Document:

EX-10.2

EMPLOYMENT AGREEMENT

THIS AGREEMENT, made and entered into as of this 15th day of May, 2006, by and between The
Kansas City Southern Railway Company, a Missouri corporation (“Railway”), Kansas City Southern, a
Delaware corporation (“KCS”) and Daniel W. Avramovich, an individual (“Executive”).

WHEREAS, Executive has been offered employment by Railway, and Railway, KCS and Executive
desire for Railway to continue to employ Executive on the terms and conditions set forth in this
Agreement and to provide an incentive to Executive to remain in the employ of Railway hereafter,
particularly in the event of any change in control (as herein defined) of KCS, or Railway , thereby
establishing and preserving continuity of management of Railway.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, it
is agreed by and between Railway, KCS and Executive as follows:

1. Employment. Railway hereby employs Executive as its Executive Vice President Sales
& Marketing to serve at the pleasure of the Board of Directors of Railway (the “Railway Board”) and
to have such duties, powers and responsibilities as may be prescribed or delegated from time to
time by the President or other officer to whom Executive reports, subject to the powers vested in
the Railway Board and in the stockholders of Railway. Executive shall faithfully perform his
duties under this Agreement to the best of his ability and shall devote substantially all of his
working time and efforts to the business and affairs of Railway and its affiliates.

2. Compensation.

(a) Base Compensation. Railway shall pay Executive as compensation for his services
hereunder an annual base salary at the rate approved by the Railway’s Compensation Committee. Such
rate shall not be reduced except as agreed by the parties or except as part of a general salary
reduction program imposed by Railway for non-union employees and applicable to all officers of
Railway, not related to a Change of Control.

3. Benefits. During the period of his employment hereunder, Railway shall provide
Executive with coverage under such benefit plans and programs as are made generally available to
similarly situated employees of Railway, provided (a) Railway shall have no obligation with respect
to any plan or program if Executive is not eligible for coverage thereunder, and (b) Executive
acknowledges that stock options and other stock and equity participation awards are granted in the
discretion of the Railway Board or the Compensation Committee of the Railway Board and that
Executive has no right to receive stock options or other equity participation awards or any
particular number or level of stock options or other awards. In determining contributions,
coverage and benefits under any disability insurance policy and under any cash compensation-based
plan provided to Executive by Railway, it shall be assumed that the value of Executive’s annual
compensation, pursuant to this Agreement, is 175% of Executive’s annual base salary. Executive
acknowledges that all rights and benefits under benefit plans and programs shall be governed by the
official text of each plan or program and not by any summary or description thereof or any
provision of this Agreement (except to the extent that this Agreement expressly modifies such
benefit plans or programs) and that neither KCS, nor Railway is under any obligation to continue in
effect or to fund any such plan or program, except as provided in Paragraph 7 hereof.

4. Term and Termination.

The “Term” of this Agreement shall begin on the date first written above and continue until
terminated as provided in (a) through (d) of this Section 4.

(a) Termination by Executive. Executive may terminate this Agreement and his
employment hereunder by providing at least thirty (30) days advance written notice to Railway,
except that in the event of any material breach of this Agreement by Railway, Executive may
terminate this Agreement and his employment hereunder immediately upon notice to Railway.

(b) Death or Disability. This Agreement and Executive’s employment hereunder shall
terminate automatically on the death or disability of Executive, except to the extent employment is
continued under Railway’s disability plan. For purposes of this Agreement, Executive shall be
deemed to be disabled if he qualifies for disability benefits under Railway’s long-term disability
plan.

(c) Termination by Railway For Cause. Railway may terminate this Agreement and
Executive’s employment “for cause” immediately upon notice to Executive. For purposes of this
Agreement (except for Paragraph 7), termination “for cause” shall mean termination based upon any
one or more of the following:

(i) Any material breach of this Agreement by Executive;

(ii) Executive’s dishonesty involving Railway, KCS, or any subsidiary of Railway or
KCS;

(iii) Gross negligence or willful misconduct in the performance of Executive’s duties
as determined in good faith by the Railway Board;

(iv) Executive’s failure to substantially perform his duties and responsibilities
hereunder, including without limitation Executive’s willful failure to follow reasonable
instructions of the President or other officer to whom Executive reports;

(v) Executive’s breach of an express employment policy of Railway or its affiliates;

(vi) Executive’s fraud or criminal activity;

(vii) Embezzlement or misappropriation by Executive; or

(viii) Executive’s breach of his fiduciary duty to Railway, or KCS, or their
affiliates.

(d) Termination by Railway Other Than For Cause.

(i) Railway may terminate this Agreement and Executive’s employment other than for
cause immediately upon notice to Executive, and in such event, Railway shall provide
severance benefits to Executive in accordance with Paragraph 4(d)(ii) below. Executive
acknowledges and agrees that such severance benefits constitute the exclusive remedy of
Executive upon termination of employment other than for cause. Notwithstanding any other
provision of this Agreement, as a condition to receiving such severance benefits, Executive
shall execute a full release of claims in favor of Railway and KCS and their affiliates in
the form Attached hereto as Appendix A.

(ii) Unless the provisions of Paragraph 7 of this Agreement are applicable, if
Executive’s employment is terminated under Paragraph 4(d)(i), Railway shall continue, for a
period of one (1) year following such termination, (a) to pay to Executive as severance pay
a monthly amount equal to one-twelfth (1/12th) of the annual base salary referenced in
Paragraph 2(a) above, at the rate in effect immediately prior to termination, and, (b) to
reimburse Executive for the cost (including state and federal income taxes payable with
respect to this reimbursement) of continuing the health insurance coverage provided pursuant
to this Agreement or obtaining health insurance coverage comparable to the health insurance
provided pursuant to this Agreement, and obtaining coverage comparable to the life insurance
provided pursuant to this Agreement, unless Executive is provided comparable health or life
insurance coverage in connection with other employment. The foregoing obligations of
Railway shall continue until the end of such one (1) year period notwithstanding the death
or disability of Executive during said period (except, in the event of death, the obligation
to reimburse Executive for the cost of life insurance shall not continue). In the year in
which termination of employment occurs, Executive shall be eligible to receive benefits
under the Railway Incentive Compensation Plan and any Executive Plan in which Executive
participates (the “Executive Plan”) (if such Plans then are in existence and Executive was
entitled to participate immediately prior to termination) in accordance with the provisions
of such plans then applicable, and severance pay received in such year shall be taken into
account for the purpose of determining benefits, if any, under the Railway Incentive
Compensation Plan but not under the Executive Plan. After the year in which termination
occurs, Executive shall not be entitled to accrue or receive benefits under the Railway
Incentive Compensation Plan or the Executive Plan with respect to the severance pay provided
herein, notwithstanding that benefits under such plan there are still generally available to
executive employees of Railway. After termination of employment, Executive shall not be
entitled to accrue or receive benefits under any other employee benefit plan or program,
except that Executive shall be entitled to participate in the KCS Section 401(k) and Profit
Sharing Plan and the KCS Employee Stock Ownership Plan (if Railway employees then still
participate in such plans) in the year of termination of employment only if Executive meets
all requirements of such plans for participation in such year.

5. Confidentiality and Non-Disclosure.

(a) Executive understands and agrees that he will be given Confidential Information (as
defined below) during his employment with Railway relating to the business of Railway, KCS and/or
their affiliates, in exchange for his agreement herein. Executive hereby expressly agrees to
maintain in strictest confidence and not to use in any way (including without limitation in any
future business relationship of Executive), publish, disclose or authorize anyone else to use,
publish or disclose in any way, any Confidential Information relating in any manner to the business
or affairs of Railway, KCS and/or their affiliates. Executive agrees further not to remove or
retain any figures, calculations, letters, documents, lists, papers, or copies thereof, which
embody Confidential Information of Railway, KCS and/or their affiliates, and to return, prior to
Executive’s termination of employment for any reason, any such information in Executive’s
possession. If Executive discovers, or comes into possession of, any such information after his
termination he shall promptly return it to Railway. Executive acknowledges that the provisions of
this paragraph are consistent with Railway’s policies and procedures to which Executive, as an
employee of Railway, is bound.

(b) For purposes of this Agreement, “Confidential Information” includes, but is not limited
to, information in the possession of, prepared by, obtained by, compiled by, or that is used by
Railway, KCS or their affiliates or customers, and: (i) is proprietary to, about, or created by
Railway, KCS or their affiliates or customers; (ii) gives Railway, KCS or their affiliates or
customers some competitive business advantage, the opportunity of obtaining such advantage, or
disclosure of which might be detrimental to the interest of Railway, KCS or their affiliates or
customers; and (iii) is not typically disclosed by Railway, KCS or their affiliates or customers,
or known by persons who are not employed by Railway, KCS or their affiliates or customers. Without
in any way limiting the foregoing and by way of example, Confidential Information shall include:
information pertaining to Railway’s, KCS’s or their affiliates’ business operations such as
financial and operational information and data, operational plans and strategies, business and
marketing strategies, pricing information, plans for various products and services, and acquisition
and divestiture planning.

(c). In the event of any breach of this Paragraph 5 by Executive, Railway shall be entitled to
terminate any and all remaining severance benefits under Paragraph 4(d)(ii) and shall be entitled
to pursue such other legal and equitable remedies as may be available. Executive acknowledges,
understands and agrees that Railway, KCS and/or their affiliates will suffer immediate and
irreparable harm if Executive fails to comply with any of his obligations under Paragraph 5 of this
Agreement, and that monetary damages alone will be inadequate to compensate Railway, KCS or their
affiliates for such breach. Accordingly, Executive agrees that Railway, KCS and/or their
affiliates shall, in addition to any other remedies available to it at law or in equity, be
entitled to temporary, preliminary, and permanent injunctive relief and specific performance to
enforce the terms of Paragraph 5 without the necessity of proving inadequacy of legal remedies or
irreparable harm or posting bond.

6. Duties Upon Termination; Survival.

(a) Duties. Upon termination of this Agreement by Railway or Executive for any
reason, Executive shall immediately sign such written resignations from all positions as an
officer, director or member of any committee or board of Railway and all direct and indirect
subsidiaries and affiliates of Railway as may be requested by Railway and shall sign such other
documents and papers relating to Executive’s employment, benefits and benefit plans as Railway may
reasonably request.

(b) Survival. The provisions of Paragraphs 5, 6(a) and 7 of this Agreement shall
survive any termination of this Agreement by Railway or Executive, and the provisions of Paragraph
4(d)(ii) shall survive any termination of this Agreement by Railway under Paragraph 4(d)(i).

7. Continuation of Employment Upon Change in Control.

(a) Continuation of Employment. Subject to the terms and conditions of this Paragraph
7, in the event of a Change in Control (as defined in Paragraph 7(d)) at any time during the term
of this Agreement, Executive agrees to remain in the employ of Railway for a period of three years
(the “Three Year Period”) from the date of such Change in Control (the “Control Change Date”).
Railway agrees to continue to employ Executive for the Three Year Period. During the Three Year
Period, (i) the Executive’s position (including offices, titles, reporting requirements and
responsibilities), authority and duties shall be at least commensurate in all material respects
with the most significant of those held, exercised and assigned at any time during the 12 month
period immediately before the Control Change Date and (ii) the Executive’s services shall be
performed at the location where Executive was employed immediately before the Control Change Date
or at any other location less than 40 miles from such former location. During the Three Year
Period, Railway shall continue to pay to Executive an annual base salary on the same basis and at
the same intervals as in effect prior to the Control Change Date at a rate not less than 12 times
the highest monthly base salary paid or payable to the Executive by Railway in respect of the
12-month period immediately before the Control Change Date.

(b) Benefits. During the Three-Year Period, Executive shall be entitled to
participate, on the basis of his executive position, in each of the following KCS, or Railway
plans (together, the “Specified Benefits”) in existence, and in accordance with the terms thereof,
at the Control Change Date:

(i) any benefit plan, and trust fund associated therewith, related to: (A) life,
health, dental, disability, accidental death and dismemberment insurance or accrued but
unpaid vacation time; (B) profit sharing, thrift or deferred savings (including deferred
compensation, such as under Sec. 401(k) plans); (C) retirement or pension benefits; (D)
ERISA excess benefits and similar plans and (E) tax favored employee stock ownership (such
as under ESOP, and Employee Stock Purchase programs); and

(ii) any other benefit plans hereafter made generally available to executives of
Executive’s level or to the employees of Railway generally.

In addition, Railway and KCS shall use their best efforts to cause all outstanding options
held by Executive under any stock option plan of KCS or its affiliates to become immediately
exercisable on the Control Change Date and to the extent that such options are not vested and are
subsequently forfeited, the Executive shall receive a lump-sum cash payment within 5 days after the
options are forfeited equal to the difference between the fair market value of the shares of stock
subject to the non-vested, forfeited options determined as of the date such options are forfeited
and the exercise price for such options. During the Three-Year Period Executive shall be entitled
to participate, on the basis of his executive position, in any incentive compensation plan of KCS,
or Railway in accordance with the terms thereof at the Control Change Date; provided that if under
KCS, or Railway programs or Executive’s Employment Agreement in existence immediately prior to the
Control Change Date, there are written limitations on participation for a designated time period in
any incentive compensation plan, such limitations shall continue after the Control Change Date to
the extent so provided for prior to the Control Change Date.

If the amount of contributions or benefits with respect to the Specified Benefits or any
incentive compensation is determined on a discretionary basis under the terms of the Specified
Benefits or any incentive compensation plan immediately prior to the Control Change Date, the
amount of such contributions or benefits during the Three Year Period for each of the Specified
Benefits shall not be less than the average annual contributions or benefits for each Specified
Benefit for the three plan years ending prior to the Control Change Date and, in the case of any
incentive compensation plan, the amount of the incentive compensation during the Three Year Period
shall not be less than 75% of the maximum that could have been paid to the Executive under the
terms of the incentive compensation plan.

(c) Payment. With respect to any plan or agreement under which Executive would be
entitled at the Control Change Date to receive Specified Benefits or incentive compensation as a
general obligation of Railway which has not been separately funded (including specifically, but not
limited to, those referred to under Paragraph 7(b)(i)(D) above), Executive shall receive within
five (5) days after such date full payment in cash of all amounts to which he is then entitled
thereunder.

(d) Change in Control. For purposes of this Agreement, a “Change in Control” shall be
deemed to have occurred if:

(i) for any reason at any time less than seventy-five percent (75%) of the members of
the KCS Board shall be individuals who fall into any of the following categories: (A)
individuals who were members of the KCS Board on the date of the Agreement; or (B)
individuals whose election, or nomination for election by KCS’s stockholders, was approved
by a vote of at least seventy-five percent (75%) of the members of the KCS Board then still
in office who were members of the KCS Board on the date of the Agreement; or (C) individuals
whose election, or nomination for election, by KCS’s stockholders, was approved by a vote of
at least seventy-five percent (75%) of the members of the KCS Board then still in office who
were elected in the manner described in (A) or (B) above, or

(ii) any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934 (the “Exchange Act”)) other than KCS shall have become after
September 18, 1997, according to a public announcement or filing, the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
Railway or KCS representing thirty percent (30%) (or, with respect to Paragraph 7(c) hereof,
40%) or more (calculated in accordance with Rule 13d-3) of the combined voting power of
Railway’s or KCS’s then outstanding voting securities; or

(iii) the stockholders of Railway or KCS shall have approved a merger, consolidation or
dissolution of Railway or KCS or a sale, lease, exchange or disposition of all or
substantially all of Railway’s or KCS’s assets, if persons who were the beneficial owners
of the combined voting power of Railway’s or KCS’s voting securities immediately before any
such merger, consolidation, dissolution, sale, lease, exchange or disposition do not
immediately thereafter, beneficially own, directly or indirectly, in substantially the same
proportions, more than 60% of the combined voting power of any corporation or other entity
resulting from any such transaction.

