Document:

Unassociated Document

    APC
GROUP, INC.

    

    EXECUTIVE
EMPLOYMENT AGREEMENT

    

    THIS EXECUTIVE EMPLOYMENT AGREEMENT
(this "Agreement") is entered into this 1st day of March, 2009 ( the “Effective
Date”), between APC Group, Inc., a Nevada corporation (the “Company"), and
Kenneth S. Forster (“Executive”, collectively with the Company sometimes
referred to as the “Parties” and each individually sometimes referred to as a
“Party”). Unless otherwise indicated, all references to Sections are to Sections
in this Agreement.

    

    W
I T N E S S E T H:

    

    WHEREAS, the Company desires
to obtain the services of Executive, and Executive desires to be employed by the
Company upon the terms and conditions hereinafter set forth;

    

    NOW, THEREFORE, in
consideration of the premises, the agreements herein contained and other good
and valuable consideration, receipt of which is hereby acknowledged, the parties
hereto agree as of the date hereof as follows:

    

    1. Employment. The Company hereby
agrees to employ Executive, and Executive hereby agrees to serve the Company, as
President and Chief Executive Officer (“Employment”) for a period of nine (9)
months (the “Term”) beginning on the Effective Date and ending on November 30,
2009.  This Agreement is automatically renewable for successive terms
of twelve (12) months.  Executive or the Company shall provide the
other with written notice of non-renewal at least thirty (30) days, but not more
than sixty (60) days, before the end of the period of Employment.

    

    2. Scope of Employment.

    

    (a)           During
the Employment, Executive will serve as President and Chief Executive Officer of
the Company. In that connection, Executive will (i) devote his full-time,
attention, and energies to the business of the Company and will diligently and
to the best of his ability perform all duties incident to his employment
hereunder; (ii) use his best efforts to promote the interests and goodwill of
the Company; and (iii) perform such other duties as the Board of Directors of
the Company, or its authorized representative, may from time-to-time require,
consistent with the general level and type of duties and responsibilities
customarily associated with such position.

    

    (b)           Section
2(a) shall not be construed as preventing Executive from (i) serving on
corporate, civic or charitable boards or committees, or (ii) making investments
in other businesses or enterprises; provided that in no event shall any such
service, business activity or investment require the provision of substantial
services by Executive to the operations or the affairs of such businesses or
enterprises such that the provision thereof would interfere in any respect with
the performance of Executive's duties hereunder; and subject to Section
6.

    

    3. Compensation and Benefits During
Employment. During the Employment, the Company shall provide compensation to
Executive as follows.

    

    (a)           Executive
shall receive a base salary at the annualized rate of one hundred twenty
thousand dollars ($1200,000) or ten thousand dollars ($10,000) a
month.  Such salary shall be paid periodically in accordance with
normal Company payroll practices.  The Company shall be responsible
for the withholding of all taxes to the Internal Revenue Service as well as any
and all other taxes payable in the United States including taxes payable to any
state or local jurisdiction.  The Company shall review the base salary
at least annually, and, if appropriate, increase it. The annual salary of
$120,000, together with any increases thereto, shall be referred to herein as
the “Base Salary.”

    

    
      
        
        

      

      
        Initials
__/__ Page 1

        
          

        

      

      
        
        

      

       

    

    (b)           Executive
shall receive **** shares of the Company’s common stock (“Stock Compensation”)
registered on Form S-8 and bearing a legend regarding the Consultant’s status as
an affiliate within the meaning of Rule 144 (“S-8 Shares”), which shall accrue
monthly in equal amounts of **** S-8 Shares per month and are payable
quarterly.

    

    (c)           The
Consultant shall receive $20,000 as a signing bonus.

    

    (d)           Executive
will be entitled to participate in any health insurance or other employee
benefit plan which the Company may adopt in the future.

    

    (e)           The
Company will pay or reimburse Executive for reasonable travel, entertainment or
other expenses incurred by Executive in the furtherance of or in connection with
the performance of Executive’s duties hereunder in accordance with the Company’s
established policies.

    

    (f)           Executive
will be entitled to participate in any incentive program or discretionary bonus
program of the Company which may be implemented in the future by the Board of
Directors.

    

    (g)           Executive
will be entitled to participate in any stock option plan of the Company which
may be approved in the future by the Board of Directors.

    

    (h)           In the
event that the Company obtains director or officer insurance covering any person
during the Term of this Agreement, the Company will also take reasonable
measures to obtain such insurance covering Executive.

    

    4. Confidential
Information.

    

    (a)           Executive
acknowledges that the law provides the Company with protection for its trade
secrets and confidential information.  Executive will not disclose,
directly or indirectly, any of the Company’s confidential business information
or confidential technical information to anyone without authorization from the
Company’s management.  Executive will not use any of the Company’s
confidential business information or confidential technical information in any
way, either during or after the Employment with the Company, except as required
in the course of the Employment.

    

    (b)           Executive
will strictly adhere to any obligations that may be owed to former employers
insofar as Executive’s use or disclosure of their confidential information is
concerned.

    

    (c)           Information
will not be deemed part of the confidential information restricted by this
Section 4 if Executive can show that:   (i) the information was
in Executive’s possession or within Executive’s knowledge before the Company
disclosed it to Executive; (ii) the information was or became generally known to
those who could take economic advantage of it;  (iii) Executive
obtained the information from a party having the right to disclose it to
Executive without violation of any obligation to the Company, or (iv) Executive
is required to disclose the information pursuant to legal process (e.g., a
subpoena), provided that Executive notifies the Company immediately upon
receiving or becoming aware of the legal process in question. No combination of
information will be deemed to be within any of the four exceptions in the
previous sentence, however, whether or not the component parts of the
combination are within one or more exceptions, unless the combination itself and
its economic value and principles of operation are themselves within such an
exception or exceptions.

    

    
      
        
        

      

      
        Initials
__/__ Page 2

        
          

        

      

      
        
        

      

       

    

    (d)           All
originals and all copies of any drawings, blueprints, manuals, reports, computer
programs or data, notebooks, notes, photographs, and all other recorded,
written, or printed matter relating to research, manufacturing operations, or
business of the Company made or received by Executive during the Employment are
the property of the Company.  Upon Termination of the Employment,
whether or not with Cause, Executive will immediately deliver to the Company all
property of the Company which may still be in Executive’s
possession.  Executive will not remove or assist in removing such
property from the Company’s premises under any circumstances, either during the
Employment or after Termination thereof, except as authorized by the Company’s
management.

    

    (e)           For
a period of one year after the date of Termination of the Employment, Executive
will not, either directly or indirectly, hire or employ or offer or participate
in offering employment to any person who at the time of such Termination or at
any time during such one year period following the time of such Termination was
an employee of the Company without the prior written consent of the
Company.

    

    5.  Ownership of Intellectual
Property.

    

    (a)           The
Company will be the sole owner of any and all of Executive’s Inventions that are
related to the Company’s business, as defined in more detail below.

    

    (b)           For
purposes of this Agreement, “Inventions” means all inventions, discoveries, and
improvements (including, without limitation, any information relating to
manufacturing techniques, processes, formulas, developments or experimental
work, work in progress, or business trade secrets), along with any and all other
work product relating thereto.

    

    (c)           An
Invention is “related to the Company’s business” (“Company-Related Invention”)
if it is made, conceived, or reduced to practice by Executive (in whole or in
part, either alone or jointly with others, whether or not during regular working
hours), whether or not potentially patentable or copyrightable in the U.S. or
elsewhere, and it either: (i) involves equipment, supplies, facilities, or trade
secret information of the Company; (ii) involves the time for which Executive
was or is to be compensated by the Company; (iii) relates to the business of the
Company or to its actual or demonstrably anticipated research and development;
or (iv) results, in whole or in part, from work performed by Executive for the
Company.

    

    (d)           Executive
will promptly disclose to the Company, or its nominee(s), without additional
compensation, all Company-Related Inventions.

    

    (e)           Executive
will assist the Company, at the Company’s expense, in protecting any
intellectual property rights that may be available anywhere in the world for
such Company-Related Inventions, including signing U.S. or foreign patent
applications, oaths or declarations relating to such patent applications, and
similar documents.

    

    (f)           To
the extent that any Company-Related Invention is eligible under applicable law
to be deemed a “work made for hire,” or otherwise to be owned automatically by
the Company, it will be deemed as such, without additional compensation to
Executive.   In some jurisdictions, Executive may have a right,
title, or interest (“Right,” including without limitation all right, title, and
interest arising under patent law, copyright law, trade-secret law, or
otherwise, anywhere in the world, including the right to sue for present or past
infringement) in certain Company-Related Inventions that cannot be automatically
owned by the Company.  In that case, if applicable law permits
Executive to assign Executive’s Right(s) in future Company-Related Inventions at
this time, then Executive hereby assigns any and all such Right(s) to the
Company, without additional compensation to Executive; if not, then Executive
agrees to assign any and all such Right(s) in any such future Company-Related
Inventions to the Company or its nominee(s) upon request, without additional
compensation to Executive.

    

    
      
        
        

      

      
        Initials
__/__ Page 3

        
          

        

      

      
        
        

      

       

    

    6.  Non-competition.  As a
condition to, and in consideration of, the Company’s entering into this
Agreement, and giving Executive access to certain confidential and proprietary
information, which Executive recognizes is valuable to the Company and,
therefore, its protection and maintenance constitutes a legitimate interest to
be protected by the provisions of this Section 6 as applied to Executive and
other employees similarly situated to Executive, and for ten dollars ($10) and
other good and valuable consideration, the receipt and sufficiency of which
Executive hereby acknowledges, Executive acknowledges and hereby agrees as
follows:

    

    (a)           that
Executive is and will be engaged in the business of the Company;

    

    (b)           that
Executive has occupied a position of trust and confidence with the Company prior
to the Effective Date, and that during such period and the period of Executive’s
Employment under this Agreement, Executive has, and will, become familiar with
the Company’s trade secrets and with other proprietary and confidential
information concerning the Company;

    

    (c)           that
the obligations of this Agreement are directly related to the Employment and are
necessary to protect the Company’s legitimate business interests; and that the
Company’s need for the covenants set forth in this Agreement is based on the
following:  (i) the substantial time, money and effort expended and to
be expended by the Company in developing technical designs, computer program
source codes, marketing plans and similar confidential information; (ii) the
fact that Executive will be personally entrusted with the Company’s confidential
and proprietary information; (iii) the fact that, after having access to the
Company’s technology and other confidential information, Executive could become
a competitor of the Company; and (iv) the highly competitive nature of the
Company’s industry, including the premium that competitors of the Company place
on acquiring proprietary and competitive information; and

    

    (d)           that
for a period commencing on the Effective Date and ending twelve (12) months
following Termination as provided in Section 11, Executive will not, directly or
indirectly, serve as employee, agent, consultant, stockholder, director,
co-partner or in any other individual or representative capacity, own, operate,
manage, control, engage in, invest in or participate in any manner in, act as
consultant or advisor to, render services for (alone or in association with any
person, firm, corporation or entity), or otherwise assist any person or entity
that directly or indirectly engages or proposes to engage in (i) the same, or a
substantially similar, type of business as that in which the Company engages; or
(ii) the business of distribution or sale of (A) products and services
distributed, sold or license by the Company at the time of Termination; or (B)
products and services proposed at the time of Termination to be distributed,
sold or licensed by the Company, anywhere in North America (the “Territory”);
provided, however

    

    (e)           that
nothing contained herein shall be construed to prevent Executive from investing
in the stock or securities of any competing corporation listed on any recognized
national securities exchange or traded in the over the counter market in the
United States, but only if (i) such investment is of a totally passive nature
and does not involve Executive devoting time to the management or operations of
such corporation and Executive is not otherwise involved in the business of such
corporation; and if (ii) Executive and his associates (as such term is defined
in Regulation 14(A) promulgated under the Securities Exchange Act of 1934, as in
effect on the Effective Date), collectively, do not own, directly or indirectly,
more than an aggregate of two percent (2%) of the outstanding stock or
securities of such corporation.

    

    
      
        
        

      

      
        Initials
__/__ Page 4

        
          

        

      

      
        
        

      

       

    

    7. Legal Fees and
Expenses.  In the event of a lawsuit, arbitration, or other
dispute-resolution proceeding between the Company and Executive arising out of
or relating to this Agreement, the prevailing party, in the proceeding as a
whole and/or in any interim or ancillary proceedings (e.g., opposed motions,
including without limitation motions for preliminary or temporary injunctive
relief) will be entitled to recover its reasonable attorneys’ fees and expenses
unless the court or other forum determines that such a recovery would not serve
the interests of justice.

