Document:

Exhibit 4.1

                               ORIENT PAPER, INC.
                           2008 EQUITY INCENTIVE PLAN

1. NAME.

The name of the plan is "ORIENT PAPER, INC. 2008 EQUITY INCENTIVE PLAN."

2. PURPOSE.

The purpose of this Plan is to provide incentives to attract, retain and
motivate eligible persons whose presence and potential contributions are
important to the success of the Company, and its Parent and Subsidiaries (if
any), by offering them an opportunity to participate in the Company's future
performance through awards of Options, Restricted Stock and Stock Awards.
Capitalized terms not defined in the text are defined in Section 3.

3. DEFINITIONS.

As used in this Plan, the following terms will have the following meanings:

"AWARD" means any award under this Plan, including any Option, Restricted Stock
or Stock Award.

"AWARD AGREEMENT" means, with respect to each Award, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Award.

"BOARD" means the Board of Directors of the Company.

"CAUSE" means any cause, as defined by applicable law, for the termination of a
Participant's employment with the Company or a Parent or Subsidiary of the
Company.

"CODE" means the Internal Revenue Code of 1986, as amended.

"COMMITTEE" means the Board of Directors.

"COMPANY" means ORIENT PAPER, INC., a Nevada corporation, or any successor
corporation.

"DISABILITY" means a disability, whether temporary or permanent, partial or
total, as determined by the Committee.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

"EXERCISE PRICE" means the price at which a holder of an Option may purchase the
Shares issuable upon exercise of the Option.

"FAIR MARKET VALUE" means, as of any date, the value of a share of the Company's
Common Stock determined as follows:

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      (a) if such Common Stock is publicly traded and is then listed on a
national securities exchange, its closing price on the date of determination on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading as reported in The Wall Street Journal;

      (b) if such Common Stock is quoted on the NASDAQ National Market, its
closing price on the NASDAQ National Market on the date of determination as
reported in The Wall Street Journal;

      (c) if such Common Stock is publicly traded but is not listed or admitted
to trading on a national securities exchange, the average of the closing bid and
asked prices on the date of determination as reported in The Wall Street
Journal;

      (d) the price per share at which shares of the Company's Common Stock are
initially offered for sale to the public by the Company's underwriters in the
initial public offering of the Company's Common Stock pursuant to a registration
statement filed with the SEC under the Securities Act if the Award is made on
the effective date of such registration statement; or

      (e) if none of the foregoing is applicable, by the Committee in good
faith.

"INSIDER" means an officer or director of the Company or any other person whose
transactions in the Company's Common Stock are subject to Section 16 of the
Exchange Act.

"OPTION" means an award of an option to purchase Shares pursuant to Section 7.

"PARENT" means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if each of such corporations other than the
company owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.

"PARTICIPANT" means a person who receives an Award under this Plan.

"PERFORMANCE FACTORS" means the factors selected by the Committee, in its sole
and absolute discretion, from among the following measures to determine whether
the performance goals applicable to Awards have been satisfied:

      (a)   Net revenue and/or net revenue growth;

      (b)   Earnings before income taxes and amortization and/or earnings before
            income taxes and amortization growth;

      (c)   Operating income and/or operating income growth;

      (d)   Net income and/or net income growth;

      (e)   Earnings per share and/or earnings per share growth;

      (f)   Total stockholder return and/or total stockholder return growth;

      (g)   Return on equity;

      (h)   Operating cash flow return on income;

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      (i)   Adjusted operating cash flow return on income;

      (j)   Economic value added; and

      (k)   Individual business objectives.

"PERFORMANCE PERIOD" means the period of service determined by the Committee,
not to exceed five years, during which years of service or performance is to be
measured for Stock Awards.

"PLAN" means this Orient Paper, Inc. 2008 Equity Incentive Plan, as amended from
time to time.

"SEC" means the U.S. Securities and Exchange Commission.

"SECURITIES ACT" means the Securities Act of 1933, as amended.

"SHARES" means shares of the Company's Common Stock reserved for issuance under
this Plan, as adjusted pursuant to Sections 4 and 19, and any successor
security.

"STOCK AWARD" means an award of Shares, or cash in lieu of Shares, pursuant to
Section 9.

"SUBSIDIARY" means any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company if each of the corporations other
than the last corporation in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

"TERMINATION" or "TERMINATED" means, for purposes of this Plan with respect to a
Participant, that the Participant has for any reason ceased to provide services
as an employee, officer, director, consultant, independent contractor, or
advisor to the Company or a Parent or Subsidiary of the Company. An employee
will not be deemed to have ceased to provide services in the case of (i) sick
leave, (ii) military leave, or (iii) any other leave of absence approved by the
Company, provided that such leave is for a period of not more than 90 days,
unless reemployment upon the expiration of such leave is guaranteed by contract
or statute or unless provided otherwise pursuant to a formal policy adopted from
time to time by the Company and issued and promulgated to employees in writing.
In the case of any employee on an approved leave of absence, the Committee may
make such provisions respecting suspension of vesting of the Award while on
leave from the employ of the Company or a Subsidiary as it may deem appropriate,
except that in no event may an Option be exercised after the expiration of the
term set forth in the Option agreement.

The Committee will have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which the Participant
ceased to provide services (the "Termination Date").

4. SHARES SUBJECT TO THE PLAN.

      4.1 Number of Shares Available. Subject to Sections 4.2 and 19, the total
aggregate number of Shares initially reserved and available for grant and
issuance pursuant to this Plan will be 5,000,000 Shares and will include Shares
that are subject to: (a) issuance upon exercise of an Option but cease to be
subject to such Option for any reason other than exercise of such Option; (b) an
Award granted hereunder but forfeited or repurchased by the Company at the
original issue price; and (c) an Award that otherwise terminates without Shares
being issued. At all times the Company shall reserve and keep available a
sufficient number of Shares as shall be required to satisfy the requirements of
all outstanding Options granted under this Plan and all other outstanding but
unvested Awards granted under this Plan.

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      4.2 Adjustment of Shares. In the event that the number of outstanding
shares is changed by a stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification or similar change in the
capital structure of the Company without consideration, then (a) the number of
Shares reserved for issuance under this Plan, (b) the Exercise Prices of and
number of Shares subject to outstanding Options, and (c) the number of Shares
subject to other outstanding Awards will be proportionately adjusted, subject to
any required action by the Board or the stockholders of the Company and
compliance with applicable securities laws; provided, however, that fractions of
a Share will not be issued but will either be replaced by a cash payment equal
to the Fair Market Value of such fraction of a Share or will be rounded up to
the nearest whole Share, as determined by the Committee.

5. ELIGIBILITY.

ISOs (as defined in Section 7 below) may be granted only to employees (including
officers and directors who are also employees) of the Company or of a Parent or
Subsidiary of the Company. All other Awards may be granted to employees,
officers, directors, consultants, independent contractors and advisors of the
Company or any Parent or Subsidiary of the Company, provided such consultants,
contractors and advisors render bona fide services not in connection with the
offer and sale of securities in a capital-raising transaction. A person may be
granted more than one Award under this Plan.

6. ADMINISTRATION.

      6.1 Committee Authority. This Plan will be administered by the Committee
or by the Board acting as the Committee. Subject to the general purposes, terms
and conditions of this Plan, and to the direction of the Board, the Committee
will have full power to implement and carry out this Plan. Without limitation,
the Committee will have the authority to:

      6.1.1 construe and interpret this Plan, any Award Agreement and any other
agreement or document executed pursuant to this Plan;

      6.1.2 prescribe, amend and rescind rules and regulations relating to this
Plan or any Award;

      6.1.3 select persons to receive Awards;

      6.1.4 determine the form and terms of Awards;

      6.1.5 determine the number of Shares or other consideration subject to
Awards;

      6.1.6 determine whether Awards will be granted singly, in combination
with, in tandem with, in replacement of, or as alternatives to, other Awards
under this Plan or any other incentive or compensation plan of the Company or
any Parent or Subsidiary of the Company;

      6.1.7 grant waivers of Plan or Award conditions;

      6.1.8 determine the vesting, exercisability and payment of Awards;

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      6.1.9 correct any defect, supply any omission or reconcile any
inconsistency in this Plan, any Award or any Award Agreement;

      6.1.10 determine whether an Award has been earned; and

      6.1.11 make all other determinations necessary or advisable for the
administration of this Plan.

      6.2 Committee Discretion. Any determination made by the Committee with
respect to any Award will be made at the time of grant of the Award or, unless
in contravention of any express term of this Plan or Award, at any later time,
and such determination will be final and binding on the Company and on all
persons having an interest in any Award under this Plan. The Committee may
delegate to one or more officers of the Company the authority to grant an Award
under this Plan to Participants who are not Insiders of the Company.

