Document:

Exhibit 10.1

                       DRAWDOWN EQUITY FINANCING AGREEMENT

     THIS  AGREEMENT  dated as of the day of March 12,  2010  (the  "Agreement")
between  AUCTUS  PRIVATE  EQUITY  FUND,  LLC a  Massachusetts  corporation  (the
"Investor"),  and WINCHESTER INTERNATIONAL RESORTS, INC. a corporation organized
and existing under the laws of the Nevada (the "Company").

     WHEREAS,  the  parties  desire  that,  upon the  terms and  subject  to the
conditions  contained herein,  the Company shall issue and sell to the Investor,
from time to time as provided  herein,  and the Investor shall purchase from the
Company up to Ten Million Dollars  ($10,000,000)  of the Company's common stock,
par value $0.001 per share (the "Common Stock"); and

     WHEREAS,  such  investments will be made in reliance upon the provisions of
Regulation D ("Regulation D") of the Securities Act of 1933, as amended, and the
regulations  promulgated  thereunder (the  "Securities  Act"),  and or upon such
other exemption from the registration  requirements of the Securities Act as may
be available with respect to any or all of the investments to be made hereunder.

     WHEREAS,   contemporaneously  with  the  execution  and  delivery  of  this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement  substantially in the form attached hereto (the  "Registration  Rights
Agreement")  pursuant  to which  the  Company  has  agreed  to  provide  certain
registration   rights  under  the  1933  Act,  and  the  rules  and  regulations
promulgated thereunder, and applicable state securities laws.

     NOW, THEREFORE, the parties hereto agree as follows:

                                   ARTICLE I.
                               CERTAIN DEFINITIONS

     Section  1.1.  "Advance"  shall mean the portion of the  Commitment  Amount
requested by the Company in the Drawdown Notice.

     Section 1.2.  "Advance  Date" shall mean the first (1st)  Trading Day after
expiration of the applicable Pricing Period for each Advance.

     Section 1.3.  "Drawdown  Notice" shall mean a written notice in the form of
Exhibit A attached hereto to the Investor  executed by an officer of the Company
and  setting  forth  the  Advance  amount  that the  Company  requests  from the
Investor.

     Section  1.4.  "Drawdown  Notice  Date"  shall  mean each date the  Company
delivers (in accordance with Section 2.2(b) of this Agreement) to the Investor a
Drawdown Notice requiring the Investor to advance funds to the Company,  subject
to the terms of this Agreement.  No Drawdown Notice Date shall be less than five
(5) Trading Days after the prior Drawdown Notice Date.

     Section 1.5. "Bid Price" shall mean, on any date, the closing bid price (as
reported by Bloomberg  L.P.) of the Common Stock on the  Principal  Market or if
the Common Stock is not traded on a Principal  Market,  the highest reported bid
price  for the  Common  Stock,  as  furnished  by the  National  Association  of
Securities Dealers, Inc.

     Section  1.6.  "Closing"  shall mean one of the  closings of a purchase and
sale of Common Stock pursuant to Section 2.3.

                                       1
<PAGE>
     Section 1.7.  "Commitment  Amount" shall mean the aggregate amount of up to
Ten Million  Dollars  ($10,000,000)  which the Investor has agreed to provide to
the Company in order to purchase  the  Company's  Common  Stock  pursuant to the
terms and conditions of this Agreement.

     Section 1.8.  "Commitment  Period" shall mean the period  commencing on the
earlier to occur of (i) the  Effective  Date,  or (ii) such  earlier date as the
Company and the  Investor  may  mutually  agree in writing,  and expiring on the
earliest to occur of (x) the date on which the Investor  shall have made payment
of Advances pursuant to this Agreement in the aggregate amount of the Commitment
Amount,  (y) the date this  Agreement is terminated  pursuant to Section 10.2 or
(z) the date occurring twenty-four (24) months after the Effective Date.

     Section 1.9.  "Common  Stock" shall mean the Company's  common  stock,  par
value $0.001 per share.

     Section  1.10.  "Condition  Satisfaction  Date"  shall have the meaning set
forth in Section 7.2.

     Section 1.11.  "Damages"  shall mean any loss,  claim,  damage,  liability,
costs and expenses (including,  without limitation,  reasonable  attorney's fees
and disbursements and costs and expenses of expert witnesses and investigation).

     Section 1.12.  "Effective  Date" shall mean the date on which the SEC first
declares  effective  a  Registration  Statement  registering  the  resale of the
Registrable Securities as set forth in Section 7.2(a).

     Section  1.13.  "Exchange  Act" shall mean the  Securities  Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.

     Section 1.14.  "Floor" shall mean Seventy-Five (75%) of the average closing
bid price of the stock over the  preceding  ten (10)  trading  days prior to the
Drawdown Notice Date "Floor Price".  The "Floor" can be waived at the discretion
of the Company.

     (a) The Company, in its sole and absolute  discretion,  may waive its right
with  respect to the Floor and allow the  Investor to sell any shares  below the
Floor Price. In the event that the Company does not waive its right with respect
to the Floor, the Investor shall immediately cease selling any shares within the
Drawdown Notice if the price falls below the Floor Price.

     Section  1.15.   "Material   Adverse  Effect"  shall  mean  any  condition,
circumstance, or situation that would prohibit or otherwise materially interfere
with the ability of the Company to enter into and perform any of its obligations
under this  Agreement  or the  Registration  Rights  Agreement  in any  material
respect.

     Section 1.16. "Market Price" shall mean the lowest closing Bid Price of the
Common Stock during the Pricing Period.

     Section 1.17.  "Maximum  Advance Amount" shall not exceed One Hundred Fifty
Thousand  Dollars  ($150,000) or two hundred (200%) percent of the average daily
volume based on the trailing twenty (20) days preceding the Drawdown Notice date
whichever is of a larger value.

     Section  1.18.  "NASD" shall mean the National  Association  of  Securities
Dealers, Inc.

     Section  1.19.  "Person"  shall  mean  an  individual,  a  corporation,   a
partnership, an association, a trust or other entity or organization,  including
a government or political subdivision or an agency or instrumentality thereof.

                                       2
<PAGE>
     Section 1.20.  "Pricing Period" shall mean the five (5) consecutive Trading
Days after the Drawdown Notice Date.

     Section 1.21. "Principal Market" shall mean the Nasdaq National Market, the
Nasdaq Capital Market, the American Stock Exchange,  the OTC Bulletin Board, OTC
Pink  Sheets  or the New  York  Stock  Exchange,  whichever  is at the  time the
principal trading exchange or market for the Common Stock.

     Section 1.22.  "Purchase Price" shall be set at Ninety-Two percent (92%) of
the average  lowest  closing  best bid price  (highest  posted bid price) of the
common stock during the Pricing Period.

     Section  1.23.  "Registrable  Securities"  shall  mean the shares of Common
Stock to be issued hereunder (i) in respect of which the Registration  Statement
has not been declared  effective by the SEC, (ii) which have not been sold under
circumstances  meeting  all of the  applicable  conditions  of Rule  144 (or any
similar  provision then in force) under the Securities Act ("Rule 144") or (iii)
which have not been otherwise  transferred to a holder who may trade such shares
without  restriction  under the Securities  Act, and the Company has delivered a
new certificate or other evidence of ownership for such securities not bearing a
restrictive legend.

     Section 1.24.  "Registration  Rights Agreement" shall mean the Registration
Rights Agreement dated the date hereof, regarding the filing of the Registration
Statement for the resale of the Registrable Securities, entered into between the
Company and the Investor.

     Section 1.25.  "Registration Statement" shall mean a registration statement
on Form S-1 (if use of such form is then  available  to the Company  pursuant to
the rules of the SEC and, if not, on such other form  promulgated by the SEC for
which the Company then  qualifies  and which  counsel for the Company shall deem
appropriate, and which form shall be available for the resale of the Registrable
Securities to be registered thereunder in accordance with the provisions of this
Agreement and the  Registration  Rights  Agreement,  and in accordance  with the
intended method of distribution of such securities), for the registration of the
resale by the Investor of the Registrable Securities under the Securities Act.

     Section  1.26.  "Regulation  D" shall  have the  meaning  set  forth in the
recitals of this Agreement.

     Section 1.27.  "SEC" shall mean the United States  Securities  and Exchange
Commission.

     Section  1.28.  "Securities  Act" shall have the  meaning  set forth in the
recitals of this Agreement.

     Section  1.29.  "SEC  Documents"  shall mean  Annual  Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and Proxy Statements
of the Company as  supplemented  to the date hereof,  filed by the Company for a
period of at least twelve (12) months  immediately  preceding the date hereof or
the Advance  Date,  as the case may be, until such time as the Company no longer
has an obligation to maintain the  effectiveness of a Registration  Statement as
set forth in the Registration Rights Agreement.

     Section  1.30.  "Trading  Day" shall mean any day during which the New York
Stock Exchange shall be open for business.

                                   ARTICLE II.
                                    ADVANCES

     Section 2.1. Advances.

                                       3
<PAGE>
     (a)  Subject  to the terms and  conditions  of this  Agreement  (including,
without limitation,  the provisions of Article VII hereof),  the Company, at its
sole and exclusive option,  may issue and sell to the Investor,  and, except for
conditions outside of the Investor's control, the Investor shall be obligated to
purchase from the Company, shares of the Company's Common Stock by the delivery,
in the Company's sole discretion,  of Drawdown Notices.  The number of shares of
Common Stock that the Investor shall purchase  pursuant to each Advance shall be
determined  by dividing  the amount of the  Advance by the  Purchase  Price.  No
fractional  shares  shall be issued.  Fractional  shares shall be rounded to the
next higher whole number of shares. The aggregate maximum amount of all Advances
that the  Investor  shall be obligated  to make under this  Agreement  shall not
exceed the Commitment Amount.

