having
      received CCF’s prior express written consent thereto. INFN acknowledges that
      from time to time CCF may direct that amounts be distributed to CCF in payment
      of amounts due to CCF under the Equity Swap Confirmation and the other documents
      relating thereto, including payment of the Deferred Exchange Amount and any
      other amount owing to CCF thereunder. In providing orders or instructions to
      the
      Escrow Agent as contemplated by this Section 3(b), CCF shall do so acting in
      good faith and in accordance with the terms of the other Transaction
      Documents.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    (c)
      The
      Escrow Agent waives, releases and agrees not to assert, exercise or claim any
      lien, encumbrance, right (including setoff right) or other claim against the
      Collateral Account or any financial asset, cash balance or other item therein,
      except with respect to payment (i) of customary fees and commissions with
      respect to the routine maintenance and operation of the Collateral Account
      or
      (ii) for financial assets duly purchased for the Collateral Account in
      accordance with the provisions hereof, in each case as provided for under any
      agreements between CCF and INFN relating to the Collateral Account. The Escrow
      Agent shall neither advance margin or other credit against the Collateral
      Account, nor hypothecate any financial assets carried in the Collateral Account,
      without the prior written consent of CCF. Except as required by law, the Escrow
      Agent shall not agree with any other person or entity that it will comply with
      any withdrawal, transfer, payment and redemption instructions, or any other
      entitlement or other orders, from such person or entity concerning the
      Collateral Account or any items therein, without the prior written consent
      of
      CCF and any such agreement entered into without such consent shall be null
      and
      void.

    

    4. Additional
      Conditions. 

    

    (a)
      The
“Registration Rights Condition” shall be deemed to have been satisfied upon
      CCF’s providing written notice to the Escrow Agent confirming that CCF and INFN
      have entered into a registration rights agreement, in form and substance
      reasonably satisfactory to CCF, granting CCF demand and piggyback registration
      rights with respect to the shares to be delivered to CCF pursuant to Section
      1(b) above.

    

    (b)
      The
“Swap Documents Condition” shall be deemed to have been satisfied upon CCF’s
      providing written notice to the Escrow Agent confirming that CCF has received
      all of the documents referred to in Section 3(b) of the Schedule to the Master
      Agreement. 

    

    (c)
      The
      Registration Rights Condition and the Swap Documents Condition are collectively
      referred to herein as the “Additional Conditions.”

    

    5. Duty
      of the Escrow Agent.
      The
      sole duties and responsibilities of the Escrow Agent shall be to receive and
      hold the Deliveries, and disburse the Deliveries pursuant to Section 2 of this
      Agreement and to perform the
      duties and responsibilities with respect to the Collateral Account expressly
      set
      forth in writing herein (and in its standard securities accounts documentation
      and terms and conditions as in effect from time to time, all of which shall
      apply to the Accounts to the extent not inconsistent with this
      Agreement).
      Escrow
      Agent is not responsible for any of the respective duties or obligations of
      INFN
      or CCF under the Master Agreement, the CSA or the Confirmations, and all
      references in this Agreement to the Master Agreement, the CSA or the
      Confirmations or any other agreements are for the convenience of the parties
      hereto, and Escrow Agent shall have no duties or responsibilities with respect
      thereto. Escrow Agent is not responsible for accounting or maintaining any
      records other than to document the property received and Deliveries disbursed
      as
directed.
      Notwithstanding any item discussed herein, Escrow Agent has no discretion over
      the Deliveries deposited with it and cannot be held liable for any problem
      or
      dispute relating to such assets. All
      property received by the Escrow Agent in the Collateral Account will be reported
      for accounting purposes only. 

    

    6. Documents.
      The
      Escrow Agent may conclusively rely upon and shall be protected in acting upon
      any statement, certificate, notice, request, consent, order or other document
      believed by it to be genuine and to have been signed or presented by the proper
      party or parties. The Escrow Agent shall have no duty or liability to verify
      any
      such statement, certificate, notice, request, consent, order, or other document
      and its sole responsibility shall be to act only as expressly set forth in
      this
      Escrow Agreement. The Escrow Agent shall be under no obligation to institute
      or
      defend any action, suit or proceeding in connection with this Escrow Agreement
      unless first indemnified to its satisfaction by CCF and INFN. 

