Document:

Michael E

EXHIBIT 10.2

			
	Michael E. Golden

	PANAMERICAN BANK

	Loan Number 3302856

	6455 Enclave Way

	3400 Coral Way

	Date 11/16/2005

	Boca Raton, FL 33496

	Miami, FL 33145

	Maturity Date 05/16/2006

	BORROWER’S NAME AND ADDRESS

	LENDER’S NAME AND ADDRESS

	Loan Amount $150,000.00

Renewal Of

	“I” includes each borrower above,

jointly and severally.

	“You” means the lender, 

 its successors and assigns.

	 

For value received, I promise to pay to you, or your order, at your address listed above the PRINCIPAL sum of ONE HUNDRED FIFTY THOUSAND AND 00/100 Dollars $150,000.00

ý

Single Advance: I will receive all of this principal sum on 11/16/2005. No additional advances are contemplated under this note.

 ̈

Multiple Advance: The principal sum shown above is the maximum amount of principal I can borrow under this note. On __________ I will receive the amount of $ __________ and future principal advances are contemplated.

Conditions: The conditions for future advances are 

_________________________________________________________________________________

   

_________________________________________________________________________________

   

_________________________________________________________________________________

 ̈

Open End Credit: You and I agree that I may borrow up to the maximum amount of principal more than one time. This feature is subject to all other conditions and expires on _________ .

 ̈

Closed End Credit: You and I agree that I may borrow up to the maximum only one time (and subject to all other conditions).

INTEREST: I agree to pay interest on the outstanding principal balance from 11/16/2005 at the rate of 7.000% per year until 11/17/2005.

ý

Variable Rate: This rate may then change as stated below.

ý

Index Rate: The future rate will be 0.000% above the following index rate: The “Prime Rate” of Interest from time to time as published in The Wall Street Journal.

 ̈

No Index: The future rate will not be subject to any internal or external index. It will be entirely in your control.

ý

Frequency and Timing: The rate on this note may change as often as daily.

A change in the interest rate will take effect immediately.

 ̈

Limitation: During the term of this loan, the applicable annual interest rate will not be more than ____ % or less than ________ %. The rate may not change more than ________ % each __________ .

Effect of Variable Rate: A change in the interest rate will have the following effect on the payments:

 ̈

The amount of each scheduled payment will change.   ̈ The amount of the final payment will change.

 ̈

__________________________________________________________________________________

ACCRUAL METHOD: Interest will be calculated on a 365/360 basis.

POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note owing after maturity, and until paid in full, as stated below:

 ̈

on the same fixed or variable rate basis in effect before maturity (as indicated above).

ý

at a rate equal to The Maximum Rate of Interest Permissible by law.

ý

LATE CHARGE: If a payment is made more than 10 days after it is due, I agree to pay a late charge of 5.000% but not less than $5.00.

ý

ADDITIONAL CHARGES: In addition to interest, I agree to pay the following charges which

 ̈  are    ý  are not included in the principal amount above: Documentary Stamps - $525.00.

PAYMENTS: I agree to pay this note as follows:

ý

Interest: I agree to pay accrued interest quarterly beginning 02/16/2006

ý

Principal: I agree to pay the principal on or before 05/16/2006

 ̈

Installments: I agree to pay this note in __________ payments. The first payment will be in the amount of $__________ and will be due __________ . A payment of $__________ will be due ________________ thereafter. The final payment of the entire unpaid balance of principal and interest will be due __________ 

ADDITIONAL TERMS:

		
	 ̈ SECURITY: This note is separately secured by

(describe separate document by type and date):

(This section is for your internal use. Failure to list a

separate security document does not mean the

agreement will not secure this note.)

Signature for Lender

/s/ ROBERT GARRETT

Robert Garrett, Executive Vice President

	PURPOSE: The purpose of this loan is to distribute payments under the terms of divorce.

SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE (INCLUDING THOSE ON PAGE 2). I have received a copy on today’s date.

Michael E. Golden

/s/ MICHAEL E. GOLDEN

Michael E. Golden

/s/ MICHAEL E. GOLDEN

UNIVERSAL NOTE

ExpereTM © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-FL 3/4/2002

VMP®-C154(FL) (0301)                         VMP MORTGAGE FORMS – (800) 521-7291

(page 1 of 2)

DEFINITIONS: As used on page 1, “ý” means the terms that apply to this loan. “I,” “me” or “my” means each Borrower who signs this note and each other person or legal entity (including guarantors, endorsers, and sureties) who agree to pay this note (together referred to as “us”). “You” or “your” means the Lender and its successors and assigns.

APPLICABLE LAW: The law of the state of Florida will govern this note. Any term of this note which is contrary to applicable law will not be effective, unless the law permits you and me to agree to such a variation. If any provision of this agreement cannot be enforced according to its terms, this fact will not affect the enforceability of the remainder of this agreement. No modification of this agreement may be made without your express written consent. Time is of the essence in this agreement.

COMMISSIONS OR OTHER REMUNERATION: I understand and agree that any insurance premiums paid to insurance companies as part of this note will involve money retained by you or paid back to you as commissions or other remuneration.

In addition, I understand and agree that some other payments to third parties as part of this note may also involve money retained by you or paid back to you as commissions or other remuneration.

PAYMENTS: Each payment I make on this note will first reduce the amount I owe you for charges which are neither interest nor principal. The remainder of each payment will then reduce accrued unpaid interest, and then unpaid principal. If you and I agree to a different application of payments, we will describe our agreement on this note. I may prepay a part of, or the entire balance of this loan without penalty, unless we specify to the contrary on this note. Any partial prepayment will not excuse or reduce any later scheduled payment until this note is paid in full (unless, when I make the prepayment, you and I agree in writing to the contrary).

INTEREST: Interest accrues on the principal remaining unpaid from time to time, until paid in full. If I receive the principal in more than one advance, each advance will start to earn interest only when I receive the advance. The interest rate in effect on this note at any given time will apply to the entire principal advanced at that time. Notwithstanding anything to the contrary, I do not agree to pay and you do not intend to charge any rate of interest that is higher than the maximum rate of interest you could charge under applicable law for the extension of credit that is agreed to here (either before or after maturity). If any notice of interest accrual is sent and is in error, we mutually agree to correct it, and if you actually collect more interest than allowed by law and this agreement, you agree to refund it to me.

INDEX RATE: The index will serve only as a device for settling the rate on this note. You do not guarantee by selecting this index, or the margin, that the rate on this note will be the same rate you charge on any other loans or class of loans to me or other borrowers.

ACCRUAL METHOD: The amount of interest that I will pay on this loan will be calculated using the interest rate and accrual method stated o page 1 of this note. For the purpose of interest calculation, the accrual method will determine the number of days in a “year.” If no accrual method is stated, then you may use any reasonable accrual method for calculating interest.