7. OPTIONS.

The Committee may grant Options to eligible persons and will determine whether
such Options will be Incentive Stock Options within the meaning of the Code
("ISO") or Nonqualified Stock Options ("NQSOs"), the number of Shares subject to
the Option, the Exercise Price of the Option, the period during which the option
may be exercised, and all other terms and conditions of the Option, subject to
the following:

      7.1 Form of Option Grant. Each Option granted under this Plan will be
evidenced by an Award Agreement which will expressly identify the Option as an
ISO or an NQSO (hereinafter referred to as the "Stock Option Agreement"), and
will be in such form and contain such provisions (which need not be the same for
each Participant) as the Committee may from time to time approve, and which will
comply with and be subject to the terms and conditions of this Plan.

      7.2 Date of Grant. The date of grant of an Option will be the date on
which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee. The Stock Option Agreement and a copy of
this Plan will be delivered to the Participant within a reasonable time after
the granting of the Option.

      7.3 Exercise Period. Options may be exercisable within the times or upon
the events determined by the Committee as set forth in the Stock Option
Agreement governing such Option; provided, however, that no Option will be
exercisable after the expiration of ten (10) years from the date the Option is
granted; and provided further that no ISO granted to a person who directly or by
attribution owns more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or of any Parent or Subsidiary of the
Company ("Ten Percent Stockholder") will be exercisable after the expiration of
five (5) years from the date the ISO is granted. The Committee also may provide
for Options to become exercisable at one time or from time to time, periodically
or otherwise, in such number of Shares or percentage of Shares as the Committee
determines, provided, however, that in all events a Participant will be entitled
to exercise an Option at the rate of at least 20% per year over five years from
the date of grant, subject to reasonable conditions such as continued
employment; and further provided that an Option granted to a Participant who is
an officer, director or consultant may become fully exercisable, subject to
reasonable conditions such as continued employment, at any time or during any
period established by the Company.

      7.4 Exercise Price. The Exercise Price of an Option will be determined by
the Committee when the Option is granted and may be not less than 85% of the
Fair Market Value of the Shares on the date of grant; provided that: (a) the
Exercise Price of an ISO will be not less than 100% of the Fair Market Value of

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the Shares on the date of grant; and (b) the Exercise Price of an Option granted
to a Ten Percent Stockholder will not be less than 110% of the Fair Market Value
of the Shares on the date of grant. Payment for the Shares purchased may be made
in accordance with Section 10 of this Plan.

      7.5 Method of Exercise. Options may be exercised only by delivery to the
Company of a written stock option exercise agreement (the "Exercise Agreement")
in a form approved by the Committee, (which need not be the same for each
Participant), stating the number of Shares being purchased, the restrictions
imposed on the Shares purchased under such Exercise Agreement, if any, and such
representations and agreements regarding the Participant's investment intent and
access to information and other matters, if any, as may be required or desirable
by the Company to comply with applicable securities laws, together with payment
in full of the Exercise Price for the number of Shares being purchased.

      7.6 Termination. Notwithstanding the exercise periods set forth in the
Stock Option Agreement, exercise of an Option will always be subject to the
following:

            7.6.1 If the Participant's service is Terminated for any reason
except death or Disability, then the Participant may exercise such Participant's
Options only to the extent that such Options would have been exercisable upon
the Termination Date no later than three (3) months after the Termination Date
(or such longer time period not exceeding five (5) years as may be determined by
the Committee, with any exercise beyond three (3) months after the Termination
Date deemed to be an NQSO).

            7.6.2 If the Participant's service is Terminated because of the
Participant's death or Disability (or the Participant dies within three (3)
months after a Termination other than for Cause or because of Participant's
Disability), then the Participant's Options may be exercised only to the extent
that such Options would have been exercisable by the Participant on the
Termination Date and must be exercised by the Participant (or the Participant's
legal representative) no later than twelve (12) months after the Termination
Date (or such longer time period not exceeding five (5) years as may be
determined by the Committee, with any such exercise beyond (i) three (3) months
after the Termination Date when the Termination is for any reason other than the
Participant's death or Disability, or (ii) twelve (12) months after the
Termination Date when the Termination is for Participant's death or Disability,
deemed to be an NQSO).

            7.6.3 Notwithstanding the provisions in paragraph 7.6(a) above, if
the Participant's service is Terminated for Cause, neither the Participant, the
Participant's estate nor such other person who may then hold the Option shall be
entitled to exercise any Option with respect to any Shares whatsoever, after
Termination, whether or not after Termination the Participant may receive
payment from the Company or a Subsidiary for vacation pay, for services rendered
prior to Termination, for services rendered for the day on which Termination
occurs, for salary in lieu of notice, or for any other benefits. For the purpose
of this paragraph, Termination shall be deemed to occur on the date when the
Company dispatches notice or advice to the Participant that his service is
Terminated.

      7.7 Limitations on Exercise. The Committee may specify a reasonable
minimum number of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent the Participant from
exercising the Option for the full number of Shares for which it is then
exercisable.

      7.8 Limitations on ISO. The aggregate Fair Market Value (determined as of
the date of grant) of Shares with respect to which ISO are exercisable for the
first time by a Participant during any calendar year (under this Plan or under

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any other incentive stock option plan of the Company, Parent or Subsidiary of
the Company) will not exceed $100,000. If the Fair Market Value of Shares on the
date of grant with respect to which ISO are exercisable for the first time by a
Participant during any calendar year exceeds $100,000, then the Options for the
first $100,000 worth of Shares to become exercisable in such calendar year will
be ISO and the Options for the amount in excess of $100,000 that become
exercisable in that calendar year will be NQSOs. In the event that the Code or
the regulations promulgated thereunder are amended after the Effective Date of
this Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISO, such different limit will be automatically
incorporated herein and will apply to any Options granted after the effective
date of such amendment.

      7.9 Modification, Extension or Renewal. The Committee may modify, extend
or renew outstanding Options and authorize the grant of new Options in
substitution therefore, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant's rights under
any Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered will be treated in accordance with Section 424(h)
of the Code. The Committee may reduce the Exercise Price of outstanding Options
without the consent of Participants affected by a written notice to them;
provided, however, that the Exercise Price may not be reduced below the minimum
Exercise Price that would be permitted under Section 7.4 of this Plan for
Options granted on the date the action is taken to reduce the Exercise Price.

      7.10 No Disqualification. Notwithstanding any other provision in this
Plan, no term of this Plan relating to ISO will be interpreted, amended or
altered, nor will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.

8. RESTRICTED STOCK.

A Restricted Stock Award is an offer by the Company to sell to an eligible
person Shares that are subject to restrictions. The Committee will determine to
whom an offer will be made, the number of Shares the person may purchase, the
price to be paid (the "Purchase Price"), the restrictions to which the Shares
will be subject, and all other terms and conditions of the Restricted Stock
Award, subject to the following:

      8.1 Form of Restricted Stock Award. All purchases under a Restricted Stock
Award made pursuant to this Plan will be evidenced by an Award Agreement (the
"Restricted Stock Purchase Agreement") that will be in such form (which need not
be the same for each Participant) as the Committee will from time to time
approve, and will comply with and be subject to the terms and conditions of this
Plan. The offer of Restricted Stock will be accepted by the Participant's
execution and delivery of the Restricted Stock Purchase Agreement and full
payment for the Shares to the Company within thirty (30) days from the date the
Restricted Stock Purchase Agreement is delivered to the person. If such person
does not execute and deliver the Restricted Stock Purchase Agreement along with
full payment for the Shares to the Company within thirty (30) days, then the
offer will terminate, unless otherwise extended by the Committee.

      8.2 Purchase Price. The Purchase Price of Shares sold pursuant to a
Restricted Stock Award will be determined by the Committee on the date the
Restricted Stock Award is granted and may not be less than 85% of the Fair
Market Value of the Shares on the grant date, except in the case of a sale to a
Ten Percent Stockholder, in which case the Purchase Price will be 100% of the
Fair Market Value. Payment of the Purchase Price must be made in accordance with
Section 10 of this Plan.

      8.3 Terms of Restricted Stock Awards. Restricted Stock Awards shall be
subject to such restrictions as the Committee may impose. These restrictions may
be based upon completion of a specified number of years of service with the

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Company or upon completion of the performance goals as set out in advance in the
Participant's individual Restricted Stock Purchase Agreement. Restricted Stock
Awards may vary from Participant to Participant and between groups of
Participants. Prior to the grant of a Restricted Stock Award, the Committee
shall: (a) determine the nature, length and starting date of any Performance
Period for the Restricted Stock Award; (b) select from among the Performance
Factors to be used to measure performance goals, if any; and (c) determine the
number of Shares that may be awarded to the Participant. Prior to the payment of
any Restricted Stock Award, the Committee shall determine the extent to which
such Restricted Stock Award has been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Restricted Stock
Awards that are subject to different Performance Periods and have different
performance goals and other criteria.