(e) Termination After Control Change Date. Notwithstanding any other provision of
this Paragraph 7, at any time after the Control Change Date, Railway may terminate the employment
of Executive (the “Termination”), but unless such Termination is for Cause as defined in
subparagraph (g) or for disability, within five (5) days of the Termination Railway shall pay to
Executive his full base salary through the Termination, to the extent not theretofore paid, plus a
lump sum amount (the “Special Severance Payment”) equal to the product of (i) 175% of his annual
base salary specified in Paragraph 7(a) multiplied by (ii) Three; and Specified Benefits (excluding
any incentive compensation) to which Executive was entitled immediately prior to Termination shall
continue until the end of the 3-year period (“Benefits Period”) beginning on the date of
Termination. If any plan pursuant to which Specified Benefits are provided immediately prior to
Termination would not permit continued participation by Executive after Termination, then Railway
shall pay to Executive within five (5) days after Termination a lump sum payment equal to the
amount of Specified Benefits Executive would have received under such plan if Executive had been
fully vested in the average annual contributions or benefits in effect for the three plan years
ending prior to the Control Change Date (regardless of any limitations based on the earnings or
performance of KCS, or Railway) and a continuing participant in such plan to the end of the
Benefits Period. Following the end of the Benefits Period, Railway shall continue to provide to
the Executive and the Executive’s family the following benefits (“Post-Period Benefits”): (1) prior
to the Executive’s attainment of age sixty (60), health, prescription and dental benefits
equivalent to those then applicable to active peer executives of Railway) and their families, as
the same may be modified from time to time, and (2) following the Executive’s attainment of age
sixty (60) (and without regard to the Executive’s period of service with Railway) health and
prescription benefits equivalent to those then applicable to retired peer executives of Railway and
their families immediately prior to the Change of Control. The cost to the Executive of such
Post-Period Benefits shall not exceed the cost of such benefits to active or retired (as
applicable) peer executives immediately prior to the Change of Control. Notwithstanding the
preceding two sentences of this Paragraph 7(e), if the Executive is covered under any health,
prescription or dental plan provided by a subsequent employer, then the corresponding type of plan
coverage (i.e., health, prescription or dental), required to be provided as Post-Period Benefits
under this Paragraph 7(e) shall cease. The Executive’s rights under this Paragraph 7(e) shall be
in addition to, and not in lieu of, any post-termination continuation coverage or conversion rights
the Executive may have pursuant to applicable law, including without limitation continuation
coverage required by Section 4980 of the Code. Nothing in this Paragraph 7(e) shall be deemed to
limit in any manner the reserved right of Railway, in its sole and absolute discretion, to at any
time amend, modify or terminate health, prescription or dental benefits for active or retired
employees generally.

(f) Resignation After Control Change Date. In the event of a Change in Control as
defined in Paragraph 7(d), thereafter, upon good reason (as defined below), Executive may, at any
time during the three-year period following the Change in Control, in his sole discretion, on not
less than thirty (30) days’ written notice (the “Notice of Resignation”) to the Secretary of
Railway and effective at the end of such notice period, resign his employment with Railway (the
“Resignation”). Within five (5) days of such a Resignation, Railway shall pay to Executive his
full base salary through the effective date of such Resignation, to the extent not theretofore
paid, plus a lump sum amount equal to the Special Severance Payment (computed as provided in the
first sentence of Paragraph 7(e), except that for purposes of such computation all references to
“Termination” shall be deemed to be references to “Resignation”). Upon Resignation of Executive,
Specified Benefits to which Executive was entitled immediately prior to Resignation shall continue
on the same terms and conditions as provided in Paragraph 7(e) in the case of Termination
(including equivalent payments provided for therein), and Post-Period Benefits shall be provided on
the same terms and conditions as provided in Paragraph 7(e) in the case of Termination. For
purposes of this Agreement, “good reason” means any of the following:

(i) the assignment of the Executive of any duties inconsistent in any respect with the
Executive’s position (including offices, titles, reporting requirements or
responsibilities), authority or duties as contemplated by Section 7(a)(i), or any other
action by Railway which results in a diminution or other material adverse change in such
position, authority or duties;

(ii) any failure by Railway to comply with any of the provisions of Paragraph 7;

(iii) Railway’s requiring the Executive to be based at any office or location other
than the location described in Section 7(a)(ii);

(iv) any other material adverse change to the terms and conditions of the Executive’s
employment; or

(v) any purported termination by Railway of the Executive’s employment other than as
expressly permitted by this Agreement (any such purported termination shall not be effective
for any other purpose under this Agreement).

A passage of time prior to delivery of the Notice of Resignation or a failure by the Executive to
include in the Notice of Resignation any fact or circumstance which contributes to a showing of
Good Reason shall not waive any right of the Executive under this Agreement or preclude the
Executive from asserting such fact or circumstance in enforcing rights under this Agreement.

(g) Termination for Cause After Control Change Date. Notwithstanding any other
provision of this Paragraph 7, at any time after the Control Change Date, Executive may be
terminated by Railway “for cause.” Cause means commission by the Executive of any felony or
willful breach of duty by the Executive in the course of the Executive’s employment; except that
Cause shall not mean:

(i) bad judgment or negligence;

(ii) any act or omission believed by the Executive in good faith to have been in or not
opposed to the interest of Railway (without intent of the Executive to gain, directly or
indirectly, a profit to which the Executive was not legally entitled);

(iii) any act or omission with respect to which a determination could properly have
been made by the Railway Board that the Executive met the applicable standard of conduct for
indemnification or reimbursement under Railway’s by-laws, any applicable indemnification
agreement, or applicable law, in each case in effect at the time of such act or omission; or

(iv) any act or omission with respect to which Notice of Termination of the Executive
is given, more than 12 months after the earliest date on which any member of the Railway
Board, not a party to the act or omission, knew or should have known of such act or
omission.

Any Termination of the Executive’s employment by Railway for Cause shall be communicated to the
Executive by Notice of Termination.

(h) Gross-up for Certain Taxes. If it is determined (by the reasonable computation of
Railway’s independent auditors, which determinations shall be certified to by such auditors and set
forth in a written certificate (“Certificate”) delivered to the Executive) that any benefit
received or deemed received by the Executive from Railway, or KCS pursuant to this Agreement or
otherwise (collectively, the “Payments”) is or will become subject to any excise tax under Section
4999 of the Code or any similar tax payable under any United States federal, state, local or other
law (such excise tax and all such similar taxes collectively, “Excise Taxes”), then Railway shall,
immediately after such determination, pay the Executive an amount (the “Gross-up Payment”) equal to
the product of:

(i) the amount of such Excise Taxes; multiplied by

(ii) the Gross-up Multiple (as defined in Paragraph 7(k)).

The Gross-up Payment is intended to compensate the Executive for the Excise Taxes and
any federal, state, local or other income or excise taxes or other taxes payable by the
Executive with respect to the Gross-up Payment.

Railway shall cause the preparation and delivery to the Executive of a Certificate upon
request at any time. Railway shall, in addition to complying with this Paragraph 7(h),
cause all determinations and certifications under Paragraphs 7(h)-(o) to be made as soon as
reasonably possible and in adequate time to permit the Executive to prepare and file the
Executive’s individual tax returns on a timely basis.

(i) Determination by the Executive.

(i) If Railway shall fail to: (A) deliver a Certificate to the Executive or (B) pay to
the Executive the amount of the Gross-up Payment, if any, within 14 days after receipt from
the Executive of a written request for a Certificate, or if at any time following receipt of
a Certificate the Executive disputes the amount of the Gross-up Payment set forth therein,
the Executive may elect to demand the payment of the amount which the Executive, in
accordance with an opinion of counsel to the Executive (“Executive Counsel Opinion”),
determines to be the Gross-up Payment. Any such demand by the Executive shall be made by
delivery to Railway of a written notice which specifies the Gross-up Payment determined by
the Executive and an Executive Counsel Opinion regarding such Gross-up Payment (such written
notice and opinion collectively, the “Executive’s Determination”). Within 14 days after
delivery of the Executive’s Determination to Railway, Railway shall either: (A) pay the
Executive the Gross-up Payment set forth in the Executive’s Determination (less the portion
of such amount, if any, previously paid to the Executive by Railway) or (B) deliver to the
Executive a Certificate specifying the Gross-up Payment determined by Railway’s independent
auditors, together with an opinion of Railway’s counsel (“Railway Counsel Opinion”), and pay
the Executive the Gross-up Payment specified in such Certificate. If for any reason Railway
fails to comply with clause (B) of the preceding sentence, the Gross-up Payment specified in
the Executive’s Determination shall be controlling for all purposes.

(ii) If the Executive does not make a request for, and Railway does not deliver to the
Executive, a Certificate, Railway shall, for purposes of Paragraph 7(j), be deemed to have
determined that no Gross-up Payment is due.

(j) Additional Gross-up Amounts. If, despite the initial conclusion of Railway and/or
the Executive that certain Payments are neither subject to Excise Taxes nor to be counted in
determining whether other Payments are subject to Excise Taxes (any such item, a “Non-Parachute
Item”), it is later determined (pursuant to subsequently-enacted provisions of the Code, final
regulations or published rulings of the IRS, final IRS determination or judgment of a court of
competent jurisdiction or Railway’s independent auditors) that any of the Non-Parachute Items are
subject to Excise Taxes, or are to be counted in determining whether any Payments are subject to
Excise Taxes, with the result that the amount of Excise Taxes payable by the Executive is greater
than the amount determined by Railway or the Executive pursuant to Paragraph 7(h) or Paragraph
7(i), as applicable, then Railway shall pay the Executive an amount (which shall also be deemed a
Gross-up Payment) equal to the product of:

(i) the sum of (A) such additional Excise Taxes and (B) any interest, fines, penalties,
expenses or other costs incurred by the Executive as a result of having taken a position in
accordance with a determination made pursuant to Paragraph 7(h); multiplied by

(ii) the Gross-up Multiple.

(k) Gross-up Multiple. The Gross-up Multiple shall equal a fraction, the numerator of
which is one (1.0), and the denominator of which is one (1.0) minus the sum, expressed as a decimal
fraction, of the rates of all federal, state, local and other income and other taxes and any Excise
Taxes applicable to the Gross-up Payment; provided that, if such sum exceeds 0.8, it shall be
deemed equal to 0.8 for purposes of this computation. (If different rates of tax are applicable to
various portions of a Gross-up Payment, the weighted average of such rates shall be used.)

(l) Opinion of Counsel. “Executive Counsel Opinion” means a legal opinion of
nationally recognized executive compensation counsel that there is a reasonable basis to support a
conclusion that the Gross-up Payment determined by the Executive has been calculated in accord with
this Paragraph 7 and applicable law. “Company Counsel Opinion” means a legal opinion of nationally
recognized executive compensation counsel that (i) there is a reasonable basis to support a
conclusion that the Gross-up Payment set forth in the Certificate of Railway’s independent auditors
has been calculated in accord with this Paragraph 7 and applicable law, and (ii) there is no
reasonable basis for the calculation of the Gross-up Payment determined by the Executive.

(m) Amount Increased or Contested. The Executive shall notify Railway in writing of
any claim by the IRS or other taxing authority that, if successful, would require the payment by
Railway of a Gross-up Payment. Such notice shall include the nature of such claim and the date on
which such claim is due to be paid. The Executive shall give such notice as soon as practicable,
but no later than 10 business days, after the Executive first obtains actual knowledge of such
claim; provided, however, that any failure to give or delay in giving such notice shall affect
Railway’s obligations under this Paragraph 7 only if and to the extent that such failure results in
actual prejudice to Railway. The Executive shall not pay such claim less than 30 days after the
Executive gives such notice to Railway (or, if sooner, the date on which payment of such claim is
due). If Railway notifies the Executive in writing before the expiration of such period that it
desires to contest such claim, the Executive shall:

(i) give Railway any information that it reasonably requests relating to such claim;

(ii) take such action in connection with contesting such claim as Railway reasonably
requests in writing from time to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney reasonably selected by Railway;

(iii) cooperate with Railway in good faith to contest such claim; and

(iv) permit Railway to participate in any proceedings relating to such claim; provided,
however, that Railway shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax, including related interest and penalties, imposed as a result of such
representation and payment of costs and expenses. Without limiting the foregoing, Railway
shall control all proceedings in connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner. The Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as Railway shall determine; provided, however, that if Railway directs the
Executive to pay such claim and sue for a refund, Railway shall advance the amount of such
payment to the Executive, on are interest-free basis and shall indemnify the Executive, on
an after-tax basis, for any Excise Tax or income tax, including related interest or
penalties, imposed with respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due is limited solely
to such contested amount. The Railway’s control of the contest shall be limited to issues
with respect to which a Gross-up Payment would be payable. The Executive shall be entitled
to settle or contest, as the case may be, any other issue raised by the IRS or other taxing
authority.

(n) Refunds. If, after the receipt by the Executive of an amount advanced by Railway
pursuant to Paragraph 7(m), the Executive receives any refund with respect to such claim, the
Executive shall (subject to Railway’s complying with the requirements of Paragraph 7(m)) promptly
pay Railway the amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by Railway
pursuant to Paragraph 7(m), a determination is made that the Executive shall not be entitled to a
full refund with respect to such claim and Railway does not notify the Executive in writing of its
intent to contest such determination before the expiration of 30 days after such determination,
then the applicable part of such advance shall be forgiven and shall not be required to be repaid
and the amount of such advance shall offset, to the extent thereof, the amount of Gross-up Payment
required to be paid. Any contest of a denial of refund shall be controlled by Paragraph 7(m).

(o) Expenses. If any dispute should arise under this Agreement after the Control
Change Date involving an effort by Executive to protect, enforce or secure rights or benefits
claimed by Executive hereunder, Railway shall pay (promptly upon demand by Executive accompanied by
reasonable evidence of incurrence) all reasonable expenses (including attorneys’ fees) incurred by
Executive in connection with such dispute, without regard to whether Executive prevails in such
dispute except that Executive shall repay Railway any amounts so received if a court having
jurisdiction shall make a final, nonappealable determination that Executive acted frivolously or in
bad faith by such dispute. To assure Executive that adequate funds will be made available to
discharge Railway’s obligations set forth in the preceding sentence, Railway has established a
trust and upon the occurrence of a Change in Control shall promptly deliver to the trustee of such
trust to hold in accordance with the terms and conditions thereof that sum which the Railway Board
shall have determined is reasonably sufficient for such purpose.

(p) Prevailing Provisions. On and after the Control Change Date, the provisions of
this Paragraph 7 shall control and take precedence over any other provisions of this Agreement
which are in conflict with or address the same or a similar subject matter as the provisions of
this Paragraph 7.