POST MATURITY RATE: For purposes of deciding when the “Post Maturity Rate” (shown on page 1) applies, the term “maturity” means the date of the last scheduled payment indicated on page 1 of this note or the date you accelerate payment on the note, whichever is earlier.

SINGLE ADVANCE LOANS: If this is a single advance loan, you and I expect that you will make only one advance of principal. However, you may add other amounts to the principal if you make any payments described in the “PAYMENTS BY LENDER” paragraph below.

MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I expect that you will make more than one advance of principal. If this is closed end credit, repaying a part of the principal will not entitle me to additional credit.

PAYMENTS BY LENDER: If you are authorized to pay, on my behalf, charges I am obligated to pay (such as property insurance premiums), then you may treat those payments made by you as advances and add them to the unpaid principal under this note, or you may demand immediate payment of the charges.

SET-OFF: I agree that you may set off any amount due and payable under this note against any right I have to receive money from you.

“Right to receive money from you” means:

(1)

any deposit account balance I have with you;

(2)

any money owed to me on an item presented to you or in your possession for collection or exchange; and

(3)

any repurchase agreement or other nondeposit obligation.

“Any amount due and payable under this note” means the total amount of which you are entitled to demand payment under the terms of this note at the time you set off. This total includes any balance the due date for which you properly accelerate under this note.

If my right to receive money from you is also owned by someone who has not agreed to pay this note, your right of set-off will apply to my interest in the obligation and to any other amounts I could withdraw on my sole request or endorsement. Your right of set-off does not apply to an account or other obligation where my rights are only as a representative. It also does not apply to any Individual Retirement Account or other tax-deferred retirement account.

You will not be liable for the dishonor of any check when the dishonor occurs because you set off this debt against any of my accounts. I agree to hold you harmless from any such claims arising as a result of our exercise of your right of set-off.

REAL ESTATE OR RESIDENCE SECURITY: If this note is secured by real estate or a residence that is personal property, the existence of a default and your remedies for such a default will be determined by applicable law, by the terms of any separate instrument creating the security interest and, to the extent not prohibited by law and not contrary to the terms of the separate security instrument, by the “Default” and “Remedies” paragraphs herein.

DEFAULT: I will be in default if any one or more of the following occur: (1) I fail to make a payment on time or in the amount due; (2) I fail to keep the property insured, if required; (3) I fail to pay, or keep any promise, on any debt or agreement I have with you; (4) any other creditor of mine attempts to collect any debt I owe him through court proceedings; (5) I die, am declared incompetent, make an assignment for the benefit of creditors, or become insolvent (either because my liabilities exceed my assets or I am unable to pay my debts as they become due); (6) I make any written statement or provide any financial information that is untrue or inaccurate at the time it was provided; (7) I do or fail to do something which causes you to believe that you will have difficulty collecting the amount I owe you; (8) any collateral securing this note is used in a manner or for a purpose which threatens confiscation by a legal authority; (9) I change my name or assume an additional name without first notifying you before making such a change; (10) I fail to plant, cultivate and harvest crops in due season; (11) any loan proceeds are used for a purpose that will contribute to excessive erosion of highly erodible land or to the conversion of wetlands to produce an agricultural commodity, as further explained in 7 C.F.R. Part 1940, Subpart G, Exhibit M.

REMEDIES: If I am in default on this note you have, but are not limited to, the following remedies:

(1)

You may demand immediate payment of all I owe you under this note (principal, accrued unpaid interest and other accrued charges).

(2)

You may set off this debt against any right I have to the payment of money from you, subject to the terms of the “Set-Off” paragraph herein.

(3)

You may demand security, additional security, or additional parties to be obligated to pay this note as a condition for not using any other remedy.

(4)

You may refuse to make advances to me or allow purchases on credit by me.

(5)

You may use any remedy you have under state or federal law.

By selecting any one or more of these remedies you do not give up your right to later use any other remedy. By waiving your right to declare an event to be a default, you do not waive your right to later consider the event as a default if it continues or happens again.

COLLECTION COSTS AND ATTORNEY’S FEES: I agree to pay all costs of collection, replevin or any other or similar type of cost if I am in default. In addition, if you hire an attorney to collect this note, I also agree to pay any reasonable fee you incur with such attorney plus court costs (except where prohibited by law). I agree that reasonable attorneys’ fees shall be construed to mean 10% of the principal sum named in this note, or such larger fee that the court may determine to be reasonable and just. To the extent permitted by the United States Bankruptcy Code. I also agreed to pay the reasonable attorney’s fees and costs you incur to collect this debt as awarded by any court exercising jurisdiction under the Bankruptcy Code.

WAIVER: I give up my rights to require you to do certain things. I will not require you to:

(1)

demand payment of amounts due (presentment);

(2)

obtain official certification of nonpayment (protest); or

(3)

give notice that amounts due have not been paid (notice of dishonor).

I waive any defenses I have based on suretyship or impairment of collateral.

To the extent permitted by law, I also waive my right to a trial by jury in respect to any litigation arising from this note and any other agreement executed in conjunction with this credit transaction.

OBLIGATIONS INDEPENDENT: I understand that I must pay this note even if someone else has also agreed to pay it (by, for example, signing this form or a separate guarantee or endorsement). You may sue me alone, or anyone else who is obligated on this note, or any number of us together, to collect this note. You may do so without any notice that it has not been paid (notice of dishonor). You may without notice release any party to this agreement without releasing any other party. If you give up any of your rights, with or without notice, it will not affect my duty to pay this note. Any extension of new credit to any of us, or renewal of this note by all or less than all of us will not release me from my duty to pay it. (Of course, you are entitled to only one payment in full.) I agree that you may at your option extend this note or the debt represented by this note, or any portion of the note or debt, from time to time without limit or notice and for any term without affecting my liability for payment of the note. I will not assign my obligation under this agreement without your prior written approval.

FINANCIAL INFORMATION: I agree to provide you, upon request, any financial statement or information you may deem necessary. I warrant that the financial statements and information I provide to you are or will be accurate, correct and complete.

NOTICE: Unless otherwise required by law, any notice to me shall be given by delivering it or by mailing it by first class mail addressed to me at my last known address. My current address is on page 1. I agree to inform you in writing of any change in my address. I will give any notice to you by mailing it first class to your address stated on page 1 of this agreement, or to any other address that you have designated.