      8.4 Termination During Performance Period. If a Participant is Terminated
during a Performance Period for any reason, then such Participant will be
entitled to payment (whether in Shares, cash or otherwise) with respect to the
Restricted Stock Award only to the extent earned as of the date of Termination
in accordance with the Restricted Stock Purchase Agreement, unless the Committee
determines otherwise.

9. STOCK AWARDS.

      9.1 Awards of Stock. A Stock Award is an award of Shares (which may
consist of Restricted Stock) for services rendered to the Company or any Parent
or Subsidiary of the Company. A Stock Award will be awarded pursuant to an Award
Agreement (the "Stock Award Agreement") that will be in such form (which need
not be the same for each Participant) as the Committee will from time to time
approve, and will comply with and be subject to the terms and conditions of this
Plan. A Stock Award may be awarded upon satisfaction of such performance goals
as are set out in advance in the Participant's individual Stock Award Agreement
(the "Performance Stock Award Agreement") that will be in such form (which need
not be the same for each Participant) as the Committee will from time to time
approve, and will comply with and be subject to the terms and conditions of this
Plan. Stock Awards may vary from Participant to Participant and between groups
of Participants, and may be based upon the achievement of the Company, Parent or
Subsidiary and/or individual performance factors or upon such other criteria as
the Committee may determine.

      9.2 Terms of Stock Awards. The Committee will determine the number of
Shares to be awarded to the Participant. If the Stock Award is being earned upon
the satisfaction of performance goals pursuant to a Performance Stock Award
Agreement, then the Committee will: (a) determine the nature, length and
starting date of any Performance Period for each Stock Award; (b) select from
among the Performance Factors to be used to measure the performance, if any; and
(c) determine the number of Shares that may be awarded to the Participant. Prior
to the payment of any Stock Award, the Committee shall determine the extent to
which such Stock Award has been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Stock Awards that
are subject to different Performance Periods and different performance goals and
other criteria. The number of Shares may be fixed or may vary in accordance with
such performance goals and criteria as may be determined by the Committee. The
Committee may adjust the performance goals applicable to the Stock Awards to
take into account changes in law and accounting or tax rules and to make such
adjustments as the Committee deems necessary or appropriate to reflect the
impact of extraordinary or unusual items, events or circumstances to avoid
windfalls or hardships.

      9.3 Form of Payment. The earned portion of a Stock Award may be paid to
the Participant by the Company either currently or on a deferred basis, with
such interest or dividend equivalent, if any, as the Committee may determine.

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Payment may be made in the form of cash or whole Shares or a combination
thereof, either in a lump sum payment or in installments, all as the Committee
will determine.

10. PAYMENT FOR SHARE PURCHASES. Payment for Shares purchased pursuant to this
Plan may be made in cash (by check) or, where expressly approved for the
Participant by the Committee and where permitted by law:

      10.1 by cancellation of indebtedness of the Company to the Participant;

      10.2 by surrender of shares that either: (1) have been owned by the
Participant for more than six (6) months and have been paid for within the
meaning of SEC Rule 144 (and, if such shares were purchased from the Company by
use of a promissory note, such note has been fully paid with respect to such
shares); or (2) were obtained by the Participant in the public market;

      10.3 by waiver of compensation due or accrued to the Participant for
services rendered;

      10.4 with respect only to purchases upon exercise of an Option, and
provided that a public market for the Company's stock exists:

            10.4.1 through a "same day sale" commitment from the Participant and
a broker-dealer that is a member of the National Association of Securities
Dealers (an "NASD Dealer") whereby the Participant irrevocably elects to
exercise the Option and to sell a portion of the Shares so purchased to pay for
the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the Exercise Price directly to the Company; or

            10.4.2 through a "margin" commitment from the Participant and a NASD
Dealer whereby the Participant irrevocably elects to exercise the Option and to
pledge the Shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the Exercise Price,
and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company; or

            10.4.3 by any combination of the foregoing.

11. WITHHOLDING TAXES.

      11.1 Withholding Generally. Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan, payments
in satisfaction of Awards are to be made in cash, such payment will be net of an
amount sufficient to satisfy federal, state, and local withholding tax
requirements.

      11.2 Stock Withholding. When, under applicable tax laws, a participant
incurs tax liability in connection with the exercise or vesting of any Award
that is subject to tax withholding and the Participant is obligated to pay the
Company the amount required to be withheld, the Committee may allow the
Participant to satisfy the minimum withholding tax obligation by electing to
have the Company withhold from the Shares to be issued that number of Shares
having a Fair Market Value equal to the minimum amount required to be withheld,

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determined on the date that the amount of tax to be withheld is to be
determined. All elections by a Participant to have Shares withheld for this
purpose will be made in accordance with the requirements established by the
Committee and will be in writing in a form acceptable to the Committee.

12. PRIVILEGES OF STOCK OWNERSHIP.

      12.1 Voting and Dividends. No Participant will have any of the rights of a
stockholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will be
a stockholder and will have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock.

      12.2 Financial Statements. The Company will provide financial statements
to each Participant prior to such Participant's purchase of Shares under this
Plan, and to each Participant annually during the period such Participant has
Awards outstanding; provided, however, the Company will not be required to
provide such financial statements to Participants whose services in connection
with the Company assure them access to equivalent information.

13. NON-TRANSFERABILITY OF AWARDS.

      13.1 Awards of Stock and Restricted Stock granted under this Plan, and any
interest therein, will not be transferable or assignable by the Participant, and
may not be made subject to execution, attachment or similar process, other than
by will or by the laws of descent and distribution. Awards of Options granted
under this Plan, and any interest therein, will not be transferable or
assignable by the Participant, and may not be made subject to execution,
attachment or similar process, other than by will or by the laws of descent and
distribution, by instrument to an inter vivos or testamentary trust in which the
options are to be passed to beneficiaries upon the death of the trustor, or by
gift to "immediate family" as that term is defined in 17 C.F.R. 240.16a-1(e).
During the lifetime of the Participant an Award will be exercisable only by the
Participant. During the lifetime of the Participant, any elections with respect
to an Award may be made only by the Participant unless otherwise determined by
the Committee and set forth in the Award Agreement with respect to Awards that
are not ISOs.

      13.2 This restriction shall cease to apply to Shares received as a Stock
Award or Restricted Stock Award under this Plan at the time ownership of such
shares vests in the recipient of the Award. Similarly, this restriction shall
not apply to shares of stock received upon the exercise of vested Options.

14. CERTIFICATES.

All certificates for Shares or other securities delivered under this Plan will
be subject to such stop transfer orders, legends and other restrictions as the
Committee may deem necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any rules, regulations
and other requirements of the SEC or any stock exchange or automated quotation
system upon which the Shares may be listed or quoted.

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15. ESCROW; PLEDGE OF SHARES.

To enforce any restrictions on a Participant's Shares, the Committee may require
the Participant to deposit all certificates representing Shares, together with
stock powers or other instruments of transfer approved by the Committee
appropriately endorsed in blank, with the Company or an agent designated by the
Company to hold in escrow until such restrictions have lapsed or terminated, and
the Committee may cause a legend or legends referencing such restrictions to be
placed on the certificates. Any Participant who is permitted to execute a
promissory note as partial or full consideration for the purchase of Shares
under this Plan will be required to pledge and deposit with the Company all or
part of the Shares so purchased as collateral to secure the payment of the
Participant's obligation to the Company under the promissory note; provided,
however, that the Committee may require or accept other or additional forms of
collateral to secure the payment of such obligation and, in any event, the
Company will have full recourse against the Participant under the promissory
note notwithstanding any pledge of the Participant's Shares or other collateral.
In connection with any pledge of the Shares, the Participant will be required to
execute and deliver a written pledge agreement in such form as the Committee
will from time to time approve. The Shares purchased with the promissory note
may be released from the pledge on a pro rata basis as the promissory note is
paid.

16. EXCHANGE OF AWARDS.

The Committee may, at any time or from time to time, authorize the Company, with
the consent of the respective Participants, to issue new Awards in exchange for
the surrender and cancellation of any or all outstanding Awards.

17. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.

