Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Wescorp Technologies Ltd. - Exhibit 10.1

Execution Version 
December 18, 2007 

ASSET PURCHASE AGREEMENT 

Between: 

FEP SERVICES INC. 

and 

DALE NORMAN PLANTE 

and 

KYLE PLANTE 

and 

WESCORP TECHNOLOGIES LTD. 

TABLE OF CONTENTS 

  	 	  	  	Page 
	 	  	  	 
	ARTICLE 1 	DEFINITIONS AND INTERPRETATION 	1
	 	1.1 	Defined Terms 	1 
	 	1.2 	Currency 	6 
	 	1.3 	Sections and Headings 	6 
	 	1.4 	Number, Gender and Persons 	6 
	 	1.5 	Accounting Principles 	7 
	 	1.6 	Entire Agreement 	7 
	 	1.7 	Time of Essence 	7 
	 	1.8 	Applicable Law 	7 
	 	1.9 	Successors and Assigns 	7 
	 	1.10 	Amendments and Waivers 	7 
	 	1.11 	Severability 	7 
	 	1.12 	Schedules 	8 
	ARTICLE 2 	PURCHASE AND SALE OF COLLECTIVE PURCHASED ASSETS
        	8
	 	2.1 	Collective Purchased Assets 	8 
	 	2.2 	Excluded Assets 	9 
	ARTICLE 3 	PURCHASE PRICE 	10 
	 	3.1 	Purchase Price 	10 
	 	3.2 	Allocation of Purchase Price 	10 
		3.3 	Deemed Purchase Price for Allocation for Purposes and Calculation
        of GST 	10
	 	3.4 	GST 	11 
	ARTICLE 4 	LIMITED ASSUMPTION OF ACCOUNTS PAYABLE 	11 
	 	4.1 	Assumption of Raider Accounts Payable 	11 
	 	4.2 	Assumption of Total Fluid Accounts Payable 	11 
	 	4.3 	Indemnification 	12 
	ARTICLE 5 	NO EMPLOYMENT OF EMPLOYEES 	12 
	 	5.1 	No Employment of Employees 	12 
	 	5.2 	Indemnity to Purchaser 	12 
	ARTICLE 6 	REPRESENTATIONS AND WARRANTIES OF THE VENDOR 	 12
	 	6.1 	Organization 	12 
	 	6.2 	Authorization 	13 
	 	6.3 	No Other Agreements to Purchase 	13 
	 	6.4 	No Violation 	13 
	 	6.5 	Inventories 	13 
	 	6.6 	Title to and Condition of Personal Property 	13 
	 	6.7 	Intentionally Deleted Article 	14 
	 	6.8 	Intellectual Property 	14 
	 	6.9 	Consents 	14 
	 	6.10 	Contracts 	15 
	 	6.11 	Compliance with Laws; Governmental Authorization 	15 
	 	6.12 	Taxes 	15 
	 	6.13 	Litigation 	15 
	 	6.14 	Residency 	15 
	 	6.15 	Deleted Article 	15 
	 	6.16 	Environmental 	15 
	 	6.17 	Collective Purchased Assets Sufficient 	16 

-i- 

TABLE OF CONTENTS 
(continued) 

  	 	  	  	Page 
	 	  	  	 
	 	  	  	 
	 	6.18 	Amalgamation Completion 	16 
	 	6.19 	Full Disclosure 	16 
	ARTICLE 7 	REPRESENTATIONS AND WARRANTIES OF THE PURCHASER 	16
	 	7.1 	Organization 	16 
	 	7.2 	Authorization 	16 
	 	7.3 	No Violation 	17 
	 	7.4 	GST Registration 	17 
	 	7.5 	Compliance 	17 
	 	7.6 	Filings 	17 
	 	7.7 	Right to Transfer 	17 
	 	7.8 	Securities 	17 
	ARTICLE 8 	SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES
        	18 
	 	8.1 	Survival of Representations and Warranties 	18 
	ARTICLE 9 	ADDITIONAL COVENANTS 	18 
	 	9.1 	PIPA Compliance 	18 
	 	9.2 	Compliance with Applicable Securities Law and Regulations
        	18
	 	9.3 	Delivery of Makon Assets 	19 
	ARTICLE 10 	CLOSING AND TRANSFER OF POSSESSION 	19 
	 	10.1 	Place of Closing 	19 
	 	10.2 	Deliveries by the Vendor 	19 
	 	10.3 	Purchaser’s Deliveries at Closing 	20 
	 	10.4 	Further Assurances 	21 
	ARTICLE 11 	INDEMNIFICATION AND LIMITATIONS REGARDING LOSSES
        	 21
	 	11.1 	Indemnification by the Vendor, Kyle and Dale 	21 
	 	11.2 	Indemnification by the Purchaser 	22 
	ARTICLE 12 	MISCELLANEOUS 	22 
	 	12.1 	Notices 	22 
	 	12.2 	Legal Fees 	23 
	 	12.3 	No Merger 	23 
	 	12.4 	Counterparts 	24 

Schedules 

	A 	
      Raider Intellectual Property

	B 	
      Makon Intellectual Property

	C 	
      Total Fluid Intellectual Property

	D 	
      Raider Assets

	E 	
      Makon Assets

	F 	
      Total Fluid Assets

	G 	
      Promissory Note

	H 	
      General Conveyance

	I 	
      Bill of Sale

	J 	
      Restrictions - Wescorp Shares

-ii- 

TABLE OF CONTENTS
 (continued) 

	  		Page 
	  	  	 
	K 	Intentionally Deleted 	 
	L 	Release of Original License Agreement 	 
	M 	Consulting Agreement - Bowhay
    	 
	N 	Consulting Agreement - McCaw 	 
	O 	Release of Bowhay Prior Consulting
      Agreement 	 
	P 	Release of McCaw Prior Consulting Agreement 	 
	Q 	Permitted Encumbrances 	 
	R 	Raider Accounts Payable 	 
	S 	Raider Contracts 	 
	T 	Letter of Opinion - Vendor’s Solicitor 	 
	U 	Raider Consents 	 
	V 	Total Fluid Consents 	 
	W 	Allocation of Purchase Price 	 
	X 	License Agreement 	 
	Y 	Raider Contract Assignment 	 

-iii- 

ASSET PURCHASE AGREEMENT 

THIS AGREEMENT is made December 18, 2007. 

BETWEEN: 

FEP SERVICES INC., a body corporate 
duly
incorporated pursuant to the laws of Alberta 
(the "Vendor") 

OF THE FIRST PART 

- and - 

DALE NORMAN PLANTE, an individual resident 
in the
Netherlands 

OF THE SECOND PART 

- and - 

KYLE PLANTE, an individual resident 
in Grande
Prairie, Alberta 

(Dale Norman Plante and Kyle Plante are collectively the
"Shareholders") 

OF THE THIRD PART 

- and - 

WESCORP TECHNOLOGIES LTD., a body corporate 
duly
incorporated pursuant to the laws of Alberta 
(the "Purchaser")

OF THE FOURTH PART 

IN CONSIDERATION of the covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is acknowledged by each Party to this Agreement, the
Parties agree as follows: 

ARTICLE 1      DEFINITIONS AND
INTERPRETATION 

	1.1 	
      Defined Terms

	 	 	 
		
      For the purposes of this Agreement, unless the context
      otherwise requires, the following terms shall have the respective meanings
      set out below and grammatical variations of such terms shall have
      corresponding meanings:

	 	 	 
		(a) 	
      “Agreement” means this document, the recitals, if
      any, and all Schedules hereto and includes all written amendments to the
      foregoing;

	 	 	 
		(b) 	
      “Amalgamation” means the amalgamation of Prior
      FEP, Raider and Total Fluid, which resulted in the creation of the
      Vendor;

- 2 -

	 	(c) 	
      “Ancillary Agreements” means all agreements,
      certificates and other instruments delivered or given pursuant to this
      Agreement at Closing;

	 	 	 
	 	(d) 	
      “Bill of Sale” means the bill of sale in the form
      attached hereto Schedule I;

	 	 	 
	 	(e) 	
      "Business Day" means any day, other than a
      Saturday or a Sunday, or a statutory holiday in Edmonton,
  Alberta;

	 	 	 
	 	(f) 	
      “Closing” means the date of completion of the
      transaction of purchase and sale contemplated in this Agreement;

	 	 	 
	 	(g) 	
      "Closing Date" means, effective 1:00 p.m.
      (Edmonton, Alberta time) on December 18, 2007 or such earlier or later
      date as the Parties may mutually agree upon in writing;

	 	 	 
	 	(h) 	
      “Collective Intellectual Property” shall have the
      meaning set out in section 6.8;

	 	 	 
	 	(i) 	
      "Collective Purchased Assets" means the Makon
      Assets, Raider Assets and Total Fluid Assets;

	 	 	 
	 	(j) 	
      “Consulting Agreement - Bowhay” means the
      agreement in the form attached hereto as Schedule M;

	 	 	 
	 	(k) 	
      “Consulting Agreement - McCaw” means the agreement
      in the form attached hereto as Schedule N;

	 	 	 
	 	(l) 	
      “Dale” means Dale Norman Plante;

	 	 	 
	 	(m) 	
      "Encumbrance" means any encumbrance, lien, charge,
      hypothec, pledge, mortgage, title retention agreement, security interest
      of any nature, adverse claim, exception, reservation, easement, right of
      occupation, any matter capable of registration against title, option,
      right of pre-emption, privilege or any Contract to create any of the
      foregoing;

	 	 	 
	 	(n) 	
      "ETA" means Part IX of the Excise Tax Act
      (Canada), as amended from time to time;

	 	 	 
	 	(o) 	
      "Excluded Assets" has the meaning set out in
      section 2.2;

	 	 	 
	 	(p) 	
      “General Conveyance” means a general conveyance in
      the form attached hereto as Schedule H;

	 	 	 
	 	(q) 	
      "GST" means all taxes payable under the ETA and
      any reference to a specific provision of the ETA shall refer to any
      successor provision thereto of like or similar effect;

	 	 	 
	 	(r) 	
      “including” means including but without limiting
      the generality of the foregoing, unless the context otherwise expressly
      provides, such as, including only;

	 	 	 
	 	(s) 	
      "Intellectual Property" means all intellectual,
      proprietary and industrial property and rights thereto including, but not
      limited to, all (a) inventions and discoveries; (b) works in which any
      copyright exists including software; (c) designs,
  industrial

- 3 -

	 		
      designs and mask works; (d) trade-marks, certification
      marks, trade dress, trade names, business names, corporate names, business
      styles, internet domain names and web sites, and any word, symbol, icon,
      logo or other indicia of origin adopted or used in connection with any
      product or service or business (collectively referred to as
      "Marks"); (d) all intellectual, proprietary and industrial property
      rights in respect of any of the foregoing including all copyrights, patent
      rights, patent disclosures, design and industrial design rights, patent
      disclosures rights in Marks, rights in confidential information, trade
      secrets, know-how, technical expertise, formulae, compositions, processes,
      research data, databases, drawings, specifications, plans, customer and
      supplier lists and related information and other proprietary rights; and
      (e) all applications and registrations, all continuations, divisions,
      reissues, renewals and extensions therefor, the right to make
      applications, rights of priority and rights to claim priority with respect
      to any of the foregoing intellectual and industrial property and rights
      thereto;

	 	 	 	 
	 	(t) 	
      “Kyle” means Kyle Plante;

	 	 	 	 
	 	(u) 	
      “License Agreement” means the license agreement to
      be made between the Purchaser as licensee and 1139076 Alberta Ltd. as
      licensor, in the form attached hereto as Schedule X;

	 	 	 	 
	 	(v) 	
      "Losses" means with respect to any matter, any and
      all liabilities (whether direct, indirect, contingent, statutory or
      otherwise), obligations, claims (including direct or indirect claims),
      losses, damages, costs and expenses of whatever kind or nature and
      howsoever arising (including all legal fees and disbursements on a
      solicitor and his own client full indemnity basis and other professional
      fees and disbursements, fees paid to any government authority, interest,
      fines, penalties and amounts paid in settlement or in satisfaction of a
      judgment) directly or indirectly as a consequence of such matter,
      including loss of revenue, loss of business, loss of benefit,
      consequential and indirect damages, special damages, punitive damages and
      exemplary damages;

	 	 	 	 
	 	(w) 	
      "Makon" means Makon Water Recycling Systems
      Inc.;

	 	 	 	 
	 	(x) 	
      "Makon Assets" has the meaning set out in section
      2.1(a);

	 	 	 	 
	 	(y) 	
      "Makon Business" means that portion of the
      Vendor's Business that was carried on using the Makon Intellectual
      Property and the Makon Assets;

	 	 	 	 
	 	(z) 	
      "Makon Intellectual Property" means any and all
      Intellectual Property used or previously used in the conduct of the Makon
      Business, including the Intellectual Property described in Schedule
    B;

	 	 	 	 
	 	(aa) 	
      “Market Price” shall mean:

	 	 	 	 
	 		(i) 	
      for Shares shall mean an amount equal to the weighted
      average of the trading prices of the Shares of Wescorp Energy Inc. on the
      principal stock exchange on which such Shares are traded, for each of the
      trading days during the last five (5) trading days immediately prior to
      the day prior to the Closing Date, converted to Canadian dollars using the
      exchange rate

- 4 -

	 		
      described in the Bank of Canada webpage
      (www.bankofcanada.ca) and described as the US/Canada Noon Rate;

	 	 	 
	 	(ii) 	
      for the Oil Sands Quest Inc. Shares shall mean an amount
      equal to the weighted average of the trading prices of shares of Oil Sands
      Quest Inc. on the principal stock exchange on which such shares are
      traded, for each of the trading days during the last five (5) days
      immediately prior to the day prior to the Closing Date, converted to
      Canadian dollars using the exchange rate described in the Bank of Canada
      webpage (www.bankofcanada.ca) and described as the US/Canada Noon
    Rate;

	 	(bb) 	
      “Oil Sands Quest Inc. Shares” means 470,173 common
      shares of Oil Sands Quest Inc.;

	 	 	 
	 	(cc) 	
      “Original License Agreement” means the license
      agreement made April 7, 2006, between 1139076 Alberta Ltd. and Total
      Fluid;

	 	 	 
	 	(dd) 	
      "Parties" means the Vendor, Purchaser and
      Shareholders, and their respective successors and permitted
  assigns;

	 	 	 
	 	(ee) 	
      "Permitted Encumbrances" means those Encumbrances
      described in Schedule Q;

	 	 	 
	 	(ff) 	
      “Person” means a natural person, partnership,
      limited partnership, limited liability partnership, body corporate,
      corporation, company, joint stock company, limited liability company,
      trust, unincorporated association, joint venture or any other type of
      business enterprise, entity or governmental entity whatsoever and
      howsoever constituted, and pronouns have a similarly extended
    meaning;

	 	 	 
	 	(gg) 	
      “Prior FEP” means FEP Services Inc. as it existed
      prior to the Amalgamation;

	 	 	 
	 	(hh) 	
      “Promissory Note” means the promissory note in the
      form attached hereto as Schedule G;

	 	 	 
	 	(ii) 	
      "Purchase Price" has the meaning set out in
      section 3.1;

	 	 	 
	 	(jj) 	
      "Purchased Businesses" means the Makon Business,
      Raider Business and Total Fluid Business;

	 	 	 
	 	(kk) 	
      “Purchaser’s Solicitors” means Bryan & Company
      LLP;

	 	 	 
	 	(ll) 	
      "Raider" means Raider Corporation;

	 	 	 
	 	(mm) 	
      "Raider Accounts Payable" has the meaning set out
      in section 4.1, as more particularly described in Schedule R;

	 	 	 
	 	(nn) 	
      "Raider Accounts Receivable" has the meaning set
      out in section 2.1(b)(iii);

	 	 	 
	 	(oo) 	
      "Raider Assets" has the meaning set out in section
      2.1(b);

- 5 -

	 	(pp) 	
      "Raider Business" means that portion of the
      Vendor's Business that was carried on by Raider prior to the Amalgamation
      and by the Vendor after the Amalgamation,

	 	 	 
	 	(qq) 	
      "Raider Consents" means the consents and approvals
      required in connection with the sale and purchase of the Raider Business
      and Raider Assets herein contemplated, as described in Schedule
  U;

	 	 	 
	 	(rr) 	
      “Raider Contract Assignment” means the assignment
      in the form attached hereto as Schedule Y;

	 	 	 
	 	(ss) 	
      “Raider Contracts” means the contracts described
      in Schedule S’

	 	 	 
	 	(tt) 	
      "Raider Intellectual Property" means any and all
      Intellectual Property used or previously used in the conduct of the Raider
      Business, including the Intellectual Property described in Schedule
    A;

	 	 	 
	 	(uu) 	
      “Release of Bowhay Prior Consulting Agreement”
      means the release in the form attached hereto as Schedule O;