     (b) The Investor  shall  immediately  cease  selling any shares  within the
Drawdown  Notice if the price falls below the Floor Price.  The Company,  in its
sole and absolute discretion,  may waive its right with respect to the Floor and
allow the  Investor  to sell any  shares  below the Floor  Price.  Only when the
closing  bid price of the stock is above the Floor  Price (the price at the time
when the  Investor  must  immediately  cease  selling  shares) may the  Investor
reinitiate  selling of any shares without such waiver from the Company  required
under this subsection.

     Section 2.2. Mechanics.

     (a) Drawdown Notice. At any time during the Commitment  Period, the Company
may request the  Investor to purchase  shares of Common  Stock by  delivering  a
Drawdown Notice to the Investor,  subject to the conditions set forth in Section
7.2; provided, however, the amount for each Advance as designated by the Company
in the  applicable  Drawdown  Notice shall not be more than the Maximum  Advance
Amount and the aggregate amount of the Advances pursuant to this Agreement shall
not exceed the Commitment Amount. The Company acknowledges that the Investor may
sell  shares of the  Company's  Common  Stock  corresponding  with a  particular
Drawdown  Notice after the Drawdown  Notice is received by the  Investor.  There
shall be a minimum of five (5) Trading Days between each Drawdown Notice Date.

     (b) Date of Delivery of Drawdown  Notice. A Drawdown Notice shall be deemed
delivered   on:   (i)   the   Trading   Day  it  is   received   by   email   to
louposner@auctusfund.com and als@auctusfund.com if such notice is received prior
to 5:00 pm Eastern  Time;  or (ii) the  immediately  succeeding  Trading  Day if
Drawdown Notice is received by facsimile or otherwise after 5:00 pm Eastern Time
on a Trading Day or at any time on a day which is not a Trading Day. No Drawdown
Notice may be deemed delivered on a day that is not a Trading Day or if positive
receipt is not acknowledged by Auctus.

     Section 2.3.  Closings.  On each Advance Date (i) the Company shall deliver
to the Investor such number of shares of the Common Stock registered in the name
of the  Investor as shall equal (x) the amount of the Advance  specified in such
Drawdown  Notice  pursuant to Section 2.1  herein,  divided by (y) the  Purchase
Price and (ii) upon receipt of such shares,  the Investor  shall  deliver to the
Company  the amount of the  Advance  specified  in the  Drawdown  Notice by wire
transfer of immediately available funds. In addition, on or prior to the Advance
Date,  each of the  Company  and the  Investor  shall  deliver  to the other all
documents,  instruments and writings  required to be delivered by either of them
pursuant to this  Agreement  in order to implement  and effect the  transactions
contemplated  herein. To the extent the Company has not paid the fees, expenses,

                                       4
<PAGE>
and disbursements of the Investor in accordance with Section 12.4, the amount of
such fees,  expenses,  and  disbursements  may be deducted by the Investor  (and
shall be paid to the relevant party) directly out of the proceeds of the Advance
with no  reduction in the amount of shares of the  Company's  Common Stock to be
delivered on such Advance Date.

     (a) Company's Obligations Upon Closing.

     (i) The Company  shall use all  reasonable  efforts to become DTC  eligible
within a reasonable  time of the date of this  Agreement.  Upon  approval of DTC
eligibility,  the Company shall  deliver to the  Investor,  through the use of a
Deposit/Withdrawal  at Custodian from a Deposit Trust Company method or commonly
referred to as "DWAC/DTC" of the Investor's choosing, the shares of Common Stock
applicable  to the Advance in  accordance  with Section  2.3.  The  certificates
evidencing  such shares  shall be free of  restrictive  legends.  Upon  receipt,
Investor will perform a wire transfer on the same business day provided that the
shares have been received in sufficient  time to perform such  transfer.  In the
event that the Investor is no longer able,  due to time  constraints  beyond his
control,  to  perform a wire on the day of  receipt,  the wire will be  promptly
executed the following business day.

     (ii) the Company's Registration Statement with respect to the resale of the
shares of Common Stock  delivered in connection with the Advance shall have been
declared effective by the SEC;

     (iii)  the  Company   shall  have   obtained  all   material   permits  and
qualifications  required by any  applicable  state for the offer and sale of the
Registrable Securities,  or shall have the availability of exemptions therefrom.
The sale and issuance of the Registrable  Securities shall be legally  permitted
by all laws and regulations to which the Company is subject;

     (iv) the Company  shall file with the SEC in a timely  manner all  reports,
notices and other documents required of a "reporting company" under the Exchange
Act and applicable Commission regulations;

     (v) the fees as set forth in Section 12.4 below shall have been paid or can
be withheld as provided in Section 2.3; and

     (vi) The Company's transfer agent shall be DWAC eligible.

     (b)  Investor's  Obligations  Upon  Closing.  Upon  receipt  of the  shares
referenced in Section  2.3(a)(i) above and provided the Company is in compliance
with its  obligations  in Section 2.3, the Investor shall deliver to the Company
the amount of the Advance  specified in the Drawdown  Notice by wire transfer of
immediately available funds.

     Section  2.4.  Hardship.  In the event  the  Investor  sells  shares of the
Company's Common Stock after receipt of an Drawdown Notice and the Company fails
to perform its  obligations  as mandated in Section  2.3, and  specifically  the
Company  fails to  deliver to the  Investor  on the  Advance  Date the shares of
Common  Stock  corresponding  to the  applicable  Advance  pursuant  to  Section
2.3(a)(i),  the Company  acknowledges  that the Investor shall suffer  financial
hardship  and  therefore  shall be liable for any and all  losses,  commissions,
fees,  interest,  legal  fees or any  other  financial  hardship  caused  to the
Investor.

The Company  understands  that a delay in the delivery of the  securities in the
form required pursuant to this  registration  statement beyond the Closing could
result  in  economic  loss  to  the  Investor.  After  the  Effective  Date,  as
compensation  to the  Investor  for late  issuance of such shares  (delivery  of
securities after the applicable closing), the Company agrees to make payments to
the  Investor in  accordance  with the  schedule  below where the number of days

                                       5
<PAGE>
overdue is defined as the number of  business  days beyond the close with amount
due being cumulative.

The Company shall pay any payments  incurred  under this Section in  immediately
available  funds  upon  demand.  Nothing  herein  shall  limit  the right of the
Investor to pursue damages for the Company's failure to comply with the issuance
and delivery of securities to the Investor.

       Payments for Each                  For each $10,000
     Number of Days Overdue             Worth of Common Stock
     ----------------------             ---------------------
            1                                 $100
            2                                 $200
            3                                 $300
            4                                 $400
            5                                 $500
            6                                 $600
            7                                 $700
            8                                 $800
            9                                 $900
            10                                $1000
            Over 10                           $1000 + $200 for each Business Day
                                              beyond the tenth day

                                  ARTICLE III.
                   REPRESENTATIONS AND WARRANTIES OF INVESTOR

     Investor  hereby  represents  and warrants to, and agrees with, the Company
that the  following  are true and  correct as of the date  hereof and as of each
Advance Date:

     Section  3.1.   Organization  and  Authorization.   The  Investor  is  duly
incorporated  or  organized  and  validly  existing in the  jurisdiction  of its
incorporation  or  organization  and has all  requisite  power and  authority to
purchase and hold the securities issuable hereunder.  The decision to invest and
the execution and delivery of this Agreement by such Investor,  the  performance
by such  Investor of its  obligations  hereunder  and the  consummation  by such
Investor of the transactions  contemplated  hereby have been duly authorized and
requires no other  proceedings on the part of the Investor.  The undersigned has
the right,  power and  authority to execute and deliver this  Agreement  and all
other  instruments  (including,  without  limitations,  the Registration  Rights
Agreement), on behalf of the Investor. This Agreement has been duly executed and
delivered by the Investor and,  assuming the  execution and delivery  hereof and
acceptance thereof by the Company,  will constitute the legal, valid and binding
obligations of the Investor, enforceable against the Investor in accordance with
its terms.

     Section  3.1.1.  Evaluation of Risks.  The Investor has such  knowledge and
experience in financial, tax and business matters as to be capable of evaluating
the  merits  and risks of,  and  bearing  the  economic  risks  entailed  by, an
investment  in the Company and of protecting  its  interests in connection  with
this  transaction.  It recognizes that its investment in the Company  involves a
high degree of risk.

     Section 3.2. No Legal Advice From the  Company.  The Investor  acknowledges
that it had the  opportunity  to  review  this  Agreement  and the  transactions
contemplated  by this Agreement with his or its own legal counsel and investment

                                       6
<PAGE>
and tax  advisors.  The Investor is relying  solely on such counsel and advisors
and  not on any  statements  or  representations  of the  Company  or any of its
representatives  or agents for legal,  tax or investment  advice with respect to
this  investment,  the  transactions  contemplated  by  this  Agreement  or  the
securities laws of any jurisdiction.

     Section 3.3. Investment Purpose.  The securities are being purchased by the
Investor for its own account, and for investment  purposes.  The Investor agrees
not to assign or in any way transfer the Investor's  rights to the securities or
any interest  therein and  acknowledges  that the Company will not recognize any
purported  assignment or transfer except in accordance  with applicable  Federal
and state securities laws. No other person has or will have a direct or indirect
beneficial  interest  in the  securities.  The  Investor  agrees  not  to  sell,
hypothecate  or  otherwise   transfer  the  Investor's   securities  unless  the
securities are registered  under Federal and applicable state securities laws or
unless, in the opinion of counsel satisfactory to the Company, an exemption from
such laws is available.

     Section 3.4. Accredited Investor.  The Investor is an "Accredited Investor"
as that term is defined in Rule 501(a)(3) of Regulation D of the Securities Act.

