Document:

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                                                                    EXHIBIT 10.1

                              INVESTMENT AGREEMENT
                              --------------------

THIS INVESTMENT AGREEMENT (this "AGREEMENT"), dated as of October 30, 2007 is by
and between Smoky Market Foods, Inc., a Nevada corporation (the "Company"), and
Dutchess Private Equities Fund, Ltd., a Cayman Islands exempted company (the
"Investor").

WHEREAS, the parties desire that, upon the terms and subject to the conditions
contained herein, the Investor shall invest up to Ten Million dollars
($10,000,000) to purchase the Company's Common Stock, $.001 par value per share
(the "Common Stock");

WHEREAS, such investments will be made in reliance upon the provisions of
Section 4(2) under the Securities Act of 1933, as amended (the "1933 Act"), Rule
506 of Regulation D, and the rules and regulations promulgated thereunder,
and/or upon such other exemption from the registration requirements of the 1933
Act as may be available with respect to any or all of the investments in Common
Stock to be made hereunder; and

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

NOW THEREFORE, in consideration of the foregoing recitals, which shall be
considered an integral part of this Agreement, the covenants and agreements set
forth hereafter, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Investor hereby
agree as follows:

SECTION 1. DEFINITIONS.

      As used in this Agreement, the following terms shall have the following
meanings specified or indicated below, and such meanings shall be equally
applicable to the singular and plural forms of such defined terms.

      "1933 Act" shall have the meaning set forth in the preamble of this
agreement.

      "1934 Act" shall mean the Securities Exchange Act of 1934, as it may be
amended.

      "Affiliate" shall have the meaning specified in Section 5(H), below.

      "Agreement" shall mean this Investment Agreement.

      "Best Bid" shall mean the highest posted bid price of the Common Stock
during a given period of time.

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      "By-laws" shall have the meaning specified in Section 4(C).

      "Certificate of Incorporation" shall have the meaning specified in Section
4(C).

      "Closing" shall have the meaning specified in Section 2(G).

      "Closing Date" shall mean no more than seven (7) Trading Days following
the Put Notice Date.

      "Common Stock" shall have the meaning set forth in the preamble of this
Agreement.

      "Control" or "Controls" shall have the meaning specified in Section 5(H).

      "Effective Date" shall mean the date the SEC declares effective under the
1933 Act the Registration Statement covering the Securities.

      "Environmental Laws" shall have the meaning specified in Section 4(M).

      "Equity Line Transaction Documents" shall mean this Agreement and the
Registration Rights Agreement.

      "Execution Date" shall mean the date indicated in the preamble to this
Agreement.

      "Indemnities" shall have the meaning specified in Section 11.

      "Indemnified Liabilities" shall have the meaning specified in Section 11.

      "Ineffective Period" shall mean any period of time that the Registration
Statement or any Supplemental Registration Statement (as defined in the
Registration Rights Agreement between the parties) becomes ineffective or
unavailable for use for the sale or resale, as applicable, of any or all of the
Registrable Securities (as defined in the Registration Rights Agreement) for any
reason (or in the event the prospectus under either of the above is not current
and deliverable) during any time period required under the Registration Rights
Agreement.

      "Investor" shall have the meaning indicated in the preamble of this
Agreement.

      "Material Adverse Effect" shall have the meaning specified in Section
4(A).

      "Maximum Common Stock Issuance" shall have the meaning specified in
Section 2(H).

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      "Open Market Adjustment Amount" shall have the meaning specified in
Section 2(I).

      "Open Market Purchase" shall have the meaning specified in Section 2(I)

      "Open Market Share Purchase" shall have the meaning specified in Section
2(I).

      "Open Period" shall mean the period beginning on and including the Trading
Day immediately following the Effective Date and ending on the earlier to occur
of (I) the date which is thirty-six (36) months from the Effective Date; or (II)
termination of the Agreement in accordance with Section 9, below.

      "Pricing Period" shall mean the period beginning on the Put Notice Date
and ending on and including the date that is five (5) Trading Days after such
Put Notice Date.

      "Principal Market" shall mean the American Stock Exchange, Inc., the
National Association of Securities Dealers, Inc. Over-the-Counter Bulletin
Board, the NASDAQ National Market System or the NASDAQ Small Cap Market,
whichever is the principal market on which the Common Stock is listed.

      "Prospectus" shall mean the prospectus, preliminary prospectus and
supplemental prospectus used in connection with the Registration Statement.

      "Purchase Amount" shall mean the total amount being paid by the Investor
on a particular Closing Date to purchase the Securities.

      "Purchase Price" shall mean ninety-three percent (93%) of the lowest
closing Best Bid price of the Common Stock during the Pricing Period.

      "Put" shall have the meaning set forth in Section 2(B)(1) hereof.

      "Put Amount" shall have the meaning set forth in Section 2(B)(1) hereof.

      "Put Notice" shall mean a written notice sent to the Investor by the
Company stating the Put Amount in U.S. dollars the Company intends to sell to
the Investor pursuant to the terms of the Agreement and stating the current
number of Shares issued and outstanding on such date.

      "Put Notice Date" shall mean the Trading Day, as set forth below,
immediately following the day on which the Investor receives a Put Notice,
however a Put Notice shall be deemed to have been received on (A) the Trading
Day it is received by facsimile or otherwise by the Investor if such notice is
received prior to 9:00 am Eastern Time, or (B) the immediately succeeding
Trading Day if it is received by facsimile or otherwise after 9:00 am Eastern
Time on a Trading Day. No Put Notice may be deemed delivered on a day that is
not a Trading Day.

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      "Put Restriction" shall mean the days between the beginning of the Pricing
Period and Closing Date. During this time, the Company shall not be entitled to
deliver another Put Notice.

      "Put Shares Due" shall have the meaning specified in Section 2(I).

      "Registration Period" shall have the meaning specified in Section 5(C),
below.

      "Registration Rights Agreement" shall have the meaning set forth in the
recitals, above.

      "Registration Statement" means the registration statement of the Company
filed under the 1933 Act covering the resale of the Securities.

      "Related Party" shall have the meaning specified in Section 5(H).

      "Resolution" shall have the meaning specified in Section 8(E).

      "SEC" shall mean the U.S. Securities & Exchange Commission.

      "SEC Documents" shall have the meaning specified in Section 4(F).

      "Securities" shall mean the shares of Common Stock issued pursuant to the
terms of the Agreement.

      "Shares" shall mean the shares of the Company's Common Stock.

      "Subsidiaries" shall have the meaning specified in Section 4(A).

      "Trading Day" shall mean any day on which the Principal Market for the
Common Stock is open for trading, from the hours of 9:30 am until 4:00 pm.

SECTION 2. PURCHASE AND SALE OF COMMON STOCK.

(A) PURCHASE AND SALE OF COMMON STOCK. Subject to the terms and conditions set
forth herein, the Company shall issue and sell to the Investor, and the Investor
shall purchase from the Company, up to that number of Shares having an aggregate
Purchase Price of Ten Million dollars ($10,000,000).

(B) DELIVERY OF PUT NOTICES.

(I) Subject to the terms and conditions of the Equity Line Transaction
Documents, and from time to time during the Open Period, the Company may, in its
sole discretion, deliver a Put Notice to the Investor which states the dollar
amount (designated in U.S. Dollars) (the "Put Amount"), which the Company
intends to sell to the Investor on a Closing Date (the "Put"). The Put Notice
shall be in the form attached hereto as Exhibit C and incorporated herein by
reference. The amount that the Company shall be entitled to Put to the Investor
(the "Put Amount") shall, at the Company's election, be either:

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(A) any amount up to Two Hundred percent (200%) of the average daily volume of
the Common Stock on the Principal Market for the Ten (10) Trading Days prior to
the applicable Put Notice Date, multiplied by the average of the Best Bid Prices
for the three (3) Trading Days immediately preceding the Put Date, or (B) any
amount up to two hundred fifty thousand dollars ($250,000). During the Open
Period, the Company shall not be entitled to submit a Put Notice until after the
previous Closing has been completed. The purchase price for the Common Stock
identified in the Put Notice shall be equal to the Purchase Price.

(C) INTENTIONALLY OMITTED

(D) INTENTIONALLY OMITTED

(E) CONDITIONS TO INVESTOR'S OBLIGATION TO PURCHASE SHARES. Subject to the
satisfactions of the conditions set forth in Sections 2(E), 7 and 8, the
Investor shall purchase at each Closing a number of shares equal to the Put
Amount divided by the Purchase Price. Notwithstanding anything to the contrary
in this Agreement, the Company shall not be entitled to deliver a Put Notice and
the Investor shall not be obligated to purchase any Shares at a Closing (as
defined in Section 2(G)) unless each of the following conditions are satisfied:

      (I) a Registration Statement shall have been declared effective and shall
remain effective and available for the resale of all the Registrable Securities
subject to the Put Notice (as defined in the Registration Rights Agreement) at
all times until the Closing with respect to the subject Put Notice;

      (II) at all times during the period beginning on the related Put Notice
Date and ending on and including the related Closing Date, the Common Stock
shall have been listed on the Principal Market and shall not have been suspended
from trading thereon for a period of two (2) consecutive Trading Days during the
Open Period and the Company shall not have been notified of any pending or
threatened proceeding or other action to suspend the trading of the Common
Stock;

      (III) the Company has complied with its obligations and is otherwise not
in breach of or in default under, this Agreement, the Registration Rights
Agreement or any other agreement executed in connection herewith which has not
been cured prior to delivery of the Investor's Put Notice Date;

      (IV) no injunction shall have been issued and remain in force, or action
commenced by a governmental authority which has not been stayed or abandoned,
prohibiting the purchase or the issuance of the Securities; and

      (V) the issuance of the Securities will not violate any shareholder
approval requirements of the Principal Market.

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If any of the events described in clauses (I) through (V) above occurs during a
Pricing Period, then the Investor shall have no obligation to purchase the Put
Amount of Common Stock set forth in the applicable Put Notice.

(F) RESERVED

(G) MECHANICS OF PURCHASE OF SHARES BY INVESTOR. Subject to the satisfaction of
the conditions set forth in Sections 2(E), 7 and 8, the closing of the purchase
by the Investor of Shares (a "Closing") shall occur on the date which is no
later than seven (7) Trading Days following the applicable Put Notice Date (each
a "Closing Date"). Prior to each Closing Date, (I) the Company shall deliver to
the Investor pursuant to this Agreement, certificates representing the Shares to
be issued to the Investor on such date and registered in the name of the
Investor; and (II) the Investor shall deliver to the Company the Purchase Price
to be paid for such Shares, determined as set forth in Section 2(B). In lieu of
delivering physical certificates representing the Securities and provided that
the Company's transfer agent then is participating in The Depository Trust
Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon
request of the Investor, the Company shall use all commercially reasonable
efforts to cause its transfer agent to electronically transmit the Securities by
crediting the account of the Investor's prime broker (as specified by the
Investor within a reasonably in advance of the Investor's notice) with DTC
through its Deposit Withdrawal Agent Commission ("DWAC") system.

The Company understands that a delay in the issuance of Securities beyond the
Closing Date could result in economic damage to the Investor. After the
Effective Date, as compensation to the Investor for such loss, the Company
agrees to make late payments to the Investor for late issuance of Securities
(delivery of Securities after the applicable Closing Date) in accordance with
the following schedule (where "No. of Days Late" is defined as the number of
trading days beyond the Closing Date, with the Amounts being cumulative.) unless
the Investor elects to "cover" and seek an Open Market Adjustment Amount as
permitted by Section 2(I):

 LATE PAYMENT FOR EACH
 NO. OF DAYS LATE                     $10,000 WORTH OF COMMON STOCK

          1                                       $100
          2                                       $200
          3                                       $300
          4                                       $400
          5                                       $500
          6                                       $600
          7                                       $700
          8                                       $800
          9                                       $900
          10                                    $1,000
          Over  10                              $1,000 + $200 for each
                                                Business Day late beyond 10 days

The Company shall make any payments incurred under this Section in immediately
available funds upon demand by the Investor. Nothing herein shall limit the
Investor's right to pursue actual damages for the Company's failure to issue and
deliver the Securities to the Investor, except that such late payments shall
offset any such actual damages incurred by the Investor (and payments under this
Section shall be in lieu of, and not in addition to, any Open Market Adjustment
Amount, as set forth below.