	 	 	 
	 	(vv) 	
      “Release of McCaw Prior Consulting Agreement”
      means the release in the form attached hereto as Schedule P;

	 	 	 
	 	(ww) 	
      “Release of Original License Agreement” means a
      release in the form attached hereto as Schedule L;

	 	 	 
	 	(xx) 	
      “Restrictions” means collectively the Restrictions
      - Wescorp Shares;

	 	 	 
	 	(yy) 	
      “Restrictions - Wescorp Shares” shall mean the
      restrictions set in Schedule J hereof;

	 	 	 
	 	(zz) 	
      “Shares” means common shares of Wescorp Energy
      Inc.;

	 	 	 
	 	(aaa) 	
      "Shareholders" means Dale Norman Plante and Kyle
      Plante;

	 	 	 
	 	(bbb) 	
      "Tax Act" means the Income Tax Act (Canada), as
      amended from time to time;

	 	 	 
	 	(ccc) 	
      "Taxes" means and includes all taxes, duties,
      fees, premiums, assessments, imposts, levies and other charges of any kind
      whatsoever imposed by any governmental authority, together with all
      interest, penalties, fines, additions to tax or other additional amounts
      imposed in respect thereof, including, without limitation, those levied
      on, or measured by, or referred to as income, gross receipts, profits,
      capital, transfer, land transfer, sales, goods and services, use, value
      added, excise, stamp, withholding, business, franchising, property,
      payroll, employment, health, social services, education and social
      security taxes, all surtaxes, all customs duties and import and export
      taxes, all license, franchise and registration fees and all employment
      insurance, health insurance and Canada and other government pension plan
      premiums;

	 	 	 
	 	(ddd) 	
      "Total Fluid" means Total Fluid Separation
      Inc.;

- 6 -

	 	(eee) 	
      “Total Fluid Accounts Payable” has the meaning set
      out in Section 4.2;

	 	 	 
	 	(fff) 	
      "Total Fluid Assets" has the meaning set out in
      section 2.1(c);

	 	 	 
	 	(ggg) 	
      "Total Fluid Business" means that portion of the
      Vendor's Business that was carried on by Total Fluid prior to the
      Amalgamation and by the Vendor after the Amalgamation;

	 	 	 
	 	(hhh) 	
      "Total Fluid Consents" means the consents and
      approvals required in connection with the sale and purchase of the Total
      Fluid Business and Total Fluid Assets herein contemplated, as described in
      Schedule V;

	 	 	 
	 	(iii) 	
      "Total Fluid Intellectual Property" means any and
      all Intellectual Property used or previously used in the conduct of the
      Total Fluid Business, including the Intellectual Property described in
      Schedule C;

	 	 	 
	 	(jjj) 	
      "Vendor's Business" means the entire business
      carried on by the Vendor, including the Makon Business, Raider Business
      and Total Fluid Business;

	 	 	 
	 	(kkk) 	
      "Vendor's Knowledge" means the knowledge of the
      Vendor, and either of the Shareholders, after due inquiry of the
      employees, consultants, advisors and agents of the Vendor, and the
      Shareholders;

	 	 	 
	 	(lll) 	
      “Vendor’s Solicitors” means Hendrickson Gower
      Massing Olivieri LLP;

	 	(mmm) 	
      “Wescorp Shares” means the Shares of Wescorp
      Energy Inc. referred to in section 3.1 (b)
hereof.

		
      Definitions contained in this section are not exhaustive
      of the defined terms or expressions used in this Agreement and other terms
      or expressions may be defined throughout this Agreement.

	 	 
	1.2 	
      Currency

	 	 
		
      Unless otherwise indicated, all dollar amounts in this
      Agreement are expressed in Canadian funds.

	 	 
	1.3 	
      Sections and Headings

	 	 
		
      The division of this Agreement into Articles, sections
      and subsections and the insertion of headings are for convenience of
      reference only and shall not affect the interpretation of this Agreement.
      Unless otherwise indicated, any reference in this Agreement to an Article,
      section, subsection or Schedule refers to the specified Article, section
      or subsection of or Schedule to this Agreement.

	 	 
	1.4 	
      Number, Gender and Persons

	 	 
		
      In this Agreement, words importing the singular number
      only shall include the plural and vice versa, words importing gender shall
      include all genders and words importing persons shall include individuals,
      corporations, partnerships, associations,
trusts,

- 7 -

		
      unincorporated organizations, governmental bodies and
      other legal or business entities of any kind whatsoever.

	 	 
	1.5 	
      Accounting Principles

	 	 
		
      Any reference in this Agreement to generally accepted
      accounting principles refers to generally accepted accounting principles
      that have been established in Canada, including those approved from time
      to time by the Canadian Institute of Chartered Accountants or any
      successor body thereto.

	 	 
	1.6 	
      Entire Agreement

	 	 
		
      This Agreement together with the other agreements tabled
      on the Closing Date constitute the entire agreement between the Parties
      with respect to the subject matter hereof and supersedes all prior
      agreements, understandings, negotiations and discussions, whether written
      or oral, between the Vendor and the Purchaser. There are no conditions,
      covenants, agreements, representations, warranties or other provisions,
      express or implied, collateral, statutory or otherwise, relating to the
      subject matter hereof except as herein provided or as contemplated in
      documents made between the Parties tabled on the Closing Date.

	 	 
	1.7 	
      Time of Essence

	 	 
		
      Time shall be of the essence in the performance of the
      Parties' obligations in respect of this Agreement.

	 	 
	1.8 	
      Applicable Law

	 	 
		
      This Agreement shall be construed, interpreted and
      enforced in accordance with, and the respective rights and obligations of
      the Parties shall be governed by, the laws of the Province of Alberta and
      the federal laws of Canada applicable therein. Each Party irrevocably and
      unconditionally submits to the exclusive jurisdiction of the courts of
      such province and all courts competent to hear appeals therefrom, and any
      judgment or order of such courts may be enforced in any
    jurisdiction.

	 	 
	1.9 	
      Successors and Assigns

	 	 
		
      This Agreement shall enure to the benefit of and shall be
      binding on and enforceable by the Parties and, where the context so
      permits, their respective successors and permitted assigns. No Party may
      assign any of its rights or obligations hereunder without the prior
      written consent of the other Parties.

	 	 
	1.10 	
      Amendments and Waivers

	 	 
		
      No amendment or waiver of any provision of this Agreement
      shall be binding on any Party unless consented to in writing by the
      Parties. No waiver of any provision of this Agreement shall constitute a
      waiver of any other provision, nor shall any waiver constitute a
      continuing waiver unless otherwise provided.

	 	 
	1.11 	
      Severability

- 8 -

		
      If any provision of this Agreement is deemed by a court
      of competent jurisdiction to be void, illegal or unenforceable for any
      reason whatsoever, then the same shall be read down to the extent
      necessary to make it enforceable or, if not capable of being so read down,
      shall be deemed to be severed from the other terms of this Agreement. In
      either event all other provisions, terms and covenants of this Agreement
      shall remain binding and effective upon the Parties and shall be construed
      as if this Agreement had been executed with the offending provision read
      down to the extent necessary to make it enforceable, or without such
      severed provision, as the case may be.

	 	 
	1.12 	
      Schedules

	 	 
		
      The following Schedules are attached to and form part of
      this Agreement:

	 	A 	
      Raider Intellectual Property

	 	B 	
      Makon Intellectual Property

	 	C 	
      Total Fluid Intellectual Property

	 	D 	
      Raider Assets

	 	E 	
      Makon Assets

	 	F 	
      Total Fluid Assets

	 	G 	
      Promissory Note

	 	H 	
      General Conveyance

	 	I 	
      Bill of Sale

	 	J 	
      Restrictions - Wescorp Shares

	 	K 	
      Intentionally Deleted

	 	L 	
      Release of Original License Agreement

	 	M 	
      Consulting Agreement - Bowhay

	 	N 	
      Consulting Agreement - McCaw

	 	O 	
      Release of Bowhay Prior Consulting Agreement

	 	P 	
      Release of McCaw Prior Consulting Agreement

	 	Q 	
      Permitted Encumbrances

	 	R 	
      Raider Accounts Payable

	 	S 	
      Raider Contracts

	 	T 	
      Letter of Opinion - Vendor’s Solicitor

	 	U 	
      Raider Consents

	 	V 	
      Total Fluid Consents

	 	W 	
      Allocation of Purchase Price

	 	X 	
      License Agreement

	 	Y 	
      Raider Contract Assignment

ARTICLE 2      PURCHASE AND SALE OF
COLLECTIVE PURCHASED ASSETS 

	2.1 	
      Collective Purchased Assets

	 	 	 
		
      Subject to the provisions of this Agreement, the Vendor
      agrees to sell, assign and transfer to the Purchaser and the Purchaser
      agrees to purchase from the Vendor on the Closing Date and free and clear
      of all Encumbrances except the Permitted Encumbrances:

	 	 	 
		(a) 	
      subject to Section 2.2, all of the property and assets
      used in connection with the Makon Business, whether personal, tangible or
      intangible, of every kind and

- 9 -

description and wheresoever situate
(collectively the "Makon Assets"), including the following: 

	 	(i) 	
      the assets described in Schedule E; and

	 	 	 
	 	(ii) 	
      the Makon Intellectual Property, described in Schedule
      B.

	 	(b) 	
      subject to section 2.2, all of the property and assets
      used in connection with the Raider Business, whether personal, tangible or
      intangible, of every kind and description and wheresoever situate
      (collectively the "Raider Assets"), including the
  following:

	 	 	 	 
	 		(i) 	
      the assets described in Schedule D;

	 	 	 	 
	 		(ii) 	
      the Raider Intellectual Property described in Schedule
      A;

	 	 	 	 
	 		(iii) 	
      all accounts receivable arising out of or relating to the
      operation of the Raider Business (the "Raider Accounts
      Receivable");

	 	 	 	 
	 		(iv) 	
      the Raider Contracts described in Schedule S;

	 	 	 	 
	 		(v) 	
      all cash in bank accounts maintained for the Raider
      Business; and

	 	 	 	 
	 		(vi) 	
      all cheques payable with respect to the Raider
      Business.

	 	 	 	 
	 	(c) 	
      subject to section 2.2, all of the property and assets
      used in connection with the Total Fluid Business, whether personal,
      tangible or intangible, of every kind and description and wheresoever
      situate (collectively the "Total Fluid Assets"), including the
      following:

	 	 	 	 
	 		(i) 	
      the assets described in Schedule F;

	 	 	 	 
	 		(ii) 	
      the Total Fluid Intellectual Property;
  and

	2.2 	
      Excluded Assets

	 	 	 
		
      Notwithstanding any other provision of this Agreement,
      the Collective Purchased Assets shall not include any of the following
      property and assets (collectively, the "Excluded
Assets"):

	 	 	 
		(a) 	
      all of the Vendor's cash on hand or in banks or other
      depositories, except with respect to the Raider Business;

	 	 	 
		(b) 	
      all bank accounts of the Vendor, except with respect to
      the Raider Business;

	 	 	 
		(c) 	
      the Vendor's accounts receivable, except the Raider
      Accounts Receivable;

	 	 	 
		(d) 	
      the Vendor's constating documents, minute books, and
      shareholder records and to the extent not reasonably required by the
      Purchaser as a successor to the Purchased Businesses, the original
      corporate and financial records of the Vendor.

- 10 -

ARTICLE 3      PURCHASE PRICE

	3.1 	
      Purchase Price

	 	 	 
		
      The aggregate purchase price (the "Purchase
      Price") payable by the Purchaser to the Vendor for the Collective
      Purchased Assets shall be:

	 	 	 
		(a) 	
      the sum of Two Million Six Hundred Sixty Five Thousand
      ($2,665,000.00) Dollars by way of delivery to the Vendor of a Promissory
      Note in the form attached hereto as Schedule G to be executed and
      delivered by the Purchaser to the Vendor on the Closing Date;

	 	 	 
		(b) 	
      Thirteen Million Nine Hundred Thousand (13,900,000)
      Shares to be transferred to the Vendor with share certificates in the
      Vendor’s name to be delivered within fifteen (15) days following Closing
      Date;

	 	 	 
		(c) 	
      Four Hundred Seventy Thousand One Hundred Forty Three
      (470,143) Oil Sands Quest Inc. Shares, the certificate for which, and the
      stock transfer for which, shall be delivered to the Vendor within ninety
      (90) days following the Closing Date;

	 	 	 
		(d) 	
      The total outstanding amount of the Raider Accounts
      Payable and the Total Fluid Accounts Payable assumed by the Purchaser
      pursuant to Section 4.1 and Section 4.2 hereof.

	 	 	 
	3.2 	
      Allocation of Purchase Price

	 	 	 
		
      The Vendor and the Purchaser agree to allocate the
      Purchase Price among the Collective Purchased Assets in accordance with
      Schedule W and to report the sale and purchase of the Collective Purchased
      Assets for all federal, provincial and local tax purposes in a manner
      consistent with such allocation.

	 	 	 
	3.3 	
      Deemed Purchase Price for Allocation for Purposes and
      Calculation of GST

	 	 	 
		
      For the purpose of calculation of GST, and for the
      purposes of allocation of the Purchase Price, the Purchase Price shall be
      the cumulative total of the following amounts:

	 	 	 
		(a) 	
      The sum of Two Million Six Hundred Sixty-five Thousand
      Dollars ($2,665,000.00) as provided for in section 3.1(a)
hereof.

	 	 	 
		(b) 	
      An amount calculated by multiplying 13,900,000 times the
      Market Price for the Shares.

	 	 	 
		(c) 	
      An amount calculated by multiplying 470,143 times the
      Market Price for the Oil Sands Quest Inc. Shares.

	 	 	 
		(d) 	
      The total amount of the Raider Accounts Payable assumed
      by the Purchaser pursuant to Section 4.1 hereof, and the Total Fluid
      Accounts Payable assumed by the Purchaser in accordance with Article 4.2
      hereof.

- 11 -

	3.4 	
      GST

	 	 	 
		(a) 	
      The Purchaser covenants and agrees that it is a GST
      registrant pursuant to the ETA, and that its GST registration number is
      82638 2525 RT0001.

	 	 	 
		(b) 	
      The Purchaser shall prepare, and deliver to the Vendor at
      closing, and thereafter the Vendor and Purchaser agree to execute and file
      a joint election or elections under Section 167 of the ETA and under the
      provisions of any applicable legislation, to have the sale provided for
      herein to take place on a GST free basis. The Purchaser shall file such
      election with its GST return for the reporting period in which the sale of
      the Collective Purchased Assets takes place.

	 	 	 
		(c) 	
      The Purchaser agrees to indemnify and save harmless the
      Vendor of and from all GST payable pursuant to the terms of this
      Agreement.

ARTICLE 4      LIMITED ASSUMPTION
OF ACCOUNTS PAYABLE 

	4.1 	
      Assumption of Raider Accounts Payable

	 	 	 
		(a) 	
      Subject to the provisions of this Agreement, the
      Purchaser agrees to assume, pay, satisfy and discharge that portion of the
      Vendor's accounts payable relating to the operation of the Raider Business
      which are listed in Schedule R (The "Raider Accounts Payable"). Subject to
      Article 4.2, the Purchaser and the Vendor acknowledge and agree that the
      Purchaser shall not be assuming, paying, satisfying or discharging any
      other liabilities of the Vendor.

	 	 	 
		(b) 	
      That portion of the Raider Accounts Payable being the sum
      of $239,892.18 owed by the Vendor to Wescorp Energy Inc. shall be paid by
      the Purchaser by the issuance of a Promissory Note to and in favour of
      Wescorp Energy Inc.

	 	 	 
	4.2 	
      Assumption of Total Fluid Accounts
  Payable

	 	 	 
		(a) 	
      DELETED SECTION

 

 

	 	(b) 	
      Subject to the provisions of this Agreement the Purchaser
      agrees to assume, pay, satisfy and discharge that portion of the Vendor’s
      accounts payable relating to the Total Fluid Business which are restricted
      to the sum of $32,897.00, which the Vendor acknowledges is owed by the
      Vendor to Wescorp Energy Inc.,

- 12 -

	 		
      which the Purchaser shall satisfy by the issuance of a
      Promissory Note to and in favour of Wescorp Energy Inc.

	 	 	 
	 	(c) 	
      The amounts set out in Section 4.2(b) hereof are
      hereinafter referred to as the “Total Fluid Accounts
  Payable”.

	4.3 	
      Indemnification

	 	 	 
		(a) 	
      Except for the Raider Accounts Payable assumed by the
      Purchaser pursuant to Section 4.1 hereof, and the Total Fluid Accounts
      Payable assumed by the Purchaser pursuant to Section 4.2 hereof, the
      Vendor shall remain responsible for and shall indemnify and hold harmless
      the Purchaser, and its directors, officers, employees and agents from and
      against all Losses incurred as a result of or in relation to the operation
      of the Purchased Businesses prior to the Closing Date even though such
      Losses may be incurred, reported or filed after the Closing
Date.

