Document:

November
      20, 2008

    

    Re:
      Amendment to December 2007 Subscription Agreement

    

    Dear
      Investor:

    

    Purple
      Beverage Company, Inc. (the “Company”) has been offered the opportunity to
      receive financing from a third party lender pursuant to which the Company shall
      issue and sell to the lender one or more debentures at a conversion price that
      will be set at a 20% discount to market. Subject to certain conditions and
      at
      the option of the lender, the Company may raise up to a maximum aggregate amount
      of $6,000,000 in connection with this financing, in four tranches of up to
      $1.5
      million each, with a minimum of $250,000 to be advanced at the initial closing.
      Although the Company is currently negotiating definitive documents with the
      lender, there can be no assurance that this financing will be
      consummated.

    

    In
      addition, the Company has been offered, and in the future may be offered, other
      opportunities to receive financings that would involve issuing a security priced
      at market or at a discount to market. Such financings are imperative to the
      Company’s ongoing survival but are prohibitive due to restrictions and
      provisions that would trigger substantial anti-dilution adjustments set forth
      in
      our December 2007 Subscription Agreement, as amended. 

    

    Therefore,
      we are writing to obtain your consent to eliminate certain restrictions set
      forth in the December 2007 Subscription Agreements, as amended, that preclude
      the issuances of variable priced equity linked instruments (which restrictions
      are set to expire on December 12, 2008) and certain provisions set forth in
      our
      December 2007 Subscription Agreement, as amended, that would trigger substantial
      anti-dilution adjustments in the event that such instruments are priced at
      below
      the $0.10 per share (which adjustments are set to expire on June 12, 2009)
      with
      respect to financings consummated on or prior to January 31, 2009.

    

    Accordingly,
      by executing this consent and amendment in the space provided below, you hereby
      agree that all restrictive covenants (including, without limitation, Section
      9(r)) and all most favored nation price protection features applicable to shares
      and warrants (including, without limitation, Section 12) set forth in the
      Subscription Agreement, as amended, are hereby eliminated in connection with
      any
      financings to be consummated by the Company on or prior to January 31, 2009
      whereby the Company issues securities at a price below $0.10 per share, or
      issues securities priced at market or at a discount to market. 

     

    
      	 	
              Best
                regards,

            
	 	 
	 	 
	 	
              /s/
                Theodore Farnsworth 

            
	 	
              Theodore
                Farnsworth

            
	 	
              Chief
                Executive Officer 

            

    

    

    Please
      return signed letter to Michael Hartstein - Fax 646.390.6328, or
      mhartstein@palladiumcapital.com

    

    Stockholder’s
      Name: _____________________ Signature: _______________________ Date:
      ________

     

    
      
         

      

      
        
          Purple
            Beverage Company, Inc.

          450
            E Las
            Olas Boulevard, Suite 830 ∙ Ft. Lauderdale, Florida 33301 ∙ P:
            954.462.8382

          www.DrinkPurple.comExhibit
      10.1

    

    

    

      ENGLISH
        TRANSLATION OF ASSIGNMENT AGREEMENT

    

    

    

    ASSIGNMENT
      AGREEMENT, dated as of November 19, 2008 (this “Agreement”), by and between
      Wonder Auto Limited, a British Virgin Islands corporation (“Assignor”) Golden
      Stone Capital Limited, a British Virgin Islands corporation (“Assignee”), Money
      Victory Limited, a British Virgin Island corporation (“Money Victory”) and Lin
      Tan, the majority owner of Money Victory. Capitalized terms used, but not
      otherwise defined, herein have the meanings ascribed to them in the Stock
      Purchase Agreement (as defined below).

    

    BACKGROUND

    

    

    Assignor
      is a party to that certain Stock Purchase Agreement, dated as of April 9, 2008
      (the “Stock Purchase Agreement”), by and among Assignor, Money Victory, and Lin
      Tan. Assignor desires to assign all of its rights, obligations and duties under
      the Stock Purchase Agreement to Assignee and Assignee desires to assume all
      of
      such rights, obligations and duties.

    

    TERMS
      AND
      CONDITIONS

    

    

    NOW,
      THEREFORE, in consideration of the premises and of other good and valuable
      consideration, Assignor and Assignee hereby agree as follows:

    

    1.
      Assignment of Rights: Assignor hereby assigns, transfers and conveys to Assignee
      and Assignee hereby accepts such assignment of Assignor’s right, title and
      interest in, to and under the Stock Purchase Agreement. The total consideration
      for such assignment of rights is $5,900,000. Assignee shall wire such amount
      to
      Assignor’s designated bank account within 110 business days after the signing of
      this Agreement. Assignor shall transfer its shares of Money Victory to Assignee
      within 30 business days after its receipt of $5,900,000.

    

    2.
      Assumption: Assignee hereby agrees to perform and discharge all of the
      obligations of Assignor under the Stock Purchase Agreement and Assignee hereby
      assumes such obligations of Assignor under and with respect to Stock Transfer
      Agreement as if Assignee had entered into the Stock Purchase Agreement directly
      with Money Victory and Lin Tan.

    

    3.
      Assignee’s Acknowledgment: Assignee hereby acknowledges that Assignee has read
      the Stock Purchase Agreement and has received an original or an exact copy
      of
      the Stock Purchase Agreement.

    

    4.
      Consent of Money Victory and Lin Tan: Each of Money Victory and Lin Tan hereby
      consent and agree to the assignment and assumption of the Stock Purchase
      Agreement as provided for herein.

    

    5.
      Each
      of Assignor and Assignee hereby represents that, at the time of this Agreement,
      it does not have any material non-public information about Money Victory or
      Golden Elephant Glass Technology, Inc, a Nevada company and whose common stock
      is traded on the Over-the-Counter Bulletin Board.

    

    6.
      Each
      of Assignor and Assignee hereby represents that, at the time of this Agreement,
      it is not aware of any facts that would cause the transaction contemplated
      by
      this Agreement in violation of the applicable U.S. securities laws.

    

    7.
      Authority and Enforceability. Assignee hereby represents that it has all
      requisite power and authority to enter into and perform its obligations under
      this Agreement and to carry out the transactions contemplated hereby. When
      executed and delivered, this Agreement and the Stock Purchase Agreement will
      be
      enforceable against Assignee in accordance with their terms.

    

    8.
      Miscellaneous: This Agreement may be executed in two or more counterparts,
      each
      of which shall be deemed an original, and all of which when taken together
      shall
      constitute a single document. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    This
      Agreement shall become effective upon the execution by all the parties hereto.
      Once the Agreement is effective, the Assignee shall have all the rights and
      interests contemplated in the Agreement.

    

    Assignor:

    

    Wonder
      Auto Limited

    By:
      /s/
      Qingjie Zhao

    Name:
      Qingjie Zhao

    Title:
      CEO

    

    

    Assignee:

    

    Golden
      Stone Capital Limited

    By:
      /s/
      Yanping Li

    Name:
      Yanping Li

    

    Money
      Victory:

    

    Money
      Victory Limited

    By:
      /s/
      Lin Tan

    Name:
      Lin
      Tan

    

    /s/ Lin
      Tan

    Lin
      TanLOAN
      AND SECURITIES PURCHASE AGREEMENT

    

    By
      and Between

    

    MDWERKS,
      INC.,

    

    XENI
      FINANCIAL SERVICES, CORP.

    

    and

    

    DEBT
      OPPORTUNITY FUND, LLLP

    

    DATED
      NOVEMBER 14, 2008

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    LOAN
      AND SECURITIES PURCHASE AGREEMENT

    

    This
      LOAN
      AND SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated this 14th day of
      November, 2008, is made by and between MDWERKS, INC., a Delaware corporation
      (“MDwerks” or the “Company”), XENI FINANCIAL SERVICES, CORP., a Florida
      corporation (“XFSC” and along with MDwerks, each a “Borrower” and collectively
      the “Borrowers”), and DEBT OPPORTUNITY FUND, LLLP, a limited liability
      limited partnership organized under the laws of the State of Florida (the
“Lender”).

    

    RECITALS

    

    WHEREAS,
      pursuant to the terms and conditions of this Agreement, the Borrowers wish
      to
      borrow $10,300,000 from the Lender (the “Loan”) to be evidenced by the issuance
      of a Senior Secured Promissory Note in the form attached hereto as Exhibit
      A
      (the
“Note”);

    

    WHEREAS,
      the Borrowers will use the proceeds from the Loan to purchase medicinal
      preparations prescription worker’s compensation claims (“Prescription Claims”)
      from Prospective Client (“XXX”) under the terms and conditions of that certain
      Prescription Claims Assignment Agreement (the “Claims Purchase Agreement”)
      between XFSC and XXX to be entered into pursuant to Section 5.8
      hereof;

    

    WHEREAS,
      as part of the agreement to make the Loan, the Lender has requested that MDwerks
      sell and issue to the Lender a Series J Warrant to purchase an aggregate of
      9,339,816 shares of common stock, par value $.001 per share (the “Common
      Stock”), of MDwerks initially at an exercise price of $1.00 per share in the
      form attached hereto as Exhibit
      B
      (the
“Series J Warrant” or the “Warrant”); and

    

    WHEREAS,
      the Lender desires to provide the Loan to the Borrowers and purchase the Warrant
      from MDwerks according to the terms hereinafter set forth. 

    

    NOW,
      THEREFORE, the
      Borrowers and the Lender hereby agree as follows:

    

    ARTICLE
      I

    THE
      LOAN AND PURCHASE AND SALE OF THE WARRANT

    

    1.1 The
      Loan and Purchase and Sale of the Warrant.
      Subject
      to the terms and conditions hereof and in reliance on the representations and
      warranties contained herein, or made pursuant hereto, (a) the Borrowers will
      borrow, and the Lender will lend the Borrowers at the closing of the
      transactions contemplated hereby (the “Closing”), the aggregate amount of up to
      $10,300,000 under the Note, subject to a deduction for an original issue
      discount of 2%, less the fee owed to the Lender pursuant to Section 12.9
      hereof in the amount of $80,000 (the “Cash Payment”) and (b) MDwerks will issue
      and sell to the Lender, and the Lender will purchase from MDwerks at the
      Closing, the Warrant for making the Loan to the Borrowers. The Note will be
      issued with an original issue discount of two percent (2%). The Borrowers shall
      receive from the Lender $0.98 for each $1.00 of principal amount of the Note
      as
      indicated in Section 1.3 hereof.

     

    1.2 Closing.
      The
      Closing shall be deemed to occur at the offices of Bush Ross, P.A., 1801 N.
      Highland Avenue, Tampa, Florida 33602, at 5:00 p.m. EST on November 14, 2008,
      or
      at such other place, date or time as mutually agreeable to the parties (the
      “Closing Date”).

     

    1.3 Closing
      Matters.
      Subject
      to the terms and conditions hereof, the following actions shall be
      taken:

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    (a) On
      the
      Closing Date, (i) the Borrowers will deliver to the Lender the documents set
      forth in Section 5.4 hereof, (ii) the Lender shall advance $1,500,000 under
      the
      Note by, after applying the 2% original issue discount of $30,000, delivering
      the sum of $1,470,000, less the Cash Payment of $80,000, by wire transfer of
      immediately available funds in the form of (A) $1,090,000 to the Escrow Account
      (as defined in Section 1.4) to be held by the Escrow Agent and (B) $300,000
      in
      accordance with instructions of the Borrowers.

     

    (b) After
      the
      Closing Date, the Lender shall advance an additional $8,800,000 under the Note
      by, after applying the 2% original issue discount, delivering $8,624,000 to
      the
      Escrow Agent by wire transfers to the Escrow Account consisting of no more
      than
      six (6) separate financings with at least two (2) such financings occurring
      during each calendar week beginning with the first full calendar week following
      the Closing Date (each such subsequent payment referred to herein as a
“Subsequent Funding” with all such payments into the Escrow Account referred to
      herein as the “Funded Amount”).

     

    1.4 Escrow. 
      The
      Lender has agreed that the Funded Amount pursuant to clauses (a) and (b) of
      Section 1.3 above will be deposited in an escrow account (the “Escrow Account”)
      to be held and released by the Escrow Agent (as defined in the Escrow Agreement)
      pursuant to the terms of an Escrow Agreement, substantially in the form attached
      hereto as Exhibit
      C
      (the
“Escrow Agreement”). Subject to the terms of the Escrow Agreement, the Funded
      Amount shall be released to Borrowers by wire transfer to the Claims Purchase
      Account (as defined in Section 5.9) upon satisfaction (or waiver) of the
      conditions set forth in Article V below, or returned to the Lender, if each
      of
      the conditions set forth in Article V below is not satisfied (or waived) by
      December 8, 2008 (the “Funding Date”). In the event that the Funded Amount is
      returned to the Lender hereunder, the Lender shall promptly return the Note
      and
      the Warrant to the Borrowers for cancellation; provided,
      however,
      the
      Borrowers shall reissue the Note to the Lender in the amount of such sums
      actually received by the Borrowers, inclusive of the Cash Payment, pursuant
      to
      this Agreement.

     

    1.5 Claim
      Purchases.
      

     

    (a) Segregation
      of Funds.
      Except
      as otherwise provided in this Agreement, the proceeds from the Loan and any
      and
      all amounts received from the collection and processing of Prescription Claims
      purchased under the Claims Purchase Agreement (the “Restricted Funds”) shall be
      deposited in the Claims Purchase Account and segregated at all times from the
      operating funds of the Borrowers and any other accounts held by the
      Borrowers.

     

    (b) Removal
      of Restricted Funds.
      The
      Borrowers shall not remove Restricted Funds from the Claims Purchase Account
      except upon receipt, and then only to the extent, of the Lender’s prior written
      consent, which may be withheld in the Lender’s sole discretion; provided,
      however,
      that
      the Borrowers may use Restricted Funds to (i) purchase additional Prescription
      Claims as provided in this Section 1.5 and (ii) make payments to XXX in
      accordance with the Claims Purchase Agreement provided that the Borrowers
      deliver written notice of any payment to be made to XXX to Lender at least
      ten
      (10) days prior to making such payment. Every thirty (30) days, the Lender
      and
      Borrowers shall conduct a meeting in person or via teleconference at a mutually
      agreeable time, date and location to review the status of, and adequacy of
      amounts in, the Claims Purchase Account and to discuss the potential release
      of
      funds from the Claims Purchase Account to an operating account of XFSC (any
      such
      released funds shall be referred to as “Permitted Withdrawals”); provided,
      however,
      such
      release shall be the sole discretion of the Lender.