    

    8.  Successors.

    

    (a)           This
Agreement shall inure to the benefit of and be binding upon (i) the Company and
its successors and assigns; (ii) Executive and heirs, nominees, legal
representatives and/or assigns, except that Executive’s duties and
responsibilities under this Agreement are of a personal nature and will not be
assignable or delegable in whole or in part.

    

    (b)           The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation, Acquisition or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, "the Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or
otherwise.

    

    9.  Arbitration.

    

    (a)           Except
as set forth in paragraph (b) of this Section 9 or to the extent prohibited by
applicable law, any dispute, controversy or claim arising out of or relating to
this Agreement will be submitted to binding arbitration before a single
arbitrator in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association in effect on the
date of the demand for arbitration.  The arbitration shall take place
before a single arbitrator, who will preferably but not necessarily be a lawyer
but who shall have at least five years’ experience in working in or with
entities engaged in the business of the Company.  Unless otherwise
agreed by the parties, the arbitration shall take place in Fairbanks County,
Alaska.  The arbitrator shall apply Alaska law to the merits of any
dispute or claim, without reference to rules of conflict of
law.  Executive hereby expressly consents to the personal jurisdiction
of the state and federal courts located in Alaska for any action or proceeding
arising from or relating to this Agreement and/or relating to any arbitration in
which the parties are participants.  The arbitrator is hereby directed
to take all reasonable measures not inconsistent with the interests of justice
to expedite, and minimize the cost of, the arbitration proceedings.

    

    (b)           To
protect inventions, trade secrets, or other confidential information of Section
4, and/or to enforce the non-competition provisions of Section 6, the Company
may seek temporary, preliminary, and/or permanent injunctive relief in a court
of competent jurisdiction, in each case, without waiving its right to
arbitration.

    

    (c)           At
the request of either party, the arbitrator may take any interim measures he/she
deems necessary with respect to the subject matter of the dispute, including
measures for the preservation of confidentiality set forth in this
Agreement.

    

    (d)           Judgment
may be entered on the arbitrator’s decision in any court having
jurisdiction.

    

    
      
        
        

      

      
        Initials
__/__ Page 5

        
          

        

      

      
        
        

      

       

    

    (e)           EXECUTIVE
HAS READ AND UNDERSTANDS THESE PROVISIONS, WHICH DISCUSS ARBITRATION. EXECUTIVE
UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY
FUTURE CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT,
OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH, OR
TERMINATION THEREOF TO BINDING ARBITRATION TO THE EXTENT PERMITTED BY LAW, AND
THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY
TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF
THE EMPLOYER/EXECUTIVE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING
CLAIMS:

    

    (i) ANY
AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, BOTH
EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH
EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS;
NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL
INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND
DEFAMATION;

    

    (ii) ANY
AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL STATUTE,
INCLUDING, BUT NOT LIMITED TO, THE CIVIL RIGHTS ACT OF 1991, THE AGE
DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF
1990, THE FAIR LABOR STANDARDS ACT; AND

    

    (iii) ANY
AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO
EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.

    

    10. Indemnification.  The
Company shall to the full extent permitted by law or as set forth in
the  articles of incorporation, and any future amendments, and the
bylaws of the Company, indemnify, defend and hold harmless Executive from and
against any and all claims, demands, liabilities, damages, losses and expenses
(including attorney's fees, court costs and disbursements) arising out of the
performance of duties hereunder except in the case of Executive’s gross
negligence or willful misconduct.

    

    11. Termination.  This
Agreement and the employment relationship created hereby will terminate (i) upon
the disability or death of Executive under Section 11 (a) or 11(b); (ii) with
cause under Section 11 (c); (iii) for good reason under Section 11 (d); or (iv)
without cause under Section 11(e).

    

    
      	
               
      

            	
              (a)

            	
              Disability.  The
      Company shall have the right to terminate the employment of Executive
      under this Agreement for disability in the event Executive suffers an
      injury, illness, or incapacity of such character as to substantially
      disable his from performing his duties without reasonable accommodation by
      Executive hereunder for a period of more than thirty (30) consecutive days
      upon the Company giving at least thirty (30) days written notice of
      Termination.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Death. This Agreement
      will terminate on the Death of the
Executive.

            

    

    

    
      	
               
      

            	
              (c)

            	
              With
      Cause.  Company may terminate this Agreement at any time
      because of, (i) an act of material dishonesty made by Executive in
      connection with Executive’s responsibilities as an employee; (ii)
      Executive’s conviction of, or plea of nolo contendere
      to, a felony or other crime involving moral turpitude, dishonesty or theft
      or fraud; or (iii) Executive’s gross misconduct.  Any act, or
      failure to act, based upon authority given pursuant to a resolution duly
      adopted by the Board or based upon the advice of counsel for the Company
      shall be conclusively presumed to be done, or omitted to be done, by
      Executive in good faith and in the best interests of the Company and thus
      shall not be deemed grounds for Termination With
  Cause.

            

    

    

    
      
        
        

      

      
        Initials
__/__ Page 6

        
          

        

      

      
        
        

      

       

    

    
      	
               
      

            	
              (d)

            	
              Good
      Reason.  The Executive may terminate his employment for
      “Good Reason” by giving the Company ten (10) days written notice
      if:

            

    

    

    
      	
               
      

            	
              (i)

            	
              Executive
      is assigned, without Executive’s express written consent, any duties
      materially inconsistent with his positions, duties, responsibilities, or
      status with Company as of the date hereof, or there is a material
      reduction of Executive’s position, duties, responsibilities or status as
      in effect as of the date hereof;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              There
      is a significant reduction in Executive’s Base Salary or bonuses as in
      effect immediately prior to such reduction;
or

            

    

     

    
      	
            	
              (iii)

            	
              
                Company
      does not pay any material amount of compensation due hereunder and then
      fails either to pay such amount within the ten (10) day notice period
      required for Termination hereunder or to contest in good faith such
      notice.  Further, if such contest is not resolved within thirty
      (30) days, the Company shall submit such dispute to arbitration under
      Section 9.

              

            

    

     

    
      	
               
      

            	
              (e)

            	
              
                Without Cause.  The
      Company may terminate this Agreement without
  cause.

              

            

    

     

    12.  Obligations
of Company Upon Termination.

    

    (a)           In
the event of the termination of Executive’s employment pursuant to Section 11
(a), (b) or (c), Executive will be entitled only to the compensation earned by
him hereunder as of the date of such termination.

    

    (b)           In
the event of the termination of Executive’s employment pursuant to Section 11
(d) or (e), Executive will be entitled to receive as severance pay, an amount
equal to $10,000 or $20,000 if such termination occurs on or before November 30,
2009 and 2010, respectively, or $30,000 if such termination occurs after
November 30, 2010 in addition to all payments of salary earned through the date
of termination in one lump sum.

    

    13.  Other
Provisions.

    

    (a)           All
notices and statements with respect to this Agreement must be in
writing.  Notices to the Company shall be delivered to the Chairman of
the Board or any other executive of the Company.  Notices to Executive
may be delivered to Executive in person or sent to Executive’s then-current
mailing address as indicated in the Company’s records.

    

    (b)           This
Agreement sets forth the entire agreement of the parties concerning the subjects
covered herein; there are no promises, understandings, representations, or
warranties of any kind concerning those subjects except as expressly set forth
in this Agreement.

    

    (c)           Any
modification of this Agreement must be in writing and signed by all parties; any
attempt to modify this Agreement, orally or in writing, not executed by all
parties will be void.

    

    
      
        
        

      

      
        Initials
__/__ Page 7

        
          

        

      

      
        
        

      

       

    

    (d)           If
any provision of this Agreement, or its application to anyone or under any
circumstances, is adjudicated to be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability will not affect any other
provision or application of this Agreement which can be given effect without the
invalid or unenforceable provision or application and will not invalidate or
render unenforceable such provision or application in any other
jurisdiction.

    

    (e)           This
Agreement will be governed and interpreted under the laws of the United States
of America and the laws, but not the choice of law rules, of the State of Alaska
as applied to contracts made and carried out in Alaska by residents of
Alaska.

    

    (f)           No
failure on the part of any party to enforce any provisions of this Agreement
will act as a waiver of the right to enforce that provision.

    

    (g)           Section
headings are for convenience only and shall not define or limit the provisions
of this Agreement.

    

    (h)           This
Agreement may be executed in several counterparts, each of which is an
original.  It shall not be necessary in making proof of this Agreement
or any counterpart hereof to produce or account for any of the other
counterparts.  A copy of this Agreement signed by one party and faxed
to another party shall be deemed to have been executed and delivered by the
signing party as though an original.  A photocopy of this Agreement
shall be effective as an original for all purposes.

    

    (i)           Executive
acknowledges that Executive has had the opportunity to discuss this Agreement
with and obtain advice from Executive’s private attorney, has had sufficient
time to, and has carefully read and fully understands all the provisions of this
Agreement, is knowingly and voluntarily entering into this Agreement, agrees to
be bound by this Agreement and has received a duplicate original of this
Agreement for Executive’s records.

    

    IN
WITNESS WHEREOF the undersigned have duly executed this Agreement as of the date
first set out on the first page of this Agreement.

     

    
      
        
          
            
              	
                      APC
      GROUP, INC.
    

                    	 	 	EXECUTIVE:	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                      /s/
      Kenneth
      S. Forster

                    	 	 	
                      /s/
      Kenneth
      S. Forster

                    	 
	
                      
                        Kenneth
      S. Forster

                      

                    	 	 	
                      
                        Kenneth
      S. Forster 

                      

                    	 
	
                      Secretary

                    	 	 	
                       

                    	 

            

          

        

      

    

    
       

       

       

      
        
          
            
              
                	
                        DIRECTORS

                      	 	 	EXECUTIVE:	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                        /s/ Matthew
      Meyer

                      	 	 	
                        /s/
      Kenneth
      S. Forster

                      	 
	
                        
                          
                            Matthew
      Meyer

                          

                        

                      	 	 	
                        
                          Kenneth
      S. Forster 

                        

                      	 
	
                         

                      	 	 	
                         

                      	 

              

            

          

        

      

    

     

    
      
        
        

      

      
        Initials
__/__ Page 8SECURITIES PURCHASE
AGREEMENT

     

    THIS SECURITIES PURCHASE AGREEMENT
(this “Agreement”), dated as of September ___, 2008, is entered into by and
among Federal Sports &
Entertainment, Inc. (f/k/a Rite Time Mining, Inc.), a Nevada corporation
(the “Company”), and the Buyer(s) set forth on the signature pages affixed
hereto (individually, a “Buyer” or collectively “Buyers”).

     

    WITNESSETH:

     

    WHEREAS, the Company and the
Buyer(s) are executing and delivering this Agreement in reliance upon an
exemption from securities registration pursuant to Section 4(2) and/or
Rule 506 of Regulation D (“Regulation D”) and/or Regulation S (“Regulation
S”) as promulgated by the U.S. Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “Securities
Act”);

     

    WHEREAS, the parties desire
that, upon the terms and subject to the conditions contained herein, the Company
shall sell to the Buyers, as provided herein, and the Buyers shall purchase a
minimum (the “Minimum”) of Five Hundred Thousand Dollars ($500,000) (the
“Minimum Purchase Price”) and a maximum (the “Maximum”) of up to One Million
Dollars ($1,000,000) (the “Maximum Purchase Price” and, collectively with the
Minimum Purchase Price, the “Purchase Price”) principal amount of Secured
Convertible Promissory Notes (the “Notes”), which, at the option of the Holder
and simultaneously upon the closing of the Merger (defined below), shall be
convertible into units (“Units”) of the Company’s securities at a conversion
price of $1.00 per Unit.  Each Unit shall consist of one share of the
Company’s common stock, par value $0.001 (the “Common Stock”) (as converted, the
“Conversion Shares”) and fifty percent (50%) of one common stock purchase
warrant (“Conversion Warrants”), exercisable per whole Warrant at a price of
$2.00 per share. The total Purchase Price shall be allocated among the Buyer(s)
in the respective amounts set forth on the Buyer Counterpart Signature Page(s),
affixed hereto (the “Subscription Amount”);

     

    WHEREAS, all of the total
principal amount of the Notes, subject to the deduction of any and all fees and
expenses, shall be utilized by the Company to make a loan (the “Bridge Loan”) to
Diamond Sports & Entertainment, Inc., doing business as Federal League
Baseball (collectively with its affiliate, “FLB”);

     

    WHEREAS, the Company (i) is
currently negotiating a reverse triangular merger with FLB (the “Merger”) and
(ii) is conducting a private placement offering (the “PPO”) of the Units at a
sale price of $1.00 per Unit, to close prior to or simultaneously with the
closing of the Merger;

     

    WHEREAS, in anticipation of
the Merger and the PPO, the Company has (i) changed its name to “Federal Sports
& Entertainment, Inc.”, (ii) increased its authorized capital stock (the
“Recapitalization”) to 300,000,000 shares of Common Stock and 10,000,000 shares
of preferred stock, $0.001 par value per share (“Preferred Stock”), and (iii)
conducted a two for one forward stock split (the “Stock Split”) in the form of a
stock dividend;

     

    WHEREAS, all of the principal
amount of the Notes shall be repaid in full (or converted) simultaneously with
the closing of the PPO (the Merger, the PPO, the Stock Split and the
transactions contemplated thereby are sometimes hereinafter referred to as the
“Transactions”);

     

    WHEREAS, upon the closing of
the Merger, the Company shall issue to the Buyers for each dollar of principal
amount of the Notes (i) warrants to purchase one (1) share of the Common Stock
exercisable for a period of five (5) years with an initial exercise price of
$2.00 per share (the “Bridge Warrants”) and one (1) share of Common Stock (the
“Bridge Shares”), subject to adjustment, as set forth in Section 4(i) hereof;
and

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    WHEREAS, the aggregate
proceeds of the sale of the Notes shall be held in escrow pursuant to the terms
of an escrow agreement substantially in the form of the Escrow Agreement among
the Company, the Buyer(s), the Placement Agent (as hereinafter defined) and the
Escrow Agent (as defined below) (the “Escrow Agreement”).