8. Mitigation and Other Employment. After a termination of Executive’s employment
pursuant to Paragraph 4(d)(i) or a Change in Control as defined in Paragraph 7(d), Executive shall
not be required to mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise, and except as otherwise specifically provided in Paragraph 4(d)(ii)
with respect to health and life insurance and in Paragraph 7(e) with respect to health,
prescription and dental benefits, no such other employment, if obtained, or compensation or
benefits payable in connection therewith shall reduce any amounts or benefits to which Executive is
entitled hereunder. Such amounts or benefits payable to Executive under this Agreement shall not
be treated as damages but as severance compensation to which Executive is entitled because
Executive’s employment has been terminated.

9. KCS Not An Obligor. Notwithstanding that KCS has executed this Agreement, it shall
have no obligation for the payment of salary, benefits, or other compensation hereunder, and all
such obligations shall be the sole responsibility of Railway.

10. Notice. Notices and all other communications to either party pursuant to this
Agreement shall be in writing and shall be deemed to have been given when personally delivered,
delivered by facsimile or deposited in the United States mail by certified or registered mail,
postage prepaid, addressed, in the case of Railway or KCS, to Railway or KCS at P.O. Box 219335,
Kansas City, Missouri 64121-9335,, Attention: Secretary, or, in the case of the Executive, to him
at P.O. Box 219335, Kansas City, Missouri 64121-9335,, or to such other address as a party shall
designate by notice to the other party.

11. Amendment. No provision of this Agreement may be amended, modified, waived or
discharged unless such amendment, waiver, modification or discharge is agreed to in writing signed
by Executive, the President of Railway and the President of KCS. No waiver by any party hereto at
any time of any breach by another party hereto of, or compliance with, any condition or provision
of this Agreement to be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the time or at any prior or subsequent time.

12. Successors in Interest. The rights and obligations of KCS and Railway under this
Agreement shall inure to the benefit of and be binding in each and every respect upon the direct
and indirect successors and assigns of KCS and Railway, regardless of the manner in which such
successors or assigns shall succeed to the interest of KCS or Railway hereunder, and this Agreement
shall not be terminated by the voluntary or involuntary dissolution of KCS or Railway or by any
merger or consolidation or acquisition involving KCS or Railway, or upon any transfer of all or
substantially all of KCS’s or Railway’s assets, or terminated otherwise than in accordance with its
terms. In the event of any such merger or consolidation or transfer of assets, the provisions of
this Agreement shall be binding upon and shall inure to the benefit of the surviving corporation or
the corporation or other person to which such assets shall be transferred. Neither this Agreement
nor any of the payments or benefits hereunder may be pledged, assigned or transferred by Executive
either in whole or in part in any manner, without the prior written consent of Railway.

13. Severability. The invalidity or unenforceability of any particular provision of
this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed
in all respects as if such invalid or unenforceable provisions were omitted.

14. Controlling Law and Jurisdiction. The validity, interpretation and performance of
this Agreement shall be subject to and construed under the laws of the State of Missouri, without
regard to principles of conflicts of law.

15. Entire Agreement. This Agreement constitutes the entire agreement among the
parties with respect to the subject matter hereof and terminates and supersedes all other prior
agreements and understandings, both written and oral, between the parties with respect to the terms
of Executive’s employment or severance arrangements.

IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Agreement as of
the 15 day of May, 2006.

THE KANSAS CITY SOUTHERN RAILWAY COMPANY

By: /s/ Arthur L. Shoener

Arthur L. Shoener, President and CEO

KANSAS CITY SOUTHERN

By:  /s/ Michael R. Haverty

Michael R. Haverty, Chairman, President, and CEO

EXECUTIVE

/s/ Daniel W. Avramovich

Daniel W. Avramovich

1

Appendix A

WAIVER AND RELEASE

In consideration of the benefits described in the Employment Agreement, I do hereby fully waive all
claims and release The Kansas City Southern Railway Company (KCSR), and its affiliates, parents,
subsidiaries, successors, assigns, directors and officers, fiduciaries, employees and agents, as
well as any employee benefit plans from liability and damages related in any way to any claim I may
have against or KCSR. This waiver and release includes, but is not limited to all claims, causes
of action and rights under Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights
Act of 1991; the Age Discrimination in Employment Act of 1967, as amended; the Civil Rights Act of
1866; the American with Disabilities Act of 1990; the Rehabilitation Act of 1973; the Older Workers
Benefit Protection Act of 1990; the Employee Retirement Income Security Act of 1974, as amended;
the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act; the
Federal Employers Liability Act; the Railway Labor Act, including bumping rights, rights to file a
grievance, rights to a hearing (whether before any company official, any system, group, regional or
special adjustment board, the National Railroad Adjustment Board, or any other entity), and any
rights to arbitration thereunder; the Missouri Human Rights Act, the Kansas Act Against
Discrimination, the Kansas and Missouri Workers’ Compensation acts, and all local state and federal
statutes and regulations; all claims arising from labor protective conditions imposed by the
Interstate Commerce Commission or the Surface Transportation Board; all any KCSR incentive or
benefit plan or program, and any rights under any collective bargaining agreement, including
seniority rights, bumping rights and reinstatement rights, rights to file or assert a grievance or
other complaint, rights to a hearing, or rights to arbitration under such agreement; and all rights
under common law such as breach of contract, tort or personal injury of any sort.

I understand that this Agreement and Release also precludes me from recovering any relief as a
result of any lawsuit, grievance or claims brought on my behalf and arising out of my employment or
resignation of, or separation from employment, provided that nothing in this Agreement and this
Release may affect my entitlement, if any, to workers’ compensation or unemployment compensation.
Additionally, nothing in this Agreement and Release prohibits me from communications with, filing a
complaint with, or full cooperation in the investigations of, any governmental agency on matters
within their jurisdictions. However, as stated above, this Agreement and Release does prohibit me
from recovering any relief, including monetary relief, as a result of such activities.

If any term, provision, covenant, or restriction of this Agreement and Release is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remainder of this Agreement and
Release and the other terms, provisions, covenants and restrictions hereof shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. I understand and agree
that, in the event of breach by me of any of the terms and conditions of this Agreement and
Release, the Railway will be entitled to recover all costs and expenses as a result of my breach,
including but not limited to, reasonable attorneys’ fees and costs.

I have read this Agreement and Release and I understand all of its terms. I enter into and sign
this Agreement and Release knowingly and voluntarily, with full knowledge of what it means.

	 	 	 
	     

Employee Signature

	 	     

Date
	 
	 	 
	     -

Employee Name(Please Print)

	 	     

Social Security Number
	 
	 	 

2Exhibit 10.1

                          SECURITIES PURCHASE AGREEMENT

     SECURITIES  PURCHASE AGREEMENT (the "AGREEMENT"), dated as of June 9, 2006,
by  and  among  Sorell  Inc., a Nevada corporation, with headquarters located at
Buk-ri  35,  Nama-Myun,  Yongin  City,  South  Korea  (the  "COMPANY"),  and the
investors  listed  on  the  Schedule  of Buyers attached hereto (individually, a
"BUYER"  and  collectively,  the  "BUYERS").

     WHEREAS:

     A.     The  Company  and  each  Buyer  is  executing  and  delivering  this
Agreement  in  reliance upon the exemption from securities registration afforded
by  Section 4(2) of the Securities Act of 1933, as amended (the "1933 ACT"), and
Rule  506  of  Regulation D ("REGULATION D") as promulgated by the United States
Securities  and  Exchange  Commission  (the  "SEC")  under  the  1933  Act.

     B.     The  Company  has  authorized  a new series of 8% Senior Convertible
Notes  (the  "NOTES")  of the Company, which Notes shall be convertible into the
Company's  common  stock,  $0.001  par  value per share (the "COMMON STOCK"), in
accordance  with  the  terms  of  the  Notes.

     C.  Each Buyer wishes to purchase, and the Company wishes to sell, upon the
terms  and  conditions  stated  in  this Agreement, (i) that aggregate principal
amount  of  Notes,  in  substantially the form attached hereto as Exhibit A, set
forth  opposite such Buyer's name in column (3) on the Schedule of Buyers (which
aggregate  amount  for  all  Buyers  shall be up to a maximum of $1,000,000) (as
converted,  collectively,  the  "CONVERSION  SHARES")  and  (ii)  Warrants,  in
substantially  the  form  attached  hereto  as  Exhibit  B  (collectively,  the
"WARRANTS"),  to  acquire  that  number of shares of Common Stock (as exercised,
collectively,  the  "WARRANT  SHARES")  set  forth opposite such Buyer's name in
column  (4)  on  the  Schedule  of  Buyers.

     D.  The  Notes  bear interest, which, subject to certain conditions, may be
paid  in  Common  Stock  ("INTEREST  SHARES").

     E. 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 as Exhibit C (the "REGISTRATION RIGHTS
AGREEMENT"),  pursuant  to  which  the  Company  has  agreed  to provide certain
registration  rights  with respect to the Conversion Shares, Interest Shares and
Warrant  Shares  under  the  1933  Act and the rules and regulations promulgated
thereunder,  and  applicable  state  securities  laws.

     F.  The Notes, the Conversion Shares, the Interest Shares, the Warrants and
the Warrant Shares, are collectively are referred to herein as the "SECURITIES".

     NOW,  THEREFORE,  the  Company  and  each  Buyer  hereby  agree as follows:

     1.     PURCHASE  AND  SALE  OF  NOTES  AND  WARRANTS.

          (a) AMOUNT. Subject to the satisfaction (or waiver) of the conditions
     set forth in Sections 6 and 7 below, the Company shall issue and sell to
     each Buyer, and each Buyer

                                        1
<PAGE>
     severally,  but  not  jointly,  agrees  to purchase from the Company on the
     Closing  Date  (as  defined  below), a principal amount of Notes, as is set
     forth  opposite  such Buyer's name in column (3) on the Schedule of Buyers,
     along  with  Warrants  to  acquire  that number of Warrant Shares as is set
     forth  opposite  such Buyer's name in column (4) on the Schedule of Buyers.

          (b)  CLOSING. The closing (the "CLOSING") of the purchase of the Notes
     and the Warrants by the Buyers shall occur at the offices of Sichenzia Ross
     Friedman  Ference  LLP,  1065 Avenue of the Americas, 21st Floor, New York,
     New York 10018. The date and time of the Closing (the "CLOSING DATE") shall
     be  10:00  a.m.,  New  York  City  Time,  on  the  date  hereof, subject to
     notification  of  satisfaction (or waiver) of the conditions to the Closing
     set  forth  in  Sections  6  and 7 below (or such later date as is mutually
     agreed  to  by  the  Company  and  each  Buyer).

          (c)  PURCHASE  PRICE. The purchase price for each Buyer (the "PURCHASE
     PRICE")  of the Notes and related Warrants to be purchased by each Buyer at
     the  Closing  shall be equal to $1.00 for each $1.00 of principal amount of
     Notes  being purchased by such Buyer at the Closing. The aggregate Purchase
     Price to be paid by each Buyer at the Closing is as set forth opposite such
     Buyer's  name  in  column  (3)  on  the  Schedule  of  Buyers.

          (d) FORM OF PAYMENT. On the Closing Date, (A) each Buyer shall pay its
     aggregate  Purchase  Price to the Company for the Notes and the Warrants to
     be  issued  and  sold  to  such  Buyer  at the Closing, by wire transfer of
     immediately  available  funds  to the Company's escrow account (the "ESCROW
     ACCOUNT")  with Signature Bank as escrow agent in accordance with the below
     written  wire instructions, and (B) the Company shall deliver to each Buyer
     the  Notes  (in such principal amount as is set forth opposite such Buyer's
     name  in  column  (3)  on  the Schedule of Buyers), along with the Warrants
     (exercisable  for  the  number  of  shares  of Common Stock as is set forth
     opposite  such  Buyer's name in column (4) on the Schedule of Buyers), each
     duly  executed  on behalf of the Company and registered in the name of such
     Buyer  or  its  designee.  Wire  instructions for the Escrow Account are as
     follows:

          Name:     Continental Stock Transfer & Trust Company  AAF  SORELL  INC
                    CST&T  AAF  SORELL  INC
          Bank:     JP  Morgan  Chase  Bank
          Account:  530-061627
          ABA:      021000021

     2.     BUYER'S  REPRESENTATIONS  AND  WARRANTIES.

     Each  Buyer  represents  and  warrants  with  respect  to only itself that:

          (a)  ORGANIZATION;  AUTHORITY.  Such  Buyer,  if  an  entity  is  duly
     organized,  validly  existing  and  in  good standing under the laws of the
     jurisdiction  of  its  organization.  Buyer  has  the  requisite  power and
     authority  to enter into and to consummate the transactions contemplated by
     the  Transaction  Documents  (as  defined below) to which it is a party and
     otherwise  to  carry  out  its  obligations  hereunder  and  thereunder.

                                        2
<PAGE>
          (b)  NO  PUBLIC  SALE OR DISTRIBUTION. Such Buyer is (i) acquiring the
     Notes  and the Warrants, (ii) upon conversion of the Notes will acquire the
     Conversion Shares, and (iii) upon exercise of the Warrants will acquire the
     Warrant  Shares,  in  each  case,  for  its own account and not with a view
     towards,  or for resale in connection with, the public sale or distribution
     thereof,  except  pursuant  to  sales registered or exempted under the 1933
     Act;  provided,  however,  that  by making the representations herein, such
     Buyer does not agree to hold any of the Securities for any minimum or other
     specific  term  and  reserves the right to dispose of the Securities at any
     time  in  accordance  with  or  pursuant  to a registration statement or an
     exemption  under  the  1933  Act.  Such  Buyer  is acquiring the Securities
     hereunder  in  the  ordinary  course  of  its business. Such Buyer does not
     presently have any agreement or understanding, directly or indirectly, with
     any  Person  to  distribute  any  of  the  Securities.

          (c) ACCREDITED INVESTOR STATUS. Such Buyer is an "accredited investor"
     as  that  term  is  defined  in  Rule  501(a)  of  Regulation  D.

          (d) RELIANCE ON EXEMPTIONS. Such Buyer understands that the Securities
     are  being  offered  and sold to it in reliance on specific exemptions from
     the registration requirements of United States federal and state securities
     laws  and  that  the Company is relying in part upon the truth and accuracy
     of,  and  such  Buyer's  compliance  with, the representations, warranties,
     agreements,  acknowledgments  and  understandings  of  such Buyer set forth
     herein  in  order  to determine the availability of such exemptions and the
     eligibility  of  such  Buyer  to  acquire  the  Securities.

          (e)  INFORMATION.  Such  Buyer  and  its  advisors,  if any, have been
     furnished  with  all  materials  relating  to  the  business,  finances and
     operations  of  the Company and materials relating to the offer and sale of
     the  Securities which have been requested by such Buyer. Such Buyer and its
     advisors,  if  any,  have been afforded the opportunity to ask questions of
     the  Company.  Neither  such  inquiries  nor  any  other  due  diligence
     investigations  conducted  by  such  Buyer  or its advisors, if any, or its
     representatives shall modify, amend or affect such Buyer's right to rely on
     the  Company's  representations and warranties contained herein. Such Buyer
     understands that its investment in the Securities involves a high degree of
     risk. Such Buyer has sought such accounting, legal and tax advice as it has
     considered  necessary  to make an informed investment decision with respect
     to  its  acquisition  of  the  Securities.

          (f)  NO  GOVERNMENTAL  REVIEW.  Such  Buyer understands that no United
     States  federal  or  state  agency  or any other government or governmental
     agency  has  passed  on  or  made  any recommendation or endorsement of the
     Securities  or  the  fairness  or  suitability  of  the  investment  in the
     Securities  nor have such authorities passed upon or endorsed the merits of
     the  offering  of  the  Securities.