	 	 	 
		(b) 	
      Purchaser agrees to indemnify and hold harmless the
      Vendor, and its Directors, officers, employees and agents from and against
      all Losses incurred as a result of or in relation to the Raider Accounts
      Payable assumed by the Purchaser pursuant to section 4.1 hereof, and the
      Total Fluid Accounts Payable assumed by the Purchaser pursuant to section
      4.2 hereof, even though such Losses may be incurred, reported or filed
      after the Closing Date.

ARTICLE 5      NO EMPLOYMENT OF
EMPLOYEES 

5.1        No Employment
of Employees 

Notwithstanding any other provision contained herein, the
Purchaser will not be offering employment to any of the employees of the Vendor
on the Closing Date, or otherwise and any employment agreements between the
Vendor and its employees are expressly excluded from the Collective Purchased
Assets. 

5.2        Indemnity to
Purchaser 

The Vendor acknowledges and agrees that it is liable for all
Losses arising as a result of or in relation to any termination of it's
employees employment with the Vendor and agrees to indemnify and hold harmless
the Purchaser from and against any such Losses incurred even though such Losses
may be incurred, reported or filed after the Closing Date. 

ARTICLE 6      REPRESENTATIONS AND
WARRANTIES OF THE VENDOR 

The Vendor, Dale and Kyle jointly and severally represent and
warrant to the Purchaser as follows and acknowledge that the Purchaser is
relying on such representations and warranties in connection with its purchase
of the Collective Purchased Assets:

	6.1 	
      Organization

	 	 
		
      The Vendor is a corporation incorporated and organized
      and validly subsisting under the laws of the Province of Alberta and has
      the corporate power to own or lease its property, to carry on the
      Purchased Businesses as now being conducted by it and to enter
  into

- 13 -

		
      this Agreement and to perform its obligations hereunder.
      The Vendor is duly qualified as a corporation to do business in each
      jurisdiction in which the nature of the Purchased Businesses or the
      Collective Purchased Assets makes such qualification necessary.

	 	 
	6.2 	
      Authorization

	 	 
		
      This Agreement has been authorized, executed and
      delivered by the Vendor and constitutes a legal, valid and binding
      obligation of the Vendor.

	 	 
	6.3 	
      No Other Agreements to Purchase

	 	 
		
      No Person, other than the Purchaser, has any written or
      oral agreement or option or any right or privilege (whether by law,
      pre-emptive or contractual) capable of becoming an agreement or option for
      the purchase or acquisition from the Vendor of any of the Collective
      Purchased Assets.

	 	 
	6.4 	
      No Violation

	 	 
		
      The execution and delivery of this Agreement by the
      Vendor and the consummation of the transactions herein provided for will
      not result in:

	 	(a) 	
      the breach or violation of any of the provisions of, or
      constitute a default under, or conflict with or cause the acceleration of
      any obligation of the Vendor under:

	 	 	 	 
	 		(i) 	
      any contract to which the Vendor is a party or by which
      the Collective Purchased Assets are bound;

	 	 	 	 
	 		(ii) 	
      any provision of the constating documents or by laws or
      resolutions of the board of directors (or any committee thereof) or
      shareholders of the Vendor;

	 	 	 	 
	 		(iii) 	
      any judgment, decree, order or award of any court,
      governmental body or arbitrator having jurisdiction over the Vendor;
    or

	 	 	 	 
	 		(iv) 	
      to the Vendor’s knowledge any license, permit, approval,
      consent or authorization held by the Vendor or necessary to the operation
      of the Purchased Businesses or the Collective Purchased Assets;
  or

	 	 	 	 
	 	(b) 	
      the creation or imposition of any Encumbrance, other than
      a Permitted Encumbrance, on any of the Collective Purchased
  Assets.

	6.5 	
      Inventories

	 	 
		
      All inventories included in the Collective Purchased
      Assets which are classified as finished goods or saleable in the form of
      finished goods, and the applicable specifications on all other inventories
      not classified as finished goods are merchantable and usable.

	 	 
	6.6 	
      Title to and Condition of Personal
  Property

	 	 
		
      The Collective Purchased Assets are legally and
      beneficially owned by the Vendor with a good and marketable title thereto,
      free and clear of all Encumbrances other than

- 14 -

		
      Permitted Encumbrances. In particular, without limiting
      the generality of the foregoing, there has been no assignment, subletting
      or granting of any license (of occupation or otherwise) of or in respect
      of any of the Collective Purchased Assets or any granting of any agreement
      or right capable of becoming an agreement or option for the purchase of
      the Collective Purchased Assets.

	 	 	 
	6.7 	
      Intentionally Deleted Article

	 	 	 
	6.8 	
      Intellectual Property

	 	 	 
		
      The Vendor is the legal and beneficial owner of the Makon
      Intellectual Property, Raider Intellectual Property and Total Fluid
      Intellectual Property (collectively the "Collective Intellectual
      Property"). The Vendor has the full right and authority to convey to
      the Purchaser all of the Vendor’s right, title, and interest in and to the
      Collective Intellectual Property free and clear of all Encumbrances. The
      Vendor has not granted to any Person any interest in or right to use all
      or any portion of the Collective Intellectual Property, and:

	 	 	 
		(a) 	
      the conduct of the Purchased Businesses, including the
      Vendor's use of the Collective Intellectual Property, does not infringe
      upon or breach any intellectual property rights of any other Person, nor
      is any other Person, to the Vendor’s Knowledge, infringing the Collective
      Intellectual Property rights of the Vendor;

	 	 	 
		(b) 	
      the Vendor is entitled to use the Collective Intellectual
      Property, no other Person has claimed, asserted or alleged otherwise and
      to the Vendor's Knowledge no grounds for such a claim or assertion exist;
      and

	 	 	 
		(c) 	
      there have been no unauthorized disclosures of any
      information relating to the Collective Intellectual Property which the
      Vendor considers to be confidential, nor any authorized disclosures of
      such information which would result in such information being in the
      public domain.

	 	 	 
	6.9 	
      Consents

	 	 	 
		
      There are no consents, authorizations, permissions,
      approvals, agreements, orders or acknowledgements required to be obtained
      by the Vendor from any Person or government authority:

	 	 	 
		(a) 	
      in relation to the sale of the Makon Assets or which
      could reasonably affect the Purchaser's ability to operate the Makon
      Business at the Closing;

	 	 	 
		(b) 	
      in relation to the sale of the Raider Assets or which
      could reasonably affect the Purchaser's ability to operate the Raider
      Business at the Closing, other than the Raider Consents;

	 	 	 
		(c) 	
      in relation to the sale of the Total Fluid Assets or
      which could reasonably affect the Purchaser's ability to operate the Total
      Fluid Business after Closing, subject always to the delivery, at Closing,
      of the Release of Bowhay Prior Consulting Agreement, the Release of McCaw
      Prior Consulting Agreement, and the Release of Original License
      Agreement.

- 15 -

	6.10 	
      Contracts

	 	 
		
      The Vendor has performed all of the obligations required
      to be performed by it and is entitled to all benefits under, and is not in
      material default or to the Vendor's Knowledge alleged to be in default in
      respect of any material contract relating to the Purchased Businesses or
      Collective Purchased Assets to which it is a party or by which it is
      bound; all such material contracts are in good standing and in full force
      and effect, and no event, condition or occurrence exists that, after
      notice or lapse of time or both, would constitute a default under any of
      the foregoing.

	 	 
	6.11 	
      Compliance with Laws; Governmental
      Authorization

	 	 
		
      To the Vendor’s Knowledge, the Vendor is and has been in
      compliance with all laws, by- laws, statutes, ordinances, regulations,
      rules, judgments, decrees or orders applicable to the Purchased Businesses
      or the Collective Purchased Assets.

	 	 
	6.12 	
      Taxes

	 	(a) 	
      The Vendor has filed on a timely basis all tax returns
      required to be filed by it in respect of Taxes and has paid all Taxes that
      are due and payable, and all assessments, reassessments, charges,
      penalties, interest and fines due and payable by it. To the Vendor’s
      Knowledge, there are no actions, suits, proceedings, investigations or
      claims pending or threatened against the Vendor in respect of Taxes, nor
      are any material matters under discussion with any government authority
      relating to Taxes asserted by any government authority.

	 	 	 
	 	(b) 	
      The Vendor shall file, on a timely basis, all tax returns
      required to be filed by it in respect of Taxes subsequent to the date of
      this Agreement.

	6.13 	
      Litigation

	 	 
		
      There are no actions, suits or proceedings (whether or
      not purportedly on behalf of the Vendor) pending or, to the Vendor's
      Knowledge, threatened against or affecting the Vendor, the Purchased
      Businesses or the Collective Purchased Assets at law or in equity or
      before or by any federal, provincial, municipal or other governmental
      department, court, commission, board, bureau, agency or instrumentality,
      domestic or foreign, or before or by an arbitrator, arbitration board or
      mediator. To the Vendor's Knowledge there are no grounds on which any such
      action, suit or proceeding might be reasonably commenced.

	 	 
	6.14 	
      Residency

	 	 
		
      The Vendor is not a non-resident of Canada for the
      purposes of the Tax Act.

	 	 
	6.15 	
      Deleted Article

	 	 
	6.16 	
      Environmental.

	 	 
		
      To the Vendor’s Knowledge, the Vendor, in respect of the
      Purchased Businesses and the Collective Purchased Assets, is in material
      compliance with all applicable federal, provincial, municipal and local
      laws, statutes, ordinances, by laws and regulations,
and

- 16 -

		
      orders, directives, codes, guidelines and decisions
      rendered by any ministry, court, authority, department or administrative
      or regulatory agency ("Environmental Laws") relating to the
      protection of the environment, occupational health and safety or the
      manufacture, processing, distribution, use, treatment, storage, disposal,
      transport or handling of any pollutants, contaminants, chemicals, wastes
      or industrial toxic or hazardous wastes or substances ("Hazardous
      Substances").

	 	 	 
	6.17 	
      Collective Purchased Assets Sufficient

	 	 	 
		
      The:

	 	 	 
		(a) 	
      Makon Assets constitute all of the assets, rights, and
      properties heretofor used by the Vendor in the conduct of the Makon
      Business;

	 	 	 
		(b) 	
      Raider Assets constitute all of the assets, rights, and
      properties heretofor used by the Vendor in the conduct of the Raider
      Business; and

	 	 	 
		(c) 	
      Total Fluids Assets constitute all of the assets, rights,
      and properties heretofor used by the Vendor in the conduct of the Total
      Fluid Business, subject however to the execution and delivery of the
      License Agreement, the Consulting Agreement - Bowhay, and the Consulting
      Agreement - McCaw.

	 	 	 
	6.18 	
      Amalgamation Completion

	 	 	 
		
      The amalgamation of FEP Services Inc., Raider Corporation
      and Total Fluid Separations Inc. has been completed in accordance with
      law, and the Vendor is the resulting amalgamated corporation and is the
      owner of all of the assets and liabilities that were the property of FEP
      Services Inc., Raider Corporation and Total Fluid Separations Inc.
      immediately prior to such amalgamation.

	 	 	 
	6.19 	
      Full Disclosure

	 	 	 
		
      To the Vendor's Knowledge, the Vendor has disclosed to
      the Purchaser all facts and information relating to the Collective
      Purchased Assets and the Purchased Businesses which would reasonably be
      expected to be material to the Purchaser's decision to complete the
      transactions herein contemplated.

ARTICLE 7      REPRESENTATIONS AND
WARRANTIES OF THE PURCHASER

The Purchaser represents and warrants to the Vendor as follows
and acknowledges and confirms that the Vendor is relying on such representations
and warranties in connection with its sale of the Collective Purchased Assets:

	7.1 	
      Organization

	 	 
		
      The Purchaser is a corporation duly incorporated and
      organized and validly subsisting under the laws of the Province of Alberta
      and has the corporate power to enter into this Agreement and to perform
      its obligations hereunder.

	 	 
	7.2 	
      Authorization

- 17 -

		
      This Agreement has been duly authorized, executed and
      delivered by the Purchaser and constitutes a legal, valid and binding
      obligation of the Purchaser.

	 	 	 
	7.3 	
      No Violation

	 	 	 
		
      The execution and delivery of this Agreement by the
      Purchaser and the consummation of the transactions herein provided for
      will not result in the violation of, or constitute a default under, or
      conflict with or cause the acceleration of any obligation of the Purchaser
      under:

	 	 	 
		(a) 	
      any contract to which the Purchaser is a party or by
      which it is bound;

	 	 	 
		(b) 	
      any provision of the constating documents or by laws or
      resolutions of the board of directors (or any committee thereof) or
      shareholders of the Purchaser; or

	 	 	 
		(c) 	
      any judgment, decree, order or award of any court,
      governmental body or arbitrator having jurisdiction over the
    Purchaser.

	 	 	 
	7.4 	
      GST Registration

	 	 	 
		
      The Purchaser is a registrant for purposes of the ETA
      whose registration number is 82638 2525 RT0001.

	 	 	 
	7.5 	
      Compliance

	 	 	 
		
      The entering into and performance of this Agreement and
      the transactions contemplated herein will not be in violation of any
      Statute, Regulation, Rule, Bylaw, Order, Judgment or Decree by which the
      Purchaser is bound.

	 	 	 
	7.6 	
      Filings

	 	 	 
		(a) 	
      Subject to the provisions of this Agreement, there are no
      further filings or notices required, or approvals or consents required
      with respect to the transfer of the Wescorp Shares to the Vendor, except
      those that will be obtained by the Purchaser prior to the delivery of the
      Wescorp Shares to the Vendor pursuant to the terms of this
    Agreement.

	 	 	 
		(b) 	
      Subject to the provisions of this Agreement, following
      the delivery of the Stock Certificate for the Oil Sands Quest Inc. Shares,
      the Vendor will be required to submit such stock transfer to the transfer
      agent for Oil Sands Quest Inc. in order to complete the transfer of the
      Oil Sands Quest Inc. Shares to the Vendor.

	 	 	 
	7.7 	
      Right to Transfer

	 	 	 
		
      The Purchaser has good and sufficient power and authority
      to transfer the legal and beneficial title and ownership of the Wescorp
      Shares and the outstanding Oil Sands Quest Inc. Shares to the Vendor free
      and clear of all liens, charges and encumbrances.

	 	 	 
	7.8 	
      Securities

	 	 	 
		
      To the best of the knowledge of the Purchaser, no
      securities, commissioners or similar regulatory authority has currently
      issued any Order which is currently
outstanding,

- 18 -

preventing or suspending trading of the
Wescorp Shares or the Oil Sands Quest Inc. Shares, and the Purchaser is not in
default of any requirement of any applicable securities laws, rules or policies
with respect to the transfer of the Wescorp Shares and the Oil Sands Quest Inc.
Shares to the Vendor. 

ARTICLE 8      SURVIVAL OF
COVENANTS, REPRESENTATIONS AND WARRANTIES 

	8.1 	
      Survival of Representations and
  Warranties

	 	 	 
		(a) 	
      The representations and warranties contained in this
      Agreement and in all certificates and documents delivered pursuant to or
      contemplated by this Agreement shall survive the Closing of the
      transactions contemplated hereby.

ARTICLE 9      ADDITIONAL COVENANTS

	9.1 	
      PIPA Compliance

	 	 	 
		
      The Purchaser agrees to comply with the provisions of
      section 22 of the Personal Information Protection Act s.a. 2003 ch.
      P-6.5 as amended ("PIPA"). The Vendor and the Purchaser agree that
      the collection, use and disclosure of personal information is restricted
      to purposes that relate to the transactions contemplated by this Agreement
      and upon completion of the transactions contemplated by this Agreement the
      Purchaser agrees to use and disclose such personal information only for
      such purposes as the information was initially collected by the Vendor
      unless otherwise consented to by the Persons in respect of whom the
      personal information relates. If the transactions relating to this
      Agreement are not completed then all such personal information shall be
      returned to the Vendor or destroyed at the request of the
Vendor.

	 	 	 
	9.2 	
      Compliance with Applicable Securities Law and
      Regulations

	 	 	 
		
      The Vendor acknowledges and agrees that:

	 	 	 
		(a) 	
      that the 13,900,000 common shares of the capital of
      Wescorp Energy Inc. that are being transferred to the Vendor pursuant to
      section 3.1 hereof are subject to the Restrictions set out in Schedule J
      attached hereto; and

	 	 	 
		(b) 	
      the Vendor is aware of the Restrictions set out in
      Schedule J and shall, at all times, act in accordance with and comply with
      such Restrictions; and

	 	 	 
		(c) 	
      The Restrictions form part of this Agreement and the
      acknowledgments, covenants, and representations contained therein are
      binding upon the Vendor. The Vendor undertakes and agrees not to sell or
      otherwise dispose of any interest in and to the Wescorp Shares except in
      compliance with all applicable laws, regulations, rules and orders,
      including those in force in Canada and the United States.