     Section 3.5. Information.  The Investor and its advisors (and its counsel),
if any,  have  been  furnished  with all  materials  relating  to the  business,
finances and  operations of the Company and  information  it deemed  material to
making an informed investment decision.  The Investor and its advisors,  if any,
have been  afforded  the  opportunity  to ask  questions  of the Company and its
management.  Neither such  inquiries nor any other due diligence  investigations
conducted by such Investor or its advisors, if any, or its representatives shall
modify,  amend  or  affect  the  Investor's  right  to  rely  on  the  Company's
representations  and  warranties  contained  in  this  Agreement.  The  Investor
understands that its investment  involves a high degree of risk. The Investor is
in a position  regarding  the  Company,  which,  based upon  employment,  family
relationship or economic bargaining power,  enabled and enables such Investor to
obtain information from the Company in order to evaluate the merits and risks of
this investment. The Investor has sought such accounting,  legal and tax advice,
as it has  considered  necessary to make an informed  investment  decision  with
respect to this transaction.

     Section  3.6.  Receipt of  Documents.  The  Investor  and its counsel  have
received and read in their entirety: (i) this Agreement and the Exhibits annexed
hereto;  (ii) all due  diligence and other  information  necessary to verify the
accuracy and completeness of such representations, warranties and covenants; and
(iii) answers to all questions the Investor  submitted to the Company  regarding
an  investment  in the Company;  and the Investor has relied on the  information
contained  therein and has not been furnished any other  documents,  literature,
memorandum or prospectus.

     Section 3.7.  Registration Rights Agreement.  The parties have entered into
the Registration Rights Agreement dated the date hereof.

     Section 3.8. No General  Solicitation.  Neither the Company, nor any of its
affiliates,  nor any person  acting on its or their  behalf,  has engaged in any
form of general  solicitation  or general  advertising  (within  the  meaning of
Regulation D under the Securities  Act) in connection  with the offer or sale of
the shares of Common Stock offered hereby.

     Section 3.9. Not an Affiliate. The Investor is not an officer,  director or
a person  that  directly,  or  indirectly  through  one or more  intermediaries,
controls or is controlled by, or is under common control with the Company or any
"Affiliate"  of the  Company  (as  that  term  is  defined  in  Rule  405 of the
Securities Act).

                                       7
<PAGE>
     Section 3.10.  Trading  Activities.  The Investor's trading activities with
respect to the Company's Common Stock shall be in compliance with all applicable
federal  and state  securities  laws,  rules and  regulations  and the rules and
regulations  of the  Principal  Market on which the  Company's  Common  Stock is
listed or traded and Investor  will comply with any requests  that the SEC makes
in  connection  with the Filing of the  Registration  Agreement  to ensure  such
compliance.  Neither the Investor nor its  affiliates has an open short position
in the Common Stock of the Company,  the Investor  agrees that it shall not, and
that it will  cause its  affiliates  not to,  engage  in any  short  sales of or
hedging transactions with respect to the Common Stock, provided that the Company
acknowledges and agrees that upon receipt of an Drawdown Notice the Investor has
the  right to sell the  shares  to be issued  to the  Investor  pursuant  to the
Drawdown Notice during the applicable Pricing Period.

     Section 3.11 No Registration as a Dealer.  The Investor is not and will not
be  required  to be  registered  as a "dealer"  under the 1934 Act,  either as a
result of its execution and performance of its obligations  under this Agreement
or otherwise.

     Section 3.12 Good Standing.  The Investor is a limited  liability  company,
duly  organized,  validly  existing and in good  standing  under the laws of its
state of formation and any jurisdiction in which it is conducting business.

                                   ARTICLE IV.
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     Except as stated below, on the disclosure  schedules  attached hereto or in
the SEC  Documents  (as defined  herein),  the  Company  hereby  represents  and
warrants to, and  covenants  with,  the Investor that the following are true and
correct as of the date hereof:

     Section  4.1.   Organization  and   Qualification.   The  Company  is  duly
incorporated  or  organized  and  validly  existing in the  jurisdiction  of its
incorporation or organization  and has all requisite  corporate power to own its
properties  and to carry on its  business  as now being  conducted.  Each of the
Company and its  subsidiaries  is duly qualified as a foreign  corporation to do
business and is in good  standing in every  jurisdiction  in which the nature of
the business conducted by it makes such qualification  necessary,  except to the
extent that the failure to be so qualified or be in good standing would not have
a Material Adverse Effect on the Company and its subsidiaries taken as a whole.

     Section 4.2. Authorization, Enforcement, Compliance with Other Instruments.
(i) The Company has the  requisite  corporate  power and authority to enter into
and perform this Agreement,  the Registration  Rights  Agreement,  the Placement
Agent Agreement and any related agreements,  in accordance with the terms hereof
and thereof, (ii) the execution and delivery of this Agreement, the Registration
Rights  Agreement,  the Placement Agent Agreement and any related  agreements by
the Company and the consummation by it of the transactions  contemplated  hereby
and thereby,  have been duly  authorized by the Company's Board of Directors and
no further  consent or  authorization  is required by the Company,  its Board of
Directors or its  stockholders,  (iii) this Agreement,  the Registration  Rights
Agreement,  the Placement Agent  Agreement and any related  agreements have been
duly  executed  and  delivered  by  the  Company,   (iv)  this  Agreement,   the
Registration  Rights  Agreement,  the Placement Agent Agreement and assuming the
execution  and delivery  thereof and  acceptance by the Investor and any related
agreements   constitute  the  valid  and  binding  obligations  of  the  Company
enforceable  against the Company in accordance with their terms,  except as such

                                       8
<PAGE>
enforceability  may be  limited by general  principles  of equity or  applicable
bankruptcy, insolvency, reorganization,  moratorium, liquidation or similar laws
relating to, or affecting  generally,  the enforcement of creditors'  rights and
remedies.

     Section 4.2.1. Capitalization.  The authorized capital stock of the Company
consists  of  75,000,000  shares of Common  Stock,  $0.001 par value;  8,055,000
shares issued and outstanding, respectively. All of such outstanding shares have
been validly issued and are fully paid and nonassessable. Except as disclosed in
the SEC Documents, no shares of Common Stock are subject to preemptive rights or
any other similar rights or any liens or  encumbrances  suffered or permitted by
the Company.  Except as disclosed in the SEC  Documents,  as of the date hereof,
(i) there are no outstanding options,  warrants,  scrip, rights to subscribe to,
calls or commitments of any character  whatsoever  relating to, or securities or
rights  convertible  into,  any shares of capital stock of the Company or any of
its subsidiaries, or contracts,  commitments,  understandings or arrangements by
which the  Company or any of its  subsidiaries  is or may become  bound to issue
additional  shares of capital stock of the Company or any of its subsidiaries or
options,  warrants,  scrip,  rights to subscribe to, calls or commitments of any
character  whatsoever relating to, or securities or rights convertible into, any
shares of capital  stock of the Company or any of its  subsidiaries,  (ii) there
are no outstanding debt securities  (iii) there are no outstanding  registration
statements   other  than  on  Form  S-1and  (iv)  there  are  no  agreements  or
arrangements  under which the Company or any of its subsidiaries is obligated to
register the sale of any of their  securities  under the  Securities Act (except
pursuant to the  Registration  Rights  Agreement).  There are no  securities  or
instruments  containing   anti-dilution  or  similar  provisions  that  will  be
triggered by this Agreement or any related  agreement or the consummation of the
transactions  described  herein or therein.  This section  shall not prevent the
Company,  after the date hereof,  from obtaining other funding or other means of
financing.

     The Company has  furnished to the Investor  true and correct  copies of the
Company's Certificate of Incorporation,  as amended and as in effect on the date
hereof (the "Certificate of  Incorporation"),  and the Company's By-laws,  as in
effect on the date  hereof  (the  "By-laws"),  and the  terms of all  securities
convertible  into or exercisable for Common Stock and the material rights of the
holders thereof in respect thereto.

     Section 4.3. No Conflict.  The execution,  delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated  hereby will not (i) result in a violation  of the  Certificate  of
Incorporation,  any certificate of  designations  of any  outstanding  series of
preferred  stock of the Company or By-laws or (ii) conflict with or constitute a
default (or an event  which with notice or lapse of time or both would  become a
default)  under,  or  give to  others  any  rights  of  termination,  amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any of its  subsidiaries  is a party, or result in a violation of
any law, rule,  regulation,  order,  judgment or decree  (including  federal and
state  securities  laws and  regulations  and the rules and  regulations  of the
Principal Market on which the Common Stock is quoted)  applicable to the Company
or any of its  subsidiaries  or by which any  material  property or asset of the
Company or any of its  subsidiaries is bound or affected and which would cause a
Material Adverse Effect.  Except as disclosed in the SEC Documents,  neither the
Company nor its  subsidiaries is in violation of any term of or in default under
its  Articles of  Incorporation  or By-laws or their  organizational  charter or
by-laws,   respectively,   or  any  material  contract,   agreement,   mortgage,
indebtedness,  indenture,  instrument, judgment, decree or order or any statute,
rule or regulation  applicable to the Company or its subsidiaries.  The business
of the Company and its  subsidiaries  is not being conducted in violation of any
material  law,  ordinance,  regulation  of any  governmental  entity.  Except as
specifically contemplated by this Agreement and as required under the Securities
Act and any  applicable  state  securities  laws, the Company is not required to

                                       9
<PAGE>
obtain  any  consent,   authorization  or  order  of,  or  make  any  filing  or
registration with, any court or governmental  agency in order for it to execute,
deliver  or  perform  any of its  obligations  under  or  contemplated  by  this
Agreement or the  Registration  Rights  Agreement in  accordance  with the terms
hereof  or  thereof.   All  consents,   authorizations,   orders,   filings  and
registrations  which the Company is required to obtain pursuant to the preceding
sentence  have been  obtained or effected  on or prior to the date  hereof.  The
Company and its subsidiaries are unaware of any fact or circumstance which might
give rise to any of the foregoing.