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(H) OVERALL LIMIT ON COMMON STOCK ISSUABLE. Notwithstanding anything contained
herein to the contrary, if during the Open Period the Company becomes listed on
an exchange that limits the number of shares of Common Stock that may be issued
without shareholder approval, then the number of Shares issuable by the Company
and purchasable by the Investor, shall not exceed that number of the shares of
Common Stock that may be issuable without shareholder approval (the "Maximum
Common Stock Issuance"). If such issuance of shares of Common Stock could cause
a delisting on the Principal Market, then the Maximum Common Stock Issuance
shall first be approved by the Company's shareholders in accordance with
applicable law and the By-laws and Certificate of Incorporation of the Company,
if such issuance of shares of Common Stock could cause a delisting on the
Principal Market. The parties understand and agree that the Company's failure to
seek or obtain such shareholder approval shall in no way adversely affect the
validity and due authorization of the issuance and sale of Securities or the
Investor's obligation in accordance with the terms and conditions hereof to
purchase a number of Shares in the aggregate up to the Maximum Common Stock
Issuance limitation, and that such approval pertains only to the applicability
of the Maximum Common Stock Issuance limitation provided in this Section 2(H).

(I) If, by the third (3rd) business day after the Closing Date, the Company
fails to deliver any portion of the shares of the Put to the Investor (the "Put
Shares Due") and the Investor purchases, in an open market transaction or
otherwise, shares of Common Stock necessary to make delivery of shares which
would have been delivered if the full amount of the shares to be delivered to
the Investor by the Company (the "Open Market Share Purchase") , then the
Company shall pay to the Investor, in addition to any other amounts due to
Investor pursuant to the Put, and not in lieu thereof, the Open Market
Adjustment Amount (as defined below). The "Open Market Adjustment Amount" is the
amount equal to the excess, if any, of (x) the Investor's total purchase price
(including brokerage commissions, if any) for the Open Market Share Purchase
minus (y) the net proceeds (after brokerage commissions, if any) received by the
Investor from the sale of the Put Shares Due. The Company shall pay the Open
Market Adjustment Amount to the Investor in immediately available funds within
five (5) business days of written demand by the Investor. By way of illustration
and not in limitation of the foregoing, if the Investor purchases shares of
Common Stock having a total purchase price (including brokerage commissions) of
$11,000 to cover an Open Market Purchase with respect to shares of Common Stock
it sold for net proceeds of $10,000, the Open Market Purchase Adjustment Amount
which the Company will be required to pay to the Investor will be $1,000. Remedy
under this Section 2(I) is in lieu of, and not in addition to, a remedy under
Section 2(G).

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(J) LIMITATION ON AMOUNT OF OWNERSHIP. Notwithstanding anything to the contrary
in this Agreement, in no event shall the Investor be entitled to purchase that
number of Shares, which when added to the sum of the number of shares of Common
Stock beneficially owned (as such term is defined under Section 13(d) and Rule
13d-3 of the 1934 Act), by the Investor, would exceed 4.99% of the number of
shares of Common Stock outstanding on the Closing Date, as determined in
accordance with Rule 13d-1(j) of the 1934 Act. The limitation set forth in this
Section 2(J) may be amended, or its applicability waived, only by a written
document signed by Investor and Company, which document shall not be effective
for 61 days following its execution.

SECTION 3. INVESTOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS.

The Investor represents and warrants to the Company, and covenants, that:

(A) SOPHISTICATED INVESTOR. The Investor has, by reason of its business and
financial experience, such knowledge, sophistication and experience in financial
and business matters and in making investment decisions of this type that it is
capable of (I) evaluating the merits and risks of an investment in the
Securities and making an informed investment decision; (II) protecting its own
interest; and (III) bearing the economic risk of such investment for an
indefinite period of time.

(B) AUTHORIZATION; ENFORCEMENT. This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Investor and is a valid and
binding agreement of the Investor enforceable against the Investor in accordance
with its terms, subject as to enforceability to general principles of equity and
to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
and other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies.

(C) SECTION 9 OF THE 1934 ACT. During the term of this Agreement, the Investor
will comply with the provisions of Section 9 of the 1934 Act, and the rules
promulgated thereunder, with respect to transactions involving the Common Stock.
The Investor agrees not to sell the Company's stock short, either directly or
indirectly through its affiliates, principals or advisors, the Company's common
stock during the term of this Agreement.

(D) ACCREDITED INVESTOR. Investor is an "Accredited Investor" as that term is
defined in Rule 501(a) of Regulation D of the 1933 Act.

(E) NO CONFLICTS. The execution, delivery and performance of the Transaction
Documents by the Investor and the consummation by the Investor of the
transactions contemplated hereby and thereby will not result in a violation of
Partnership Agreement or other organizational documents of the Investor.

(F) OPPORTUNITY TO DISCUSS. The Investor has received all materials relating to
the Company's business, finance and operations which it has requested. The
Investor has had an opportunity to discuss the business, management and
financial affairs of the Company with the Company's management.

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(G) INVESTMENT PURPOSES. The Investor is purchasing the Securities for its own
account for investment purposes and not with a view towards distribution and
agrees to resell or otherwise dispose of the Securities solely in accordance
with the registration provisions of the 1933 Act (or pursuant to an exemption
from such registration provisions).

(H) NO REGISTRATION AS A DEALER. The Investor is not and will not be required to
be registered as a "dealer" under the 1934 Act, either as a result of its
execution and performance of its obligations under this Agreement or otherwise.

(I) GOOD STANDING. The Investor is a Limited Partnership, duly organized,
validly existing and in good standing in the Cayman Islands.

(J) TAX LIABILITIES. The Investor understands that it is liable for its own tax
liabilities.

(K) REGULATION M. The Investor will comply with Regulation M under the 1934 Act,
if applicable.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

Except as set forth in a Disclosure Schedule (the "Disclosure Schedule")
delivered by the Company with this Agreement and incorporated into this
Agreement by reference (which Disclosure Schedule shall be divided into separate
Schedules referencing the subsection of this Section 4 to which they are an
exception, with it being understood that any disclosure set forth in the
Disclosure Schedule that is an exception to several subsections need only be
listed once if its applicability to several subsections is reasonably apparent)
or as disclosed on the Company's SEC Documents, the Company represents and
warrants to the Investor 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 and authorization to own its properties and to
carry on its business as now being conducted. Both the Company and the companies
it owns or controls ("Subsidiaries") are duly qualified to do business and are
in good standing in every jurisdiction in which its ownership of property or 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 used in this Agreement, "Material
Adverse Effect" means any material adverse effect on the business, properties,
assets, operations, results of operations, financial condition or prospects of
the Company and its Subsidiaries, if any, taken as a whole, or on the
transactions contemplated hereby or by the agreements and instruments to be
entered into in connection herewith, or on the authority or ability of the
Company to perform its obligations under the Equity Line Transaction Documents
(as defined in Section 1 and 4(B), below).

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(B) AUTHORIZATION; ENFORCEMENT; COMPLIANCE WITH OTHER INSTRUMENTS.

      (I) The Company has the requisite corporate power and authority to enter
into and perform this Investment Agreement and the Registration Rights Agreement
(collectively, the "Equity Line Transaction Documents"), and to issue the
Securities in accordance with the terms hereof and thereof.

      (II) The execution and delivery of the Equity Line Transaction Documents
by the Company and the consummation by it of the transactions contemplated
hereby and thereby, including without limitation the reservation for issuance
and the issuance of the Securities pursuant to this Agreement, have been duly
and validly 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 shareholders.

      (III) The Equity Line Transaction Documents have been duly and validly
executed and delivered by the Company.

      (IV) The Equity Line Transaction Documents 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. As of the date hereof, the authorized capital stock of the
Company consists of 200,000,000 shares of Common Stock, $.001 par value per
share, of which as of the date hereof, 53,199,080 are issued and outstanding;
10,000,000 shares of Preferred Stock authorized, of which as of the date hereof,
none are issued or outstanding. As of the date hereof, there are issued and
outstanding warrants permitting the purchase from the Company of 7,861,000
shares of Common Stock, options permitting the purchase from the Company of
1,887,500 shares of Common Stock. In addition, there are 4,212,500 shares of
Common Stock reserved for future awards under the Company's stock incentive
plan. All of such outstanding shares have been, or upon issuance will be,
validly issued and are fully paid and nonassessable.

Except as disclosed in the Company's publicly available filings with the SEC or
as expressly contemplated by or retained in the Equity Line Transaction
Documents;

(I) no shares of the Company's capital stock are subject to preemptive rights or
any other similar rights or any liens or encumbrances suffered or permitted by
the Company; (II) there are no outstanding debt securities; (III) there are no
outstanding shares of capital stock, options, warrants, scrip, rights to

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subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries; (IV) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
their securities under the 1933 Act (except the Registration Rights Agreement);
(V) there are no outstanding securities of the Company or any of its
Subsidiaries which contain any redemption or similar provisions, and there are
no contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to redeem a security of the
Company or any of its Subsidiaries; (VI) there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Securities as described in this Agreement; (VII) the Company
does not have any stock appreciation rights or "phantom stock" plans or
agreements or any similar plan or agreement; and (VIII) there is no dispute as
to the classification of any shares of the Company's capital stock.

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

(D) ISSUANCE OF SHARES. The Company has reserved 10,000,000 Shares for issuance
pursuant to this Agreement, which have been duly authorized and reserved those
Shares for issuance (subject to adjustment pursuant to the Company's covenant
set forth in Section 5(F) below) pursuant to this Agreement. Upon issuance in
accordance with this Agreement, the Securities will be validly issued, fully
paid for and non-assessable and free from all taxes, liens and charges with
respect to the issue thereof. In the event the Company cannot register a
sufficient number of Shares for issuance pursuant to this Agreement, the Company
will use commercially reasonable efforts to authorize and reserve for issuance
the number of Shares required for the Company to perform its obligations
hereunder as soon as reasonably practicable.

(E) NO CONFLICTS. The execution, delivery and performance of the Equity Line
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby will not (I) result in a violation
of the Certificate of Incorporation, any Certificates of Designation,
Preferences and Rights of any outstanding series of preferred stock of the
Company or the By-laws; or (II) conflict with, or constitute a material default
(or an event which with notice or lapse of time

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or both would become a material default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any material agreement,
contract, indenture mortgage, indebtedness or instrument to which the Company or
any of its Subsidiaries is a party, or to the Company's knowledge result in a
violation of any law, rule, regulation, order, judgment or decree (including
United States federal and state securities laws and regulations and the rules
and regulations of the Principal Market or principal securities exchange or
trading market on which the Common Stock is traded or listed) applicable to the
Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected. Neither the Company nor
its Subsidiaries is in violation of any term of, or in default under, the
Certificate of Incorporation, any Certificate of Designations, Preferences and
Rights of any outstanding series of preferred stock of the Company or the
By-laws or their organizational charter or by-laws, respectively, or any
contract, agreement, mortgage, indebtedness, indenture, instrument, judgment,
decree or order or any statute, rule or regulation applicable to the Company or
its Subsidiaries, except for possible conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations that would not
individually or in the aggregate have or constitute a Material Adverse Effect.
The business of the Company and its Subsidiaries is not being conducted, and
shall not be conducted, in violation of any law, statute, ordinance, rule, order
or regulation of any governmental authority or agency, regulatory or
self-regulatory agency, or court, except for possible violations the sanctions
for which either individually or in the aggregate would not have a Material
Adverse Effect. Except as specifically contemplated by this Agreement and as
required under the 1933 Act or any securities laws of any states, to the
Company's knowledge, the Company is not required to obtain any consent,
authorization, permit or order of, or make any filing or registration (except
the filing of a registration statement as outlined in the Registration Rights
Agreement between the Parties and filings required by Regulation D and
comparable Blue Sky laws) with, any court, governmental authority or agency,
regulatory or self-regulatory agency or other third party in order for it to
execute, deliver or perform any of its obligations under, or contemplated by,
the Equity Line Transaction Documents in accordance with the terms hereof or
thereof. All consents, authorizations, permits, 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 and are
in full force and effect as of the date hereof, except for securities law
filings, which will be made on a timely basis. Except as disclosed in Schedule
4(e), the Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing. The Company is not, and will not
be, in violation of the listing requirements of the Principal Market as in
effect on the date hereof and on each of the Closing Dates and is not aware of
any facts which would reasonably lead to delisting of the Common Stock by the
Principal Market in the foreseeable future.