	 	 	 
		(d) 	
      the Vendor is purchasing, and receiving as payment
      hereunder, the 13,900,000 shares of Wescorp Energy Inc. and the 470,143
      shares of Oil Sands Quest Inc. as principal, and upon the completion of
      the Closing, the Vendor will be the sole legal and beneficial owner of
      such shares.

- 19 -

	9.3 	
      Delivery of Makon Assets

	 	 
		
      The Vendor and the Purchaser acknowledge that the Makon
      Assets are currently situated in the Province of Ontario, and the Vendor
      undertakes and agrees to deliver, to a location specified by the
      Purchaser, in Alberta, the Makon Assets, within fifteen (15) days of the
      Closing Date, and the parties further agree that for all purposes the
      Makon Assets are sold to the Purchaser FOB Edmonton
  Alberta.

ARTICLE 10    CLOSING AND TRANSFER OF
POSSESSION 

	10.1 	
      Place of Closing

	 	 	 
		
      The Closing shall take place at 5:00 p.m. (Edmonton,
      Alberta time) on the Closing Date at the offices of Bryan & Company
      LLP, counsel for the Purchaser, 2600 Manulife Place, 10180 - 101 Street,
      Edmonton, Alberta T5J 3Y2.

	 	 	 
	10.2 	
      Deliveries by the Vendor

	 	 	 
		
      At the Closing, the Vendor shall deliver the following to
      the Purchaser:

	 	 	 
		(a) 	
      certified copies of all resolutions of the board of
      directors of the Vendor approving the entering into and completion of the
      transaction contemplated by this Agreement and the Ancillary
      Agreements;

	 	 	 
		(b) 	
      certified copies of all resolutions of the shareholders
      of the Vendor approving the entering into and completion of the
      transaction contemplated by this Agreement and the Ancillary
      Agreements;

	 	 	 
		(c) 	
      a certificate of status, and a certificate of
      amalgamation, with respect to the Vendor issued by the appropriate
      government officials of their respective jurisdiction of
    incorporation;

	 	 	 
		(d) 	
      Letter of Opinion - Vendor’s Solicitor;

	 	 	 
		(e) 	
      General Conveyance;

	 	 	 
		(f) 	
      Raider Contract Assignment and Raider Consent;

	 	 	 
		(g) 	
      Executed Release of Original License Agreement;

	 	 	 
		(h) 	
      Executed Release of Bowhay Prior Consulting
    Agreement;

	 	 	 
		(i) 	
      Executed Release of McCaw Prior Consulting
    Agreement;

	 	 	 
		(j) 	
      Executed Consulting Agreement - Bowhay;

	 	 	 
		(k) 	
      Executed Consulting Agreement - McCaw;

	 	 	 
		(l) 	
      Executed License Agreement;

- 20 -

	 	(m) 	
      assignment(s) of the Vendor's interest in the Makon
      Intellectual Property, Raider Intellectual Property and Total Fluid
      Intellectual Property in form and substance satisfactory to the
      Purchaser;

	 	 	 
	 	(n) 	
      Bill of Sale for the Makon Assets, Raider Assets and
      Total Fluid Assets in form and substance satisfactory to the
    Purchaser;

	 	 	 
	 	(o) 	
      GST Joint Election;

	 	 	 
	 	(p) 	
      And acknowledgment signed by 1139076 Alberta Ltd. that
      all amounts payable by the Vendor pursuant to the Original License
      Agreement (including, but not limited to amounts owing in relation to the
      Total Fluid Assets) have been filed;

	 	 	 
	 	(q) 	
      proof of discharge of any Encumbrance other than the
      Permitted Encumbrances;

	 	 	 
	 	(r) 	
      physical possession of the Makon Assets, Raider Assets
      and Total Fluid Assets and all deeds, conveyances, assurances, transfers
      and assignments, and any other instruments, in registrable form where
      required and otherwise duly executed by the Vendor and in form
      satisfactory to the Purchaser, necessary or reasonably required to
      transfer the Makon Assets, Raider Assets and Total Fluid Assets to the
      Purchaser with a good and marketable title, free and clear of all
      Encumbrances other than Permitted Encumbrances (provided that the Makon
      Assets shall be delivered in accordance with section 9.3 hereof;

	 	 	 
	 	(s) 	
      all other agreements contemplated by or referred to in
      this Agreement to be executed by the Vendor, in each case duly executed by
      the Vendor;

	 	 	 
	 	(t) 	
      all other agreements contemplated by or referred to in
      this Agreement to be delivered by the Vendor, in each case duly executed
      by all counterparts other than the Purchaser; and

	 	 	 
	 	(u) 	
      such other and further documents as the Purchaser may
      reasonably request.

	10.3 	
      Purchaser’s Deliveries at Closing

	 	 	 	 
		(a) 	
      At the Closing, the Purchaser shall deliver the following
      to the Vendor:

	 	 	 	 
			(i) 	
      a certificate of status with respect to the Purchaser
      issued by appropriate government officials of its jurisdiction of
      incorporation;

	 	 	 	 
			(ii) 	
      the calculation of the Purchase Price, calculated by the
      Purchaser in accordance with section 3.3 hereof;

	 	 	 	 
			(iii) 	
      certified copy of directors resolution of the Purchaser
      approving the entering into and completion of the transaction contemplated
      by this Agreement and the Ancillary Agreements;

	 	 	 	 
			(iv) 	
      the Promissory Note;

	 	 	 	 
			(v) 	
      all other agreements contemplated by or referred to in
      this Agreement to be executed by the Purchaser and to be delivered on
      Closing;

- 21 -

	 	(vi) 	
      GST Joint Election.

	 	(b) 	
      At the Closing, the Purchaser agrees:

	 	 	 	 
	 		(i) 	
      Provided it has received the Consulting Agreement -
      Bowhay executed by Jim Bowhay to execute and deliver such agreement and
      provide one copy to Jim Bowhay.

	 	 	 	 
	 		(ii) 	
      Provided it has received the Consulting Agreement - McCaw
      executed by Dermot McCaw to execute and deliver such agreement and provide
      one copy to Dermot McCaw.

	 	 	 	 
	 		(iii) 	
      Provided it has received the License Agreement executed
      by 1139076 Alberta Ltd. to execute and deliver such agreement and provide
      one copy to 1139076 Alberta Ltd.

	 	 	 	 
	 	(c) 	
      Within fifteen (15) days following the Closing Date, the
      Purchaser shall deliver to the Vendor a share certificate for 13,900,000
      common shares of Wescorp Energy Inc. issued in the name of the Vendor,
      which shall be subject to the Restrictions - Wescorp Shares.

	 	 	 	 
	 	(d) 	
      Within ninety (90) days following the Closing Date, the
      Purchaser shall deliver to the Vendor the share certificate for and an
      executed stock transfer form for the Oil Sands Quest Shares being
      transferred to the Purchaser in accordance with section 3.1(c)
    hereof.

	 	 	 	 
	 	(e) 	
      Such other and further documents as the Vendor may
      reasonably request.

	10.4 	
      Further Assurances

	 	 
		
      From time to time subsequent to the Closing Date, each
      Party to this Agreement covenants and agrees that it will, at the expense
      of the requesting Party, promptly execute and deliver all such documents,
      including, conveyances, transfers, consents and other assurances, and do
      all such other acts and things as the other Party, acting reasonably, may
      from time to time request be executed or done in order to better evidence
      or perfect or effectuate any provision of this Agreement or of any
      Ancillary Agreement or any of the respective obligations intended to be
      created hereby or thereby.

ARTICLE 11     INDEMNIFICATION AND
LIMITATIONS REGARDING LOSSES 

	11.1 	
      Indemnification by the Vendor, Kyle and
  Dale

	 	 	 
		
      In addition to any other indemnity given by the Vendor,
      Kyle and Dale in this Agreement, the Vendor, Kyle and Dale joint and
      severally agree to indemnify and save harmless the Purchaser, and its
      directors, officers, employees and agents from all Losses suffered or
      incurred by the Purchaser as a result of or arising directly or indirectly
      out of or in connection with:

	 	 	 
		(a) 	
      any breach by the Vendor, Kyle or Dale of or any
      inaccuracy of any representation or warranty of the Vendor, Kyle or Dale
      contained in this

- 22 -

	 		
      Agreement or in any agreement, certificate or other
      document delivered pursuant hereto; and

	 	 	 
	 	(b) 	
      any breach or non performance by the Vendor, Kyle or Dale
      of any covenant to be performed by it that is contained in this Agreement
      or in any agreement, certificate or other document delivered pursuant
      hereto.

	11.2 	
      Indemnification by the Purchaser

	 	 	 
		
      In addition to any other indemnity given by the Purchaser
      in this Agreement, the Purchaser agrees to indemnify and save harmless the
      Vendor, its directors, officers, employees and agents from all Losses
      suffered or incurred by the Vendor as a result of or arising directly or
      indirectly out of or in connection with:

	 	 	 
		(a) 	
      any breach by the Purchaser of or any inaccuracy of any
      representation or warranty contained in this Agreement or in any
      agreement, instrument, certificate or other document delivered pursuant
      hereto; and

	 	 	 
		(b) 	
      any breach or non performance by the Purchaser of any
      covenant to be performed by it that is contained in this Agreement or in
      any agreement, certificate or other document delivered pursuant
    hereto.

ARTICLE 12     MISCELLANEOUS 

	12.1 	
      Notices

	 	 	 	 
		(a) 	
      Any notice or other communication required or permitted
      to be given hereunder shall be in writing and shall be delivered in
      person, transmitted by telecopy or similar means of recorded electronic
      communication or sent by registered mail, charges prepaid, addressed as
      follows:

	 	 	 	 
			(i) 	
      if to the Vendor:

	 	 	 	 
				
      Hendrickson Gower Massing Olivieri LLP 
Barristers and
      Solicitors 
2250, 10060 Jasper Avenue 
Edmonton, Alberta T5J 3R8
      
Attention: Adam Merrick 
Fax No. (780) 421-5864

	 	 	 	 
			(ii) 	
      if to the Shareholders:

	 	 	 	 
				
      Dale Norman Plante 
Duinrellweg 10 
2242
  JN

				
      Wassenaar, Netherlands

	 	 	 	 
				
      Kyle Plante 

	 	 	 	Box 23391
				
      Grande Prairie, Alberta T8V
7G7

- 23 -

	 	(iii) 	
      if to the Purchaser:

	 	 	 
	 		
      Wescorp Technologies Ltd. 
770, 435 - 4th
      Avenue SW 
Calgary, Alberta T2P 3A8 
Attention: Doug Biles
      
Fax No.: (403) 444-7029

	 	 	 
	 		
      with a copy to:

	 	 	 
	 		
      Bryan & Company LLP 
Barristers & Solicitors
      
2600, 10180 - 101 Street 
Edmonton, Alberta T5J 3Y2 
Attention:
      Michael W. Crozier 
Fax No.: (780) 428-6324

	 	(b) 	
      Any such notice or other communication shall be deemed to
      have been given and received on the day on which it was delivered or
      transmitted (or, if such day is not a Business Day, on the next following
      Business Day) or, if mailed, on the fifth Business Day following the date
      of mailing; provided, however, that if at the time of mailing or within
      five Business Days thereafter there is or occurs a labour dispute or other
      event that might reasonably be expected to disrupt the delivery of
      documents by mail, any notice or other communication hereunder shall be
      delivered or transmitted by means of recorded electronic communication as
      aforesaid.

	 	 	 
	 	(c) 	
      Any Party may at any time change its address for service
      from time to time giving notice to the other Parties in accordance with
      this section.

	12.2 	
      Legal Fees

	 	 
		
      Each Party shall be responsible for their own legal and
      other professional fees incurred in respect of the transactions
      contemplated by this Agreement.

	 	 
	12.3 	
      No Merger

	 	 
		
      All covenants, agreements, rights, obligations,
      indemnities, representations and warranties of the Parties set forth in
      this Agreement and in any documents or agreements delivered pursuant to or
      contemplated by this Agreement shall survive, and not merge on, the
      completion of the Closing and, notwithstanding the Closing, shall continue
      in full force and effect thereafter.

- 24 -

	12.4 	
      Counterparts

	 	 
		
      This Agreement and the Ancillary Agreements may be
      executed in counterparts, each of which shall constitute an original and
      all of which taken together shall constitute one and the same instrument
      and counterparts may be delivered by facsimile transmission, or other
      electronic transmission.

	 	 
		
      IN WITNESS WHEREOF this Agreement has been
      executed by the Parties.

	  	 	FEP SERVICES INC. 
	 	 	 
	  	 	Per: /s/ Dale Norman Plante                                                                  
	 	 	 
	  	 	WESCORP TECHNOLOGIES LTD. 
	 	 	 
	  	 	Per: /s/ Douglas Biles                                                                             
      
	 	 	 
	  	 	/s/ Dale Norman Plante                                                                          
	Witness 	 	DALE NORMAN PLANTE 
	 	 	 
	  	 	/s/ Kyle Plante                                                                                        
    
	Witness 	 	KYLE PLANTEWWW.EXFILE.COM, INC. -- 888-775-4789 -- ARKADOS GROUP, INC. -- EXHIBIT 4.1 TO FORM 8-K

    EXHIBIT
      4.1

    
NEITHER
      THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE
      BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
      COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
      THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
      MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
      STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
      OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
      SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
      EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
      SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
      COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF
      THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
      OR
      OTHER LOAN SECURED BY SUCH SECURITIES.

    

    Original
      Issue Date: December ___, 2007

    Original
      Conversion Price (subject to adjustment herein):
$0.85

    

    $___________

    

    

    6%
      SECURED CONVERTIBLE DEBENTURE

    DUE
      DECEMBER 28, 2008

    

    THIS
      SECURED DEBENTURE is one of a
      series of duly authorized and issued 6% Secured Convertible Debentures of
      Arkados Group, Inc. (formerly CDKNet.com, Inc.), a Delaware corporation, having
      a principal place of business at 220 Old New Brunswick Road, 2nd Floor,
      Piscataway, NJ  08854 (the “Company”), designated as its 6%
      Secured Convertible Debenture, due December 28, 2008 (this debenture, the
“Debenture” and collectively with the other such series of debentures,
      the “Debentures”).

    

    FOR
      VALUE
      RECEIVED, the Company promises to pay to _______________ or its registered
      assigns (the “Holder”), or shall have paid pursuant to the terms
      hereunder, the principal sum of $__________ by December 28, 2008 or such later
      date as may be determined under the terms of the “Amendment and Waiver
      Agreement” defined below (the “Maturity Date”), or such earlier date
      as this Debenture is required to be repaid as provided hereunder, and to pay
      interest to the Holder on the aggregate unconverted and then outstanding
      principal amount of this Debenture in accordance with the provisions
      hereof.  This Debenture is subject to the following additional
      provisions:

    

    Section
      1.       Definitions.  For
      the purposes hereof, in addition to the terms defined elsewhere in this
      Debenture: (a) capitalized terms not otherwise defined herein have the meanings
      given to such terms in the Purchase Agreement, and (b) the following terms
      shall
      have the following meanings:

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    “Alternate
      Consideration” shall have the meaning set forth in Section
      5(d).

    

    “Amendment
      and Waiver Agreement” shall mean that agreement entered into as of December
      6, 2007 by and among  the “Company and each of the other parties set
      forth on the signature page thereto, each of which are Holders of Debentures
      of
      like tenor hereto.

    

    “Base
      Conversion Price” shall have the meaning set forth in Section
      5(b).

    

    “Business
      Day” means any day except Saturday, Sunday and any day which shall be a
      federal legal holiday in the United States or a day on which banking
      institutions in the State of New York are authorized or required by law or
      other
      government action to close.

    “Buy-In”
      shall have the meaning set forth in Section 4(d)(v).

    

    “Change
      of Control Transaction” means the occurrence after the date hereof of any of
      (i) an acquisition after the date hereof 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 the Company, by contract or otherwise) of in excess of 40% of the
      voting securities of the Company, or (ii) the Company merges into or
      consolidates with any other Person, or any Person merges into or consolidates
      with the Company and, after giving effect to such transaction, the stockholders
      of the Company immediately prior to such transaction own less than 60% of the
      aggregate voting power of the Company or the successor entity of such
      transaction, or (iii) the Company sells or transfers its assets, as an entirety
      or substantially as an entirety, to another Person and the stockholders of
      the
      Company immediately prior to such transaction own less than 60% of the aggregate
      voting power of the acquiring entity immediately after the transaction, (iv)
      a
      replacement at one time or within a two year period of more than one-half of
      the
      members of the Company’s board of directors which is not approved by a majority
      of those individuals who are members of the board of directors on the date
      hereof (or by those individuals who are serving as members of the board of
      directors on any date whose nomination to the board of directors was approved
      by
      a majority of the members of the board of directors who are members on the
      date
      hereof), or (v) the execution by the Company of an agreement to which the
      Company  is a party or by which it is bound, providing for any of the
      events set forth above in (i) through (iv).