     

    NOW, THEREFORE, in
consideration of the mutual covenants and other agreements contained in this
Agreement the Company and the Buyer(s) hereby agree as follows:

     

    
      
        	
              	
                1.

              	
                PURCHASE AND SALE OF
      NOTES.

              

      

    

     

    (a)           Purchase of
Notes.  Subject to the satisfaction (or waiver) of the terms
and conditions of this Agreement, each Buyer agrees, severally and not jointly,
to purchase at Closing (as defined herein below) and the Company agrees to sell
and issue to each Buyer, severally and not jointly, at Closing, Notes in amounts
set forth on the signature pages affixed hereto.  Upon execution of
this Agreement on the Buyer Counterpart Signature Page, attached hereto as Annex
A, and completion of the Accredited Investor Certification, the Investor
Profile, and if applicable, the Wire Transfer Authorization (each attached
hereto) by a Buyer, the Buyer shall wire transfer the Subscription Amount set
forth on the signature pages affixed hereto in same-day funds set forth
immediately below, which Subscription Amount shall be held in escrow pursuant to
the terms of the Escrow Agreement and disbursed in accordance
therewith.

     

    Wire
Instructions

     

    
      
        	
              	
                Bank:

              	
                PNC
  Bank

              

      

      
        	
              	
                ABA#:

              	
                031100089

              

      

      
        	
                
                

              	
                Account
    Name:

              	
                PNC Bank, on behalf of CSC Trust
      Company of Delaware as Escrow Agent for Federal Sports &
      Entertainment, Inc.; 79-1152

              

      

      
        	
              	
                Account#:

              	
                5605012373

              

      

      
        	
              	
                FBO:

              	
                Buyer
  Name

              

      

      Social
Security Number

      Address

       

    

    (b)           Closing
Date.  The initial closing of the purchase and sale of the
Notes (the “Closing”) shall take place at 10:00 a.m. Eastern Standard Time on or
before the fifth (5th)
business day following the receipt into escrow of acceptable subscriptions for
at least the Minimum, subject to notification of satisfaction of the conditions
to the Closing set forth herein and in Sections 7 and 8 below (or such later
date as is mutually agreed to by the Company and the Buyer(s)).  There
may be multiple Closings until such time as subscriptions for the Maximum are
accepted (the date of any such Closing is hereinafter referred to as a “Closing
Date”).  The Closing shall occur on the Closing Date at the offices of
the Placement Agent, 488 Madison Avenue, New York, New York 10022 (or such other
place as is mutually agreed to by the Company and the Buyer(s)).

     

    
      (c)           Escrow Arrangements; Form of
Payment.  Upon execution hereof by the Buyer and pending the
Closing, the Purchase Price shall be deposited in a non-interest bearing escrow
account with PNC Bank on behalf of CSC Trust Company of Delaware as escrow agent
(the “Escrow Agent”), pursuant to the terms of the Escrow
Agreement.  Subject to the satisfaction of the terms and conditions of
this Agreement, on the Closing Date, (i) the Escrow Agent shall deliver to the
Company in accordance with the terms of the Escrow Agreement the Purchase Price
for the Notes to be issued and sold to the Buyer(s) on such Closing Date, and
(ii) the Company shall deliver to the Buyer(s), the Note, duly executed on
behalf of the Company.

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      
        	
              	
                2.

              	
                BUYER’S
      REPRESENTATIONS AND
WARRANTIES.

              

      

    

     

    Each
Buyer represents and warrants, severally and not jointly, as to such Buyer,
that:

     

    (a)           Investment
Purpose.  Each Buyer is acquiring the Notes, and, upon closing
of the Merger, the Buyer will acquire the Bridge Warrants, the Bridge Shares
and/or the shares of Common Stock issuable upon exercise of the Bridge Warrants
(the “Bridge Warrant Shares”), (and upon conversion of the Notes, if applicable,
the Conversion Shares, the Conversion Warrants and/or the shares of Common Stock
issuable upon exercise of the Warrants (the “Conversion Warrant Shares”)), for
its own account for investment only 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 Securities Act; provided, however, that
by making the representations herein, such Buyer reserves the right to dispose
of the Bridge Warrants, the Bridge Shares and the Bridge Warrant Shares (and the
Conversion Shares, the Conversion Warrants and the Conversion Warrant Shares) at
any time in accordance with or pursuant to an effective registration statement
covering such Bridge Warrants, the Bridge Shares and the Bridge Warrant Shares,
and the Conversion Shares, the Conversion Warrants and the Conversion Warrant
Shares, or an available exemption under the Securities Act.  The Buyer
agrees not to sell, hypothecate or otherwise transfer the Buyer’s securities
unless such securities are registered under the federal and applicable state
securities laws or unless, in the opinion of counsel satisfactory to the
Company, an exemption from such law is available.

     

    (b)           Residence of
Buyer.  Each Buyer resides in the jurisdiction set forth on the
signature pages affixed hereto.

     

    (c)           Non-US
Person.  If a Buyer is not a person in the United States or a
U.S. Person (as defined in Rule 902(k) of Regulation S) or is not purchasing the
Notes on behalf of a person in the United States or a U.S. Person:

     

    (i)           neither
the Buyer nor any disclosed principal is a U.S. Person nor are they subscribing
for the Notes for the account of a U.S. Person or for resale in the United
States and the Buyer confirms that the Notes have not been offered to the Buyer
in the United States and that this Agreement has not been signed in the United
States;

     

    (ii)           the
Buyer acknowledges that the Notes have not been registered under the Securities
Act and may not be offered or sold in the United States or to a U.S. Person
unless the securities are registered under the U.S. Securities Act and all
applicable state securities laws or an exemption from such registration
requirements is available, and further agrees that hedging transactions
involving such securities may not be conducted unless in compliance with the
U.S. Securities Act;

     

    
      (iii)           the
Buyer and if applicable, the disclosed principal for whom the Buyer is acting,
understands that the Company is the seller of the Notes and underlying
securities and that, for purposes of Regulation S, a “distributor” is any
underwriter, dealer or other person who participates pursuant to a contractual
arrangement in the distribution of securities sold in reliance on Regulation S
and that an “affiliate” is any partner, officer, director or any person directly
or indirectly controlling, controlled by or under common control with any person
in question. Except as otherwise permitted by Regulation S, the Buyer and if
applicable, the disclosed principal for whom the Buyer is acting, agrees that it
will not, during a one year distribution compliance period, act as a
distributor, either directly or through any affiliate, or sell, transfer,
hypothecate or otherwise convey the Notes or underlying securities other than to
a non-U.S. Person;

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (iv)           the
Buyer and if applicable, the disclosed principal for whom the Buyer is acting,
acknowledges and understands that in the event the Notes are offered, sold or
otherwise transferred by the Buyer or if applicable, the disclosed principal for
whom the Buyer is acting, to a non-U.S Person prior to the expiration of a one
year distribution compliance period, the purchaser or transferee must agree not
to resell such securities except in accordance with the provisions of Regulation
S, pursuant to registration under the Securities Act, or pursuant to an
available exemption from registration; and must further agree not to engage in
hedging transactions with regard to such securities unless in compliance with
the Securities Act; and

     

    (v)           neither
the Buyer nor any disclosed principal will offer, sell or otherwise dispose of
the Notes or the underlying securities in the United States or to a U.S. Person
unless (A) the Company has consented to such offer, sale or disposition and such
offer, sale or disposition is made in accordance with an exemption from the
registration requirements under the Securities Act and the securities laws of
all applicable states of the United States or (B) the SEC has declared effective
a registration statement in respect of such securities.

     

    (d)           Accredited Investor
Status.  The Buyer meets the requirements of at least one of
the suitability standards for an “Accredited Investor”
as that term is defined in Rule 501(a)(3) of Regulation D, and as set forth on
the Accredited Investor Certification attached hereto.

     

    (e)           Accredited Investor
Qualifications.  The Buyer (i) if a natural person, represents
that the Buyer has reached the age of 21 and has full power and authority to
execute and deliver this Agreement and all other related agreements or
certificates and to carry out the provisions hereof and thereof; (ii) if a
corporation, partnership, or limited liability company or partnership, or
association, joint stock company, trust, unincorporated organization or other
entity, represents that such entity was not formed for the specific purpose of
acquiring the Notes, such entity is duly organized, validly existing and in good
standing under the laws of the state of its organization, the consummation of
the transactions contemplated hereby is authorized by, and will not result in a
violation of state law or its charter or other organizational documents, such
entity has full power and authority to execute and deliver this Agreement and
all other related agreements or certificates and to carry out the provisions
hereof and thereof and to purchase and hold the Notes, the execution and
delivery of this Agreement has been duly authorized by all necessary action,
this Agreement has been duly executed and delivered on behalf of such entity and
is a legal, valid and binding obligation of such entity; or (iii) if executing
this Agreement in a representative or fiduciary capacity, represents that it has
full power and authority to execute and deliver this Agreement in such capacity
and on behalf of the subscribing individual, ward, partnership, trust, estate,
corporation, or limited liability company or partnership, or other entity for
whom the Buyer is executing this Agreement, and such individual, partnership,
ward, trust, estate, corporation, or limited liability company or partnership,
or other entity has full right and power to perform pursuant to this Agreement
and make an investment in the Company, and represents that this Agreement
constitutes a legal, valid and binding obligation of such entity.  The
execution and delivery of this Agreement will not violate or be in conflict with
any order, judgment, injunction, agreement or controlling document to which the
Buyer is a party or by which it is bound;

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (f)           Buyer Relationship with
Placement Agent.  The Buyer’s substantive relationship with
Gottbetter Capital Markets, LLC as placement agent for the transactions
contemplated hereby (“GCap,” or the “Placement Agent”) or subagent through which
the Buyer is subscribing for the Notes predates the Placement Agent’s or such
subagent’s contact with the Buyer regarding an investment in the
Notes;

     

    (g)           Solicitation.  The
Buyer is unaware of, is in no way relying on, and did not become aware of the
offering of the Notes through or as a result of, any form of general
solicitation or general advertising including, without limitation, any article,
notice, advertisement or other communication published in any newspaper,
magazine or similar media or broadcast over television or radio, in connection
with the offering and sale of the Notes and is not subscribing for the Notes and
did not become aware of the offering of the Notes through or as a result of any
seminar or meeting to which the Buyer was invited by, or any solicitation of a
subscription by, a person not previously known to the Buyer in connection with
investments in securities generally;

     

    (h)           Brokerage
Fees.  The Buyer has taken no action that would give rise to
any claim by any person for brokerage commissions, finders’ fees or the like
relating to this Agreement or the transaction contemplated hereby (other than
commissions to be paid by the Company to the Placement Agent (or its selected
dealers);

     

    (i)           Buyer’s
Advisors.  The Buyer and the Buyer’s attorney, accountant,
purchaser representative and/or tax advisor, if any (collectively, the
“Advisors”), as the case may be, has such knowledge and experience in financial,
tax, and business matters, and, in particular, investments in securities, so as
to enable it to utilize the information made available to it in connection with
the Notes to evaluate the merits and risks of an investment in the Notes and the
Company and to make an informed investment decision with respect
thereto.

     

    (j)           Buyer
Liquidity.  Each Buyer has adequate means of providing for such
Buyer’s current financial needs and foreseeable contingencies and has no need
for liquidity of its investment in the Notes for an indefinite period of
time.

