Document:

EX-10.1

 

Exhibit 10.1

CHECKFREE CORPORATION

INDIVIDUAL SEPARATION AGREEMENT AND GENERAL RELEASE

     THIS AGREEMENT AND GENERAL RELEASE (also referred to herein as “Agreement”) is made and
entered into by and between Randall A. McCoy for himself or herself, his or her dependents, heirs,
executors, administrators, successors and assigns (hereinafter collectively referred to as
“Employee”) and CHECKFREE CORPORATION, CHECKFREE SERVICES CORPORATION, their subsidiaries, parents,
affiliates, and related entities, and their agents, employees, representatives, attorneys,
officers, directors, owners, insurers, successors, assigns, and employee benefit plans (hereinafter
collectively referred to as “Employer”).

W I T N E S S E T H

     Employee and Employer are terminating their employment relationship and desire to settle fully
and finally all differences between them which may arise out of or relate to Employee’s employment
with Employer and all other claims Employee has through the date of this Agreement.

     NOW THEREFORE, in consideration of the promises and releases herein contained, it is agreed as
follows:

1.   In consideration of the promises undertaken and the releases given herein by Employee, Employer
agrees that, upon the execution of this Agreement, Employer will pay to Employee the amounts
(“Severance Payments”) outlined in Stephen Olsen’s letter dated August 14, 2007 (“Olsen Letter”) in
the manner outlined in the Olsen Letter. The Severance Payments will be paid at the same annual
level of salary as in effect as of the date of Employee’s receipt of this Agreement and will be
made less withholding for taxes and other appropriate items. Employee understands that the
Severance Pay is being offered as additional consideration for signing this Agreement and that this
is a benefit to which Employee would not have been entitled had Employee not signed this Agreement.
Employee expressly acknowledges that the Severance Payments are made in lieu of any payments
specified in that certain Retention Agreement between CheckFree Corporation and Randy A. McCoy
dated July 27, 2007, as amended August 2, 2007 (the “Retention Agreement”). Employee expressly
acknowledges that the Company does not owe Employee any additional amounts for wages, back pay,
severance pay, severance plan benefits, bonuses, accrued vacation, benefits, insurance, sick leave,
other leave, or any other reason, including but not limited to any payments under the Retention
Agreement.

2.   In consideration for the promises made hereunder, Employee hereby fully, finally, and forever
releases, remises, waives, and discharges Employer of and from all claims, demands, actions, causes
of actions, suits, damages, losses and expenses, of any and every nature whatsoever, as a result of
any actions or omissions occurring through the effective date of this Agreement. Specifically
included in this release, remise, waiver and discharge are, among other things, any and all claims
for employment discrimination, harassment, and retaliation, any claims for alleged underpayment of
wages and employment benefits incurred during or as a result of the employment relationship between Employee and Employer, and including, specifically, any claims
arising from that employment relationship or otherwise under the Age Discrimination in Employment
Act, Title VII of the Civil Rights Act of

 

 

 

CheckFree Services Corporation

Individual Separation Agreement and General Release

CONFIDENTIAL

Page 1 of 7

 

 

1964, the Americans With Disabilities Act, the
Employee Retirement Income Security Act of 1974, the Fair Labor Standards Act, the Equal Pay Act,
and 42 U.S.C. § 1981, or any other federal, state or local statute, rule or regulation relating to
employment rights, as well as any claims for alleged wrongful discharge, negligence, intentional
infliction of emotional distress, breach of contract, fraud, or any other alleged unlawful
behavior, conduct, or omissions, the existence of which is denied by Employer. Additionally,
Employee agrees to release, remise, waive and discharge Employer of and from any and all of the
aforementioned claims upon which Employee may have a right to recover in any lawsuit brought by any
other person on Employee’s behalf or which includes Employee in any class. Specifically excluded
from this release, remise, waiver and discharge are any claims to enforce Employee’s rights
pursuant to this Agreement and the severance payments, benefits and indemnity agreements and
obligations referenced therein.