          (g) TRANSFER OR RESALE. Such Buyer understands that except as provided
     in  the Registration Rights Agreement: (i) the Securities have not been and
     are  not  being registered under the 1933 Act or any state securities laws,
     and  may  not be offered for sale, sold, assigned or transferred unless (A)
     subsequently  registered thereunder, (B) such Buyer shall have delivered to
     the  Company an opinion of counsel, by counsel reasonably acceptable to the
     Company  and  in form and substance reasonably satisfactory to the Company,
     to  the  effect  that  such  Securities  to

                                        3
<PAGE>
     be  sold,  assigned  or  transferred  may  be sold, assigned or transferred
     pursuant to an exemption from such registration, or (C) such Buyer provides
     the  Company  with  reasonable  assurance that such Securities can be sold,
     assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under
     the  1933  Act,  as  amended,  (or a successor rule thereto) (collectively,
     "RULE  144");  (ii) any sale of the Securities made in reliance on Rule 144
     may  be  made only in accordance with the terms of Rule 144 and further, if
     Rule  144  is  not  applicable,  any  resale  of  the  Securities  under
     circumstances  in  which  the  seller (or the Person (as defined in Section
     3(s)) through whom the sale is made) may be deemed to be an underwriter (as
     that  term  is  defined  in  the 1933 Act) may require compliance with some
     other  exemption under the 1933 Act or the rules and regulations of the SEC
     thereunder; and (iii) neither the Company nor any other Person is under any
     obligation  to  register  the  Securities  under  the 1933 Act or any state
     securities laws or to comply with the terms and conditions of any exemption
     thereunder.  The  Securities  may  be  pledged  pursuant  to  an  available
     exemption  from  registration  under the 1933 Act in connection with a bona
     fide  margin  account or other loan or financing arrangement secured by the
     Securities  and  such  pledge  of  Securities  shall  not be deemed to be a
     transfer,  sale  or  assignment  of  the Securities hereunder, and no Buyer
     effecting  a  pledge of Securities shall be required to provide the Company
     with  any  notice  thereof  or  otherwise  make any delivery to the Company
     pursuant to this Agreement or any other Transaction Document (as defined in
     Section  3(b)),  including,  without  limitation,  this  Section  2(g).

          (h)  LEGENDS.  Such  Buyer  understands that the certificates or other
     instruments representing the Notes and the Warrants and, until such time as
     the  resale  of  the Conversion Shares, the Warrant Shares and the Interest
     Shares,  if any, have been registered under the 1933 Act as contemplated by
     the  Registration Rights Agreement, the stock certificates representing the
     Conversion  Shares,  the  Warrant  Shares  and the Interest Shares, if any,
     except  as  set forth below, shall bear any legend as required by the "blue
     sky"  laws  of  any  state  and  a  restrictive legend in substantially the
     following form (and a stop-transfer order may be placed against transfer of
     such  stock  certificates):

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

                                        4
<PAGE>
     The  legend  set forth above shall be removed and the Company shall issue a
     certificate  without such legend to the holder of the Securities upon which
     it  is stamped, if, unless otherwise required by state securities laws, (i)
     such  Securities  are  registered  for  resale  under the 1933 Act, (ii) in
     connection  with a sale, assignment or other transfer, such holder provides
     the Company with an opinion of counsel, by counsel reasonably acceptable to
     the  Company  and  in  form  and  substance  reasonably satisfactory to the
     Company,  to  the  effect  that  such  sale,  assignment or transfer of the
     Securities  may  be  made  without  registration  under  the  applicable
     requirements  of  the  1933  Act, or (iii) such holder provides the Company
     with  reasonable  assurance  that  the  Securities can be sold, assigned or
     transferred  pursuant  to  Rule  144(k).

          (i)  VALIDITY; ENFORCEMENT. This Agreement and the Registration Rights
     Agreement  to  which  such  Buyer  is  a  party  have been duly and validly
     authorized,  executed  and  delivered  on  behalf  of  such Buyer and shall
     constitute  the  legal,  valid  and  binding  obligations  of  such  Buyer
     enforceable  against  such Buyer in accordance with their respective terms,
     except  as  such  enforceability  may  be  limited by general principles of
     equity or to applicable bankruptcy, insolvency, reorganization, moratorium,
     liquidation and other similar laws relating to, or affecting generally, the
     enforcement  of  applicable  creditors'  rights  and  remedies.

          (j)  NO  CONFLICTS.  The  execution,  delivery and performance by such
     Buyer of this Agreement and the Registration Rights Agreement to which such
     Buyer  is  a  party  and the consummation by such Buyer of the transactions
     contemplated  hereby and thereby will not (i) if Buyer is an entity, result
     in  a  violation  of  the  organizational  documents  of such Buyer 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 such Buyer is a party, or (iii)
     result  in  a  violation  of  any law, rule, regulation, order, judgment or
     decree  (including  United  States  federal  and  state  securities  laws)
     applicable  to  such  Buyer,  except  in the case of clauses (ii) and (iii)
     above,  for such conflicts, defaults, rights or violations which would not,
     individually or in the aggregate, reasonably be expected to have a material
     adverse  effect  on  the  ability  of such Buyer to perform its obligations
     hereunder.

          (k) RESIDENCY. Such Buyer is a resident of that jurisdiction specified
     below  its  address  on  the  Schedule  of  Buyers.

     3.     REPRESENTATIONS  AND  WARRANTIES  OF  THE  COMPANY.

     The  Company  represents  and  warrants  to  each  of  the  Buyers  that:

          (a) ORGANIZATION AND QUALIFICATION. The Company and its "SUBSIDIARIES"
     (which  for  purposes  of  this  Agreement  means  any  entity in which the
     Company,  directly  or indirectly, owns capital stock or holds an equity or
     similar  interest) are entities duly organized and validly existing in good
     standing  under  the laws of the jurisdiction in which they are formed, and
     have  the  requisite power and authorization to own their properties and to
     carry on their business as now being conducted. Each of the Company and its
     Subsidiaries is duly qualified as a foreign entity to do business and is in
     good  standing  in every jurisdiction in which its ownership of property or
     the  nature  of  the  business  conducted  by  it  makes such qualification

                                        5
<PAGE>
     necessary,  except  to the extent that the failure to be so qualified or be
     in  good standing would not have a Material Adverse Effect. As used in this
     Agreement,  "MATERIAL  ADVERSE EFFECT" means any material adverse effect on
     the  business,  properties,  assets,  operations,  results  of  operations,
     condition  (financial  or  otherwise)  or  prospects of the Company and its
     Subsidiaries,  taken as a whole, or on the transactions contemplated hereby
     and by the other Transaction Documents or by the agreements and instruments
     to be entered into in connection herewith or therewith, or on the authority
     or  ability of the Company to perform its obligations under the Transaction
     Documents  (as  defined  below). The Company has no Subsidiaries, except as
     set  forth  on  Schedule  3(a).

          (b)  AUTHORIZATION;  ENFORCEMENT;  VALIDITY.  The  Company  has  the
     requisite  corporate  power  and  authority  to  enter into and perform its
     obligations under this Agreement, the Notes, the Warrants, the Registration
     Rights  Agreement,  and  each  of  the other agreements entered into by the
     parties  hereto  in  connection  with the transactions contemplated by this
     Agreement  (collectively,  the  "TRANSACTION  DOCUMENTS")  and to issue the
     Securities  in  accordance with the terms hereof and thereof. The execution
     and  delivery  of  the  Transaction  Documents  by  the  Company  and  the
     consummation  by  the  Company  of the transactions contemplated hereby and
     thereby,  including,  without  limitation,  the  issuance of the Notes, the
     reservation for issuance and the issuance of the Conversion Shares issuable
     upon  conversion  of  the  Notes,  the  issuance  of  the  Warrants and the
     reservation  for  issuance and issuance of the Warrant Shares issuable upon
     exercise  of the Warrants, have been duly authorized by the Company's Board
     of  Directors  and  (other  than  the  filing  with  the SEC of one or more
     Registration  Statements  in  accordance  with  the  requirements  of  the
     Registration  Rights  Agreement and any other filings as may be required by
     any state securities agencies) no further filing, consent, or authorization
     is  required  by  the  Company, its Board of Directors or its stockholders.
     This  Agreement  and  the other Transaction Documents of even date herewith
     have  been  duly  executed and delivered by the Company, and constitute the
     legal,  valid  and  binding obligations of the Company, enforceable against
     the  Company  in  accordance  with  their  respective terms, except as such
     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 applicable
     creditors'  rights  and  remedies.

          (c) ISSUANCE OF SECURITIES. The issuance of the Notes and the Warrants
     are  duly  authorized and upon issuance in accordance with the terms of the
     Transaction  Documents shall be free from all taxes, liens and charges with
     respect  to  the  issue  thereof. As of the Closing, the Company shall have
     reserved  from  its  duly authorized capital stock not less than the sum of
     (i)  100%  of  the  maximum  number of shares of Common Stock issuable upon
     conversion  of  the Notes (assuming for purposes hereof, that the Notes are
     convertible  at  the  Conversion  Price and without taking into account any
     limitations on the conversion of the Notes set forth in the Notes) and (ii)
     100% of the maximum number of shares of Common Stock issuable upon exercise
     of  the  Warrants  (without  taking  into  account  any  limitations on the
     exercise  of  the  Warrants  set  forth  in the Warrants). Upon issuance or
     conversion  in accordance with the Notes or exercise in accordance with the
     Warrants,  as  the  case may be, the Interest Shares, the Conversion Shares
     and  the  Warrant  Shares, respectively, will be validly issued, fully paid
     and  nonassessable  and  free from all preemptive or similar rights, taxes,
     liens and charges with respect to the issue thereof, with the holders being
     entitled  to  all rights accorded to a holder of Common Stock. Based on the
     representations and warranties of the Buyers contained in Section 2 hereof,
     the  offer  and  issuance  by  the Company of the Securities is exempt from
     registration  under  the  1933  Act.

                                        6
<PAGE>
          (d)  NO  CONFLICTS.  The  execution,  delivery  and performance of the
     Transaction Documents by the Company and the consummation by the Company of
     the  transactions  contemplated  hereby  and  thereby  (including,  without
     limitation,  the  issuance  of the Notes, the Warrants, and reservation for
     issuance  of  the  Conversion  Shares  and  the Warrant Shares and Interest
     Shares,  if  any)  will  not  (i)  result in a violation of the Articles of
     Incorporation  (as  defined  in  Section 3(r)) of the Company or any of its
     Subsidiaries,  any  capital  stock  of the Company or Bylaws (as defined in
     Section  3(r))  of  the Company or any of its Subsidiaries 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,  except to the extent such conflict, default or termination right
     would  not  reasonably  be  expected  to have a Material Adverse Effect, or
     (iii)  result  in a violation of any law, rule, regulation, order, judgment
     or  decree  (including  United  States federal and state securities laws or
     regulations  and  the  rules and regulations of the OTC Bulletin Board (the
     "PRINCIPAL MARKET") applicable to the Company or any of its Subsidiaries or
     by which any property or asset of the Company or any of its Subsidiaries is
     bound  or affected except to the extent such violation would not reasonably
     be  expected  to  have  a  Material  Adverse  Effect.

          (e)  CONSENTS.  The  Company  is  not  required to obtain any consent,
     authorization  or  order  of,  or make any filing or registration with, any
     court,  governmental  agency or any regulatory or self-regulatory agency or
     any  other Person in order for it to execute, deliver or perform any of its
     obligations  under  or  contemplated  by the Transaction Documents, in each
     case  in  accordance  with  the  terms  hereof  or  thereof.  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  Closing  Date,  and  the  Company and its
     Subsidiaries  are unaware of any facts or circumstances which might prevent
     the  Company  from  obtaining  or  effecting  any  of  the  registration,
     application  or  filings pursuant to the preceding sentence. The Company is
     not  in  violation  of the listing requirements of the Principal Market and
     has  no  knowledge of any facts which would reasonably lead to delisting or
     suspension  of  the  Common  Stock  in  the  foreseeable  future.

          (f)  ACKNOWLEDGMENT  REGARDING  BUYER'S  PURCHASE  OF  SECURITIES. The
     Company  acknowledges  and  agrees  that each Buyer is acting solely in the
     capacity  of  arm's  length  purchaser  with  respect  to  the  Transaction
     Documents  and the transactions contemplated hereby and thereby and that no
     Buyer  is (i) an officer or director of the Company, (ii) an "affiliate" of
     the  Company  (as  defined  in  Rule  144) or (iii) to the knowledge of the
     Company,  a  "beneficial  owner"  of  more than 10% of the shares of Common
     Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act
     of  1934,  as  amended  (the "1934 ACT")). The Company further acknowledges
     that  no Buyer is acting as a financial advisor or fiduciary of the Company
     (or  in any similar capacity) with respect to the Transaction Documents and
     the transactions contemplated hereby and thereby, and any advice given by a
     Buyer  or  any  of  its  representatives  or  agents in connection with the
     Transaction  Documents and the transactions contemplated hereby and thereby
     is  merely  incidental  to  such  Buyer's  purchase  of the Securities. The
     Company  further  represents  to  each Buyer that the Company's decision to
     enter  into  the  Transaction  Documents  has  been  based  solely  on  the
     independent  evaluation  by  the  Company  and  its  representatives.

                                        7
<PAGE>
          (g)  NO  GENERAL  SOLICITATION;  PLACEMENT  AGENT'S  FEES. 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) in connection with the
     offer  or  sale of the Securities. The Company shall be responsible for the
     payment of any placement agent's fees, financial advisory fees, or brokers'
     commissions  (other than for persons engaged by any Buyer or its investment
     advisor)  relating  to  or  arising  out  of  the transactions contemplated
     hereby.  The  Company  shall pay, and hold each Buyer harmless against, any
     liability,  loss or expense (including, without limitation, attorney's fees
     and  out-of-pocket expenses) arising in connection with any such claim. The
     Company  acknowledges  that it has engaged New York Global Securities, Inc.
     as  placement  agent  (the  "AGENT")  in  connection  with  the sale of the
     Securities. Other than the Agent, the Company has not engaged any placement
     agent  or  other  agent  in  connection  with  the  sale of the Securities.

          (h) NO INTEGRATED OFFERING. None of the Company, its Subsidiaries, any
     of their affiliates, and any Person acting on their behalf has, directly or
     indirectly,  made  any  offers  or  sales  of any security or solicited any
     offers  to  buy  any  security,  under  circumstances  that  would  require
     registration  of  any  of  the  Securities under the 1933 Act or cause this
     offering  of  the  Securities  to be integrated with prior offerings by the
     Company for purposes of the 1933 Act or any applicable stockholder approval
     provisions,  including, without limitation, under the rules and regulations
     of  any  exchange  or  automated  quotation  system  on  which  any  of the
     securities  of  the  Company are listed or designated. None of the Company,
     its  Subsidiaries,  their  affiliates and any Person acting on their behalf
     will  take  any  action or steps referred to in the preceding sentence that
     would  require  registration of any of the Securities under the 1933 Act or
     cause the offering of the Securities to be integrated with other offerings.