								
	DATE OF

TRANSACTION

	PRINCIPAL

ADVANCE

	BORROWER’S

INITIALS

(not required)

	PRINCIPAL

PAYMENTS

	PRINCIPAL

BALANCE

	INTEREST

RATE

	INTEREST

PAYMENTS

	INTEREST

PAID

THROUGH:

	 	$

	 	$

	$

	%

	$

	 
	 	$

	 	$

	$

	%

	$

	 
	 	$

	 	$

	$

	%

	$

	 
	 	$

	 	$

	$

	%

	$

	 
	 	$

	 	$

	$

	%

	$

	 
	 	$

	 	$

	$

	%

	$

	 
	 	$

	 	$

	$

	%

	$

	 
	 	$

	 	$

	$

	%

	$

	 
	 	$

	 	$

	$

	%

	$

	 
	 	$

	 	$

	$

	%

	$

	 

ExpereTM © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-FL 3/4/2002

VMP®-C154(FL) (0301)

(page 2 of 2)

PAB

PANAMERICAN BANK

MEMORANDUM

TO:

Maria (“Fefi”) Leon

FROM:

Robert K. Garrett

DATE:

November 17, 2005

RE:

Michael E. Golden

New Loan i/a/o $150,000.00

Fefi:

Pursuant to the above referenced transaction and enclosed documents, kindly accept this memorandum as your authorization to disburse the proceeds of the $150,000.00 loan as follows:

							
	PanAmerican Bank:                                                                                          

	     

	 	 	     

	 	 
	> Documentary Stamp Taxes:

	 	$

	525.00

	 	$

	525.00

	 	 	 	 	 	 	 
	Michael E. Golden

	 	 	 	 	 	 
	> Credit Checking Account No. 123792606:

	 	$

	149,475.00

	 	$

	149,475.00

	 	 	 	 	 	 	 
	Total Loan Proceeds:

	 	 	 	 	$

	150,000.00

Please let me know if you have any questions.

Thank you.

Page 1 of 1

LENDER:

PANAMERICAN BANK

BORROWER(S):

Michael E. Golden

PROPERTY ADDRESS: N/A

LOAN NO.:

3302856

ERROR AND OMISSIONS / COMPLIANCE AGREEMENT

STATE OF FL

COUNTY OF MIAMI-DADE

The undersigned borrower(s) for and in consideration of the above-referenced Lender funding the closing of this loan agrees, if requested by Lender or Closing Agent for Lender, to fully cooperate and adjust for clerical errors, any or all loan closing documentation if deemed necessary or desirable in the reasonable discretion of Lender to enable Lender to sell, convey, seek guaranty or market said loan to any entity, including but not limited to an investor, Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Government National Mortgage Association, Federal Housing authority or the Department of Veterans Affairs, or any Municipal Bonding Authority.

The undersigned borrower(s) agree(s) to comply with all above noted requests by the above-referenced Lender within 30 days from date of mailing of said requests. Borrower(s) agree(s) to assume all costs including, by way of illustration and not limitation, actual expense, legal fees and marketing losses for failing to comply with correction requests in the above noted time period.

The undersigned borrower(s) do hereby so agree and covenant in order to assure that this loan documentation executed this date will conform and be acceptable in the marketplace in the instance of transfer, sale or conveyance by Lender of its interest in and to said loan documentation, and to assure marketable title in the said borrower(s).

DATED effective this 16th day of November, 2005.

			
	/s/ MICHAEL E. GOLDEN

	     

	                                                                           

	Michael E. Golden                                            (Borrower)

	 	(Borrower)

	 	 	 
	 	 	 
	(Borrower)

	 	(Borrower)

Sworn to and subscribed before me this                   day of                            .

                                                                

Notary Public

State/Commonwealth of

Acting in the County/Parish of

My Commission Expires:

VMP®-14 (0405)                         VMP Mortgage Solutions, Inc. (800) 521-7291

5/04Untitled Page

		
			

				

				Exhibit 10.1

				

				

			

		

		
			SECURITIES PURCHASE AGREEMENT

					

				

		

		
			          Securities Purchase Agreement dated as of December 16, 2005 (this “Agreement”) by and between Material Technologies, Inc., a Delaware corporation, with principal executive offices located at 11661 San Vicente Boulevard, Suite 707, Los Angeles, California 90049 (the “Company”), and Golden Gate Investors, Inc., a California corporation (“Holder”).

				

				          WHEREAS, Holder desires to purchase from the Company, and the Company desires to issue and sell to Holder, upon the terms and subject to the conditions of this Agreement, a         Convertible Debenture of the Company in the aggregate principal amount of $200,000 (the “Debenture”); and

				

				          WHEREAS, in conjunction with the Debenture, the Company has issued a Warrant to Purchase Common Stock to the Holder (the “Warrant”); and

				

				          WHEREAS, upon the terms and subject to the conditions set forth in the Debenture and the Warrant, the Debenture and Warrant are convertible and exercisable, respectively, into shares of the Company’s Common Stock (the “Common Stock”).

				

				          NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto, intending to be legally bound, hereby agree as follows:

				

				          I.          PURCHASE AND SALE OF DEBENTURE

				

				          A.          Transaction.    Holder hereby agrees to purchase from the Company, and the Company hereby agrees to issue and sell to Holder in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act of 1933, as amended (the “Securities Act”), the Debenture.

				

				          B.          Purchase Price; Form of Payment.    The purchase price for the Debenture to be purchased by Holder hereunder shall be $200,000 (the “Purchase Price”).  Simultaneously with the execution of this Agreement, Holder shall pay $50,000 of the Purchase Price (the “Initial Purchase Price”) by wire transfer of immediately available funds to the Company. Simultaneously with the execution of this Agreement, the Company shall deliver the Convertible Debenture and the Warrants (which shall have been duly authorized, issued and executed I/N/O Holder or, if the Company otherwise has been notified, I/N/O Holder’s nominee). Upon notification and verification that the Registration Statement for the Conversion Shares (as defined below) and the shares of Common Stock issuable upon exercise of the Warrants (the “Warrant Shares”) has been filed with the Securities and Exchange Commission (the “Commission”), Holder shall pay an additional $50,000 of the Purchase Price by wire transfer of immediately available funds to the Company. Upon notification and verification that the Company has responded to the first round of comments from the Commission on the Registration Statement, Holder shall pay an additional $50,000 of the Purchase Price by wire transfer of immediately available funds to the Company. Upon notification and verification that the Registration Statement has been declared effective by the Commission and such shares can legally be issued to Holder, Holder shall immediately pay the remainder of the Purchase Price by wire transfer of immediately available funds to the Company.

				

				

				

			

		

		
			1

		

		
			

			

			

			

			

			          II.       HOLDER’S REPRESENTATIONS AND WARRANTIES

		
			          Holder represents and warrants to and covenants and agrees with the Company as follows:

				

				                    1.          Holder is purchasing the Debenture, Warrant, and the Common Stock issuable upon conversion, redemption, or exercise of the Debenture (the “Conversion Shares”) or the Warrant (the “Warrant Shares” and, collectively with the Debenture, Warrant, and the Conversion Shares, the “Securities”) for its own account, for investment purposes only and not with a view towards or in connection with the public sale or distribution thereof in violation of the Securities Act.