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(F) SEC DOCUMENTS; FINANCIAL STATEMENTS. As of the date hereof, the Company has
filed all reports, schedules, forms, statements and other documents required to
be filed by it with the SEC pursuant to the reporting requirements of the 1934
Act (all of the foregoing filed prior to the date hereof any currently effective
Registration Statement or Form SB-2 filed by the Company and all exhibits
included therein and financial statements and schedules in or attached to any of
the foregoing and documents incorporated by reference into any of the foregoing
being hereinafter referred to as the "SEC Documents"). The Company has delivered
to the Investor or its representatives, or they have had access through EDGAR
to, true and complete copies of the SEC Documents. As of their respective filing
dates, the SEC Documents complied in all material respects with the requirements
of the 1934 Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary 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 SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles, by a firm
that is a member of the Public Companies Accounting Oversight Board ("PCAOB")
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 written information provided by or on behalf of the
Company to the Investor which is not included in the SEC Documents, including,
without limitation, information referred to in Section 4(D) of this Agreement,
contains any untrue statement of a material fact or omits to state any material
fact necessary to make the statements therein, in the light of the circumstance
under which they are or were made, not misleading. Neither the Company nor any
of its Subsidiaries or any of their officers, directors, employees or agents
have provided the Investor with any material, nonpublic information which was
not publicly disclosed prior to the date hereof and any material, nonpublic
information provided to the Investor by the Company or its Subsidiaries or any
of their officers, directors, employees or agents prior to any Closing Date
shall be publicly disclosed by the Company prior to such Closing Date.

                                       13
<PAGE>

(G) ABSENCE OF CERTAIN CHANGES. Except as otherwise set forth in the SEC
Documents, the Company does not intend to change the business operations of the
Company in any material way. The Company has not taken any steps, and does not
currently expect to take any steps, to seek protection pursuant to any
bankruptcy law nor does the Company or its Subsidiaries have any knowledge or
reason to believe that its creditors intend to initiate involuntary bankruptcy
proceedings.

(H) ABSENCE OF LITIGATION AND/OR REGULATORY PROCEEDINGS. Except as set forth in
the SEC Documents, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the
executive officers of Company or any of its Subsidiaries, threatened against or
affecting the Company, the Common Stock or any of the Company's Subsidiaries or
any of the Company's or the Company's Subsidiaries' officers or directors in
their capacities as such, in which an adverse decision could have a Material
Adverse Effect.

(I) ACKNOWLEDGMENT REGARDING INVESTOR'S PURCHASE OF SHARES. The Company
acknowledges and agrees that the Investor is acting solely in the capacity of an
arm's length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby. The Company further acknowledges
that the Investor is not acting as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to the Equity Line Transaction
Documents and the transactions contemplated hereby and thereby and any advice
given by the Investor or any of its respective representatives or agents in
connection with the Equity Line Transaction Documents and the transactions
contemplated hereby and thereby is merely incidental to the Investor's purchase
of the Securities, and is not being relied on by the Company. The Company
further represents to the Investor that the Company's decision to enter into the
Equity Line Transaction Documents has been based solely on the independent
evaluation by the Company and its representatives.

(J) NO UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR CIRCUMSTANCES. Except as
set forth in the SEC Documents, as of the date hereof, no event, liability,
development or circumstance has occurred or exists, or to the Company's
knowledge is contemplated to occur, with respect to the Company or its
Subsidiaries or their respective business, properties, assets, prospects,
operations or financial condition, that would be required to be disclosed by the
Company under applicable securities laws on a registration statement filed with
the SEC relating to an issuance and sale by the Company of its Common Stock and
which has not been publicly announced.

(K) EMPLOYEE RELATIONS. Neither the Company nor any of its Subsidiaries is
involved in any union labor dispute nor, to the knowledge of the Company or any
of its Subsidiaries, is any such dispute threatened. Neither the Company nor any
of its Subsidiaries is a party to a collective bargaining agreement, and the
Company and its Subsidiaries believe that relations with their employees are
good. No executive officer (as defined in Rule 501(f) of the 1933 Act) has
notified the Company that such officer intends to leave the Company's employ or
otherwise terminate such officer's employment with the Company.

                                       14
<PAGE>

(L) INTELLECTUAL PROPERTY RIGHTS. The Company and its Subsidiaries own or
possess adequate rights or licenses to use all trademarks, trade names, service
marks, service mark registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, governmental authorizations, trade
secrets and rights necessary to conduct their respective businesses as now
conducted. Except as set forth in the SEC Documents, none of the Company's
trademarks, trade names, service marks, service mark registrations, service
names, patents, patent rights, copyrights, inventions, licenses, approvals,
government authorizations, trade secrets or other intellectual property rights
necessary to conduct its business as now or as proposed to be conducted have
expired or terminated, or are expected to expire or terminate within two (2)
years from the date of this Agreement. The Company and its Subsidiaries do not
have any knowledge of any infringement by the Company or its Subsidiaries of
trademark, trade name rights, patents, patent rights, copyrights, inventions,
licenses, service names, service marks, service mark registrations, trade secret
or other similar rights of others, or of any such development of similar or
identical trade secrets or technical information by others and, except as set
forth in the SEC Documents, there is no claim, action or proceeding being made
or brought against, or to the Company's knowledge, being threatened against, the
Company or its Subsidiaries regarding trademark, trade name, patents, patent
rights, invention, copyright, license, service names, service marks, service
mark registrations, trade secret or other infringement; and the Company and its
Subsidiaries are unaware of any facts or circumstances which might give rise to
any of the foregoing. The Company and its Subsidiaries have taken commercially
reasonable security measures to protect the secrecy, confidentiality and value
of all of their intellectual properties.

(M) ENVIRONMENTAL LAWS. The Company and its Subsidiaries (I) are, to the
knowledge of the management and directors of the Company and its Subsidiaries,
in compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"); (II) have, to the knowledge of the
management and directors of the Company, received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses; and (III) are in compliance, to the knowledge of the
management and directors of the Company, with all terms and conditions of any
such permit, license or approval where, in each of the three (3) foregoing
cases, the failure to so comply would have, individually or in the aggregate, a
Material Adverse Effect.

(N) TITLE. The Company and its Subsidiaries have good and marketable title to
all personal property owned by them which is material to the business of the
Company and its Subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in the SEC Documents or
such as do not materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the Company or any
of its Subsidiaries. Any real property and facilities held under lease by the
Company or any of its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its Subsidiaries.

                                       15
<PAGE>

(O) INSURANCE. Each of the Company's Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as management of the Company reasonably believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged. Neither the Company nor any of its Subsidiaries has been refused any
insurance coverage sought or applied for and neither the Company nor its
Subsidiaries has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.

(P) REGULATORY PERMITS. The Company and its Subsidiaries have in full force and
effect all certificates, approvals, authorizations and permits from the
appropriate federal, state, local or foreign regulatory authorities and
comparable foreign regulatory agencies, necessary to own, lease or operate their
respective properties and assets and conduct their respective businesses, and
neither the Company nor any such Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such certificate,
approval, authorization or permit, except for such certificates, approvals,
authorizations or permits which if not obtained, or such revocations or
modifications which, would not have a Material Adverse Effect.

(Q) INTERNAL ACCOUNTING CONTROLS. The Company and each of its Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (I) transactions are executed in accordance with
management's general or specific authorizations; (II) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles by a firm with membership to the PCAOB
and to maintain asset accountability; (III) access to assets is permitted only
in accordance with management's general or specific authorization; and (IV) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

(R) NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Company nor any of its
Subsidiaries is subject to any charter, corporate or other legal restriction, or
any judgment, decree, order, rule or regulation which in the judgment of the
Company's officers has or is expected in the future to have a Material Adverse
Effect. Neither the Company nor any of its Subsidiaries is a party to any
contract or agreement which in the judgment of the Company's officers has or is
expected to have a Material Adverse Effect.

                                       16
<PAGE>

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

(T) CERTAIN TRANSACTIONS. Except as set forth in the SEC Documents filed at
least ten (10) days prior to the date hereof 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
disinterested third parties and other than the grant of stock options disclosed
in the SEC Documents, none of the officers, directors, or employees of the
Company is presently a party to any transaction with the Company or any of its
Subsidiaries (other than for 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.

(U) DILUTIVE EFFECT. The Company understands and acknowledges that the number of
shares of Common Stock issuable upon purchases pursuant to this Agreement will
increase in certain circumstances including, but not necessarily limited to, the
circumstance wherein the trading price of the Common Stock declines during the
period between the Effective Date and the end of the Open Period. The Company's
executive officers and directors have studied and fully understand the nature of
the transactions contemplated by this Agreement and recognize that they have a
potential dilutive effect on the shareholders of the Company. The Board of
Directors of the Company has concluded, in its good faith business judgment, and
with full understanding of the implications, that execution of the Equity Line
Transaction Document is in the best interests of the Company. The Company
specifically acknowledges that, subject to such limitations as are expressly set
forth in the Equity Line Transaction Documents, its obligation to issue shares
of Common Stock upon purchases pursuant to this Agreement is absolute and
unconditional regardless of the dilutive effect that such issuance may have on
the ownership interests of other shareholders of the Company.

                                       17
<PAGE>

(V) LOCK-UP. The Company shall cause its officers, insiders, directors, and
affiliates or other related parties under control of the Company, to refrain
from selling Common Stock during each Pricing Period.

(W) NO GENERAL SOLICITATION. Neither the Company, nor any of its affiliates, nor
any person acting on its 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 Common Stock to be offered as set forth in this
Agreement.

(X) NO BROKERS, FINDERS OR FINANCIAL ADVISORY FEES OR COMMISSIONS. No brokers,
finders or financial advisory fees or commissions will be payable by the
Company, its agents or Subsidiaries, with respect to the transactions
contemplated by this Agreement, except as otherwise disclosed in this Agreement.

SECTION 5. COVENANTS OF THE COMPANY

(A) BEST EFFORTS. The Company shall use all commercially reasonable efforts to
timely satisfy each of the conditions set forth in Section 7 of this Agreement.

(B) BLUE SKY. The Company shall, at its sole cost and expense, on or before each
of the Closing Dates, take such action as the Company shall reasonably determine
is necessary to qualify the Securities for, or obtain exemption for the
Securities for, sale to the Investor at each of the Closings pursuant to this
Agreement under applicable securities or "Blue Sky" laws of such states of the
United States, as reasonably specified by the Investor, and shall provide
evidence of any such action so taken to the Investor on or prior to the Closing
Date.

(C) REPORTING STATUS. Until one of the following occurs, the Company shall file
all reports required to be filed with the SEC pursuant to the 1934 Act, and the
Company shall not terminate its status, or take an action or fail to take any
action, which would terminate its status as a reporting company under the 1934
Act: (i) this Agreement terminates pursuant to Section 9 and the Investor has
the right to sell all of the Securities without restrictions pursuant to Rule
144(k) promulgated under the 1933 Act, or such other exemption (ii) the date on
which the Investor has sold all the Securities and this Agreement has been
terminated pursuant to Section 9.