3.   Employee also agrees not to institute a lawsuit against Employer in regard to any claims,
demands, causes of action, suits, damages, losses and expenses, arising from acts or omissions made
by or before the date of execution of this Agreement, and Employee will ask no other person or
entity to initiate such a lawsuit on his or her behalf. Further, Employee agrees that if he or she
has already instituted a suit or an administrative complaint or charge in regard to any such
claims, he or she will immediately withdraw or dismiss such suit, complaint or charge. Nothing in
the above release, remise, or waiver and discharge, however, is intended to waive any of the
Employee’s entitlement to any already-vested benefits under any applicable pension plan.

4.   Employee affirms his or her obligations under the Confidentiality and Noncompetition Agreement,
or other applicable agreement which is attached hereto as Attachment A, to keep all proprietary
information of Employer confidential, to refrain from solicitation of Employer’s employees, and to
refrain from competing with Employer in the manner and for the period as provided thereunder.
Employee further states in accordance with Employee’s existing and continuing obligations to
Employer that Employee has returned or will immediately return to Employer, on or before Employee’s
termination date, all property of Employer, including, but not limited to, files, records, computer
access codes, and computer programs, instruction manuals, business plans, and other property,
including, computers, computer equipment and peripherals, pagers, cell phones and security access
badges which Employee obtained, retained, prepared or helped to prepare in connection with
Employee’s employment with Employer. If Employee does not return such property, Employer shall be
entitled to offset its value against any payments due Employee hereunder.

5.   Employee affirms his or her obligations under the Associate PC Purchase Loan Agreement (PC Loan)
to repay Employer, if applicable, and hereby authorizes Employer to deduct the amount outstanding
under the PC Loan from amounts due to him or her hereunder.

6.   The parties agree that following the termination of Employee’s employment with Employer they
will refrain from making negative comments about, or otherwise disparaging, the other,
specifically, the Employee agrees not to make negative comments about or disparage any of the Employer’s products or services
to the general public, clients or potential clients and/or employees of Employer.

 

 

 

CheckFree Services Corporation

Individual Separation Agreement and General Release

CONFIDENTIAL

Page 2 of 7

 

 

7.   This Agreement shall not be construed as an admission by Employer of any liability, or any acts
of wrongdoing, or the violation of any federal, state or local law, ordinance or regulation, nor
shall it be considered as evidence of any such alleged liability, wrongdoing, or violation of any
federal, state or local law, ordinance or regulation.

8.   Except as set forth herein, Employer and Employee agree, as a matter of current and specific
intent, that this Agreement terminates all aspects of the relationship between them for all time,
including, without limitation, the rights and obligations described in the Retention Agreement,
except as specifically referenced in this Agreement and as follows: Employee may seek further
employment with Employer, but Employee acknowledges that Employer has no legal or equitable
obligation whatsoever to hire Employee for reinstatement, employment, re-employment, consulting or
other similar status. Further, if Employee is hired, reinstated or offered consulting, Employer
shall have, after the Employee’s new start date, no further obligation to pay the Employee any
remaining amount of the Severance Payment. If the Employee is offered further employment, after
the Employee’s new start date Employee recognizes that his or her relationship with the Employer
shall be an ‘at will’ relationship and, further, the Employer is not restricted from terminating
Employee’s employment for cause.

9.   The nature and terms of this Agreement are strictly confidential and shall not be disclosed by
Employee at any time to any person other than his or her lawyer and accountants without the prior
written consent of Employer, except as necessary in any legal proceedings brought to enforce the
provisions and terms of this Agreement, to prepare and file income tax returns, or pursuant to
court order after a notice to Employer. If either Employer or Employee are asked about the
termination of the relationship by parties outside Employer’s group of employees and agents who
have a legitimate business reason to know of the terms hereof, they will respond only to confirm
the Employee’s dates of employment and the Employee’s position title.

10.   This Agreement shall be interpreted, enforced, and governed under the laws of the State of
Georgia. Its provisions are severable, and if any part of the Agreement is found to be
unenforceable, the remainder of the Agreement will continue to be valid and effective.

11.   Employee affirms that the only consideration received by Employee for entering into this
Agreement is as stated herein and in the Olsen Letter, and that no other promise, representation or
agreement of any kind whatsoever has been made to, or relied upon by, Employee in connection with
Employee’s execution of this Agreement. Employee further acknowledges that he or she has read the
entire Agreement and fully understands the meaning and intent of the Agreement, including, but not
limited to, its final and binding effect in relation to the general release of all claims.