An Award will not be effective unless such Award is in compliance with all
applicable federal and state securities laws, rules and regulations of any
governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed or quoted, as they are
in effect on the date of grant of the Award and also on the date of exercise or
other issuance. Notwithstanding any other provision in this Plan, the Company
will have no obligation to issue or deliver certificates for Shares under this
Plan prior to: (a) obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable; and/or (b) completion of any
registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company will be under no obligation to register the
Shares with the SEC or to effect compliance with the registration, qualification
or listing requirements of any state securities laws, stock exchange or
automated quotation system, and the Company will have no liability for any
inability or failure to do so.

18. NO OBLIGATION TO EMPLOY.

Nothing in this Plan or any Award granted under this Plan will confer or be
deemed to confer on any Participant any right to continue in the employ of, or
to continue any other relationship with, the Company or any Parent or Subsidiary
of the Company or limit in any way the right of the Company or any Parent or
Subsidiary of the Company to terminate Participant's employment or other
relationship at any time, with or without cause.

19. CORPORATE TRANSACTIONS.

      19.1 Assumption or Replacement of Awards by Successor. In the event of (a)
a dissolution or liquidation of the Company, (b) a merger or consolidation in
which the Company is not the surviving corporation (other than a merger or
consolidation with a wholly-owned subsidiary, a reincorporation of the Company

<PAGE>

in a different jurisdiction, or other transaction in which there is no
substantial change in the stockholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such merger
(other than any stockholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (d) the sale of substantially
all of the assets of the Company, or (e) the acquisition, sale, or transfer of
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction, any or all outstanding Awards may be assumed, converted or
replaced by the successor corporation (if any), which assumption, conversion or
replacement will be binding on all Participants. In the alternative, the
successor corporation may substitute equivalent Awards or provide substantially
similar consideration to Participants as was provided to stockholders (after
taking into account the existing provisions of the Awards). The successor
corporation may also issue, in place of outstanding Shares of the Company held
by the Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant. In the event such
successor corporation (if any) refuses to assume or substitute Awards, as
provided above, pursuant to a transaction described in this Subsection 19.1,
such Awards will expire on such transaction at such time and on such conditions
as the Committee will determine. Notwithstanding anything in this Plan to the
contrary, the Committee may provide that the vesting of any or all Awards
granted pursuant to this Plan will accelerate upon a transaction described in
this Section 19. If the Committee exercises such discretion with respect to
Options, such Options will become exercisable in full prior to the consummation
of such event at such time and on such conditions as the Committee determines,
and if such Options are not exercised prior to the consummation of the corporate
transaction, they shall terminate at such time as determined by the Committee.

      19.2 Other Treatment of Awards. Subject to any greater rights granted to
Participants under the foregoing provisions of this Section 19, in the event of
the occurrence of any transaction described in Section 19.1, any outstanding
Awards will be treated as provided in the applicable agreement or plan of
merger, consolidation, dissolution, liquidation, or sale of assets.

      19.3 Assumption of Awards by the Company. The Company, from time to time,
also may substitute or assume outstanding awards granted by another company,
whether in connection with an acquisition of such other company or otherwise, by
either; (a) granting an Award under this Plan in substitution of such other
company's award; or (b) assuming such award as if it had been granted under this
Plan if the terms of such assumed award could be applied to an Award granted
under this Plan. Such substitution or assumption will be permissible if the
holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain unchanged
(except that the exercise price and the number and nature of Shares issuable
upon exercise of any such option will be adjusted appropriately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.

20. ADOPTION AND EFFECTIVE DATE.

This 2008 Equity Incentive Plan is effective as of April 20, 2008, the date it
was adopted by the Board.

<PAGE>

21. STOCKHOLDER APPROVAL.

This Plan shall be approved by the stockholders of the Company within twelve
(12) months before or after the date this Plan is adopted by the Board.

22. TERM OF PLAN/GOVERNING LAW.

Unless earlier terminated as provided herein, this Plan will terminate on April
20, 2009. This Plan and all agreements thereunder shall be governed by and
construed in accordance with the laws of the State of Nevada.

23. AMENDMENT OR TERMINATION OF PLAN.

The Board may at any time terminate or amend this Plan in any respect, including
without limitation amendment of any form of Award Agreement or instrument to be
executed pursuant to this Plan; provided, however, that the Board will not,
without the approval of the stockholders of the Company, amend this Plan in any
manner that requires such stockholder approval under the Code, if applicable, or
by any stock exchange or market on which the Common Stock of the Company is
listed for trading.

24. NONEXCLUSIVITY OF THE PLAN.

Neither the adoption of this Plan by the Board, the submission of this Plan to
the stockholders of the Company for approval, nor any provision of this Plan
will be construed as creating any limitations on the power of the Board to adopt
such additional compensation arrangements as it may deem desirable, including,
without limitation, the granting of stock options and bonuses otherwise than
under this Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.

25. ACTION BY COMMITTEE.

Any action permitted or required to be taken by the Committee or any decision or
determination permitted or required to be made by the Committee pursuant to this
Plan shall be taken or made in the Committee's sole and absolute discretion.f8k041808ex10i_megamedia.htm

    Exhibit
10.1

     

     

    SECURITIES
PURCHASE AGREEMENT

     

    This
Securities Purchase Agreement dated as of April 18, 2008 (this “Agreement”) is made by and
between Mega Media Group, Inc., a Nevada corporation, with principal executive
offices located at 1122 Coney Island Avenue, Brooklyn, New York 11235 (the
“Company”), and Golden
Gate Investors, Inc. (“Holder”).

     

    WHEREAS,
Holder desires to purchase from the Company, and the Company desires to issue
and sell to Holder, upon the terms and subject to the conditions of this
Agreement, a Convertible Debenture of the Company in the aggregate principal
amount of $1,500,000 (the “Debenture”); and

     

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

     

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

     

    I.    PURCHASE
AND SALE OF DEBENTURE

        

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

     

    B. Purchase Price; Form of
Payment.  The purchase price for the Debenture to be purchased
by Holder hereunder shall be $1,500,000 (the “Purchase
Price”).  Simultaneously with the execution of this Agreement,
Holder shall pay the Purchase Price by wire transfer of $100,000 in immediately
available funds to the Company and delivery to the Company of a Secured
Promissory Note in the principal amount of $1,400,000, in the form attached
hereto as Exhibit
A (the “Promissory
Note”).  Simultaneously with the execution of this Agreement,
the Company shall deliver the Debenture (which shall have been duly authorized,
issued and executed I/N/O Holder or, if the Company otherwise has been notified,
I/N/O Holder’s nominee) to the Holder.

     

    Notwithstanding
the foregoing, only with respect to the Promissory Note issued by the Holder on
the date hereof, the Holder shall make the following prepayment under the
Promissory Note if the following conditions are satisfied: $250,000 shall be
prepaid from the outstanding principal balance of the Promissory Note on the
date that is the five month anniversary of the date hereof, if (a) no Event of
Default (as defined in the Debenture) has occurred under the Debenture through
such date, and (b) the Volume Weighted Average Price (as defined in the
Debenture) per share of the Common Stock of the Company for the ten (10)
consecutive Trading Days (as defined in the Debenture) immediately preceding
such anniversary date is not less than $0.10 per share (as adjusted for any
stock splits, stock dividends, combinations, subdivisions, recapitalizations or
the like).  Any amounts so prepaid by the Holder under the terms of
this section (i) may be applied, in the sole and absolute discretion of Holder,
to any other amounts that Holder may otherwise be obligated or required to
prepay under the Promissory Note; and (ii) shall not impact the funding
obligations or prepayment obligations of the Holder under this Agreement, the
Debenture or the Second Debenture, if any, or the Second Promissory Note, if
any, as otherwise set forth in this Agreement.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

    C. Second
Debenture.  Provided that no Event of Default (as defined in
the Debenture) has occurred under the Debenture (provided that Holder may, in
its sole and absolute discretion waive the occurrence of such Event of Default
with respect to this Section), Holder shall, in Holder’s sole and absolute
discretion, select a date during the Second Debenture Period (as defined below)
(with such date as selected by Holder referred to herein as the “Second Debenture Date”) at
which the Company shall sell and the Holder shall purchase a debenture in the
principal amount of $1,500,000 in exchange for a purchase price of $1,500,000
(the “Second
Debenture”), with such purchase price paid via a cash payment of $250,000
and the issuance of a promissory note in the principal amount of $1,250,000 (the
“Second Promissory
Note”), with the form of and terms of the Second Debenture and the Second
Promissory Note and payment of the purchase price subject to the same terms and
conditions of this Agreement, the Debenture and the Promissory Note, as
applicable, provided that the Discount Multiplier (as defined in the Second
Debenture) for the Second Debenture shall be 90%, and when the Second Debenture
is issued, the term “Debenture” as used in this Agreement shall be deemed to
include the Second Debenture in all respects and when the Second Promissory Note
is issued, the term “Promissory Note” as used in this Agreement shall be deemed
to include the Second Promissory Note in all respects. The closing of the
purchase and sale of the Second Debenture and the issuance of the Second
Promissory Note shall occur within thirty days of the Second Debenture
Date.  For the purposes of this Agreement, the “Second Debenture Period” shall
mean the period that commences on the date hereof and terminates upon the date
that the remaining Principal Amount of the Debenture is equal to an amount not
greater than $250,000.  The delivery of the purchase price, including
the Second Promissory Note, by the Holder to the Company in connection with the
purchase of the Second Debenture shall occur after the expiration of the Company
Refusal Period (as defined below) and prior to the date that is twenty (20)
Trading Days after the Second Debenture Date.