(D) USE OF PROCEEDS. The Company will use the proceeds from the sale of the
Shares (excluding amounts paid by the Company for fees as set forth in the
Equity Line Transaction Documents) for general corporate and working capital
purposes and acquisitions or assets, businesses or operations or for other
purposes that the Board of Directors, in its good faith deem to be in the best
interest of the Company.

                                       18
<PAGE>

(E) FINANCIAL INFORMATION. During the Open Period, the Company agrees to make
available to the Investor via EDGAR or other electronic means the following
documents and information on the forms set forth: (I) within five (5) Trading
Days after the filing thereof with the SEC, a copy of its Annual Reports on Form
10-KSB, its Quarterly Reports on Form 10-QSB, any Current Reports on Form 8-K
and any Registration Statements or amendments filed pursuant to the 1933 Act;
(II) copies of any notices and other information made available or given to the
shareholders of the Company generally, contemporaneously with the making
available or giving thereof to the shareholders; and (III) within two (2)
calendar days of filing or delivery thereof, copies of all documents filed with,
and all correspondence sent to, the Principal Market, any securities exchange or
market, or the National Association of Securities Dealers, Inc., unless such
information is material nonpublic information.

(F) RESERVATION OF SHARES. The Company shall take all action necessary to at all
times have authorized, and reserved for the purpose of issuance, a sufficient
number of shares of Common Stock to provide for the issuance of the Securities
to the Investor as required hereunder. In the event that the Company determines
that it does not have a sufficient number of authorized shares of Common Stock
to reserve and keep available for issuance as described in this Section 5(F),
the Company shall use all commercially reasonable efforts to increase the number
of authorized shares of Common Stock by seeking shareholder approval for the
authorization of such additional shares.

(G) LISTING. The Company shall promptly secure and maintain the listing of all
of the Registrable Securities (as defined in the Registration Rights Agreement)
on the Principal Market and each other national securities exchange and
automated quotation system, if any, upon which shares of Common Stock are then
listed (subject to official notice of issuance) and shall maintain, such listing
of all Registrable Securities from time to time issuable under the terms of the
Equity Line Transaction Documents. Neither the Company nor any of its
Subsidiaries shall take any action which would be reasonably expected to result
in the delisting or suspension of the Common Stock on the Principal Market
(excluding suspensions of not more than one (1) trading day resulting from
business announcements by the Company). The Company shall promptly provide to
the Investor copies of any notices it receives from the Principal Market
regarding the continued eligibility of the Common Stock for listing on such
automated quotation system or securities exchange. The Company shall pay all
fees and expenses in connection with satisfying its obligations under this
Section 5(G).

                                       19
<PAGE>

(H) TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall cause each of
its Subsidiaries not to, enter into, amend, modify or supplement, or permit any
Subsidiary to enter into, amend, modify or supplement, any agreement,
transaction, commitment or arrangement with any of its or any Subsidiary's
officers, directors, persons who were officers or directors at any time during
the previous two (2) years, shareholders who beneficially own 5% or more of the
Common Stock, or Affiliates or with any individual related by blood, marriage or
adoption to any such individual or with any entity in which any such entity or
individual owns a 5% or more beneficial interest (each a "Related Party"),
except for (I) customary employment arrangements and benefit programs on
reasonable terms, (II) any agreement, transaction, commitment or arrangement on
an arms-length basis on terms no less favorable than terms which would have been
obtainable from a disinterested third party other than such Related Party, or
(III) any agreement, transaction, commitment or arrangement which is approved by
a majority of the disinterested directors of the Company. For purposes hereof,
any director who is also an officer of the Company or any Subsidiary of the
Company shall not be a disinterested director with respect to any such
agreement, transaction, commitment or arrangement. "Affiliate" for purposes
hereof means, with respect to any person or entity, another person or entity
that, directly or indirectly, (I) has a 5% or more equity interest in that
person or entity, (II) has 5% or more common ownership with that person or
entity, (III) controls that person or entity, or (IV) is under common control
with that person or entity. "Control" or "Controls" for purposes hereof means
that a person or entity has the power, directly or indirectly, to conduct or
govern the policies of another person or entity.

(I) FILING OF FORM 8-K. On or before the date which is four (4) Trading Days
after the Execution Date, the Company shall file a Current Report on Form 8-K
with the SEC describing the terms of the transaction contemplated by the Equity
Line Transaction Documents in the form required by the 1934 Act, if such filing
is required.

(J) CORPORATE EXISTENCE. The Company shall use all commercially reasonable
efforts to preserve and continue the corporate existence of the Company.

(K) NOTICE OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF RIGHT TO MAKE
A PUT. The Company shall promptly notify the Investor upon the occurrence of any
of the following events in respect of a Registration Statement or related
prospectus in respect of an offering of the Securities: (I) receipt of any
request by the SEC or any other federal or state governmental authority during
the period of effectiveness of the Registration Statement for amendments or
supplements to the Registration Statement or related prospectus; (II) the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of any Registration Statement or the
initiation of any proceedings for that purpose; (III) receipt of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Securities for sale in any jurisdiction or the
initiation or notice of any proceeding for such purpose; (IV) the happening of
any event that makes any statement made in such Registration Statement or
related prospectus or any document incorporated or deemed to be incorporated

                                       20
<PAGE>

therein by reference untrue in any material respect or that requires the making
of any changes in the Registration Statement, related prospectus or documents so
that, in the case of a Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the related prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (V) the Company's
reasonable determination that a post-effective amendment to the Registration
Statement would be appropriate, and the Company shall promptly make available to
Investor any such supplement or amendment to the related prospectus. The Company
shall not deliver to Investor any Put Notice during the continuation of any of
the foregoing events in this Section 5(K).

(L) REIMBURSEMENT. If (I) the Investor becomes involved in any capacity in any
action, proceeding or investigation brought by any shareholder of the Company,
in connection with or as a result of the consummation of the transactions
contemplated by the Equity Line Transaction Documents, or if the Investor is
impleaded in any such action, proceeding or investigation by any person (other
than as a result of a breach of the Investor's representations and warranties
set forth in this Agreement); or (II) the Investor becomes involved in any
capacity in any action, proceeding or investigation brought by the SEC against
or involving the Company or in connection with or as a result of the
consummation of the transactions contemplated by the Equity Line Transaction
Documents (other than as a result of a breach of the Investor's representations
and warranties set forth in this Agreement), then in any such case, the Company
will reimburse the Investor for its reasonable legal and other expenses
(including the cost of any investigation and preparation) incurred in connection
therewith, as such expenses are incurred. In addition, other than with respect
to any matter in which the Investor is a named party, the Company will pay to
the Investor the charges, as reasonably determined by the Investor, for the time
of any officers or employees of the Investor devoted to appearing and preparing
to appear as witnesses, assisting in preparation for hearings, trials or
pretrial matters, or otherwise with respect to inquiries, hearing, trials, and
other proceedings relating to the subject matter of this Agreement. The
reimbursement obligations of the Company under this section shall be in addition
to any liability which the Company may otherwise have, shall extend upon the
same terms and conditions to any affiliates of the Investor that are actually
named in such action, proceeding or investigation, and partners, directors,
agents, employees, attorneys, accountants, auditors and controlling persons (if
any), as the case may be, of Investor and any such affiliate, and shall be
binding upon and inure to the benefit of any successors of the Company, the
Investor and any such affiliate and any such person.

(M) TRANSFER AGENT. Upon effectiveness of the Registration Statement, and for so
long as the Registration Statement is effective, the Company shall deliver
instructions to its transfer agent to issue Shares to the Investor that are
covered for resale by the Registration Statement free of restrictive legends
following receipt from Investor of a letter certifying that the resale was made
pursuant to, and in a manner permitted by, the Registration Statement and that
the prospectus delivery requirements of the 1933 Act were satisfied with respect
to such resale.

                                       21
<PAGE>

(N) ACKNOWLEDGEMENT OF TERMS. The Company hereby represents and warrants to the
Investor that: (i) it is voluntarily entering into this Agreement of its own
freewill, (ii) it is not entering this Agreement under economic duress, (iii)
the terms of this Agreement are reasonable and fair to the Company, and (iv) the
Company has had independent legal counsel of its own choosing review this
Agreement, advise the Company with respect to this Agreement, and represent the
Company in connection with this Agreement.

SECTION 6. INTENTIONALLY OMITTED

SECTION 7. CONDITIONS OF THE COMPANY'S OBLIGATION TO SELL.

The obligation hereunder of the Company to issue and sell the Securities to the
Investor is further subject to the satisfaction, at or before each Closing Date,
of each of the following conditions set forth below. These conditions are for
the Company's sole benefit and may be waived by the Company at any time in its
sole discretion.

(A) The Investor shall have executed this Agreement and the Registration Rights
Agreement and delivered the same to the Company.

(B) The Investor shall have delivered to the Company the Purchase Price for the
Securities being purchased by the Investor between the end of the Pricing Period
and the Closing Date via a Put Settlement Sheet (hereto attached as Exhibit D).
After receipt of confirmation of delivery of such Securities to the Investor,
the Investor, by wire transfer of immediately available funds pursuant to the
wire instructions provided by the Company will disburse the funds constituting
the Purchase Amount.

(C) No statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.

SECTION 8. FURTHER CONDITIONS OF THE INVESTOR'S OBLIGATION TO PURCHASE.

The obligation of the Investor hereunder to purchase Shares is subject to the
satisfaction, on or before each Closing Date, of each of the following
conditions set forth below.

(A) The Company shall have executed the Equity Line Transaction Documents and
delivered the same to the Investor.

(B) The Common Stock shall be authorized for quotation on the Principal Market
and trading in the Common Stock shall not have been suspended by the Principal
Market or the SEC, at any time during the 90 days preceding such Closing Date
(excluding suspensions of not more than one (1) Trading Day resulting from
business announcements by the Company, provided that such suspensions occur
prior to the Company's delivery of the Put Notice related to such Closing).

                                       22
<PAGE>

(C) The representations and warranties of the Company shall be true and correct
as of the date when made, and the Company shall have performed, satisfied and
complied with the covenants, agreements and conditions required by the Equity
Line Transaction Documents to be performed, satisfied or complied with by the
Company on or before such Closing Date. The Investor may request an update as of
such Closing Date regarding the representation contained in Section 4(C) above.

(D) The Company shall have executed and delivered to the Investor the
certificates representing, or have executed electronic book-entry transfer of,
the Securities (in such denominations as the Investor shall request) being
purchased by the Investor at such Closing.

(E) The Board of Directors of the Company shall have adopted resolutions
consistent with Section 4(B)(II) above (the "Resolutions") and such Resolutions
shall not have been amended or rescinded prior to such Closing Date.

(F) Reserved

(G) No statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.

(H) The Registration Statement shall be effective on each Closing Date and no
stop order suspending the effectiveness of the Registration statement shall be
in effect or to the Company's knowledge shall be pending or threatened.
Furthermore, on each Closing Date (I) neither the Company nor the Investor shall
have received notice that the SEC has issued or intends to issue a stop order
with respect to such Registration Statement or that the SEC otherwise has
suspended or withdrawn the effectiveness of such Registration Statement, either
temporarily or permanently, or intends or has threatened to do so (unless the
SEC's concerns have been addressed and Investor is reasonably satisfied that the
SEC no longer is considering or intends to take such action), and (II) no other
suspension of the use or withdrawal of the effectiveness of such Registration
Statement or related prospectus shall exist.

(I) At the time of each Closing, the Registration Statement (including
information or documents incorporated by reference therein) and any amendments
or supplements thereto shall not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or which would require public
disclosure or an update supplement to the prospectus.