    

    “Cash
      Sale Redemption Amount” shall equal the sum of (i) 100% of the principal
      amount of this Debenture to be prepaid, plus all accrued and unpaid interest
      thereon, (ii) the principal amount of this Debenture to be prepaid, plus all
      other accrued and unpaid interest hereon, divided by the Conversion Price on
      the
      closing date of the applicable event multiplied by the “Effective Price”
(defined below), and (iii) all other amounts, costs, expenses and liquidated
      damages due in respect of this Debenture.  The “Effective Price” shall
      be the cash consideration paid by the acquirer in such event (less the amount
      set forth in clause (i) above) divided by the sum of; (x) the issued and
      outstanding shares 

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    of
      Common
      Stock of the Company then outstanding and (y) the shares of Common Stock into
      which the outstanding Debentures may be converted on the day immediately
      preceding the record date fixed for determining the holders of shares of Common
      Stock eligible to receive a distribution (or if no such date has been fixed,
      the
      date of the day immediately preceding the closing of the transaction) and (z)
      the number of shares deemed issuable to the Warrant holders pursuant to the
      mandatory redemption provisions in the Warrants which take effect upon sale
      of
      assets for cash consideration whether or not any Warrant holder shall have
      elected to have their Warrants Redeemed; provided,
however, that the number of shares of Common Stock
      issuable on conversion of the Debentures and issuable upon exercise of the
      Warrants for this purpose shall be determined on a fully converted or exercised
      basis and ignoring any conversion or exercise limitations therein).

    

    “Common
      Stock” means the common stock, par value $.0001 per share, of the Company
      and stock of any other class of securities into which such securities may
      hereafter have been reclassified or changed into.

    

    “Conversion
      Date” shall have the meaning set forth in Section 4(a).

    

    “Conversion
      Price” shall have the meaning set forth in Section 4(b).

    

    “Conversion
      Shares” means the shares of Common Stock issuable upon conversion of this
      Debenture or as payment of interest in accordance with the terms.

    

    “Debenture
      Register” shall have the meaning set forth in Section 2(c).

    

    “Dilutive
      Issuance” shall have the meaning set forth in Section 5(b).

    

    “Dilutive
      Issuance Notice” shall have the meaning set forth in Section
      5(b).

    

    “Effectiveness
      Period” shall have the meaning given to such term in the Registration Rights
      Agreement.

    

    “Equity
      Conditions” shall mean, during the period in question, (i) the Company shall
      have duly honored all conversions and redemptions scheduled to occur or
      occurring by virtue of one or more Notice of Conversions of the Holder, if
      any,
      (ii) all liquidated damages and other amounts owing to the Holder in respect
      of
      this Debenture shall have been paid, (iii) there is an effective
      Registration Statement pursuant to which the Holder is permitted to utilize
      the
      prospectus thereunder to resell all of the shares issuable pursuant to the
      Transaction Documents (and the Company believes, in good faith, that such
      effectiveness will continue uninterrupted for the foreseeable future), (iv)
      the
      Common Stock is trading on the Trading Market and all of the shares issuable
      pursuant to the Transaction Documents are listed for trading on a Trading Market
      (and the Company believes, in good faith, that trading of the Common Stock
      on a
      Trading Market will continue uninterrupted for the foreseeable future), (v)
      there is a sufficient number of authorized but unissued and otherwise unreserved
      shares of Common Stock for the

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    issuance
      of all of the shares issuable pursuant to the Transaction Documents, (vi) there
      is then existing no Event of Default or event which, with the passage of time
      or
      the giving of notice, would constitute an Event of Default, (vii) the issuance
      of the shares in question  to
      the Holder would not violate the limitations set forth in Section 4(c), (viii)
      no public announcement of a pending or proposed Fundamental Transaction, Change
      of Control Transaction or acquisition transaction has occurred that has not
      been
      consummated and (ix) for a period of 20 consecutive Trading Days prior to
      the applicable date in question, the daily trading volume for the Common Stock
      on the Trading Market exceeds 200,000 shares per Trading Day (subject to
      adjustment for forward and reverse stock splits and the like) in the case of
      a
      Forced Conversion pursuant to Section 6.

    

    “Event
      of Default” shall have the meaning set forth in Section 8.

    

    “Exchange
      Act” means the Securities Exchange Act of 1934, as amended, and the rules
      and regulations promulgated thereunder.

    

    “Forced
      Conversion” shall have the meaning set forth in Section 6(b).

    

    “Forced
      Conversion Date” shall
      have the meaning set forth in Section 6(b).

    

    “Forced
      Conversion Notice” shall have the meaning set forth in Section
      6(b).

    

    “Forced
      Conversion Notice Date” shall have the meaning set forth in Section
      6(b).

    

    “Fundamental
      Transaction” shall have the meaning set forth in Section 5(d).

    

    “Interest
      Conversion Rate” means 85% of the lesser of (i) the average of the VWAPs for
      the 10 consecutive Trading Days ending on the Trading Day that is immediately
      prior to the applicable Interest Payment Date or (ii) the average of the VWAPs
      for the 10 consecutive Trading Days ending on the Trading Day that is
      immediately prior to the date the applicable interest payment shares are issued
      and delivered if after the Interest Payment Date.

    

    “Interest
      Notice Period” shall have the meaning set forth in Section
      2(a).

    

    “Interest
      Payment Date” shall have the meaning set forth in Section 2(a).

    

    “Interest
      Share Amount” shall have the meaning set forth in Section 2(a).

    

    “Late
      Fees” shall have the meaning set forth in Section 2(d).

    

    “Mandatory
      Default Amount”  shall equal the sum of (i) the greater of: (A)
      130% of the principal amount of this Debenture to be prepaid, plus all accrued
      and unpaid interest thereon, or (B) the principal amount of this Debenture
      to be
      prepaid, plus all other accrued and unpaid interest hereon, divided by the
      Conversion Price on (x) the date

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    the
      Mandatory Default Amount is demanded or otherwise due or (y) the date the
      Mandatory Default Amount is paid in full, whichever is less, multiplied by
      the
      average of the 15 VWAPs immediately prior to (x) the date the Mandatory Default
      Amount is demanded or otherwise due or (y) the date the Mandatory Default Amount
      is paid in full, whichever is greater, and (ii) all other amounts, costs,
      expenses and liquidated damages due in respect of this Debenture.

    

    “New
      York Courts” shall have the meaning set forth in Section 9(d).

    

    “Notice
      of Conversion” shall have the meaning set forth in Section
      4(a).

    

    “Original
      Issue Date” shall mean the date of the first issuance of the Debentures
      regardless of the number of transfers of any Debenture and regardless of the
      number of instruments which may be issued to evidence such
      Debenture.

    

    “Permitted
      Indebtedness” shall mean (a) the Indebtedness existing on the Original Issue
      Date and set forth on Schedule 3.1(aa) attached to the Purchase
      Agreement, (b) lease obligations and purchase money Indebtedness of up to
      $100,000, in the aggregate, incurred in connection with the acquisition of
      capital assets and lease obligations with respect to newly acquired or leased
      assets, (c) Indebtedness incurred pursuant to the Transaction Documents, (d)
      unsecured accounts payable incurred in the ordinary course of business, (e)
      indebtedness with respect to taxes, governmental changes or levies which are
      being contested in good faith, provided that adequate reserves are maintained
      on
      the books of the Company or Subsidiaries, as the case may be, in accordance
      with
      GAAP and (f) additional Indebtedness incurred by the Company in connection
      with
      raising capital for the financing of its operations, acquisition of another
      entity (by merger, consolidation, the acquisition of all or substantially of
      the
      assets of such entity or similar transaction), provided that such
      Indebtedness does not mature or require payments of principal prior to the
      Maturity Date and is subordinate in right of payment to the Indebtedness
      evidenced by this Debenture.

    

    “Permitted
      Lien” shall mean the individual and collective reference to the following:
      (a) Liens for taxes, assessments and other governmental charges or levies not
      yet due or Liens for taxes, assessments and other governmental charges or levies
      being contested in good faith and by appropriate proceedings for which adequate
      reserves (in the good faith judgment of the management of the Company) have
      been
      established in accordance with GAAP, (b) Liens prior to the Original Issue
      Date
      as set forth on the Disclosure Schedules, (c) Liens granted in connection with
      clauses (b) and (c) under Permitted Indebtedness (provided, in the case of
      clause (b) such Liens are not secured by assets of the Company or its
      Subsidiaries other than the assets so leased or acquired), and (d) Liens imposed
      by law which were incurred in the ordinary course of business, such as
      carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and
      other similar Liens arising in the ordinary course of business, and (x) which
      do
      not individually or in the aggregate materially detract from the value of such
      property or assets or materially impair the use thereof in the operation of
      the
      business of the Company and its consolidated Subsidiaries or (y) which are
      being
      contested in good faith by appropriate 

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    proceedings,
      which proceedings have the effect of preventing the forfeiture or sale of the
      property or asset subject to such Lien.

     

     “Person”
      means a corporation, an association, a partnership, organization, a business,
      an
      individual, a government or political subdivision thereof or a governmental
      agency.

    

    “Purchase
      Agreement” means the Securities Purchase Agreement, dated as of June 30,
      2006 to which the Company and the original Holder are parties, as amended,
      modified or supplemented from time to time in accordance with its
      terms.

    

    “Registration
      Rights Agreement” means the Registration Rights Agreement, dated as of the
      date of the Purchase Agreement, to which the Company and the original Holder
      are
      parties, as amended, modified or supplemented from time to time in accordance
      with its terms.

    

    “Registration
      Statement” means a registration statement meeting the requirements set forth
      in the Registration Rights Agreement, covering among other things the resale
      of
      the Conversion Shares and naming the Holder as a “selling stockholder”
thereunder.

    

    “Securities
      Act” means the Securities Act of 1933, as amended, and the rules and
      regulations promulgated thereunder.

    

    “Subsidiary”
      shall have the meaning given to such term in the Purchase
      Agreement.

    

    “Threshold
      Period” shall have the meaning given to such term in Section
      6(b).

    

    “Trading
      Day” means a day on which the Common Stock is traded on a Trading
      Market.

    

    “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 Nasdaq SmallCap
      Market, the American Stock Exchange, the New York Stock Exchange,  the
      Nasdaq National Market or the OTC Bulletin Board.

    

    “Transaction
      Documents” shall have the meaning set forth in the Purchase
      Agreement.

    

    “VWAP”
      means, for any date, the price determined by the first of the following clauses
      that applies: (a) if the Common Stock is then listed or quoted on a Trading
      Market, the daily volume weighted average price of the Common Stock for such
      date (or the nearest preceding date) on the Trading Market on which the Common
      Stock is then listed or quoted as reported by Bloomberg Financial L.P. (based
      on
      a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (b) 
if the Common Stock is not then listed or quoted on a Trading Market and if
      prices for the Common Stock are then

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    reported
      in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar
      organization or agency succeeding to its functions of reporting prices), the
      most recent bid price per share of the Common Stock so reported; or (c) in
      all other cases, the fair market value of a share of Common Stock as determined
      by an independent appraiser selected in good faith by the Holder and reasonably
      acceptable to the Company.

    

    “Warrants”
      shall have the meaning set forth in the Purchase Agreement.

    

    Section
      2.     Interest.

    

    a)  Payment
      of Interest in Cash or Kind. The Company shall pay interest to the Holder on
      the aggregate unconverted and then outstanding principal amount of this
      Debenture at the rate of 6% per annum, payable semiannually  on
      January 1 and July 1, beginning on January 1, 2007 (provided that interest
      due
      on January 1, 2007, July 1, 2007 and January 1, 2008 upon principal outstanding
      on such date shall be added to the principal outstanding and shall thereafter
      bear interest at the rate set forth herein, and further provide that if the
      Company raised at least $2 million of equity financing during the period
      beginning on December 1, 2007 and ending March 3, 2008, on each Interest Payment
      Date thereafter interest due on upon principal outstanding on such date shall
      be
      added to the principal outstanding and shall thereafter bear interest at the
      rate set forth herein), upon a redemption event pursuant to Section 6(a) and
      on
      the Maturity Date (except that, if any such date is not a Business Day, then
      such payment shall be due on the next succeeding Business Day) (each such date,
      an “Interest Payment Date”), in cash or duly authorized, fully paid and
      non-assessable shares of Common Stock at the Interest Conversion Rate, or a
      combination thereof  (the amount to be paid in shares, the
“Interest Share Amount”); provided, however, payment in
      shares of Common Stock may only occur if during the 20 Trading Days immediately
      prior to the applicable Interest Payment Date  (the “Interest
      Notice Period”) and through and including the date such shares of Common
      Stock are issued to the Holder all of the Equity Conditions, unless waived
      by
      the Holder in writing, have been met and the Company shall have given the Holder
      notice in accordance with the notice requirements set forth below.

    

    b)  Company’s
      Election to Pay Interest in Kind.  Subject to the terms and
      conditions herein, the decision whether to pay interest hereunder in shares
      of
      Common Stock or cash shall be at the sole discretion of the
      Company.  Prior to the commencement of an Interest Notice Period, the
      Company shall provide the Holder with written notice of its election to pay
      interest hereunder on the applicable Interest Payment Date either in cash,
      shares of Common Stock or a combination thereof (the Company may indicate in
      such notice that the election contained in such notice shall continue for later
      periods until revised) and the Interest Share Amount as to the applicable
      Interest Payment Date.  During any Interest Notice Period, the
      Company’s election (whether specific to an Interest Payment Date or continuous)
      shall be irrevocable as to such Interest Payment Date.  Subject to the
      aforementioned conditions, failure to timely provide such written notice shall
      be deemed an election by the Company to pay the interest on such Interest
      Payment Date in cash.  At any time the Company delivers a notice to
      the Holder of its 

     

     

     

    
      
         

      

      
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    election
      to pay the interest in shares of Common Stock, the Company shall file a
      prospectus supplement pursuant to Rule 424 disclosing such
      election.

    

    c)  Interest
      Calculations. Interest shall be calculated on the basis of a 360-day year
      and shall accrue daily commencing on the Original Issue Date until payment
      in
      full of the principal sum, together with all accrued and unpaid interest and
      other amounts which may become due hereunder, has been made.  Payment
      of interest in shares of Common Stock shall otherwise occur pursuant to Section
      4(d)(ii) and only for purposes of the payment of interest in shares, the
      Interest Payment Date shall be deemed the Conversion Date.  Interest
      shall cease to accrue with respect to any principal amount converted, provided
      that the Company in fact delivers the Conversion Shares within the time period
      required by Section 4(d)(ii).  Interest hereunder will be paid to the
      Person in whose name this Debenture is registered on the records of the Company
      regarding registration and transfers of this Debenture (the “Debenture
      Register”). Except as otherwise provided herein, if at any time the Company
      pays interest partially in cash and partially in shares of Common Stock to
      the
      holders of the Debentures, then such payment shall be distributed ratably among
      the holders of the Debentures based on their (or their predecessor’s initial
      purchases of Debentures pursuant to the Purchase Agreement.

    

    d)  Late
      Fee.  All overdue accrued and unpaid interest to be paid hereunder
      shall entail a late fee at the rate of 18% per annum (or such lower maximum
      amount of interest permitted to be charged under applicable law) (“Late
      Fees”) which will accrue daily, from the date such interest is due hereunder
      through and including the date of payment. Notwithstanding anything to the
      contrary contained herein, if on any Interest Payment Date the Company has
      elected to pay interest in Common Stock and is not able to pay accrued interest
      in the form of Common Stock because it does not then satisfy the conditions
      for
      payment in the form of Common Stock set forth above, then, at the option of
      the
      Holder, the Company, in lieu of (and in full satisfaction of) delivering either
      shares of Common Stock pursuant to this Section 2 or paying the regularly
      scheduled cash interest payment, shall deliver, within three Trading Days of
      each applicable Interest Payment Date, an amount in cash equal to the product
      of
      the number of shares of Common Stock otherwise deliverable to the Holder in
      connection with the payment of interest due on such Interest Payment Date and
      the highest VWAP during the period commencing on the Interest Payment Date
      and
      ending on the Trading Day prior to the date such payment is made.

    

    e)  Prepayment.  Except
      as otherwise set forth in this Debenture, the Company may not prepay any portion
      of the principal amount of this Debenture without the prior written consent
      of
      the Holder.

    

    Section
      3.                      Registration
      of Transfers and Exchanges.