     

    D. Non-Funding
Penalty.  Notwithstanding the foregoing requirements of Holder
to purchase the Second Debenture, in the event that Holder does not purchase the
Second Debenture within 10 business days of the date that the delivery of funds
associated with such purchase would otherwise be due, upon 20 days’ prior
written notice from the Company of such failure to so purchase the Second
Debenture, Holder shall pay an amount equal to $25,000 (the “Non-Funding Penalty”) to the
Company, provided however that in the event that the Common Stock shall trade on
the Trading Market (as defined in the Debenture) at a price per share that is
$0.039 per share or lower for ten (10) consecutive days at any time during the
six month period commencing on the date hereof and ending on the six month
anniversary of the date hereof (as adjusted for any stock splits, stock
dividends, combinations, subdivisions, recapitalizations or the like), then the
Non-Funding Penalty shall be reduced to equal $5,000.  The amount
payable by the Holder to the Company in connection with any damages, losses,
claims or other amounts in connection with the failure of the Holder to purchase
the Second Debenture shall not exceed $25,000 (or $5,000, subject to the terms
of this Section) in the aggregate.  Upon the payment of the
Non-Funding Penalty to the Company, the Holder shall have no further obligations
or duties under this Agreement, the Debenture or any agreements or debentures
entered into in connection with the Second Debenture, if any, with respect to
the purchase of the Second Debenture or other duties to deliver any additional
funds to the Company, provided however, that other than with respect to the
removal of the requirement to purchase and enter into the Second Debenture, the
Company and the Holder shall remain obligated and bound by the remaining terms
and conditions of this Agreement, the Debenture, the Promissory Note and any
agreements or debentures previously entered into in connection with the
Debenture.  The Company’s sole and exclusive remedy in the event that
the Holder fails to purchase the Second Debenture shall be the right of the
Company to receive the Non-Funding Penalty from the Holder.

     

    
      
        	
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        2

        
          

        

      

      
        
        

      

    

     

     

    E. Holder Non-Funding
Election.  In the event that the Common Stock shall trade on
the Trading Market (as defined in the Debenture) at a price per share that is
$0.030 per share or lower for ten (10) consecutive days at any time during the
six month period commencing on the date hereof and ending on the six month
anniversary of the date hereof (as adjusted for any stock splits, stock
dividends, combinations, subdivisions, recapitalizations or the like), the
Holder shall have the right, in the Holder’s sole and absolute discretion,
during the time period commencing on the date hereof and ending on the six month
anniversary of the date hereof, to terminate the right and obligation of the
Holder to purchase the Second Debenture through the delivery of written notice
to the Company of such termination in the manner provided in Section XVII
hereof.  In the event that Holder so terminates Holder’s right and
obligation to purchase the Second Debenture under the terms of this Section
I.H., the Holder shall have no obligation to pay any of the Non-Funding Penalty
and shall have no further obligations or duties under this Agreement, the
Debenture or any agreements or debentures entered into in connection with the
Second Debenture, if any, with respect to the purchase of the Second Debenture
or other duties to deliver any additional funds to the Company, provided
however, that other than with respect to the removal of the requirement to
purchase and enter into the Second Debenture and pay any of the Non-Funding
Penalty, the Company and the Holder shall remain obligated and bound by the
remaining terms and conditions of this Agreement, the Debenture, the Promissory
Note and any agreements or debentures previously entered into in connection with
the Debenture.

     

    F. Company Non-Funding
Election.  If during each day of the ten Trading Day (as
defined in the Debenture) period immediately preceding the Second Debenture
Date, the Volume Weighted Average Price (as defined in the Debenture) per share
of the Common Stock of the Company is not less than $0.10 per share (as adjusted
for any stock splits, stock dividends, combinations, subdivisions,
recapitalizations or the like), then the Company shall have the right, via
delivery of written notice to the Holder within ten (10) Trading Days of the
Second Debenture Date (such period referred to herein as the “Company Refusal Period”) to
refuse to sell to the Holder the Second Debenture on the terms described herein,
and all rights and obligations of the Holder to purchase the Second Debenture as
set forth herein shall be terminated and of no further force or
effect.  In the event that the Company elects not to sell the Second
Debenture to the Holder under the terms of this Section, the Holder shall have
no obligation to pay any of the Non-Funding Penalty and shall have no further
obligations or duties under this Agreement, the Debenture or any agreements or
debentures entered into in connection with the Second Debenture, if any, with
respect to the purchase of the Second Debenture or other duties to deliver any
additional funds to the Company, provided however, that other than with respect
to the removal of the requirement to purchase and enter into the Second
Debenture and pay any of the Non-Funding Penalty, the Company and the Holder
shall remain obligated and bound by the remaining terms and conditions of this
Agreement, the Debenture, the Promissory Note and any agreements or debentures
previously entered into in connection with the Debenture.

     

    
       

      
        
          	
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        3

        
          

        

      

      
        
        

      

    

     

     

     

    
    

          
II.    HOLDER’S
REPRESENTATIONS AND WARRANTIES

     

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

     

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

     

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

     

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

     

    4. Holder
understands that the Securities have not been approved or disapproved by the
Securities and Exchange Commission (the “Commission”) or any state or
provincial securities commission.

     

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

     

        III.    THE
COMPANY’S REPRESENTATIONS

     

    The
Company represents and warrants as of the date hereof to the Holder that, except
as set forth on Schedule III attached hereto, the statements contained in this
Section 3 are complete and accurate as of the date of this
Agreement.  As used in this Section 3, the term “Knowledge” shall mean
the knowledge of the members of the board of directors of the Company and/or the
officers or employees of the Company after reasonable
investigation.

     

    A. Capitalization.

     

    1. The
authorized capital stock of the Company consists of 500,000,000 shares of Common
Stock and no shares of Preferred Stock of which 83,752,254 shares and no shares,
respectively, are issued and outstanding as of the date hereof and are fully
paid and nonassessable.  The amount, exercise, conversion or
subscription price and expiration date for each outstanding option and other
security or agreement to purchase shares of Common Stock is accurately set forth
on Schedule
III.A.1.

    
       

      
        
          	
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                  Initials

                	
                	
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        4

        
          

        

      

      
        
        

      

    

     

     

     

     

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

     

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

     

    B. Organization;
Reporting Company Status.

     

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

     

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

     

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

    
       

      
        
          	
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        5

        
          

        

      

      
        
        

      

    

     

     

    D. Authority; Validity and
Enforceability.  The Company has the requisite corporate power
and authority to enter into the Documents (as such term is hereinafter defined)
and to perform all of its obligations hereunder and thereunder (including the
issuance, sale and delivery to Holder of the Securities).  The
execution, delivery and performance by the Company of the Documents and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance of the Debenture and the issuance
and reservation for issuance of the Conversion Shares) have been duly and
validly authorized by all necessary corporate action on the part of the Company
and no further filing, consent, or authorization is required by the Company, its
board of directors, or its stockholders.  Each of the Documents has
been duly and validly executed and delivered by the Company and each Document
constitutes a valid and binding obligation of the Company enforceable against it
in accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally and except as rights to indemnity and
contribution may be limited by federal or state securities laws or the public
policy underlying such laws.  The Securities have been duly and
validly authorized for issuance by the Company and, when executed and delivered
by the Company, will be valid and binding obligations of the Company enforceable
against it in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors’ rights and remedies generally.  For
purposes of this Agreement, the term “Documents” means (i) this
Agreement; (ii) the Debenture; and (iii) the Promissory Note.