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    (c) Notice
      of Proposed Purchase.
      At
      least three (3) Trading Days prior to the purchase of any Prescription Claims
      under the Claims Purchase Agreement (a “Proposed Purchase”), Borrowers shall
      submit a written request to the Lender identifying the specific Prescription
      Claims included in the Proposed Purchase and the total amount and date of the
      Proposed Purchase. Provided that the conditions in Section 1.5(d) are met,
      Borrowers shall be entitled to use the Restricted Funds for the Proposed
      Purchase to the extent that the sum of the Restricted Funds and Acceptable
      Receivables exceeds the aggregate principal amount of all Advances (the
“Borrowing Base”). As used in this Agreement, “Acceptable Receivables” means the
      purchased Prescription Claims for which XFSC has not received payment, but
      excluding the following Prescription Claims: (i) any Prescription Claim or
      portion thereof that remains unpaid 180 days or more after the Prescription
      Claim was submitted for payment; (ii) any Prescription Claim or portion thereof
      with respect to which any Borrower has received notice of a claim or dispute
      over payment; (iii) any Prescription Claim submitted for payment to an entity
      that is insolvent, the subject of bankruptcy proceedings or out of business;
      (iv) any Prescription Claim not subject to a duly perfected, first-priority
      security interest in the Lender’s favor or which is subject to any Lien (as
      defined in Section 8.3) in favor of any Person (as defined in Section 3.13)
      other than the Lender; (v) Prescription Claims owed by an obligor, regardless
      of
      whether otherwise eligible, if 25% or more of the total amount of Prescription
      Claims due from such obligor is ineligible under sub-clauses (i) or (ii) above;
      (vi) Prescription Claims, or portions thereof, otherwise deemed ineligible
      by
      the Lender in its sole discretion.

     

    (d) Conditions
      Precedent to Purchases.
      The
      Borrowers’ ability to use Restricted Funds for a Proposed Purchase shall be
      subject to the further conditions precedent that:

     

    (i) An
      Event
      of Default has not occurred and is not continuing or an Event of Default would
      not result from the Proposed Purchase;

     

    (ii) No
      default has occurred and is continuing by either XXX or XFSC with respect to
      the
      Claims Purchase Agreement;

     

    (iii) The
      representations and warranties contained in this Agreement or contained in
      the
      other Transaction Documents are true and correct as of the date of the Proposed
      Purchase, except to the extent any such representation or warranty is stated
      to
      relate solely to an earlier date, in which case such representation or warranty
      shall be true and correct on and as of such earlier date;

     

    (iv) The
      Prescription Claims set forth in the Proposed Purchase are to be purchased
      under
      the terms of and in accordance with the Claims Purchase Agreement;

     

    (v) The
      Borrowers shall have provided to the Lender a certificate, in form and detail
      reasonably satisfactory to the Lender, setting forth the calculation of the
      available Borrowing Base, executed on behalf of the Borrowers by officers of
      the
      Borrowers (the “Borrowing Base Certificate”), and the Lender shall be satisfied
      that the Proposed Purchase does not exceed the available Borrowing Base;
      and

     

    (vi) Since
      the
      date of the most recently filed financial statements of the Borrowers, there
      has
      been no change in either of the Borrowers’ business, properties or condition
      (financial or otherwise) that has had or would have a Material Adverse Effect
      (as defined in Section 3.1).

     

    Each
      request for a Proposed Purchase by the Borrowers shall constitute a
      representation and warranty by each Borrower that the conditions contained
      in
      this Section 1.5(d) have been satisfied.

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    ARTICLE
      II

    SECURITY
      DOCUMENTS

     

    2.1  Security
      Documents.

     

    (a) Security
      Agreement and Collateral Assignment.
      All of
      the obligations of the Borrowers under the Note shall be secured by a lien
      on
      all the personal property and assets of the Borrowers now existing or
      hereinafter acquired granted pursuant to (i) a security agreement from each
      Borrower dated of even date herewith between each of the Borrowers and the
      Lender in the form attached hereto as Exhibit
      D
      (“Security Agreements), and (ii) such other documents as the Lender may
      reasonably require from Borrowers to secure its interests under this
      Agreement.

     

    (b) Guaranty.
      All of
      the obligations of the Borrowers under the Note shall be guaranteed pursuant
      to
      a guaranty agreement in the form attached hereto as Exhibit
      E
      (“Guaranty Agreement”) by each of the following subsidiaries of the Company
      (each a “Subsidiary” and collectively, the “Subsidiaries”): MDwerks Global
      Holdings, Inc., a corporation, organized under the laws of the State of Florida
      (“MGHI”), Xeni Medical Systems, Inc., a corporation organized under the laws of
      the State of Delaware (“XMSI”), Xeni Medical Billing, Corp., a corporation
      organized under the laws of the State of Delaware (“XMBC”), and Patient Payment
      Solutions, Inc., a corporation organized under the laws of the State of Florida
      (“PPS”).

     

    (c) Guarantor
      Security Documents.
      All of
      the obligations of each Subsidiary under its Guaranty Agreement shall be secured
      by a lien on all the personal property and assets of such Subsidiary now
      existing or hereinafter acquired granted pursuant to a guarantor security
      agreement dated of even date herewith between such Subsidiary and the Purchaser
      in the form attached hereto as Exhibit
      F
      (“Guarantor Security Agreement”).

     

    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES OF THE BORROWERS

    

    Each
      of
      the Borrowers hereby represents and warrants to the Lender as of the date of
      this Agreement as follows:

    

    3.1 Organization
      and Qualification.
      Each
      Borrower is a corporation duly organized and validly existing and in good
      standing under the laws of the jurisdiction in which it is incorporated, and
      has
      all requisite corporate power and authority to carry on its business as now
      conducted. Each Borrower is duly qualified as a foreign corporation to do
      business and is in good standing in every jurisdiction in which its ownership
      of
      property or the nature of the business conducted by it makes such qualification
      necessary, except to the extent that the failure to be so qualified or be in
      good standing would not have a Material Adverse Effect. As used in this
      Agreement, “Material Adverse Effect” means any material adverse effect on the
      business, properties, assets, operations, results of operations, or condition
      (financial or otherwise) of the Borrowers and the Subsidiaries, taken as a
      whole, or on the transactions contemplated hereby or by the agreements and
      instruments to be entered into in connection herewith, or on the authority
      or
      ability of a Borrower to perform its obligations in all material respects under
      the Transaction Documents.

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    3.2  Subsidiaries.
      MDwerks
      has no other subsidiaries other than the Subsidiaries, and XFSC has no
      subsidiaries. The Company owns, directly or indirectly, all of the capital
      stock
      of each Subsidiary and XFSC, free and clear of any and all Liens, except
      Permitted Liens (as defined in Section 8.3), and all the issued and outstanding
      shares of capital stock of each Subsidiary and XFSC are validly issued and
      are
      fully paid, non-assessable and free of preemptive and similar rights. Each
      Subsidiary is a corporation duly organized and validly existing and in good
      standing under the laws of the jurisdiction in which it is incorporated, and
      has
      all requisite corporate power and authority to carry on its business as now
      conducted. Each Subsidiary is duly qualified as a foreign corporation to do
      business and is in good standing in every jurisdiction in which its ownership
      of
      property or the nature of the business conducted by it makes such qualification
      necessary, except to the extent that the failure to be so qualified or be in
      good standing would not have a Material Adverse Effect.

     

    3.3 Compliance.

     

    (a) Neither
      any Borrower nor any Subsidiary (i) is in default under or in violation of
      (and no event has occurred that has not been waived that, with notice or lapse
      of time or both, would result in a default by any Borrower or any Subsidiary
      under), nor has any Borrower or any Subsidiary received notice of a claim that
      it is in default under or that it is in violation of, any indenture, loan or
      credit agreement or any other agreement or instrument to which it is a party
      or
      by which it or any of its properties is bound, except such that, individually
      or
      in the aggregate, such default(s) and violations(s) would not have a Material
      Adverse Effect, (ii) is in violation of any order of any court, arbitrator
      or governmental body, or (iii) is in violation of any of the provisions of
      its certificate or articles of incorporation, bylaws or other organizational
      or
      charter documents.

     

    (b) The
      business of each Borrower and each Subsidiary is presently being conducted
      in
      accordance with all applicable foreign, federal, state and local governmental
      laws, rules, regulations and ordinances (including, without limitation, rules
      and regulations of each governmental and regulatory agency, self regulatory
      organization and Trading Market applicable to any Borrower or any Subsidiary),
      except such that, individually or in the aggregate, the noncompliance therewith
      would not have a Material Adverse Effect. Each Borrower has all franchises,
      permits, licenses, consents and other governmental or regulatory authorizations
      and approvals necessary for the conduct of its business as now being conducted
      by it unless the failure to possess such franchises, permits, licenses, consents
      and other governmental or regulatory authorizations and approvals, individually
      or in the aggregate, would not have a Material Adverse Effect, and each Borrower
      has not received any written notice of proceedings relating to the revocation
      or
      modification of any of the foregoing. For purposes of this Agreement, “Trading
      Market” means the following markets or exchanges on which the Common Stock is
      listed or quoted for trading on the date in question: the NYSE Arca, OTC
      Bulletin Board, the American Stock Exchange, the New York Stock Exchange, the
      Nasdaq National Market or the Nasdaq Capital Market.

     

    3.4 Capitalization.

     

    (a) As
      of the
      date hereof and without giving effect to the sale of the Warrant at Closing
      as
      contemplated hereby, the Company’s authorized capital stock consists of (1)
      200,000,000 shares of Common Stock, par value $.001 per share, of which
      14,370,208 shares are outstanding and (2) 10,000,000 shares of preferred stock,
      par value $.001 per share, of which (x) 1,000 shares have been designated as
      Series A Convertible Preferred Stock, par value $0.001 per share, of which
      2
      shares are outstanding, and (y) 1,500 shares have been designated as Series
      B
      Preferred Stock, par value $0.001, of which 1,000 shares are outstanding. All
      of
      such outstanding shares have been, or upon issuance will be, validly issued,
      are
      fully paid and nonassessable. 110,702,017 shares of Common Stock are reserved
      for issuance upon the exercise or conversion of all outstanding warrants,
      convertible notes, options, or other securities exchangeable, convertible or
      exercisable into shares of Common Stock.

     

    (b) Except
      for the Warrant, or as disclosed in the SEC Documents (as defined in Section
      3.14):

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    (i) no
      holder
      of shares of the Company’s capital stock has any preemptive rights or any other
      similar rights or has been granted or holds any Liens or encumbrances suffered
      or permitted by the Company;

     

    (ii) there
      are
      no outstanding options, warrants, scrip, rights to subscribe to, calls or
      commitments of any character whatsoever relating to, or securities or rights
      convertible into, or exercisable or exchangeable for, any shares of capital
      stock of any Borrower or any Subsidiary, or contracts, commitments,
      understandings or arrangements by which any Borrower or any Subsidiary is or
      may
      become bound to issue additional shares of capital stock of any Borrower or
      any
      Subsidiary or options, warrants, scrip, rights to subscribe to, calls or
      commitments of any character whatsoever relating to, or securities or rights
      convertible into, or exercisable or exchangeable for, any shares of capital
      stock of any Borrower or any Subsidiary;

     

    (iii) there
      are
      no outstanding debt securities, notes, credit agreements, credit facilities
      or
      other agreements, documents or instruments evidencing Indebtedness (as defined
      in Section 3.13 hereof) of any Borrower or any Subsidiary in excess of $100,000
      or by which a Borrower or a Subsidiary is or may become bound and involves
      Indebtedness in excess of $100,000;

     

    (iv) there
      are
      no financing statements securing obligations in any material amounts, either
      singly or in the aggregate, filed in connection with any Borrower or any
      Subsidiary;

     

    (v) there
      are
      no agreements or arrangements under which any Borrower or any Subsidiary is
      obligated to register the sale of any of their securities under the Securities
      Act of 1933, as amended (the “Securities Act”);

     

    (vi) there
      are
      no outstanding securities or instruments of any Borrower or any Subsidiary
      that
      contain any redemption or similar provisions, and there are no contracts,
      commitments, understandings or arrangements by which any Borrower or any
      Subsidiary is or may become bound to redeem a security of a Borrower or a
      Subsidiary;

     

    (vii) there
      are
      no securities or instruments containing antidilution or similar provisions
      that
      will be triggered by the issuance of the Warrant; and

     

    (viii) neither
      of the Borrowers has any stock appreciation rights or “phantom stock” plans or
      agreements or any similar plan or agreement.

     

    3.5 Issuance
      of the Warrant.

     

    (a) The
      Warrant to be issued hereunder is duly authorized and, upon issuance in
      accordance with the terms hereof, shall be free from all taxes, Liens and
      charges with respect to the issuance thereof. As of the Closing Date, the
      Company has authorized and has reserved free of preemptive rights and other
      similar contractual rights of stockholders, a number of its authorized but
      unissued shares of Common Stock equal to one hundred percent (100%) of the
      aggregate number of shares of Common Stock to effect the exercise of the Warrant
      (the “Warrant Shares”).

     

    (b) The
      Warrant Shares, when issued and paid for upon exercise of the Warrant will
      be
      validly issued, fully paid and nonassessable and free from all taxes, Liens
      and
      charges with respect to the issue thereof, with the holders being entitled
      to
      all rights accorded to a holder of the Common Stock.

     

    (c) Assuming
      the accuracy of each of the representations and warranties made by the Lender
      and set forth in Article IV hereof (and assuming no change in applicable law
      and
      no unlawful distribution of the Warrant by the Lender or other Persons), the
      issuance by the Company to the Lender of the Warrant is exempt from registration
      under the Securities Act.

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    3.6 Authorization;
      Enforcement; Validity.
      Each
      Borrower has the respective requisite corporate power and authority to enter
      into and perform, as applicable, its obligations under this Agreement, the
      Registration Rights Agreement to be entered into between the Company and the
      Lender on even date herewith in the form attached hereto as Exhibit
      G
      (the
“Registration Rights Agreement”), the Security Agreement, the Note, the Warrant,
      and each of the other agreements or instruments entered into by the parties
      hereto in connection with the transactions contemplated by this Agreement
      (collectively, the “Transaction Documents”) and to issue the Note and the
      Warrant (including without limitation, the Warrant Shares) in accordance with
      the terms hereof and thereof. The execution and delivery of the Transaction
      Documents by each Borrower and the consummation by each Borrower of the
      transactions contemplated hereby and thereby, including, without limitation,
      the
      issuance of the Note and the Warrant, have been duly authorized by its Board,
      and no further consent or authorization is required by either of the Borrowers,
      their respective Boards or stockholders. This Agreement, the Note and the other
      Transaction Documents have been duly executed and delivered by each Borrower,
      as
      applicable, and constitute the legal, valid and binding obligations of each
      Borrower enforceable against the Borrowers in accordance with their respective
      terms, except (i) as limited by general equitable principles and applicable
      bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
      other laws of general application affecting enforcement of creditors’ rights and
      remedies generally, (ii) as limited by laws relating to the availability of
      specific performance, injunctive relief or other equitable remedies and (iii)
      insofar as indemnification and contribution provisions may be limited by
      applicable law or by principles of public policy thereunder.

     

    3.7 Dilutive
      Effect.
      Each
      Borrower understands and acknowledges that the Company’s obligation to issue the
      Warrant Shares upon exercise of the Warrant is absolute and unconditional
      regardless of the dilutive effect that such issuance may have on the ownership
      interests of other stockholders of the Company.