(J) If applicable, the shareholders of the Company shall have approved the
issuance of any Shares in excess of the Maximum Common Stock Issuance in
accordance with Section 2(H) or the Company shall have obtained appropriate
approval pursuant to the requirements of Nevada law and the Company's Articles
of Incorporation and By-laws.

                                       23
<PAGE>

(K) The conditions to such Closing set forth in Section 2(E) shall have been
satisfied on or before such Closing Date.

(L) The Company shall have certified to the Investor the number of Shares of
Common Stock outstanding when a Put Notice is given to the Investor. The
Company's delivery of a Put Notice to the Investor constitutes the Company's
certification of the existence of the necessary number of shares of Common Stock
reserved for issuance.

SECTION 9. TERMINATION. This Agreement shall terminate upon any of the following
events:

(I) when the Investor has purchased an aggregate of Ten Million dollars
($10,000,000) in the Common Stock of the Company pursuant to this Agreement; or,

(II) on the date which is thirty-six (36) months after the Effective Date; or,

(III) upon written notice of the Company to the Investor. Any and all shares, or
penalties, if any, due under this Agreement shall be immediately payable and due
upon termination of the Line.

SECTION 10. SUSPENSION

This Agreement shall be suspended upon any of the following events, and shall
remain suspended until such event is rectified:

      (I) the trading of the Common Stock is suspended by the SEC, the Principal
Market or the NASD for a period of two (2) consecutive Trading Days during the
Open Period; or,

      (II) The Common Stock ceases to be registered under the 1934 Act or listed
or traded on the Principal Market. Immediately upon the occurrence of one of the
above-described events, the Company shall send written notice of such event to
the Investor.

SECTION 11. INDEMNIFICATION.

In consideration of the parties mutual obligations set forth in the Transaction
Documents, each of the parties (in such capacity, an "Indemnitor") shall defend,
protect, indemnify and hold harmless the other and all of the other party's
shareholders, officers, directors, employees, counsel, and direct or indirect
investors and any of the foregoing person's agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "Indemnitees")
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and reasonable expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including
reasonable attorneys' fees and disbursements (the "Indemnified Liabilities"),

                                       24
<PAGE>

incurred by any Indemnitee as a result of, or arising out of, or relating to (I)
any misrepresentation or breach of any representation or warranty made by the
Indemnitor or any other certificate, instrument or document contemplated hereby
or thereby; (II) any breach of any covenant, agreement or obligation of the
Indemnitor contained in the Equity Line Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby; or (III) any
cause of action, suit or claim brought or made against such Indemnitee by a
third party and arising out of or resulting from the execution, delivery,
performance or enforcement of the Equity Line Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, except
insofar as any such misrepresentation, breach or any untrue statement, alleged
untrue statement, omission or alleged omission is made in reliance upon and in
conformity with information furnished to Indemnitor which is specifically
intended for use in the preparation of any such Registration Statement,
preliminary prospectus, prospectus or amendments to the prospectus. To the
extent that the foregoing undertaking by the Indemnitor may be unenforceable for
any reason, the Indemnitor shall make the maximum contribution to the payment
and satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law. The indemnity provisions contained herein shall be in
addition to any cause of action or similar rights Indemnitor may have, and any
liabilities the Indemnitor or the Indemnitees may be subject to.

SECTION 12. GOVERNING LAW; DISPUTES SUBMITTED TO ARBITRATION.

      All disputes arising under this agreement shall be governed by and
interpreted in accordance with the laws of the Commonwealth of Massachusetts,
without regard to principles of conflict of laws. The parties to this agreement
will submit all disputes arising under this agreement to arbitration in Boston,
Massachusetts before a single arbitrator of the American Arbitration Association
("AAA"). The arbitrator shall be selected by application of the rules of the
AAA, or by mutual agreement of the parties, except that such arbitrator shall be
an attorney admitted to practice law in the Commonwealth of Massachusetts. No
party to this agreement will challenge the jurisdiction or venue provisions as
provided in this section. No party to this agreement will challenge the
jurisdiction or venue provisions as provided in this section. Nothing contained
herein shall prevent the party from obtaining an injunction.

(B) LEGAL FEES; AND MISCELLANEOUS FEES. Except as otherwise set forth in the
Equity Line Transaction Documents, each party shall pay the fees and expenses of
its advisers, counsel, the accountants and other experts, if any, and all other
expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement. Any attorneys' fees and
expenses incurred by either the Company or the Investor in connection with the
preparation, negotiation, execution and delivery of any amendments to this
Agreement or relating to the enforcement of the rights of any party, after the
occurrence of any breach of the terms of this Agreement by another party or any
default by another party in respect of the transactions contemplated hereunder,
shall be paid on demand by the party which breached the Agreement and/or
defaulted, as the case may be. The Company shall pay all stamp and other taxes
and duties levied in connection with the issuance of any Securities.

                                       25
<PAGE>

(C) COUNTERPARTS. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that a facsimile signature shall be
considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original signature.

(D) HEADINGS; SINGULAR/PLURAL. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement. Whenever required by the context of this
Agreement, the singular shall include the plural and masculine shall include the
feminine.

(E) 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.

(F) ENTIRE AGREEMENT; AMENDMENTS. This Agreement is the FINAL AGREEMENT between
the Company and the Investor with respect to the terms and conditions set forth
herein, and, the terms of this Agreement may not be contradicted by evidence of
prior, contemporaneous, or subsequent oral agreements of the Parties. No
provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and the Investor, and no provision hereof may be
waived other than by an instrument in writing signed by the party against whom
enforcement is sought. The execution and delivery of the Equity Line Transaction
Documents shall not alter the force and effect of any other agreements between
the Parties, and the obligations under those agreements.

(G) NOTICES. Any notices or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered (I) upon receipt, when delivered personally; (II) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (III) one (1) business 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:

Smoky Market Foods, Inc.
804 Estates Drive, Suite 100
Aptos, CA 95003
Telephone: (866) 851-7787
Facsimile: (831) 567-0829

                                       26
<PAGE>

IF TO THE INVESTOR:

Dutchess Private Equities Fund, Ltd.,
50 Commonwealth Avenue, Suite 2
Boston, MA 02116
Telephone: 617-301-4700
Facsimile: 617-249-0947

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

(H) NO ASSIGNMENT. This Agreement may not be assigned.

(I) NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of
the parties hereto and is not for the benefit of, nor may any provision hereof
be enforced by, any other person, except that the Company acknowledges that the
rights of the Investor may be enforced by its general partner.

(J) SURVIVAL. The representations and warranties of the Company and the Investor
contained in Sections 2 and 3, the agreements and covenants set forth in
Sections 4 and 5, and the indemnification provisions set forth in Section 11,
shall survive each of the Closings and the indemnification provisions set forth
in Section 11 shall survive the termination of this Agreement.

(K) PUBLICITY. The Company and the Investor shall consult with each other in
issuing any press releases or otherwise making public statements with respect to
the transactions contemplated hereby and no party shall issue any such press
release or otherwise make any such public statement without the prior consent of
the other party, which consent shall not be unreasonably withheld or delayed,
except that no prior consent shall be required if such disclosure is required by
law, in which such case the disclosing party shall provide the other party with
prior notice of such public statement. Notwithstanding the foregoing, the
Company shall not publicly disclose the name of the Investor without the prior
consent of the Investor, except to the extent required by law. The Investor
acknowledges that this Agreement and all or part of the Equity Line Transaction
Documents may be deemed to be "material contracts" as that term is defined by
Item 601(b)(10) of Regulation S-B, and that the Company may therefore be
required to file such documents as exhibits to reports or registration
statements filed under the 1933 Act or the 1934 Act (and that the Investor's
name may be included in such reports). The Investor further agrees that the
status of such documents and materials as material contracts shall be determined
solely by the Company, in consultation with its counsel.

                                       27
<PAGE>

(L) 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.

(M) [Omitted.]

(N) 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, as the parties
mutually agree that each has had a full and fair opportunity to review this
Agreement and seek the advice of counsel on it.

(O) REMEDIES. The Investor shall have all rights and remedies set forth in this
Agreement and the Registration Rights Agreement and all rights and remedies
which such holders have been granted at any time under any other agreement or
contract and all of the rights which the Investor has by law. Any person having
any rights under any provision of this Agreement shall be entitled to enforce
such rights specifically (without posting a bond or other security), to recover
damages by reason of any default or breach of any provision of this Agreement,
including the recovery of reasonable attorneys fees and costs, and to exercise
all other rights granted by law.

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

(Q) PRICING OF COMMON STOCK. For purposes of this Agreement, the bid price of
the Common Stock shall be as reported on Bloomberg.

SECTION 13. NON-DISCLOSURE OF NON-PUBLIC INFORMATION.

(a) The Company shall not disclose material, non-public information to the
Investor, its advisors, or its representatives.

(b) Nothing herein shall require the Company to disclose material, non-public
information to the Investor or its advisors or representatives. Notwithstanding
anything herein to the contrary, the Company will, as hereinabove provided,
immediately notify the advisors and representatives of the Investor and, if any,
underwriters, of any event or the existence of any circumstance (without any
obligation to disclose the specific event or circumstance) of which it becomes
aware, constituting non-public information (whether or not requested of the
Company specifically or generally during the course of due diligence by such

                                       28
<PAGE>

persons or entities), which, if not disclosed in the prospectus included in the
Registration Statement would cause such prospectus to include a material
misstatement or to omit a material fact required to be stated therein in order
to make the statements, therein, in light of the circumstances in which they
were made, not misleading. Nothing contained in this Section 13 shall be
construed to mean that such persons or entities other than the Investor (without
the written consent of the Investor prior to disclosure of such information) may
not obtain non-public information in the course of conducting due diligence in
accordance with the terms of this Agreement and nothing herein shall prevent any
such persons or entities from notifying the Company of their opinion that based
on such due diligence by such persons or entities, that the Registration
Statement contains an untrue statement of material fact or omits a material fact
required to be stated in the Registration Statement or necessary to make the
statements contained therein, in light of the circumstances in which they were
made, not misleading.

ARTICLE 14  ACKNOWLEDGEMENTS OF THE PARTIES.

Notwithstanding anything in this Agreement to the contrary, the parties hereto
hereby acknowledge and agree to the following: (i) the Investor makes no
representations or covenants that it will not engage in trading in the
securities of the Company, other than the Investor will not sell short the
Company's common stock at any time during this Agreement; (ii) the Company
shall, by 8:30 a.m. Boston Time on the fourth Trading Day following the date
hereof, file a current report on Form 8-K disclosing the material terms of the
transactions contemplated hereby and in the other Equity Line Transaction
Documents; (iii) the Company has not and shall not provide material non-public
information to the Investor unless prior thereto the Investor shall have
executed a written agreement regarding the confidentiality and use of such
information; and (iv) the Company understands and confirms that the Investor
will be relying on the acknowledgements set forth in clauses (i) through (iii)
above if the Investor effects any transactions in the securities of the Company.

                                       29
<PAGE>

SIGNATURE PAGE OF INVESTMENT AGREEMENT

Your signature on this Signature Page evidences your agreement to be bound by
the terms and conditions of the Investment Agreement as of the date first
written above.

The undersigned signatory hereby certifies that he has read and understands the
Investment Agreement, and the representations made by the undersigned in this
Investment Agreement are true and accurate, and agrees to be bound by its terms.

DUTCHESS PRIVATE EQUITIES FUND, LTD.

By: /s/ Douglas H. Leighton
    -----------------------
    Douglas H. Leighton, Director

SMOKY MARKET FOODS, INC.