     

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

     

    F. Non-contravention.  The
execution and delivery by the Company of the Documents, the issuance of the
Securities, and the consummation by the Company of the other transactions
contemplated hereby and thereby do not, and compliance with the provisions of
this Agreement and other Documents will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of a material benefit under, or result in the creation of
any Lien (as such term is hereinafter defined) upon any of the properties or
assets of the Company or any of its Subsidiaries under, or result in the
termination of, or require that any consent be obtained or any notice be given
with respect to (i) the Articles or Certificate of Incorporation or By-Laws of
the Company or the comparable charter or organizational documents of any of its
Subsidiaries, in each case as amended to the date of this Agreement, (ii) any
loan or credit agreement, debenture, bond, mortgage, indenture, lease, contract
or other agreement, instrument or permit applicable to the Company or any of its
Subsidiaries or their respective properties or assets or (iii) any statute, law,
rule or regulation applicable to, or any judgment, decree or order of any court
or government body having jurisdiction over, the Company or any of its
Subsidiaries or any of their respective properties or assets.  A
“Lien” means any
assignment, transfer, pledge, mortgage, security interest or other encumbrance
of any nature, or an agreement to do so, or the ownership or acquisition or
agreement to acquire any asset or property of any character subject to any of
the foregoing encumbrances (including any conditional sale contract or other
title retention agreement).

    
       

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

     

    H. Commission
Filings.  The Company is subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act.  The Company has properly
and timely filed with the Commission all reports, proxy statements, forms and
other documents required to be filed with the Commission under the Securities
Act and the Exchange Act since becoming subject to such Acts (the “Commission Filings”),
including without limitation the timely filing of all required reports under
Section 13 or 15(d) of the Exchange Act during the 12 months prior to the date
hereof (or for such shorter period that the Company was required to file such
reports).  As of their respective dates, (i) the Commission Filings
complied in all material respects with the requirements of the Securities Act or
the Exchange Act, as the case may be, and the rules and regulations of the
Commission promulgated thereunder applicable to such Commission Filings and (ii)
none of the Commission Filings contained at the time of its filing any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.  The
financial statements of the Company included in the Commission Filings, as of
the dates of such documents, were true and complete in all material respects and
complied with applicable accounting requirements and the published rules and
regulations of the Commission with respect thereto, were prepared in accordance
with generally accepted accounting principles in the United States (“GAAP”) (except in the case of
unaudited statements permitted by Form 10-QSB under the Exchange Act) applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly presented the consolidated financial position of
the Company and its Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments that
in the aggregate are not material and to any other adjustment described
therein).

     

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

     

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

     

    K. Securities Law
Matters.  Assuming the accuracy of the representations and
warranties of Holder set forth in Article II, the offer and sale by the Company
of the Securities is exempt from (i) the registration and prospectus delivery
requirements of the Securities Act and the rules and regulations of the
Commission thereunder and (ii) the registration and/or qualification provisions
of all applicable state and provincial securities and “blue sky”
laws.  

     

    
      
        
          	
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      The
Company shall not directly or indirectly take, and shall not permit any of its
directors, officers or Affiliates directly or indirectly to take, any action
(including, without limitation, any offering or sale to any person or entity of
any security similar to the Debenture) which will make unavailable the exemption
from Securities Act registration being relied upon by the Company for the offer
and sale to Holder of the Debenture and the Conversion Shares, as contemplated
by this Agreement.  No form of general solicitation or advertising has
been used or authorized by the Company or any of its officers, directors or
Affiliates in connection with the offer or sale of the Debenture (and the
Conversion Shares), as contemplated by this Agreement or any other agreement to
which the Company is a party.  As used in the Documents, “Affiliate” has the meaning
ascribed to such term in Rule 12b-2 under the Exchange Act.

    

     

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

     

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

     

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

     

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

     

    P. Subsidiaries.  Other than the
Subsidiaries, the Company does not presently own or control, directly or
indirectly, any interest in any other corporation, association, or other
business entity.  The Company is not a participant in any joint
venture, partnership, or similar arrangement.

     

    Q. Litigation.  Other than as
disclosed in the Commission Filings, there is no action, suit, proceeding or
investigation pending or, to the Company’s knowledge, currently threatened
against the Company or its Subsidiaries that questions the validity of this
Agreement, the Documents, or the right of the Company to enter into such
agreements, or to consummate the transactions contemplated hereby or thereby, or
that might result, either individually or in the aggregate, in any material
adverse changes in the business, assets or condition of the Company and its
Subsidiaries, taken as a whole, financially or otherwise, or any change in the
current equity ownership of the Company or its Subsidiaries.  Neither
the Company nor its Subsidiaries are parties or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality.  There is no action, suit, proceeding or
investigation by the Company or its Subsidiaries currently pending or that the
Company or its Subsidiaries intends to initiate.

    
       

      
        
          	
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    R. Agreements.  Except
for agreements explicitly contemplated hereby, or disclosed in the Commission
Filings, there are no agreements, understandings or proposed transactions
between the Company and any of its officers, directors, Affiliates, or any
affiliate thereof.

     

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

     

    T. Acknowledgment Regarding Holder’s
Purchase of Securities.  The Company acknowledges and agrees
that the Holder is acting solely in the capacity of an arm's length purchaser
with respect to this Agreement and the transactions contemplated
hereby.  The Company further acknowledges that Holder is not acting as
a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to this Agreement and the transactions contemplated hereby and any
statement made by Holder or any of its representatives or agents in connection
with this Agreement and the transactions contemplated hereby is not advice or a
recommendation and is merely incidental to the Holder’s purchase of the
Securities.  The Company further represents to Holder that the
Company's decision to enter into this Agreement has been based solely on the
independent evaluation of the Company and its representatives.

     

    U. No Integrated
Offering.  Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf, has directly or indirectly made any
offers or sales in any security or solicited any offers to buy any security
under circumstances that would require registration under the Securities Act of
the issuance of the Securities to the Holder.  The issuance of the
Securities to the Holder will not be integrated with any other issuance of the
Company's securities (past, current or future) for purposes of any shareholder
approval provisions applicable to the Company or its securities.

     

    V. Internal Accounting
Controls.  The Company and each of its Subsidiaries maintain a
system of internal accounting controls sufficient, in the judgment of the
Company's board of directors, to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

    
       

      
        
          	
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    W. Foreign Corrupt
Practices.  Neither the Company, nor any of its Subsidiaries,
nor any director, officer, agent, employee or other person acting on behalf of
the Company or any Subsidiary has, in the course of his actions for, or on
behalf of, the Company, used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expenses relating to political activity;
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as
amended; or made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or
employee.

     

    X. Solvency.  The
Company (after giving effect to the transactions contemplated by this Agreement)
is solvent (i.e., its assets have a fair market value in excess of the amount
required to pay its probable liabilities on its existing debts as they become
absolute and matured) and currently the Company has no information that would
lead it to reasonably conclude that the Company would not, after giving effect
to the transaction contemplated by this Agreement, have the ability to, nor does
it intend to take any action that would impair its ability to, pay its debts
from time to time incurred in connection therewith as such debts
mature.  The Company did not receive a qualified opinion from its
auditors with respect to its most recent fiscal year end and, after giving
effect to the transactions contemplated by this Agreement, does not anticipate
or know of any basis upon which its auditors might issue a qualified opinion in
respect of its current fiscal year.

     

    Y. No Shell
Company.  The Company is not, nor at any time during the twelve
month period immediately preceding the date hereof has the Company been a “shell
company,” as such term is defined in Rule 405 promulgated under the Securities
Act.

     

    Z. No Investment
Company.  The Company is not, and upon the issuance and sale of
the Securities as contemplated by this Agreement will not be an "investment
company" required to be registered under the Investment Company Act of 1940 (an
"Investment Company").  The Company is not controlled by an Investment
Company.

     

    IV.    CERTAIN
COVENANTS AND ACKNOWLEDGMENTS

     

    A. Filings.  The
Company shall take all actions and make all necessary Commission Filings and
“blue sky” filings required to be made by the Company in connection with the
sale of the Securities to Holder as required by all applicable laws, including
without limitation such action as the Company shall reasonably determine is
necessary to qualify the Securities, or obtain an exemption for the Securities
for sale to the Holder at the Closing pursuant to this Agreement under all
applicable laws, and shall provide a copy thereof to Holder promptly after such
filing.

     

    B. Reporting
Status.  With a view to making available to the Holder the
benefits of Rule 144 promulgated under the Securities Act or any similar rule or
regulation of the Commission that may at any time permit Holder to sell
securities of the Company to the public without registration (“Rule 144”), and
as a material inducement to the Holder’s purchase of the Securities, the Company
represents, warrants, and covenants to the following:

     

    1. The
Company's Common Stock is registered under Section 12(g) of the Exchange
Act.

    
       

      
        
          	
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    2. The
Company is not and for at least the last 12 months prior to the date hereof has
not been a "shell company," as defined in paragraph (i)(1)(i) of Rule 144 or
Rule 12b-2 of the Exchange Act.