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
 

    7. Fees.
      The
      Escrow Agent shall be entitled to compensation for its services as stated in
      the
      fee schedule attached hereto as Exhibit A, which compensation shall be paid
      by
      INFN. The fee agreed upon for the services rendered hereunder is intended as
      full compensation for the Escrow Agent’s services as contemplated by this Escrow
      Agreement; provided, however, that in the event that the conditions for the
      disbursement of property under the Escrow Agreement are not fulfilled, or the
      Escrow Agent renders any material service not contemplated in the Escrow
      Agreement, or there is any assignment of interest in the subject matter of
      the
      Escrow Agreement, or any material modification hereof, or if any material
      controversy arises hereunder, or the Escrow Agent is made a party to any
      litigation pertaining to the Escrow Agreement, or the subject matter hereof,
      then the Escrow Agent shall be reasonably compensated for such extraordinary
      services and reimbursed for all costs and expenses, including reasonable
      attorney’s fees, occasioned by any delay, controversy, litigation or event, and
      the same shall be recoverable from INFN; provided, however, that to the extent
      INFN is required to pay any such costs or expenses to the Escrow Agent pursuant
      to the provisions of this Section 7 as a result of the fault or negligence
      of
      CCF, INFN shall be entitled to recover such amount from CCF. 

    

    8. Indemnification
      of Escrow Agent.
      CCF and
      INFN,
      both jointly and severally hereby indemnify and hold harmless the Escrow Agent
      from and against, any and all loss, liability, cost, damage and expense,
      including, without limitation, reasonable counsel fees, which the Escrow Agent
      may suffer or incur by reason of any action, claim or proceeding brought against
      the Escrow Agent arising out of or relating in any way to this Escrow Agreement
      or any transaction to which this Escrow Agreement relates unless such action,
      claim or proceeding is the result of the gross negligence of the Escrow Agent.
      To the extent INFN or CCF is required to pay any such loss, liability, damage,
      cost or expense to the Escrow Agent pursuant to the provisions of this Section
      8
      as a result of the fault or negligence of the other party, INFN or CCF, as
      applicable, shall be entitled to recover such amount from the other party.
      The
      Escrow Agent may consult counsel with respect of any question arising under
      the
      Escrow Agreement and the Escrow Agent shall not be liable for any action taken
      or omitted in good faith upon advice of such counsel. The obligation of CCF
      and
      INFN under this Section 8 shall survive the termination of this Agreement or
      the
      resignation or removal of the Escrow Agent.

    

    9. Notices.
      All
      notices, requests, demands, and other communications under this Escrow Agreement
      shall be in writing and shall be deemed to have been duly given (a) on the
      date
      of service if served personally on the party to whom notice is to be given,
      (b)
      on the day of transmission if sent by facsimile/email transmission to the
      facsimile number/email address given below, and telephonic confirmation of
      receipt is obtained promptly after completion of transmission, (c) on the day
      after delivery to Federal Express or similar overnight courier or the Express
      Mail service maintained by the United States Postal Service, or (d) on the
      fifth
      day after mailing, if mailed to the party to whom notice is to be given, by
      first class mail, registered or certified, postage prepaid, and properly
      addressed, return receipt requested, to the party as follows:

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    If
      to
      Cogent:

    

    Cogent
      Capital Investments LLC

    Attn:
      Gregory L. Kofford, Senior Principal

    11444
      South 1780 East

    Sandy,
      Utah 84092

    Telephone:
      (801) 523-6063

    Fax:
      (801) 576-0583

    

    If
      to
      CCF:

    

    Cogent
      Capital Financial LLC

    Attn:
      Gregory L. Kofford, Senior Principal

    11444
      South 1780 East

    Sandy,
      Utah 84092

    Telephone:
      (801) 523-6063

    Fax:
      (801) 576-0583

    

    If
      to
      INFN:

    

    Innofone.com,
      Incorporated

    Attn:
      Alex Lightman

    1431
      Ocean Avenue, Suite 1500

    Santa
      Monica, CA 90401

    Telephone:
      310-393-4357

    Fax:
      310-458-2844

    

    If
      to
      Escrow Agent:

    

    Investor’s
      Bank & Trust Company

    For
      address and other contact information, see Exhibit B hereto.