    

    a)  Different
      Denominations. This Debenture is exchangeable for an equal aggregate
      principal amount of Debentures of different authorized denominations, as
      requested by the Holder surrendering the same.  No service charge will
      be made for such registration of transfer or exchange.

    

    
      
         

      

      
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    b)  Investment
      Representations. This Debenture has been issued subject to certain
      investment representations of the original Holder set forth in the Purchase
      Agreement and may be transferred or exchanged only in compliance with the
      Purchase Agreement and applicable federal and state securities laws and
      regulations.

    

    c)  Reliance
      on Debenture Register. Prior to due presentment to the Company for transfer
      of this Debenture, the Company and any agent of the Company may treat the Person
      in whose name this Debenture is duly registered on the Debenture Register as
      the
      owner hereof for the purpose of receiving payment as herein provided and for
      all
      other purposes, whether or not this Debenture is overdue, and neither the
      Company nor any such agent shall be affected by notice to the
      contrary.

    

    Section
      4.         
 Conversion.

    

    a)  Voluntary
      Conversion. At any time after the Original Issue Date until this Debenture
      is no longer outstanding, this Debenture shall be convertible into shares of
      Common Stock at the option of the Holder, in whole or in part at any time and
      from time to time (subject to the limitations on conversion set forth in
      Section 4(c) hereof).  The Holder shall effect conversions by
      delivering to the Company the form of Notice of Conversion attached hereto
      as
Annex A (a “Notice of Conversion”), specifying therein the
      principal amount of this Debenture to be converted and the date on which such
      conversion is to be effected (a “Conversion Date”).  If no
      Conversion Date is specified in a Notice of Conversion, the Conversion Date
      shall be the date that such Notice of Conversion is provided
      hereunder.  Once delivered, the Notice of Conversion shall be
      irrevocable, unless provided otherwise by the Company in its sole discretion
      or
      as provided in Section 4(d)(iii).  To effect conversions hereunder,
      the Holder shall not be required to physically surrender this Debenture to
      the
      Company unless the entire principal amount of this Debenture plus all accrued
      and unpaid interest thereon has been so converted. Conversions hereunder shall
      have the effect of lowering the outstanding principal amount of this Debenture
      in an amount equal to the applicable conversion.  The Holder and the
      Company shall maintain records showing the principal amount converted and the
      date of such conversions.  The Company shall deliver any objection to
      any Notice of Conversion within 1 Business Day of receipt of such
      notice.  In the event of any dispute or discrepancy, the records of
      the Holder shall be controlling and determinative in the absence of manifest
      error. The Holder and any assignee, by acceptance of this Debenture, acknowledge
      and agree that, by reason of the provisions of this paragraph, following
      conversion of a portion of this Debenture, the unpaid and unconverted principal
      amount of this Debenture may be less than the amount stated on the face
      hereof.

    

    b)  Conversion
      Price.  The conversion price in effect on any Conversion Date
      shall be equal to $0.85 (subject to adjustment herein)(the
“Conversion Price”).

    

    c)  Conversion
      Limitations. The Company shall not effect any conversion of this Debenture,
      and a Holder shall not have the right to convert any portion of this Debenture
      to the extent that after giving effect to such conversion, such Holder (together
      

     

     

    
      
         

      

      
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    with
      such
      Holder’s affiliates, and any other person or entity acting as a group together
      with such Holder or any of such Holder’s affiliates), as set forth on the
      applicable Notice of Conversion, would beneficially own in excess of the
      Beneficial Ownership Limitation (as defined below).  For purposes of the
      foregoing sentence, the number of shares of Common Stock beneficially owned
      by
      such Holder and its affiliates shall include the number of shares of Common
      Stock issuable upon conversion of this Debenture with respect to which the
      determination of such sentence is being made, but shall exclude the number
      of
      shares of Common Stock which would be issuable upon (A) conversion of the
      remaining, nonconverted principal amount of this Debenture beneficially owned
      by
      such Holder or any of its affiliates and (B) exercise or conversion of the
      unexercised or nonconverted portion of any other securities of the Company
      (including, without limitation, any other Debentures or the Warrants) subject
      to
      a limitation on conversion or exercise analogous to the limitation contained
      herein beneficially owned by such Holder or any of its affiliates.  Except
      as set forth in the preceding sentence, for purposes of this Section 4(c),
      beneficial ownership shall be calculated in accordance with Section 13(d) of
      the
      Exchange Act and the rules and regulations promulgated thereunder.  To
      the extent that the limitation contained in this Section 4(c) applies, the
      determination of whether this Debenture is convertible (in relation to other
      securities owned by such Holder together with any affiliates) and of which
      amounts of this Debenture are convertible shall be in the sole discretion of
      such Holder, and the submission of a Notice of Conversion shall be deemed to
      be
      such Holder’s determination of whether this Debenture may be converted (in
      relation to other securities owned by such Holder) and which amounts of this
      Debenture are convertible, in each case subject to such aggregate percentage
      limitations. To ensure compliance with this restriction, each Holder will be
      deemed to represent to the Company each time it delivers a Notice of Conversion
      that such Notice of Conversion has not violated the restrictions set forth
      in
      this paragraph and the Company shall have no obligation to verify or confirm
      the
      accuracy of such determination.  In addition, a determination as to
      any group status as contemplated above shall be determined in accordance with
      Section 13(d) of the Exchange Act and the rules and regulations promulgated
      thereunder.   For purposes of this Section 4(c), in determining
      the number of outstanding shares of Common Stock, a Holder may rely on the
      number of outstanding shares of Common Stock as reflected in the most recent
      of
      the following: (A) the Company’s most recent Form 10-QSB or Form 10-KSB, as the
      case may be, (B) a more recent public announcement by the Company or (C) any
      other notice by the Company or the Company’s transfer agent setting forth the
      number of shares of Common Stock outstanding.  Upon the written request of
      a Holder, the Company shall within two Trading Days confirm in writing to such
      Holder the number of shares of Common Stock then outstanding.  In any case,
      the number of outstanding shares of Common Stock shall be determined after
      giving effect to the conversion or exercise of securities of the Company,
      including this Debenture, by such Holder or its affiliates since the date as
      of
      which such number of outstanding shares of Common Stock was reported. The
      Company, in refraining from or taking actions under this Section 4(c), may
      rely
      solely upon filings made by the Holder under Section 13(d) of the Exchange
      Act
      or written representation of the Holder as to its beneficial
      ownership.  The “Beneficial Ownership Limitation” shall be 4.99% of
      the number of shares of the Common Stock outstanding immediately after giving
      effect to the issuance of shares of Common Stock issuable upon conversion of
      this 

     

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    Debenture
      held by the Holder.  The Beneficial Ownership Limitation provisions of
      this Section 4(c) may be waived by such Holder, at the election of such Holder,
      upon not less than 61 days’ prior notice to the Company to change the Beneficial
      Ownership Limitation to 9.99% of the number of shares of the Common Stock
      outstanding immediately after giving effect to the issuance of shares of Common
      Stock upon conversion of this Debenture held by the Holder, and the provisions
      of this Section 4(c) shall continue to apply.  Upon such a change by a
      Holder of the Beneficial Ownership Limitation from such 4.99% limitation to
      such
      9.99% limitation, the Beneficial Ownership Limitation may not be waived by
      such
      Holder.  The provisions of this paragraph shall be implemented in a
      manner otherwise than in strict conformity with the terms of this Section 4(c)
      to correct this paragraph (or any portion hereof) which may be defective or
      inconsistent with the intended Beneficial Ownership Limitation herein contained
      or to make changes or supplements necessary or desirable to properly give effect
      to such limitation. The limitations contained in this paragraph shall apply
      to a
      successor holder of this Debenture.

    

    
      	
              d)  

            	
              Mechanics
                of Conversion

            

    

    

    i.  Conversion
      Shares Issuable Upon Conversion of Principal Amount.  The number
      of shares of Common Stock issuable upon a conversion hereunder shall be
      determined by the quotient obtained by dividing (x) the outstanding principal
      amount of this Debenture to be converted by (y) the Conversion
      Price.

    i.  

    

    ii.  Delivery
      of Certificate Upon Conversion. Not later than three Trading Days after any
      Conversion Date, the Company will deliver or cause to be delivered to the Holder
      (A) a certificate or certificates representing the Conversion Shares which
      shall
      be free of restrictive legends and trading restrictions (other than those
      required by the Purchase Agreement) representing the number of shares of Common
      Stock being acquired upon the conversion of this Debenture (including, if the
      Company has given continuous notice pursuant to Section 2(b) for payment of
      interest in shares of Common Stock at least 20 Trading Days prior to the date
      on
      which the Conversion Notice is delivered to the Company, shares of Common Stock
      representing the payment of accrued interest otherwise determined pursuant
      to
      Section 2(a) but assuming that the Interest Payment Period is the 20 Trading
      Days period immediately prior to the date on which the Conversion Notice is
      delivered to the Company and (B) a bank check in the amount of accrued and
      unpaid interest (to the extent the Company is paying to pay accrued interest
      in
      cash). The Company shall, if available and if allowed under applicable
      securities laws, use its reasonable best efforts to deliver any certificate
      or
      certificates required to be delivered by the Company under this Section
      electronically through the Depository Trust Corporation or another established
      clearing corporation performing similar functions.

    

    iii.  Failure
      to Deliver Certificates.  If in the case of any Notice of
      Conversion such certificate or certificates are not delivered to or as directed
      by 

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    the
      applicable Holder by the third Trading Day after a Conversion Date, the Holder
      shall be entitled by written notice to the Company at any time on or before
      its
      receipt of such certificate or certificates thereafter, to rescind such
      conversion, in which event the Company shall immediately return the certificates
      representing the principal amount of this Debenture tendered for
      conversion.

    

    iv.  Obligation
      Absolute; Partial Liquidated Damages.  If the Company fails for
      any reason to deliver to the Holder such certificate or certificates pursuant
      to
      Section 4(d)(ii) by the third Trading Day after the Conversion Date, the Company
      shall pay to such Holder, in cash, as liquidated damages and not as a penalty,
      for each $1000 of principal amount being converted, $10 per Trading Day
      (increasing to $20 per Trading Day after 5 Trading Days after such damages
      begin
      to accrue) for each Trading Day after such third Trading Day until such
      certificates are delivered.  The Company’s obligations to issue and
      deliver the Conversion Shares upon conversion of this Debenture in accordance
      with the terms hereof are absolute and unconditional, irrespective of any action
      or inaction by the Holder to enforce the same, any waiver or consent with
      respect to any provision hereof, the recovery of any judgment against any Person
      or any action to enforce the same, or any setoff, counterclaim, recoupment,
      limitation or termination, or any breach or alleged breach by the Holder or
      any
      other Person of any obligation to the Company or any violation or alleged
      violation of law by the Holder or any other person, and irrespective of any
      other circumstance which might otherwise limit such obligation of the Company
      to
      the Holder in connection with the issuance of such Conversion Shares;
provided, however, such delivery shall not operate as a waiver by
      the Company of any such action the Company may have against the
      Holder.  In the event the Holder of this Debenture shall elect to
      convert any or all of the outstanding principal amount hereof, the Company
      may
      not refuse conversion based on any claim that the Holder or any one associated
      or affiliated with the Holder has been engaged in any violation of law,
      agreement or for any other reason, unless, an injunction from a court, on
      notice, restraining and or enjoining conversion of all or part of this Debenture
      shall have been sought and obtained and the Company posts a surety bond for
      the
      benefit of the Holder in the amount of 150% of the principal amount of this
      Debenture outstanding, which is subject to the injunction, which bond shall
      remain in effect until the completion of arbitration/litigation of the dispute
      and the proceeds of which shall be payable to such Holder to the extent it
      obtains judgment.  In the absence of an injunction precluding the
      same, the Company shall issue Conversion Shares or, if applicable, cash, upon
      a
      properly noticed conversion.  Nothing herein shall limit a Holder’s
      right to pursue actual damages or declare an Event of Default pursuant to
      Section 8 herein for the Company’s failure to deliver Conversion Shares within
      the period specified herein and such Holder 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.  The exercise
      of any such rights shall not prohibit the Holder from seeking to enforce damages
      pursuant to any other Section hereof or under applicable law.

    

    
      
         

      

      
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    v.  Compensation
      for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In
      addition to any other rights available to the Holder, if the Company fails
      for
      any reason to deliver to the Holder such certificate or certificates pursuant
      to
      Section 4(d)(ii) by the third Trading Day after the Conversion Date, and if
      after such third Trading Day the Holder is required by its brokerage firm to
      purchase (in an open market transaction or otherwise) Common Stock to deliver
      in
      satisfaction of a sale by such Holder of the Conversion Shares which the Holder
      anticipated receiving upon such conversion (a “Buy-In”), then the Company
      shall (A) pay in cash to the Holder (in addition to any remedies available
      to or
      elected by the Holder) the amount by which (x) the Holder’s total purchase price
      (including brokerage commissions, if any) for the Common Stock so purchased
      exceeds (y) the product of (1) the aggregate number of shares of Common Stock
      that such Holder anticipated receiving from the conversion at issue multiplied
      by (2) the actual sale price of the Common Stock at the time of the sale
      (including brokerage commissions, if any) giving rise to such purchase
      obligation and (B) at the option of the Holder, either reissue (if surrendered)
      this Debenture in a principal amount equal to the principal amount of the
      attempted conversion or deliver to the Holder the number of shares of Common
      Stock that would have been issued had the Company timely complied with its
      delivery requirements under Section 4(d)(ii).  For example, if the
      Holder purchases Common Stock having a total purchase price of $11,000 to cover
      a Buy-In with respect to an attempted conversion of this Debenture with respect
      to which the actual sale price of the Conversion Shares at the time of the
      sale
      (including brokerage commissions, if any) giving rise to such purchase
      obligation was a total of $10,000 under clause (A) of the immediately preceding
      sentence, the Company shall be required to pay the Holder $1,000.  The
      Holder shall provide the Company written proof indicating the amounts payable
      to
      the Holder in respect of the Buy-In.

    

    vi.  Reservation
      of Shares Issuable Upon Conversion. The Company covenants that it will at
      all times reserve and keep available out of its authorized and unissued shares
      of Common Stock solely for the purpose of issuance upon conversion of this
      Debenture and payment of interest on this Debenture, each as herein provided,
      free from preemptive rights or any other actual contingent purchase rights
      of
      persons other than the Holder (and the other holders of the Debentures), not
      less than such number of shares of the Common Stock as shall (subject to the
      terms and conditions set forth in the Purchase Agreement) be issuable (taking
      into account the adjustments and restrictions of Section 5) upon the conversion
      of the outstanding principal amount of this Debenture and payment of interest
      hereunder.  The Company covenants that all shares of Common Stock that
      shall be so issuable shall, upon issue, be duly and validly authorized, issued
      and fully paid, nonassessable.

    

    
      
         

      

      
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    vii.  Fractional
      Shares. Upon a conversion hereunder the Company shall not be required to
      issue stock certificates representing fractions of shares of the Common Stock,
      but may if otherwise permitted, make a cash payment in respect of any final
      fraction of a share based on the VWAP at such time.  If the Company
      elects not, or is unable, to make such a cash payment, the Holder shall be
      entitled to receive, in lieu of the final fraction of a share, one whole share
      of Common Stock.

    

    viii.  Transfer
      Taxes.  The issuance of certificates for shares of the Common
      Stock on conversion of this Debenture shall be made without charge to the Holder
      hereof for any documentary stamp or similar taxes that may be payable in respect
      of the issue or delivery of such certificate, provided that the Company shall
      not be required to pay any tax that may be payable in respect of any transfer
      involved in the issuance and delivery of any such certificate upon conversion
      in
      a name other than that of the Holder of this Debenture so converted and the
      Company shall not be required to issue or deliver such certificates unless
      or
      until the person or persons requesting the issuance thereof shall have paid
      to
      the Company the amount of such tax or shall have established to the satisfaction
      of the Company that such tax has been paid.

    

    Section
      5.       Certain
      Adjustments.

    

    a)  Stock
      Dividends and Stock Splits.  If the Company, at any time while
      this Debenture is outstanding: (A) pays a stock dividend or otherwise makes
      a
      distribution or distributions on shares of its Common Stock or any other equity
      or equity equivalent securities payable in shares of Common Stock (which, for
      avoidance of doubt, shall not include any shares of Common Stock issued by
      the
      Company pursuant to this Debenture, including as interest thereon), (B)
      subdivides outstanding shares of Common Stock into a larger number of shares,
      (C) combines (including by way of reverse stock split) outstanding shares of
      Common Stock into a smaller number of shares, or (D) issues by reclassification
      of shares of the Common Stock any shares of capital stock of the Company, then
      the Conversion Price shall be multiplied by a fraction of which the numerator
      shall be the number of shares of Common Stock (excluding treasury shares, if
      any) outstanding immediately before such event and of which the denominator
      shall be the number of shares of Common Stock outstanding immediately after
      such
      event.  Any adjustment made pursuant to this Section shall become
      effective immediately after the record date for the determination of
      stockholders entitled to receive such dividend or distribution and shall become
      effective immediately after the effective date in the case of a subdivision,
      combination or re-classification.