     

    3. The
Company is subject to the reporting requirements of section 13 or 15(d) of the
Exchange Act and has filed all required reports under section 13 or 15(d) of the
Exchange Act during the 12 months prior to the date hereof (or for such shorter
period that the issuer was required to file such reports), other than Form 8-K
reports;

     

    4. from the
date hereof until all the Securities either have been sold by the Holder, or may
permanently be sold by the Holder without any restrictions pursuant to Rule 144,
(the "Registration
Period") the Company shall file with the SEC in a timely manner all
required reports under section 13 or 15(d) of the Exchange Act and such reports
shall conform to the requirements of the Exchange Act and the SEC for filing
thereunder;

     

    5. The
Company shall furnish to the Holder so long as the Holder owns Securities,
promptly upon request, (i) a written statement by the Company that it has
complied with the reporting requirements of Rule 144, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested to permit the Holders to sell such securities pursuant to
Rule 144 without registration; and

     

    6. During
the Registration Period the Company shall not terminate its status as an issuer
required to file reports under the Exchange Act even if the Exchange Act or the
rules and regulations thereunder would otherwise permit such
termination.

     

    C. 8-K Filing.  On or
before the fourth Business Day following the date hereof, the Company shall file
a Current Report on Form 8-K describing the terms of the transactions
contemplated by the Documents in the form required by the Exchange Act and
attaching the material Documents (including, without limitation, this Agreement
and the Debenture) as exhibits to such filing (the “8-K Filing”).  In
the event that the Company does not file the 8-K Filing within four Business
Days following the date hereof, the Discount Multiplier (as defined in the
Debenture) under the Debenture shall decrease by one percentage point (1%) for
each period of five Business Days that the 8-K Filing is not filed by the
Company following the date hereof for all conversions of the Debenture
thereafter.

     

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

     

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

     

    
       

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

     

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

     

    H. Transactions with
Affiliates.  So long as the Debenture is outstanding, neither
the Company nor any of its Subsidiaries shall, directly or indirectly, enter
into any material transaction or agreement with any stockholder, officer,
director or Affiliate of the Company or family member of any officer, director
or Affiliate of the Company, unless the transaction or agreement is
(i) reviewed and approved by a majority of Disinterested Directors (as such
term is hereinafter defined) and (ii) on terms no less favorable to the
Company or the applicable Subsidiary than those obtainable from a nonaffiliated
person.  A “Subsidiary” means any entity
of which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are owned directly or indirectly by the Company.  A “Disinterested Director” shall
mean a director of the Company who is not and has not been an officer or
employee of the Company and who is not a member of the family of, controlled by
or under common control with, any such officer or employee.

     

    I. Certain
Restrictions.  So long as the Debenture is outstanding, no
dividends shall be declared or paid or set apart for payment nor shall any other
distribution be declared or made upon any capital stock of the Company, nor
shall any capital stock of the Company be redeemed, purchased or otherwise
acquired (other than a redemption, purchase or other acquisition of shares of
Common Stock made for purposes of an employee incentive or benefit plan
(including a stock option plan) of the Company or pursuant to any of the
security agreements listed on Schedule IV.I) for
any consideration by the Company, directly or indirectly, nor shall any moneys
be paid to or made available for a sinking fund for the redemption of any Common
Stock.  So long as the Debenture remains outstanding, the Company
shall not (i) issue or sell shares of Common Stock or Preferred Stock without
consideration or for a consideration per share less than the bid price as
determined on the Trading Market (the “Bid Price”) of the Common
Stock determined immediately prior to its issuance, prior to providing the
Holder with a three (3) Business Day right of refusal to purchase such
securities at such price (the “Right of First Refusal”) (ii)
issue any preferred stock, warrant, option, right, contract, call, or other
security or instrument granting the holder thereof the right to acquire Common
Stock without consideration or for a consideration less than such Common Stock's
Bid Price determined immediately prior to its issuance, or (iii) file any
registration statements on Form S-8 valued at more than $500,000 in the
aggregate.  In the event the company provides the Holder with the
Right of First Refusal and the Holder elects not to exercise such right or does
not notify the Company within the time period set forth above of its intent to
exercise such right and purchase such securities, then the Company shall be
permitted to complete such transaction on the terms set forth to Holder, within
ten (10) Business Days of such refusal or deemed refusal of Holder’s right to
exercise its Right of First Refusal hereunder.

    
       

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

     

    V.    ISSUANCE
OF COMMON STOCK

     

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

     

    B. Holder
shall have the right to convert the Debenture by telecopying an executed and
completed Conversion Notice (as such term is defined in the Debenture) to the
Company.  Each date on which a Conversion Notice is telecopied to and
received by the Company in accordance with the provisions hereof shall be deemed
a Conversion Date (as such term is defined in the Debenture).  The
Company shall cause the transfer agent to transmit the certificates evidencing
the Common Stock issuable upon conversion of the Debenture (together with a new
debenture, if any, representing the principal amount of the Debenture not being
so converted) to Holder via express courier, or if a Registration Statement
covering the Common Stock has been declared effective by the SEC by electronic
transfer, within two (2) business days after receipt by the Company of the
Conversion Notice, as applicable (the “Delivery Date”).

     

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

     

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

     

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

    

     

    E. Mandatory Redemption. In the
event the Company is prohibited from issuing Common Stock, or fails to timely
deliver Common Stock on a Delivery Date, or upon the occurrence of an Event of
Default (as defined in the Debenture) or for any reason other than pursuant to
the limitations set forth herein, then at the Holder's election, the Company
must pay to the Holder ten (10) business days after request by the Holder or on
the Delivery Date (if requested by the Holder) a sum of money determined by
multiplying up to the outstanding Principal Amount (as defined in the Debenture)
of the Debenture designated by the Holder by 125%, together with accrued but
unpaid interest thereon ("Mandatory Redemption
Payment"). The Mandatory Redemption Payment must be received by the
Holder on the same date as the Company Common Stock otherwise deliverable or
within ten (10) business days after request, whichever is sooner ("Mandatory Redemption Payment
Date"). Upon receipt of the Mandatory Redemption Payment, the
corresponding Debenture principal and interest will be deemed paid and no longer
outstanding.

     

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

     

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

     

    
       

      
        
          	
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VI.   CLOSING
DATE

    
    

     

    The
“Closing” shall occur by
the delivery: (i) to the Holder of the documents evidencing the Debenture and
all other Documents, and (ii) to the Company the Purchase Price, including the
Promissory Note, and the date on which the Closing occurs shall be referred to
herein as the “Closing
Date”.

     

    VII.   CONDITIONS
TO THE COMPANY’S OBLIGATIONS

     

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

     

    A. Delivery
by Holder to the Company of the Purchase Price, including the Promissory Note
evidencing such applicable portion of the Purchase Price;

     

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

     

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

     

    VIII.   CONDITIONS
TO HOLDER’S OBLIGATIONS

    
    

     

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

     

    A. Delivery
by the Company of the Debenture (I/N/O Holder or I/N/O Holder’s nominee) to
Holder;

     

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

     

    C. The
Company shall have delivered to the Holder a certificate of the Company executed
by an officer of the Company, dated as of the Closing, certifying
the resolutions adopted by the Company’s board of directors authorizing the
execution of the Documents, the issuance of the Securities, and the transactions
contemplated hereby, and copies of any required third party consents, approvals
and filings required in connection with the consummation of the transactions
contemplated by this Agreement;

     

    
       

      
        
          	
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        15

        
          

        

      

      
        
        

      

    

     

     

     

    D. There not
having occurred (i) any general suspension of trading in, or limitation on
prices listed for, the Common Stock on the OTCBB/Pink Sheet, (ii) the
declaration of a banking moratorium or any suspension of payments in respect of
banks in the United States, (iii) the commencement of a war, armed hostilities
or other international or national calamity directly or indirectly involving the
United States or any of its territories, protectorates or possessions or
(iv) in the case of the foregoing existing at the date of this Agreement, a
material acceleration or worsening thereof;

     

    E. There not
having occurred any event or development, and there being in existence no
condition, having or which reasonably and foreseeably could have a Material
Adverse Effect;

     

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

     

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

     

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

     

    I. Delivery
by the Company of an enforceability opinion with respect to this Agreement and
the transactions contemplated hereunder from its outside counsel in form and
substance satisfactory to Holder; and

     

    J. Delivery
by the Company of a valid waiver of any preemptive rights held by the
individuals and/or parties listed on Schedule III.A.3 hereto in form and
substance satisfactory to Holder.