12.   Employee further acknowledges that he or she has been advised by Employer to consult with an
attorney in connection with this Agreement. Employee further acknowledges that he or she was given
at least forty-five (45) days from the time he or she first received this Agreement within which to
consider whether to sign it. Additionally, Employee acknowledges that he or she will have seven
(7) days from the date of the execution of this Agreement by Employee within which to change his or
her mind and revoke the Agreement, upon which event the payments and other obligations of Employer will cease. Employee acknowledges and agrees that any revocation of
this Agreement must be made in writing and delivered within the seven-day revocation period to:

 

 

 

CheckFree Services Corporation

Individual Separation Agreement and General Release

CONFIDENTIAL

Page 3 of 7

 

 

Deborah N. Gable

Vice President, Human Resources

CheckFree Corporation

4411 East Jones Bridge Road

Norcross, Georgia 30092

Employee further acknowledges that the effective date of this Agreement will be the eighth (8th)
day after it has been executed by Employee.

13.   Unless as limited or prohibited by applicable law, if Employee breaches this Agreement by suing
Employer on any claim released hereunder, Employee will pay all costs and expenses of defending
against the suit incurred by Employer, including attorneys’ fees.

14.   If the Employee is being paid Severance Payments for twenty-six (26) weeks or more, the parties
agree that the Severance Payments will cease immediately upon the Employee’s commencing any new
full-time permanent employment. Employee agrees that he or she will promptly notify Employer of
the start date of his or her new employment.

15.   If the Employee continues participation in CheckFree’s medical and/or dental programs during
the severance period, the parties agree that upon the Employee’s eligibility for other medical
and/or dental coverage, the coverage with CheckFree will cease immediately upon the Employee’s
effective date of the new medical and/or dental coverage. Employee agrees that he or she will
promptly notify Employer of the start date of his or her new medical and/or dental coverage.

16.   Employee agrees to fully cooperate with Employer in any and all investigations, inquiries or
litigation whether in any judicial, administrative, or public, quasi-public or private forum, in
which Employer is involved, whether or not Employee is a defendant in such investigations,
inquiries, proceedings or litigation. Employee shall provide such truthful testimony, background
information, and other support and cooperation as Employer may reasonably request and Employer
shall reimburse Employee for his actual, reasonable costs incurred, provided that such costs have
been preapproved by Employer.

17.   The parties hereby warrant and represent that they have not made any false statements or
misrepresentations in connection with this Agreement. Employee further warrants and represents
that he or she has not assigned or transferred to any person or entity not a party to this
Agreement any claim or right released hereunder, and Employee shall defend, indemnify, and hold
harmless Employer from and against any claim (including the payment of attorneys’ fees and costs
actually incurred whether or not litigation has commenced) based on or in connection with or
arising out of any such assignment or transfer made by the Employee.

18.   The terms of this Agreement shall not be amended or changed except in writing and signed by
Employee and a duly-authorized agent of Employer.

19.   Employee warrants, represents, and acknowledges that this Agreement is entered into by Employee
knowingly and voluntarily as an act of Employee’s own free will; that Employee is
of sound mind; that Employee has been given time to consult with a lawyer before signing; that
Employee is laboring under no physical,

 

 

 

CheckFree Services Corporation

Individual Separation Agreement and General Release

CONFIDENTIAL

Page 4 of 7

 

 

psychological, or mental infirmity which would affect his or her capacity either to understand the
terms of this Agreement or to freely enter into and be bound by the provisions of this Agreement.

 

[INTENTIONALLY LEFT BLANK]

 

 

 

 

CheckFree Services Corporation

Individual Separation Agreement and General Release

CONFIDENTIAL

Page 5 of 7

 

 

     RECEIPT: I acknowledge receipt of a copy of this Agreement this 14th day of August, 2007.

	 	 	 
	 

	 	 

	 

	 	 
	 

	 	Signature for Purposes of Receipt Only

     BY SIGNING THIS AGREEMENT IN THE SPACE PROVIDED BELOW, I STATE THAT I HAVE PERSONALLY READ THE
FOREGOING AGREEMENT, AND I AM VOLUNTARILY AND KNOWINGLY ENTERING INTO THE TERMS AND PROVISIONS
CONTAINED IN IT, WITH FULL UNDERSTANDING OF ITS CONSEQUENCES.