    

    

    Any
      party
      may change its address for purposes of this paragraph by giving the other
      parties written notice of the new address in the manner set forth
      above.

    

    10. Successors
      and Assigns.
      Except
      as otherwise provided in this Escrow Agreement, no party hereto shall assign
      this Escrow Agreement or any rights or obligations hereunder without the prior
      written consent of the other parties hereto and any such attempted assignment
      without such prior written consent shall be void and of no force and effect.
      This Escrow Agreement shall inure to the benefit of and shall be binding upon
      the successors and permitted assigns of the parties hereto.

    

    11. Governing
      Law; Jurisdiction.
      This
      Escrow Agreement shall be construed, performed, and enforced in accordance
      with,
      and governed by, the laws of the Commonwealth of Massachusetts, without giving
      effect to the principles of conflicts of laws thereof. This is intended to
      be
“an agreement” within the meaning of Section 8-110(e) of the Code and
      the terms “financial assets” and “entitlement orders” herein shall include the
      respective meanings given such terms in Article 8 of such Code.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    

    12. Severability.
      In the
      event that any part of this Escrow Agreement is declared by any court or other
      judicial or administrative body to be null, void, or unenforceable, said
      provision shall survive to the extent it is not so declared, and all of the
      other provisions of this Escrow Agreement shall remain in full force and
      effect.

    

    13. Amendments;
      Waivers.
      This
      Escrow Agreement may be amended or modified, and any of the terms, covenants,
      or
      conditions hereof may be waived, only by a written instrument executed by the
      parties hereto, or in the case of a waiver, by the party waiving compliance.
      Any
      waiver by any party of any condition, or of the breach of any provision, term,
      or covenant contained in this Escrow Agreement, in any one or more instances,
      shall not be deemed to be nor construed as further or continuing waiver of
      any
      such condition, or of the breach of any other provision, term, or covenant
      of
      this Escrow Agreement.

    

    14. Entire
      Agreement.
      This
      Escrow Agreement contains the entire understanding among the parties hereto
      with
      respect to the escrow contemplated hereby and supersedes and replaces all prior
      and contemporaneous agreements and understandings, oral or written, with regard
      to such escrow.

    

    15. Section
      Headings.
      The
      section headings in this Escrow Agreement are for reference purposes only and
      shall not affect the meaning or interpretation of this Escrow
      Agreement.

    

    16. Counterparts.
      This
      Escrow Agreement may be executed in counterparts, each of which shall be deemed
      an original, but all of which shall constitute the same instrument.

    

    17. Resignations
      and Termination.
      Escrow
      Agent may resign upon 30 days advance written notice to the parties hereto.
      If a
      successor Escrow Agent is not appointed within the 30-day period following
      such
      notice, Escrow Agent may petition any court of competent jurisdiction to name
      a
      successor Escrow Agent or interplead the Deliveries with such court, whereupon
      Escrow Agent’s duties hereunder shall terminate upon the naming of a successor
      or interpleader of the Deliveries. This Escrow Agreement shall terminate upon
      completion of the final disbursement by the Escrow Agent pursuant to paragraph
      2
      above. 

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto have caused this Escrow Agreement to be executed the day and
      year
      first set forth above.

    

    
      	
              Innofone.com,
                Incorporated

            	 
	 	 
	 	 
	
              By:/s/
                Alex Lightman

            	 
	
              Alex
                Lightman, Chief Executive Officer

            	 
	 	 
	 	 
	
              Cogent
                Capital Investments LLC

            	 
	 	 
	 	 
	 	 
	
              By:
                /s/
                Gregory L. Kofford

            	 
	
              Gregory
                L. Kofford, Senior Principal

            	 
	 	 
	 	 
	
              Cogent
                Capital Financial LLC

            	 
	 	 
	 	 
	 	 
	
              By:
                /s/
                Gregory L. Kofford

            	 
	
              Gregory
                L. Kofford, Senior Principal

            	 
	 	 
	
              Investors
                Bank & Trust Company

            	 
	 	 
	 	 
	
              By: 
                /s/
                Ronald Gayton

            	 
	
              Name:
                Ronald Gayton

            	 
	
              Its:     
                Director                                               
                

            	 

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    Exhibit
      A

    