     

    (k)           High Risk Investment; Review
of Risk Factors.  The Buyer is aware that an investment in the
Notes, and upon closing of the Merger, the Bridge Shares, the Bridge Warrants
and/or the Bridge Warrant Shares (and upon conversion of the Notes, the
Conversion Shares, the Conversion Warrants and/or the Conversion Warrant
Shares), involves a number of very significant risks and has carefully read and
considered the matters set forth under the caption “Risk Factors” in the
Confidential Private Placement Memorandum dated April 28, 2008 (the “PPM”)
drafted in connection with the PPO, and in particular, acknowledges that the
Company is a shell company and its ability to repay the Notes is based on the
consummation of the Transactions.

     

    (l)           Reliance on
Exemptions.  Each Buyer understands that the Notes 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
such securities.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (m)           Information.  Each
Buyer and its Advisors have been furnished with all materials relating to the
business, finances and operations of the Company and information it deemed
material to making an informed investment decision regarding its purchase of the
Notes and the underlying Units and the related Bridge Warrants and Bridge
Shares, which have been requested by such Buyer.  Each Buyer and its
Advisors have been afforded the opportunity to review the PPM, as well as the
Company’s SEC Filings, as such term is defined below (hard copies of which were
made available to the Buyer upon request to the Company or the Placement Agent
or were otherwise accessible to the Buyer via the SEC’s EDGAR system), and the
information contained therein.  Each Buyer and its Advisors have been
afforded the opportunity to ask questions of the Company and its
management.  Neither such inquiries nor any other due diligence
investigations conducted by such Buyer or its Advisors shall modify, amend or
affect such Buyer’s right to rely on the Company’s representations and
warranties contained in Section 3 below.  Each 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
Notes.

     

    (n)           No Other Representations or
Information.  In evaluating the suitability of an investment in
the Notes, the Buyer has not relied upon any representation or information (oral
or written) other than as stated in the PPM or in this Agreement.  No
oral or written representations have been made, or oral or written information
furnished, to the Buyer or its Advisors, if any, in connection with the offering
of the Notes which are in any way inconsistent with the information contained in
the PPM;

     

    (o)           No Governmental
Review.  Each 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 Notes, the Bridge Warrants, the
Bridge Warrant Shares or the Bridge Shares (or the Conversion Warrants, the
Conversion Warrant Shares or the Conversion Shares), or the fairness or
suitability of the investment in the Notes, the Bridge Warrants, the Bridge
Warrant Shares or the Bridge Shares (and the Conversion Warrants, the Conversion
Warrant Shares and the Conversion Shares), nor have such authorities passed upon
or endorsed the merits of the offering of the Notes, the Bridge Warrants, the
Bridge Warrant Shares or the Bridge Shares (or the Conversion Warrants, the
Conversion Warrant Shares or the Conversion Shares).

     

    (p)           Transfer or
Resale.  Each Buyer understands that: (i) the Notes have not
been and are not being registered under the Securities Act or any state
securities laws, and may not be offered for sale, sold, assigned or transferred
unless (A) subsequently registered thereunder, or (B) such Buyer shall have
delivered to the Company an opinion of counsel, in a generally acceptable form,
to the effect that such securities to be sold, assigned or transferred may be
sold, assigned or transferred pursuant to an exemption from such registration
requirements; (ii) any sale of such securities made in reliance on Rule 144
under the Securities Act (or a successor rule thereto) (“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 such securities under circumstances in which
the seller (or the person through whom the sale is made) may be deemed to
be an underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the SEC thereunder; and (iii) except as otherwise set forth in
this Agreement, neither the Company nor any other person is under any obligation
to register such securities under the Securities Act or any state securities
laws or to comply with the terms and conditions of any exemption
thereunder.  The Company reserves the right to place stop transfer
instructions against the shares and certificates for the Bridge Shares and the
Bridge Warrant Shares (and Conversion Shares and the Warrant Shares) to the
extent specifically set forth under this Agreement.  There can be no
assurance that there will be any market or resale for the Notes, Bridge Shares,
Bridge Warrants or Bridge Warrant Shares (or the Conversion Shares, Conversion
Warrants or Conversion Warrant Shares), nor can there be any assurance that the
Notes, Bridge Shares, Bridge Warrants or Bridge Warrant Shares (or the
Conversion Shares, Conversion Warrants or Conversion Warrant Shares) will be
freely transferable at any time in the foreseeable future.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (q)           Legends.  Each
Buyer understands that the certificates or other instruments representing the
Notes, the Bridge shares, the Bridge Warrants and/or the Bridge Warrant Shares
(and the Conversion Warrants, the Conversion Warrant Shares and/or the
Conversion Shares) shall bear a restrictive legend in substantially the
following form (and a stop transfer order may be placed against transfer of such
stock certificates):

     

    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES MAY
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (C) IN COMPLIANCE WITH RULE 144 OR 144A THEREUNDER, IF
AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, (D) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT, OR (E) IN A TRANSACTION THAT DOES NOT
REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES
LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN
OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY
SATISFACTORY TO THE COMPANY. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY
NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

     

    The
legend set forth above shall be removed and the Company within three (3)
business days shall issue a certificate without such legend to the holder of the
Notes, Bridge Warrants, Bridge Warrant Shares and Bridge Shares (and the
Conversion Warrants, Conversion Warrant Shares and Conversion Shares) upon which
it is stamped, if, unless otherwise required by state securities laws, (i) the
Buyer or its broker make the necessary representations and warranties to the
transfer agent for the Common Stock that it has complied with the prospectus
delivery requirements in connection with a sale transaction, provided the Notes,
Bridge Warrants, Bridge Warrant Shares and Bridge Shares (and the Conversion
Warrants, Conversion Warrant Shares and Conversion Shares) are registered under
the Securities Act or (ii) in connection with a sale transaction, after such
holder provides the Company with an opinion of counsel satisfactory to the
Company, which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions, to the effect that a public
sale, assignment or transfer of the Notes, Bridge Warrants, Bridge Warrant
Shares and Bridge Shares (or the Conversion Warrants, conversion Warrant Shares
and Conversion Shares) may be made without registration under the Securities
Act.

     

    (r)           Authorization,
Enforcement.  This Agreement has been duly and validly
authorized, executed and delivered on behalf of such Buyer and is a valid and
binding agreement of such Buyer enforceable in accordance with its terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    
      (s)           Receipt of
Documents.  Each Buyer and its counsel have received and read
in their entirety:  (i) this Agreement and each representation,
warranty and covenant set forth herein; and (ii) all due diligence and other
information necessary to verify the accuracy and completeness of such
representations, warranties and covenants; each Buyer has received answers to
all questions such Buyer submitted to the Company regarding an investment in the
Company; and each Buyer has relied on the information contained therein and has
not been furnished any other documents, literature, memorandum or
prospectus.

    

     

    (t)           Trading
Activities.  The Buyer’s trading activities with respect to the
Company’s Common Stock shall be in compliance with all applicable federal and
state securities laws, rules and regulations and the rules and regulations of
the principal market on which the Company’s Common Stock is listed or
traded.  Neither the Buyer nor its affiliates has an open short
position in the Common Stock of the Company and, except as set forth below, the
Buyer shall not, and shall not cause any of its affiliates under common control
with the Buyer, to engage in any short sale as defined in any applicable SEC or
Financial Industry Regulatory Authority (FINRA) rules on any hedging
transactions with respect to the Common Stock until the earlier to occur of (i)
the third anniversary of the Closing Date and (ii) the Buyer(s) no longer own a
principal balance of the Notes.  Without limiting the foregoing, the
Buyer agrees not to engage in any naked short transactions in excess of the
amount of shares owned (or an offsetting long position) by the
Buyer.

     

    (u)           Regulation
FD.  Each Buyer acknowledges and agrees that all of the
information received by it in connection with the transactions contemplated by
this Agreement is of a confidential nature and may be regarded as material
non-public information under Regulation FD promulgated by the SEC and that such
information has been furnished to the Buyer for the sole purpose of enabling the
Buyer to consider and evaluate an investment in the Notes. The Buyer agrees that
it will treat such information in a confidential manner, will not use such
information for any purpose other than evaluating an investment in the Notes,
will not, directly or indirectly, trade or permit the Buyer’s agents,
representatives or affiliates to trade in any securities of the Company while in
possession of such information and will not, directly or indirectly, disclose or
permit the Buyer’s agents, representatives or affiliates to disclose any of such
information without the Company’s prior written consent. The Buyer shall make
its agents, affiliates and representatives aware of the confidential nature of
the information contained herein and the terms of this section including the
Buyer’s agreement to not disclose such information, to not trade in the
Company’s securities while in the possession of such information and to be
responsible for any disclosure or other improper use of such information by such
agents, affiliates or representatives. Likewise, without the Company’s prior
written consent, the Buyer will not, directly or indirectly, make any
statements, public announcements or other release or provision of information in
any form to any trade publication, to the press or to any other person or entity
whose primary business is or includes the publication or dissemination of
information related to the transactions contemplated by this
Agreement.  In the event the Merger (or other business combination if
such transaction assumes a different corporate form) is not entered into, the
Company acknowledges that the information covered by this Section 2(u) will no
longer be deemed material, non public information under Regulation
FD.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    
      
        (v)           No Legal Advice from the
Company.  Each Buyer acknowledges that it had the opportunity
to review this Agreement and the transactions contemplated by this Agreement
with its own legal counsel and investment and tax advisors.  Each
Buyer is relying solely on such Advisors and not on any statements or
representations of the Company or any of its representatives or agents for
legal, tax or investment advice with respect to this investment, the
transactions contemplated by this Agreement or the securities laws of any
jurisdiction.

      

       

      (w)          No Group
Participation. Each Buyer and its affiliates is not a member of any
group, nor is any Buyer acting in concert with any other person, including any
other Buyer, with respect to its acquisition of the Notes, Bridge Warrants,
Bridge Warrant Shares or Bridge Shares (and the Conversion Warrants, Conversion
Warrant Shares or Conversion Shares).

    

     

    (x)           Reliance.  Any
information which the Buyer has heretofore furnished or is furnishing herewith
to the Company or the Placement Agent is complete and accurate and may be relied
upon by the Company and the Placement Agent in determining the availability of
an exemption from registration under federal and state securities laws in
connection with the offering of securities as described in the Transmittal
Letter.  The Buyer further represents and warrants that it will notify
and supply corrective information to the Company and the Placement Agent
immediately upon the occurrence of any change therein occurring prior to the
Company’s issuance of the Notes. Within five (5) days after receipt of a request
from the Company or the Placement Agent, the Buyer will provide such information
and deliver such documents as may reasonably be necessary to comply with any and
all laws and ordinances to which the Company or the Placement Agent is
subject.