				

				                    2.          Holder is (i) an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act, (ii) experienced in making investments of the kind contemplated by this Agreement, (iii) capable, by reason of its business and financial experience, of evaluating the relative merits and risks of an investment in the Securities, and (iv) able to afford the loss of its investment in the Securities.

				

				                    3.            Holder understands that the Securities are being offered and sold by the Company in reliance on an exemption from the registration requirements of the Securities Act and equivalent state securities and “blue sky” laws, and that the Company is relying upon the accuracy of, and Holder’s compliance with, Holder’s representations, warranties and covenants set forth in this Agreement to determine the availability of such exemption and the eligibility of Holder to purchase the Securities;

				

				                    4.          Holder understands that the Securities have not been approved or disapproved by the Commission or any state or provincial securities commission.

				

				                    5.          This Agreement has been duly and validly authorized, executed and delivered by Holder and is a valid and binding agreement of Holder enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and except as rights to indemnity and contribution may be limited by federal or state securities laws or the public policy underlying such laws.

				

				                    6.          The execution and delivery by Holder of this Agreement does not, and the consummation of the transactions contemplated hereby will not, contravene or constitute a default under or violation of (i) any provision of applicable law or regulation, or (ii) any agreement, judgment, injunction, order, decree or other instrument binding upon Holder.

			

			

			

			

			

			

			

		

		
			2

		

		
			

			

			

			

			

			          III.      THE COMPANY’S REPRESENTATIONS
			The Company represents and warrants to Holder that:

				

				          A.       Capitalization.

					

				                    1.          The authorized capital stock of the Company consists of  (i) 1,700,000,000 shares of Common Stock of which 151,573,275 shares of Class A common stock are issued and 108,832,909 shares are outstanding as of November 1, 2005, and 600,000 shares of Class B common stock are issued and outstanding as of the date hereof, and (ii) 50,000,000 shares of preferred stock, of which 337 shares of Class A, 1,350 shares of Class C, and 1,420,000 shares of Class D, are issued and outstanding, respectively, as of the date hereof.  All shares of common and preferred stock that are issued and outstanding are fully paid and nonassessable.  The amount, exercise, conversion or subscription price and expiration date for each outstanding option and other security or agreement to purchase shares of Common Stock is accurately set forth on Schedule II.A.1.

					

				                    2.          The Conversion Shares and the Warrant Shares have been duly and validly authorized and reserved for issuance by the Company, and, when issued by the Company upon conversion of the Debenture, will be duly and validly issued, fully paid and nonassessable and will not subject the holder thereof to personal liability by reason of being such holder.

				

				                    3.            Except as disclosed on Schedule II.A.3., there are no preemptive, subscription, “call,” right of first refusal or other similar rights to acquire any capital stock of the Company or other voting securities of the Company that have been issued or granted to any person and no other obligations of the Company to issue, grant, extend or enter into any security, option, warrant, “call,” right, commitment, agreement, arrangement or undertaking with respect to any of their respective capital stock.

				

				          B.       Organization; Reporting Company Status.

					

				                    1.          The Company is a corporation duly organized, validly existing and in good standing under the laws of the state or jurisdiction in which it is incorporated and is duly qualified as a foreign corporation in all jurisdictions in which the failure so to qualify would reasonably be expected to have a material adverse effect on the business, properties, prospects, condition (financial or otherwise) or results of operations of the Company or on the consummation of any of the transactions contemplated by this Agreement (a “Material Adverse Effect”).

				

				                    2.          The Company is compliant with the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  The Common Stock is traded on the OTC Bulletin Board service of the National Association of Securities Dealers, Inc. (“OTCBB”) and the Company has not received any notice regarding, and to its knowledge there is no threat of, the termination or discontinuance of the eligibility of the Common Stock for such trading.

				

				          C.      Authorization.    The Company (i) has duly and validly authorized and reserved for issuance shares of Common Stock, which is a number sufficient for the conversion of the 

			

			

		

		
			3

		

		
			

			

			

			

			

			Debenture and the exercise of the Warrant and (ii) at all times from and after the date hereof shall have a sufficient number of shares of Common Stock duly and validly authorized and reserved for issuance to satisfy the conversion of the Debenture in full and the exercise of the Warrant.  The Company understands and acknowledges the potentially dilutive effect on the Common Stock of the issuance of the Conversion Shares and the Warrant Shares.  The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Debenture and the exercise of the Warrant in accordance with this Agreement is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other stockholders of the Company and notwithstanding the commencement of any case under 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”).  In the event the Company is a debtor under the Bankruptcy Code, the Company hereby waives to the fullest extent permitted any rights to relief it may have under 11 U.S.C. § 362 in respect of the conversion of the Debenture.  The Company agrees, without cost or expense to Holder, to take or consent to any and all action necessary to effectuate relief under 11 U.S.C. § 362.

			

			          D.          Authority; Validity and Enforceability.  The Company has the requisite corporate power and authority to enter into the Documents (as such term is hereinafter defined) and to perform all of its obligations hereunder and thereunder (including the issuance, sale and delivery to Holder of the Securities).  The execution, delivery and performance by the Company of the Documents and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Debenture and the issuance and reservation for issuance of the Conversion Shares and the Warrant Shares) have been duly and validly authorized by all necessary corporate action on the part of the Company.  Each of the Documents has been duly and validly executed and delivered by the Company and each Document constitutes a valid and binding obligation of the Company enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and except as rights to indemnity and contribution may be limited by federal or state securities laws or the public policy underlying such laws.  The Securities have been duly and validly authorized for issuance by the Company and, when executed and delivered by the Company, will be valid and binding obligations of the Company enforceable against it in accordance with their respective terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally.  For purposes of this Agreement, the term “Documents” means (i) this Agreement; (ii) the Registration Rights Agreement dated as of even date herewith between the Company and Holder; (iii) the Debenture; and (iv) the Warrant.

			

			          E.          Validity of Issuance of the Securities.  The Debenture, the Conversion Shares upon their issuance in accordance with the Debenture, the Warrant and the Warrant Shares will be validly issued and outstanding, fully paid and nonassessable, and not subject to any preemptive rights, rights of first refusal, tag-along rights, drag-along rights or other similar rights.
			

			

			          F.          Non-contravention.  The execution and delivery by the Company of the Documents, the issuance of the Securities, and the consummation by the Company of the other transactions contemplated hereby and thereby do not, and compliance with the provisions of this Agreement and other Documents will not, conflict with, or result in any violation of, or default 

			

			

			

		

		
			4

		

		
			

			

			

			

			

			(with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or loss of a material benefit under, or result in the creation of any Lien (as such term is hereinafter defined) upon any of the properties or assets of the Company or any of its Subsidiaries under, or result in the termination of, or require that any consent be obtained or any notice be given with respect to (i) the Articles or Certificate of Incorporation or By-Laws of the Company or the comparable charter or organizational documents of any of its Subsidiaries, in each case as amended to the date of this Agreement, (ii) any loan or credit agreement, Debenture, bond, mortgage, indenture, lease, contract or other agreement, instrument or permit applicable to the Company or any of its Subsidiaries or their respective properties or assets or (iii) any Law (as such term is hereinafter defined) applicable to, or any judgment, decree or order of any court or government body having jurisdiction over, the Company or any of its Subsidiaries or any of their respective properties or assets.