EMPLOYEE:

	 	 	 	 	 
	 	 	/s/ Randal A. McCoy
	 	 	 
	 	 	Randall A. McCoy (Signature)

	 

	 	Date:	 	8-14-07
	 

	 	 	 	 

EMPLOYER:

	 	 	 	 	 
	 	 	CHECKFREE SERVICES CORPORATION

	 

	 	By:	 	/s/ Stephen E. Olsen 
	 

	 	 	 	 

	 

	 	Title:	 	EVP, CIO
	 

	 	 	 	 

	 

	 	Date:	 	8/14/07
	 

	 	 	 	 

 

 

 

CheckFree Services Corporation

Individual Separation Agreement and General Release

CONFIDENTIAL

Page 6 of 7

 

 

ATTACHMENT A

CONFIDENTIALITY AND NONCOMPETITION AGREEMENT

(OR OTHER APPLICABLE AGREEMENT)

Attached hereto is the Employee’s (check one):

1) Confidentiality and Noncompetition Agreement,    X   

2) Other applicable agreement,                      or

3) No agreement applies.                     

 

 

 

CheckFree Services Corporation

Individual Separation Agreement and General Release

CONFIDENTIAL

Page 7 of 7

 

 

August 14, 2007

Randall A. McCoy

CheckFree Corporation

4411 East Jones Bridge Road

Norcross, GA 30092

Dear Randy:

Your employment with CheckFree Corporation and CheckFree Services Corporation, together with their
parent and subsidiaries (“CheckFree”) will terminate on August 24, 2007. Effective as of August
24, 2007, you will cease to be an Executive Vice President of CheckFree Corporation, as Executive
Vice President and General Manager of CheckFree Services Corporation, or as an officer of any
CheckFree subsidiary, parent, affiliate, or related entity.

To assist with your transition, the following severance package will be available, contingent on
returning all company property, continuing professional performance and conduct, and completing and
returning the attached Separation Agreement and General Release document to Deborah N. Gable as
detailed below.

SEVERANCE PAY:

You will receive fifty-two (52) weeks of severance provided you sign and return the attached
Separation Agreement and General Release (“Release”) document within forty-five (45) days from this
notification, August 14, 2007. Your severance will not begin until you execute the Release
document. Payments will be made during the regular payroll cycle; provided that in order to comply
with Section 409A of the Internal Revenue Code, under no circumstances will any severance payments
be made to you after September 15, 2008. If on September 15, 2008 you have not received your full
fifty-two (52) weeks of severance, the remaining amount owed to you will be made in a lump sum
payment on September 15, 2008. If you find subsequent employment during this severance period, you
must notify CheckFree. Your severance payments will end the pay period following your start date
of new employment.

BENEFITS:

Medical and Dental Coverage - If you have previously elected and are currently participating
in these programs, Medical and Dental will end on the last day of the pay period of your
severance payments. However, if you become eligible for other healthcare coverage during the
severance period, you must notify CheckFree. The healthcare benefits under CheckFree will
end the pay period following your effective date of new healthcare coverage.

 

 

 

CheckFree Services Corporation

Individual Separation Agreement and General Release

CONFIDENTIAL

Page 1 of 3

 

 

You will receive an information package from Wausau regarding COBRA coverage. This
paperwork needs to be completed and returned as soon as possible, but no later than 60 days
from the date of Wausau’s notice. You have the option of discontinuing COBRA coverage at
anytime.

Life Insurance — Regular group term life insurance ends on your last day of active
employment. You may elect to convert your group life insurance coverage into an individual
policy. The forms necessary for electing conversion will be provided to you.

Supplemental Life Insurance — If you have elected the voluntary Supplemental Life
Insurance, it will also end on your last day of active employment. This benefit is
portable; therefore, if you wish to continue the Supplemental Life coverage you must
complete the forms provided to you.

401(k) Retirement Savings Plan - If you are currently enrolled in the 401(k) Plan, your
contributions to the Plan will end on your last day of active employment. The money you
have invested in the Plan will remain invested as you have previously directed, or you may
choose to have your funds distributed. To receive the necessary paperwork or for additional
information, please contact Sun Trust at 1-800-453-4015. You may want to consult a tax
accountant before electing a rollover or withdrawal of funds.