     Section 4.4. SEC Documents;  Financial  Statements.  As of the date hereof,
the  Company  has filed all  reports,  schedules,  forms,  statements  and other
documents  required  to be filed by it with the SEC  pursuant  to the  reporting
requirements  of the 1934 Act. As of their  respective  dates,  to the Company's
knowledge,  the  financial  statements  of the  Company  disclosed  in  the  SEC
Documents  (the  "Financial  Statements")  complied  as to form in all  material
respects with  applicable  accounting  requirements  and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared  in  accordance   with  generally   accepted   accounting   principles,
consistently  applied,  during  the  periods  involved  (except  (i)  as  may be
otherwise  indicated in such financial  statements or the notes thereto, or (ii)
in the case of  unaudited  interim  statements,  to the extent  they may exclude
footnotes or may be condensed or summary  statements) and, fairly present in all
material respects the financial  position of the Company as of the dates thereof
and the  results of its  operations  and cash flows for the  periods  then ended
(subject,  in the  case  of  unaudited  statements,  to  normal  year-end  audit
adjustments).  No other  information  provided by or on behalf of the Company to
the  Investor  which is not  included in the SEC  Documents  contains any untrue
statement of a material  fact or omits to state any material  fact  necessary in
order to make the statements  therein,  in the light of the circumstances  under
which they were made, not misleading.

     Section 4.5. No Default. Except as disclosed in Exhibit 4.7, the Company is
not in default in the  performance  or  observance  of any material  obligation,
agreement,  covenant or condition contained in any indenture,  mortgage, deed of
trust or other  material  instrument  or  agreement to which it is a party or by
which it is or its property is bound and neither the execution, nor the delivery
by the Company, nor the performance by the Company of its obligations under this
Agreement or any of the exhibits or  attachments  hereto will  conflict  with or
result in the  breach or  violation  of any of the  terms or  provisions  of, or
constitute  a default or result in the  creation  or  imposition  of any lien or
charge on any assets or  properties  of the  Company  under its  Certificate  of
Incorporation, By-Laws, any material indenture, mortgage, deed of trust or other
material agreement  applicable to the Company or instrument to which the Company
is a party or by which it is bound,  or any  statute,  or any decree,  judgment,
order,  rules or regulation of any court or  governmental  agency or body having
jurisdiction  over the Company or its  properties,  in each case which  default,
lien or charge is likely to cause a  Material  Adverse  Effect on the  Company's
business or financial condition.

     Section 4.6. Absence of Events of Default.  Except for matters described in
Exhibit  4.8  and/or  this  Agreement,  no Event of  Default,  as defined in the
respective  agreement to which the Company is a party, and no event which,  with
the giving of notice or the  passage of time or both,  would  become an Event of
Default (as so  defined),  has occurred  and is  continuing,  which would have a
Material  Adverse  Effect  on the  Company's  business,  properties,  prospects,
financial condition or results of operations.

     Section 4.7. Intellectual Property Rights. The Company and its subsidiaries
own or possess adequate rights or licenses to use all material trademarks, trade
names, service marks, service mark registrations, service names, patents, patent
rights,    copyrights,    inventions,    licenses,    approvals,    governmental
authorizations,  trade secrets and rights  necessary to conduct their respective
businesses as now conducted.  The Company and its  subsidiaries  do not have any

                                       10
<PAGE>
knowledge of any  infringement by the Company or its  subsidiaries of trademark,
trade name rights, patents,  patent rights,  copyrights,  inventions,  licenses,
service names, service marks, service mark registrations,  trade secret or other
similar  rights of others,  and, to the  knowledge of the  Company,  there is no
claim,  action or proceeding being made or brought against,  or to the Company's
knowledge,  being threatened against, the Company or its subsidiaries  regarding
trademark,  trade name, patents, patent rights, invention,  copyright,  license,
service names, service marks, service mark registrations,  trade secret or other
infringement;  and the Company and its  subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing.

     Section  4.8.  Employee  Relations.  Neither  the  Company  nor  any of its
subsidiaries  is involved in any labor  dispute  nor,  to the  knowledge  of the
Company or any of its subsidiaries,  is any such dispute threatened. None of the
Company's or its subsidiaries'  employees is a member of a union and the Company
and its subsidiaries believe that their relations with their employees are good.

     Section 4.9.  Environmental  Laws. The Company and its subsidiaries are (i)
in compliance with any and all applicable material foreign,  federal,  state and
local  laws and  regulations  relating  to the  protection  of human  health and
safety,  the environment or hazardous or toxic substances or wastes,  pollutants
or contaminants ("Environmental Laws"), (ii) have received all permits, licenses
or other  approvals  required  of them under  applicable  Environmental  Laws to
conduct their  respective  businesses and (iii) are in compliance with all terms
and conditions of any such permit, license or approval.

     Section 4.10.  Title.  Except as set forth in Exhibit 4.10, the Company has
good and marketable  title to its  properties  and material  assets owned by it,
free and clear of any pledge,  lien,  security interest,  encumbrance,  claim or
equitable  interest  other than such as are not  material to the business of the
Company.  Any real property and  facilities  held under lease by the Company and
its subsidiaries are held by them under valid, subsisting and enforceable leases
with such  exceptions as are not material and do not interfere with the use made
and proposed to be made of such  property  and  buildings by the Company and its
subsidiaries.

     Section 4.11.  Insurance.  Except as set forth in Exhibit 4.11, the Company
and each of its  subsidiaries  are insured by insurers of  recognized  financial
responsibility  against such losses and risks and in such amounts as  management
of the Company  believes to be prudent and customary in the  businesses in which
the Company and its subsidiaries  are engaged.  Neither the Company nor any such
subsidiary  has been refused any  insurance  coverage  sought or applied for and
neither the Company nor any such  subsidiary  has any reason to believe  that it
will not be able to renew  its  existing  insurance  coverage  as and when  such
coverage  expires or to obtain similar  coverage from similar insurers as may be
necessary  to  continue  its  business at a cost that would not  materially  and
adversely  affect  the  condition,  financial  or  otherwise,  or the  earnings,
business or operations of the Company and its subsidiaries, taken as a whole.

     Section 4.12.  Regulatory Permits. The Company and its subsidiaries possess
all material certificates,  authorizations and permits issued by the appropriate
federal,  state or foreign  regulatory  authorities  necessary to conduct  their
respective  businesses,  and neither the  Company  nor any such  subsidiary  has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit.

     Section 4.13.  Internal  Accounting  Controls.  The Company and each of its
subsidiaries  maintain a system of internal  accounting  controls  sufficient 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

                                       11
<PAGE>
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.
Representation by the company relating to internal controls will be made at such
time the registration filing has been approved.

     Section 4.14. No Material  Adverse  Breaches,  etc.  Except as set forth in
Exhibit 4.16,  neither the Company nor any of its subsidiaries is subject to any
charter,  corporate or other legal restriction,  or any judgment, decree, order,
rule or  regulation  which in the judgment of the  Company's  officers has or is
expected  in the  future to have a  Material  Adverse  Effect  on the  business,
properties,  operations, financial condition, results of operations or prospects
of the Company or its  subsidiaries.  Except as set forth in the SEC  Documents,
neither the Company nor any of its  subsidiaries is in breach of any contract or
agreement  which breach,  in the judgment of the Company's  officers,  has or is
expected  to  have  a  Material  Adverse  Effect  on the  business,  properties,
operations,  financial  condition,  results of  operations  or  prospects of the
Company or its subsidiaries.

     Section 4.15.  Absence of Litigation.  Except as set forth in Exhibit 4.17,
there is no action, suit, proceeding,  inquiry or investigation before or by any
court,  public board,  government agency,  self-regulatory  organization or body
pending  against  or  affecting  the  Company,  the  Common  Stock or any of the
Company's subsidiaries, wherein an unfavorable decision, ruling or finding would
(i) have a Material Adverse Effect on the transactions  contemplated hereby (ii)
adversely affect the validity or enforceability  of, or the authority or ability
of the Company to perform its  obligations  under,  this Agreement or any of the
documents contemplated herein, or (iii) except as expressly disclosed in the SEC
Documents,  have  a  Material  Adverse  Effect  on  the  business,   operations,
properties,  financial  condition or results of operation of the Company and its
subsidiaries taken as a whole.

     Section  4.16.  Subsidiaries.  Except as  disclosed  in Exhibit  4.18,  the
Company does not presently own or control, directly or indirectly,  any interest
in any other corporation, partnership, association or other business entity.

     Section 4.17. Tax Status.  Except as disclosed in Exhibit 4.19, the Company
and each of its  subsidiaries has made or filed all federal and state income and
all other tax returns,  reports and declarations required by any jurisdiction to
which it is subject 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.

     Section  4.18.  Certain  Transactions.  Except as set forth in Exhibit 4.20
none of the  officers,  directors,  or  employees  of the Company is presently a
party to any transaction with the Company (other than for services as employees,
officers and directors),  including any contract, agreement or other arrangement
providing for the furnishing of services to or by,  providing for rental of real
or personal property to or from, or otherwise  requiring payments to or from any
officer,  director or such  employee or, to the  knowledge  of the Company,  any
corporation,  partnership, trust or other entity in which any officer, director,
or any such  employee  has a  substantial  interest or is an officer,  director,
trustee or partner.

                                       12
<PAGE>
     Section  4.19.  Fees  and  Rights  of First  Refusal.  The  Company  is not
obligated to offer the securities  offered hereunder on a right of first refusal
basis or otherwise to any third parties  including,  but not limited to, current
or former shareholders of the Company,  underwriters,  brokers,  agents or other
third parties.

     Section 4.20. Use of Proceeds.  The Company shall use the net proceeds from
this offering for general corporate purposes, including, without limitation, the
payment of loans incurred by the Company. However, in no event shall the Company
use the net  proceeds  from this  offering  for the payment (or loan to any such
person for the payment) of any  judgment,  or other  liability,  incurred by any
executive officer,  officer, director or employee of the Company, except for any
liability owed to such person for services rendered, or if any judgment or other
liability is incurred by such person  originating from services  rendered to the
Company, or the Company has indemnified such person from liability.

     Section 4.21. Further  Representation and Warranties of the Company. For so
long  as  any  securities   issuable  hereunder  held  by  the  Investor  remain
outstanding, the Company acknowledges,  represents,  warrants and agrees that it
will maintain the listing of its Common Stock on the Principal Market.