			

			          G.          Approvals.  No authorization, approval or consent of any court or public or governmental authority is required to be obtained by the Company for the issuance and sale of the Securities to Holder as contemplated by this Agreement, except such authorizations, approvals and consents as have been obtained by the Company prior to the date hereof.
			

			

			          H.          Commission Filings.  The Company has properly and timely filed with the Commission all reports, proxy statements, forms and other documents required to be filed with the Commission under the Securities Act and the Exchange Act since becoming subject to such Acts (the “Commission Filings”).  As of their respective dates, (i) the Commission Filings complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the Commission promulgated thereunder applicable to such Commission Filings and (ii) none of the Commission Filings contained at the time of its filing any 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 light of the circumstances under which they were made, not misleading.  The financial statements of the Company included in the Commission Filings, as of the dates of such documents, were true and complete in all material respects and complied with applicable accounting requirements and the published rules and regulations of the Commission with respect thereto, were prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) (except in the case of unaudited statements permitted by Form 10-Q under the Exchange Act) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly presented the consolidated financial position of the Company and its Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments that in the aggregate are not material and to any other adjustment described therein).

			

			          I.          Full Disclosure.  There is no fact known to the Company (other than general economic or industry conditions known to the public generally) that has not been fully disclosed in the Commission Filings that (i) reasonably could be expected to have a Material Adverse Effect or (ii) reasonably could be expected to materially and adversely affect the ability of the Company to perform its obligations pursuant to the Documents.

			

			

			

			

		

		
			5

		

		
			

			

			

			

			

			          J.          Absence of Events of Default.  No “Event of Default” (as defined in any agreement or instrument to which the Company is a party) and no event which, with notice, lapse of time or both, would constitute an Event of Default (as so defined), has occurred and is continuing.
			

			

			          K.        Securities Law Matters.  Assuming the accuracy of the representations and warranties of Holder set forth in Article II, the offer and sale by the Company of the Securities is either compliant with or exempt from (i) the registration and prospectus delivery requirements of the Securities Act and the rules and regulations of the Commission thereunder and (ii) the registration and/or qualification provisions of all applicable state and provincial securities and “blue sky” laws.  The Company shall not directly or indirectly take, and shall not permit any of its directors, officers or Affiliates directly or indirectly to take, any action (including, without limitation, any offering or sale to any person or entity of any security similar to the Debenture) which will make unavailable the exemption from Securities Act registration being relied upon by the Company for the offer and sale to Holder of the Debenture, Warrant, Conversion Shares, and the Warrant Shares as contemplated by this Agreement.  No form of general solicitation or advertising has been used or authorized by the Company or any of its officers, directors or Affiliates in connection with the offer or sale of the Securities as contemplated by this Agreement or any other agreement to which the Company is a party.
			

			

			          L.          Registration Rights.  Except as set forth on Schedule II.L., no Person has, and as of the Closing (as such term is hereinafter defined), no Person shall have, any demand, “piggy-back” or other rights to cause the Company to file any registration statement under the Securities Act relating to any of its securities or to participate in any such registration statement. [ask Bob]
			

			

			          M.          Interest.  The timely payment of interest on the Debenture is not prohibited by the Articles or Certificate of Incorporation or By-Laws of the Company, in each case as amended to the date of this Agreement, or any agreement, contract, document or other undertaking to which the Company is a party.
			

			

			          N.          No Misrepresentation.  No representation or warranty of the Company contained in this Agreement or any of the other Documents, any schedule, annex or exhibit hereto or thereto or any agreement, instrument or certificate furnished by the Company to Holder pursuant to this Agreement contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
			

			

			          O.          Finder’s Fee.  There is no finder’s fee, brokerage commission or like payment in connection with the transactions contemplated by this Agreement for which Holder is liable or responsible.
			

			

			          IV.          CERTAIN COVENANTS AND ACKNOWLEDGMENTS

				

			          A.          Filings.  The Company shall make all necessary Commission Filings and “blue sky” filings required to be made by the Company in connection with the sale of the Securities to Holder as required by all applicable laws, and shall provide a copy thereof to Holder promptly after such filing.

			

			

			

		

		
			6

		

		
			

			

			

			

			

			          B.         Reporting Status.  So long as Holder beneficially owns any of the Securities, the Company shall file all reports required to be filed by it with the Commission pursuant to Section 13 or 15(d) of the Exchange Act.
			

			

			          C.          Listing.  Except to the extent the Company lists its Common Stock on The New York Stock Exchange, The American Stock Exchange or The Nasdaq Stock Market, the Company shall use its best efforts to maintain its listing of the Common Stock on OTCBB.  If the Common Stock is delisted from OTCBB, the Company will use its best efforts to list the Common Stock on the most liquid national securities exchange or quotation system that the Common Stock is qualified to be listed on.

			

			          D.          Reserved Conversion Common Stock.  The Company at all times from and after the date hereof shall have such number of shares of Common Stock duly and validly authorized and reserved for issuance as shall be sufficient for the conversion in full of the Debenture and the exercise of the Warrant.

			

			          E.          Information.  Each of the parties hereto acknowledges and agrees that Holder shall not be provided with, nor be given access to, any material non-public information relating to the Company.

			

			          F.          Accounting and Reserves.  The Company shall maintain a standard and uniform system of accounting and shall keep proper books and records and accounts in which full, true, and correct entries shall be made of its transactions, all in accordance with GAAP applied on consistent basis through all periods, and shall set aside on such books for each fiscal year all such reserves for depreciation, obsolescence, amortization, bad debts and other purposes in connection with its operations as are required by such principles so applied.
			

			

			          G.          Certain Restrictions.  So long as the Debenture is outstanding, no dividends shall be declared or paid or set apart for payment nor shall any other distribution be declared or made upon any Common Stock of the Company, nor shall any capital stock of the Company be redeemed, purchased or otherwise acquired (other than a redemption, purchase or other acquisition of shares of Common Stock made for purposes of an employee incentive or benefit plan (including a stock option plan) of the Company or pursuant to any of the security agreements listed on Schedule III.H) for any consideration by the Company, directly or indirectly, nor shall any moneys be paid to or made available for a sinking fund for the redemption of any Common Stock.
			