          (i) DILUTIVE EFFECT. The Company understands and acknowledges that the
     number of Conversion Shares issuable upon conversion of the Notes, and, the
     Warrant  Shares  issuable  upon  exercise of the Warrants, will increase in
     certain circumstances. The Company further acknowledges that its obligation
     to  issue Conversion Shares upon conversion of the Notes in accordance with
     this Agreement and the Notes and its obligation to issue the Warrant Shares
     upon  exercise  of  the  Warrants in accordance with this Agreement and the
     Warrants  is,  in  each  case, absolute and unconditional regardless of the
     dilutive  effect  that such issuance may have on the ownership interests of
     other  stockholders  of  the  Company.

          (j) APPLICATION OF TAKEOVER PROTECTIONS; RIGHTS AGREEMENT. The Company
     and  its  Board  of  Directors  have taken all necessary action, if any, in
     order  to  render  inapplicable any poison pill (including any distribution
     under a rights agreement) or other similar anti-takeover provision which is
     or  could  become  applicable  to any Buyer as a result of the transactions
     contemplated  by  this  Agreement,  including,  without  limitation,  the
     Company's  issuance  of  the  Securities  and  any Buyer's ownership of the
     Securities.  The  Company  has  not  adopted  a  stockholder rights plan or
     similar  arrangement  relating  to accumulations of beneficial ownership of
     Common  Stock  or  a  change  in  control  of  the  Company.

          (k)  SEC  DOCUMENTS;  FINANCIAL  STATEMENTS.  During the two (2) years
     prior  to  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

                                        8
<PAGE>
     1934  Act  (all  of  the  foregoing  filed prior to the date hereof and all
     exhibits  included  therein  and  financial statements, notes and schedules
     thereto  and  documents incorporated by reference therein being hereinafter
     referred  to  as  the  "SEC  DOCUMENTS").  The Company has delivered to the
     Buyers  or  their  respective  representatives  true,  correct and complete
     copies  of each of the SEC Documents not available on the EDGAR system that
     have  been  requested  by each Buyer. As of their respective dates, the SEC
     Documents  complied  in  all material respects with the requirements of the
     1934  Act  and  the rules and regulations of the SEC promulgated thereunder
     applicable to the SEC Documents, and none of the SEC Documents, at the time
     they  were filed with the SEC, contained any untrue statement of a material
     fact  or  omitted to state a material fact required to be stated therein or
     necessary  in  order  to  make  the statements therein, in the light of the
     circumstances  under  which  they  were  made,  not misleading. As of their
     respective  dates,  the financial statements of the Company included in the
     SEC  Documents complied as to form in all material respects with applicable
     accounting  requirements and the published rules and regulations of the SEC
     with  respect thereto as in effect as of the time of filing. 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).

          (l)  ABSENCE OF CERTAIN CHANGES. Except as disclosed in Schedule 3(l),
     since  the  date  of the Company's most recent audited financial statements
     contained  in  a Form 10-KSB, there has been no material adverse change and
     no  material  adverse  development  in  the  business,  assets, properties,
     operations,  condition  (financial  or otherwise), results of operations or
     prospects  of  the Company. Except as disclosed in Schedule 3(l), since the
     date  of  the Company's most recent audited financials statements contained
     in  a  Form 10-KSB, the Company has not (i) declared or paid any dividends,
     (ii)  sold  any  assets,  individually  or  in  the aggregate, in excess of
     $50,000  outside  of  the  ordinary course of business or (iii) had capital
     expenditures,  individually  or in the aggregate, in excess of $50,000. The
     Company  has  not  taken  any  steps  to  seek  protection  pursuant to any
     bankruptcy law nor does the Company have any knowledge or reason to believe
     that its creditors intend to initiate involuntary bankruptcy proceedings or
     any  actual knowledge of any fact which would reasonably lead a creditor to
     do  so.

          (m) NO UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR CIRCUMSTANCES.
     No event, liability, development or circumstance has occurred or exists, or
     is  contemplated  to occur with respect to the Company, its Subsidiaries or
     their  respective  business, properties, prospects, operations or financial
     condition,  that  would  be  required  to be disclosed by the Company under
     applicable  securities  laws  on a registration statement on Form S-1 filed
     with  the SEC relating to an issuance and sale by the Company of its Common
     Stock  and  which  has  not  been  publicly  announced.

          (n)  CONDUCT  OF BUSINESS; REGULATORY PERMITS. Neither the Company nor
     its  Subsidiaries  is  in  violation of any term of or in default under its
     Articles  of  Incorporation  or  Bylaws  or their organizational charter or
     Articles  of  Incorporation  or  bylaws,  respectively.

                                        9
<PAGE>
     Neither  the  Company  nor  any  of its Subsidiaries is in violation of any
     judgment,  decree  or  order  or any statute, ordinance, rule or regulation
     applicable  to the Company or its Subsidiaries, and neither the Company nor
     any  of  its  Subsidiaries will conduct its business in violation of any of
     the foregoing, except in all cases for possible violations which would not,
     individually  or  in the aggregate, have a Material Adverse Effect. Without
     limiting  the  generality of the foregoing, the Company is not in violation
     of  any  of  the rules, regulations or requirements of the Principal Market
     and  has  no  knowledge of any facts or circumstances that would reasonably
     lead to delisting or suspension of the Common Stock by the Principal Market
     in  the  foreseeable  future.  During  the  two (2) years prior to the date
     hereof,  (i)  the  Common  Stock  has  been designated for quotation on the
     Principal  Market,  (ii) trading in the Common Stock has not been suspended
     by  the  SEC  or the Principal Market and (iii) the Company has received no
     communication,  written  or  oral,  from  the  SEC  or the Principal Market
     regarding  the  suspension  or  delisting  of  the  Common  Stock  from the
     Principal  Market.  The  Company  and  its  Subsidiaries  possess  all
     certificates,  authorizations  and  permits  issued  by  the  appropriate
     regulatory  authorities  necessary  to conduct their respective businesses,
     except  where  the  failure to possess such certificates, authorizations or
     permits  would  not  have,  individually  or  in  the aggregate, a Material
     Adverse  Effect,  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.

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

          (p)  SARBANES-OXLEY ACT. The Company is in compliance with any and all
     applicable  requirements  of  the  Sarbanes-Oxley  Act  of  2002  that  are
     effective  as  of  the  date  hereof,  and any and all applicable rules and
     regulations  promulgated by the SEC thereunder that are effective as of the
     date  hereof,  except where such noncompliance would not have, individually
     or  in  the  aggregate,  a  Material  Adverse  Effect.

          (q)  TRANSACTIONS  WITH  AFFILIATES.  Except  as  set forth in the SEC
     Documents  filed  at least ten days prior to the date hereof and other than
     the  grant  of  stock  options  disclosed  on  Schedule  3(q),  none of the
     officers, directors or employees of the Company is presently a party to any
     transaction  with  the  Company  or any of its Subsidiaries (other than for
     ordinary  course  services  as employees, officers or directors), including
     any  contract,  agreement or other arrangement providing for the furnishing
     of  services to or by, providing for rental of real or personal property to
     or  from,  or  otherwise  requiring  payments  to or from any such officer,
     director  or employee or, to the knowledge of the Company, any corporation,
     partnership,  trust or other entity in which any such officer, director, or
     employee  has a substantial interest or is an officer, director, trustee or
     partner.

                                       10
<PAGE>
          (r)  EQUITY  CAPITALIZATION.  As  of  the  date hereof, the authorized
     capital  stock  of  the  Company  consists  of 100,000,000 shares of Common
     Stock,  of  which  as  of  the  date  hereof,  34,107,784  are  issued  and
     outstanding, and no shares are reserved for issuance pursuant to securities
     (other than the Notes and the Warrants) exercisable or exchangeable for, or
     convertible  into,  shares  of Common Stock. All of such outstanding shares
     have  been, or upon issuance will be, validly issued and are fully paid and
     nonassessable.  Except  as  disclosed  in  Schedule  3(r):  (i) none of the
     Company's  share  capital  is  subject  to  preemptive  rights or any other
     similar  rights  or  any liens or encumbrances suffered or permitted by the
     Company;  (ii) there are no outstanding options, warrants, scrip, rights to
     subscribe to, calls or commitments of any character whatsoever relating to,
     or  securities  or  rights convertible into, or exercisable or exchangeable
     for,  any  share  capital  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 share
     capital  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, or
     exercisable or exchangeable for, any share capital of the Company or any of
     its  Subsidiaries;  (iii)  there are no outstanding debt securities, notes,
     credit  agreements,  credit  facilities  or  other agreements, documents or
     instruments  evidencing  Indebtedness  of  the  Company  or  any  of  its
     Subsidiaries  or  by which the Company or any of its Subsidiaries is or may
     become  bound;  (iv) there are no financing statements securing obligations
     in  any  material  amounts,  either  singly  or  in the aggregate, filed in
     connection  with  the  Company or any of its Subsidiaries; (v) 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  1933 Act (except the Registration Rights Agreement); (vi) there
     are  no  outstanding securities or instruments of the Company or any of its
     Subsidiaries  which contain any redemption or similar provisions, and there
     are  no contracts, commitments, understandings or arrangements by which the
     Company  or  any  of  its  Subsidiaries  is or may become bound to redeem a
     security  of  the  Company  or  any of its Subsidiaries; (vii) there are no
     securities  or  instruments  containing anti-dilution or similar provisions
     that  will  be  triggered  by  the  issuance  of the Securities; (viii) the
     Company  does  not  have  any  stock appreciation rights or "phantom stock"
     plans  or agreements or any similar plan or agreement; and (ix) the Company
     and  its  Subsidiaries  have  no  liabilities or obligations required to be
     disclosed  in  the SEC Documents but not so disclosed in the SEC Documents,
     other  than  those  incurred in the ordinary course of the Company's or its
     Subsidiaries'  respective  businesses  and  which,  individually  or in the
     aggregate,  do not or would not have a Material Adverse Effect. The Company
     has  furnished  to  the  Buyer  true,  correct  and  complete copies of the
     Company's  Articles  of  Incorporation,  as amended and as in effect on the
     date hereof (the "ARTICLES OF INCORPORATION"), and the Company's Bylaws, as
     amended  and  as in effect on the date hereof (the "BYLAWS"), and the terms
     of  all  securities  convertible  into, or exercisable or exchangeable for,
     shares  of  Common  Stock and the material rights of the holders thereof in
     respect  thereto.

          (s)  INDEBTEDNESS  AND OTHER CONTRACTS. Neither the Company nor any of
     its  Subsidiaries  (i) has any outstanding Indebtedness (as defined below),
     (ii)  is  in  violation  of  any  term of or in default under any contract,
     agreement  or  instrument  relating  to any Indebtedness, except where such
     violations and defaults would not result, individually or in the aggregate,
     in  a  Material  Adverse  Effect,  or  (iii)  is  a  party to any contract,
     agreement  or  instrument  relating to any Indebtedness, the performance of
     which,  in  the  judgment  of  the  Company's  officers,  has  or  is

                                       11
<PAGE>
     expected  to  have  a  Material  Adverse  Effect.  Schedule 3(s) provides a
     detailed  description  of  the  material  terms  of  any  such  outstanding
     Indebtedness.  For  purposes  of  this Agreement: (x) "INDEBTEDNESS" of any
     Person  means, without duplication (A) all indebtedness for borrowed money,
     (B)  all obligations issued, undertaken or assumed as the deferred purchase
     price  of  property  or  services  (including, without limitation, "capital
     leases" in accordance with generally accepted accounting principals) (other
     than  trade  payables entered into in the ordinary course of business), (C)
     all reimbursement or payment obligations with respect to letters of credit,
     surety  bonds  and other similar instruments, (D) all obligations evidenced
     by  notes,  bonds, debentures or similar instruments, including obligations
     so  evidenced  incurred  in  connection  with  the acquisition of property,
     assets  or  businesses,  (E)  all indebtedness created or arising under any
     conditional  sale  or  other  title  retention  agreement,  or  incurred as
     financing,  in  either case with respect to any property or assets acquired
     with the proceeds of such indebtedness (even though the rights and remedies
     of  the  seller  or  bank  under such agreement in the event of default are
     limited  to  repossession  or  sale  of  such  property),  (F) all monetary
     obligations  under  any leasing or similar arrangement which, in connection
     with generally accepted accounting principles, consistently applied for the
     periods  covered  thereby,  is  classified  as  a  capital  lease,  (G) all
     indebtedness  referred  to  in clauses (A) through (F) above secured by (or
     for which the holder of such Indebtedness has an existing right, contingent
     or  otherwise,  to  be  secured  by)  any  mortgage,  lien, pledge, charge,
     security  interest  or  other encumbrance upon or in any property or assets
     (including  accounts  and contract rights) owned by any Person, even though
     the  Person  which  owns  such assets or property has not assumed or become
     liable  for  the  payment  of  such  indebtedness,  and  (H) all Contingent
     Obligations  in  respect  of  indebtedness  or obligations of others of the
     kinds  referred  to  in  clauses  (A)  through  (G)  above; (y) "CONTINGENT
     OBLIGATION"  means,  as  to  any  Person, any direct or indirect liability,
     contingent  or  otherwise, of that Person with respect to any indebtedness,
     lease,  dividend  or  other  obligation  of  another  Person if the primary
     purpose  or  intent  of the Person incurring such liability, or the primary
     effect  thereof,  is  to provide assurance to the obligee of such liability
     that  such  liability  will  be  paid or discharged, or that any agreements
     relating  thereto  will  be  complied  with,  or  that  the holders of such
     liability will be protected (in whole or in part) against loss with respect
     thereto; and (z) "PERSON" means an individual, a limited liability company,
     a  partnership,  a joint venture, a corporation, a trust, an unincorporated
     organization  and  a  government  or  any  department  or  agency  thereof.

          (t)  ABSENCE  OF  LITIGATION.  There  is  no action, suit, proceeding,
     inquiry  or  investigation  before  or  by the Principal Market, any court,
     public  board,  government  agency,  self-regulatory  organization  or body
     pending  or,  to  the  knowledge  of  the  Company,  threatened  against or
     affecting  the  Company,  the  Common  Stock  or  any  of  the  Company's
     Subsidiaries  or  any  of  the  Company's  or its Subsidiaries' officers or
     directors,  that  could,  individually  or  in the aggregate, reasonably be
     expected  to  result  in  a  Material  Adverse  Effect.

          (u) INSURANCE. 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

                                       12
<PAGE>
     as  may be necessary to continue its business at a cost that would not have
     a  Material  Adverse  Effect.

          (v)  EMPLOYEE  RELATIONS.  (i)  Neither  Company  nor  any  of  its
     Subsidiaries  is  a party to any collective bargaining agreement or employs
     any  member of a union. The Company and its Subsidiaries believe that their
     relations  with  their  employees  are  good.  No  executive officer of the
     Company  or  any of its Subsidiaries (as defined in Rule 501(f) of the 1933
     Act)  has  notified  the  Company  or any such Subsidiary that such officer
     intends  to leave the Company or any such Subsidiary or otherwise terminate
     such  officer's  employment  with  the  Company  or any such Subsidiary. No
     executive  officer  of  the  Company  or  any  of  its Subsidiaries, to the
     knowledge  of the Company or any such Subsidiary, is, or is now expected to
     be,  in  violation  of  any  material  term  of  any  employment  contract,
     confidentiality,  disclosure  or  proprietary  information  agreement,
     non-competition  agreement,  or  any  other  contract  or  agreement or any
     restrictive  covenant,  and the continued employment of each such executive
     officer  does  not  subject  the  Company  or  any  such  Subsidiary to any
     liability  with  respect  to  any  of  the  foregoing  matters.