     Section 4.22. Opinion of Counsel.  Investor shall receive an opinion letter
from counsel to the Company on the date hereof.

     Section 4.23. Opinion of Counsel. The Company will obtain for the Investor,
at the  Company's  expense,  any  and  all  opinions  of  counsel  which  may be
reasonably  required in order to sell the securities  issuable hereunder without
restriction.

     Section 4.24. Dilution. The Company is aware and acknowledges that issuance
of shares of the  Company's  Common  Stock  could  cause  dilution  to  existing
shareholders and could  significantly  increase the outstanding number of shares
of Common Stock.

                                   ARTICLE V.
                                 INDEMNIFICATION

     The Investor  and the Company  represent  to the other the  following  with
respect to itself:

     Section 5.1. Indemnification.

     (a) In  consideration  of the  Investor's  execution  and  delivery of this
Agreement,  and in addition to all of the Company's other obligations under this
Agreement,  the Company shall defend,  protect,  indemnify and hold harmless the
Investor,  and all of its officers,  directors,  partners,  employees and agents
(including,   without   limitation,   those  retained  in  connection  with  the
transactions  contemplated  by  this  Agreement)  (collectively,  the  "Investor
Indemnitees")  from and against any and all  actions,  causes of action,  suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith  (irrespective of whether any such Investor Indemnitee is a
party  to the  action  for  which  indemnification  hereunder  is  sought),  and
including  reasonable   attorneys'  fees  and  disbursements  (the  "Indemnified
Liabilities"),  incurred by the Investor  Indemnitees or any of them as a result
of, or arising out of, or relating to (a) any misrepresentation or breach of any
representation  or  warranty  made  by the  Company  in  this  Agreement  or the
Registration  Rights Agreement or any other certificate,  instrument or document
contemplated  hereby or thereby,  (b) any breach of any  covenant,  agreement or
obligation of the Company contained in this Agreement or the Registration Rights
Agreement or any other certificate,  instrument or document  contemplated hereby
or thereby,  or (c) any cause of action,  suit or claim  brought or made against
such  Investor  Indemnitee  not  arising  out of any  action or  inaction  of an
Investor  Indemnitee,  and  arising  out of or  resulting  from  the  execution,

                                       13
<PAGE>
delivery,  performance or enforcement of this Agreement or any other instrument,
document  or  agreement   executed  pursuant  hereto  by  any  of  the  Investor
Indemnitees.  To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution to
the payment and  satisfaction of each of the Indemnified  Liabilities,  which is
permissible under applicable law.

     (b) In  consideration  of the  Company's  execution  and  delivery  of this
Agreement, and in addition to all of the Investor's other obligations under this
Agreement,  the Investor shall defend, protect,  indemnify and hold harmless the
Company and all of its officers, directors,  shareholders,  employees and agents
(including,   without   limitation,   those  retained  in  connection  with  the
transactions  contemplated  by  this  Agreement)  (collectively,   the  "Company
Indemnitees") from and against any and all Indemnified  Liabilities  incurred by
the  Company  Indemnitees  or any of them as a result of, or arising  out of, or
relating  to (a)  any  misrepresentation  or  breach  of any  representation  or
warranty  made  by the  Investor  in this  Agreement,  the  Registration  Rights
Agreement, or any instrument or document contemplated hereby or thereby executed
by the Investor, (b) any breach of any covenant,  agreement or obligation of the
Investor(s)  contained in this Agreement,  the Registration  Rights Agreement or
any other  certificate,  instrument or document  contemplated  hereby or thereby
executed by the Investor,  or (c) any cause of action,  suit or claim brought or
made against such Company  Indemnitee  based on  misrepresentations  or due to a
breach by the  Investor  and arising  out of or  resulting  from the  execution,
delivery,  performance or enforcement of this Agreement or any other instrument,
document  or  agreement   executed   pursuant  hereto  by  any  of  the  Company
Indemnitees. To the extent that the foregoing undertaking by the Investor may be
unenforceable for any reason,  the Investor shall make the maximum  contribution
to the payment and satisfaction of each of the Indemnified Liabilities, which is
permissible under applicable law.

     (c) The obligations of the parties to indemnify or make contribution  under
this Section 5.1 shall survive termination.

                                   ARTICLE VI.
                            COVENANTS OF THE COMPANY

     Section 6.1.  Registration Rights. The Company shall cause the Registration
Rights Agreement to remain in full force and effect and the Company shall comply
in all material respects with the terms thereof.

     Section 6.2. Listing of Common Stock. The Company shall maintain the Common
Stock's authorization for quotation on the Principal Market.

     Section 6.3. Exchange Act  Registration.  The Company will cause its Common
Stock to continue to be registered under Section 12(g) of the Exchange Act, will
file in a timely  manner all  reports  and other  documents  required of it as a
reporting  company  under the  Exchange Act and will not take any action or file
any document  (whether or not permitted by Exchange Act or the rules thereunder)
to  terminate  or suspend  such  registration  or to  terminate  or suspend  its
reporting and filing obligations under said Exchange Act.

     Section  6.4.  Transfer  Agent  Instructions.  Upon  effectiveness  of  the
Registration  Statement the Company shall deliver  instructions  to its transfer
agent to issue  shares  of  Common  Stock to the  Investor  free of  restrictive
legends on or before each Advance Date.

     Section 6.5. Corporate Existence. The Company will take all steps necessary
to preserve and continue the corporate existence of the Company.

     Section 6.6. Notice of Certain Events Affecting Registration; Suspension of
Right to Make an Advance.  The Company will immediately notify the Investor upon
its becoming aware of the  occurrence of any of the following  events in respect

                                       14
<PAGE>
of a  registration  statement or related  prospectus  relating to an offering of
Registrable Securities: (i) receipt of any request for additional information by
the SEC or any other Federal or state  governmental  authority during the period
of effectiveness of the Registration  Statement for amendments or supplements to
the registration  statement or related prospectus;  (ii) the issuance by the SEC
or  any  other  Federal  or  state  governmental  authority  of any  stop  order
suspending the effectiveness of the Registration  Statement or the initiation of
any proceedings for that purpose; (iii) receipt of any notification with respect
to the suspension of the qualification or exemption from qualification of any of
the  Registrable  Securities for sale in any  jurisdiction  or the initiation or
threatening of any proceeding for such purpose;  (iv) the happening of any event
that  makes  any  statement  made  in  the  Registration  Statement  or  related
prospectus of any document  incorporated or deemed to be incorporated therein by
reference  untrue in any  material  respect or that  requires  the making of any
changes in the Registration Statement,  related prospectus or documents so that,
in the case of the  Registration  Statement,  it will  not  contain  any  untrue
statement of a material  fact or omit to state any material  fact required to be
stated therein or necessary to make the statements  therein not misleading,  and
that in the case of the  related  prospectus,  it will not  contain  any  untrue
statement of a material  fact or omit to state any material  fact required to be
stated therein or necessary to make the statements  therein, in the light of the
circumstances under which they were made, not misleading;  and (v) the Company's
reasonable  determination  that a  post-effective  amendment to the Registration
Statement would be appropriate;  and the Company will promptly make available to
the Investor any such  supplement  or amendment to the related  prospectus.  The
Company  shall not  deliver  to the  Investor  any  Drawdown  Notice  during the
continuation of any of the foregoing events.

     Section 6.7.  Restriction on Sale of Capital  Stock.  During the Commitment
Period,  the Company shall not,  without 10 days written notice to the Investor,
(i) issue or sell any Common Stock or Preferred Stock without  consideration  or
for a  consideration  per  share  less than the Bid  Price of the  Common  Stock
determined  immediately prior to its issuance,  (ii) issue or sell 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  per share less than the Bid Price of the
Common Stock  determined  immediately  prior to its issuance,  or (iii) file any
registration statement on Form S-8.

     Section  6.8.  Consolidation;  Merger.  The Company  shall not, at any time
after the date hereof, effect any merger or consolidation of the Company with or
into,  or a transfer  of all or  substantially  all the assets of the Company to
another  entity (a  "Consolidation  Event")  unless the  resulting  successor or
acquiring  entity  (if  not the  Company)  assumes  by  written  instrument  the
obligation to deliver to the Investor such shares of stock and/or  securities as
the Investor is entitled to receive pursuant to this Agreement.

     Section 6.9. Issuance of the Company's Common Stock. The sale of the shares
of Common Stock shall be made in accordance with the provisions and requirements
of Regulation D and any applicable state securities law.

     Section 6.10.  Review of Public  Disclosures.  All SEC filings  (including,
without  limitation,  all filings required under the Exchange Act, which include
Forms 10-Q and 10-QSB,  10-K and 10K-SB,  8-K, etc) and other public disclosures
made by the Company, including, without limitation, all press releases, investor
relations  materials,  and  scripts of  analysts  meetings  and calls,  shall be
reviewed and approved for release by the Company's  attorneys and, if containing
financial information, the Company's independent certified public accountants.

     Section  6.11.  Market  Activities.  The  Company  will  not,  directly  or
indirectly,  (i) take  any  action  designed  to cause  or  result  in,  or that
constitutes or might reasonably be expected to constitute,  the stabilization or

                                       15
<PAGE>
manipulation  of the price of any security of the Company to facilitate the sale
or resale of the  Common  Stock or (ii)  sell,  bid for or  purchase  the Common
Stock,  or pay anyone any  compensation  for soliciting  purchases of the Common
Stock.

                                  ARTICLE VII.
                CONDITIONS FOR ADVANCE AND CONDITIONS TO CLOSING

     Section 7.1.  Conditions  Precedent to the Obligations of the Company.  The
obligation hereunder of the Company to issue and sell the shares of Common Stock
to the  Investor  incident to each  Closing is subject to the  satisfaction,  or
waiver by the Company, at or before each such Closing, of each of the conditions
set forth below.