     

    (y)           (For
ERISA plans only).  The fiduciary of
the ERISA plan represents that such fiduciary has been informed of and
understands the Company’s investment objectives, policies and strategies, and
that the decision to invest “plan assets” (as such term is defined in ERISA) in
the Company is consistent with the provisions of ERISA that require
diversification of plan assets and impose other fiduciary
responsibilities.  The Buyer fiduciary or Plan (a) is responsible for
the decision to invest in the Company; (b) is independent of the Company or any
of its affiliates; (c) is qualified to make such investment decision; and (d) in
making such decision, the Buyer fiduciary or Plan has not relied primarily on
any advice or recommendation of the Company or any of its
affiliates;

     

    (z)           The
Buyer should check the Office of Foreign Assets Control (“OFAC”) website at
<http://www.treas.gov/ofac> before making the following representations.
The Buyer represents that the amounts invested by it in the Company in the Notes
were not and are not directly or indirectly derived from activities that
contravene federal, state or international laws and regulations, including
anti-money laundering laws and regulations. Federal regulations and Executive
Orders administered by OFAC prohibit, among other things, the engagement in
transactions with, and the provision of services to, certain foreign countries,
territories, entities and individuals.  The lists of OFAC prohibited
countries, territories, persons and entities can be found on the OFAC website at
<http://www.treas.gov/ofac>.  In addition, the programs
administered by OFAC (the “OFAC Programs”) prohibit dealing with
individuals1 or
entities in certain countries regardless of whether such individuals or entities
appear on the OFAC lists;

    __________________________

    1 These
individuals include specially designated nationals, specially designated
narcotics traffickers and other parties subject to OFAC sanctions and embargo
programs.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    
      (aa)           To
the best of the Buyer’s knowledge, none of: (1) the Buyer; (2) any person
controlling or controlled by the Buyer; (3) if the Buyer is a privately-held
entity, any person having a beneficial interest in the Buyer; or (4) any person
for whom the Buyer is acting as agent or nominee in connection with this
investment is a country, territory, individual or entity named on an OFAC list,
or a person or entity prohibited under the OFAC Programs.  Please be
advised that the Company may not accept any amounts from a prospective investor
if such prospective investor cannot make the representation set forth in the
preceding paragraph.  The Buyer agrees to promptly notify the Company
and the Placement Agent should the Buyer become aware of any change in the
information set forth in these representations.  The Buyer understands
and acknowledges that, by law, the Company may be obligated to “freeze the
account” of the Buyer, either by prohibiting additional subscriptions from the
Buyer, declining any redemption requests and/or segregating the assets in the
account in compliance with governmental regulations, and the Placement Agent may
also be required to report such action and to disclose the Buyer’s identity to
OFAC.  The Buyer further acknowledges that the Company may, by written
notice to the Buyer, suspend the redemption rights, if any, of the Buyer if the
Company reasonably deems it necessary to do so to comply with anti-money
laundering regulations applicable to the Company and the Placement Agent or any
of the Company’s other service providers.  These individuals include
specially designated nationals, specially designated narcotics traffickers and
other parties subject to OFAC sanctions and embargo programs;

    

     

    (bb)           To
the best of the Buyer’s knowledge, none of: (1) the Buyer; (2) any person
controlling or controlled by the Buyer; (3) if the Buyer is a privately-held
entity, any person having a beneficial interest in the Buyer; or (4) any person
for whom the Buyer is acting as agent or nominee in connection with this
investment is a senior foreign political figure2, or
any immediate family3
member or
close associate4 of a
senior foreign political figure, as such terms are defined in the footnotes
below; and

     

    (cc)           If
the Buyer is affiliated with a non-U.S. banking institution (a “Foreign Bank”),
or if the Buyer receives deposits from, makes payments on behalf of, or handles
other financial transactions related to a Foreign Bank, the Buyer represents and
warrants to the Company that: (1) the Foreign Bank has a fixed address, other
than solely an electronic address, in a country in which the Foreign Bank is
authorized to conduct banking activities; (2) the Foreign Bank maintains
operating records related to its banking activities; (3) the Foreign Bank is
subject to inspection by the banking authority that licensed the Foreign Bank to
conduct banking activities; and (4) the Foreign Bank does not provide banking
services to any other Foreign Bank that does not have a physical presence in any
country and that is not a regulated affiliate.

    __________________________

    2 A
“senior foreign political figure” is defined as a senior official in the
executive, legislative, administrative, military or judicial branches of a
foreign government (whether elected or not), a senior official of a major
foreign political party, or a senior executive of a foreign government-owned
corporation. In addition, a “senior foreign political figure” includes any
corporation, business or other entity that has been formed by, or for the
benefit of, a senior foreign political figure.

    

    3
“Immediate family” of a senior foreign political figure typically includes the
figure’s parents, siblings, spouse, children and in-laws.

    

    4 A “close
associate” of a senior foreign political figure is a person who is widely and
publicly known to maintain an unusually close relationship with the senior
foreign political figure, and includes a person who is in a position to conduct
substantial domestic and international financial transactions on behalf of the
senior foreign political figure.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    
      
        	
              	
                3.

              	
                REPRESENTATIONS AND
      WARRANTIES OF THE COMPANY.

              

      

       

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

       

      (a)           Organization and
Qualification.  The Company is a corporation duly organized and
validly existing in good standing under the laws of the State of Nevada, and has
the requisite corporate power to own its properties and to carry on its business
as now being conducted.  The Company is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect, as defined
below.  The Company has no subsidiaries.

    

     

    (b)           Authorization, Enforcement,
Compliance with Other Instruments.  (i) The Company has
the requisite corporate power and authority to enter into and perform this
Agreement and the Escrow Agreement and all other documents necessary or
desirable to effect the transactions contemplated hereby (collectively the
“Transaction Documents”) and to issue the Notes, the Bridge Warrants, the Bridge
Warrant Shares and the Bridge Shares (and the Conversion Warrants, the
Conversion Warrant Shares and the Conversion Shares) in accordance with the
terms hereof and thereof, (ii) the execution and delivery of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby, including, without limitation, the issuance of
the Notes, the Bridge Warrants, the Bridge Warrant Shares and the Bridge Shares
(and the Conversion Warrants, the Conversion Warrant Shares and the Conversion
Shares) and the reservation for issuance of the Bridge Warrant Shares issuable
upon exercise of the Bridge Warrants (and the Conversion Shares and the
Conversion Warrant Shares), have been duly authorized by the Company’s Board of
Directors and no further consent or authorization is required by the Company,
its Board of Directors or its stockholders, (iii) the Transaction Documents will
be duly executed and delivered by the Company, (iv) the Transaction Documents
when executed will constitute the valid and binding obligations of the Company
enforceable against the Company in accordance with their 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 creditors’ rights and
remedies.

     

    (c)           Capitalization.  The
authorized capital stock of the Company, after giving effect to the
Recapitalization, consists of 300,000,000 shares of Common Stock and 10,000,000
shares of Preferred Stock.  As of the date hereof, the Company has
5,005,000 shares of Common Stock issued and outstanding (of which it is
anticipated that 2,505,000 shares will be retired in connection with the Merger)
and 0 shares of preferred stock outstanding.  All of such outstanding
shares have been duly authorized, validly issued and are fully paid and
nonassessable.  No shares of Common Stock are subject to preemptive
rights or any other similar rights or any liens or encumbrances suffered or
permitted by the Company.  As of the date of this Agreement, (i) there
are no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company, or contracts,
commitments, understandings or arrangements by which the Company is or may
become bound to issue additional shares of capital stock of the Company or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company, (ii) there are no outstanding debt
securities and (iii) there are no agreements or arrangements under which the
Company is obligated to register the sale of any of their securities under the
Securities Act (except in connection with the Merger and the PPO), and (iv)
there are no outstanding registration statements and there are no outstanding
comment letters from the SEC or any other regulatory agency.  There
are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by the issuance of the Notes as described in this
Agreement.  The Notes, Bridge Warrants, Bridge Warrant Shares and
Bridge Shares (and the Conversion Warrants, Conversion Warrant Shares and
Conversion Shares) when issued, will be free and clear of all pledges, liens,
encumbrances and other restrictions (other than those arising under federal or
state securities laws as a result of the issuance of the Notes).  No
co-sale right, right of first refusal or other similar right exists with respect
to the Notes, Bridge Warrants, Bridge Warrant Shares and Bridge Shares (or the
Conversion Warrants, Conversion Warrant Shares and Conversion Shares) or the
issuance and sale thereof.  The issue and sale of the Notes, Bridge
Warrants, Bridge Warrant Shares and Bridge Shares (and the conversion Warrants,
Conversion Warrant Shares and Conversion Shares) will not result in a right of
any holder of Company securities to adjust the exercise, exchange or reset price
under such securities.  The Company has made available to the Buyer
true and correct copies of the Company’s Amended and Restated Articles of
Incorporation, and as in effect on the date hereof (the “Articles of
Incorporation”), and the Company’s By-laws, as in effect on the date hereof (the
“By-laws”), and the terms of all securities exercisable for Common Stock and the
material rights of the holders thereof in respect thereto other than stock
options issued to employees and consultants.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    
      (d)           Issuance of
Securities.  The Notes are duly authorized and, upon issuance
in accordance with the terms hereof, shall be duly issued, fully paid and
nonassessable, are free from all taxes, liens and charges with respect to the
issue thereof.  The Bridge Shares and the Bridge Warrant Shares (and
the Conversion Warrant Shares and Conversion Shares) have been duly authorized
and reserved for issuance.  Upon closing of the Merger in accordance
with the Transaction Documents, the Bridge Shares and the Bridge Warrant Shares,
upon exercise of the Bridge Warrants, will be duly issued, fully paid and
nonassessable.  Upon conversion or exercise in accordance with the
Transaction Documents, the Conversion Shares and the Conversion Warrant Shares
will be duly issued, fully paid and nonassessable.

    

     

    (e)           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 will not (i) result in a violation of the
Articles of Incorporation, any certificate of designations of any outstanding
series of preferred stock of the Company or the By-laws or (ii) violate or
conflict with, or result in a breach of any provision of,  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 is a party, or result in a violation of any law,
rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations and the rules and regulations of the OTC
Bulletin Board (the “OTCBB”) on which the Common Stock is quoted) applicable to
the Company or by which any property or asset of the Company is bound or
affected except for those which could not reasonably be expected to have a
material adverse effect on the assets, business, condition (financial or
otherwise), results of operations or future prospects of the Company (a
“Material Adverse Effect”).  Except those which could not reasonably
be expected to have a Material Adverse Effect, the Company is not in violation
of any term of or in default under its Articles of Incorporation or
By-laws.  Except those which could not reasonably be expected to have
a Material Adverse Effect, the Company is not in violation of any term of or in
default under any material contract, agreement, mortgage, indebtedness,
indenture, instrument, judgment, decree or order or any statute, rule or
regulation applicable to the Company.  The business of the Company is
not being conducted, and shall not be conducted in violation of any material
law, ordinance, or regulation of any governmental entity.  Except as
specifically contemplated by this Agreement and as required under the Securities
Act and any applicable state securities laws, the Company is not required to
obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under or contemplated by this
Agreement or the Escrow Agreement in accordance with the terms hereof or
thereof.  All consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date
hereof.  The Company is unaware of any facts or circumstance, which
might give rise to any of the foregoing.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    
      (f)           SEC Filings; Financial
Statements.  The Company has timely filed (subject to 12b-25
filings with respect to certain periodic filings) all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the Exchange Act (as hereinafter defined) (all
of the foregoing and all other documents filed with the SEC prior to the date
hereof and all exhibits included therein and financial statements and schedules
thereto and documents incorporated by reference therein, being hereinafter
referred to herein as the “SEC Filings”).  The SEC Filings are
available to the Buyers via the SEC’s EDGAR system.  As of their
respective dates, the SEC Filings complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder, and none of the SEC Filings, 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 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 Company’s SEC Filings with the SEC (the “Financial
Statements”) for the year ended November 30, 2007 and the period from May 3,
2006 (date of inception) to November 30, 2006 and any subsequent interim period
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto.  Such financial statements have been prepared in accordance
with generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such Financial
Statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements), and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).  No other
information provided by or on behalf of the Company to the Buyer including,
without limitation, information referred to in this Agreement, contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

    

     

    (g)           Absence of
Litigation.  There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending against or affecting the Company or
the Common Stock, wherein an unfavorable decision, ruling or finding would (i)
adversely affect the validity or enforceability of, or the authority or ability
of the Company to perform its obligations under, this Agreement or any of the
documents contemplated herein, or (ii) have a Material Adverse
Effect.

     

    (h)           Acknowledgment Regarding
Buyer’s Purchase of the Notes.  The Company acknowledges and
agrees that each Buyer is acting solely in the capacity of an arm’s length
purchaser with respect to this Agreement and the transactions contemplated
hereby.  The Company further acknowledges that each Buyer is not
acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions contemplated
hereby and any advice given by such Buyer or any of their respective
representatives or agents in connection with this Agreement and the transactions
contemplated hereby is merely incidental to such Buyer’s purchase of the Notes,
the Bridge Warrants, the Bridge Warrant Shares or the Bridge Shares (and the
Convrsion Warrants, the Conversion Warrant Shares or the Conversion
Shares).  The Company further represents to the Buyers that the
Company’s decision to enter into this Agreement has been based solely on the
independent evaluation by the Company and its representatives.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (i)           No General
Solicitation.  Neither the Company, nor any of its affiliates,
nor any person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with the offer or sale of the Notes, the Bridge Warrants, the Bridge
Warrant Shares or the Bridge Shares.

     

    (j)           No Integrated
Offering.  Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security,
under circumstances that would require registration of the Notes, the Bridge
Warrants, the Bridge Warrant Shares or the Bridge Shares under the Securities
Act or cause this offering of the Notes, the Bridge Warrants, the Bridge Warrant
Shares or the Bridge Shares to be integrated with prior offerings by the Company
for purposes of the Securities Act.

     

    (k)          Employee
Relations.  The Company is not involved in any labor dispute
nor, to the knowledge of the Company, is any such dispute
threatened.  None of the Company’s employees is a member of a union,
and the Company believes that its relations with its one employee is
good.

     

    
      (l)           Intellectual Property
Rights.  The Company has no proprietary intellectual
property.  The Company has not received any notice of infringement of,
or conflict with, the asserted rights of others with respect to any intellectual
property that it utilizes.

       

      (m)         Environmental
Laws.