By: /s/ Edward Feintech
    -------------------
    Edward Feintech, CEO

                                       30
<PAGE>

LIST OF EXHIBITS
----------------

EXHIBIT A       Registration Rights Agreement
EXHIBIT B       Form of Notice of Effectiveness
EXHIBIT C       Put Notice
EXHIBIT D       Put Settlement  Sheet

<PAGE>

                                    EXHIBIT A

                          REGISTRATION RIGHTS AGREEMENT

                                 [SEE ATTACHED]

<PAGE>

                                    EXHIBIT B

FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
                                                                Date: __________
[TRANSFER AGENT]

      Re:   Smoky Market Foods, Inc.

Ladies and Gentlemen:

      We are counsel to Smoky Market Foods, Inc., a Nevada corporation (the
"Company"), and have represented the Company in connection with that certain
Investment Agreement (the "Investment Agreement") entered into by and among the
Company and _________________________ (the "Investor") pursuant to which the
Company has agreed to issue to the Investor shares of the Company's common
stock, $.001 par value per share (the "Common Stock") on the terms and
conditions set forth in the Investment Agreement. Pursuant to the Investment
Agreement, the Company also has entered into a Registration Rights Agreement
with the Investor (the "Registration Rights Agreement") pursuant to which the
Company agreed, among other things, to register the resale of shares of Common
Stock issued or issuable under the Investment Agreement under the Securities Act
of 1933, as amended (the "1933 Act"). In connection with the Company's
obligations under the Registration Rights Agreement, on ____________ ___, 2006,
the Company filed a Registration Statement on Form S- ___ (File No.
333-________) (including any amendments thereof the "Registration Statement")
with the Securities and Exchange Commission (the "SEC") registering under the
1933 Act, among other securities, the re-sale of ______________ shares of Common
Stock (subject to adjustment for stock splits and similar transaction) (the
"Registrable Securities") by the Investor as a selling shareholder thereunder.

      In connection with the foregoing, we advise you that [a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective] [the Registration Statement has
become effective] under the 1933 Act at [enter the time of effectiveness] on
[enter the date of effectiveness] and to our knowledge, as of the date hereof no
stop order suspending its effectiveness has been issued and no proceedings for
that purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.

                                                Very truly yours,

                                                [Company Counsel]

<PAGE>

                                    EXHIBIT C

Date:

RE: Put Notice Number __

Dear Mr. Leighton,

This is to inform you that as of today, Smoky Market Foods, Inc., a Nevada
corporation (the "Company"), hereby elects to exercise its right pursuant to the
Investment Agreement to require Dutchess Private Equities Fund, Ltd. (the
"Investor") to purchase shares of its common stock. The Company hereby certifies
that:

The amount of this put is $__________.

The Pricing Period runs from ________ until _______.

The current number of shares issued and outstanding as of the Company are:

                  ____________________________________________

Assuming the Investor has previously sold all shares of common stock issued to
it under the Investment Agreement, the number of shares registered for re-sale
under the Registration Statement on Form SB-2, File No. 333-________________ by
the Investor that have not be sold are: _________________________.

Regards,

/s/ Edward Feintech
-------------------
Edward Feintech, CEO
Smoky Market Foods, Inc.

<PAGE>

                                    EXHIBIT D

PUT SETTLEMENT SHEET

Date:

Dear Mr. Feintech,

Pursuant to the Put given by Smoky Market Foods, Inc., to Dutchess Private
Equities Fund, Ltd. on _________________ 200_, we are now submitting the amount
of common shares for you to issue to Dutchess. Please have a certificate
representing __________ shares (the "Put Shares") issued to Dutchess Private
Equities Fund, Ltd. Immediately.

The Put Shares have been offered and sold pursuant to the Registration Statement
on Form SB-2, File No. 333-___________ and the prospectus that is part thereof.
The offer and sale of such Put Shares were in accordance with the plan of
distribution set forth in the prospectus and all applicable state and federal
securities laws. The selling stockholder or his/her/its agent complied with the
prospectus delivery requirements under the Securities Act of 1933, as amended,
in connection with such offer and sale. Accordingly, please issue the
certificate representing the Put Shares without restrictive legend.

The Put Shares should be issued in the name of Dutchess Private Equities Fund,
Ltd. immediately and sent via DWAC to the following account:

XXXXXX

If not DWAC eligible, please send FedEx Priority Overnight to:

XXXXXX

Regards,

/s/ Douglas H. Leighton
-----------------------
Douglas H. Leighton

<PAGE>

        DATE. . . . . . . . . . . . . . . . . . . . .  PRICE

        Date of Day 1 . . . . . . . . . . . . . . . .  Closing Bid of Day 1
        Date of Day 2 . . . . . . . . . . . . . . . .  Closing Bid of Day 2
        Date of Day 3 . . . . . . . . . . . . . . . .  Closing Bid of Day 3
        Date of Day 4 . . . . . . . . . . . . . . . .  Closing Bid of Day 4
        Date of Day 5 . . . . . . . . . . . . . . . .  Closing Bid of Day 5

        LOWEST 1 (ONE) CLOSING BID IN PRICING PERIOD   ______________

        PUT AMOUNT                                     ______________

        AMOUNT WIRED TO COMPANY                        ______________

        PURCHASE PRICE (93)% (NINETY-THREE PERCENT)    ______________

        AMOUNT OF SHARES DUE                           ______________

The undersigned has completed this Put as of this ___th day of _________, 200_.

SMOKY MARKET FOODS, INC.

/s/ Edward Feintech
-------------------
Edward Feintech, CEO<PAGE>

                                                                    EXHIBIT 10.2

                          REGISTRATION RIGHTS AGREEMENT
                          -----------------------------

      This Registration Rights Agreement (the "Agreement") is dated as of
October 30, 2007, by and between Smoky Market Foods, Inc., a corporation
organized under the laws of State of Nevada, with its principal executive office
at 804 Estates Drive, Suite 100, Aptos, CA 95003 (the "Company"), and Dutchess
Private Equities Fund, Ltd., a Cayman Islands exempted company, with its
principal office at 50 Commonwealth Avenue, Suite 2, Boston, MA 02116 (the
"Holder").

      WHEREAs, in connection with the Investment Agreement by and between the
Company and the Investor of this date (the "Investment Agreement"), the Company
has agreed to issue and sell to the Investor an indeterminate number of shares
of the Company's Common Stock, $.001 par value per share (the "Common Stock"),
to be purchased pursuant to the terms and subject to the conditions set forth in
the Investment Agreement; and

      WHEREAS, to induce the Investor to execute and deliver the Investment
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "1933 Act"), and
applicable state securities laws, with respect to the shares of Common Stock
issuable pursuant to the Investment Agreement.

      NOW THEREFORE, IN CONSIDERATION OF THE FOREGOING PROMISES AND THE MUTUAL
COVENANTS CONTAINED HEREINAFTER AND OTHER GOOD AND VALUABLE CONSIDERATION, THE
RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE COMPANY AND THE
INVESTOR HEREBY AGREE AS FOLLOWS:

SECTION 1. DEFINITIONS.

      As used in this Agreement, the following terms shall have the following
meanings:

      "Execution Date" means the date of this Agreement set forth above.

      "Investor" means Dutchess Private Equities Fund, Ltd., a Cayman Islands
exempted company.

      "Person" means a corporation, a limited liability company, an association,
a partnership, an organization, a business, an individual, a governmental or
political subdivision thereof or a governmental agency.

      "Potential Material Event" means any of the following: (I) the possession
by the Company of material information not ripe for disclosure in the
Registration Statement, which shall be evidenced by determinations in good faith
by the Board of Directors of the Company that disclosure of such information in
the Registration Statement would be detrimental to the business and affairs of
the Company, or (II) any material engagement or activity by the Company which
would, in the good faith determination of the Board of Directors of the Company,
be adversely affected by disclosure in the Registration Statement at such time,
which determination shall be accompanied by a good faith determination by the
Board of Directors of the Company that the Registration Statement would be
materially misleading absent the inclusion of such information.

      "Principal Market" shall mean The American Stock Exchange, National
Association of Securities Dealer's, Inc., Over-the-Counter electronic bulletin
board, the Nasdaq Global Market or The Nasdaq Capital Market whichever is the
principal market on which the Common Stock of the Company is listed.

      "Register," "Registered," and "Registration" refer to the Registration
effected by preparing and filing one (1) or more Registration Statements in
compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any
successor rule providing for offering securities on a continuous basis ("Rule
415"), and the declaration or ordering of effectiveness of such Registration
Statement(s) by the United States Securities and Exchange Commission (the
"SEC").

                                       1
<PAGE>

      "Registrable Securities" means (I) the shares of Common Stock issued or
issuable pursuant to the Investment Agreement, and (II) any shares of capital
stock issued or issuable with respect to such shares of Common Stock, if any, as
a result of any stock split, stock dividend, recapitalization, exchange or
similar event or otherwise, which have not been (X) included in the Registration
Statement that has been declared effective by the SEC, or (Y) sold under
circumstances meeting all of the applicable conditions of Rule 144 (or any
similar provision then in force) under the 1933 Act.

      "Registration Statement" means the registration statement of the Company
filed under the 1933 Act covering the Registrable Securities.

      All capitalized terms used in this Agreement and not otherwise defined
herein shall have the same meaning ascribed to them as in the Investment
Agreement.

SECTION 2. REGISTRATION.

      (A) The Company shall, within twenty-one (21) days of the date of this
Agreement, file with the SEC the Registration Statement or Registration
Statements (as is necessary) on Form SB-2 (or, if such form is unavailable for
such a registration, on such other form as is available for such registration),
covering the resale of 4,000,000 shares of Common Stock, except to the extent
that the SEC requires the share amount to be reduced as a condition of
effectiveness in which case the Registration Statement shall cover such number
of shares of Common Stock that the Company estimates the SEC would permit, which
Registration Statement(s) shall state that, in accordance with Rule 416
promulgated under the 1933 Act, such Registration Statement also covers such
indeterminate number of additional shares of Common Stock as may become issuable
upon stock splits, stock dividends or similar transactions.

      (B) The Company agrees not to include any other securities in the
Registration Statement covering the Registrable Securities without Investor's
prior written consent which Investor may withhold in its sole discretion;
provided, however, the Investor hereby consents to the inclusion by the Company
of 1,000,000 shares of common stock for the benefit of other selling
stockholders. Furthermore, the Company agrees that it will not file any other
Registration Statement for other securities, until thirty calendar days after
the Registration Statement for the Registrable Securities is declared effective
by the SEC.

SECTION 3. RELATED OBLIGATIONS.

      At such time as the Company is obligated to prepare and file the
Registration Statement with the SEC pursuant to Section 2(a), the Company will
effect the registration of the Registrable Securities in accordance with the
intended method of disposition thereof and, with respect thereto, the Company
shall have the following obligations:

      (A) The Company shall use all commercially reasonable efforts to cause
such Registration Statement relating to the Registrable Securities to become
effective within one hundred and twenty (120) days after the Execution Date and
shall keep such Registration Statement effective until the earlier to occur of
the date on which (A) the Investor shall have sold all the Registrable
Securities; or (B) the Investor has no right to acquire any additional shares of
Common Stock under the Investment Agreement (the "Registration Period"). The
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading. The Company shall use all commercially
reasonable efforts to respond to all SEC comments within seven (7) business days
from receipt of such comments by the Company; provided, however, if any comment
requires the amendment, and reaudit, of audited financial statements, the
Company shall have seven (7) business days from the completion of such reaudit
to respond to the SEC comments. The Company shall use all commercially
reasonable efforts to cause the Registration Statement relating to the
Registrable Securities to become effective no later than five (5) business days
after notice from the SEC that the Registration Statement may be declared
effective. The Investor agrees to provide all information which it is required
by law to provide to the Company, including the intended method of disposition
of the Registrable Securities, and the Company's obligations set forth above
shall be conditioned on the receipt of such information.