               (ii)  The Company and its Subsidiaries are in compliance with all
          applicable  South Korean and United States federal, state, provincial,
          local  and  foreign  laws and regulations respecting labor, employment
          and  employment  practices  and  benefits,  terms  and  conditions  of
          employment  and  wages  and  hours,  except  where  failure  to  be in
          compliance  would  not,  either  individually  or  in  the  aggregate,
          reasonably  be  expected  to  result  in  a  Material  Adverse Effect.

          (w)  TITLE.  The Company and its Subsidiaries have good and marketable
     title  in  fee simple to all real property and good and marketable title to
     all  personal  property  owned by them which is material to the business of
     the Company and its Subsidiaries, in each case free and clear of all liens,
     encumbrances  and defects except such as do not materially affect the value
     of  such property and do not interfere with the use made and proposed to be
     made  of such property by the Company and any of its Subsidiaries. Any real
     property  and  facilities  held  under  lease by the Company and any of 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.

          (x) INTELLECTUAL PROPERTY RIGHTS. The Company and its Subsidiaries own
     or  possess adequate rights or licenses to use all trademarks, trade names,
     service  marks,  service mark registrations, service names, patents, patent
     rights,  copyrights,  inventions,  licenses,  approvals,  governmental
     authorizations,  trade  secrets  and  other  intellectual  property  rights
     ("INTELLECTUAL  PROPERTY  RIGHTS")  necessary  to  conduct their respective
     businesses  as  now conducted except where the failure to so own or possess
     would  not  reasonably  be expected to result in a Material Adverse Effect.
     None  of  the  Company's  Intellectual  Property  Rights  have  expired  or
     terminated, or are expected to expire or terminate, within three years from
     the  date of this Agreement. The Company does not have any knowledge of any
     infringement  by  the  Company or its Subsidiaries of Intellectual Property
     Rights  of  others.  There  is no claim, action or proceeding being made or
     brought,  or to the knowledge of the Company, being threatened, against the
     Company or its Subsidiaries regarding its Intellectual Property Rights. The
     Company

                                       13
<PAGE>
     is  unaware  of  any facts or circumstances which might give rise to any of
     the  foregoing infringements or claims, actions or proceedings. The Company
     and its Subsidiaries have taken reasonable security measures to protect the
     secrecy, confidentiality and value of all of their intellectual properties.

          (y)  ENVIRONMENTAL  LAWS.  The Company and its Subsidiaries (i) are in
     compliance  with  any and all applicable Environmental Laws (as hereinafter
     defined),  (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 where, in each of the
     foregoing  clauses  (i),  (ii) and (iii), the failure to so comply could be
     reasonably  expected  to have, individually or in the aggregate, a Material
     Adverse  Effect.  The  term "ENVIRONMENTAL LAWS" means all applicable South
     Korean  and United States federal, state, provincial, local or foreign laws
     relating  to  pollution  or  protection  of human health or the environment
     (including,  without  limitation,  ambient air, surface water, groundwater,
     land  surface  or  subsurface  strata), including, without limitation, laws
     relating  to  emissions,  discharges,  releases  or  threatened releases of
     chemicals,  pollutants,  contaminants,  or toxic or hazardous substances or
     wastes  (collectively,  "HAZARDOUS  MATERIALS")  into  the  environment, or
     otherwise  relating  to  the  manufacture,  processing,  distribution, use,
     treatment, storage, disposal, transport or handling of Hazardous Materials,
     as  well  as all authorizations, codes, decrees, demands or demand letters,
     injunctions,  judgments,  licenses,  notices  or  notice  letters,  orders,
     permits,  plans  or  regulations  issued,  entered, promulgated or approved
     thereunder.

          (z)  SUBSIDIARY RIGHTS. The Company or one of its Subsidiaries has the
     unrestricted  right  to  vote,  and  (subject  to  limitations  imposed  by
     applicable  law)  to  receive  dividends  and distributions on, all capital
     securities  of its Subsidiaries as owned by the Company or such Subsidiary.

          (aa)  INVESTMENT  COMPANY. The Company is not, and is not an affiliate
     of,  an  "investment  company" within the meaning of the Investment Company
     Act  of  1940,  as  amended.  (bb)  TAX STATUS. The Company and each of its
     Subsidiaries (i) has made or filed all foreign, South Korean, United States
     federal, state and provincial income and all other tax returns, reports and
     declarations  required by any jurisdiction to which it is subject, (ii) 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 (iii) 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.

          (cc)  INTERNAL  ACCOUNTING  AND  DISCLOSURE  CONTROLS.  The  Company
     maintains  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

                                       14
<PAGE>
     conformity  with  generally  accepted accounting principles and to maintain
     asset and liability accountability, (iii) access to assets or incurrence of
     liabilities  is  permitted  only in accordance with management's general or
     specific  authorization and (iv) the recorded accountability for assets and
     liabilities  is  compared  with  the  existing  assets  and  liabilities at
     reasonable  intervals  and  appropriate action is taken with respect to any
     difference.  The  Company  maintains disclosure controls and procedures (as
     such  term  is defined in Rule 13a-14 under the 1934 Act) that are designed
     to  ensure  that information required to be disclosed by the Company in the
     reports that it files or submits under the 1934 Act is recorded, processed,
     summarized and reported, within the time periods specified in the rules and
     forms  of  the  SEC, including, without limitation, controls and procedures
     designed  in  to  ensure  that  information required to be disclosed by the
     Company  in  the  reports  that  it  files or submits under the 1934 Act is
     accumulated  and  communicated  to  the Company's management, including its
     principal executive officer or officers and its principal financial officer
     or  officers,  as appropriate, to allow timely decisions regarding required
     disclosure.  During  the twelve months prior to the date hereof neither the
     Company  nor  any  of  its  Subsidiaries  have  received  any  notice  or
     correspondence  from  any  accountant  relating  to  any potential material
     weakness  in  any part of the system of internal accounting controls of the
     Company  or  any  of  its  Subsidiaries.

          (dd)  OFF  BALANCE  SHEET  ARRANGEMENTS.  There  is  no  transaction,
     arrangement,  or  other  relationship  between  the  Company  and  an
     unconsolidated  or  other  off  balance sheet entity that is required to be
     disclosed  by  the  Company  in  its  Exchange  Act  filings  and is not so
     disclosed  or  that otherwise would be reasonably likely to have a Material
     Adverse  Effect.

          (ee)  RANKING OF NOTES. No Indebtedness of the Company is senior to or
     ranks  pari  passu with the Notes in right of payment, whether with respect
     of  payment  of  redemptions,  interest,  damages  or  upon  liquidation or
     dissolution  or  otherwise.

          (ff) REGISTRATION ELIGIBILITY. The Company is eligible to register the
     Conversion Shares, the Warrant Shares and the Interest Shares for resale by
     the  Buyers  using  Form  SB-2  promulgated  under  the  1933  Act.

          (gg)  MANIPULATION OF PRICE. The Company has not, and to its knowledge
     no  one  acting  on  its behalf has, (i) taken, directly or indirectly, any
     action  designed to cause or to result in the stabilization or manipulation
     of  the  price  of  any  security  of the Company to facilitate the sale or
     resale  of any of the Securities, (ii) other than the Agent, sold, bid for,
     purchased, or paid any compensation for soliciting purchases of, any of the
     Securities,  or  (iii)  other  than the Agent, paid or agreed to pay to any
     person  any  compensation  for  soliciting  another  to  purchase any other
     securities  of  the  Company.

          (hh)  DISCLOSURE.  The  Company confirms that neither it nor any other
     Person  acting on its behalf has provided any of the Buyers or their agents
     or  counsel  with  any  information that constitutes or could reasonably be
     expected  to  constitute  material, nonpublic information other than as set
     forth  in the following sentence. The Company understands and confirms that
     each  of the Buyers will rely on the foregoing representations in effecting
     transactions  in  securities of the Company. All disclosure provided to the
     Buyers  regarding  the  Company,  its  business  and  the  transactions
     contemplated  hereby,  including  the  Schedules  to  this

                                       15
<PAGE>
     Agreement, furnished by or on behalf of the Company is true and correct and
     does  not  contain any untrue statement of a material fact or omit to state
     any  material  fact necessary in order to make the statements made therein,
     in  the  light  of  the  circumstances  under  which  they  were  made, not
     misleading. Each press release issued by the Company during the twelve (12)
     months  preceding the date of this Agreement did not at the time of release
     contain any untrue statement of a material fact or omit to state a material
     fact  required  to  be  stated  therein  or  necessary in order to make the
     statements  therein, in the light of the circumstances under which they are
     made,  not misleading. No event or circumstance has occurred or information
     exists  with  respect  to  the Company or any of its Subsidiaries or its or
     their  business, properties, prospects, operations or financial conditions,
     which, under applicable law, rule or regulation, requires public disclosure
     or announcement by the Company but which has not been so publicly announced
     or  disclosed.

     4.     COVENANTS.

          (a)  BEST  EFFORTS.  Each  party  shall use its best efforts timely to
     satisfy  each  of  the  conditions  to  be  satisfied  by it as provided in
     Sections  6  and  7  of  this  Agreement.

          (b)  FORM  D  AND  BLUE  SKY. The Company agrees to file a Form D with
     respect  to  the Securities as required under Regulation D and to provide a
     copy  thereof  to each Buyer promptly after such filing. The Company shall,
     on  or  before  the  Closing  Date,  take  such action as the Company shall
     reasonably determine is necessary in order to obtain an exemption for or to
     qualify  the  Securities  for sale to the Buyers at the Closing pursuant to
     this Agreement under applicable securities or "Blue Sky" laws of the states
     of  the  United States (or to obtain an exemption from such qualification),
     and  shall provide evidence of any such action so taken to the Buyers on or
     prior  to  the Closing Date. The Company shall make all filings and reports
     relating  to the offer and sale of the Securities required under applicable
     securities  or "Blue Sky" laws of the states of the United States following
     the  Closing  Date.

          (c)  REPORTING  STATUS.  Until  the  later  of  the  date on which the
     Investors (as defined in the Registration Rights Agreement) shall have sold
     all  the Conversion Shares, Warrant Shares and Interest Shares, if any, and
     none  of  the  Notes  or  Warrants is outstanding or the date which is four
     years from the date hereof (the "REPORTING PERIOD"), the Company shall file
     all  reports required to be filed pursuant to the 1934 Act, and the Company
     shall  not terminate its status as an issuer required to file reports under
     the  1934  Act even if the 1934 Act or the rules and regulations thereunder
     would  otherwise  permit  such  termination.

          (d)  USE  OF PROCEEDS. The Company will use the proceeds from the sale
     of  the  Securities  for raw materials and general working capital, and not
     for  (A) repayment of any outstanding Indebtedness of the Company or any of
     its  Subsidiaries  or  (B)  redemption  or  repurchase of any of its or its
     Subsidiaries  equity  securities.

          (e) FINANCIAL INFORMATION. The Company agrees to send the following to
     each  Investor (as defined in the Registration Rights Agreement) during the
     Reporting  Period  (i)  unless the following are filed with the SEC through
     EDGAR  and are available to the public through the EDGAR system, within one
     (1)  Business  Day  after  the  filing  thereof  with  the  SEC,  a

                                       16
<PAGE>
     copy  of  its Annual Reports on Form 10-K or 10-KSB, any interim reports or
     any  consolidated  balance  sheets, income statements, stockholders' equity
     statements  and/or  cash  flow statements for any period other than annual,
     any Current Reports on Form 8-K and any registration statements (other than
     on  Form S-8) or amendments filed pursuant to the 1933 Act, and (ii) copies
     of  any  notices  and  other  information  made  available  or given to the
     stockholders  of  the  Company generally, contemporaneously with the making
     available  or  giving  thereof  to  the  stockholders.

          (f)  LISTING.  The Company shall promptly secure the listing of all of
     the  Registrable  Securities  (as  defined  in  the  Registration  Rights
     Agreement)  upon  each national securities exchange and automated quotation
     system,  if  any,  upon  which  the Common Stock is then listed (subject to
     official  notice  of  issuance)  and  shall  maintain  such  listing of all
     Registrable  Securities  from  time to time issuable under the terms of the
     Transaction  Documents.  The  Company  shall  maintain  the  Common Stocks'
     authorization  for  quotation  on the Principal Market. Neither the Company
     nor any of its Subsidiaries shall take any action which would be reasonably
     expected  to  result  in the delisting or suspension of the Common Stock on
     the  Principal  Market.  The  Company  shall  pay  all fees and expenses in
     connection  with  satisfying  its  obligations  under  this  Section  4(f).

          (g)  FEES.  The  Company  shall  be responsible for the payment of any
     placement  agent's  fees,  financial advisory fees, or broker's commissions
     (other than for Persons engaged by any Buyer) relating to or arising out of
     the  transactions  contemplated  hereby, including, without limitation, any
     fees  payable  to  the  Agent.  The  Company shall pay, and hold each Buyer
     harmless  against,  any  liability,  loss  or  expense  (including, without
     limitation,  reasonable attorney's fees and out-of-pocket expenses) arising
     in  connection  with  any  claim  relating  to  any  such  payment.

          (h) PLEDGE OF SECURITIES. The Company acknowledges and agrees that the
     Securities  may  be  pledged  pursuant  to  an  available  exemption  from
     registration  under  the  1933  Act  by  an  Investor  (as  defined  in the
     Registration  Rights  Agreement)  in  connection  with  a  bona fide margin
     agreement  or  other  loan  or financing arrangement that is secured by the
     Securities.  The pledge of Securities shall not be deemed to be a transfer,
     sale or assignment of the Securities hereunder, and no Investor effecting a
     pledge  of  Securities  shall  be  required to provide the Company with any
     notice  thereof  or  otherwise make any delivery to the Company pursuant to
     this  Agreement  or  any  other  Transaction  Document,  including, without
     limitation,  Section 2(g) hereof; provided that an Investor and its pledgee
     shall  be  required to comply with the provisions of Section 2(g) hereof in
     order  to  effect  a  sale,  transfer  or  assignment of Securities to such
     pledgee.  The  Company  hereby  agrees  to  execute  and  deliver  such
     documentation  as  a  pledgee  of  the Securities may reasonably request in
     connection  with a pledge of the Securities to such pledgee by an Investor.

          (i)  DISCLOSURE  OF  TRANSACTIONS  AND OTHER MATERIAL INFORMATION. The
     Company shall file a Current Report on Form 8-K describing the terms of the
     transactions contemplated by the Transaction Documents in the form required
     by  the  1934  Act  and  attaching  the  material  Transaction  Documents
     (including,  without  limitation, this Agreement (and all schedules to this
     Agreement),  the  form  of  Notes, the form of Warrant and the Registration
     Rights

                                       17
<PAGE>
     Agreement)  (including  all  attachments, the "8-K FILING"). From and after
     the filing of the 8-K Filing with the SEC, the Company shall have disclosed
     any  material  nonpublic information delivered to the Buyers by the Company
     or any of its Subsidiaries, or any of their respective officers, directors,
     employees  or  agents.  The  Company shall not, and shall cause each of its
     Subsidiaries  and  its  and  each  of their respective officers, directors,
     employees  and  agents,  not  to,  provide  any  Buyer  with  any material,
     nonpublic information regarding the Company or any of its Subsidiaries from
     and  after  the  filing  of the 8-K Filing with the SEC without the express
     written  consent  of  such  Buyer.