     

    3.8 No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by each
      Borrower and the consummation by each Borrower of the transactions contemplated
      hereby and thereby (including, without limitation, the reservation for issuance
      of the Warrant Shares) will not (i) result in a violation of any articles
      or certificate of incorporation, any certificate of designations, preferences
      and rights of any outstanding series of preferred stock or bylaws of any
      Borrower or any Subsidiary or (ii) conflict with, or constitute a default
      (or an event which with notice or lapse of time or both would become a default)
      under, or give to others any rights of termination, amendment, acceleration
      or
      cancellation of, any material agreement, indenture or instrument to which any
      Borrower or any Subsidiary is a party (except where such defaults, conflicts,
      rights of termination, amendment, acceleration or cancellation have been waived
      or postponed until the fulfillment of the Borrowers’ obligations under the
      Transaction Documents), or (iii) result in a violation of any federal,
      state, local or foreign statute, rule, regulation, order, judgment or decree
      (including federal and state securities laws and regulations and rules and
      regulations of any governmental or any regulatory agency, self-regulatory
      organization, or Trading Market applicable to the Company) or by which any
      property or asset of the Borrowers are bound or affected, except in the case
      of
      clauses (ii) and (iii), for such breaches, violations or defaults as would
      not
      be reasonably expected to have a Material Adverse Effect.

    
      
        
        

      

      
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    3.9 Governmental
      Consents.
      Except
      for (i) filings required under the Securities Exchange Act of 1934, as
      amended (the “Exchange Act”) to disclose the existence of the transactions
      contemplated by this Agreement, (ii) application(s) to each Trading Market
      for the listing of the Warrant Shares for trading thereon in the time and manner
      required thereby, and (iii) the filing of Form D with the Commission and
      such filings as are required to be made under applicable state securities laws,
      neither Borrower is required to obtain any consent, authorization or order
      of,
      or make any filing or registration with, any court, governmental or any
      regulatory agency, self-regulatory organization or any other Person in order
      for
      it to execute, deliver or perform any of its obligations under or contemplated
      by the Transaction Documents, in each case, in accordance with the terms hereof
      or thereof. Each Borrower is unaware of any facts or circumstances relating
      to
      any Borrower or any Subsidiary that might prevent any Borrower from obtaining
      or
      effecting any of the foregoing.

     

    3.10 Registration
      and Approval of Sale of Securities.
      Based
      in material part upon the representations and warranties herein (and in the
      other Transaction Documents) of the Lender, the Company has complied and will
      comply with all applicable federal and state securities laws in connection
      with
      the offer, issuance and sale of the Warrant hereunder (except in the case of
      state securities laws, for any failures to comply that, individually or in
      the
      aggregate, will not have a Material Adverse Effect). Assuming the accuracy
      of
      the representations and warranties in Article IV hereof (and assuming no change
      in applicable law and no unlawful distribution of the Warrant by the Lender
      or
      other Persons), no registration under the Securities Act is required for the
      offer and sale of the Warrant by the Company to the Lender as is contemplated
      hereby. Neither the Company nor any Person acting on its behalf, directly or
      indirectly, has or will sell, offer to sell or solicit offers to buy the Warrant
      or similar securities to, or solicit offers with respect thereto from, or enter
      into any negotiations relating thereto with, any Person, or has taken or will
      take any action so as to either (a) bring the issuance and sale of the
      Warrant under the registration provisions of the Securities Act or applicable
      state securities laws, or (b) trigger shareholder approval provisions under
      the rules or regulations of any Trading Market. Neither the Company nor any
      of
      its affiliates that it controls, nor any Person acting on its or their behalf,
      has: (x) 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 any of the Warrant; or (y) directly or indirectly made
      any
      offers or sales of any security or solicited any offers to buy any security
      under circumstances that would cause the offering of the Warrant pursuant to
      this Agreement to be integrated with prior offerings by the Company for purposes
      of the Securities Act in a manner that would prevent the Company from selling
      the Warrant pursuant to Regulation D and Rule 506 thereof under the Securities
      Act, nor will the Company or any of its affiliates that it controls or Persons
      acting on its or their behalf engage in any form of general solicitation or
      take
      any action or steps that would cause the offering of the Warrant to be
      integrated with other offerings.

     

    3.11 Placement
      Agent’s Fees.
      No
      brokerage or finder’s fee or commission are or will be payable to any Person
      with respect to the transactions contemplated by this Agreement based upon
      arrangements made by any Borrower or any Subsidiary. The Borrowers agree that
      they shall be responsible for the payment of any placement agent’s fees,
      financial advisory fees, or brokers’ commissions (other than for Persons engaged
      by the Lender or any of its affiliates) relating to or arising out of the
      transactions contemplated hereby. The Borrowers shall pay, and hold the Lender
      harmless against, any liability, loss or expense (including, without limitation,
      reasonable attorney’s fees and out-of-pocket expenses) arising in connection
      with any claim for any such fees or commissions.

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    3.12 Litigation.
      Except
      as disclosed in Schedule 3.12 or as disclosed in the SEC Documents, there is
      no
      action, suit, written notice of violation, or written notice of any proceeding
      pending or, to the knowledge of the Borrowers, threatened against or affecting
      the Common Stock or any Borrower, any Subsidiary or any of their respective
      executive officers, directors or properties before or by any court, arbitrator,
      governmental or administrative agency, regulatory authority (federal, state,
      county, local or foreign), self regulatory authority or Trading Market
      (collectively, an “Action”) which (i) adversely affects or challenges the
      legality, validity or enforceability of any of the Transaction Documents or
      the
      Warrant or (ii) would, if there were an unfavorable decision, have or
      reasonably be expected to result in a Material Adverse Effect. To the Borrowers’
knowledge, neither the Borrowers nor any Subsidiary, nor any director or
      executive officer thereof (in his/her capacity as such), is or, within the
      last
      five years, has been the subject of any Action involving a claim of violation
      of
      or liability under federal or state securities laws or a claim of breach of
      fiduciary duty. To the knowledge of the Company, there has not been, and there
      is not pending or threatened in writing, any investigation by the United States
      Securities and Commission (the “Commission” or “SEC”) involving the Company or
      any current director or executive officer of the Company. The Commission has
      not
      issued any stop order or other order suspending the effectiveness of any
      registration statement filed by the Company under the Exchange Act or the
      Securities Act. There is no action, suit, claim, investigation, arbitration,
      alternate dispute resolution proceeding or other proceeding pending or, to
      the
      knowledge of the Borrowers, threatened in writing against or involving either
      of
      the Borrowers or any of their respective properties or assets, which
      individually or in the aggregate, would reasonably be expected to have a
      Material Adverse Effect. There are no outstanding orders, judgments,
      injunctions, awards or decrees of any court, arbitrator or governmental or
      regulatory body against either of the Borrowers or any executive officers or
      directors of the Borrowers in their capacities as such, which individually
      or in
      the aggregate, would reasonably be expected to have a Material Adverse
      Effect.

     

    3.13 Indebtedness
      and Other Contracts.
      Except
      as disclosed in the SEC Documents, neither any Borrower nor any Subsidiary
      (a) has any outstanding Indebtedness (as defined below in this Section
      3.13), (b) is a party to any contract, agreement or instrument, the
      violation of which, or default under, by any other party to such contract,
      agreement or instrument would result in a Material Adverse Effect, (c) is
      in violation of any term of or in default under any contract, agreement or
      instrument relating to any Indebtedness, except where such violations and
      defaults would not result, individually or in the aggregate, in a Material
      Adverse Effect, or (d) is a party to any contract, agreement or instrument
      relating to any Indebtedness, the performance of which, in the judgment of
      the
      Borrowers’ officers, has or is expected to have a Material Adverse Effect. For
      purposes of this Agreement: (x) “Indebtedness” of any Person means, without
      duplication (i) all indebtedness for borrowed money, (ii) all
      obligations issued, undertaken or assumed as the deferred purchase price of
      property or services (other than trade payables entered into in the ordinary
      course of business), (iii) all reimbursement or payment obligations with
      respect to letters of credit, surety bonds and other similar instruments,
      (iv) all obligations evidenced by notes, bonds, debentures or similar
      instruments, including obligations so evidenced incurred in connection with
      the
      acquisition of property, assets or businesses, (v) all indebtedness created
      or arising under any conditional sale or other title retention agreement, or
      incurred as financing, in either case with respect to any property or assets
      acquired with the proceeds of such indebtedness (even though the rights and
      remedies of the seller or bank under such agreement in the event of default
      are
      limited to repossession or sale of such property), (vi) all monetary
      obligations under any leasing or similar arrangement which, in connection with
      generally accepted accounting principles, consistently applied for the periods
      covered thereby, is classified as a capital lease, (vii) all indebtedness
      referred to in clauses (i) through (vi) above secured by (or for which the
      holder of such Indebtedness has an existing right, contingent or otherwise,
      to
      be secured by) any mortgage, Lien, pledge, change, security interest or other
      encumbrance upon or in any property or assets (including accounts and contract
      rights) owned by any Person, even though the Person which owns such assets
      or
      property has not assumed or become liable for the payment of such indebtedness,
      and (viii) all Contingent Obligations in respect of indebtedness or
      obligations of others of the kinds referred to in clauses (i) through
      (vii) above; (y) “Contingent Obligation” means, as to any Person, any
      direct or indirect liability, contingent or otherwise, of that Person with
      respect to any indebtedness, lease, dividend or other obligation of another
      Person if the primary purpose or intent of the Person incurring such liability,
      or the primary effect thereof, is to provide assurance to the obligee of such
      liability that such liability will be paid or discharged, or that any agreements
      relating thereto will be complied with, or that the holders of such liability
      will be protected (in whole or in part) against loss with respect thereto;
      and
      (z) “Person” means an individual, a limited liability company, a
      partnership, a joint venture, a corporation, a trust, an unincorporated
      organization and a government or any department or agency
      thereof.

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    3.14 Financial
      Information; SEC Documents.
      The
      Company has filed all reports required to be filed by it under the Exchange
      Act,
      including pursuant to Section 13(a) or 15(d) thereof, for the two years
      preceding the date hereof (or such shorter period as the Company was required
      by
      law to file such material) (the foregoing materials, including the exhibits
      thereto, being collectively referred to herein as the “SEC Documents”) on a
      timely basis or has received a valid extension of such time of filing and has
      filed any such SEC Documents prior to the expiration of any such extension.
      As
      of their respective dates, the SEC Documents complied in all material respects
      with the requirements of the Securities Act and the Exchange Act and the rules
      and regulations of the Commission promulgated thereunder, and none of the SEC
      Documents, when filed, contained 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; provided, however, that the Borrowers make
      no
      representation as to the information included in any SEC Documents prepared
      by
      third parties and included therein, and the Borrowers make no representation
      as
      to the accuracy of information contained in third party studies and reports
      cited in the SEC Documents. Each registration statement and any amendment
      thereto filed by the Company during the two years preceding the date hereof
      pursuant to the Securities Act and the rules and regulations thereunder, as
      of
      the date such statement or amendment became effective, complied as to form
      in
      all material respects with the Securities Act and did not 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 made therein not
      misleading; provided, however, that the Borrowers make no representation as
      to
      the information included in any SEC Documents prepared by third parties and
      included therein, and the Borrowers make no representation as to the accuracy
      of
      information contained in third party studies and reports cited in the SEC
      Documents; and each prospectus filed pursuant to Rule 424(b) under the
      Securities Act, as of its issue date and as of the closing of any sale of
      securities pursuant thereto did not 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 made therein, in the light of the
      circumstances under which they were made, not misleading; provided, however,
      that the Borrowers make no representation as to the information included in
      any
      SEC Documents prepared by third parties and included therein and the Borrowers
      make no representation as to the accuracy of information contained in third
      party studies and reports cited in the SEC Documents. The financial statements
      of the Company included in the SEC Documents comply in all material respects
      with applicable accounting requirements and the rules and regulations of the
      Commission with respect thereto as in effect at the time of filing. Such
      financial statements have been prepared in accordance with United States
      generally accepted accounting principles applied on a consistent basis during
      the periods involved (“GAAP”), except as may be otherwise specified in such
      financial statements or the notes thereto and except that unaudited financial
      statements may not contain all footnotes required by GAAP and remain subject
      to
      year end adjustments, and fairly present in all material respects the financial
      position of the Company and its consolidated subsidiaries as of and for the
      dates thereof and the results of operations and cash flows for the periods
      then
      ended, subject, in the case of unaudited statements, to normal year-end audit
      adjustments.

     

    3.15 Absence
      of Certain Changes or Developments.
      Except
      as disclosed in Schedule 3.15 attached hereto or as disclosed in the SEC
      Documents or as contemplated herein and in the Transaction Documents, since
      December 31, 2007:

     

    (a) there
      has
      been no Material Adverse Effect, and no event or circumstance has occurred
      or
      exists with respect to the Company or its businesses, properties, operations
      or
      financial condition, which, under Exchange Act, Securities Act, or rules or
      regulations of any Trading Market, requires public disclosure or announcement
      by
      the Company but which has not been so publicly announced or
      disclosed;

     

    (b) each
      Borrower has not:

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    (i) issued
      any stock, bonds or other corporate securities or any right, options or warrants
      with respect thereto, except pursuant to the exercise or conversion of
      securities outstanding as of such date;

     

    (ii) borrowed
      any amount in excess of $250,000 or incurred or become subject to any other
      liabilities in excess of $250,000 (absolute or contingent) except current
      liabilities incurred in the ordinary course of business which are comparable
      in
      nature and amount to the current liabilities incurred in the ordinary course
      of
      business during the comparable portion of its prior fiscal year, as adjusted
      to
      reflect the current nature and volume of the business of the
      Borrower;

     

    (iii) discharged
      or satisfied any Lien or encumbrance in excess of $250,000 or paid any
      obligation or liability (absolute or contingent) in excess of $250,000, other
      than current liabilities paid in the ordinary course of business and payments
      of
      principal and interest to Gottbetter Capital Master, Ltd. (“Gottbetter”) and
      Vicis Capital Master Fund (“Vicis”);

     

    (iv) declared
      or made any payment or distribution of cash or other property to stockholders
      with respect to its stock, or purchased or redeemed, or made any agreements
      so
      to purchase or redeem, any shares of its capital stock, in each case in excess
      of $50,000 individually or $100,000 in the aggregate;

     

    (v) sold,
      assigned or transferred any other tangible assets, or canceled any debts or
      claims, in each case in excess of $250,000, except in the ordinary course of
      business;

     

    (vi) sold,
      assigned or transferred any patent rights, trademarks, trade names, copyrights,
      trade secrets or other intangible assets or intellectual property rights in
      excess of $250,000, or disclosed any proprietary confidential information to
      any
      person except to customers in the ordinary course of business;

     

    (vii) suffered
      any material losses or waived any rights of material value, whether or not
      in
      the ordinary course of business, or suffered the loss of any material amount
      of
      prospective business;

     

    (viii) made
      any
      changes in employee compensation except in the ordinary course of business
      and
      consistent with past practices;

     

    (ix) made
      capital expenditures or commitments therefor that aggregate in excess of
      $250,000;

     

    (x) entered
      into any material transaction, whether or not in the ordinary course of business
      that has not been disclosed in the SEC Documents;

     

    (xi) made
      charitable contributions or pledges in excess of $10,000;

     

    (xii) suffered
      any material damage, destruction or casualty loss, whether or not covered by
      insurance;

     

    (xiii) experienced
      any material problems with labor or management in connection with the terms
      and
      conditions of their employment;

     

    (xiv) altered
      its method of accounting, except to the extent required by
      GAAP;

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    (xv) issued
      any equity securities to any officer, director or affiliate (as such term is
      defined in Rule 144 of the Securities Act), except pursuant to existing stock
      option, equity incentive or similar incentive plans; or

     

    (xvi) entered
      into an agreement, written or otherwise, to take any of the foregoing
      actions.