     

    IX.    SURVIVAL;
INDEMNIFICATION

     

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

     

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

     

     

    
      
        	
                ______________

                Initials

              	
              	
                ____________

                Initials

              

      

    

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

     

     

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

     

    2. any
failure by the Company to perform any of its covenants, agreements, undertakings
or obligations set forth in this Agreement or the other Documents or any
instrument, certificate or agreement entered into or delivered by the Company
pursuant to this Agreement or the other Documents;

     

    3. the
purchase of the Debenture, the conversion of the Debenture, the payment of
interest on the Debenture, the consummation of the transactions contemplated by
this Agreement and the other Documents, the use of any of the proceeds of the
Purchase Price by the Company, the purchase or ownership of any or all of the
Securities, the performance by the parties hereto of their respective
obligations hereunder and under the Documents or any claim, litigation,
investigation, proceedings or governmental action relating to any of the
foregoing, whether or not Holder is a party thereto; and/or

     

    4. resales
of the Common Stock by Holder in the manner and as contemplated by this
Agreement and the Documents.

     

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

     

    
       

      
        
          	
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        17

        
          

        

      

      
        
        

      

       

       

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

    

     

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

     

    X.    GOVERNING
LAW

    
    

     

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

     

    XI.    SUBMISSION
TO JURISDICTION

    
    

     

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

     

    XII.    WAIVER
OF JURY TRIAL

    
    

     

    TO
THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ITS RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OTHER DOCUMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT AND OTHER DOCUMENTS.  EACH PARTY
HERETO (i) CERTIFIES THAT NEITHER OF THEIR RESPECTIVE REPRESENTATIVES, AGENTS OR
ATTORNEYS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (ii)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS HEREIN.

     

    
       

      
        
          	
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        18

        
          

        

      

      
        
        

      

    

     

     

          
XIII.   COUNTERPARTS;
EXECUTION

    
    

     

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

     

    XIV.   HEADINGS

    
    

     

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

     

    XV.    SEVERABILITY

     

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

     

    XVI.    ENTIRE
AGREEMENT; REMEDIES, AMENDMENTS AND WAIVERS

     

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

     

    XVII.    NOTICES

     

    
    

    Any
notices, consents, waivers, or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered (i) upon receipt, when delivered personally; (ii) upon
confirmation of receipt, when sent by facsimile; (iii) three (3) days after
being sent by U.S. certified mail, return receipt requested, or (iv) one (1) day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:

     

    
       

      
        
          	
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        19

        
          

        

      

      
        
        

      

    

     

     

    
      
        	
                A. 

              	
                If
      to the Company, to:

              
	 
      	 
      
	 
      	
                Mega
      Media Group, Inc.

              
	 
      	
                1122
      Coney Island Avenue

              
	 
      	
                Brooklyn,
      New York 11235

              
	 
      	
                Telephone:     718-947-1100

              
	 
      	
                Facsimile:        646-417-5109

              
	 
      	 
      
	
                B. 

              	
                If
      to Holder, to:

              
	 
      	
                Golden
      Gate Investors, Inc.

                1150
      Silverado Street, Suite 220

                La
      Jolla, California 92037

                Telephone:   858-551-8789

                Facsimile:     
      858-551-8779

              

      

    

     

    The
Company or Holder may change the foregoing address by notice given pursuant to
this Article XVII.

     

          
XVIII.    CONFIDENTIALITY

    
    

     

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

     

    XIX.    MAXIMUM
INTEREST RATE

    
    

     

    Notwithstanding
anything herein to the contrary, if at any time the applicable interest rate as
provided for herein shall exceed the maximum lawful rate which may be contracted
for, charged, taken or received by the Holder in accordance with any applicable
law (the “Maximum
Rate”), the rate of interest applicable to this Agreement shall be
limited to the Maximum Rate.  To the greatest extent permitted under
applicable law, the Company hereby waives and agrees not to allege or claim that
any provisions of this Agreement could give rise to or result in any actual or
potential violation of any applicable usury laws.

     

    
       

      
        
          	
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        20

        
          

        

      

      
        
        

      

    

     

     

          
XX.    ASSIGNMENT

    
    

     

    This
Agreement shall not be assignable by the Company without the prior written
consent of the Holder.  The Holder may assign this Agreement upon 10
days prior written notice to the Company.

    

    

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

    

    

    Mega
Media Group,
Inc.                                                                                                Golden
Gate Investors, Inc.

    

    By:
__________________________                                                                       
By: __________________________

    

    Name:________________________                                                                        
Name:________________________

    

    Title:
_________________________                                                                       
Title: _________________________

    

     

    
       

      
        
          	
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        21

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    SCHEDULE
III.A.1

     

    WARRANTS
AND OPTIONS

     

    
      	
              Convertible
      Loans

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
              Date

            	
              Payee

            	
              Amount

            	 
      	
              Loan
      Due

            	
              Conversion
      Price

            	 
      	 
      	 
      	 
      
	 
      	
              1/29/2008

            	
              Andrey
      Anikeyev

            	
              $100,000.00

            	 
      	
              1/29/2009

            	
              20%
      discount to market

            	 
      	 
      	 
      
	 
      	
              5/5/2007

            	
              FCIC

            	
              $250,000.00

            	 
      	
              06/30/08

            	
              0.25

            	 
      	 
      	 
      	 
      	 
      
	 
      	
              1/29/2008

            	
              David
      Kokakis

            	
              $329,455.00

            	 
      	
              current

            	
              Exercise
      Price $0.30

            
	 
      	
              2/29/2008

            	
              ESJA

            	
              $90,000.00

            	 
      	
              8/30/2008

            	
              20%
      discount to market

            	 
      	 
      	 
      
	 
      	
              1/22/2008

            	
              Eugene
      Khavinson

            	
              $100,000.00

            	 
      	
              1/23/2009

            	
              20%
      discount to market

            	 
      	 
      	 
      
	 
      	
              2/28/2008

            	
              FD
      Import

            	
              $200,000.00

            	 
      	
              10/15/2008

            	
              20%
      discount to market

            	 
      	 
      	 
      
	 
      	
              3/23/2008

            	
              Tangiers

            	
              $75,000.00

            	 
      	
              3/24/2009

            	
              30%
      discount to market

            	 
      	 
      	 
      
	 
      	
              6/1/2005

            	
              Ramses

            	
              $220,000.00

            	 
      	
              6/15/2008

            	
              being
      negotiated to convert, also have an option to extend for another
      year

            
	 
      	
              6/1/2005

            	
              Shroff

            	
              $220,000.00

            	 
      	
              6/15/2008

            	
              being
      negotiated to convert, also have an option to extend for another
      year

            
	
              Options

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
              Date
      Issued

            	
              Exp
      Date

            	
              Options

            	
              Amount
      exercised

            	
              Balance

            	
              ex
      price

            	 
      	 
      	 
      
	 
      	
              2/6/2008

            	
              Aleksandr
      Shvarts

            	
              2/5/2009

            	
              800000

            	
              0.00

            	
              800000

            	
              0.31

            	 
      	 
      	 
      
	 
      	
              2/6/2008

            	
              Dr.
      Elan Kaufman

            	
              2/5/2009

            	
              800000

            	
              25,000.00

            	
              775000

            	
              0.31

            	 
      	 
      	 
      
	 
      	
              2/6/2008

            	
              Dr.
      Lev Paukman

            	
              2/5/2009

            	
              800000

            	
              25,000.00

            	
              775000

            	
              0.31

            	 
      	 
      	 
      
	 
      	
              2/6/2008

            	
              Gennady
      Pomeranets

            	
              2/5/2009

            	
              800000

            	
              132,680.00

            	
              667320

            	
              0.31

            	 
      	 
      	 
      

    

     

    
       

      
        
          	
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    SCHEDULE
III.A.3

     

    PREEMPTIVE
RIGHTS

     

    

     

    No
preemptive rights exist.

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        	
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        23

        
          

        

      

      
        
        

      

    

     

     

    SCHEDULE
III.L.

     

    REGISTRATION
RIGHTS

     

    No
registration rights exist.

    

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        	
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        24

        
          

        

      

      
        
        

      

    

     

     

    SCHEDULE
IV.I.

     

    SECURITY
AGREEMENTS

     

    Security
Agreement between the Company and First Capital Invest Corp., dated as of June
7, 2007.

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        	
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        25

        
          

        

      

      
        
        

      

    

     

     

     

     

    EXHIBIT
A

     

    SECURED
PROMISSORY NOTE

     

    
 

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
       

      
        
          	
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Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}]]