          (j)  ADDITIONAL  NOTES.  So  long  as  any Buyer beneficially owns any
     Securities,  the  Company  will  not,  without the prior written consent of
     Buyers  holding  a majority of the principal amount of the Notes, issue any
     Notes  (other  than  to  the Buyers as contemplated hereby) and the Company
     shall  not  issue any other securities that would cause a breach or default
     under  the  Notes.

          (k)  CONDUCT  OF  BUSINESS.  The  business  of  the  Company  and  its
     Subsidiaries  shall  not be conducted in violation of any law, ordinance or
     regulation  of  any governmental entity, except where such violations would
     not  result, either individually or in the aggregate, in a Material Adverse
     Effect.

          (l) ADDITIONAL ISSUANCES OF SECURITIES.

               (i)  For purposes of this Section 4(l), the following definitions
          shall  apply.

                    (A)  "CONVERTIBLE  SECURITIES" means any stock or securities
               (other  than  Options)  convertible  into  or  exercisable  or
               exchangeable  for  shares  of  Common  Stock.

                    (B)  "OPTIONS"  means  any  rights,  warrants  or options to
               subscribe  for  or purchase shares of Common Stock or Convertible
               Securities.

                    (C)  "COMMON STOCK EQUIVALENTS" means, collectively, Options
               and  Convertible  Securities.

               (ii)  From  the  date  hereof until one hundred eighty (180) days
          after  the  Effective  Date  (as  defined  in  the Registration Rights
          Agreement)  the  Company  will  not,  directly or indirectly, file any
          registration  statement  with  the  SEC  other  than  the Registration
          Statement  (as  defined  in  the  Registration  Rights Agreement) or a
          registration  statement  on  Form  S-8  pursuant  to  the  1933  Act.

               (iii)  From  the  Closing Date until the date twelve months after
          the  Effective  Date,  the  Company  will not, directly or indirectly,
          offer, sell, grant any option to purchase, or otherwise dispose of (or
          announce  any  offer,  sale,  grant or any option to purchase or other
          disposition  of)  any  of  its  or  its Subsidiaries' equity or equity
          equivalent  securities,  including  without  limitation  any  debt,
          preferred  stock  or other instrument or security that is, at any time
          during  its  life  and  under  any  circumstances, convertible into or
          exchangeable  or  exercisable  for

                                       18
<PAGE>
          shares  of  Common  Stock or Common Stock Equivalents (any such offer,
          sale,  grant,  disposition  or  announcement  being  referred  to as a
          "SUBSEQUENT  PLACEMENT")  unless the Company shall have first complied
          with  this  Section  4(l).

                    (A) The Company shall deliver to each Buyer a written notice
               (the "OFFER NOTICE") of any proposed or intended issuance or sale
               or  exchange  (the  "OFFER") of the securities being offered (the
               "OFFERED  SECURITIES")  in  a  Subsequent  Placement, which Offer
               Notice  shall  (w)  identify and describe the Offered Securities,
               (x)  describe the price and other terms upon which they are to be
               issued,  sold  or  exchanged,  and  the  number  or amount of the
               Offered  Securities  to  be  issued,  sold  or exchanged, and (y)
               identify  the  persons  or  entities  (if known) to which or with
               which  the  Offered Securities are to be offered, issued, sold or
               exchanged and (z) offer to issue and sell to such Buyers at least
               80%  of  the  Offered Securities, allocated among such Buyers (a)
               based on such Buyer's pro rata portion of the aggregate principal
               amount of Notes purchased hereunder (the "BASIC AMOUNT"), and (b)
               with  respect  to  each  Buyer  that elects to purchase its Basic
               Amount,  any  additional  portion  of  the  Offered  Securities
               attributable  to  the Basic Amounts of other Buyers as such Buyer
               shall  indicate  it  will  purchase  or  acquire should the other
               Buyers  subscribe  for  less  than  their  Basic  Amounts  (the
               "UNDERSUBSCRIPTION  AMOUNT").

                    (B) To accept an Offer, in whole or in part, such Buyer must
               deliver  a  written notice to the Company prior to the end of the
               fifth  (5th) Business Day after such Buyer's receipt of the Offer
               Notice  (the  "OFFER  PERIOD"), setting forth the portion of such
               Buyer's  Basic  Amount that such Buyer elects to purchase and, if
               such  Buyer  shall elect to purchase all of its Basic Amount, the
               Undersubscription  Amount,  if  any,  that  such  Buyer elects to
               purchase  (in  either  case,  the "NOTICE OF ACCEPTANCE"). If the
               Basic  Amounts  subscribed  for  by  all Buyers are less than the
               total  of  all  of the Basic Amounts, then each Buyer who has set
               forth  an  Undersubscription  Amount  in its Notice of Acceptance
               shall  be  entitled to purchase, in addition to the Basic Amounts
               subscribed  for,  the  Undersubscription Amount it has subscribed
               for;  PROVIDED,  HOWEVER,  that  if the Undersubscription Amounts
               subscribed for exceed the difference between the total of all the
               Basic  Amounts  and  the  Basic  Amounts  subscribed  for  (the
               "AVAILABLE  UNDERSUBSCRIPTION  AMOUNT"),  each  Buyer  who  has
               subscribed  for any Undersubscription Amount shall be entitled to
               purchase  only  that  portion  of the Available Undersubscription
               Amount as the Basic Amount of such Buyer bears to the total Basic
               Amounts  of all Buyers that have subscribed for Undersubscription
               Amounts,  subject  to  rounding  by the Company to the extent its
               deems  reasonably  necessary.

                    (C)  The  Company shall have ten (10) Business Days from the
               expiration  of  the  Offer  Period above to offer, issue, sell or
               exchange all or any part of such Offered Securities as to which a
               Notice  of  Acceptance  has  not  been  given  by the Buyers (the
               "REFUSED  SECURITIES").

                    (D) In the event the Company shall propose to sell less than
               all the Refused Securities (any such sale to be in the manner and
               on  the terms specified in Section 4(l)(iii)(C) above), then each
               Buyer  may,  at  its  sole  option  and  in  its  sole

                                       19
<PAGE>
               discretion, reduce the number or amount of the Offered Securities
               specified  in its Notice of Acceptance to an amount that shall be
               not less than the number or amount of the Offered Securities that
               such  Buyer  elected to purchase pursuant to Section 4(l)(iii)(B)
               above  multiplied by a fraction, (1) the numerator of which shall
               be  the  number  or  amount  of  Offered  Securities  the Company
               actually  proposes  to issue, sell or exchange (including Offered
               Securities  to  be  issued  or sold to Buyers pursuant to Section
               4(l)(iii)(C)  above  prior  to  such  reduction)  and  (2)  the
               denominator  of which shall be the original amount of the Offered
               Securities.

                    (E)  Upon  the  closing of the issuance, sale or exchange of
               all  or less than all of the Refused Securities, the Buyers shall
               acquire  from  the  Company,  and  the Company shall issue to the
               Buyers,  the  number or amount of Offered Securities specified in
               the  Notices  of  Acceptance,  as  reduced  pursuant  to  Section
               4(l)(iii)(C)  above if the Buyers have so elected, upon the terms
               and conditions specified in the Offer. The purchase by the Buyers
               of  any  Offered  Securities  is  subject  in  all  cases  to the
               preparation, execution and delivery by the Company and the Buyers
               of  a  purchase  agreement  relating  to  such Offered Securities
               reasonably  satisfactory  in form and substance to the Buyers and
               their  respective  counsel.

               (iv)  The restrictions contained in subsections (ii) and (iii) of
          this  Section  4(l) shall not apply in connection with the issuance of
          any  Excluded  Securities  (as  defined  in the Notes) or any security
          issued  in  a bona fide underwritten public offering by the Company or
          any  of  its  Subsidiaries.

     5.     REGISTER.  The  Company  shall  maintain  at its principal executive
offices  (or  such  other office or agency of the Company as it may designate by
notice  to each holder of Securities), a register for the Notes and the Warrants
in  which  the  Company shall record the name and address of the Person in whose
name the Notes and the Warrants have been issued (including the name and address
of  each  transferee),  the  principal  amount of Notes held by such Person, the
number  of  Conversion  Shares issuable upon conversion of the Notes and Warrant
Shares  issuable upon exercise of the Warrants held by such Person.  The Company
shall  keep  the  register open and available at all times during business hours
for  inspection  of  any  Buyer  or  its  legal  representatives.

     6.     CONDITIONS  TO  THE COMPANY'S OBLIGATION TO SELL.  The obligation of
the  Company  hereunder  to issue and sell the Notes and the related Warrants to
each  Buyer  at  the  Closing  is  subject to the satisfaction, at or before the
Closing  Date,  of  each  of  the  following  conditions,  provided  that  these
conditions  are  for the Company's sole benefit and may be waived by the Company
at  any  time  in its sole discretion by providing each Buyer with prior written
notice  thereof:

          (a)  Such  Buyer shall have executed each of the Transaction Documents
     to  which  it  is  a  party  and  delivered  the  same  to  the  Company.

          (b)  Such  Buyer  and  each  other  Buyer  shall have delivered to the
     Company  the  Purchase  Price  for the Notes and the related Warrants being
     purchased  by  such  Buyer  at  the

                                       20
<PAGE>
     Closing  by  wire  transfer  of immediately available funds pursuant to the
     wire  instructions  provided  in  Section  1(d)  hereof.

          (c) The representations and warranties of such Buyer shall be true and
     correct  in  all  material  respects as of the date when made and as of the
     Closing  Date  as  though made at that time (except for representations and
     warranties  that  speak  as  of a specific date), and such Buyer shall have
     performed,  satisfied  and  complied  in  all  material  respects  with the
     covenants,  agreements  and  conditions  required  by  this Agreement to be
     performed,  satisfied  or  complied  with  by such Buyer at or prior to the
     Closing  Date.

     7.     CONDITIONS  TO  EACH BUYER'S OBLIGATION TO PURCHASE.  The obligation
of  each  Buyer  hereunder to purchase the Notes and the related Warrants at the
Closing  is  subject to the satisfaction, at or before the Closing Date, of each
of the following conditions, provided that these conditions are for each Buyer's
sole  benefit and may be waived by such Buyer at any time in its sole discretion
by  providing  the  Company  with  prior  written  notice  thereof:

          (a)  The  Company  shall have executed and delivered to such Buyer (i)
     each  of  the  Transaction  Documents and (ii) the Notes (in such principal
     amounts  as is set forth across from such Buyer's name in column (3) of the
     Schedule  of  Buyers and the related Warrants (in such principal amounts as
     is set forth across from such Buyer's name in column (4) of the Schedule of
     Buyers)  being  purchased  by  such  Buyer  at the Closing pursuant to this
     Agreement.

          (b)  The  Company  shall  have  delivered to such Buyer a certificate,
     executed  by the Secretary of the Company and dated as of the Closing Date,
     as  to  (i)  the resolutions consistent with Section 3(b) as adopted by the
     Company's Board of Directors in a form reasonably acceptable to such Buyer,
     (ii)  the Articles of Incorporation and (iii) the Bylaws, each as in effect
     at  the  Closing,  in  the  form  attached  hereto  as  Exhibit  D.

          (c)  The  representations  and warranties of the Company shall be true
     and  correct  as of the date when made and as of the Closing Date as though
     made  at that time (except for representations and warranties that speak as
     of  a  specific  date)  and the Company shall have performed, satisfied and
     complied  in  all  respects  with  the covenants, agreements and conditions
     required  by  the  Transaction  Documents  to  be  performed,  satisfied or
     complied  with  by  the Company at or prior to the Closing Date. Such Buyer
     shall  have received a certificate, executed by the Chief Executive Officer
     of  the  Company, dated as of the Closing Date, to the foregoing effect and
     as  to  such  other matters as may be reasonably requested by such Buyer in
     the  form  attached  hereto  as  Exhibit  E.

          (d)  Each  officer and director of the Company shall have delivered to
     such  Buyer  a  signed  Lock-Up  Agreement  in  the form attached hereto as
     Exhibit  F.

          (e)  The  Common Stock (i) shall be designated for quotation or listed
     on  the  Principal Market and (ii) shall not have been suspended, as of the
     Closing  Date,  by  the  SEC  or  the  Principal Market from trading on the
     Principal  Market  nor  shall suspension by the SEC or the Principal Market
     have  been threatened, as of the Closing Date, either (A) in writing by the
     SEC

                                       21
<PAGE>
     or  the  Principal  Market  or  (B)  by  falling  below the minimum listing
     maintenance  requirements  of  the  Principal  Market.

          (f)  The  Company  shall have obtained all governmental, regulatory or
     third  party  consents and approvals, if any, necessary for the sale of the
     Securities.

          (g)  The  Company  shall  have  delivered  to  such  Buyer  such other
     documents  relating  to  the transactions contemplated by this Agreement as
     such  Buyer  or  its  counsel  may  reasonably  request.

     8.     TERMINATION.  In  the event that the Closing shall not have occurred
with respect to a Buyer on or before ten (10) Business Days from the date hereof
due to the Company's or such Buyer's failure to satisfy the conditions set forth
in  Sections  6  and 7 above (and the nonbreaching party's failure to waive such
unsatisfied  condition(s)),  the  nonbreaching  party  shall  have the option to
terminate  this  Agreement  with respect to such breaching party at the close of
business  on  such  date  without  liability  of  any  party to any other party.

     9.     MISCELLANEOUS.

          (a)  GOVERNING LAW; JURISDICTION; JURY TRIAL. All questions concerning
     the  construction,  validity,  enforcement  and  interpretation  of  this
     Agreement  shall be governed by the internal laws of the State of New York,
     without  giving effect to any choice of law or conflict of law provision or
     rule  (whether  of  the  State of New York or any other jurisdictions) that
     would cause the application of the laws of any jurisdictions other than the
     State  of  New York. Each party hereby irrevocably submits to the exclusive
     jurisdiction  of  the state and United States federal courts sitting in The
     City of New York, Borough of Manhattan, for the adjudication of any dispute
     hereunder  or  in  connection herewith or with any transaction contemplated
     hereby  or  discussed herein, and hereby irrevocably waives, and agrees not
     to  assert  in  any  suit,  action  or proceeding, any claim that it is not
     personally  subject  to the jurisdiction of any such court, that such suit,
     action  or proceeding is brought in an inconvenient forum or that the venue
     of  such  suit,  action  or  proceeding  is  improper.  Each  party  hereby
     irrevocably  waives  personal  service  of  process and consents to process
     being  served  in  any  such  suit,  action or proceeding by mailing a copy
     thereof  to  such  party  at  the address for such notices to it under this
     Agreement and agrees that such service shall constitute good and sufficient
     service  of  process  and notice thereof. Nothing contained herein shall be
     deemed  to  limit  in  any  way  any  right  to serve process in any manner
     permitted  by  law.  EACH  PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
     HAVE,  AND  AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
     DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR
     ANY  TRANSACTION  CONTEMPLATED  HEREBY.

          (b)  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; provided that a facsimile
     signature  shall  be  considered  due  execution  and shall be binding upon

                                       22
<PAGE>
     the  signatory  thereto  with the same force and effect as if the signature
     were  an  original,  not  a  facsimile  signature.

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

          (d)  SEVERABILITY. If any provision of this Agreement shall be invalid
     or  unenforceable  in any jurisdiction, such invalidity or unenforceability
     shall  not  affect  the validity or enforceability of the remainder of this
     Agreement  in  that  jurisdiction  or the validity or enforceability of any
     provision  of  this  Agreement  in  any  other  jurisdiction.