     

    3.16 Solvency.
      No
      Borrower has taken, nor does it have any intention to take, any steps to seek
      protection pursuant to any bankruptcy or similar law. No Borrower has any actual
      knowledge nor has it received any written notice that its creditors intend
      to
      initiate involuntary bankruptcy proceedings or any actual knowledge of any
      fact
      that, as of the date hereof, would reasonably lead a creditor to do so. After
      giving effect to the transactions contemplated hereby to occur at the Closing,
      no Borrower will be Insolvent (as hereinafter defined). For purposes of this
      Agreement, “Insolvent” means (i) a Borrower is unable to pay its debts and
      liabilities, subordinated, contingent or otherwise, as such debts and
      liabilities become absolute and matured, (ii) a Borrower intends to incur
      or believes that it will incur debts that would be beyond its ability to pay
      as
      such debts mature or (iii) a Borrower has unreasonably small capital with
      which to conduct the business in which it is engaged as such business is now
      conducted and is proposed to be conducted.

     

    3.17 Off-Balance
      Sheet Arrangements.
      There
      is no transaction, arrangement, or other relationship between a Borrower and
      an
      unconsolidated or other off balance sheet entity that is required to be
      disclosed by the Company in its Exchange Act filings and is not so disclosed
      or
      that if made or not made would be reasonably likely to have a Material Adverse
      Effect.

     

    3.18 Foreign
      Corrupt Practices.
      Neither
      any Borrower, nor any Subsidiary, nor any of their respective directors,
      officers, agents, employees or other Persons acting on behalf of such
      subsidiaries has, in the course of their respective actions for or on behalf
      of
      a Borrower or any of its subsidiaries (a) used any corporate funds for any
      unlawful contribution, gift, entertainment or other unlawful expenses relating
      to political activity, (b) made any direct or indirect unlawful payment to
      any foreign or domestic government official or employee from corporate funds,
      (c) violated or is in violation of any provision of the U.S. Foreign
      Corrupt Practices Act of 1977, as amended or (d) made any unlawful bribe,
      rebate, payoff, influence payment, kickback or other unlawful payment to any
      foreign or domestic government official or employee.

     

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

     

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

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    3.21 Employee
      Relations.
      Neither
      any Borrower nor any Subsidiary is a party to any collective bargaining
      agreement or employs any member of a union. No Executive Officer of a Borrower
      (as defined in Rule 501(f) of the Securities Act) has notified such Borrower
      that such officer intends to leave the Borrower or otherwise terminate such
      officer’s employment with the Borrower. No Executive Officer of a Borrower, to
      the knowledge of the Borrowers, is, or is now, in violation of any material
      term
      of any employment contract, confidentiality, disclosure or proprietary
      information agreement, non-competition agreement, or any other contract or
      agreement or any restrictive covenant, and, to the actual knowledge of the
      Borrowers, the continued employment of each such executive officer does not
      subject any Borrower or any Subsidiary to any liability with respect to any
      of
      the foregoing matters. Each Borrower and each Subsidiary are in compliance
      with
      all federal, state, local and foreign laws and regulations respecting employment
      and employment practices, terms and conditions of employment and wages and
      hours, except where failure to be in compliance would not, either individually
      or in the aggregate, reasonably be expected to result in a Material Adverse
      Effect.

     

    3.22 Title.
      Except
      as set forth in the SEC Documents, each Borrower and each Subsidiary have good
      and marketable title to all personal property owned by them which is material
      to
      their respective business, in each case free and clear of all Liens (except
      for
      Permitted Liens). Any real property and facilities held under lease by any
      Borrower or any Subsidiary are held by them under valid, subsisting and
      enforceable leases with such exceptions as are not material and do not interfere
      with the use made and proposed to be made of such property and buildings by
      any
      Borrower or any Subsidiary.

     

    3.23 Intellectual
      Property Rights.
      The
      Borrowers and the Subsidiaries own or possess the rights to use all patents,
      trademarks, domain names (whether or not registered) and any patentable
      improvements or copyrightable derivative works thereof, websites and
      intellectual property rights relating thereto, service marks, trade names,
      copyrights, licenses and authorizations which are necessary for the conduct
      of
      its business as now conducted (collectively, the “Intellectual Property Rights”)
      without any conflict with the rights of others, except any failures as,
      individually or in the aggregate, are not reasonably likely to have a Material
      Adverse Effect. Neither any Borrower nor any Subsidiary has received a written
      notice that the Intellectual Property Rights used by any Borrower or any
      Subsidiary violates or infringes upon the rights of any Person. To the knowledge
      of the Borrowers, all such Intellectual Property Rights are enforceable and
      there is no existing infringement by another Person of any of the Intellectual
      Property Rights. The Borrowers and the Subsidiaries have taken reasonable
      measures to protect the value of the Intellectual Property Rights.

     

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

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    3.25 Tax
      Matters.
      Each
      Borrower and each of the Subsidiaries (a) have made or filed all federal
      and state income and all other tax returns, reports and declarations required
      by
      any jurisdiction to which it is subject, (b) have paid all taxes and other
      governmental assessments and charges that are material in amount, shown or
      determined to be due on such returns, reports and declarations, except those
      being contested in good faith and (c) have set aside on its books
      reasonably adequate provision for the payment of all taxes for periods
      subsequent to the periods to which such returns, reports or declarations apply,
      except where such failure would not have a Material Adverse Effect. There are
      no
      unpaid taxes in any material amount claimed to be due by the taxing authority
      of
      any jurisdiction, and the officers of each Borrower know of no basis for any
      such claim.

     

    3.26 Sarbanes-Oxley
      Act;
      Internal Accounting and Disclosure Controls.
      The
      Company is in compliance in all material respects with the requirements of
      the
      Sarbanes-Oxley Act of 2002 that are effective as of the date hereof and
      applicable to it, and any and all rules and regulations promulgated by the
      SEC
      thereunder that are effective and applicable to it as of the date hereof. The
      Company maintains a system of internal accounting controls sufficient, in the
      judgment of the Company’s board of directors, to provide reasonable assurance
      that (i) transactions are executed in accordance with management’s general
      or specific authorizations, (ii) transactions are recorded as necessary to
      permit preparation of financial statements in conformity with GAAP 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 actions are taken with respect to any
      differences. The Company has established disclosure controls and procedures
      (as
      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
      designed such disclosure controls and procedures to ensure that material
      information relating to the Company, including its Subsidiaries and XFSC, is
      made known to the certifying officers by others within those entities,
      particularly during the period in which the Company’s most recently filed
      periodic report under the Exchange Act, as the case may be, is being prepared.
      The Company’s certifying officers have evaluated the effectiveness of the
      Company’s controls and procedures as of the date prior to the filing date of the
      most recently filed periodic report under the Exchange Act (such date, the
      “Evaluation Date”). The Company presented in its most recently filed periodic
      report under the Exchange Act the conclusions of the certifying officers about
      the effectiveness of the disclosure controls and procedures based on their
      evaluations as of the Evaluation Date. Since the Evaluation Date, there have
      been no significant changes in the Company’s internal controls (as such term is
      defined in Item 307(c) of Regulation S-B under the Exchange Act) or, to the
      Company’s knowledge, in other factors that could significantly affect the
      Company’s internal controls. The Company maintains and will continue to maintain
      a standard system of accounting established and administered in accordance
      with
      United States GAAP and the applicable requirements of the Exchange
      Act.

     

    3.27 Investment
      Company Status.
      The
      Company is not, and immediately after receipt of payment for the Warrant will
      not be, an “investment company,” an “affiliated person” of, “promoter” for or
“principal underwriter” for, or an entity “controlled” by an “investment
      company,” within the meaning of the Investment Company Act.

     

    3.28 Material
      Contracts.
      Each
      contract of a Borrower that involves expenditures or receipts in excess of
      $250,000 (each, a “Material Contract”) is in full force and effect and is valid
      and enforceable in accordance with its terms. Each Borrower is and has been
      in
      full compliance with all applicable terms and requirements of each its Material
      Contract and no event has occurred or circumstance exists that (with or without
      notice or lapse of time) may contravene, conflict with or result in a violation
      or breach of, or give a Borrower or any other entity the right to declare a
      default or exercise any remedy under, or to accelerate the maturity or
      performance of, or to cancel, terminate or modify any Material Contract. Each
      Borrower has not given or received from any other Person any notice or other
      communication (whether oral or written) regarding any actual, alleged, possible
      or potential violation or breach of, or default under, any Material
      Contract.

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    3.29 [Intentionally
      Omitted].

     

    3.30 No
      Disagreements with Accountants.
      There
      are no disagreements of any kind presently existing, or reasonably anticipated
      by the Borrowers to arise, between the Borrowers and the accountants formerly
      or
      presently employed by the Borrowers.

     

    3.31 Senior
      Debt.
      Except
      as disclosed in the SEC Documents, there is no Indebtedness of a Borrower that
      is senior to or ranks
      pari
      passu
      with the
      Note in right of payment, whether with respect of payment of redemptions,
      interest, damages or upon liquidation or dissolution.

     

    3.32 Manipulation
      of Price.
      Each
      Borrower has not, and to its knowledge no one acting on its behalf has, taken,
      directly or indirectly, any action designed to cause or to result or that could
      reasonably be expected to cause or result, in the stabilization or manipulation
      of the price of any security of the Company to facilitate the sale or resale
      of
      the Warrant.

     

    3.33 Listing
      and Maintenance Requirements.
      The
      Company has not, in the 12 months preceding the date hereof, received notice
      from any Trading Market on which the Common Stock is or has been listed or
      quoted to the effect that the Company is not in compliance with the listing
      or
      maintenance requirements of such Trading Market. The Company is in compliance
      with all such maintenance requirements.

     

    3.34 Application
      of Takeover Protections.
      Each
      Borrower and its Board of Directors have taken all necessary action, if any,
      in
      order to render inapplicable any control share acquisition, business
      combination, poison pill (including any distribution under a rights agreement)
      or other similar anti-takeover provision under the respective Certificates
      of
      Incorporation (or similar charter documents) or the laws of its state of
      incorporation that is or could become applicable to the Lender as a result
      of
      the Lender and the Borrowers fulfilling their obligations or exercising their
      rights under the Transaction Documents, including without limitation the
      Company’s issuance of the Warrant and the Lender’s ownership of the
      Warrant.

     

    3.35 Disclosure.
      All
      written disclosure provided to the Lender regarding each Borrower, its business
      and the transactions contemplated hereby, including the Schedules to this
      Agreement, furnished by or on behalf of the Borrowers are true and correct
      and
      do not contain any untrue statement of a material fact or omit to state any
      material fact necessary in order to make the statements made therein, in light
      of the circumstances under which they were made, not misleading; provided
      however, the Borrowers make no representation as to studies and reports prepared
      by third parties not engaged by the Borrowers and included in the materials
      delivered to Lender.

     

    ARTICLE
      IV

    REPRESENTATIONS
      AND WARRANTIES OF THE PURCHASER

    

    The
      Lender hereby represents and warrants to the Borrowers as of the date of this
      Agreement as follows:

    

    4.1 Organization;
      Authority.
      The
      Lender is an entity duly organized, validly existing and in good standing under
      the laws of the jurisdiction of its organization with full right, corporate
      or
      partnership power and authority to enter into and to consummate the transactions
      contemplated by the Transaction Documents and otherwise to carry out its
      obligations thereunder. The execution, delivery and performance by the Lender
      of
      the transactions contemplated by this Agreement have been duly authorized by
      all
      necessary partnership or similar action on the part of the Lender. Each
      Transaction Document to which it is a party has been duly executed by the
      Lender, and when delivered by the Lender in accordance with the terms hereof,
      will constitute the valid and legally binding obligation of the Lender,
      enforceable against it in accordance with its terms, except (i) as limited
      by
      general equitable principles and applicable bankruptcy, insolvency,
      reorganization, moratorium and other laws of general application affecting
      enforcement of creditors’ rights generally, (ii) as limited by laws relating to
      the availability of specific performance, injunctive relief or other equitable
      remedies and (iii) insofar as indemnification and contribution provisions may
      be
      limited by applicable law.

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    4.2 Own
      Account.
      The
      Lender understands that the Warrant is a “restricted security” and has not been
      registered under the Securities Act or any applicable state securities law
      and
      is acquiring the Warrant as principal for its own account and not with a view
      to
      or for distributing or reselling such Warrant or Warrant Shares or any part
      thereof except in compliance with the Securities Act, has no present intention
      of distributing the Warrant or Warrant Shares and has no arrangement or
      understanding with any other persons regarding the distribution of the Warrant
      or Warrant Shares (this representation and warranty not limiting the Lender’s
      right to sell the Warrant or Warrant Shares pursuant to a Registration Statement
      (defined below) or otherwise in compliance with applicable federal and state
      securities laws), except in compliance with the Securities Act. The Lender
      is
      acquiring the Warrant hereunder in the ordinary course of its business. The
      Lender does not have any agreement or understanding, directly or indirectly,
      with any Person to distribute the Warrant or Warrant Shares.

     

    4.3 Lender
      Status.
      At the
      time the Lender was offered the Warrant, it was, and at the date hereof it
      is,
      and on each date on which it exercises any warrant issued by the Company, it
      will be either: (i) an “accredited investor” as defined in Rule 501(a)(1),
      (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified
      institutional buyer” as defined in Rule 144A(a) under the Securities
      Act.

     

    4.4 Experience
      of Such Lender.
      The
      Lender, either alone or together with its representatives, has such knowledge,
      sophistication and experience in business and financial matters so as to be
      capable of evaluating the merits and risks of the prospective investment in
      the
      Warrant and the shares issuable thereunder, and has so evaluated the merits
      and
      risks of such investment. The Lender is able to bear the economic risk of an
      investment in the Warrant and the shares issuable thereunder and, at the present
      time, is able to afford a complete loss of such investment.

     

    4.5 General
      Solicitation.
      The
      Lender is not purchasing the Warrant as a result of any advertisement, article,
      notice or other communication regarding the Warrant published in any newspaper,
      magazine or similar media or broadcast over television or radio or presented
      at
      any seminar or any other general solicitation or general
      advertisement.

     

    4.6 No
      Short Position.
      Neither
      the Lender nor any of its affiliates has an open short position in the Common
      Stock of the Company. From and after Closing, the Lender will not use any share
      of Common Stock acquired pursuant to this Agreement to cover any short position
      until such time as the Registration Statement covering such share of Common
      Stock has been declared effective by the Commission. For purposes of this
      Agreement a “short sale” or “short position” includes, without limitation, all
“short sales” as defined in Rule 200 promulgated under Regulation SHO under the
      1934 Act and all types of direct and indirect stock pledges, forward sale
      contracts, options, puts, calls, swaps and similar arrangements (including
      on a
      total return basis), and sales and other transactions through non-US broker
      dealers or foreign regulated brokers.