			

			          I.          Short Selling.    So long as the Debenture is outstanding, Holder agrees and covenants on its behalf and on behalf of its affiliates that neither Holder nor its affiliates shall at any time engage in any short sales with respect to the Company’s Common Stock, or sell put options or similar instruments with respect to the Company’s Common Stock. The parties acknowledge that Holder shall be entitled to sell the Common Stock from each Debenture conversion and Warrant exercise immediately upon submission of the applicable Debenture Conversion Notice and Warrant Notice of Exercise, and payment of the purchase price, to the Company for such Common Stock.

			

			

			

		

		
			7

		

		
			

			

			

			

			

			          V.          ISSUANCE OF COMMON STOCK

				

			          A.          The Company undertakes and agrees that no instruction other than the instructions referred to in this Article V and customary stop transfer instructions prior to the registration and sale of the Common Stock pursuant to an effective Securities Act registration statement shall be given to its transfer agent for the Conversion Shares and the Warrant Shares and that the Conversion Shares and the Warrant Shares shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement, the Registration Rights Agreement and applicable law.  Nothing contained in this Section V.A. shall affect in any way Holder’s obligations and agreement to comply with all applicable securities laws upon resale of such Common Stock.

			

			          B.          Holder shall have the right to convert the Debenture and exercise the Warrant by telecopying an executed and completed Conversion Notice (as such term is defined in the Debenture) or Warrant Notice of Exercise (as such term is defined in the Warrant) to the Company.  Each date on which a Conversion Notice or Warrant Notice of Exercise is telecopied to and received by the Company prior to 12:00 P.M. Pacific Standard Time in accordance with the provisions hereof shall be deemed a Conversion Date (as such term is defined in the Debenture).  The Company shall cause the transfer agent to transmit the certificates evidencing the Common Stock issuable upon conversion of the Debenture (together with a new debenture, if any, representing the principal amount of the Debenture not being so converted) or exercise of the Warrant (together with a new Warrant, if any, representing the amount of the Warrant not being so exercised) to Holder via express courier within two (2) business days after receipt by the Company of the Conversion Notice or Warrant Notice of Exercise (the “Delivery Date”).

			

			          C.          Upon the conversion of the Debenture or exercise of the Warrant or part thereof, the Company shall, at its own cost and expense, take all necessary action (including the issuance of an opinion of counsel) to assure that the Company's transfer agent shall issue stock certificates in the name of Holder (or its nominee) or such other persons as designated by Holder and in such denominations to be specified at conversion representing the number of shares of common stock issuable upon such conversion or exercise. The Company warrants that the Conversion Shares and Warrant Shares will be unlegended, free-trading, and freely transferable, and will not contain a legend restricting the resale or transferability of the Company Common Stock provided the Conversion Shares and Warrant Shares are being sold pursuant to an effective registration statement covering the Common Stock to be sold or is otherwise exempt from registration when sold.

			

			          D.          The Company understands that a delay in the delivery of the Common Stock in the form required pursuant to this section, or the Mandatory Redemption Amount described in Section E hereof, beyond the Delivery Date or Mandatory Redemption Payment Date (as hereinafter defined) could result in economic loss to the Holder. As compensation to the Holder for such loss, the Company agrees to pay late payments to the Holder for late issuance of Common Stock in the form required pursuant to Section E hereof upon Conversion of the Debenture or late payment of the Mandatory Redemption Amount, in the amount of $100 per business day after the Delivery Date or Mandatory Redemption Payment Date, as the case may be, for each $10,000 of Debenture principal amount being converted or redeemed. The Company shall pay any payments incurred under this Section in immediately available funds upon demand. 

			

			

		

		
			8

		

		
			

			

			

			

			

			Furthermore, in addition to any other remedies which may be available to the Holder, in the event that the Company fails for any reason to effect delivery of the Common Stock by the Delivery Date or make payment by the Mandatory Redemption Payment Date, the Holder will be entitled to revoke all or part of the relevant Notice of Conversion or rescind all or part of the notice of Mandatory Redemption by delivery of a notice to such effect to the Company whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to the delivery of such notice, except that late payment charges described above shall be payable through the date notice of revocation or rescission is given to the Company.

			

			          E.          Mandatory Redemption. In the event the Company is prohibited from issuing Common Stock, or fails to timely deliver Common Stock on a Delivery Date, or upon the occurrence of an Event of Default (as defined in the Debenture) or for any reason other than pursuant to the limitations set forth herein, then at the Holder's election, the Company must pay to the Holder ten (10) business days after request by the Holder or the Delivery Date (if requested by the Holder) a sum of money determined by multiplying up to the outstanding principal amount of the Debenture designated by the Holder by 130%, together with accrued but unpaid interest thereon ("Mandatory Redemption Payment"). The Mandatory Redemption Payment must be received by the Holder within ten (10) business days after request, whichever is sooner ("Mandatory Redemption Payment Date"). Upon receipt of the Mandatory Redemption Payment, the corresponding Debenture principal and interest will be deemed paid and no longer outstanding.

			

			          F.          Buy-In. In addition to any other rights available to the Holder, if the Company fails to deliver to the Holder such Common Stock issuable upon conversion of a Debenture or exercise of a Warrant by the Delivery Date and if ten (10) days after the Delivery Date the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Common Stock which the Holder anticipated receiving upon such conversion (a "Buy-In"), then the Company shall pay in cash to the Holder (in addition to any remedies available to or elected by the Holder) the amount by which (A) the Holder's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (B) the aggregate principal and/or interest amount of the Debenture or Warrant for which such conversion or exercise was not timely honored, together with interest thereon at a rate of 15% per annum, accruing until such amount and any accrued interest thereon is paid in full (which amount shall be paid as liquidated damages and not as a penalty). For example, if the Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of $10,000 of Debenture or Warrant principal and/or interest, the Company shall be required to pay the Holder $1,000, plus interest. The Holder shall provide the Company written notice and supporting documentation indicating the amounts payable to the Holder in respect of the Buy-In.

			

			          G.          The Securities shall be delivered by the Company to the Holder pursuant to Section I.B. hereof on a “delivery-against-payment basis” at the Closing.

			

			

			

			

		

		
			9

		

		
			

			

			

			

			

			          VI.         CLOSING DATE
			
				          The Closing shall occur by the delivery: (i) to the Holder of the certificate evidencing the Debenture and all other Agreements, and (ii) to the Company the Purchase Price.  The Closing is anticipated to take place on or about December [__], 2005 (the “Closing Date”).  Either Party may terminate this Agreement and any agreement represented by the Documents after the Closing Date if the non-terminating party has not satisfied all of its obligations hereunder.