       

      (i)           The
Company has complied with all applicable Environmental Laws (as defined below),
except for violations of Environmental Laws that, individually or in the
aggregate, have not had and would not reasonably be expected to have a Material
Adverse Effect.  There is no pending or, to the knowledge of the
Company, threatened civil or criminal litigation, written notice of violation,
formal administrative proceeding, or investigation, inquiry or information
request, relating to any Environmental Law involving the Company, except for
litigation, notices of violations, formal administrative proceedings or
investigations, inquiries or information requests that, individually or in the
aggregate, have not had and would not reasonably be expected to have a Material
Adverse Effect.  For purposes of this Agreement, “Environmental Law”
means any federal, state or local law, statute, rule or regulation or the common
law relating to the environment or occupational health and safety, including
without limitation any statute, regulation, administrative decision or order
pertaining to (i) treatment, storage, disposal, generation and transportation of
industrial, toxic or hazardous materials or substances or solid or hazardous
waste; (ii) air, water and noise pollution; (iii) groundwater and soil
contamination; (iv) the release or threatened release into the environment of
industrial, toxic or hazardous materials or substances, or solid or hazardous
waste, including without limitation emissions, discharges, injections, spills,
escapes or dumping of pollutants, contaminants or chemicals; (v) the protection
of wild life, marine life and wetlands, including without limitation all
endangered and threatened species; (vi) storage tanks, vessels, containers,
abandoned or discarded barrels, and other closed receptacles; (vii) health and
safety of employees and other persons; and (viii) manufacturing, processing,
using, distributing, treating, storing, disposing, transporting or handling of
materials regulated under any law as pollutants, contaminants, toxic or
hazardous materials or substances or oil or petroleum products or solid or
hazardous waste.  As used above, the terms “release” and “environment”
shall have the meaning set forth in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (“CERCLA”).

    

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    (ii)           To
the knowledge of the Company there is no material environmental liability with
respect to any solid or hazardous waste transporter or treatment, storage or
disposal facility that has been used by the Company.

     

    (iii)          The
Company (i) has received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct its business and (ii) is in
compliance with all terms and conditions of any such permit, license or
approval.

     

    (n)           Title.  The
Company does not own or lease any real or personal property.

     

    (o)           Internal Accounting
Controls.  The Company is in
material compliance with the provisions of the Sarbanes-Oxley Act of 2002
currently applicable to the Company.  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 conformity with generally
accepted accounting principles and to maintain asset accountability, and (iii)
the recorded amounts for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

     

    (p)           No Material Adverse
Breaches, etc.  Except as set forth in the SEC Filings, the
Company is not subject to any charter, corporate or other legal restriction, or
any judgment, decree, order, rule or regulation which in the judgment of the
Company’s officers has or is expected in the future to have a Material Adverse
Effect.  Except as set forth in the SEC Filings, the Company is not in
breach of any contract or agreement which breach, in the judgment of the
Company’s officers, has or is expected to have a Material Adverse
Effect.

     

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

     

    (r)           Certain
Transactions.  Except as set forth in the SEC Filings, and
except for arm’s length transactions pursuant to which the Company makes
payments in the ordinary course of business upon terms no less favorable than
the Company could obtain from third parties, none of the officers, directors, or
employees of the Company is presently a party to any transaction with the
Company (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    
      (s)           Rights of First
Refusal.  The Company is not obligated to offer the securities
offered hereunder on a right of first refusal basis or otherwise to any third
parties including, but not limited to, current or former stockholders of the
Company, underwriters, brokers, agents or other third parties.

       

      (t)           Reliance.  The
Company acknowledges that the Buyers are relying on the representations and
warranties made by the Company hereunder and that such representations and
warranties are a material inducement to the Buyer purchasing the
Notes.  The Company further acknowledges that without such
representations and warranties of the Company made hereunder, the Buyers would
not enter into this Agreement.

       

      (u)           Brokers’
Fees.  The Company does not have any liability or obligation to
pay any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement, except for the payment of a
commission, to the Placement Agent, as more particularly described in the Term
Sheet.

       

      
        	 	
                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 5
and 6 of this Agreement.

       

      (b)           Form
D.  The Company agrees to file a Form D with respect to the
offer and sale of the Notes as required under Regulation D.  The
Company shall, on or before the Closing Date, take such action as the Company
shall reasonably determine is necessary to qualify the Notes, Bridge Warrants,
Bridge Warrant Shares and Bridge Shares (and the Conversion Warrants, Conversion
Warrant Shares and Conversion Shares), or obtain an exemption for the Notes,
Bridge Warrants, Bridge Warrant Shares and Bridge Shares (and the Conversion
Warrants, Conversion Warrant Shares and Conversion Shares) 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, and shall provide evidence
of any such action so taken to the Buyers on or prior to the Closing
Date.

       

      (c)           Reporting
Status.  Until the earlier of (i) the date as of which the
Buyer(s) may sell all of the Bridge Warrants, the Bridge Warrant Shares, and the
Bridge Shares (and the Conversion Warrants, Conversion Warrant Shares and
Conversion Shares) without restriction pursuant to Rule 144 promulgated under
the Securities Act (or successor thereto), or (ii) the date on which (A) the
Buyer(s) shall have sold all the Bridge Warrants, the Bridge Warrant Shares and
the Bridge Shares (and the Conversion Warrants, Conversion Warrant Shares and
Conversion Shares) and (B) none of the Notes are outstanding, the Company shall
file in a timely manner all reports required to be filed with the SEC pursuant
to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the
regulations of the SEC thereunder, and the Company shall not terminate its
status as an issuer required to file reports under the Exchange Act even if the
Exchange Act or the rules and regulations thereunder would otherwise permit such
termination.

       

      (d)           Use of
Proceeds.  The Company shall use 100% of the net proceeds from
the sale of the Notes (deducting $15,000 payable to Brewer & Prichard, P.C.,
$[50,000] payable to the Placement Agent, $96,161.75 payable to Gottbetter &
Partners, LLP and fees payable to the Escrow Agent) to make the Bridge Loan to
FLB.  The principal amount of the Bridge Loan shall equal to the gross
proceeds from the sale of the Notes.

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      (e)           Reservation of
Shares.  The Company shall take all action reasonably necessary
to at all times have authorized, and reserved for the purpose of issuance, that
number of shares of Common Stock equal to equal to the sum of (i) the number of
Bridge Shares, plus (ii) the number of shares of Common Stock for which the
Bridge Warrants are exercisable from time to time based upon an exercise price
(the “Exercise Price”) per whole Bridge Warrant of $2.00 per share.

       

      (f)           Listings or
Quotation.  The Company shall use its best efforts to maintain
the listing or quotation of its Common Stock upon the OTC Bulletin
Board.

       

      (g)           Corporate
Existence.  So long as any of the Notes remain outstanding, the
Company shall not directly or indirectly consummate any merger, reorganization,
restructuring, reverse stock split consolidation, sale of all or substantially
all of the Company’s assets, enter into a change of control transaction, or any
similar transaction or related transactions (each such transaction, an
“Organizational Change”), other than the Recapitalization, the Stock Split, the
PPO and the Merger, unless, prior to the consummation of an Organizational
Change, the Company obtains the written consent of each Buyer.  In any
such case, the Company will make appropriate provision with respect to such
holders’ rights and interests to insure that the provisions of this Section 4(g)
will thereafter be applicable to the Notes.  The provisions of this
Section 4(g) shall be inapplicable with respect to any Organizational Change,
including the Recapitalization, the Stock Split and the PPO, effected in
connection with the Merger.

       

      (h)           Resales Absent Effective
Registration Statement.  Each of the Buyers understands and
acknowledges that (i) this Agreement and the agreements contemplated hereby may
require the Company to issue and deliver Bridge Shares or Bridge Warrant Shares
(and the Conversion Shares or Conversion Warrant Shares) to the Buyers with
legends restricting their transferability under the Securities Act, and (ii) it
is aware that resales of such Bridge Shares or Bridge Warrant Shares (or
Conversion Shares or Conversion Warrant Shares) may not be made unless, at the
time of resale, there is an effective registration statement under the
Securities Act covering such Buyer’s resale(s) or an applicable exemption from
registration.

       

      (i)           Issuance
of Bridge Shares and Bridge Warrants.  Concurrently upon the closing
of the Merger (or such other business combination if such a transaction assumes
a different corporate form), the Company will issue to the Buyer(s) the Bridge
Shares and Bridge Warrants. The Bridge Shares shall consist of one (1) share of
Company Common Stock for each dollar of principal amount of the Notes, such
number of shares assumes that the PPO offering price of the one share of Common
Stock component is $1.00 per share or greater. If the PPO offering price per
share of Common Stock in the Units offered is less than $1.00 (“Re-Set Offering
Price”), then the number of Bridge Shares shall increase to equal the aggregate
principal amount of the Notes divided by Re-Set Offering Price. The Bridge
Warrant shall be in the form attached as Exhibit A to this Agreement and the
number of shares of Company Common Stock to which the Bridge Warrant shall be
exercisable shall equal the number of Bridge Shares actually issued. In the
event that the Merger or other business combination with FLB does not close,
Buyer shall be entitled to receive Bridge Shares and Bridge Warrants upon the
closing of any subsequent business combination by the Company with an operating
company.

       

      (j)           Disclosure of Information in
Form 8-K.  Company will disclose in the Form 8-K filed with the SEC
within 4 business days of closing the Merger (or business combination if such
transaction assumes a different corporate form) all of the confidential
information provided to Buyers as described in Section 2(u) of this Agreement so
that Buyers will not be privy to any confidential information not made generally
available to the public (it being understood that information not disclosed in
the Form 8-K filing will no longer be deemed material, non public information
under Regulation FD).

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      
        	 	
                5.

              	
                CONDITIONS TO THE
      COMPANY’S OBLIGATION TO
SELL.

              

      

       

      The
obligation of the Company hereunder to issue and sell the Notes to the Buyer(s)
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:

       

      (a)           Each
Buyer shall have executed this Agreement and completed and executed the
Accredited Investor Certification and the Investor Profile and delivered them to
the Company.

       

      (b)           The
Buyer(s) shall have delivered to the Escrow Agent the Purchase Price for Notes
in respective amounts as set forth on the signature pages affixed hereto and the
Escrow Agent shall have delivered the net proceeds to the Company by wire
transfer of immediately available U.S. funds pursuant to the wire instructions
provided by the Company; it being understood that the sale of the Notes shall
not close unless the Minimum principal amount of Notes (i.e., $500,000) is
subscribed for.

       

      (c)           The
representations and warranties of the Buyer(s) contained in this Agreement 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 the Buyer(s) 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 the Buyer(s) at or prior to the Closing Date.

       

      
        	 	
                6.

              	
                CONDITIONS TO THE
      BUYER’S OBLIGATION TO
PURCHASE.

              

      

       

      (a)           The
obligation of the Buyer(s) hereunder to purchase the Notes at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the
following conditions:

       

      (i)           Those
stockholders of FLB listed on Schedule 1 to the Pledge Agreement (defined below)
beneficially owning in the aggregate one million shares of the capital stock of
FLB on a fully converted basis (such shares constituting the “FLB Control
Shares”) shall have entered into a pledge agreement of even date herewith (the
“Pledge Agreement”) with the Company and Gottbetter & Partners, LLP as
collateral agent (the “Collateral Agent”) pursuant to which such stockholders
shall have pledged to, and deposited with, the Collateral Agent the FLB Control
Shares, for the benefit of the Buyers, and the Collateral Agent, Buyers and
holders of the FLB Control Shares shall have entered into a Pledge Shares Escrow
Agreement.

       

      (ii)         
FLB shall have entered into a security agreement and intercreditor agreement (if
applicable) of even date herewith with the Buyers pursuant to which FLB shall
have granted and conveyed to the Buyers a security interest in all of the
tangible and intangible assets of FLB now owned by FLB, as security for the full
and timely repayment of the Notes in accordance with the terms of the
Notes.

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

      (iii)         The
representations and warranties of the Company contained in this Agreement shall
be true and correct in all material respects (except to the extent that any of
such representations and warranties is already qualified as to materiality in
Section 3 above, in which case, such representations and warranties shall be
true and correct without further qualification) 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 material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing Date.  The
Company shall have obtained and delivered to the Placement Agent (on behalf of
the Buyers) any and all consents, permits, approvals, registrations and waivers
necessary or appropriate for consummation of the purchase and sale of the Notes,
all of which shall be in full force and effect.  The Placement Agent
(on behalf of the Buyers) shall have received a certificate, executed by the
President 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 the Placement
Agent (on behalf of the Buyers), including, without limitation, an update as of
the Closing Date regarding the representation contained in Section 3(c)
above.