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    ARTICLE
      V

    CONDITIONS
      TO CLOSING OF THE PURCHASER

    

    The
      obligation of the Lender to make the Loan and purchase the Warrant at the
      Closing is subject to the fulfillment to the Lender’s satisfaction on or prior
      to the Closing Date of each of the conditions set forth in Sections 5.1 through
      5.7 below, any of which may be waived by such Lender. The obligation of the
      Lender to make an advance in connection with a Subsequent Funding is subject
      to
      the fulfillment to the Lender’s satisfaction on or prior to the date of each
      such Subsequent Funding of each of Sections 5.2 though 5.7 below, any of which
      may be waived by such Lender. The release of funds from the Escrow Account
      is
      subject to the fulfillment to the Lender’s satisfaction on or prior to the date
      of such release of each of Sections 5.2 through 5.10 below, any of which may
      be
      waived by such Lender.

    

    5.1 Other
      Agreements and Documents.
      The
      Borrowers shall have delivered the following agreements and
      documents:

     

    (a) The
      Note
      in the form of Exhibit
      A
      attached
      hereto, executed by the Borrowers;

     

    (b) The
      Series J Warrant in the form of Exhibit
      B
      attached
      hereto;

     

    (c) The
      Escrow Agreement in the form of Exhibit
      C
      attached
      hereto;

     

    (d) The
      Security Agreement in the form of Exhibit
      D
      attached
      hereto, executed by each Borrower;

     

    (e) The
      Guaranty Agreement in the form of Exhibit
      E
      attached
      hereto, executed by each Subsidiary;

     

    (f) The
      Guarantor Security Agreement in the form of Exhibit
      F
      attached
      hereto, executed by each Subsidiary;

     

    (g) The
      Registration Rights Agreement in the form of Exhibit
      G
      attached
      hereto, executed by the Company;

     

    (h) An
      opinion of counsel to the Borrowers, dated the date of the Closing,
      substantially in the form of
      Exhibit H
      hereto,
      with such exceptions and limitations as shall be reasonably acceptable to
      counsel to the Lender;

     

    (i) The
      Irrevocable Transfer Agent Instructions, substantially in the form
      of Exhibit
      I
      attached
      hereto, shall have been delivered to the Company’s transfer agent;

     

    (j) Financing
      Statements on Form UCC-1 with respect to the personal property and assets of
      each Borrower and each Subsidiary as to which the Lender will hold a security
      interest;

     

    (k) A
      Certificate of Good Standing from the state of incorporation of each Borrower
      and each Subsidiary;

     

    (l) A
      certificate of the Secretary of each Borrower, dated as of the Closing Date,
      certifying the Board resolutions approving this Agreement and the transactions
      contemplated hereby and in a form acceptable to Lender;

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    (m) A
      certificate of each Borrower’s CEO, dated as of the Closing Date, certifying the
      fulfillment of the conditions specified in Sections 5.2 and 5.3 of this
      Agreement and such other matters as the Lender shall reasonably request;
      and

     

    (n) A
      completed and duly executed Florida documentary stamp tax return on Form
      DR-228.

     

    5.2 Representations
      and Warranties Correct.
      The
      representations and warranties in Article III hereof shall be true and correct
      when made, and shall be true and correct on the Closing Date, the date of any
      Subsequent Funding, and the Escrow Release Date, as applicable, with the same
      force and effect as if they had been made on and as of the Closing Date, the
      Subsequent Funding Date, and the Escrow Release Date, as applicable, except
      to
      the extent any such representation or warranty is stated to relate solely to
      an
      earlier date, in which case such representation or warranty shall be true and
      correct on and as of such earlier date.

     

    5.3 Performance.
      All
      covenants, agreements and conditions contained in this Agreement to be performed
      or complied with by the Borrowers on or prior to the Closing Date, the
      Subsequent Funding Date, and the Escrow Release Date, as applicable, shall
      have
      been performed or complied with by the Borrowers in all material
      respects.

     

    5.4 No
      Impediments.
      Neither
      the Borrowers nor the Lender shall be subject to any order, decree or injunction
      of a court or administrative agency of competent jurisdiction that prohibits
      the
      transactions contemplated hereby or would impose any material limitation on
      the
      ability of such Lender to exercise its full rights under the Note or full rights
      of ownership of the Warrant. At the time of the Closing and the Subsequent
      Funding, the Loan and purchase of the Warrant by the Lender hereunder shall
      be
      legally permitted by all laws and regulations to which the Lender and the
      Borrowers are subject.

     

    5.5 Trading
      Markets.
      The
      listing or trading of the Warrant Shares on each Trading Market shall have
      been
      approved by such Trading Market authority.

     

    5.6 Material
      Adverse Changes; Investigation.
      There
      shall have been no change which would have a Material Adverse Effect on Borrower
      or any Guarantor since the date of the most recent financial statements of
      such
      person delivered to Lender from time to time. No fact shall have been discovered
      with regard to (a) a Borrower, Subsidiary or XXX or any affiliates thereof
      or
      (b) this transaction, which in the Lender’s determination would make the
      consummation of the transactions contemplated by this Agreement not in the
      Lender’s best interests.

     

    5.7 Further
      Assurances.
      Borrower shall have delivered such further documentation or assurances as Lender
      may reasonably require.

     

    5.8 Claims
      Purchase Agreement.
      The
      Borrowers shall have delivered the Claims Purchase Agreement in form and
      substance reasonably satisfactory to the Lender, executed by XFSC and XXX.
      The
      Borrowers shall have delivered to the Lender irrevocable instructions, signed
      by
      Total Bank and XFSC, to deposit all claims receipts into the Claims Purchase
      Account, and otherwise in form and substance reasonably satisfactory to the
      Lender.

     

    5.9 Control
      Agreement.
      XFSC
      shall have established a segregated bank account at TotalBank in the name of
      XFSC (the “Claims Purchase Account”), which shall be (a) the account owned by
      XFSC identified in the Claims Purchase Agreement, (b) pledged to the Lender
      as
      part of the security for the Loan, and (c) governed by an account control
      agreement in form and substance reasonably satisfactory to the Lender, as the
      same may be amended, supplemented or otherwise modified from time to time with
      the prior unanimous written consent of the parties thereto. 

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    5.10 Consent.
      The
      Borrowers shall have obtained the consent of Vicis and, if necessary, of
      Gottbetter to the transactions contemplated hereby and shall have entered in
      to
      an agreement with Gottbetter that subordinates any security interest held by
      Gottbetter to the security interests obtained by the Lender under the
      Transaction Documents.

     

    ARTICLE
      VI

    CONDITIONS
      TO CLOSING OF THE BORROWERS

    

    The
      Borrowers’ obligations to issue the Note and the Company’s obligation to sell
      the Warrant at the Closing are subject to the fulfillment to its satisfaction
      on
      or prior to the Closing Date of each of the following conditions:

    

    6.1 Representations.
      The
      representations made by the Lender pursuant to Article IV hereof shall be
      true and correct when made and shall be true and correct on the Closing
      Date.

     

    6.2  No
      Impediments.
      Neither
      the Borrowers nor the Lender shall be subject to any order, decree or injunction
      of a court or administrative agency of competent jurisdiction that prohibits
      the
      transactions contemplated hereby or would impose any material limitation on
      the
      ability of the Lender to exercise full rights of ownership of the Warrant.
      At
      the time of the Closing, the making of the Loan and purchase of the Warrant
      by
      the Lender hereunder shall be legally permitted by all laws and regulations
      to
      which the Lender and the Borrowers are subject.

     

    ARTICLE
      VII

    AFFIRMATIVE
      COVENANTS

    

    Each
      of
      the Borrowers hereby covenants and agrees, so long as any amounts remain
      outstanding under the Note, as follows:

    

    7.1 Maintenance
      of Corporate Existence.
      Each
      Borrower shall and shall cause its subsidiaries to, maintain in full force
      and
      effect its corporate existence, rights and franchises and all material terms
      of
      licenses and other rights to use licenses, trademarks, trade names, service
      marks, copyrights, patents or processes owned or possessed by it and necessary
      to the conduct of its business, except where the failure to maintain such
      corporate existence, rights, franchises, licenses and rights to use licenses,
      trademarks, trade names, service marks, copyrights, patents or processes would
      not (a) result in a Material Adverse Effect or (b) materially adversely affect
      the rights of Lender under any Transaction Document.

     

    7.2 Maintenance
      of Properties.
      Each
      Borrower shall and shall cause its subsidiaries to, keep each of its properties
      necessary to the conduct of its business in good repair, working order and
      condition, reasonable wear and tear excepted, and from time to time make all
      needful and proper repairs, renewals, replacements, additions and improvements
      thereto; and each Borrower shall and shall its subsidiaries to at all times
      comply with each material provision of all material leases to which it is a
      party or under which it occupies property.

     

    7.3 Payment
      of Taxes.
      Each
      Borrower shall and shall cause its subsidiaries to, promptly pay and discharge,
      or cause to be paid and discharged when due and payable, all lawful taxes,
      assessments and governmental charges or levies imposed upon the income, profits,
      assets, property or business of the Borrower and its subsidiaries; provided,
      however, that any such tax, assessment, charge or levy need not be paid if
      the
      validity thereof shall be contested timely and in good faith by appropriate
      proceedings, if the Borrower or its subsidiaries shall have set aside on its
      books adequate reserves with respect thereto, and the failure to pay shall
      not
      be prejudicial in any material respect to the holders of the Warrant, and
      provided, further, that the Borrower or its subsidiaries will pay or cause
      to be
      paid any such tax, assessment, charge or levy forthwith upon the commencement
      of
      proceedings to foreclose any Lien which may have attached as security
      therefor.

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    7.4 Payment
      of Indebtedness.
      Each
      Borrower shall, and shall cause its subsidiaries to, pay or cause to be paid
      when due all Indebtedness incident to the operations of the Borrower or its
      subsidiaries (including, without limitation, claims or demands of workmen,
      materialmen, vendors, suppliers, mechanics, carriers, warehousemen and
      landlords) which, if unpaid might become a Lien (except for Permitted Liens)
      upon the assets or property of the Borrower or its subsidiaries, except where
      the Borrower (or its subsidiary, as the case may be) disputes the payment of
      such Indebtedness in good faith by appropriate proceedings.

     

    7.5 Reservation
      of Common Stock.
      The
      Company shall continue to reserve, free of preemptive rights and other similar
      contractual rights of stockholders, a number of its authorized but unissued
      shares of Common Stock not less than one hundred percent (100%) of the aggregate
      number of shares of Common Stock to effect the exercise of the
      Warrant.

     

    7.6 Maintenance
      of Insurance.
      Each
      Borrower shall and shall cause its subsidiaries to, keep its assets which are
      of
      an insurable character insured by financially sound and reputable insurers
      against loss or damage by theft, fire, explosion and other risks customarily
      insured against by companies in the line of business of the Borrower or its
      subsidiaries, in amounts sufficient to prevent the Borrower and its subsidiaries
      from becoming a co-insurer of the property insured; and the Borrower shall
      and
      shall cause its subsidiaries to maintain, with financially sound and reputable
      insurers, insurance against other hazards and risks and liability to persons
      and
      property to the extent and in the manner customary for companies in similar
      businesses similarly situated or as may be required by law, including, without
      limitation, general liability, fire and business interruption insurance, and
      product liability insurance as may be required pursuant to any license agreement
      to which the Borrower or its subsidiaries is a party or by which it is
      bound.

     

    7.7 Notice
      of Adverse Change.
      The
      Borrowers shall promptly give notice to all holders of the Note or Warrant
      (but
      in any event within seven (7) days) after becoming aware of the existence of
      any
      condition or event which constitutes, or the occurrence of, any of the
      following:

     

    (a) any
      Event
      of Default (as hereinafter defined);

     

    (b) any
      other
      event of noncompliance by any Borrower or its subsidiaries under this Agreement
      in any material respect;

     

    (c) the
      institution of an action, suit or proceeding against any Borrower or any
      subsidiary before any court, administrative agency or arbitrator, including,
      without limitation, any action of a foreign government or instrumentality,
      which, if adversely decided, would result in a Material Adverse Effect whether
      or not arising in the ordinary course of business; or

     

    (d) any
      information relating to a Borrower or any subsidiary which would reasonably
      be
      expected to result in a material adverse effect on its inability to perform
      its
      obligations of under any Transaction Document.

     

    Any
      notice given under this Section 7.7 shall specify the nature and period of
      existence of the condition, event, information, development or circumstance,
      the
      anticipated effect thereof and what actions the Borrowers have taken and/or
      proposes to take with respect thereto.

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    7.8 Compliance
      With Agreements.
      Each
      Borrower shall and shall cause its subsidiaries to comply in all material
      respects, with the terms and conditions of all material agreements, commitments
      or instruments to which the Borrower or any of its subsidiaries is a party
      or by
      which it or they may be bound.

     

    7.9 Other
      Agreements.
      Each
      Borrower shall not enter into any agreement in which the terms of such agreement
      would restrict or impair the right or ability to perform of the Borrower under
      any Transaction Document.

     

    7.10  Compliance
      With Laws.
      Each
      Borrower shall and shall cause each of its subsidiaries to duly comply in all
      material respects with any material laws, ordinances, rules and regulations
      of
      any foreign, federal, state or local government or any agency thereof, or any
      writ, order or decree, and conform to all valid requirements of governmental
      authorities relating to the conduct of their respective businesses, properties
      or assets.

     

    7.11  Protection
      of Licenses, etc.
      Each
      Borrower shall and shall cause its subsidiaries to, maintain, defend and protect
      to the best of their ability licenses and sublicenses (and to the extent the
      Borrower or a subsidiary is a licensee or sublicensee under any license or
      sublicense, as permitted by the license or sublicense agreement), trademarks,
      trade names, service marks, patents and applications therefor and other
      proprietary information owned or used by it or them, (except where the failure
      to defend and protect such licenses and sublicenses would not (a) result in
      a
      Material Adverse Effect or (b) materially adversely affect the rights of Lender
      under any Transaction Document) and shall keep duplicate copies of any licenses,
      trademarks, service marks or patents owned or used by it, if any, at a secure
      place selected by the Borrower.

     

    7.12 Accounts
      and Records; Inspections.

     

    (a) Each
      Borrower shall keep true records and books of account in which full, true and
      correct entries will be made of all dealings or transactions in relation to
      the
      business and affairs of the Borrower and its subsidiaries in accordance with
      GAAP applied on a consistent basis.

     

    (b) Each
      Borrower shall permit the holder(s) of the Note and the Warrant or any of such
      holder’s officers, employees or representatives during regular business hours of
      the Borrower, upon reasonable notice and as often as such holder may reasonably
      request, to visit and inspect the offices and properties of the Borrower and
      its
      subsidiaries and to make extracts or copies of the books, accounts and records
      of the Borrower or its subsidiaries at such holder’s expense.

     

    (c) Nothing
      contained in this Section 7.12 shall be construed to limit any rights which
      a
      holder of the Note or the Warrant may otherwise have with respect to the books
      and records of any Borrower or its subsidiaries, to inspect its properties
      or to
      discuss its affairs, finances and accounts.

     

    7.13 Maintenance
      of Office.
      Each
      Borrower will maintain its principal office at the address of the Borrower
      set
      forth in Section 12.6 of this Agreement where notices, presentments and demands
      in respect of this Agreement, the Note or the Warrant may be made upon the
      Borrower, until such time as the Borrower shall notify the holders of the Note
      and the Warrant in writing, at least thirty (30) days prior thereto, of any
      change of location of such office.