    Escrow
      Agent fees

    

    

    Annual
      Escrow Agent Fee: $3,000
      

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    Exhibit
      B

    INVESTORS
      BANK & TRUST COMPANY

    Delivery
      Instructions for Accounts Serviced out of:

    BOSTON

    Trust,
      Institutional Custody and Retirement Plan Services

    
      	
              Account
                #:

            	
              4739700

            	
              Account
                Name:

            	
              Cogent
                Capital Financial Escrow

            
	
              Administrator:

            	
              Chris
                Woodfin

            	
              Phone

            	
              (617)
                937-6374

            

    

    

    
      	
              Investors
                Bank Mailing Instructions

              Investors
                Bank and Trust Company

              Overnight

              200
                Clarendon Street, TAD 058, 16th
                Floor

              Attn:
                Chris Woodfin

              Boston,
                MA 02116

              Regular
                Mail

              P.O.
                Box 300, TAD 058

              Attn:
                Chris Woodfin

              Boston,
                MA 02117-0300

               

              DTC
                Eligible Securities

              Agent
                Bank Name: Investors Bank & Trust Company

              *Agent
                Bank Number 26016

              Institutional
                ID: 28166 

              DTC
                Participant Number: 2132

              4739700
                - Cogent Capital Investments Escrow

               

              Government
                Issues Delivered Through Fed Book Entry

              ABA
                #011001438

              INV
                BK BOS/1020

              Cogent
                Capital Investments Escrow - 4739700 

               

              GNMA
                Securities Delivered through Fed Book Entry effective
                12/6/02

              Federal
                Reserve Bank of Boston

              ABA
                #011001438 - 

              Investors
                Bank & Trust Co. - Boston

              Sub
                Account: #1020

              FFC:
                (4739700 Cogent Capital Investments Escrow)

               

              ACH
                Transfers

              ABA
                # 011001438

              4739700
                

              Cogent
                Capital Investments Escrow

               

              Fed
                Wire Cash Transfers

              {3400}
                Receiving Bank:

              ABA
                number: 011001438

              Short
                Name: Investors Bk Bos

              ABA
                Lookup: Investors Bank & Trust Co.

              Boston,
                MA

               

              {4100}
                Beneficiary’s Bank: 569530395

              {4200}
                Beneficiary: 4739700

              {4320}
                Reference for Beneficiary: Cogent Capital Investments Escrow
                

            	
              DTC
                Ineligible Securities -Unrestricted

              The
                Bank of New York

              One
                Wall Street, 3rd Floor

              Window
                A

              New
                York, NY 10286

              A/C
                Name: Investors Bank & Trust Company

              A/C#:
                017198

              4739700
                Cogent Capital Investments Escrow

               

              DTC
                Ineligible - Restricted / Non-transferable Securities (must be held
                in
                client name)

              The
                Bank of New York

              One
                Wall Street, 3rd Floor

              Window
                A

              New
                York, NY 10286

              A/C
                Name: Investors Bank & Trust Company

              A/C#:
                017200

              4739700
                Cogent Capital Investments Escrow 

               

              DTC
                Ineligible - Restricted Securities (will be reregistered into nominee
                name)

              The
                Bank of New York

              One
                Wall Street, 3rd Floor

              Window
                A

              New
                York, NY 10286

              A/C
                Name: Investors Bank & Trust Company

              A/C#:
                017195

              Cogent
                Capital Investments Escrow - 4739700 

               

              Registration
                Instructions for Broker Accounts

              Saturn
                & Co. Tax ID No. 04-2457313

              IBT
                A/C #: 4739700

              Account
                Name: Cogent Capital Investments Escrow

              Attn:
                Trade Processing TAD 58

              P.O.
                Box 9130

              Boston,
                MA 02117-9130

               

              DTC
                Eligible Physical Certificates Instructions

              Depository
                Trust Company

              55
                Water Street

              New
                York Window - Concourse Level 

              New
                York, NY 10041

              Attn:
                Participant # 2132 - IBT

              Attn:
                Robert Mendez

              IBT
                Acct #: 4739700

               

              Note:
                Send all legal documentation (ex. Stock powers) to the administrator
                at
                Investors Bank & Trust via mail

            

    

    

    

    
      
         

      

      
        10

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