       

      (iv)         The
Company shall have executed and delivered to the Placement Agent (on behalf of
the Buyers) the Notes in the respective amounts set forth on the signature pages
affixed hereto and the Disbursement of Funds Memotrandum.

       

      (v)          The
Company shall have reserved out of its authorized and unissued Common Stock,
solely for the purpose of effecting the issuance of the Bridge Shares and the
exercise of the Bridge Warrants, sufficient shares of Common Stock to effect the
issuance of the Bridge Shares and the exercise of the Bridge
Warrants.

       

      (vi)         The
Company shall have delivered to the Placement Agent (on behalf of the Buyers) a
certificate, executed on behalf of the Company by its Secretary, dated as of the
Closing Date, certifying the resolutions adopted by the Board of Directors of
the Company approving the transactions contemplated by this Agreement and the
issuance of the Notes, certifying the current versions of the Articles of
Incorporation and By-laws of the Company and certifying as to the signatures and
authority of persons signing this Agreement on behalf of the
Company.  The foregoing certificate shall only be required to be
delivered on the first Closing Date, unless any information contained in the
certificate has changed.

       

      (vii)        The
Buyer(s) shall have received an opinion from the Company’s counsel, dated as of
the Closing Date, in form and substance reasonably acceptable to the
Buyers.

       

      (viii)      
The Placement Agent shall have completed all legal due diligence on FLB, to the
extent reasonably satisfactory to the Placement Agent.

       

      (ix)         FLB
shall have performed and complied in all material respects with all agreements,
covenants and conditions to closing required to be performed and complied by it
under the Bridge Loan Agreement between the Company and FLB, unless such
agreements, covenants and conditions have been waived by the Company under the
Bridge Loan Agreement.

       

      (x)          The
Buyers shall have completed their legal due diligence of the Company and FLB to
their satisfaction and received from the Company and FLB all executed documents
necessary to close the contemplated transactions.

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      (b)           INDEMNIFICATION OF
BUYERS. In consideration of the Buyer’s execution and delivery of this
Agreement and acquiring the Notes, the Bridge Warrants, the Bridge Warrant
Shares and the Bridge Shares (and the Conversion Warrants, the Conversion
Warrant Shares and the Conversion Shares) hereunder, and in addition to all of
the Company’s other obligations under this Agreement, the Company shall defend,
protect, indemnify and hold harmless the Buyer(s) and each other holder of the
Notes, the Bridge Warrants, the Bridge Warrant Shares and the Bridge Shares (and
the Conversion Warrants, the Conversion Warrant Shares and the Conversion
Shares), and all of their officers, directors, employees and
agents (including, without limitation, those retained in connection with
the transactions contemplated by this Agreement) (collectively, the “Buyer
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 Buyer Indemnitee is a
party to the action for which indemnification hereunder is sought), and
including reasonable attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by the Buyer Indemnitees or any of them as a result of,
or arising out of, or relating to (a) any material misrepresentation made by the
Company in the PPM, (b) any material breach of any covenant, agreement or
obligation of the Company contained in this Agreement, or (c) any cause of
action, suit or claim brought or made against such Buyer Indemnitee and arising
out of or resulting from the execution, delivery, performance or enforcement of
this Agreement by any of the Buyer Indemnitees.  To the extent that
the foregoing undertaking by the Company may be unenforceable for any reason,
the Company shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities, which is permissible under applicable
law.

       

      
        	 	
                7.

              	
                “PIGGYBACK”
      REGISTRATION RIGHTS.

              

      

       

      (a)           Piggyback
Registration. If the Company shall determine to register for sale for
cash any of its Common Stock, for its own account or for the account of others
(other than the any of the Buyers), other than (i) a registration relating
solely to employee benefit plans or securities issued or issuable to employees,
consultants (to the extent the securities owned or to be owned by such
consultants could be registered on Form S-8) or any of their family members
(including a registration on Form S-8) or (ii) a registration relating solely to
a Securities Act Rule 145 transaction or a registration on Form S-4 in
connection with a merger, acquisition, divestiture, reorganization or similar
event, the Company shall promptly give to each of the Buyers written notice
thereof (and in no event shall such notice be given less than 20 calendar days
prior to the filing of such registration statement), and shall include as a
piggyback registration (the “Piggyback
Registration”) all of the Bridge Shares and Bridge Warrant Shares
(together, the “Shares”) specified in a written request delivered by each of the
Buyers to the Company within 10 calendar days after receipt of such written
notice from the Company. However, the Company may, without the consent of the
Buyers, withdraw such registration statement prior to its becoming effective if
the Company or such other stockholders have elected to abandon the proposal to
register the securities proposed to be registered thereby.  In the
event that the SEC limits the number of shares of Common Stock that may be sold
in such registration statement, the Company may scale back from the registration
statement such number of Shares on a pro-rata basis.  In such event,
the Company shall give the Buyers prompt notice of the number of Shares excluded
therein.

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

      (b)           Underwriting.  If
a Piggyback Registration is for a registered public offering that is to be made
by an underwriting, the Company shall so advise the Buyers of the Shares
eligible for inclusion in such registration statement pursuant to Section
7(a).  In that event, the right of any Buyer to Piggyback Registration
shall be conditioned upon such Buyer’s participation in such underwriting and
the inclusion of such Buyer’s Shares in the underwriting to the extent provided
herein. The Buyer proposing to sell any of his Shares through such underwriting
shall (together with the Company and any other stockholders of the Company
selling their securities through such underwriting) enter into an underwriting
agreement in customary form with the underwriter selected for such underwriting
by the Company or the selling stockholders, as
applicable.  Notwithstanding any other provision of this Section, if
the underwriter or the Company determines that marketing factors require a
limitation on the number of shares of Common Stock or the amount of other
securities to be underwritten, the underwriter may exclude some or all Shares
from such registration and underwriting.  The Company shall so advise
the Buyer (unless the Buyer failed to timely elect to include his Shares through
such underwriting or has indicated to the Company his decision not to do so),
and indicate to such Buyer the number of Shares that may be included in the
registration and underwriting, if any. The number of Shares to be included in
such registration and underwriting shall be allocated among all of the Buyers as
follows:

       

      (i)          If
the Piggyback Registration was initiated by the Company, the number of shares
that may be included in the registration and underwriting shall be allocated
first to the Company and then, subject to obligations and commitments existing
as of the date hereof, to all selling stockholders, including the Buyers, who
have requested to sell in the registration on a pro rata basis according to the
number of shares requested to be included therein; and

      (ii)         If
the Piggyback Registration was initiated by the exercise of demand registration
rights by a stockholder or stockholders of the Company (other than the any of
the Buyers), then the number of shares that may be included in the registration
and underwriting shall be allocated first to such selling stockholders who
exercised such demand and then, subject to obligations and commitments existing
as of the date hereof, to all other selling stockholders, including the Buyers,
who have requested to sell in the registration on a pro rata basis according to
the number of shares requested to be included therein.

       

      8.           CONFLICT
WAIVER

       

      The
Buyers hereby acknowledge that the Collateral Agent is counsel to the Company in
connection with the transactions contemplated and referred to
herein.  The Buyers agree that in the event of any dispute arising in
connection with this Agreement, the Pledge Agreement or otherwise in connection
with any transaction or agreement contemplated and referred herein, the
Collateral Agent shall be permitted to continue to represent the Company, and
the Buyers will not seek to disqualify such counsel and waive any objection the
Buyers might have with respect to the Collateral Agent acting as the Collateral
Agent pursuant to this Agreement and the Pledge Agreement.

       

      9.           GOVERNING LAW:
MISCELLANEOUS.

       

      (a)           Governing
Law.  This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York without regard to the
principles of conflict of laws.  The parties further agree that any
action between them shall be heard exclusively in federal or state court sitting
in the New York County, New York, and expressly consent to the jurisdiction and
venue of the Supreme Court of New York, sitting in New York County and the
United States District Court for the Southern District of New York for the
adjudication of any civil action asserted pursuant to this
paragraph.

       

      (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.  In the event any signature page is delivered by facsimile
transmission, the party using such means of delivery shall cause four (4)
additional original executed signature pages to be physically delivered to the
other party within five (5) days of the execution and delivery
hereof.

       

      (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.

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

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

       

      (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
confirmation of receipt, when sent by facsimile; (iii) upon receipt when sent by
U.S. certified mail, return receipt requested, or (iv) one (1) day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same.  The addresses and
facsimile numbers for such communications shall be:

       

      
        	
                If
      to the Company, to:

              	
                Federal
      Sports & Entertainment, Inc.

              
	 
      	
                47395
      Monroe Street, #274

              
	 
      	
                Indio,
      California

              
	 
      	
                Attention:   Linda
      Farrell, President

              
	 
      	
                Telephone:

              
	 
      	 
      
	
                With
      a copy to:

              	
                Gottbetter
      & Partners, LLP

              
	 
      	
                488
      Madison Avenue, 12th
      Floor

              
	 
      	
                New
      York, New York  10022

              
	 
      	
                Attention:    
      Adam S. Gottbetter, Esq.

              
	 
      	
                Telephone:  
      (212) 400-6900

              
	 
      	
                Facsimile:   
       (212) 400-6901

              

      

       

      If to the
Buyer(s), to its address and facsimile number set forth on the signature pages
affixed hereto.  Each party shall provide five (5) days’ prior written
notice to the other party of any change in address or facsimile
number.

       

      (g)           Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and
assigns.  Neither the Company nor any Buyer shall assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the other party hereto.

       

      (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.

      
        
           

        

        
          22

          
            

          

        

        
           

        

      

      (i)           Survival.  Unless
this Agreement is terminated under Section 9(l), the representations and
warranties of the Company and the Buyer(s) contained in Sections 2 and 3, the
agreements and covenants set forth in Sections 4, 5 and 9, and the
indemnification provisions set forth in Section 6, shall survive the Closing for
a period of two (2) years following the date on which the Notes are repaid in
full.  The Buyer(s) shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.

       

      (j)           Publicity.  The
Company and the Placement Agent shall have the right to approve, before issuance
any press release or any other public statement with respect to the transactions
contemplated hereby made by any party; provided, however, that the Company shall
be entitled, without the prior approval of the Placement Agent, to issue any
press release or other public disclosure with respect to such transactions
required under applicable securities or other laws or regulations (the Company
shall use its best efforts to consult the Buyer(s) in connection with any such
press release or other public disclosure prior to its release and the Buyer(s)
shall be provided with a copy thereof upon release thereof).

       

      (k)          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
the 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.

       

      (l)           Termination.  In
the event that the Closing shall not have occurred with respect to the Buyers on
or before five (5) business days from the date hereof due to the Company’s or
the Buyer’s failure to satisfy the conditions set forth in Sections 5 and 6
above (and the non-breaching party’s failure to waive such unsatisfied
condition(s)), the non-breaching 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.

       

      (m)         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.

       

      (n)          Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, the Buyer and the Company will be entitled
to specific performance under this Agreement.  The parties agree that
monetary damages may not be adequate compensation for any loss incurred by
reason of any breach of obligations described in the foregoing sentence and
hereby agree to waive in any action for specific performance of any such
obligation the defense that a remedy at law would be adequate.

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

      (o)          ANTI MONEY LAUNDERING
REQUIREMENTS

       

      
        
          	
                  The USA PATRIOT Act

                	 
      	
                  What is money

                  laundering?

                	 
      	
                  How big is the problem

                  and why is it important?

                
	
                   

                  The
      USA PATRIOT Act is designed to detect, deter, and punish terrorists in the
      United States and abroad.  The Act imposes new anti-money
      laundering requirements on brokerage firms and financial
      institutions.  Since April 24, 2002 all brokerage firms have
      been required to have new, comprehensive anti-money laundering
      programs.

                   

                  To
      help you understand theses efforts, we want to provide you with some
      information about money laundering and our steps to implement the USA
      PATRIOT Act.

                	 
      	
                   

                  Money
      laundering is the process of disguising illegally obtained money so that
      the funds appear to come from legitimate sources or
      activities.  Money laundering occurs in connection with a wide
      variety of crimes, including illegal arms sales, drug trafficking,
      robbery, fraud, racketeering, and terrorism.

                	 
      	
                   

                  The
      use of the U.S. financial system by criminals to facilitate terrorism or
      other crimes could well taint our financial markets.  According
      to the U.S. State Department, one recent estimate puts the amount of
      worldwide money laundering activity at $1 trillion a
  year.

                

        

      

      

      
        
          
            	
                    What are we required to do to eliminate money
      laundering?

                  
	 
      
	
                    Under
      new rules required by the USA PATRIOT Act, our anti-money laundering
      program must designate a special compliance officer, set up employee
      training, conduct independent audits, and establish policies and
      procedures to detect and report suspicious transaction and ensure
      compliance with the new laws.