    
      
        
        

      

      
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    7.14 Use
      of
      Proceeds.
      The
      Borrowers shall use the proceeds received from the Loan and any amounts received
      from the collection of Prescription Claims purchased under the Claims Purchase
      Agreement solely for the purchase of Prescription Claims from XXX pursuant
      to
      the Claims Purchase Agreement under the terms and conditions set forth in
      Section 1.5 of this Agreement, except that the Borrowers may (i) use the
      $300,000 referred to in Section 1.3(a)(ii)(B) for any business purpose of the
      Borrowers, (ii) make payments to XXX as permitted in Section 1.4 of this
      Agreement, and (iii) use Permitted Withdrawals for any business purpose of
      the
      Borrowers.

     

    7.15 Payments
      on the Note.
      The
      Borrowers shall make all payments required by the Note in the time, the manner
      and the form as provided in the Note.

     

    7.16 SEC
      Reporting Requirements.
      For so
      long as the Lender beneficially owns the Warrant, and until such time as all
      Warrant Shares are saleable by the Lender without restriction as to volume
      or
      manner of sale under Rule 144 under the Securities Act, the Company shall timely
      file all reports required to be filed with the Commission pursuant to the
      Exchange Act, and the Company shall not terminate its status as an issuer
      required to file reports under the Exchange Act even if the Exchange Act or
      the
      rules and regulations thereunder would permit such termination. As long as
      the
      Lender owns the Warrant or Warrant Shares, the Company will prepare and furnish
      to the Lender and make publicly available in accordance with Rule 144 or any
      successor rule such information as is required for the Lender to sell the
      Warrant or Warrant Shares under Rule 144 without regard to the volume and manner
      of sale limitations. The Company further covenants that it will take such
      further action as any holder of the Warrant or Warrant Shares may reasonably
      request, all to the extent required from time to time to enable such Person
      to
      sell such Warrant or Warrant Shares without registration under the Securities
      Act within the limitation of the exemptions provided by Rule 144.

     

    7.17 Listing
      Maintenance.
      The
      Company hereby agrees to use best efforts to maintain the listing or trading
      of
      the Common Stock on a Trading Market. The Company further agrees, if the Company
      applies to have the Common Stock traded on any other Trading Market, it will
      include in such application all of the Warrant Shares, and will take such other
      action as is necessary to cause all of the Warrant Shares to be listed on such
      other Trading Market as promptly as possible. The Company will take all action
      reasonably necessary to continue the listing and trading of its Common Stock
      on,
      and will comply in all respects with the Company’s reporting, filing and other
      obligations under the bylaws or rules of, each such Trading Market on which
      the
      Company’s Common Stock is listed or trades.

     

    7.18 Disclosure
      of Transaction.
      The
      Company shall issue a press release describing the material terms of the
      transactions contemplated hereby (the “Press Release”) and shall also file with
      the Commission a Current Report on Form 8-K (the “Form 8-K”) describing the
      material terms of the transactions contemplated hereby (and attaching as
      exhibits thereto this Agreement, the Registration Rights Agreement, the Security
      Agreement, the Collateral Assignment, the Guaranty Agreements, the Guarantor
      Security Agreements, the form of Warrant and the Press Release) as soon as
      practicable following the Closing Date but in no event more than four (4)
      Trading Days (defined below) following the Closing Date, which Press Release
      and
      Form 8-K shall be subject to prior review and reasonable comment by the Lender.
      For purposes of this Agreement, “Trading Day” means any day during which the
      principal Trading Market on which the Common Stock is listed or traded shall
      be
      open for trading.

     

    7.19 Claims
      Reporting.
      Within
      five (5) Trading Days of the end of each calendar month, or more frequently
      if
      the Lender reasonably so requires, the Borrowers will deliver, or cause to
      be
      delivered, to the Lender each of the following, each of which shall be in form
      and detail acceptable to the Lender:

     

    (a) A
      calculation of the unpaid Prescription Claims, Acceptable Receivables, and
      Restricted Funds set forth on a completed Borrowing Base Certificate, together
      with collection reports, in each case determined as of the end of the
      immediately preceding week or a more recent date and certified as true and
      correct by the Chief Executive Officer of each Borrower. The Borrowers shall
      also provide the information required by the immediately preceding sentence
      to
      the Lender, together with agings of unpaid Prescription Claims submitted for
      payment, on a monthly basis within 10 days after the end of each month,
      calculated as of the last day of the month most recently ended. In addition,
      the
      Borrowers shall provide a completed Borrowing Base Certificate to the Lender
      concurrently with any Proposed Purchase.

    
      
        
        

      

      
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    (b) All
      reports that XFSC is entitled to access, or has received from XXX, under the
      Claims Purchase Agreement dated as of the end of the immediately preceding
      week
      or a more recent date, including, as such reports are referenced in the Claims
      Purchase Agreement, a (i) Claim Detail Report, (ii) Accounts Receivable Aging
      Report,
      (iii) Weekly and Monthly Payment Report, and (iv) EzMonitor Report.

     

    7.20 Claims
      Purchase Account.
      XFSC
      shall cause TotalBank to permit the holder(s) of the Note and the Warrant or
      any
      of such holder’s officers, employees or representatives to have complete, real
      time, viewing access to the Claims Purchase Account at all times.

     

    7.21 Further
      Assurances.
      From
      time to time, each Borrower shall execute and deliver to the Lender and the
      Lender shall execute and deliver to the Borrowers such other instruments,
      certificates, agreements and documents and take such other action and do all
      other things as may be reasonably requested by the other party in order to
      implement or effectuate the terms and provisions of this Agreement and any
      of
      the Transaction Documents.

     

    For
      purposes of Articles VII-IX, the term “subsidiary” shall be deemed to include
      each Subsidiary and any subsidiary of the Borrower acquired or formed after
      the
      date hereof.

    

    ARTICLE
      VIII

    NEGATIVE
      COVENANTS

    

    Each
      Borrower hereby covenants and agrees, so long as any amounts under the Note
      remain outstanding, it will not (and not allow any subsidiary to), without
      the
      prior written consent of the holder(s) of the Note, directly or
      indirectly:

    

    8.1 Distributions
      and Redemptions.
      (i) Except with respect to the Series B Preferred Stock of the Company,
      declare or pay any dividends or make any distributions to any holder(s) of
      any
      shares of capital stock of the Company or (ii) purchase, redeem or
      otherwise acquire for value, directly or indirectly, any shares of Common Stock
      of the Company or warrants or rights to acquire such Common Stock, except as
      may
      be required by the terms of the Series B Preferred Stock of the Company; or
      (iii) purchase, redeem or otherwise acquire for value, directly or indirectly,
      any shares of preferred stock of the Company or warrants or rights to acquire
      such stock, except as may be required by the terms of such preferred
      stock.

     

    8.2 Reclassification.
      Effect
      any reclassification, combination or reverse stock split of the Common
      Stock.

     

    8.3 Liens.
      Except
      as provided in this Agreement, create, incur, assume or permit to exist any
      mortgage, lien, pledge, charge, security interest or other encumbrance, or
      any
      interest or title of any vendor, lessor, lender or other secured party to or
      of
      a Borrower or any subsidiary under any conditional sale or other title retention
      agreement or any capital lease, upon or with respect to any property or asset
      of
      either Borrower or any subsidiary (each, a “Lien” and collectively, “Liens”),
      except that the foregoing restrictions shall not apply to:

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    (a) liens
      for
      taxes, assessments and other governmental charges, if payment thereof shall
      not
      at the time be required to be made, and provided such reserve as shall be
      required by generally accepted accounting principles consistently applied shall
      have been made therefor;

     

    (b) liens
      of
      workmen, materialmen, vendors, suppliers, mechanics, carriers, warehouseman
      and
      landlords or other like liens, incurred in the ordinary course of business
      for
      sums not then due or being contested in good faith, if an adverse decision
      in
      which contest would not materially affect the business of a
      Borrower;

     

    (c) liens
      existing on the date hereof securing Indebtedness of a Borrower or any
      subsidiary that are senior to liens on the same assets held by the Lender and
      that are filed prior to the date hereof and disclosed in the SEC
      Documents;

     

    (d) liens
      securing Indebtedness of a Borrower or any subsidiary which is in an aggregate
      principal amount not exceeding $250,000 and which liens are subordinate to
      liens
      on the same assets held by the Lender;

     

    (e) statutory
      liens of landlords, statutory liens of banks and rights of set-off, and other
      liens imposed by law, in each case incurred in the ordinary course of business
      (i) for amounts not yet overdue or (ii) for amounts that are overdue
      and that are being contested in good faith by appropriate proceedings, so long
      as such reserves or other appropriate provisions, if any, as shall be required
      by generally accepted accounting principles shall have been made for any such
      contested amounts;

     

    (f) liens
      incurred or deposits made in the ordinary course of business in connection
      with
      workers’ compensation, unemployment insurance and other types of social
      security, or to secure the performance of tenders, statutory obligations, surety
      and appeal bonds, bids, leases, government contracts, trade contracts,
      performance and return-of-money bonds and other similar obligations (exclusive
      of obligations for the payment of borrowed money);

     

    (g) any
      attachment or judgment lien not constituting an Event of Default;

     

    (h) easements,
      rights-of-way, restrictions, encroachments, and other minor defects or
      irregularities in title, in each case which do not and will not interfere in
      any
      material respect with the ordinary conduct of the business of a Borrower or
      any
      of its subsidiaries;

     

    (i) any
      (i) interest or title of a lessor or sublessor under any lease,
      (ii) restriction or encumbrance that the interest or title of such lessor
      or sublessor may be subject to, or (iii) subordination of the interest of
      the lessee or sublessee under such lease to any restriction or encumbrance
      referred to in the preceding clause (ii), so long as the holder of such
      restriction or encumbrance agrees to recognize the rights of such lessee or
      sublessee under such lease;

     

    (j) liens
      in
      favor of customs and revenue authorities arising as a matter of law to secure
      payment of customs duties in connection with the importation of
      goods;

     

    (k) any
      zoning or similar law or right reserved to or vested in any governmental office
      or agency to control or regulate the use of any real property;

     

    (l) liens
      securing obligations (other than obligations representing debt for borrowed
      money) under operating, reciprocal easement or similar agreements entered into
      in the ordinary course of business of a Borrower and its
      subsidiaries;

     

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    (m) the
      security interest of XXX in the Claims Purchase Account; and

     

    (n) the
      replacement, extension or renewal of any lien permitted by this Section 8.3
      upon
      or in the same property theretofore subject or the replacement, extension or
      renewal (without increase in the amount or change in any direct or contingent
      obligor) of the Indebtedness secured thereby.

     

    All
      of
      the foregoing Liens described in subsections (a) – (n) above shall be
      referred to as “Permitted Liens”.

    

    8.4 Indebtedness.
      Create,
      incur, assume, suffer, permit to exist, or guarantee, directly or indirectly,
      any Indebtedness, excluding, however, from the operation of this
      covenant:

     

    (a) Indebtedness
      to the extent disclosed in the SEC Documents filed prior to the date hereof
      and
      otherwise existing on the date hereof;

     

    (b) Indebtedness
      which may, from time to time be incurred or guaranteed by a Borrower, which
      in
      the aggregate principal amount does not exceed $250,000 and is subordinate
      to
      the Indebtedness under this Agreement;

     

    (c) the
      endorsement of instruments for the purpose of deposit or collection in the
      ordinary course of business;

     

    (d) Indebtedness
      relating to contingent obligations of a Borrower and its subsidiaries under
      guaranties in the ordinary course of business of the obligations of suppliers,
      customers, and licensees of a Borrower and its subsidiaries;

     

    (e) Indebtedness
      relating to loans from a Borrower to its subsidiaries;

     

    (f) Indebtedness
      relating to capital leases in an amount not to exceed $250,000;

     

    (g)  accounts
      or notes payable arising out of the purchase of merchandise, supplies,
      equipment, software, computer programs or services in the ordinary course of
      business.

     

    8.5 Liquidation
      or Sale.
      Sell,
      transfer, lease or otherwise dispose of 10% or more of its consolidated assets
      (as shown on the most recent financial statements of either Borrower or a
      subsidiary, as the case may be) in any single transaction or series of related
      transactions (other than the sale of inventory in the ordinary course of
      business), or liquidate, dissolve, recapitalize or reorganize in any form of
      transaction.

     

    8.6 Change
      of Control Transaction.
      Enter
      into a Change in Control Transaction. For purposes of this Agreement, “Change in
      Control Transaction” means the occurrence of (a) an acquisition by an
      individual or legal entity or “group” (as described in Rule 13d-5(b)(1)
      promulgated under the Exchange Act) of effective control (whether through legal
      or beneficial ownership of capital stock of a Borrower, by contract or
      otherwise) of in excess of fifty percent (50%) of the voting securities of
      a
      Borrower (except that the acquisition of the Warrant by the Lender shall not
      constitute a Change in Control for purposes of this Section), (b) a
      replacement at one time or over time of more than one-half of the members of
      the
      Board of a Borrower that is not approved by a majority of those individuals
      who
      are members of the Board on the date hereof (or by those individuals who are
      serving as members of the Board on any date whose nomination to the Board was
      approved by a majority of the members of the Board who are members on the date
      hereof), (c) the merger or consolidation of a Borrower or any subsidiary of
      a Borrower in one or a series of related transactions with or into another
      entity (except in connection with a merger involving a Borrower solely for
      the
      purpose, and with the sole effect, of reorganizing that Borrower under the
      laws
      of another jurisdiction; provided that the certificate of incorporation and
      bylaws (or similar charter or organizational documents) of the surviving entity
      are substantively identical to those of the Borrower and do not otherwise
      adversely impair the rights of the Lender), or (d) the execution by a
      Borrower of an agreement to which the Borrower is a party or by which it is
      bound, providing for any of the events set forth above in (a), (b) or
      (c).

    
      
        
        

      

      
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    8.7 Amendment
      of Charter Documents.
      Amend
      or waive any provision of the Certificate of Incorporation or Bylaws of a
      Borrower in any way that materially adversely affects the rights of the Lender
      without the prior written consent of the Lender.

     

    8.8 Loans
      and Advances.
      Except
      for loans and advances outstanding as of the Closing Date and loans and advances
      to clients through XFSC, directly or indirectly, make any advance or loan to,
      or
      guarantee any obligation of, any Person, except for intercompany loans or
      advances and those provided for in this Agreement. 

     

    8.9 Transactions
      with Affiliates.

     

    (a) Make
      any
      intercompany transfers from XFSC of monies or other assets in any single
      transaction or series of transactions, except as otherwise permitted in this
      Agreement.

     

    (b) Engage
      in
      any transaction with any of the officers, directors, employees or affiliates
      of
      a Borrower or of its subsidiaries, except on terms no less favorable to the
      Borrower or the subsidiary as could be obtained in an arm’s length
      transaction.

     

    (c)  Divert
      (or permit anyone to divert) any business or opportunity of a Borrower or
      subsidiary to any other corporate or business entity.