          (e)  ENTIRE  AGREEMENT;  AMENDMENTS.  This  Agreement  and  the  other
     Transaction  Documents supersede all other prior oral or written agreements
     between  the  Buyers,  the  Company, their Affiliates and Persons acting on
     their  behalf  with  respect  to  the  matters  discussed  herein, and this
     Agreement,  the  other Transaction Documents and the instruments referenced
     herein  and  therein  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 any Buyer
     makes any representation, warranty, covenant or undertaking with respect to
     such  matters.  No provision of this Agreement may be amended other than by
     an  instrument in writing signed by the Company and the holders of at least
     a  majority  of  the  aggregate number of Registrable Securities issued and
     issuable  hereunder, and any amendment to this Agreement made in conformity
     with the provisions of this Section 9(e) shall be binding on all Buyers and
     holders  of  Securities,  as  applicable. No provision hereof may be waived
     other  than  by  an  instrument in writing signed by the party against whom
     enforcement  is  sought. No such amendment shall be effective to the extent
     that  it  applies  to  less  than  all  of  the  holders  of the applicable
     Securities  then  outstanding. No consideration shall be offered or paid to
     any Person to amend or consent to a waiver or modification of any provision
     of  any  of the Transaction Documents unless the same consideration also is
     offered  to  all  of  the  parties to the Transaction Documents, holders of
     Notes  or holders of the Warrants, as the case may be. The Company has not,
     directly or indirectly, made any agreements with any Buyers relating to the
     terms  or  conditions  of  the transactions contemplated by the Transaction
     Documents  except  as  set  forth  in  the  Transaction  Documents. Without
     limiting  the  foregoing, the Company confirms that, except as set forth in
     this  Agreement,  no  Buyer  has  made any commitment or promise or has any
     other  obligation  to  provide  any  financing to the Company or otherwise.

          (f)  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  confirmation  of  transmission is mechanically or electronically
     generated and kept on file by the sending party); or (iii) one Business Day
     after  deposit  with  an  overnight  courier service, in each case properly
     addressed  to  the  party  to receive the same. The addresses and facsimile
     numbers  for  such  communications  shall  be:

                                       23
<PAGE>
                    If  to  the  Company:

                              Sorell  Inc.

                              Buk-ri  35
                              Nama-Myun
                              Yongin  City,  South  Korea
                              Telephone:     +82312334664
                              Facsimile:     +82312334795
                              Attention:     Bon Kwan Ku, Chief Executive
                                             Officer

                         With a copy (for informational purposes only)  to:

                              Sichenzia  Ross  Friedman  Ference  LLP
                              1065  Avenue  of  the  Americas,  21st  Floor
                              New  York,  New  York  10018
                              Telephone:     (212)  930-9700
                              Facsimile:     (212)  930-9725
                              Attention:     Marc  J.  Ross,  Esq.

                              And  to:

                              Cutler  Law  Group
                              3206  West  Wimbledon  Dr
                              Augusta,  GA  30909
                              Telephone:     (706)  737-6600
                              Facsimile:     (706)  738-1966
                              Attention:     M.  Richard  Cutler

                    If to a Buyer, to its address and facsimile number set forth
               on  the  Schedule  of  Buyers,  with  copies  to  such  Buyer's
               representatives  as  set  forth  on  the  Schedule  of  Buyers,

     or  to  such  other  address  and/or  facsimile  number  and/or  to  the
     attention  of  such  other  Person  as the recipient party has specified by
     written  notice  given  to  each  other  party  five  (5) days prior to the
     effectiveness  of such change. Written confirmation of receipt (A) given by
     the  recipient  of such notice, consent, waiver or other communication, (B)
     mechanically  or electronically generated by the sender's facsimile machine
     containing  the  time, date, recipient facsimile number and an image of the
     first  page  of  such  transmission or (C) provided by an overnight courier
     service  shall  be  rebuttable  evidence  of  personal  service, receipt by
     facsimile  or  receipt from an overnight courier service in accordance with
     clause  (i),  (ii)  or  (iii)  above,  respectively.

          (g)  SUCCESSORS  AND ASSIGNS. This Agreement shall be binding upon and
     inure  to  the  benefit  of the parties and their respective successors and
     assigns, including any purchasers of the Notes or the Warrants. The Company
     shall  not  assign  this  Agreement  or any rights or obligations hereunder
     without  the prior written consent of the holders of at least a majority of
     the  aggregate  number  of  Registrable  Securities  issued  and  issuable
     hereunder,  including  by  way  of  a

                                       24
<PAGE>
     Fundamental  Transaction  (unless  the  Company  is  in compliance with the
     applicable  provisions  governing Fundamental Transactions set forth in the
     Notes  and  the  Warrants).  A  Buyer  may assign some or all of its rights
     hereunder  in connection with transfer of any of its Securities without the
     consent  of the Company, in which event such assignee shall be deemed to be
     a  Buyer  hereunder  with  respect  to  such  assigned  rights.

          (h)  NO  THIRD PARTY BENEFICIARIES. This Agreement is intended for the
     benefit of the parties hereto and their respective permitted successors and
     assigns,  and  is  not  for the benefit of, nor may any provision hereof be
     enforced  by,  any  other  Person.

          (i) SURVIVAL. Unless this Agreement is terminated under Section 8, the
     representations  and  warranties of the Company and the Buyers contained in
     Sections  2 and 3 and the agreements and covenants set forth in Sections 4,
     5 and 9 shall survive the Closing. Each Buyer shall be responsible only for
     its  own  representations,  warranties, agreements and covenants hereunder.

          (j)  FURTHER  ASSURANCES. Each party shall do and perform, or cause to
     be  done and performed, all such further acts and things, and shall execute
     and  deliver  all  such  other  agreements,  certificates,  instruments and
     documents,  as any other party may reasonably request in order to carry out
     the  intent  and  accomplish  the  purposes  of  this  Agreement  and  the
     consummation  of  the  transactions  contemplated  hereby.

          (k)  INDEMNIFICATION.  In  consideration of each Buyer's execution and
     delivery  of  the  Transaction  Documents  and  acquiring  the  Securities
     thereunder  and in addition to all of the Company's other obligations under
     the Transaction Documents, the Company shall defend, protect, indemnify and
     hold harmless each Buyer and each other holder of the Securities and all of
     their  stockholders,  partners, members, officers, directors, employees and
     direct  or  indirect  investors and any of the foregoing Persons' agents or
     other  representatives  (including,  without  limitation, those retained in
     connection  with  the  transactions  contemplated  by  this  Agreement)
     (collectively,  the  "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  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 any
     Indemnitee  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  the Transaction Documents 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  the Transaction
     Documents  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  Indemnitee  by a third party (including for these purposes a
     derivative  action  brought on behalf of the Company) and arising out of or
     resulting  from  (i) the execution, delivery, performance or enforcement of
     the  Transaction Documents or any other certificate, instrument or document
     contemplated  hereby  or  thereby,  (ii)  any transaction financed or to be
     financed  in whole or in part, directly or indirectly, with the proceeds of
     the issuance of the Securities, or (iii) the status of such Buyer or holder
     of  the  Securities  as  an  investor  in  the  Company  pursuant  to  the
     transactions  contemplated  by  the  Transaction  Documents.  To  the

                                       25
<PAGE>
     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. Except as otherwise set forth herein, the
     mechanics  and  procedures with respect to the rights and obligations under
     this  Section 9(k) shall be the same as those set forth in Section 6 of the
     Registration  Rights  Agreement.

          (l)  NO  STRICT CONSTRUCTION. The language used in this Agreement will
     be  deemed to be the language chosen by the parties to express their mutual
     intent,  and  no  rules  of strict construction will be applied against any
     party.

          (m)  REMEDIES. Each Buyer and each holder of the Securities shall have
     all  rights  and  remedies  set  forth in the Transaction Documents and all
     rights  and remedies which such holders have been granted at any time under
     any  other  agreement  or contract and all of the rights which such holders
     have  under  any  law.  Any Person having any rights under any provision of
     this  Agreement  shall  be  entitled  to  enforce  such rights specifically
     (without posting a bond or other security), to recover damages by reason of
     any  breach  of  any  provision of this Agreement and to exercise all other
     rights  granted  by  law.  Furthermore,  the Company recognizes that in the
     event  that  it  fails  to perform, observe, or discharge any or all of its
     obligations under the Transaction Documents, any remedy at law may prove to
     be  inadequate  relief to the Buyers. The Company therefore agrees that the
     Buyers  shall be entitled to seek temporary and permanent injunctive relief
     in  any  such  case  without  the  necessity  of proving actual damages and
     without  posting  a  bond  or  other  security.

          (n)  PAYMENT SET ASIDE. To the extent that the Company makes a payment
     or  payments  to  the  Buyers  hereunder  or  pursuant  to any of the other
     Transaction  Documents  or  the  Buyers  enforce  or  exercise their rights
     hereunder  or  thereunder,  and such payment or payments or the proceeds of
     such  enforcement  or  exercise  or  any  part  thereof  are  subsequently
     invalidated,  declared  to  be  fraudulent  or  preferential,  set  aside,
     recovered  from,  disgorged  by  or  are required to be refunded, repaid or
     otherwise  restored to the Company, a trustee, receiver or any other Person
     under  any law (including, without limitation, any bankruptcy law, foreign,
     provincial,  state  or  United  States federal law, common law or equitable
     cause of action), then to the extent of any such restoration the obligation
     or  part  thereof  originally intended to be satisfied shall be revived and
     continued  in full force and effect as if such payment had not been made or
     such  enforcement  or  setoff  had  not  occurred.

          (o)  CURRENCY. Unless otherwise indicated, all dollar amounts referred
     to  in  this  Agreement  are  in  United States Dollars ("US DOLLARS"). All
     amounts  owing  under  this  Agreement or any Transaction Document shall be
     paid  in  US  Dollars. All amounts denominated in other currencies shall be
     converted  in  the  US  Dollar  equivalent  amount  in  accordance with the
     Exchange  Rate  on  the  date  of  calculation.  "EXCHANGE  RATE" means, in
     relation to any amount of currency to be converted into US Dollars pursuant
     to  this  Agreement,  the  US Dollar exchange rate as published in the Wall
     Street  Journal  on  the  relevant  date  of  calculation.

                                       26
<PAGE>
          (p)  JUDGMENT  CURRENCY.

               (i) If for the purpose of obtaining or enforcing judgment against
          the  Company  or  any  Subsidiary, in any court in any jurisdiction it
          becomes  necessary  to  convert  into  any  other currency (such other
          currency  being  hereinafter  in  this Section 9(p) referred to as the
          "JUDGMENT CURRENCY") an amount due in US Dollars under this Agreement,
          the  conversion  shall  be made at the Exchange Rate prevailing on the
          Business  Day  immediately  preceding:

                    (A)  the  date  of  actual payment of the amount due, in the
               case of any proceeding in the courts of New York or in the courts
               of  any  other  jurisdiction  that  will  give  effect  to  such
               conversion  being  made  on  such  date:  or

                    (B)  the  date on which the foreign court determines, in the
               case  of  any  proceeding in the courts of any other jurisdiction
               (the  date  as  of which such conversion is made pursuant to this
               Section  9(p)  being  hereinafter  referred  to  as the "JUDGMENT
               CONVERSION  DATE").

               (ii)  If  in  the  case  of  any  proceeding  in the court of any
          jurisdiction  referred  to  in  Section  9(p)(i)(B)  above, there is a
          change in the Exchange Rate prevailing between the Judgment Conversion
          Date  and the date of actual payment of the amount due, the applicable
          party  shall  pay  such  adjusted amount as may be necessary to ensure
          that  the  amount paid in the Judgment Currency, when converted at the
          Exchange  Rate  prevailing  on  the  date of payment, will produce the
          amount  of  US Dollars which could have been purchased with the amount
          of  Judgment  Currency stipulated in the judgment or judicial order at
          the  Exchange  Rate  prevailing  on  the  Judgment  Conversion  Date.

               (iii)  Any  amount  due from the Company or any Subsidiary, under
          this  provision  shall  be  due  as  a  separate debt and shall not be
          affected by judgment being obtained for any other amounts due under or
          in  respect  of  this  Agreement.

          (q)  INDEPENDENT  NATURE  OF  BUYERS'  OBLIGATIONS  AND  RIGHTS.  The
     obligations  of  each  Buyer under any Transaction Document are several and
     not  joint  with  the obligations of any other Buyer, and no Buyer shall be
     responsible  in any way for the performance of the obligations of any other
     Buyer  under  any  Transaction Document. Nothing contained herein or in any
     other  Transaction  Document,  and  no  action  taken by any Buyer pursuant
     hereto  or  thereto,  shall  be  deemed  to  constitute  the  Buyers  as  a
     partnership,  an  association, a joint venture or any other kind of entity,
     or create a presumption that the Buyers are in any way acting in concert or
     as  a  group  with  respect  to  such  obligations  or  the  transactions
     contemplated by the Transaction Documents and the Company acknowledges that
     the  Buyers  are  not  acting in concert or as a group with respect to such
     obligations  or the transactions contemplated by the Transaction Documents.
     Each  Buyer  confirms  that  it  has  independently  participated  in  the
     negotiation  of  the transaction contemplated hereby with the advice of its
     own  counsel  and  advisors.  Each Buyer shall be entitled to independently
     protect  and  enforce its rights, including, without limitation, the rights
     arising  out  of  this Agreement or out of any other Transaction Documents,
     and  it  shall  not  be  necessary  for  any other Buyer to be joined as an
     additional  party  in  any  proceeding  for  such  purpose.

                            [Signature Pages Follow]

                                       27
<PAGE>
     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature  page  to this Securities Purchase Agreement to be duly executed as of
the  date  first  written  above.

COMPANY:
SORELL  INC.

By:
Name:   Bon  Kwan  Koo
Title:  Chief  Executive  Officer

                                       28
<PAGE>
     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature  page  to this Securities Purchase Agreement to be duly executed as of
the  date  first  written  above.

BUYERS:

By:
Name:
Title:

                                       29
<PAGE>

                               SCHEDULE OF BUYERS
<TABLE>
<CAPTION>

<S>                  <C>                         <C>               <C>           <C>
(1)                  (2)                         (3)               (4)           (5)
                                                 AGGREGATE         AGGREGATE     LEGAL
                     ADDRESS AND                 PRINCIPAL         NUMBER        REPRESENTATIVE'S ADDRESS
BUYER                FACSIMILE NUMBER            AMOUNT OF NOTES   OF WARRANTS   AND FACSIMILE NUMBER

-------------------  --------------------------  ----------------  ------------  -------------------------

-------------------  --------------------------  ----------------  ------------  -------------------------

-------------------  --------------------------  ----------------  ------------  -------------------------

-------------------  --------------------------  ----------------  ------------  -------------------------

-------------------  --------------------------  ----------------  ------------  -------------------------

-------------------  --------------------------  ----------------  ------------  -------------------------

-------------------  --------------------------  ----------------  ------------  -------------------------
</TABLE>

                                       30
<PAGE>
                                    EXHIBITS
                                    --------

Exhibit  A     Form  of  Notes
Exhibit  B     Form  of  Warrants
Exhibit  C     Registration  Rights  Agreement
Exhibit  D     Secretary's  Certificate
Exhibit  E     Officer's  Certificate
Exhibit  F     Form  of  Lock-Up  Agreement

                                       31

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