     (a)  Accuracy  of  the  Investor's   Representations  and  Warranties.  The
representations  and warranties of the Investor shall be true and correct in all
material respects.

     (b)  Performance  by the  Investor.  The  Investor  shall  have  performed,
satisfied  and  complied in all  respects  with all  covenants,  agreements  and
conditions  required by this Agreement and the Registration  Rights Agreement to
be  performed,  satisfied  or complied  with by the Investor at or prior to such
Closing.

     Section 7.2. Conditions Precedent to the Right of the Company to Deliver an
Drawdown  Notice.  The right of the  Company to deliver  an  Drawdown  Notice is
subject to the fulfillment by the Company, on such Drawdown Notice (a "Condition
Satisfaction Date"), of each of the following conditions:

     (a)  Registration  of the Common Stock with the SEC. The Company shall have
filed with the SEC a  Registration  Statement  with respect to the resale of the
Registrable  Securities in accordance with the terms of the Registration  Rights
Agreement.  As set forth in the Registration Rights Agreement,  the Registration
Statement shall have previously  become  effective and shall remain effective on
each  Condition  Satisfaction  Date and (i) neither the Company nor the Investor
shall have  received  notice  that the SEC has issued or intends to issue a stop
order with respect to the  Registration  Statement or that the SEC otherwise has
suspended or withdrawn the effectiveness of the Registration  Statement,  either
temporarily or  permanently,  or intends or has threatened to do so, and (ii) no
other  suspension  of  the  use  or  withdrawal  of  the  effectiveness  of  the
Registration  Statement  or related  prospectus  shall exist.  The  Registration
Statement  must  have  been  declared  effective  by the SEC  prior to the first
Drawdown Notice Date.

     (b)   Authority.   The  Company   shall  have   obtained  all  permits  and
qualifications   required  by  any  applicable  state  in  accordance  with  the
Registration  Rights  Agreement  for the offer and sale of the  shares of Common
Stock,  or shall have the  availability  of exemptions  therefrom.  The sale and
issuance of the shares of Common  Stock shall be legally  permitted  by all laws
and regulations to which the Company is subject.

     (c) Fundamental  Changes.  There shall not exist any fundamental changes to
the information set forth in the Registration Statement, which would require the
Company to file a post-effective amendment to the Registration Statement.

     (d) Performance by the Company. The Company shall have performed, satisfied
and  complied  in all  material  respects  with all  covenants,  agreements  and
conditions  required by this Agreement and the Registration  Rights Agreement to
be  performed,  satisfied  or  complied  with by the Company at or prior to each
Condition Satisfaction Date.

     (e) No Injunction.  No statute, rule, regulation,  executive order, decree,
ruling or injunction shall have been enacted,  entered,  promulgated or endorsed
by any court or governmental  authority of competent jurisdiction that prohibits
or directly and adversely  affects any of the transactions  contemplated by this

                                       16
<PAGE>
Agreement,  and no proceeding shall have been commenced that may have the effect
of prohibiting or adversely  affecting any of the  transactions  contemplated by
this Agreement.

     (f) No Suspension  of Trading in or Delisting of Common Stock.  The trading
of the Common Stock is not suspended by the SEC or the Principal  Market (if the
Common Stock is traded on a Principal Market).  The issuance of shares of Common
Stock with  respect to the  applicable  Closing,  if any,  shall not violate the
shareholder  approval  requirements of the Principal Market (if the Common Stock
is traded on a Principal Market). The Company shall not have received any notice
threatening  the continued  listing of the Common Stock on the Principal  Market
(if the Common Stock is traded on a Principal Market).

     (g)  Maximum  Advance  Amount.  The amount of an Advance  requested  by the
Company shall not exceed the Maximum  Advance Amount.  In addition,  in no event
shall the number of shares issuable to the Investor pursuant to an Advance cause
the  aggregate  number  of  shares of  Common  Stock  beneficially  owned by the
Investor and its  affiliates  to exceed four and 99/100  percent  (4.99%) of the
then outstanding  Common Stock of the Company.  For the purposes of this section
beneficial ownership shall be calculated in accordance with Section 13(d) of the
Exchange Act.

     (h) No Knowledge.  The Company has no knowledge of any event which would be
more likely than not to have the effect of causing such  Registration  Statement
to be suspended or otherwise ineffective.

     (i) Executed Drawdown Notice. The Investor shall have received the Drawdown
Notice executed by an officer of the Company and the  representations  contained
in  such  Drawdown  Notice  shall  be true  and  correct  as of  each  Condition
Satisfaction Date.

                                  ARTICLE VIII.
         DUE DILIGENCE REVIEW; NON-DISCLOSURE OF NON-PUBLIC INFORMATION

     Section 8.1. Non-Disclosure of Non-Public Information.

     (a) The Company covenants and agrees that it shall refrain from disclosing,
and shall cause its  officers,  directors,  employees and agents to refrain from
disclosing,  any material  non-public  information to the Investor  without also
disseminating such information to the public, unless prior to disclosure of such
information the Company identifies such information as being material non-public
information  and provides the Investor with the  opportunity to accept or refuse
to accept such material non-public information for review.

     (b)  Nothing  herein  shall  require  the  Company to  disclose  non-public
information to the Investor or its advisors or representatives,  and the Company
represents that it does not disseminate  non-public information to any investors
who purchase stock in the Company in a public offering,  to money managers or to
securities analysts,  provided, however, that notwithstanding anything herein to
the contrary, the Company will, as hereinabove provided,  immediately notify the
advisors and representatives of the Investor and, if any,  underwriters,  of any
event or the existence of any  circumstance  (without any obligation to disclose
the specific  event or  circumstance)  of which it becomes  aware,  constituting
non-public  information (whether or not requested of the Company specifically or
generally  during  the course of due  diligence  by such  persons or  entities),
which, if not disclosed in the prospectus included in the Registration Statement
would  cause such  prospectus  to include a material  misstatement  or to omit a
material  fact  required to be stated  therein in order to make the  statements,
therein,  in light of the circumstances in which they were made, not misleading.

                                       17
<PAGE>
Nothing  contained  in this  Section  8.2 shall be  construed  to mean that such
persons or entities other than the Investor  (without the written consent of the
Investor  prior to disclosure  of such  information)  may not obtain  non-public
information  in the course of conducting  due  diligence in accordance  with the
terms of this  Agreement  and nothing  herein shall  prevent any such persons or
entities  from  notifying  the Company of their  opinion  that based on such due
diligence by such persons or entities,  that the Registration Statement contains
an untrue  statement of material  fact or omits a material  fact  required to be
stated  in the  Registration  Statement  or  necessary  to make  the  statements
contained  therein,  in light of the  circumstances in which they were made, not
misleading.

                                   ARTICLE IX.
                           CHOICE OF LAW/JURISDICTION

     Section  9.1.  Governing  Law.  This  Agreement  shall be  governed  by and
interpreted in accordance  with the laws of the  Commonwealth  of  Massachusetts
without regard to the principles of conflict of laws. The parties  further agree
that any action between them shall be heard in Boston,  MA. for the adjudication
of any civil action asserted pursuant to this paragraph.

                                   ARTICLE X.
                             ASSIGNMENT; TERMINATION

     Section  10.1.  Assignment.  Neither this  Agreement  nor any rights of the
Company hereunder may be assigned to any other Person.

     Section 10.2. Termination.

     (a) The  obligations  of the  Investor to make  Advances  under  Article II
hereof shall terminate twenty-four (24) months after the Effective Date.

     (b) The  obligation  of the  Investor  to make an  Advance  to the  Company
pursuant to this Agreement shall terminate  permanently  (including with respect
to an Advance Date that has not yet  occurred) in the event that (i) there shall
occur any stop order or  suspension  of the  effectiveness  of the  Registration
Statement  for an aggregate of fifty (50)  Trading  Days,  other than due to the
acts of the Investor, during the Commitment Period, or (ii) the Company shall at
any time fail materially to comply with the  requirements of Article VI and such
failure is not cured  within  thirty (30) days after  receipt of written  notice
from the Investor,  provided, however, that this termination provision shall not
apply to any period commencing upon the filing of a post-effective  amendment to
such  Registration  Statement  and  ending  upon  the date on  which  such  post
effective amendment is declared effective by the SEC.

                                   ARTICLE XI.
                                     NOTICES

     a. Section 11.0.0.1.  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 receipt, when sent by facsimile,
provided a copy is mailed by U.S.  certified  mail,  return  receipt  requested;
(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:

                                       18
<PAGE>
If to the Company, to:      Winchester International Resorts, Inc.
                            7014 Apache Dirve
                            Olive Branch, MS. 38654
                            Attention: Ronald L. Marquardt, CEO
                            Telephone: 828-466-2597
                            Facsimile: 828-465-2523

If to the Investor, to:     Auctus Private Equity Fund, LLC
                            One Beacon St. 34th Floor
                            Boston, MA 02108
                            ATTN: Lou Posner, Director
                            Telephone: 617-532-6408
                            Facsimile: 617-532-6402

With a copy to:

Each party shall provide five (5) days' prior written  notice to the other party
of any change in address or facsimile number.

                                  ARTICLE XII.
                                  MISCELLANEOUS

     Section 12.1.  Counterparts.  This Agreement may be executed in two or more
identical  counterparts,  all of  which  shall  be  considered  one and the same
agreement and shall become effective when  counterparts have been signed by each
party and  delivered  to the other  party.  In the event any  signature  page is
delivered  by  facsimile  transmission,  the party  using such means of delivery
shall  cause  four  (4)  additional  original  executed  signature  pages  to be
physically  delivered to the other party  within five (5) days of the  execution
and delivery hereof,  though failure to deliver such copies shall not affect the
validity of this Agreement.