                  	 	
                    As
      part of our required program, we may ask you to provide various
      identification documents or other information.  Until you
      provide the information or documents we need, we may not be able to effect
      any transactions for
you.

                  

          

        

      

       

      (p)           Expenses.  The
Company acknowledges and agrees that it will pay $10,000 of Buyers’ legal fees
and that Buyers shall deduct such amount from the proceeds wired to the Escrow
Agent.

      

      [REMAINDER
PAGE INTENTIONALLY LEFT BLANK]

      
        
           

        

        
          24

          
            

          

        

        
           

        

      

      

      IN WITNESS WHEREOF, the Buyers and the Company
have caused this Securities Purchase Agreement to be duly executed as of the
date first written above.

      

      
        
          
            
              	 
      	
                      COMPANY:

                    
	 
      	
                      Federal
      Sports & Entertainment, Inc.

                    
	 
      	 
      
	 
      	
                      By: 

                    	 
      
	 
      	
                      Name: Linda
      Farrell

                    
	 
      	
                      Title:   President

                    

            

          

        

      

      

      
        
          	 
      	
                  BUYERS:

                   

                  The
      Buyers executing the Signature Page in the form attached hereto as Annex A and
      delivering the same to the Company or its agents shall be deemed to have
      executed this Agreement and agreed to the terms
  hereof.

                

        

      

      

      [SIGNATURE
PAGE TO SECURITIES PURCHASE AGREEMENT]

      
        
           

        

        
          25

          
            

          

        

        
           

        

      

      

      Annex
A

      

      Securities
Purchase Agreement

      Buyer
Counterpart Signature Page

      

      The
undersigned, desiring to: (i) enter into the Securities Purchase Agreement dated
as of September ___5, 2008
(the “Agreement”), between the undersigned, Federal Sports & Entertainment,
Inc. (f/k/a Rite Time Mining, Inc.), a Nevada corporation (the “Company”), and
the other parties thereto, in or substantially in the form furnished to the
undersigned and (ii) purchase the Notes of the Company as set forth below,
hereby agrees to purchase such Notes from the Company and further agrees to join
the Agreement as a party thereto, with all the rights and privileges
appertaining thereto, and to be bound in all respects by the terms and
conditions thereof.  The undersigned specifically acknowledges having
read the representations section in the Agreement entitled “Buyer’s
Representations and Warranties,” and hereby represent that the statements
contained therein are complete and accurate with respect to the undersigned as a
Buyer.

      

      The Buyer
hereby elects to purchase $____________ Notes (to be completed by the Buyer)
under the Securities Purchase Agreement.

      

      
        
          
            
              
                
                  
                    
                      	 
      	
                              Name
      of Buyer:

                            
	 
      	 
      
	 
      	
                              If
      an entity:

                            
	 
      	 
      
	 
      	
                              Print
      Name of Entity:

                            
	 	 
	 
      	 
      
	 
      	 
      
	 
      	
                              By: 

                            	 
      
	 
      	 
      	
                              Name:

                            
	 
      	 
      	
                              Title:

                            

                    

                  

                

              

            

          

        

      

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	 	
                                              If
      an individual:

                                            
	 
      	 
      
	 
      	
                                              Print
      Name:

                                            	 
      
	 
      	 
      	 
      
	 
      	
                                              Signature:

                                            	 
      
	 
      	 
      	 
      
	 
      	
                                              All
      Buyers:

                                            
	 
      	 
      	 
      
	 
      	
                                              Address:

                                            	 
      
	 
      	 
      
	 
      	 
      
	 	 	 
	 
      	
                                              Telephone No.: 

                                            	 
      
	 
      	 
      	 
      
	 
      	
                                              Facsimile
      No.:

                                            	 
      
	 
      	 
      	 
      
	 
      	
                                              Email
      Address:

                                            	 
      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
          
5 Will reflect the
Closing Date. Not to be completed by Buyer.

      

      
        
           

        

        
          26

          
            

          

        

        
           

        

      

       

      SCHEDULE
I

       

      SCHEDULE OF
BUYERS

      

      
        	
                Name

              	 
      	
                Amount of Subscription

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      FEDERAL
SPORTS & ENTERTAINMENT, INC.

      ACCREDITED
INVESTOR CERTIFICATION

      

      For
Individual Investors Only

      (all
Individual Investors must INITIAL where
appropriate):

      

      
        	
                Initial
      _______

              	
                I
      have a net worth (including home, furnishings and automobiles) of at least
      $1 million either individually or through aggregating my individual
      holdings and those in which I have a joint, community property or other
      similar shared ownership interest with my
  spouse.

              

      

      
        	
                Initial
      _______

              	
                I
      have had an annual gross income for the past two years of at least
      $200,000 (or $300,000 jointly with my spouse) and expect my income (or
      joint income, as appropriate) to reach the same level in the current
      year.

              

      

      
        	
                Initial
      _______

              	
                I
      am a director or executive officer of Federal Sports & Entertainment,
      Inc. (f/k/a Axxent Media
Corporation).

              

      

      

      
        For
Non-Individual Investors

      

      
        (all
Non-Individual Investors must INITIAL where
appropriate):

      

      

      
        	
                Initial
      _______

              	
                The
      investor certifies that it is a partnership, corporation, limited
      liability company or business trust that is 100% owned by persons who meet
      at least one of the criteria for Individual Investors set forth
      above.

              

      

      
        	
                Initial
      _______

              	
                The
      investor certifies that it is a partnership, corporation, limited
      liability company or business trust that has total assets of at least $5
      million and was not formed for the purpose of investing the
      Company.

              

      

      
        	
                Initial
      _______

              	
                The
      investor certifies that it is an employee benefit plan whose investment
      decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is
      a bank, savings and loan association, insurance company or registered
      investment advisor.

              

      

      
        	
                Initial
      _______

              	
                The
      investor certifies that it is an employee benefit plan whose total assets
      exceed $5,000,000 as of the date of this
  Agreement.

              

      

      
        	
                Initial
      _______

              	
                The
      undersigned certifies that it is a self-directed employee benefit plan
      whose investment decisions are made solely by persons who meet at lease
      one of the criteria for Individual
Investors.

              

      

      
        	
                Initial
      _______

              	
                The
      investor certifies that it is a U.S. bank, U.S. savings and loan
      association or other similar U.S. institution acting in its individual or
      fiduciary capacity.

              

      

      
        	
                Initial
      _______

              	
                The
      undersigned certifies that it is a broker-dealer registered pursuant to
      §15 of the Securities Exchange Act of
1934.

              

      

      
        	
                Initial
      _______

              	
                The
      investor certifies that it is an organization described in §501(c)(3) of
      the Internal Revenue Code with total assets exceeding $5,000,000 and not
      formed for the specific purpose of investing in the
    Company.

              

      

      
        	
                Initial
      _______

              	
                The
      investor certifies that it is a trust with total assets of at least
      $5,000,000, not formed for the specific purpose of investing in the
      Company, and whose purchase is directed by a person with such knowledge
      and experience in financial and business matters that such person is
      capable of evaluating the merits and risks of the prospective
      investment.

              

      

      
        	
                Initial
      _______

              	
                The
      investor certifies that it is a plan established and maintained by a state
      or its political subdivisions, or any agency or instrumentality thereof,
      for the benefit of its employees, and which has total assets in excess of
      $5,000,000.

              

      

      
        	
                Initial
      _______

              	
                The
      investor certifies that it is an insurance company as defined in §2(13) of
      the Securities Act of 1933, or a registered investment
      company.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      FEDERAL
SPORTS & ENTERTAINMENT, INC.

      Investor
Profile

      (Must
be completed by Investor)

       

      Section A - Personal
Investor Information

       

      Investor
Name(s):
___________________________________________________________________________________

       

      Individual
executing Profile or Trustee:
__________________________________________________________________

       

      Social
Security Numbers / Federal I.D. Number:
___________________________________________________________

      

      
        
          
            
              
                
                  	
                          Date
      of Birth:

                        	_______________________ 
      	 
      	
                          Marital
      Status: _________________________

                        
	
                          Joint
      Party Date of Birth: 

                        	_______________________ 
      	 
      	
                          Investment
      Experience (Years): ____________

                        
	
                          Annual
      Income:

                        	_______________________
      	 
      	
                          Liquid
      Net Worth: ______________________

                        
	
                          Net
      Worth:

                        	_______________________ 
      	 
      	 
      
	
                          Tax
      Bracket:

                        	
                          _____
      15% or below

                        	
                          _____
      25% -
      27.5%                     _____
      Over
27.5%

                        

                

              

            

          

        

      

       

      
        	
                Investment
      Objectives (circle one
      or more):   

              	
                Preservation
      of Capital, Income, Capital Appreciation, Trading Profits, Speculation or
      Other (please specify) * See definitions on following
  page

              

      

       

      Home
Street Address:
______________________________________________________________________________

       

      Home
City, State & Zip Code:
_______________________________________________________________________

       

      Home
Phone: _____________________  Home Fax:
_____________________  Home Email: __________________

       

      Employer:
_______________________________________________________________________________________

       

      Employer
Street Address:
__________________________________________________________________________

       

      Employer
City, State & Zip Code:
____________________________________________________________________

       

      Bus.
Phone: ______________________  Bus. Fax:
______________________  Bus. Email:
______________________

       

      Type of
Business:
_________________________________________________________________________________

       

      Outside
Broker/Dealer:
_____________________________________________________________________________

      

      Section B – Certificate
Delivery Instructions

       

      ____
Please deliver certificate to the Employer Address listed in Section
A.

      ____
Please deliver certificate to the Home Address listed in Section A.

      ____
Please deliver certificate to the following address:
___________________________________________________

      

       Section C – Form of Payment
– Check or Wire Transfer

      

      ____
Check payable to [PNC Bank], As
Agent for Federal Sports
& Entertainment, Inc..

      ____ Wire
funds from my outside account according to Section 1(a) of the Securities
Purchase Agreement.

      
        ____ The
funds for this investment are rolled over, tax deferred from __________ within
the allowed 60 day window.

      

      Please
check if you are a FINRA member or affiliate of a FINRA member firm:
____

      
 

      
        
          
            
              	 
      	 
      	 
      
	
                      Investor
      Signature

                    	 
      	
                      Date

                    

            

          

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Investment Objectives: The
typical investment listed with each objective are only some examples of the
kinds of investments that have historically been consistent with the listed
objectives.  However, neither Federal Sports & Entertainment, Inc.
nor Gottbetter Capital Markets, LLC can assure that any investment will achieve
your intended objective.  You must make your own investment decisions
and determine for yourself if the investments you select are appropriate and
consistent with your investment objectives.

      

      Neither
Federal Sports & Entertainment, Inc. nor Gottbetter Capital Markets, LLC
assumes responsibility to you for determining if the investments you selected
are suitable for you.

      

      Preservation of Capital: An
investment objective of Preservation of Capital
indicates you seek to maintain the principal value of your investments and are
interested in investments that have historically demonstrated a very low degree
of risk of loss of principal value.  Some examples of typical
investments might include money market funds and high quality, short-term fixed
income products.

      

      Income:  An
investment objective of Income
indicates you seek to generate from investments and are interested in
investments that have historically demonstrated a low degree of risk of loss of
principal value.  Some examples of typical investments might include
high quality, short and medium-term fixed income products, short-term bond funds
and covered call options.

      

      Capital
Appreciation:  An investment objective of Capital Appreciation
indicates you seek to grow the principal value of your investments over time and
are willing to invest in securities that have historically demonstrated a
moderate to above average degree of risk of loss of principal value to pursue
this objective.  Some examples of typical investments might include
common stocks, lower quality, medium-term fixed income products, equity mutual
funds and index funds.

      

      Trading Profits: An investment
objective of Trading
Profits indicates you seek to take advantage of short-term trading
opportunities, which may involve establishing and liquidating positions
quickly.  Some examples of typical investments might include
short-term purchases and sales of volatile or low prices common stocks, put or
call options, spreads, straddles and/or combinations on equities or
indexes.  This is a high-risk strategy.

      

      Speculation:  An
investment objective of Speculation indicates you
seek a significant increase in the principal value of your investments and are
willing to accept a corresponding greater degree of risk by investing in
securities that have historically demonstrated a high degree of risk of loss of
principal value to pursue this objective.  Some examples of typical
investments might include lower quality, long-term fixed income products,
initial public offerings, volatile or low priced common stocks, the purchase or
sale of put or call options, spreads, straddles and/or combinations on equities
or indexes, and the use of short-term or day trading strategies.

      

      Other:  Please
specify.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}]]