     

    8.10 Other
      Business.
      Enter
      into or engage, directly or indirectly, in any business other than the business
      currently conducted or proposed to be conducted as of the date of this Agreement
      by a Borrower or any subsidiary, except where the entry into such new lines
      of
      business in the aggregate does not involve expenditures by a Borrower or its
      subsidiaries in excess of $250,000 in a calendar year or the issuance of
      securities in the aggregate with a value in excess of $250,000 in a calendar
      year.

     

    8.11 Investments.
      Make
      any investments in excess of $250,000 in a calendar year in the aggregate in,
      or
      purchase any stock, option, warrant, or other security or evidence of
      Indebtedness of, any Person (exclusive of any subsidiary), other than (i)
      obligations of the United States Government or certificates of deposit or other
      instruments maturing within one year from the date of purchase from financial
      institutions with capital in excess of $50 million; (ii) loans made to, and
      purchases of accounts receivable of, healthcare providers in the ordinary course
      of business of XFSC; and (iii) loans in the aggregate amount of $999,298.98
      from
      the Company to PAS.

     

    8.12 Registration
      Statements.
      Without
      the consent of the Lender, file any registration statement with the Commission
      until the earlier of: (i) 60 Trading Days following the date that a registration
      statement or registration statements registering all the Warrant Shares is
      declared effective by the Commission; and (ii) the date the Warrant Shares
      are
      saleable by Lender under Rule 144 under the Securities Act without limitation
      as
      to volume or manner of sale; provided that this Section shall not prohibit
      the
      Company from filing a registration statement on Form S-4 or other applicable
      form for securities to be issued in connection with acquisitions of businesses
      by a Borrower or its subsidiaries, or post effective amendments to registration
      statements that were declared effective prior to the date hereof or to a
      registration statement filed with the Commission on Forms S-4 or
      S-8.

    
      
        
        

      

      
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    8.13  Expand
      the Board of Directors.
      Except
      as required by this Agreement, expand the size of the Board of Directors of
      a
      Borrower.

     

    8.14 Restricted
      Funds.
      Except
      as otherwise permitted by this Agreement, use, transfer or pledge the Restricted
      Funds for any reason.

     

    8.15 No
      Modification of Claims Purchase Agreement.
      Without
      prior written consent of the Lender, which consent will not be unreasonably
      withheld, conditioned or delayed, XFSC shall not materially amend or modify
      the
      Claims Purchase Agreement, or consent to any material amendment or modification
      of the Claims Purchase Agreement.

     

    ARTICLE
      IX

    EVENTS
      OF DEFAULT

     

    9.1 Events
      of Default.
      The
      occurrence and continuance of any of the following events shall constitute
      an
      event of default under this Agreement (each, an “Event of Default” and,
      collectively, “Events of Default”):

     

    (a) if
      a
      Borrower shall default in the payment of any sums due under the Note or other
      Transaction Document when the same shall become due and payable; and in each
      case such default shall have continued without cure for five (5) days after
      written notice (a “Default Notice”) is given to the Borrowers of such
      default;

     

    (b) if
      (i) a
      Borrower shall default in the performance of any of the covenants contained
      in
      Articles VII or VIII hereof and (x) such default shall have continued without
      cure for ten (10) Trading Days after a Default Notice is given to the Borrowers
      or (y) such default shall have materially adversely affected the Lender
      regardless of any action taken by the Borrowers to cure such default; (ii)
      a
      Borrower shall default in the performance of any other agreement or covenant
      contained in this Agreement or the Transaction Documents and such default shall
      not have been remedied to the satisfaction of the Lender within thirty (30)
      days
      after a Default Notice shall have been given to the Borrowers; or (iii) a
      Borrower or any Guarantor shall default in the performance of any other
      obligation now or hereafter owed by Borrower or any Guarantor to Lender and
      such
      default is not cured within the grace period, if any, provided
      therein.

     

    (c) the
      suspension from listing, without subsequent listing on any one of, or the
      failure of the Common Stock to be listed or quoted on at least one of the
      following: the OTC Bulletin Board, the American Stock Exchange, the Nasdaq
      Global Market, the Nasdaq Capital Market or The New York Stock Exchange, Inc.
      for a period of ten (10) consecutive Trading Days and such suspension from
      listing (or listing on an alternate exchange or quotation system) is not cured
      within ten (10) days after the tenth (10th) consecutive day of such suspension
      from listing;

     

    (d) the
      Company’s notice to the Lender, including by way of public announcement, at any
      time, of its inability to comply for any reason or its intention not to comply
      with proper requests for issuance of Warrant Shares upon exercise of the
      Warrant;

     

    (e) the
      Company shall fail to (i) timely deliver the shares of Common Stock upon
      exercise of a Warrant by the fifth (5th) Trading Day after the date of delivery
      required therefor or otherwise in accordance with the provisions of the
      Transaction Documents, (ii) file a Registration Statement in accordance with
      the
      terms of the Registration Rights Agreement, or (iii) make the payment of any
      fees and/or liquidated damages under this Agreement or any Transaction Document,
      which failure in the case of items (i) and (iii) of this Section is not remedied
      within five (5) Trading Days after the incurrence thereof and, solely with
      respect to item (iii) above, five (5) Trading Days after the Lender delivers
      a
      Default Notice to the Company of the incurrence thereof;

     

    
      
        
        

      

      
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    (f) if
      any
      material representation or warranty made in this Agreement, any Transaction
      Document or in or any certificate delivered by a Borrower or its subsidiaries
      pursuant hereto or thereto shall prove to have been incorrect in any material
      respect when made;

     

    (g) a
      Borrower shall (A) default in any payment of any amount or amounts of principal
      of or interest on any Indebtedness (other than the Indebtedness hereunder)
      the
      aggregate principal amount of which Indebtedness is in excess of $250,000 or
      (B)
      default in the observance or performance of any other agreement or condition
      relating to any such Indebtedness or contained in any instrument or agreement
      evidencing, securing or relating thereto, or any other event shall occur or
      condition exist, the effect of which default or other event or condition is
      to
      cause, or to permit the holder or holders or beneficiary or beneficiaries of
      such Indebtedness to cause with the giving of notice if required, such
      Indebtedness to become due prior to its stated maturity;

     

    (h)  if
      a Borrower or its subsidiaries shall default in the observance or performance
      of
      any term or provision of an agreement to which it is a party or by which it
      is
      bound, which default will have a Material Adverse Effect and such default is
      not
      waived or cured within the applicable grace period provided for in such
      agreement;

     

    (i) if
      a
      final judgment which, either alone or together with other outstanding final
      judgments against a Borrower and its subsidiaries, exceeds an aggregate of
      $250,000 shall be rendered against a Borrower or any subsidiary and such
      judgment shall have continued undischarged or unstayed for thirty-five (35)
      days
      after entry thereof;

     

    (j) a
      Borrower or any subsidiary shall (i) apply for or consent to the appointment
      of,
      or the taking of possession by, a receiver, custodian, trustee or liquidator
      of
      itself or of all or a substantial part of its property or assets, (ii) make
      a
      general assignment for the benefit of its creditors, (iii) commence a voluntary
      case under the United States Bankruptcy Code (as now or hereafter in effect)
      or
      under the comparable laws of any jurisdiction (foreign or domestic), (iv) file
      a
      petition seeking to take advantage of any bankruptcy, insolvency, moratorium,
      reorganization or other similar law affecting the enforcement of creditors’
rights generally, (v) acquiesce in writing to any petition filed against it
      in
      an involuntary case under United States Bankruptcy Code (as now or hereafter
      in
      effect) or under the comparable laws of any jurisdiction (foreign or domestic),
      or admit in writing its inability to pay its debts (vi) issue a notice of
      bankruptcy or winding down of its operations or issue a press release regarding
      same, or (vii) take any action under the laws of any jurisdiction (foreign
      or
      domestic) analogous to any of the foregoing; or

     

    (k) a
      proceeding or case shall be commenced in respect of a Borrower or any
      subsidiary, without its application or consent, in any court of competent
      jurisdiction, seeking (i) the liquidation, reorganization, moratorium,
      dissolution, winding up, or composition or readjustment of its debts, (ii)
      the
      appointment of a trustee, receiver, custodian, liquidator or the like of it
      or
      of all or any substantial part of its assets in connection with the liquidation
      or dissolution of the Company or any of its subsidiaries or (iii) similar relief
      in respect of it under any law providing for the relief of debtors, and such
      proceeding or case described in clause (i), (ii) or (iii) shall continue
      undismissed, or unstayed and in effect, for a period of sixty (60) days or
      any
      order for relief shall be entered in an involuntary case under United States
      Bankruptcy Code (as now or hereafter in effect) or under the comparable laws
      of
      any jurisdiction (foreign or domestic) against a Borrower or any subsidiary
      or
      action under the laws of any jurisdiction (foreign or domestic) analogous to
      any
      of the foregoing shall be taken with respect to a Borrower or any subsidiary
      and
      shall continue undismissed, or unstayed and in effect for a period of thirty
      (30) days.

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

    9.2  Remedies.

     

    (a) Upon
      the
      occurrence and continuance of an Event of Default, the Lender may at any time
      (unless all defaults shall theretofore have been remedied) at its option, by
      written notice or notices to the Borrowers, each effective upon dispatch,
      declare the entire unpaid principal amounts then outstanding under the Note
      and
      other Transaction Documents, all interest accrued and unpaid under the Note
      and
      other Transaction Documents and all other obligations of the Borrowers to the
      Lender under this Agreement or any of the other Transaction Documents to be
      forthwith due and payable. Thereupon, the then outstanding principal amounts
      under the Note and other Transaction Documents, all such accrued interest and
      all such other obligations shall become and be forthwith due and payable,
      without presentment, demand, protest or further notice of any kind, all of
      which
      are hereby expressly waived by each Borrower, and the Lender may immediately
      enforce payment of all such amounts and exercise any or all of the rights and
      remedies of the Lender under this Agreement and other Transaction Documents,
      including without limitation the right to resort to any or all collateral
      securing any obligations under the Transaction Documents and exercise any or
      all
      of the rights of a secured party pursuant to the Uniform Commercial Code of
      Florida and other applicable similar statutes in other jurisdictions. The remedy
      conferred by this Section 9.2(a) shall not be exclusive of any other remedy
      provided by any Transaction Document or now or hereafter available at law,
      in
      equity, by statute or otherwise.

     

    (b) The
      Lender, by written notice or notices to the Borrowers, may in its own discretion
      waive an Event of Default and its consequences and rescind or annul such
      declaration; provided that, no such waiver shall extend to or affect any
      subsequent Event of Default or impair any right resulting
      therefrom.

     

    (c) In
      case
      any one or more Events of Default shall occur and be continuing, the Lender
      may
      proceed to protect and enforce its rights by an action at law, suit in equity
      or
      other appropriate proceeding, whether for the specific performance of any
      agreement contained herein or in any Transaction Document or for an injunction
      against a violation of any of the terms hereof or thereof, or in aid of the
      exercise of any power granted hereby or thereby or by law. In case of a default
      in the payment of any amount due under the Note or other Transaction Document,
      the Borrowers will pay to the Lender such further amount as shall be sufficient
      to cover the cost and the expenses of collection, including, without limitation,
      actual attorney’s fees, expenses and disbursements. No course of dealing and no
      delay on the part of a Lender in exercising any rights shall operate as a waiver
      thereof or otherwise prejudice such Lender’s rights. No right conferred hereby
      or by any Transaction Document upon the Lender shall be exclusive of any other
      right referred to herein or therein or now available at law in equity, by
      statute or otherwise.

     

    ARTICLE
      X

    CERTIFICATE
      LEGENDS

    

    10.1 Legend.
      The
      Warrant and the certificates representing Warrant Shares shall be stamped or
      otherwise imprinted with a legend substantially in the following form (in
      addition to any legend required by applicable state securities or “blue sky”
laws):

     

    NEITHER
      THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
      THE
      SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
      LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
      (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
      SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
      OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION
      IS
      NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR
      RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY
      BE
      PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
      ARRANGEMENT SECURED BY THE SECURITIES.

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

    The
      Company shall issue irrevocable instructions to its transfer agent, and any
      subsequent transfer agent, to issue certificates, registered in the name of
      each
      Lender or its respective nominee(s), for the Warrant Shares in such amounts
      as
      specified from time to time by the Lender to the Company upon exercise of the
      Warrant in the form of Exhibit
      I
      attached
      hereto (the “Irrevocable
      Transfer Agent Instructions”).
      Prior
      to registration of the Warrant Shares under the Securities Act, all such
      certificates shall bear the restrictive legend specified in this
      Section 10.1. Certificates evidencing the Warrant Shares shall not contain
      any legend (including the legend set forth in Section 10.1 hereof),
      (i) while a registration statement (including the Registration Statement)
      covering the resale of such security is effective under the Securities Act,
      or
      (ii) following any sale of such Warrant Shares pursuant to Rule 144, or
      (iii) if such Warrant Shares are eligible for sale under Rule 144 by the
      Lender without limitation as to volume or manner of sale, or (iv) if such
      legend is not required under applicable requirements of the Securities Act
      (including judicial interpretations and pronouncements issued by the Staff
      of
      the Commission). The Company shall cause its counsel to issue a legal opinion
      to
      the Company’s transfer agent promptly after the effective date of a registration
      statement covering such Warrant Shares, if required by the Company’s transfer
      agent, to effect the removal of the legend hereunder. If all or any portion
      of
      the Warrant is exercised at a time when there is an effective registration
      statement to cover the resale of the Warrant Shares, such Warrant Shares, as
      the
      case may be, shall be issued free of all legends. The Company agrees that
      following the effective date of the registration statement covering Warrant
      Shares or at such time as such legend is no longer required under this
      Section 10.1, it will, no later than five (5) Trading Days following the
      delivery by the Lender to the Company or the Company’s transfer agent of a
      certificate representing Warrant Shares, as the case may be, issued with a
      restrictive legend (such date, the “Delivery Date”), deliver or cause to be
      delivered to the Lender a certificate representing such securities that is
      free
      from all restrictive and other legends. The Company may not make any notation
      on
      its records or give instructions to any transfer agent of the Company that
      enlarge the restrictions on transfer set forth in this Section. Whenever a
      certificate representing the Warrant Shares is required to be issued to the
      Lender without a legend, in lieu of delivering physical certificates
      representing the Warrant Shares, provided the Company’s transfer agent is
      participating in the Depository Trust Company (“DTC”) Fast Automated Securities
      Transfer program, the Company shall use its reasonable best efforts to cause
      its
      transfer agent to electronically transmit the Warrant Shares to the Lender
      by
      crediting the account of such Lender’s Prime Broker with DTC through its Deposit
      Withdrawal Agent Commission (“DWAC”) system (to the extent not inconsistent with
      any provisions of this Agreement).