                                       2
<PAGE>

      (B) The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection with such Registration
Statement, which prospectus is to be filed pursuant to Rule 424 promulgated
under the 1933 Act, as may be necessary to keep such Registration Statement
effective during the Registration Period, and, during such period, comply with
the provisions of the 1933 Act with respect to the disposition of all
Registrable Securities of the Company covered by such Registration Statement
until such time as all of such Registrable Securities shall have been disposed
of in accordance with the intended methods of disposition by the Investor
thereof as set forth in such Registration Statement. In the event the number of
shares of Common Stock covered by the Registration Statement filed pursuant to
this Agreement is at any time insufficient to cover all of the Registrable
Securities issuable during the next 120 days (assuming the Company submits put
notices at the same rate as the prior 120 days), the Company shall amend such
Registration Statement, or file a new Registration Statement (on the short form
available therefor, if applicable), or both, so as to cover all of the
Registrable Securities, in each case, as soon as practicable, but in any event
within thirty (30) calendar days after the necessity therefor arises (based on
the then Purchase Price of the Common Stock and other relevant factors on which
the Company reasonably elects to rely), assuming the Company has sufficient
authorized shares at that time, and if it does not, within thirty (30) calendar
days after such shares are authorized. The Company shall use commercially
reasonable efforts to cause such amendment and/or new Registration Statement to
become effective as soon as practicable following the filing thereof.

      (C) The Company shall make available to the Investor whose Registrable
Securities are included in any Registration Statement and its legal counsel
without charge (I) promptly after the same is prepared and filed with the SEC at
least one (1) copy of such Registration Statement and any amendment(s) thereto,
including financial statements and schedules, the prospectus included in such
Registration Statement (including each preliminary prospectus, if any) and, with
regards to such Registration Statement(s), any written correspondence by or on
behalf of the Company to the SEC or the staff of the SEC and any written
correspondence from the SEC or the staff of the SEC to the Company or its
representatives; (II) upon the effectiveness of any Registration Statement, the
Company shall make available copies of the prospectus, via EDGAR, included in
such Registration Statement and all amendments and supplements thereto; and
(III) such other documents, including copies of any preliminary or final
prospectus, as the Investor may reasonably request from time to time in order to
facilitate the disposition of the Registrable Securities.

      (D) The Company shall use commercially reasonable efforts to (I) register
and qualify the Registrable Securities covered by the Registration Statement
under such other securities or "blue sky" laws of such states in the United
States as the Investor reasonably requests; (II) prepare and file in those
jurisdictions, such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period; (III) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (IV)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; PROVIDED, HOWEVER, that
the Company shall not be required in connection therewith or as a condition
thereto to (X) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), or (Y) subject
itself to general taxation in any such jurisdiction. The Company shall promptly
notify the Investor who holds Registrable Securities of the receipt by the
Company of any notification with respect to the suspension of the registration
or qualification of any of the Registrable Securities for sale under the
securities or "blue sky" laws of any jurisdiction in the United States or its
receipt of actual notice of the initiation or threatening of any proceeding for
such purpose.

      (E) As promptly as practicable after becoming aware of such event, the
Company shall notify Investor in writing of the happening of any event as a
result of which the prospectus included in the Registration Statement, as then
in effect, includes an untrue statement of a material fact or omission to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,

                                       3
<PAGE>

not misleading ("Registration Default") and use all diligent efforts to promptly
prepare a supplement or amendment to such Registration Statement or prospectus
and take any other necessary steps to cure the Registration Default (which, if
such Registration Statement is on Form S-3, may consist of a document to be
filed by the Company with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d)
of the 1934 Act (as defined below) and to be incorporated by reference in the
prospectus) to correct such untrue statement or omission, and make available
copies of such supplement or amendment to the Investor. The Company shall also
promptly notify the Investor (I) when a prospectus or any prospectus supplement
or post-effective amendment has been filed, and when the Registration Statement
or any post-effective amendment has become effective (the Company will prepare
notification of such effectiveness which shall be delivered to the Investor on
the same day of such effectiveness and by overnight mail); (II) of any request
by the SEC for amendments or supplements to the Registration Statement or
related prospectus or related information, (III) of the Company's reasonable
determination that a post-effective amendment to the Registration Statement
would be appropriate, (IV) in the event the Registration Statement is no longer
effective, or (V) if the Registration Statement is stale as a result of the
Company's failure to timely file its financials or otherwise. Notwithstanding
the foregoing,

      (i) For not more than twenty (20) consecutive days or for a total of not
more than forty-five (45) days in any twelve (12) month period, the Company may
delay the disclosure of material non-public information concerning the Company,
by suspending the use of any Prospectus included in any registration
contemplated by this Agreement containing such information, the disclosure of
which at the time is not, in the good faith opinion of the Chief Executive
Officer and Chief Financial Officer of the Company, upon advice of counsel, in
the best interests of the Company (an "Allowed Delay"); provided, that the
Company shall promptly (a) notify the Investor in writing of the existence of
(but in no event, without the prior written consent of an Investor, shall the
Company disclose to such Investor any of the facts or circumstances regarding)
material non-public information giving rise to an Allowed Delay, (b) advise the
Investors in writing to cease all sales under the Registration Statement until
the end of the Allowed Delay and (c) use its best efforts to terminate an
Allowed Delay as promptly as practicable; and

      (ii) At any time (a) the Company is required to amend the Registration
Statement pursuant to Section 10(a)(3) under the Securities Act, or (b) the
Company is required to amend the Registration Statement to describe a
fundamental change in the information set forth in the Registration Statement
(including, without limitation, any transaction with respect to which the
Company is required to update the Registration Statement to include financial
statements and pro forma financial statements required by Rule 3-05 of
Regulation S-X), the Company shall be allowed up to fifteen (15) business days
from the date the amendment is required in order to file an amendment to the
Registration Statement and until the sixtieth day following the date the
amendment is required in order to cause the amended Registration Statement to be
effective (such 60-day period, the "Update Delay"); provided, that the Company
shall promptly after the occurrence of the event requiring amendment (a) notify
the Investors in writing of the existence of (but in no event, without the prior
written consent of an Investor, shall the Company disclose to such Investor any
of the facts or circumstances regarding) such material non-public information
giving rise to an Update Delay, (b) advise the Investors in writing to cease all
sales under the Registration Statement until the end of the Update Delay and (c)
use its best efforts to terminate an Update Delay as promptly as practicable.

      (iii) In no event, shall the Company exercise it's rights under (i) and
(ii) above during a Pricing Period. In addition, during an Allowed Delay or an
Update Delay, the Company may not submit a Put Notice to the Investor, nor shall
the Investor be bound by the terms and conditions of the Investment Agreement
during an Allowed Delay or an Update Delay.

      (F) The Company shall use all commercially reasonable efforts to prevent
the issuance of any stop order or other suspension of effectiveness of the
Registration Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension at
the earliest possible moment and to notify the Investor holding Registrable
Securities being sold of the issuance of such order and the resolution thereof
or its receipt of actual notice of the initiation or threat of any proceeding
concerning the effectiveness of the registration statement.

                                       4
<PAGE>

      (G) The Company shall permit the Investor and one (1) legal counsel,
designated by the Investor, to review and comment upon the Registration
Statement and all amendments and supplements thereto at least one (1) calendar
day prior to their filing with the SEC. However, any postponement of a filing of
a Registration Statement or any postponement of a request for acceleration or
any postponement of the effective date or effectiveness of a Registration
Statement by written request of the Investor (collectively, the "Investor's
Delay") shall not act to trigger any penalty of any kind, or any cash amount due
or any in-kind amount due the Investor from the Company under any and all
agreements of any nature or kind between the Company and the Investor. The
event(s) of an Investor's Delay shall act to suspend all obligations of any kind
or nature of the Company under any and all agreements of any nature or kind
between the Company and the Investor.

      (H) At the request of the Investor, the Company's counsel shall furnish to
the Investor an opinion letter confirming the effectiveness of the registration
statement. Such opinion letter shall be issued as of the date of the
effectiveness of the registration statement and be substantially in the form of
Exhibit B to the Investment Agreement.

      (I) The Company shall hold in confidence and not make any disclosure of
information concerning the Investor unless (I) disclosure of such information is
necessary to comply with federal or state securities laws, (II) the disclosure
of such information is necessary to avoid or correct a misstatement or omission
in any Registration Statement, (III) the release of such information is ordered
pursuant to a subpoena or other final, non-appealable order from a court or
governmental body of competent jurisdiction, or (IV) such information has been
made generally available to the public other than by disclosure in violation of
this Agreement or any other agreement. The Company agrees that it shall, upon
learning that disclosure of such information concerning the Investor is sought
in or by a court or governmental body of competent jurisdiction or through other
means, give prompt written notice to the Investor and allow the Investor, at the
Investor's expense, to undertake appropriate action to prevent disclosure of, or
to obtain a protective order covering such information.

      (J) The Company shall use all commercially reasonable efforts to maintain
designation and quotation of all the Registrable Securities covered by any
Registration Statement on the Principal Market. If, despite the Company's
commercially reasonable efforts, the Company is unsuccessful in satisfying the
preceding sentence, it shall use commercially reasonable efforts to cause all
the Registrable Securities covered by any Registration Statement to be listed on
each other national securities exchange and automated quotation system, if any,
on which securities of the same class or series issued by the Company are then
listed, if any, if the listing of such Registrable Securities is then permitted
under the rules of such exchange or system. The Company shall pay all fees and
expenses in connection with satisfying its obligation under this Section 3(j).

      (K) The Company shall cooperate with the Investor to facilitate the prompt
preparation and delivery of certificates representing the Registrable Securities
to be offered pursuant to the Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
Investor may reasonably request (and after any sales of such Registrable
Securities by the Investor pursuant to and in a manner permitted by an effective
Registration Statement, such certificates not bearing any restrictive legend).

      (L) The Company shall provide a transfer agent for all the Registrable
Securities not later than the effective date of the first Registration Statement
filed pursuant hereto.

      (M) If requested by the Investor, the Company shall (I) as soon as
reasonably practical incorporate in a prospectus supplement or post-effective
amendment such information as the Investor reasonably determines should be
included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect to the
offering of the Registrable Securities to be sold in such offering; (II) make
all required filings of such prospectus supplement or post-effective amendment
as soon as reasonably possible after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and
(III) supplement or make amendments to any Registration Statement if reasonably
requested by the Investor.

                                       5
<PAGE>

      (N) The Company shall use all commercially reasonable efforts to cause the
Registrable Securities covered by the applicable Registration Statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to facilitate the disposition of such Registrable
Securities.

      (O) The Company shall otherwise use all commercially reasonable efforts to
comply with all applicable rules and regulations of the SEC in connection with
any registration hereunder.

      (P) Within one (1) business day after the Registration Statement which
includes Registrable Securities is declared effective by the SEC, the Company
shall deliver to the transfer agent for such Registrable Securities, with copies
to the Investor, confirmation that such Registration Statement has been declared
effective by the SEC.

      (Q) The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Investor of Registrable Securities
pursuant to the Registration Statement.

SECTION 4. OBLIGATIONS OF THE INVESTOR.

      (A) At least five (5) calendar days prior to the first anticipated filing
date of the Registration Statement the Company shall notify the Investor in
writing of the information the Company requires from the Investor for the
Registration Statement. It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement with respect
to the Registrable Securities and the Investor agrees to furnish to the Company
that information regarding itself, the Registrable Securities and the intended
method of disposition of the Registrable Securities as shall reasonably be
required to effect the registration of such Registrable Securities and the
Investor shall execute such documents in connection with such registration as
the Company may reasonably request. The Investor covenants and agrees that, in
connection with any sale of Registrable Securities by it pursuant to the
Registration Statement, it shall comply with the "Plan of Distribution" section
of the then current prospectus relating to such Registration Statement.

      (B) The Investor, by its acceptance of the Registrable Securities, agrees
to cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of any Registration Statement
hereunder, unless the Investor has notified the Company in writing of an
election to exclude all of the Investor's Registrable Securities from such
Registration Statement.