					

					          VII.        CONDITIONS TO THE COMPANY’S OBLIGATIONS

				          Holder understands that the Company’s obligation to sell the Debenture on the Closing Date to Holder pursuant to this Agreement is conditioned upon:

					

					          A.          Delivery by Holder to the Company of the Purchase Price, subject to the terms of a letter agreement between the Holder and Company of even date herewith;

					

					          B.          The accuracy on the Closing Date of the representations and warranties of Holder contained in this Agreement as if made on the Closing Date (except for representations and warranties which, by their express terms, speak as of and relate to a specified date, in which case such accuracy shall be measured as of such specified date) and the performance by Holder in all material respects on or before the Closing Date of all covenants and agreements of Holder required to be performed by it pursuant to this Agreement on or before the Closing Date; and

					

					          C.          There shall not be in effect any law or order, ruling, judgment or writ of any court or public or governmental authority restraining, enjoining or otherwise prohibiting any of the transactions contemplated by this Agreement.

					

					          VIII.      CONDITIONS TO HOLDER’S OBLIGATIONS

				The Company understands that Holder’s obligation to purchase the Securities on the Closing Date pursuant to this Agreement is conditioned upon:

					

					          A.          Delivery by the Company of the Debenture, the Warrant and the other Agreements (I/N/O Holder or I/N/O Holder’s nominee);

					

					          B.          The accuracy on the Closing Date of the representations and warranties of the Company contained in this Agreement as if made on the Closing Date (except for representations and warranties which, by their express terms, speak as of and relate to a specified date, in which case such accuracy shall be measured as of such specified date) and the performance by the Company in all respects on or before the Closing Date of all covenants and agreements of the Company required to be performed by it pursuant to this Agreement on or before the Closing Date, all of which shall be confirmed to Holder by delivery of the certificate of the chief executive officer of the Company to that effect;

					

					          C.          There not having occurred (i) any general suspension of trading in, or limitation on prices listed for, the Common Stock on the OTCBB/Pink Sheet, (ii) the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iii) the commencement of a war, armed hostilities or other international or national calamity directly 

				

				

			

			
				10

			

			
				

				

				

				

				

				or indirectly involving the United States or any of its territories, protectorates or possessions or (iv) in the case of the foregoing existing at the date of this Agreement, a material acceleration or worsening thereof;

				

				          D.          There not having occurred any event or development, and there being in existence any condition, having or which reasonably and foreseeably could have a Material Adverse Effect;

				

				          E.          There shall not be in effect any Law, order, ruling, judgment or writ of any court or public or governmental authority restraining, enjoining or otherwise prohibiting any of the transactions contemplated by this Agreement;

				

				          F.          The Company shall have obtained all consents, approvals or waivers from governmental authorities and third persons necessary for the execution, delivery and performance of the Documents and the transactions contemplated thereby, all without material cost to the Company;

				

				          G.          Holder shall have received such additional documents, certificates, payment, assignments, transfers and other deliveries as it or its legal counsel may reasonably request and as are customary to effect a closing of the matters herein contemplated;

				

				          H.          Delivery by the Company of an enforceability opinion from its outside counsel in form and substance satisfactory to Holder.

				

				          IX.         SURVIVAL; INDEMNIFICATION

						

					          A.          The representations, warranties and covenants made by each of the Company and Holder in this Agreement, the annexes, schedules and exhibits hereto and in each instrument, agreement and certificate entered into and delivered by them pursuant to this Agreement shall survive the Closing and the consummation of the transactions contemplated hereby.  In the event of a breach or violation of any of such representations, warranties or covenants, the party to whom such representations, warranties or covenants have been made shall have all rights and remedies for such breach or violation available to it under the provisions of this Agreement or otherwise, whether at law or in equity, irrespective of any investigation made by or on behalf of such party on or prior to the Closing Date.

				

				          B.          The Company hereby agrees to indemnify and hold harmless Holder, its affiliates and their respective officers, directors, partners and members (collectively, the “Holder Indemnitees”) from and against any and all losses, claims, damages, judgments, penalties, liabilities and deficiencies (collectively, “Losses”) and agrees to reimburse Holder Indemnitees for all out-of-pocket expenses (including the fees and expenses of legal counsel), in each case promptly as incurred by Holder Indemnitees and to the extent arising out of or in connection with:

			

			
				
					               1.          any misrepresentation, omission of fact or breach of any of the Company’s representations or warranties contained in this Agreement or the other Documents, or the annexes, schedules or exhibits hereto or thereto or any instrument, agreement or 

						

						

					

				

			

			
				11

			

			
				

				

				

				

				

				
					certificate entered into or delivered by the Company pursuant to this Agreement or the other Documents;

						

						               2.          the purchase of the Debenture, the conversion of the Debenture, the payment of interest on the Debenture, the issuance of the Warrant Shares, the consummation of the transactions contemplated by this Agreement and the other Documents, the use of any of the proceeds of the Purchase Price by the Company, the purchase or ownership of any or all of the Securities, or any claim, litigation, investigation, proceedings or governmental action relating to any of the foregoing, whether or not Holder is a party thereto; or

					

				

				          C.          Holder hereby agrees to indemnify and hold harmless the Company, its Affiliates and their respective officers, directors, partners and members (collectively, the “Company Indemnitees”) from and against any and all Losses, and agrees to reimburse the Company Indemnitees for all out-of-pocket expenses (including the fees and expenses of legal counsel), in each case promptly as incurred by the Company Indemnitees and to the extent arising out of or in connection with:

				

				
					              1.          any misrepresentation, omission of fact or breach of any of Holder’s representations or warranties contained in this Agreement or the other Documents, or the annexes, schedules or exhibits hereto or thereto or any instrument, agreement or certificate entered into or delivered by Holder pursuant to this Agreement or the other Documents; or

					

				

				          D.          Promptly after receipt by either party hereto seeking indemnification pursuant to this Article VIII (an “Indemnified Party”) of written notice of any investigation, claim, proceeding or other action in respect of which indemnification is being sought (each, a “Claim”), the Indemnified Party promptly shall notify the party against whom indemnification pursuant to this Article VIII is being sought (the “Indemnifying Party”) of the commencement thereof, but the omission so to notify the Indemnifying Party shall not relieve it from any liability that it otherwise may have to the Indemnified Party except to the extent that the Indemnifying Party is materially prejudiced and forfeits substantive rights or defenses by reason of such failure.  In connection with any Claim as to which both the Indemnifying Party and the Indemnified Party are parties, the Indemnifying Party shall be entitled to assume the defense thereof.  Notwithstanding the assumption of the defense of any Claim by the Indemnifying Party, the Indemnified Party shall have the right to employ separate legal counsel and to participate in the defense of such Claim, and the Indemnifying Party shall bear the reasonable fees, out-of-pocket costs and expenses of such separate legal counsel to the Indemnified Party if (and only if): (x) the Indemnifying Party shall have agreed to pay such fees, out-of-pocket costs and expenses, (y) the Indemnified Party and the Indemnifying Party reasonably shall have concluded that representation of the Indemnified Party and the Indemnifying Party by the same legal counsel would not be appropriate due to actual or, as reasonably determined by legal counsel to the Indemnified Party, potentially differing interests between such parties in the conduct of the defense of such Claim, or if there may be legal defenses available to the Indemnified Party that are in addition to or disparate from those available to the Indemnifying Party or (z) the Indemnifying Party shall have failed to employ legal counsel reasonably satisfactory to the Indemnified Party within a reasonable period of time after notice of the commencement of such 