     Section 12.2. Entire Agreement;  Amendments.  This Agreement supersedes all
other prior oral or written agreements between the Investor,  the Company, their
affiliates  and  persons  acting on their  behalf  with  respect to the  matters
discussed  herein,  and this  Agreement and the  instruments  referenced  herein
contain  the entire  understanding  of the parties  with  respect to the matters
covered  herein and therein  and,  except as  specifically  set forth  herein or
therein,  neither  the  Company  nor  the  Investor  makes  any  representation,
warranty,  covenant or undertaking with respect to such matters. No provision of
this  Agreement  may be waived or amended other than by an instrument in writing
signed by the party to be charged with enforcement.

     Section 12.3.  Reporting  Entity for the Common Stock. The reporting entity
relied upon for the  determination of the trading price or trading volume of the
Common Stock on any given Trading Day for the purposes of this  Agreement  shall
be Bloomberg,  L.P. or any successor thereto.  The written mutual consent of the
Investor and the Company shall be required to employ any other reporting entity.

                                       19
<PAGE>
     Section  12.4.  Fees and  Expenses.  The Company  hereby  agrees to pay the
following fees:

     (a)  Fees.  Each  of the  parties  shall  pay  its own  fees  and  expenses
(including the fees of any attorneys, accountants,  appraisers or others engaged
by  such  party)  in  connection  with  this  Agreement  and  the   transactions
contemplated hereby.

     (b)  Origination  Fee. The Company has paid the Investor  Fifteen  Thousand
Dollars ($15,000) in cash as a non-refundable origination fee.

     Section  12.5.   Confidentiality.   If  for  any  reason  the  transactions
contemplated by this Agreement are not  consummated,  each of the parties hereto
shall keep  confidential  any information  obtained from any other party (except
information  publicly  available  or in such  party's  domain  prior to the date
hereof,  and except as required by court order) and shall promptly return to the
other  parties  all  schedules,  documents,  instruments,  work  papers or other
written information without retaining copies thereof, previously furnished by it
as a result of this Agreement or in connection herein.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       20
<PAGE>
     IN WITNESS  WHEREOF,  the parties  hereto have caused this Drawdown  Equity
Financing   Agreement  to  be  executed  by  the  undersigned,   thereunto  duly
authorized, as of the date first set forth above.

                                COMPANY:
                                WINCHESTER INTERNATIONAL RESORTS, INC.

                                By: /s/ Ronald L. Marquardt
                                   --------------------------------------------
                                Name:  Ronald L. Marquardt
                                Title: President & COO

                                INVESTOR:
                                AUCTUS PRIVATE EQUITY FUND, LLC

                                By: /s/ Lou Posner
                                   --------------------------------------------
                                Name:  Lou Posner
                                Title: Director

                                       21
<PAGE>
                                    EXHIBIT A

                                 DRAWDOWN NOTICE

                     WINCHESTER INTERNATIONAL RESORTS, INC.

     The undersigned,  _______________________ hereby certifies, with respect to
the sale of shares of Common Stock of  Winchester  International  Resorts,  Inc.
(the  "Company")  issuable in connection  with this Drawdown  Notice,  delivered
pursuant to the  Drawdown  Equity  Financing  Agreement  (the  "Agreement"),  as
follows:

     1. The undersigned is the duly elected ______________ of the Company.

     2. There are no  fundamental  changes to the  information  set forth in the
Registration  Statement which would require the Company to file a post effective
amendment to the Registration Statement.

     3. The Company has  performed in all material  respects all  covenants  and
agreements  to be  performed  by the  Company and has  complied in all  material
respects with all  obligations  and conditions  contained in the Agreement on or
prior to the Drawdown Notice Date, and shall continue to perform in all material
respects all covenants and agreements to be performed by the Company through the
applicable  Advance Date. All conditions to the delivery of this Drawdown Notice
are satisfied as of the date hereof.

     4. The undersigned  hereby  represents,  warrants and covenants that it has
made  all  filings  ("SEC  Filings")  required  to be  made  by it  pursuant  to
applicable securities laws (including,  without limitation, all filings required
under the Securities  Exchange Act of 1934,  which include Forms 10-Q or 10-QSB,
10-K or 10-KSB, 8-K, etc.). All SEC Filings and other public disclosures made by
the  Company,  including,  without  limitation,  all  press  releases,  analysts
meetings and calls, etc.  (collectively,  the "Public  Disclosures"),  have been
reviewed and approved for release by the Company's  attorneys and, if containing
financial  information,  the Company's independent certified public accountants.
None of the  Company's  Public  Disclosures  contain any untrue  statement  of a
material fact or omit to state any material  fact required to be stated  therein
or necessary to make the statements  therein,  in the light of the circumstances
under which they were made, not misleading.

     5. The Advance requested is _____________________.

     The   undersigned   has  executed  this   Certificate   this  ____  day  of
_________________.

                                WINCHESTER INTERNATIONAL RESORTS, INC.

                                By:
                                   --------------------------------------------
                                Name:  Ronald L. Marquardt
                                Title: CEO

                                       22
<PAGE>
                                   Exhibit 4.7

     None

                                       23
<PAGE>
                                   Exhibit 4.8

                                       24
<PAGE>
                                  Exhibit 4.10

     None

                                       25
<PAGE>
                                  Exhibit 4.11

                                       26
<PAGE>
                                  Exhibit 4.16

     None

                                       27
<PAGE>
                                  Exhibit 4.17

                                   Litigation

     None

                                       28
<PAGE>
                                  Exhibit 4.18

                                  Subsidiaries

                                       29
<PAGE>
                                  Exhibit 4.19

                                       30
<PAGE>
                                  Exhibit 4.20

                                       31ex10-1.htm

Exhibit 10.1

AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT

as of March 15, 2010

WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent

1133 Avenue of the Americas

New York, New York 10036

Ladies and Gentlemen:

Wachovia Bank, National Association, in its capacity as agent pursuant to the Loan Agreement (as hereinafter defined) acting for and on behalf of the parties thereto as lenders (in such capacity, “Agent”) and the parties to the Loan Agreement as lenders (individually, each a “Lender” and, collectively, “Lenders”) and American Biltrite Inc., a Delaware corporation (“ABI”), Ideal Tape Co., Inc., a Delaware corporation (“Ideal Tape”), K&M Associates L.P., a Rhode Island limited partnership (“K&M”; together with ABI and Ideal Tape, the “US Borrowers”), American Biltrite (Canada) Ltd., a Canadian corporation (“Canadian Borrower”; together with US Borrowers, the “Borrowers”), 425 Dexter Associates, L.P., a Rhode Island limited partnership (“Dexter”), Ocean State Jewelry, Inc., a Rhode Island corporation (“Ocean State”), Majestic Jewelry, Inc., a Delaware corporation (“Majestic”), American Biltrite Far East, Inc., a Delaware corporation (“Far East”; together with Dexter, Ocean State and Majestic, the “US Guarantors”) have entered into certain financing arrangements pursuant to which Agent and Lenders may make loans and advances and provide other financial accommodations to Borrowers as set forth in the Loan and Security Agreement, dated as of June 30, 2009, by and among Agent, Lenders, Borrowers and Guarantors (as amended, the “Loan Agreement”), and the agreements, documents and instruments at any time executed and/or delivered in connection therewith or related thereto (all of the foregoing, together with Amendment No. 1 to Loan and Security Agreement, dated as of July 15, 2009 and this Amendment No. 2 to Loan and Security Agreement (“Amendment No. 2”), as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, being collectively referred to herein as the “Financing Agreements”).

 

Borrowers have requested that Agent and Lenders agree to amend the Loan Agreement as set forth herein, and Agent and Lenders have agreed to accommodate Borrowers’ request.  The parties hereto wish to enter into this Amendment No. 2 to evidence and effectuate such amendments and certain other agreements relating thereto, in each case subject to the terms and conditions and to the extent set forth herein.

 

In consideration of the premises and covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

  

  

  

1.           Interpretation.  All capitalized terms used herein shall have the meanings assigned thereto in the Loan Agreement and the other Financing Agreements, unless otherwise defined herein.

 

2.           Amendments to Loan Agreement.

 

(a)           Additional Definitions.  As used herein, the following terms shall have the respective meanings given to them below, and the Loan Agreement and the other Financing Agreements are hereby amended to include, in addition and not in limitation, the following definitions:

 

“Amendment No. 2” shall mean Amendment No. 2 to Loan and Security Agreement, dated as of March __, 2010, by and among Borrowers, Guarantors, Agent and the Lenders, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

 

“Financial Covenant Trigger Event” shall mean if, at any time, Global Excess Availability is less than $6,000,000; provided, that, any such Financial Covenant Trigger Event shall cease to exist to the extent that Global Excess Availability is greater than $6,000,000 for thirty (30) consecutive days.

 

(b)           Eligible Accounts.  Subparagraph (l) of the definition of “Eligible Accounts” set forth in Section 1.58 of the Loan Agreement is hereby amended and restated in its entirety as follows:

 

“(l)           (i) the aggregate amount of such Accounts owing by a single account debtor (other than the account debtors of certain Borrowers as set forth in subsections (ii), (iii), (iv), (v) and (vi) of this subparagraph (l)) to any Borrower do not constitute more than fifteen (15%) percent of the aggregate amount of all otherwise Eligible Accounts, (ii) such Accounts owing by Surface Shields, Inc. to Ideal Tape do not constitute more than twenty (20%) percent of the aggregate amount of all otherwise Eligible Accounts of Ideal Tape (but the portion of the Accounts not in excess of the applicable percentages may be deemed Eligible Accounts), (iii) such Accounts owing by Wal-Mart Stores, Inc. to K&M do not constitute more than fifty (50%) percent of the aggregate amount of all otherwise Eligible Accounts of K&M (but the portion of the Accounts not in excess of the applicable percentages may be deemed Eligible Accounts), (iv) such Accounts owing by Kohl’s Illinois, Inc. to K&M do not constitute more than thirty (30%) percent of the aggregate amount of all otherwise Eligible Accounts of K&M (but the portion of the Accounts not in excess of the applicable percentages may be deemed Eligible Accounts), (v) such Accounts owing by each of Kmart Corporation and Macy’s, Inc. to K&M do not, in each case, constitute more than twenty (20%) percent of the aggregate amount of all otherwise Eligible Accounts of K&M (but the portion of the Accounts not in excess of the applicable percentages may be deemed Eligible Accounts) and (vi) such Accounts owing by Mohawk Industries, Inc. to Canadian Borrower do not constitute more than twenty (20%) percent of the aggregate amount of all otherwise Eligible Accounts of Canadian Borrower (but the portion of the Accounts not in excess of the applicable percentages may be deemed Eligible Accounts);”

 

  

2

  

 

(c)           Repurchase of Capital Stock.  Section 9.11 of the Loan Agreement is hereby amended and restated by replacing the period at the end of subparagraph (d) with “; and”, and adding new subparagraph (e) as follows:

 

“(e)           Borrowers and Guarantors may repurchase issued and outstanding Capital Stock of Borrowers and Guarantors in addition to those repurchases permitted under Section 9.11(d) above; provided, that, as to any such repurchase, each of the following conditions is satisfied: (i) as of the date of the payment for such repurchase and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing, (ii) such repurchase shall be paid with funds legally available therefor, (iii) such repurchase shall not violate any law or regulation or the terms of any indenture, agreement or undertaking to which such Borrower or Guarantor is a party or by which such Borrower or Guarantor or its or their property are bound, and (iv) the aggregate amount of all payments for such repurchases during the term of this Agreement shall not exceed $50,000.”