    

    b)  Subsequent
      Equity Sales.

    

    i.  If
      the
      Company or any Subsidiary thereof, as applicable, at any time while this
      Debenture is outstanding, shall sell, grant any option to purchase, sell or
      grant any right to reprice its securities, or otherwise dispose of or issue
      any

     

     

    
      
         

      

      
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    Common
      Stock or Common Stock Equivalents entitling any Person to acquire shares of
      Common Stock, at an effective price per share less than the then Conversion
      Price (such lower price, the “Base Conversion Price” and such issuances
      collectively, a “Dilutive Issuance”), as adjusted hereunder (if the
      holder of the Common Stock or Common Stock Equivalents so issued shall at any
      time, whether by operation of purchase price adjustments, reset provisions,
      floating conversion, exercise or exchange prices or otherwise, or due to
      warrants, options or rights per share which is issued in connection with such
      issuance, be entitled to receive shares of Common Stock at an effective price
      per share which is less than the Conversion Price, such issuance shall be deemed
      to have occurred for less than the Conversion Price on such date of the Dilutive
      Issuance), then the Conversion Price shall be reduced to equal the Base
      Conversion Price.

    

    ii.  The
      Company or any Subsidiary there, as applicable, at any time while this Debenture
      is outstanding, shall offer, sell, grant any option to purchase or offer, sell
      or grant any right to reprice its securities, or otherwise dispose of or issue
      (or announce any offer, sale, grant or any option to purchase or other
      disposition) any Common Stock or Common Stock Equivalents entitling any Person
      to acquire shares of Common Stock, at an effective price per share less than
      the
      VWAP on either the Trading Day immediately prior to the date agreements for
      such
      issuance are entered into or the date such issuance is consummated, whichever
      results in a higher VWAP, but more than the then effective Conversion Price
      (which is addressed in 5(b)(i) above) (such lower price, the “Market Base
      Conversion Price” and such issuances collectively, a “Market Dilutive
      Issuance”), as adjusted hereunder (if the holder of the Common Stock or
      Common Stock Equivalents so issued shall at any time, whether by operation
      of
      purchase price adjustments, reset provisions, floating conversion, exercise
      or
      exchange prices or otherwise, or due to warrants, options or rights per share
      which is issued in connection with such issuance, be entitled to receive shares
      of Common Stock at an effective price per share which is less than the
      Conversion Price, such issuance shall be deemed to have occurred for less than
      the Conversion Price on such date of the Market Dilutive Issuance) then the
      Conversion Price shall be reduced to a price determined by multiplying the
      then
      effective Conversion Price by a fraction, the numerator of which is the number
      of shares of Common Stock issued and outstanding immediately prior to the Market
      Dilutive Issuance plus the number of shares of Common Stock which the aggregate
      offering price for such Market Dilutive Issuance would purchase at the then
      Market Base Conversion Price, and the denominator of which shall be the sum
      of
      the number of shares of Common Stock issued and outstanding immediately prior
      to
      the Market Dilutive Issuance plus the number of shares of Common Stock so issued
      or issuable in connection with the Market Dilutive Issuance

    

    iii.  Such
      adjustments under this Section 5(b) shall be made whenever such Common Stock
      or
      Common Stock Equivalents are issued.  Notwithstanding

     

     

    
      
         

      

      
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    the
      foregoing, no adjustment will be made under this Section 5(b) in respect of
      an
      Exempt Issuance.  The Company shall notify the Holder in writing, no
      later than the Business Day following the issuance of any Common Stock or Common
      Stock Equivalents subject to this section, indicating therein the applicable
      issuance price, or of applicable reset price, exchange price, conversion price
      and other pricing terms (such notice the “Dilutive Issuance
      Notice”).  For purposes of clarification, whether or not the
      Company provides a Dilutive Issuance Notice pursuant to this Section 5(b),
      immediately after the occurrence of any Dilutive Issuance or Market Dilutive
      Issuance, after the date of such Dilutive Issuance or Market Dilutive Issuance
      the Holder is entitled to receive a number of Conversion Shares based upon
      the
      Base Conversion Price or the price determined pursuant to 5(b)(ii), as
      applicable, regardless of whether the Holder accurately refers to the Base
      Conversion Price or the price determined pursuant to 5(b)(ii) in the Notice
      of
      Conversion.

    

    iv.  Notwithstanding
      the foregoing, no adjustment shall be made pursuant to this Section 5(b) for
      an
      Exempt Issuance (defined in the Purchase Agreement.

    

    c)  Pro
      Rata Distributions. If the Company, at any time while this Debenture is
      outstanding, shall distribute to all holders of Common Stock (and not to the
      holders of the Debenture) evidences of its indebtedness or assets (including
      cash and cash dividends) or rights or warrants to subscribe for or purchase
      any
      security, then in each such case the Conversion Price shall be adjusted by
      multiplying such Conversion Price in effect immediately prior to the record
      date
      fixed for determination of stockholders entitled to receive such distribution
      by
      a fraction of which the denominator shall be the VWAP determined as of the
      record date mentioned above, and of which the numerator shall be such VWAP
      on
      such record date less the then fair market value at such record date of the
      portion of such assets or evidence of indebtedness so distributed applicable
      to
      one outstanding share of the Common Stock as determined by the Board of
      Directors in good faith.  In either case the adjustments shall be
      described in a statement provided to the Holder of the portion of assets or
      evidences of indebtedness so distributed or such subscription rights applicable
      to one share of Common Stock.  Such adjustment shall be made whenever
      any such distribution is made and shall become effective immediately after
      the
      record date mentioned above.

    

    d)  Fundamental
      Transaction. If, at any time while this Debenture is outstanding, (A) the
      Company effects any merger or consolidation of the Company with or into another
      Person, (B) the Company effects any sale of all or substantially all of its
      assets in one or a series of related transactions, (C) any tender offer or
      exchange offer (whether by the Company or another Person) is completed pursuant
      to which holders of Common Stock are permitted to tender or exchange their
      shares for other securities, cash or property, or (D) the Company effects any
      reclassification of the Common Stock or any compulsory share exchange pursuant
      to which the Common Stock is effectively converted into or exchanged for other
      securities, cash or property (in any such case, a 

     

     

    
      
         

      

      
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    “Fundamental
      Transaction”), then upon any subsequent conversion of this Debenture, the
      Holder shall have the right to receive, for each Conversion Share that would
      have been issuable upon such conversion immediately prior to the occurrence
      of
      such Fundamental Transaction, the same kind and amount of securities, cash
      or
      property as it would have been entitled to receive upon the occurrence of such
      Fundamental Transaction if it had been, immediately prior to such Fundamental
      Transaction, the holder of one share of Common Stock (the “Alternate
      Consideration”).  For purposes of any such conversion, the
      determination of the Conversion Price shall be appropriately adjusted to apply
      to such Alternate Consideration based on the amount of Alternate Consideration
      issuable in respect of one share of Common Stock in such Fundamental
      Transaction, and the Company shall apportion the Conversion Price among the
      Alternate Consideration in a reasonable manner reflecting the relative value
      of
      any different components of the Alternate Consideration.  If holders
      of Common Stock are given any choice as to the securities, cash or property
      to
      be received in a Fundamental Transaction, then the Holder shall be given the
      same choice as to the Alternate Consideration it receives upon any conversion
      of
      this Debenture following such Fundamental Transaction.  To the extent
      necessary to effectuate the foregoing provisions, any successor to the Company
      or surviving entity in such Fundamental Transaction shall issue to the Holder
      a
      new debenture consistent with the foregoing provisions and evidencing the
      Holder’s right to convert such debenture into Alternate Consideration. The terms
      of any agreement pursuant to which a Fundamental Transaction is effected shall
      include terms requiring any such successor or surviving entity to comply with
      the provisions of this paragraph (d) and insuring that this Debenture (or any
      such replacement security) will be similarly adjusted upon any subsequent
      transaction analogous to a Fundamental Transaction.

    

    e)  Calculations.  All
      calculations under this Section 5 shall be made to the nearest cent or the
      nearest 1/100th of a share, as the case may be.  For purposes of this
      Section 5, the number of shares of Common Stock deemed to be issued and
      outstanding as of a given date shall be the sum of the number of shares of
      Common Stock (excluding treasury shares, if any) issued and
      outstanding.

    

    f)  Notice
      to the Holder.

    

    i.  Adjustment
      to Conversion Price.  Whenever the Conversion Price is adjusted
      pursuant to any of this Section 5, the Company shall promptly mail to each
      Holder a notice setting forth the Conversion Price after such adjustment and
      setting forth a brief statement of the facts requiring such adjustment. If
      the
      Company issues a variable rate security, despite the prohibition thereon in
      the
      Purchase Agreement, the Company shall be deemed to have issued Common Stock
      or
      Common Stock Equivalents at the lowest possible conversion or exercise price
      at
      which such securities may be converted or exercised in the case of a Variable
      Rate Transaction (as defined in the Purchase Agreement).

    

    ii.  Notice
      to Allow Conversion by Holder.  If (A) the Company shall declare a
      dividend (or any other distribution) on the Common Stock; (B) the 

     

     

    
      
         

      

      
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    Company
      shall declare a special nonrecurring cash dividend on or a redemption of the
      Common Stock; (C) the Company shall authorize the granting to all holders of
      the
      Common Stock rights or warrants to subscribe for or purchase any shares of
      capital stock of any class or of any rights; (D) the approval of any
      stockholders of the Company shall be required in connection with any
      reclassification of the Common Stock, any consolidation or merger to which
      the
      Company is a party, any sale or transfer of all or substantially all of the
      assets of the Company, of any compulsory share exchange whereby the Common
      Stock
      is converted into other securities, cash or property; (E) the Company shall
      authorize the voluntary or involuntary dissolution, liquidation or winding
      up of
      the affairs of the Company; then, in each case, the Company shall cause to
      be
      filed at each office or agency maintained for the purpose of conversion of
      this
      Debenture, and shall cause to be mailed to the Holder at its last addresses
      as
      it shall appear upon the  stock books of the Company, at least 20
      calendar days prior to the applicable record or effective date hereinafter
      specified, a notice stating (x) the date on which a record is to be taken for
      the purpose of such dividend, distribution, redemption, rights or warrants,
      or
      if a record is not to be taken, the date as of which the holders of the Common
      Stock of record to be entitled to such dividend, distributions, redemption,
      rights or warrants are to be determined or (y) the date on which such
      reclassification, consolidation, merger, sale, transfer or share exchange is
      expected to become effective or close, and the date as of which it is expected
      that holders of the Common Stock of record shall be entitled to exchange their
      shares of the Common Stock for securities, cash or other property deliverable
      upon such reclassification, consolidation, merger, sale, transfer or share
      exchange; provided that the failure to mail such notice or any defect therein
      or
      in the mailing thereof shall not affect the validity of the corporate action
      required to be specified in such notice.  The Holder is entitled to
      convert this Debenture during the 20-day period commencing the date of such
      notice to the effective date of the event triggering such notice.

    

    Section
      6.       Redemption and Forced
      Conversion.

    

    a)           Redemption
      at Election of Holder.  If the Company shall agree to sell
      substantially all of its assets in one or more transactions in which the
      consideration consists solely of cash, cash equivalents, assumption of
      indebtedness, or any combination thereof, the Holder shall have the right to
      require the Company, by written notice to the Company, to redeem this
      Debentures, in full and in cash, at the closing of such Change of Control
      Transaction, Fundamental Transaction or sale of assets.   The
      aggregate amount payable upon such Change of Control Transaction, Fundamental
      Transaction or sale of assets shall be equal to the Cash Sale Redemption
      Amount.  In the event that the Company fails to pay the Cash Sale
      Redemption Amount on or prior to the applicable closing date, the interest
      rate
      on this Debenture shall accrue at the rate of 18% per annum, or such lower
      maximum amount of interest permitted to be charged under applicable law, until
      the Cash Sale Redemption Amount is paid in full.  Concurrently with
      the payment in full of the Cash Sale Redemption Amount, the Holder shall
      surrender this Debenture to or 

     

     

    
      
         

      

      
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    as
      directed by the Company (or the successor company).    The
      Holder may elect to convert the outstanding principal amount of the Debenture
      pursuant to Section 4 prior to actual payment in cash for the redemption under
      this Section 6 by fax delivery of a Notice of Conversion to the
      Company.

    

    b).           Forced
      Conversion.  Notwithstanding anything herein to the contrary, if
      after the Effective Date, each of the VWAPs for any 20 consecutive Trading
      Days
      (such period commencing only after the Effective Date, such period the
“Threshold Period”) exceeds 400% of the then effective Conversion Price,
      the Company may, within 1 Trading Day of the end of any such period, deliver
      a
      notice to the Holder (a “Forced Conversion Notice” and the date such
      notice is received by the Holder, the “Forced Conversion Notice Date”) to
      cause the Holder to convert, at the Company’s sole discretion, all or part of
      the then outstanding principal amount of Debentures pursuant to Section 4,
      it
      being understood that the “Conversion Date” for purposes of Section 4 shall be
      deemed to occur on the thirtieth Trading Day following the Forced Conversion
      Notice Date (such thirtieth Trading Day being referred to as the “Forced
      Conversion Date”).  The Company may not deliver a Forced
      Conversion Notice, and any Forced Conversion Notice delivered by the Corporation
      shall not be effective, unless all of the Equity Conditions are met on each
      Trading Day occurring during the 10 Trading Days immediately prior to the
      applicable Threshold Period, during the applicable Threshold Period and from
      the
      end of the Threshold Period through and including the later of the Forced
      Conversion Date and the date such Conversion Shares pursuant to such conversion
      are delivered to the Holder.  Any Forced Conversion shall be applied
      ratably to all Holders based on their initial purchases of Debentures pursuant
      to the Purchase Agreement.  For purposes of clarification, a Forced
      Conversion shall be subject to all of the provisions of Section 4, including,
      without limitation, the provision requiring payment of liquidated damages and
      limitations on conversions.

    

    Section
      7.       Negative Covenants. So long as
      any portion of this Debenture is outstanding, the Company will not and will
      not
      permit any of its Subsidiaries to directly or indirectly without the prior
      written consent of the holders of at least 60% of the principal amount of
      Debentures and Prior Debentures then outstanding:

    

    a)  other
      than Permitted Indebtedness, enter into, create, incur, assume, guarantee or
      suffer to exist any indebtedness for borrowed money of any kind, including
      but
      not limited to, a guarantee, on or with respect to any of its property or assets
      now owned or hereafter acquired or any interest therein or any income or profits
      therefrom;

    

    b)  other
      than Permitted Liens, enter into, create, incur, assume or suffer to exist
      any
      liens of any kind, on or with respect to any of its property or assets now
      owned
      or hereafter acquired or any interest therein or any income or profits
      therefrom;

    

    c)  amend
      its
      certificate of incorporation, bylaws or other charter documents so as to
      materially and adversely affect any rights of the Holder;

    

    
      
         

      

      
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    d)  repay,
      repurchase or offer to repay, repurchase or otherwise acquire more than a
deminimis number of shares of Common Stock or Common Stock
      Equivalents other than (i) as to the Conversion Shares to the extent permitted
      or required under the Transaction Documents, (ii) as otherwise permitted by
      the
      Transaction Documents or (iii) shares of Common Stock held by former employees
      of the Company which the Company is entitled to repurchased from such employees
      pursuant to the contractual rights relating to their termination of employment
      but not to exceed $50,000 in any 12 month period;

    

    e)  enter
      into any agreement with respect to any of the foregoing;

    

    f)  pay
      cash
      dividends or distributions on any equity securities of the Company;
      or

    

    g)  enter
      into any Fundamental Transaction or Change of Control Transaction without the
      consent of the Holders of 60% of the outstanding principal amount of the
      Debentures, Except with respect to a sale of assets of the Company pursuant
      to
      which the Company is required to (i) redeem all outstanding Debentures under
      Section 6(a) hereof and (ii) redeem all the Warrants pursuant to Section 1(f)
      therof.

    

    Section
      8.         Events of
      Default.