    

    10.2 Liquidated
      Damages.
      The
      Borrowers understand that a delay in the delivery of unlegended certificates
      for
      the Warrant Shares as set forth in Section 10.1 hereof beyond the Delivery
      Date could result in economic loss to the Lender. If the Company fails to
      deliver to a Lender such shares via DWAC or a certificate or certificates
      pursuant to this Section hereunder by the Delivery Date, the Borrowers
      shall pay to the Lender, in cash, as partial liquidated damages and not as
      a
      penalty, for each $500 of Warrant Shares (based on the closing price of the
      Common Stock reported by the principal Trading Market on the date such
      securities are submitted to the Company’s transfer agent) subject to Section
      10.1, $10 per Trading Day (increasing to $15 per Trading Day five (5) Trading
      Days after such damages have begun to accrue and increasing to $20 per Trading
      Day ten (10) Trading Days after such damages have begun to accrue) for each
      Trading Day after the Legend Removal Date until such certificate is delivered.
      Nothing herein shall limit the Lender’s right to pursue actual damages for the
      Company’s failure to deliver certificates representing any securities as
      required by the Transaction Documents, and the Lender shall have the right
      to
      pursue all remedies available to it at law or in equity including, without
      limitation, a decree of specific performance and/or injunctive
      relief.

     

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

    10.3 Sales
      by the Lender.
      The
      Lender agrees that the removal of the restrictive legend from certificates
      representing the Warrant or Warrant Shares as set forth in Section 10.1 is
      predicated upon the Company’s reliance that the Lender will sell any such
      securities pursuant to either the registration requirements of the Securities
      Act, including any applicable prospectus delivery requirements, or an exemption
      therefrom.

     

    ARTICLE
      XI

    INDEMNIFICATION

    

    11.1 Indemnification
      by the Borrowers.
      Each
      Borrower, jointly and severally, agrees to defend, indemnify and hold harmless
      the Lender and shall reimburse the Lender for, from and against each claim,
      loss, liability, cost and expense (including without limitation, interest,
      penalties, costs of preparation and investigation, and the actual fees,
      disbursements and expenses of attorneys, accountants and other professional
      advisors) (collectively, “Losses”) directly or indirectly relating to, resulting
      from or arising out of (a) any untrue representation, misrepresentation, breach
      of warranty or non-fulfillment of any covenant, agreement or other obligation
      by
      or of any Borrower contained in any Transaction Document or in any certificate,
      document, or instrument delivered by a Borrower to the Lender pursuant to
      Section 5.4 hereof; or (b) any action instituted against the Lender or its
      affiliates, by any stockholder of the Company who is not an affiliate of the
      Lender, with respect to any of the transactions contemplated by the Transaction
      Documents (unless such action is based upon a breach of the Lender’s
      representations, warranties or covenants under the Transaction Documents or
      any
      agreements or understandings the Lender may have with any such stockholder
      or
      any violations by the Lender of state or federal securities laws or any conduct
      by the Lender which constitutes fraud, gross negligence, willful misconduct
      or
      malfeasance).

     

    11.2 Indemnification
      by the Lender.
      Lender
      shall defend, indemnify and hold harmless the Borrowers and the Subsidiaries
      and
      shall reimburse the Borrowers and the Subsidiaries for, from and against each
      Loss directly or indirectly relating to, resulting from or arising out of any
      untrue representation, misrepresentation, breach of warranty or non-fulfillment
      of any covenant, agreement or other obligation by or of the Lender contained
      in
      any Transaction Document delivered to the Borrowers or any of its subsidiaries
      pursuant thereto.

     

    11.3 Procedure.

     

    (a) The
      indemnified party shall promptly notify the indemnifying party of any claim,
      demand, action or proceeding for which indemnification will be sought under
      this
      Agreement; provided, that the failure of any party entitled to indemnification
      hereunder to give notice as provided herein shall not relieve the indemnifying
      party of its obligations under this Article XI except to the extent that the
      indemnifying party is actually prejudiced by such failure to give
      notice.

     

    (b) In
      case
      any such action, proceeding or claim is brought against an indemnified party
      in
      respect of which indemnification is sought hereunder, the indemnifying party
      shall be entitled to participate in and, unless in the reasonable, good-faith
      judgment of the indemnified party a conflict of interest between it and the
      indemnifying party exists with respect to such action, proceeding or claim
      (in
      which case the indemnifying party shall be responsible for the reasonable fees
      and expenses of one separate counsel for the indemnified party), to assume
      the
      defense thereof with counsel reasonably satisfactory to the indemnified party.
      If the indemnifying party elects to defend any such action or claim, then the
      indemnified party shall be entitled to participate in such defense (but not
      control) with counsel of its choice at its sole cost and expense (except that
      the indemnifying party shall remain responsible for the reasonable fees and
      expenses of one separate counsel for the indemnified party in the event in
      the
      reasonable, good-faith judgment of the indemnified party a conflict of interest
      between it and the indemnifying party exists).

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

    (c) In
      the
      event that the indemnifying party advises an indemnified party that it will
      contest such a claim for indemnification hereunder, or fails, within thirty
      (30)
      days of receipt of any indemnification notice to notify, in writing, such person
      of its election to defend, settle or compromise, at its sole cost and expense,
      any action, proceeding or claim (or discontinues its defense at any time after
      it commences such defense), then the indemnified party may, at its option,
      defend, settle or otherwise compromise or pay such action or claim. In any
      event, unless and until the indemnifying party elects in writing to assume
      and
      does so assume the defense of any such claim, proceeding or action, the
      indemnified party’s costs and expenses arising out of the defense, settlement or
      compromise of any such action, claim or proceeding shall be Losses subject
      to
      indemnification hereunder.

     

    (d) The
      parties shall cooperate fully with each other in connection with any negotiation
      or defense of any such action or claim and shall furnish to the other party
      all
      information reasonably available to such party which relates to such action
      or
      claim. Each party shall keep the other party fully apprised at all times as
      to
      the status of the defense or any settlement negotiations with respect
      thereto.

     

    (e) Notwithstanding
      anything in this Article XI to the contrary, the indemnifying party shall not,
      without the indemnified party’s prior written consent, settle or compromise any
      claim or consent to entry of any judgment in respect thereof which imposes
      any
      future obligation on the indemnified party or which does not include, as an
      unconditional term thereof, the giving by the claimant or the plaintiff to
      the
      indemnified party of a release from all liability in respect of such claim.
      The
      indemnification obligations to defend the indemnified party required by this
      Article XI shall be made by periodic payments of the amount thereof during
      the
      course of investigation or defense, as and when the Loss is incurred, so long
      as
      the indemnified party shall refund such moneys if it is ultimately determined
      by
      a court of competent jurisdiction that such party was not entitled to
      indemnification. The indemnity agreements contained herein shall be in addition
      to (i) any cause of action or similar rights of the indemnified party
      against the indemnifying party or others, and (ii) any liabilities the
      indemnifying party may be subject to pursuant to the law.

     

    ARTICLE
      XII

    MISCELLANEOUS

    

    12.1 Governing
      Law.
      This
      Agreement and the rights of the parties hereunder shall be governed in all
      respects by the laws of the State of New York wherein the terms of this
      Agreement were negotiated.

     

    12.2 Survival.
      Except
      as specifically provided herein, the representations, warranties, covenants
      and
      agreements made herein shall survive the Closing.

     

    12.3 Amendment.
      This
      Agreement may not be amended, discharged or terminated (or any provision hereof
      waived) without the written consent of each Borrower and the
      Lender.

     

    12.4 Successors
      and Assigns.
      Except
      as otherwise expressly provided herein, the provisions hereof shall inure to
      the
      benefit of, and be binding upon and enforceable by and against, the successors,
      assigns, heirs, executors and administrators of the parties hereto. The Lender
      may transfer or assign its some or all of its rights hereunder, including,
      without limitation, sell a participation interest in the Loan, and the Borrowers
      may not assign their rights or obligations hereunder without the consent of
      the
      Lender.

     

    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    

    12.5 Entire
      Agreement.
      This
      Agreement, the Transaction Documents and the other documents delivered pursuant
      hereto and simultaneously herewith constitute the full and entire understanding
      and agreement between the parties with regard to the subject matter hereof
      and
      thereof.

     

    12.6 Notices,
      etc.
      All
      notices, demands or other communications given hereunder shall be in writing
      and
      shall be sufficiently given if delivered either personally, by facsimile, or
      by
      a nationally recognized courier service marked for next business day delivery
      or
      sent in a sealed envelope by first class mail, postage prepaid and either
      registered or certified with return receipt, addressed as follows:

     

    if
      to
      either of the Borrowers:

    

    MDwerks,
      Inc.

    1020
      NW
      6th
      Street

    Deerfield
      Beach, FL 33442

    Telephone:
      (954) 389-8300

    Facsimile:
      (954) 427-5871

    Attention:
      Howard B. Katz, CEO

    

    with
      a
      copy (which shall not constitute notice hereunder) to:

    

    Stephen
      P. Katz, Esq.

    Peckar
      & Abramson, P.C.

    70
      Grand
      Avenue

    River
      Edge, NJ 07661

    Telephone:
      (201) 343-3434

    Facsimile:
      (201) 343-6306

    

    if
      to the
      Lender:

    

    Debt
      Opportunity Fund, LLLP

    20711
      Sterlington Drive

    Land
      O'Lakes, Florida 34638

    Phone:
      (813) 909-2233

    Fax:
      (813) 388-4430

    

    with
      a
      copy to:

    

    Brent
      A.
      Jones, Esq.

    Bush
      Ross, P.A.

    1801
      N.
      Highland Ave.

    Tampa,
      FL
      33602

    Phone:
      (813) 224-9255

    Fax:
      (813) 223-9620

    

    Such
      communications shall be effective immediately if delivered in person or by
      confirmed facsimile, upon the date acknowledged to have been received in return
      receipt, or upon the next business day if sent by overnight courier
      service.

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

    12.7 Delays
      or Omissions.
      No
      delay or omission to exercise any right, power or remedy accruing to the
      holder(s) of the Note or Warrant upon any breach or default of a Borrower under
      this Agreement shall impair any such right, power or remedy of such holder
      nor
      shall it be construed to be a waiver of any such breach or default, or an
      acquiescence, therein, or of or in any similar breach or default thereafter
      occurring; nor shall any waiver of any single breach or default be deemed a
      waiver of any other breach or default theretofore or thereafter occurring.
      Any
      waiver, permit, consent or approval of any kind or character on the part of
      any
      holder of any breach or default under this Agreement, or any waiver on the
      part
      of any holder of any provisions or conditions of this Agreement must be, made
      in
      writing and shall be effective only to the extent specifically set forth in
      such
      writing. All remedies, either under this Agreement or by law or otherwise
      afforded to any holder, shall be cumulative and not alternative.

     

    12.8 Severability.
      The
      invalidity of any provision or portion of a provision of this Agreement shall
      not affect the validity of any other provision of this Agreement or the
      remaining portion of the applicable provision. It is the desire and intent
      of
      the parties hereto that the provisions of this Agreement shall be enforced
      to
      the fullest extent permissible under the laws and public policies applied in
      each jurisdiction in which enforcement is sought. Accordingly, if any particular
      provision of this Agreement shall be adjudicated to be invalid or unenforceable,
      such provision shall be deemed amended to delete therefrom the portion thus
      adjudicated to be invalid or unenforceable, such deletion to apply only with
      respect to the operation of such provision in the particular jurisdiction in
      which such adjudication is made.

     

    12.9 Expenses.
      The
      Borrowers shall bear their own expenses and legal fees incurred on their behalf
      with respect to the negotiation, execution and consummation of the transactions
      contemplated by this Agreement and shall pay all documentary stamp or similar
      taxes imposed by any authority upon the transactions contemplated by this
      Agreement or any Transaction Document. Without requiring any documentation
      therefor, the Borrowers will reimburse the Lender $80,000 for all fees and
      expenses incurred by it with respect to the negotiation, execution and
      consummation of the transactions contemplated by this Agreement and the
      transactions contemplated hereby and due diligence conducted in connection
      therewith, including the fees and disbursements of counsel and auditors for
      the
      Lender. Such reimbursement shall be paid on the Closing Date by the Lender
      deducting such $80,000 from the Purchase Price as provided in Section 1.1 of
      this Agreement. The Borrowers shall pay all reasonable, documented third-party
      fees and expenses incurred by the Lender in connection with the enforcement
      of
      this Agreement or any of the other Transaction Documents, including, without
      limitation, all actual reasonable attorneys’ fees and expenses.

     

    12.10 Consent
      to Jurisdiction; Waiver of Jury Trial.
      EACH OF
      THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS
      TO
      THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE STATE
      AND COUNTY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF
      OR
      RELATING TO THIS AGREEMENT AND THE TRANSACTION DOCUMENTS. EACH OF THE PARTIES
      TO
      THIS AGREEMENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
      ANY
      OBJECTION WHICH SUCH PARTY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE
      OF ANY SUCH PROCEEDING BROUGHT IN ANY SUCH COURTS AND ANY CLAIM THAT ANY SUCH
      PROCEEDING BROUGHT IN ANY SUCH COURTS HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
      EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
      BY LAW, ANY RIGHT TO TRIAL BY JURY IN ANY SUCH LEGAL PROCEEDING. EACH OF THE
      PARTIES TO THIS AGREEMENT HEREBY CONSENTS TO SERVICE OF PROCESS BY NOTICE IN
      THE
      MANNER SPECIFIED IN SECTION 12.6 AND IRREVOCABLY WAIVES, TO THE FULLEST
      EXTENT PERMITTED BY LAW, ANY OBJECTION SUCH PARTY MAY NOW OR HEREAFTER HAVE
      TO
      SERVICE OF PROCESS IN SUCH MANNER.

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

    12.11 Titles
      and Subtitles.
      The
      titles of the articles, sections and subsections of this Agreement are for
      convenience of reference only and are not to be considered in construing this
      Agreement.

     

    12.12  Execution.
      This
      Agreement may be executed in two or more counterparts, all of which when taken
      together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart. In the event that any signature is delivered by facsimile
      transmission, such signature shall create a valid and binding obligation of
      the
      party executing (or on whose behalf such signature is executed) with the same
      force and effect as if such facsimile signature page were an original
      thereof.

     

    [Signature
      Page Follows]

    
      
        
        

      

      
        -36-

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have duly executed this Loan and Securities
      Purchase Agreement, as of the day and year first above written.

    

    

    
      	
               

            	
              MDWERKS,
                INC.

            
	 	 
	
               

            	
              By:

            	
                /s/
                Howard B. Katz

            
	
               

            	 	
              Name:

            	
              Howard
                B. Katz

            
	
               

            	 	
              Title:

            	
              Chief
                Executive Officer

            
	 	 	 	 
	
               

            	 	 	 
	
               

            	
              XENI
                FINANCIAL SERVICES, CORP.

            
	 	 
	
               

            	
              By:

            	
                /s/
                Howard B. Katz

            
	
               

            	 	
              Name:

            	
              Howard
                B. Katz

            
	
               

            	 	
              Title:

            	
              Chief
                Executive Officer

            
	 	 	 	 
	
               

            	 	 	 
	
               

            	
              DEBT
                OPPORTUNITY FUND, LLLP,

              a
                Florida limited liability limited partnership

               

              By:
                Total Capital Management, LLC,

              a
                Florida limited liability company,

              as
                its General Partner

            
	 	 
	
               

            	
              By:

            	
                /s/
                Sean Lyons

            
	
               

            	 	
              Name:

            	
              Sean
                Lyons

            
	
               

            	 	
              Title:

            	
              Manager

            

    

     

    
      
        
        

      

      
        -37-

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