					

					

				

			

			
				12

			

			
				

				

				

				

				

				Claim.  If the Indemnified Party employs separate legal counsel in circumstances other than as described in clauses (x), (y) or (z) above, the fees, costs and expenses of such legal counsel shall be borne exclusively by the Indemnified Party.  Except as provided above, the Indemnifying Party shall not, in connection with any Claim in the same jurisdiction, be liable for the fees and expenses of more than one firm of legal counsel for the Indemnified Party (together with appropriate local counsel).  The Indemnifying Party shall not, without the prior written consent of the Indemnified Party (which consent shall not unreasonably be withheld), settle or compromise any Claim or consent to the entry of any judgment that does not include an unconditional release of the Indemnified Party from all liabilities with respect to such Claim or judgment.

				

				          E.          In the event one party hereunder should have a claim for indemnification that does not involve a claim or demand being asserted by a third party, the Indemnified Party promptly shall deliver notice of such claim to the Indemnifying Party.  If the Indemnified Party disputes the claim, such dispute shall be resolved by mutual agreement of the Indemnified Party and the Indemnifying Party or by binding arbitration conducted in accordance with the procedures and rules of the American Arbitration Association.  Judgment upon any award rendered by any arbitrators may be entered in any court having competent jurisdiction thereof.

				

				          X.          GOVERNING LAW
				

				          This Agreement shall be governed by and interpreted in accordance with the laws of the State of California, without regard to the conflicts of law principles of such state.

					

					          XI.         SUBMISSION TO JURISDICTION

						

					          Each of the parties hereto consents to the exclusive jurisdiction of the federal courts whose districts encompass any part of the City of San Diego or the state courts of the State of California sitting in the City of San Diego in connection with any dispute arising under this Agreement and the other Documents.  Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may effectively do so, any defense of an inconvenient forum or improper venue to the maintenance of such action or proceeding in any such court and any right of jurisdiction on account of its place of residence or domicile.  Each party hereto irrevocably and unconditionally consents to the service of any and all process in any such action or proceeding in such courts by the mailing of copies of such process by registered or certified mail (return receipt requested), postage prepaid, at its address specified in Article XVII.  Each party hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

					

					          XII.        WAIVER OF JURY TRIAL

						

					          TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER DOCUMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE 

				

				

				

			

			
				13

			

			
				

				

				

				

				

				SUBJECT MATTER OF THIS AGREEMENT AND OTHER DOCUMENTS.  EACH PARTY HERETO (i) CERTIFIES THAT NEITHER OF THEIR RESPECTIVE REPRESENTATIVES, AGENTS OR ATTORNEYS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (ii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS HEREIN.

					

				          XIII.       COUNTERPARTS; EXECUTION
				This Agreement may be executed in counterparts, each of which when so executed and delivered shall be an original, but both of which counterparts shall together constitute one and the same instrument.  A facsimile transmission of this signed Agreement shall be legal and binding on both parties hereto.

					

					          XIV.        HEADINGS

						

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

					

					          XV.         SEVERABILITY

						

					          In the event any one or more of the provisions contained in this Agreement or in the other Documents should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall not in any way be affected or impaired thereby.  The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

					

					          XVI.        ENTIRE AGREEMENT; REMEDIES, AMENDMENTS AND WAIVERS

						

					          This Agreement and the Documents constitute the entire agreement between the parties hereto pertaining to the subject matter hereof and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, of such parties.  No supplement, modification or waiver of this Agreement shall be binding unless executed in writing by both parties.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.

					

					          XVII.        NOTICES

				Except as may be otherwise provided herein, any notice or other communication or delivery required or permitted hereunder shall be in writing and shall be delivered personally, or sent by telecopier machine or by a nationally recognized overnight courier service, and shall be deemed given when so delivered personally, or by telecopier machine or overnight courier service as follows:

					

					

					

					

				

			

			
				14

			

			
				

				

				

				

				

				          A.          If to the Company, to:

				

				                        Material Technologies, Inc.

				                        11661 San Vicente Boulevard, Suite 707

				                        Los Angeles, California 90049

				                        Telephone:        310-208-5589

				                        Facsimile:         310-473-3177

				

				                        with a copy to:

				

				                        The Lebrecht Group, APLC

				                        22342 Avenida Empresa, Suite 220

				                        Rancho Santa Margarita, CA  92688

				                        Attn:  Brian A. Lebrecht, Esq.

				                        Telephone:        949-635-1240

				                        Facsimile:         949-635-1244

				

				          B.          If to Holder, to:

				

				                        Golden Gate Investors, Inc.

				                        7817 Herschel Avenue, Suite 200

				                        La Jolla, California 92037

				                        Telephone:        858-551-8789

				                        Facsimile:         858-551-8779

				

				The Company or Holder may change the foregoing address by notice given pursuant to this Article XVII.  Each such notice or other communication shall for all purposes of this agreement be treated as effective or having been given when delivered if delivered personally, or, if sent by mail, at the earlier of its receipt or one (1) business day after the same has been deposited with a national overnight courier for delivery the next business day

				

				          XVIII.      CONFIDENTIALITY

					

				          Each of the Company and Holder agrees to keep confidential and not to disclose to or use for the benefit of any third party the terms of this Agreement or any other information which at any time is communicated by the other party as being confidential without the prior written approval of the other party; provide, however, that this provision shall not apply to information which, at the time of disclosure, is already part of the public domain (except by breach of this Agreement) and information which is required to be disclosed by law (including, without limitation, pursuant to Item 601(b)(10) of Regulation S-K under the Securities Act and the Exchange Act).

				

				          XIX.        ASSIGNMENT

					

				          This Agreement shall not be assignable by either of the parties hereto.

				

				

			

			
				15

			

			
				

				

				

				

				

				          IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement to be executed and delivered on the date first above written.

				

				

				Material Technologies, Inc.                                                       Golden Gate Investors, Inc.

				

				By:   /s/ Robert M. Bernstein                                                     By:    /s/ Travis Huff                              

					

				Title:   Chief Executive Officer                                                    Title:     Portfolio Manager                    

				

				

				

				

				

				

				

				

				

				

				

				

				

				

				

				

				

				

				

				

			

			
				16

			

			
				

				

				

				

				

			

		

		
			
				SCHEDULE II.L.

						

						REGISTRATION RIGHTS

						

					

			

			
				Name

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

				

			

			
				17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00095-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00095-of-00352.parquet"}]]