    

    a)  “Event
      of Default”, wherever used herein, means any one of the following events
      (whatever the reason and whether it shall be voluntary or involuntary or
      effected by operation of law or pursuant to any judgment, decree or order of
      any
      court, or any order, rule or regulation of any administrative or governmental
      body):

    

    i.  any
      default in the payment of (A) the principal amount of any Debenture, or (B)
      interest (including Late Fees) on, or liquidated damages in respect of, any
      Debenture, as and when the same shall become due and payable (whether on a
      Conversion Date or the Maturity Date or by acceleration or otherwise) which
      default is not cured within 3 Trading Days after written notice from the
      Holder;

    

    ii.  the
      Company shall materially fail to observe or perform any other covenant or
      agreement contained in this Debenture or any other Debenture (other than a
      breach by the Company of its obligations to deliver shares of Common Stock
      to
      the Holder upon conversion which breach is addressed in clause (xi) below)
      which
      failure is not cured, if possible to cure, within the earlier to occur of (A)
      10
      Trading Days after notice of such default sent by the Holder or by any other
      Holder and (B)15 Trading Days after the Company shall become or should have
      become aware of such failure;

    

    iii.  a
      default
      or event of default (subject to any grace or cure period provided for in the
      applicable agreement, document or instrument) shall occur under (A) any of
      the
      Transaction Documents, or (B) any other material 

     

    
      
         

      

      
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    agreement,
      lease, document or instrument to which the Company or any Subsidiary is
      bound;

    

    iv.  any
      representation or warranty made herein, in any other Transaction Documents,
      in
      any written statement pursuant hereto or thereto, or in any other report,
      financial statement or certificate made or delivered to the Holder shall be
      untrue or incorrect in any material respect as of the date when made or deemed
      made;

    

    v.  (i)
      the
      Company or any of its Subsidiaries shall commence a case, as debtor, a case
      under any applicable bankruptcy or insolvency laws as now or hereafter in effect
      or any successor thereto, or the Company or any Subsidiary commences any other
      proceeding under any reorganization, arrangement, adjustment of debt, relief
      of
      debtors, dissolution, insolvency or liquidation or similar law of any
      jurisdiction whether now or hereafter in effect relating to the Company or
      any
      Subsidiary thereof or (ii) there is commenced a case against the Company or
      any
      Subsidiary thereof, in a court of competent jurisdiction, under any applicable
      bankruptcy or insolvency laws, as now or hereafter in effect or any successor
      thereto which remains undismissed for a period of 60 days; or (iii) the Company
      or any Subsidiary thereof is adjudicated by a court of competent jurisdiction
      insolvent or bankrupt; or any order of relief or other order approving any
      such
      case or proceeding is entered; or (iv) the Company or any Subsidiary thereof
      suffers any appointment of any custodian or the like for it or any substantial
      part of its property which continues undischarged or unstayed for a period
      of 60
      days; or (v) the Company or any Subsidiary thereof makes a general assignment
      for the benefit of creditors; or (vi) the Company shall fail to pay, or shall
      state in writing that it is unable to pay, or shall be unable to pay, its debts
      generally as they become due; or (vii) the Company or any Subsidiary thereof
      shall call a meeting of its creditors with a view to arranging a composition,
      adjustment or restructuring of its debts; or (viii) the Company or any
      Subsidiary thereof shall by any act or failure to act expressly indicate its
      consent to, approval of or acquiescence in any of the foregoing; or (ix) any
      corporate or other action is taken by the Company or any Subsidiary thereof
      for
      the purpose of effecting any of the foregoing;

    

    vi.  the
      Company or any Subsidiary shall default in any of its obligations (other than
      under any of the Transaction Documents) under any mortgage, credit agreement
      or
      other facility, indenture agreement, factoring agreement or other instrument
      under which there may be issued, or by which there may be secured or evidenced
      any indebtedness for borrowed money or money due under any long term leasing
      or
      factoring arrangement of the Company in an amount exceeding $150,000, whether
      such indebtedness now exists or shall hereafter be created and such default
      shall result in such indebtedness becoming or being declared due and payable
      prior to the date on which it would otherwise 

     

     

    
      
         

      

      
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    become
      due and payable, and all applicable cure periods with respect thereto shall
      have
      expired;

    

    vii.  the
      Common Stock shall not be eligible for quotation on or quoted for trading on
      a
      Trading Market for at least five consecutive Trading Days (other than as a
      result of events that affect the Trading Market in general);

    

    viii.  the
      Company shall redeem or repurchase more than a deminimis number of
      its outstanding shares of Common Stock or other equity securities of the Company
      (other than redemptions of Conversion Shares and repurchases of shares of Common
      Stock or other equity securities of departing officers and directors of the
      Company, provided that such repurchases shall not exceed $200,000, in the
      aggregate, for all officers, directors and employees during any 12 month
      period);

    

    ix.  the
      Company shall fail for any reason to deliver certificates to or as directed
      by a
      Holder by the seventh Trading Day after a Conversion Date or any Forced
      Conversion Date pursuant to and in accordance with Section 4(d) or the Company
      shall provide notice to the Holder, including by way of public announcement,
      at
      any time, of its intention not to comply with requests for conversions of any
      Debentures in accordance with the terms
      hereof; or

    

    x.  any
      monetary judgment, writ or similar final process shall be entered or filed
      against the Company, any Subsidiary or any of their respective property or
      other
      assets for than $100,000, and shall remain unvacated, unbonded or unstayed
      for a
      period of 45 calendar days.

    i.  

    

    b)  Remedies
      Upon Event of Default. If any Event of Default occurs, the full principal
      amount of this Debenture, together with interest and other amounts owing in
      respect thereof, to the date of acceleration shall become, at the Holder’s
      election, immediately due and payable in cash.   The aggregate
      amount payable upon an Event of Default shall be equal to the Mandatory Default
      Amount.  Commencing 5 days after the occurrence of any Event of
      Default that results in the eventual acceleration of this Debenture, the
      interest rate on this Debenture shall accrue at the rate of 18% per annum,
      or
      such lower maximum amount of interest permitted to be charged under applicable
      law.  Concurrently with the payment in full of the Mandatory Default
      Amount the Holder shall surrender this Debenture to or as directed by the
      Company.  The Holder need not provide and the Company hereby waives
      any presentment, demand, protest or other notice of any kind, and the Holder
      may
      immediately and without expiration of any grace period enforce any and all
      of
      its rights and remedies hereunder and all other remedies available to it under
      applicable law.  Such election may be rescinded and annulled by Holder
      at any time prior to payment hereunder and the Holder shall have all rights
      as a
      Debenture holder until such time, if any, as the full payment under this Section
      shall have been received by it.  No such rescission or annulment shall
      affect any subsequent Event of Default or impair any right consequent
      thereon.

     

     

    
      
         

      

      
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    Section
      9.       
 Miscellaneous.

    

    a)  Notices.  Any
      and all notices or other communications or deliveries to be provided by the
      Holder hereunder, including, without limitation, any Notice of Conversion,
      shall
      be in writing and delivered personally, by facsimile, sent by a nationally
      recognized overnight courier service, addressed to the Company, at the address
      set forth above, facsimile number (732) 465-9600, Attn:
      CEO or such other address or facsimile number as the
      Company may specify for such purposes by notice to the Holder delivered in
      accordance with this Section.  Any and all notices or other
      communications or deliveries to be provided by the Company hereunder shall
      be in
      writing and delivered personally, by facsimile, sent by a nationally recognized
      overnight courier service addressed to each Holder at the facsimile telephone
      number or address of such Holder appearing on the books of the Company, or
      if no
      such facsimile telephone number or address appears, at the principal place
      of
      business of the Holder.  Any notice or other communication or
      deliveries hereunder shall be deemed given and effective on the earliest of
      (i)
      the date of transmission, if such notice or communication is delivered via
      facsimile at the facsimile telephone number specified in this Section prior
      to
      5:30 p.m. (New York City time), (ii) the date after the date of transmission,
      if
      such notice or communication is delivered via facsimile at the facsimile
      telephone number specified in this Section later than 5:30 p.m. (New York City
      time) on any date and earlier than 11:59 p.m. (New York City time) on such
      date,
      (iii) the second Business Day following the date of mailing, if sent by
      nationally recognized overnight courier service, or (iv) upon actual receipt
      by
      the party to whom such notice is required to be given.

    

    b)  Absolute
      Obligation. Except as expressly provided herein, no provision of this
      Debenture shall alter or impair the obligation of the Company, which is absolute
      and unconditional, to pay the principal of, interest and liquidated damages
      (if
      any) on, this Debenture at the time, place, and rate, and in the coin or
      currency, herein prescribed.  This Debenture is a direct debt
      obligation of the Company.  This Debenture ranks
paripassu with all other Debentures now or hereafter issued under
      the terms set forth herein.

    

    c)  Lost
      or Mutilated Debenture.  If this Debenture shall be mutilated,
      lost, stolen or destroyed, the Company shall execute and deliver, in exchange
      and substitution for and upon cancellation of a mutilated Debenture, or in
      lieu
      of or in substitution for a lost, stolen or destroyed Debenture, a new Debenture
      for the principal amount of this Debenture so mutilated, lost, stolen or
      destroyed but only upon receipt of evidence of such loss, theft or destruction
      of such Debenture, and of the ownership hereof, and indemnity, if requested,
      all
      reasonably satisfactory to the Company.

    

    d)  Governing
      Law.  All questions concerning the construction, validity,
      enforcement and interpretation of this Debenture shall be governed by and
      construed and enforced in accordance with the internal laws of the State of
      New
      York, without regard to the principles of conflicts of law
      thereof.  Each party agrees that all legal proceedings concerning the
      interpretations, enforcement and defense of the transactions
      contemplated

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    by
      any of
      the Transaction Documents (whether brought against a party hereto or its
      respective affiliates, directors, officers, shareholders, employees or agents)
      shall be commenced in the state and federal courts sitting in the City of New
      York, Borough of Manhattan (the “New York Courts”).  Each party
      hereto hereby irrevocably submits to the exclusive jurisdiction of the New
      York
      Courts for the adjudication of any dispute hereunder or in connection herewith
      or with any transaction contemplated hereby or discussed herein (including
      with
      respect to the enforcement of any of the Transaction Documents), and hereby
      irrevocably waives, and agrees not to assert in any suit, action or proceeding,
      any claim that it is not personally subject to the jurisdiction of any such
      court, or such New York Courts are improper or inconvenient venue for such
      proceeding.  Each party hereby irrevocably waives personal service of
      process and consents to process being served in any such suit, action or
      proceeding by mailing a copy thereof via registered or certified mail or
      overnight delivery (with evidence of delivery) to such party at the address
      in
      effect for notices to it under this Debenture and agrees that such service
      shall
      constitute good and sufficient service of process and notice
      thereof.  Nothing contained herein shall be deemed to limit in any way
      any right to serve process in any manner permitted by law. Each party hereto
      hereby irrevocably waives, to the fullest extent permitted by applicable law,
      any and all right to trial by jury in any legal proceeding arising out of or
      relating to this Debenture or the transactions contemplated hereby. If either
      party shall commence an action or proceeding to enforce any provisions of this
      Debenture, then the prevailing party in such action or proceeding shall be
      reimbursed by the other party for its attorneys fees and other costs and
      expenses incurred with the investigation, preparation and prosecution of such
      action or proceeding.

    

    e)  Waiver.  Any
      waiver by the Company or the Holder of a breach of any provision of this
      Debenture shall not operate as or be construed to be a waiver of any other
      breach of such provision or of any breach of any other provision of this
      Debenture.  The failure of the Company or the Holder to insist upon
      strict adherence to any term of this Debenture on one or more occasions shall
      not be considered a waiver or deprive that party of the right thereafter to
      insist upon strict adherence to that term or any other term of this
      Debenture.  Any waiver must be in writing.

    

    f)  Severability.  If
      any provision of this Debenture is invalid, illegal or unenforceable, the
      balance of this Debenture shall remain in effect, and if any provision is
      inapplicable to any person or circumstance, it shall nevertheless remain
      applicable to all other persons and circumstances.  If it shall be
      found that any interest or other amount deemed interest due hereunder violates
      applicable laws governing usury, the applicable rate of interest due hereunder
      shall automatically be lowered to equal the maximum permitted rate of interest.
      The Company covenants (to the extent that it may lawfully do so) that it shall
      not at any time insist upon, plead, or in any manner whatsoever claim or take
      the benefit or advantage of, any stay, extension or usury law or other law
      which
      would prohibit or forgive the Company from paying all or any portion of the
      principal of or interest on this Debenture as contemplated herein, wherever
      enacted, now or at any time hereafter in force, or which may affect the
      covenants or the performance of this indenture, and the Company (to the extent
      it may lawfully do so) hereby expressly waives 

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    all
      benefits or advantage of any such law, and covenants that it will not, by resort
      to any such law, hinder, delay or impeded the execution of any power herein
      granted to the Holder, but will suffer and permit the execution of every such
      as
      though no such law has been enacted.

    

    g)  Next
      Business Day.  Whenever any payment or other obligation hereunder
      shall be due on a day other than a Business Day, such payment shall be made
      on
      the next succeeding Business Day.

    

    h)  Headings.  The
      headings contained herein are for convenience only, do not constitute a part
      of
      this Debenture and shall not be deemed to limit or affect any of the provisions
      hereof.

    

    i)  Assumption. 
      Any successor to the Company or surviving entity in a Fundamental Transaction
      shall (i) assume in writing all of the obligations of the Company under this
      Debenture and the other Transaction Documents pursuant to written agreements
      in
      form and substance satisfactory to the Holder (such approval not to be
      unreasonably withheld or delayed) prior to such Fundamental Transaction and
      (ii)
      to issue to the Holder a new debenture of such successor entity evidenced by
      a
      written instrument substantially similar in form and substance to this
      Debenture, including, without limitation, having a principal amount and interest
      rate equal to the principal amounts and the interest rates of the Debentures
      held by the Holder and having similar ranking to this Debenture, and
      satisfactory to the Holder (any such approval not to be unreasonably withheld
      or
      delayed).  The provisions of this Section 9(i) shall apply similarly and
      equally to successive Fundamental Transactions and shall be applied without
      regard to any limitations of this Debenture.

     

    
 

    *********************

     

     

     

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Debenture to be duly executed
      by a
      duly authorized officer as of the date first above indicated.

     

     

    
      	 	ARKADOS
              GROUP, INC.	 
	 	 	 
	 	 	 	 
	
            	
              By:
                

            	/s/ 	 
	 	 	Name: 
              Barbara Kane-Burke	 
	 	 	Title:   
              Chief Financial Officer	 
	Dated:
              _______________	 	 	 

    

    
 

    

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    ANNEX
      A

    

    NOTICE
      OF CONVERSION

    

    

    The
      undersigned hereby elects to
      convert principal under the 6% Secured Convertible Debenture of Arkados Group,
      Inc. (formerly CDKNet.Com, Inc.), a Delaware corporation (the “Company”),
      due on December 28 , 2008 into shares of common stock, par value $.0001 per
      share (the “Common Stock”), of the Company according to the conditions
      hereof, as of the date written below.  If shares are to be issued in
      the name of a person other than the undersigned, the undersigned will pay all
      transfer taxes payable with respect thereto and is delivering herewith such
      certificates and opinions as reasonably requested by the Company in accordance
      therewith.  No fee will be charged to the holder for any conversion,
      except for such transfer taxes, if any.

    

    By
      the delivery of this Notice of
      Conversion the undersigned represents and warrants to the Company that its
      ownership of the Common Stock does not exceed the amounts determined in
      accordance with Section 13(d) of the Exchange Act, specified under Section
      4 of
      this Debenture.

    

    The
      undersigned agrees to comply with
      the prospectus delivery requirements under the applicable securities laws in
      connection with any transfer of the aforesaid shares of Common
      Stock.

    

    Conversion
      calculations:

    Date
      to
      Effect Conversion:

    

    Principal
      Amount of Debenture to be Converted:

    

    Payment
      of Interest in Common Stock __ yes  __ no

    If
      yes,
      $_____ of Interest Accrued on Account of Conversion at Issue.

    

    Number
      of
      shares of Common Stock to be issued:

    

    

    Signature:

    

    Name:

    

    Address:

    

    

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    Schedule
      1

    

    CONVERSION
      SCHEDULE

     

    

    The
      6%
      Secured Convertible Debentures due on December 28, 2008 in the aggregate
      principal amount of $________ issued by Arkados Group, Inc. (formerly
      CDKNet.com, Inc.)  This Conversion Schedule reflects conversions made
      under Section 4 of the above referenced Debenture.

    

    Dated:

    

    

    
      	
               

              Date
                of Conversion

              (or
                for first entry, Original Issue Date)

            	
               

              Amount
                of Conversion

            	
               

              Aggregate
                Principal Amount Remaining Subsequent to Conversion

              (or
                original Principal Amount)

            	
               

              Company
                Attest

            
	
               

               

            	 	 	 
	
               

               

            	 	 	 
	
               

               

            	 	 	 
	
               

               

            	 	 	 
	
               

               

            	 	 	 
	
               

               

            	 	 	 
	
               

               

            	 	 	 
	
               

               

            	 	 	 
	
               

               

            	 	 	 

    

    

    

    

    
      
         

      

      
        28

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00134-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00134-of-00352.parquet"}]]