 

(d)           Fixed Charge Coverage Ratio.  Effective as of the date of this Amendment No. 2, Section 9.17(a) of the Loan Agreement is hereby amended and restated in its entirety as follows:

 

“(a)           Fixed Charge Coverage Ratio.  If a Financial Covenant Trigger Event shall occur, then, as of the end of each month, Borrowers and Guarantors shall maintain, on a consolidated basis, a Fixed Charge Coverage Ratio of not less than the ratio set forth below for each respective period as set forth below:

 

	
Period

	
Ratio

	
for the seven (7) month period ending January 31, 2009

	
1.0:1.0

	
for the eight (8) consecutive month period ending February 28, 2010

	
1.0:1.0

	
for the nine (9) consecutive month period ending March 31, 2010

	
1.0:1.0

  

3

  

	
Period

	
Ratio

	
for the ten (10) consecutive month period ending April 30, 2010

	
1.0:1.0

	
for the eleven (11) consecutive month period ending May 31, 2010

	
1.0:1.0

	
for the twelve (12) consecutive month period ending June 30, 2010 and as of the end of each month thereafter (calculated on a trailing twelve (12) consecutive month basis)

	
1.0:1.0

 

(e)           Minimum EBITDA.  Effective as of the date of this Amendment No. 2, Section 9.17(b) of the Loan Agreement is hereby amended and restated in its entirety as follows:

 

“(b)           Minimum EBITDA.  If a Financial Covenant Trigger Event shall occur, then, as of the end of each month, Borrowers and Guarantors shall maintain, on a consolidated basis, EBITDA of not less than the amount set forth below for each respective period as set forth below:

 

	
Period

	
Minimum

EBITDA

	
for the seven (7) month period ending January 31, 2009

	
$2,440,000

	
for the eight (8) consecutive month period ending February 28, 2010

	
$2,210,000

	
for the nine (9) consecutive month period ending March 31, 2010

	
$2,210,000

	
for the ten (10) consecutive month period ending April 30, 2010

	
$2,390,000

  

4

  

	
Period

	
Minimum

EBITDA

	
for the eleven (11) consecutive month period ending May 31, 2010

	
$2,670,000

	
for the twelve (12) consecutive month period ending June 30, 2010

	
$3,340,000

	
for the twelve (12) consecutive month period ending July 31, 2010

	
$3,390,000

	
for the twelve (12) consecutive month period ending August 31, 2010

	
$2,870,000

	
for the twelve (12) consecutive month period ending September 30, 2010

	
$3,090,000

	
for the twelve (12) consecutive month period ending October 31, 2010

	
$3,450,000

	
for the twelve (12) consecutive month period ending November 30, 2010

	
$3,540,000

	
for the twelve (12) consecutive month period ending December 31, 2010 and as of the end of each month thereafter (calculated on a trailing (12) consecutive month basis)

	
$3,500,000

 

3.           Amendment Fee.  In addition to any other fees payable under the Loan Agreement, in consideration of the loans and advances as provided for hereunder, Borrowers shall pay to Agent in immediately available funds an amendment fee in the amount of $30,000.  The amendment fee shall be fully earned and payable as of the date hereof.  Such fee may be charged by Agent to any loan account of Borrowers.

 

4.           Conditions Precedent.  This Amendment No. 2 shall not be effective until each of the following conditions precedent are satisfied in a manner reasonably satisfactory to Agent:

 

  

5

  

(a)            the receipt by Agent of this Amendment No. 2, duly authorized and executed by Borrowers and Guarantors;

 

(b)           the receipt by Agent of the amendment fee set forth in Section 3 above; and

 

(c)           immediately prior, and immediately after giving affect to the amendments and agreements set forth herein, there shall exist no Event of Default or event or condition which, with the giving of notice, passage of time, or both, would constitute an Event of Default.

 

5.           Effect of this Amendment No. 2.  This Amendment No. 2 constitutes the entire agreement of the parties with respect to the subject matter hereof and thereof, and supersedes all prior oral or written communications, memoranda, proposals, negotiations, discussions, term sheets and commitments with respect to the subject matter hereof and thereof.  Except as expressly amended and waived pursuant hereto, no other changes or modifications or waivers to the Financing Agreements are intended or implied, and in all other respects the Financing Agreements are hereby specifically ratified, restated and confirmed by all parties hereto as of the effective date hereof.  To the extent that any provision of the Loan Agreement or any of the other Financing Agreements are inconsistent with the provisions of this Amendment, the provisions of this Amendment shall control.

 

6.           Further Assurances.  The parties hereto shall execute and deliver such additional documents and take such additional action as may be necessary or desirable to effectuate the provisions and purposes of this Amendment No. 2.

 

7.           Governing Law.  The rights and obligations hereunder of each of the parties hereto shall be governed by and interpreted and determined in accordance with the internal laws of the State of New York but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of New York.

 

8.           Binding Effect.  This Amendment No. 2 shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.

 

9.           Counterparts.  This Amendment No. 2 may be executed in any number of counterparts, but all of such counterparts shall together constitute but one and the same agreement.  In making proof of this Amendment No. 2, it shall not be necessary to produce or account for more than one counterpart thereof signed by each of the parties hereto.  Delivery of an executed counterpart of this Amendment No. 2 by telecopier shall have the same force and effect as delivery of an original executed counterpart of this Amendment No. 2.  Any party delivering an executed counterpart of this Amendment No. 2 by telecopier also shall deliver an original executed counterpart of this Amendment No. 2, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment No. 2 as to such party or any other party.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

  

6

  

	  
	
U.S. BORROWERS

 

	
CANADIAN BORROWER

	
AMERICAN BILTRITE INC.

 

By:            /s/Richard G. Marcus______________

Name:       Richard G. Marcus________________

Title:          President                    

	
AMERICAN BILTRITE (CANADA) LTD.

 

By:            /s/Richard G. Marcus______________

Name:       Richard G. Marcus________________

Title:          President                     

	
 

IDEAL TAPE CO., INC.

 

By:            /s/Richard G. Marcus______________

Name:       Richard G. Marcus________________

Title:          President                     

	  
	
 

K&M ASSOCIATES L.P.

 

By:  AIMPAR, Inc., its General Partner

 

By:            /s/Richard G. Marcus______________

Name:       Richard G. Marcus________________

Title:          President                     

 

	  
	  	  
	  	  
	  
	
[SIGNATURES CONTINUED ON NEXT PAGE]

 

 

[Signature Page to Amendment No. 2 to LSA]

 

 

 

 

 

	  
	
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

	  
	  	  
	
U.S. GUARANTORS

 

	  
	
425 DEXTER ASSOCIATES, L.P.

 

By:  AIMPAR, Inc., its General Partner

 

By:            /s/Richard G. Marcus         

Name:       Richard G. Marcus            

Title:          President                    

	  
	  	  
	
OCEAN STATE JEWELRY, INC.

 

By:            /s/Richard G. Marcus         

Name:       Richard G. Marcus            

Title:          President                    

	  
	  	  
	
AMERICAN BILTRITE FAR EAST, INC.

 

By:            /s/Richard G. Marcus         

Name:       Richard G. Marcus            

Title:          President         

	  
	  	  
	
MAJESTIC JEWELRY, INC.

 

By:            /s/Richard G. Marcus         

Name:       Richard G. Marcus            

Title:          President                     

	  
	  	  
	  	  
	  
	
[SIGNATURES CONTINUED ON NEXT PAGE]

 

[Signature Page to Amendment No. 2 to LSA]

 

 

 

 

 

 

	
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

	  
	  	  
	
ACCEPTED AND AGREED:

	  
	  	  
	
AGENT:

 

	  
	
WACHOVIA BANK, NATIONAL ASSOCIATION

 

By:            /s/ Mark J Breier            

Name:       Mark J. Breier                   

Title:          Managing Director             

 

	  
	
ISSUING BANK:

 

	  
	
WACHOVIA BANK, NATIONAL ASSOCIATION

 

By:            /s/ Mark J Breier            

Name:       Mark J. Breier                   

Title:          Managing Director______________     

  

	  
	
LENDERS:

 

WACHOVIA BANK, NATIONAL ASSOCIATION

 

By:            /s/ Mark J Breier            

Name:       Mark J. Breier                   

Title:          Managing Director______________     

 

	  
	
WACHOVIA CAPITAL FINANCE CORPORATION (CANADA)

 

By:            /s/ Laurence S. Forte        

Name:       Laurence S. Forte________________  

Title:          Managing Director_______________   

 

	  
	  	  

 

 

[Signature Page to Amendment No. 2 to LSA]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00170-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00170-of-00352.parquet"}]]