      (C) The Investor agrees that, upon receipt of written notice from the
Company of the happening of any event of the kind described in Section 3(f) or
the first sentence of 3(e), the Investor will immediately discontinue
disposition of Registrable Securities pursuant to any Registration Statement(s)
covering such Registrable Securities until the Investor's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 3(f) or the
first sentence of 3(e).

SECTION 5. EXPENSES OF REGISTRATION.

      All expenses, other than underwriting discounts and commissions and other
than as set forth in the Investment Agreement, incurred in connection with
registrations including comments, filings or qualifications pursuant to Sections
2 and 3, including, without limitation, all registration, listing and
qualifications fees, printing and accounting fees, and fees and disbursements of
counsel for the Company shall be paid by the Company.

                                       6
<PAGE>

SECTION 6. INDEMNIFICATION.

      In the event any Registrable Securities are included in the Registration
Statement under this Agreement:

      (A) To the fullest extent permitted by law, the Company, under this
Agreement, will, and hereby does, indemnify, hold harmless and defend the
Investor who holds Registrable Securities, the directors, officers, partners,
employees, counsel, agents, representatives of, and each Person, if any, who
controls, any Investor within the meaning of the 1933 Act or the Securities
Exchange Act of 1934, as amended (the "1934 Act") (each, an "Indemnified
Person"), against any losses, claims, damages, liabilities, judgments, fines,
penalties, charges, costs, attorneys' fees, amounts paid in settlement or
expenses, joint or several (collectively, "Claims"), incurred in investigating,
preparing or defending any action, claim, suit, inquiry, proceeding,
investigation or appeal taken from the foregoing by or before any court or
governmental, administrative or other regulatory agency, body or the SEC,
whether pending or threatened, whether or not an indemnified party is or may be
a party thereto ("Indemnified Damages"), to which any of them may become subject
insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon: (I) any untrue
statement or alleged untrue statement of a material fact in the Registration
Statement or any post-effective amendment thereto or in any filing made in
connection with the qualification of the offering under the securities or other
"blue sky" laws of any jurisdiction in which the Investor has requested in
writing that the Company register or qualify the Shares ("Blue Sky Filing"), or
the omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which the statements therein were made, not misleading, (II)
any untrue statement or alleged untrue statement of a material fact contained in
the final prospectus (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission or alleged
omission to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the statements therein
were made, not misleading, or (III) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any other law, including, without
limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities pursuant to the
Registration Statement (the matters in the foregoing clauses (i) through (iii)
being, collectively, "Violations"). Subject to the restrictions set forth in
Section 6(c) the Company shall reimburse the Investor and each such controlling
person, promptly as such expenses are incurred and are due and payable, for any
reasonable legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(a): (I) shall not apply to a Claim arising out of or
based upon a Violation which is due to the inclusion in the Registration
Statement of the information furnished to the Company by any Indemnified Person
expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto; (II) shall not be
available to the extent such Claim is based on (A) a failure of the Investor to
deliver or to cause to be delivered the prospectus made available by the Company
or (B) the Indemnified Person's use of an incorrect prospectus despite being
promptly advised in advance by the Company in writing not to use such incorrect
prospectus; (III) any claims based on the manner of sale of the Registrable
Securities by the Investor or of the Investor's failure to register as a dealer
under applicable securities laws; (IV) any omission of the Investor to notify
the Company of any material fact that should be stated in the Registration
Statement or prospectus relating to the Investor or the manner of sale; and (V)
any amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not be
unreasonably withheld. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Person
and shall survive the resale of the Registrable Securities by the Investor
pursuant to the Registration Statement.

      (B) In connection with any Registration Statement in which Investor is
participating, the Investor agrees to severally and jointly indemnify, hold
harmless and defend, to the same extent and in the same manner as is set forth
in Section 6(a), the Company, each of its directors, each of its officers who
signs the Registration Statement, each Person, if any, who controls the Company
within the meaning of the 1933 Act or the 1934 Act and the Company's agents
(collectively and together with an Indemnified Person, an "INDEMNIFIED PARTY"),
against any Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or

                                       7
<PAGE>

Indemnified Damages arise out of or are based upon any Violation, in each case
to the extent, and only to the extent, that such Violation is due to the
inclusion in the Registration Statement of the written information furnished to
the Company by the Investor expressly for use in connection with such
Registration Statement; and, subject to Section 6(c), the Investor will
reimburse any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such Claim; PROVIDED, HOWEVER, that the
indemnity agreement contained in this Section 6(b) and the agreement with
respect to contribution contained in Section 7 shall not apply to amounts paid
in settlement of any Claim if such settlement is effected without the prior
written consent of the Investor, which consent shall not be unreasonably
withheld; provided, further, however, that the Investor shall only be liable
under this Section 6(b) for that amount of a Claim or Indemnified Damages as
does not exceed the net proceeds to such Investor as a result of the sale of
Registrable Securities pursuant to such Registration Statement. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Indemnified Party and shall survive the resale of the
Registrable Securities by the Investor pursuant to the Registration Statement.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(b) with respect to any preliminary
prospectus shall not inure to the benefit of any Indemnified Party if the untrue
statement or omission of material fact contained in the preliminary prospectus
were corrected on a timely basis in the prospectus, as then amended or
supplemented. This indemnification provision shall apply separately to each
Investor and liability hereunder shall not be joint and several.

      (C) Promptly after receipt by an Indemnified Person or Indemnified Party
under this Section 6 of notice of the commencement of any action or proceeding
(including any governmental action or proceeding) involving a Claim, such
Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is
to be made against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses to be paid by the indemnifying party, if, in
the reasonable opinion of counsel retained by the Indemnified Person or
Indemnified Party, the representation by counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding. The indemnifying party shall pay for only one (1) separate legal
counsel for the Indemnified Persons or the Indemnified Parties, as applicable,
and such counsel shall be selected by the Investor, if the Investor is entitled
to indemnification hereunder, or the Company, if the Company is entitled to
indemnification hereunder, as applicable. The Indemnified Party or Indemnified
Person shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or Claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the Indemnified Party or Indemnified Person which relates to such action or
Claim. The indemnifying party shall keep the Indemnified Party or Indemnified
Person fully apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding affected without
its written consent, provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the consent of the Indemnified Party or Indemnified Person,
consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party or Indemnified Person of a
release from all liability in respect to such Claim. Following indemnification
as provided for hereunder, the indemnifying party shall be subrogated to all
rights of the Indemnified Party or Indemnified Person with respect to all third
parties, firms or corporations relating to the matter for which indemnification
has been made. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the Indemnified Person or
Indemnified Party under this Section 6, except to the extent that the
indemnifying party is prejudiced in its ability to defend such action.

                                       8
<PAGE>

      (D) The indemnity agreements contained herein shall be in addition to (I)
any cause of action or similar right of the Indemnified Party or Indemnified
Person against the indemnifying party or others, and (II) any liabilities the
indemnifying party may be subject to pursuant to the law.

SECTION 7. CONTRIBUTION.

      To the extent any indemnification by an indemnifying party is prohibited
or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; PROVIDED, HOWEVER, that:
(I) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 6; (II) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any seller of Registrable Securities who was not
guilty of fraudulent misrepresentation; and (III) contribution by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities.

SECTION 8. REPORTS UNDER THE 1934 ACT.

      With a view to making available to the Investor the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at any time permit the Investor to sell securities of the Company
to the public without registration ("Rule 144"), provided that the Investor
holds any Registrable Securities are eligible for resale under Rule 144 (k), the
Company agrees to:

      (A) make and keep public information available, as those terms are
understood and defined in Rule 144;

      (B) file with the SEC in a timely manner all reports and other documents
required of the Company under the 1933 Act and the 1934 Act so long as the
Company remains subject to such requirements (it being understood that nothing
herein shall limit the Company's obligations under Section 5(c) of the
Investment Agreement) and the filing of such reports and other documents is
required for the applicable provisions of Rule 144; and

      (C) furnish to the Investor, promptly upon request, (I) a written
statement by the Company that it has complied with the reporting requirements of
Rule 144, the 1933 Act and the 1934 Act, (II) a copy of the most recent annual
or quarterly report of the Company and such other reports and documents so filed
by the Company, and (III) such other information as may be reasonably requested
to permit the Investor to sell such securities pursuant to Rule 144 without
registration.

SECTION 9. NO ASSIGNMENT OF REGISTRATION RIGHTS.

      The rights and obligations under this Agreement shall not be assignable.

SECTION 10. AMENDMENT OF REGISTRATION RIGHTS.

      The provisions of this Agreement may be amended only with the written
consent of the Company and Investor.

SECTION 11. MISCELLANEOUS.

      (A) Any notices or other communications required or permitted to be given
under the terms of this Agreement that must be in writing will be deemed to have
been delivered (I) upon receipt, when delivered personally; (II) upon receipt,
when sent by facsimile (provided a confirmation of transmission is mechanically
or electronically generated and kept on file by the sending party); or (III) one
(1) business 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:

                                       9
<PAGE>

                If to the Company:

                        Smoky Market Foods, Inc.
                        804 Estates Drive, Suite 100
                        Aptos, CA 95003
                        Telephone: (866) 851-7787
                        Facsimile: (831) 567-0829

                If to the Investor:

                        Dutchess Private Equities Fund, Ltd.
                        50 Commonwealth Ave, Suite 2
                        Boston, MA 02116
                        Telephone: (617) 301-4700
                        Facsimile: (617) 249-0947

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

      (B) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

      (C) This Agreement and the Transaction Documents constitute the entire
agreement among the parties hereto with respect to the subject matter hereof and
thereof. There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein and therein.

      (D) This Agreement and the Transaction Documents supersede all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.

      (E) The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof. Whenever required by
the context of this Agreement, the singular shall include the plural and
masculine shall include the feminine. This Agreement shall not be construed as
if it had been prepared by one of the parties, but rather as if all the parties
had prepared the same.

      (F) This Agreement may be executed in two or more identical counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.

      (G) 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.

      (H) In case any provision of this Agreement is held by a court of
competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible,
so that it is enforceable to the maximum extent possible, and the validity and
enforceability of the remaining provisions of this Agreement will not in any way
be affected or impaired thereby.

                                       10
<PAGE>

SECTION 12. DISPUTES SUBJECT TO ARBITRATION GOVERNED BY MASSACHUSETTS LAW

      All disputes arising under this agreement shall be governed by and
interpreted in accordance with the laws of the Commonwealth of Massachusetts,
without regard to principles of conflict of laws. The parties to this agreement
will submit all disputes arising under this agreement to arbitration in Boston,
Massachusetts before a single arbitrator of the American Arbitration Association
("AAA"). The arbitrator shall be selected by application of the rules of the
AAA, or by mutual agreement of the parties, except that such arbitrator shall be
an attorney admitted to practice law in the Commonwealth of Massachusetts. No
party to this agreement will challenge the jurisdiction or venue provisions as
provided in this section. Nothing contained herein shall prevent the party from
obtaining an injunction.

                                      *.*.*

                                       11
<PAGE>

                 SIGNATURE PAGE OF REGISTRATION RIGHTS AGREEMENT

Your signature on this Signature Page evidences your agreement to be bound by
the terms and conditions of the Registration Rights Agreement as of the date
first written above.

The undersigned signatory hereby certifies that he has read and understands the
Registration Rights Agreement, and the representations made by the undersigned
in this Registration Rights Agreement are true and accurate, and agrees to be
bound by its terms.

                                        DUTCHESS PRIVATE EQUITIES FUND, LTD.,

                                        By: /s/ Douglas H. Leighton
                                            ------------------------------------
                                            Douglas H. Leighton, Director

                                        SMOKY MARKET FOODS, INC.,

                                        By: /s/ Edward Feintech
                                            ------------------------------------
                                            Edward Feintech, CEO

                                       12

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