Flexible Spending Accounts - If you are participating in the Flexible Spending Account
program (healthcare or dependent), it will end on your last day of active employment. You
have 90 days after your termination date to submit expenses to UHC (incurred before your
termination date) for reimbursement.

Disability Insurance - Short-Term and Long-Term Disability coverage ends on your last day of
active employment.

Long-Term Care — Long-Term Care, if you have previously enrolled and are currently
participating, ends on your last day of active employment. This coverage is portable;
therefore, if you wish to continue Long-Term Care coverage you must complete the forms
provided to you.

Stock Purchase Plan — If you are participating in this plan, all contributions that have
not already been used to purchase shares will be returned to you with your final paycheck.
Other questions can be directed to Fidelity Stock Plan Services at 800 —544-9354.

Employee Assistance Plan (EAP) — The EAP benefits will continue through the severance
period.

PC Purchase — PC loan repayments may continue through the severance period. The balance
however, must be paid in full before or with the last severance check.

 

 

 

CheckFree Services Corporation

Individual Separation Agreement and General Release

CONFIDENTIAL

Page 2 of 3

 

 

Stock Options — Pursuant to CheckFree’s 1995 Stock Option Plan and 2002 Stock Incentive
Plan, your vested stock options, if not exercised, will expire 30 days after your
termination date from CheckFree. Please log in to your Fidelity account on
netbenefits.fidelity.com or contact a Fidelity Stock Plan Services Representative at
1-800—544-9354 prior to expiration of the options. Options are deemed to be exercised as
of the date payment is received.

UNEMPLOYMENT:

You may be eligible for unemployment compensation based on the rules of the state in which you
live. Please contact the Georgia unemployment office.

CheckFree appreciates your efforts and wishes you success in future endeavors. Should you have any
additional questions, please contact Deborah N. Gable at (678) 375-1640.

Sincerely,

/s/ Stephen Olsen

Stephen Olsen

Chief Operating Officer

Attachments: Separation Agreement and General Release

 

 

 

CheckFree Services Corporation

Individual Separation Agreement and General Release

CONFIDENTIAL

Page 3 of 3Unassociated Document

    Exhibit
      4.6

    

    AMENDED
      AND RESTATED PURCHASE AGREEMENT

    

    THIS
      AMENDED AND RESTATED
      PURCHASE AGREEMENT (the "Agreement"), dated as of
      _________, 2007, by and among Mohen, Inc. d/b/a Spiral Frog, a Delaware
      corporation (the "Company"), and the investors listed on
      the Schedule of Buyers attached hereto (individually, a "Buyer"
      and collectively, the "Buyers").

    

    WHEREAS:

    

    A.  Certain
      Buyers (the “Original Buyers”) previously purchased the
      Company’s Notes pursuant to an Amended and Restated Purchase Agreement dated as
      of April 19, 2007 (the “Prior Purchase
      Agreement”);

    

    B.  The
      Prior Purchase Agreement provided for a maximum amount of Notes to be sold
      by
      the Company of $5,000,000;

    

    C.
      The
      Company desires to sell Notes up to a maximum aggregate principal amount of
      $11,000,000, and to issue up to 6,000,000 Warrants in connection therewith,
      and
      the Original Buyers desire to amend and restate the Prior Purchase Agreement
      to
      allow for the sale of such additional Notes and issuance of
      Warrants;

    

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

    

    E.  The
      Company has authorized a series of senior secured exchangeable notes of the
      Company, which notes shall be exchangeable into the Company's Class A Common
      Stock, par value $0.001 per share (the "Common Stock"), in
      accordance with the terms of the Notes (as defined below).

    

    F.  Each
      Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
      conditions stated in this Agreement that aggregate principal amount of the
      Notes, in substantially the form attached hereto as Exhibit A (the
      "Notes"), set forth opposite such Buyer's name in column (3) on
      the Schedule of Buyers attached hereto (which aggregate amount for all Buyers
      shall be $11,000,000) (as exchangeable into Common Stock pursuant to the terms
      of the Notes, collectively, the “Exchange Shares”) and such
      number of warrants (“Warrants”) to purchase Common Stock (the
“Warrant Shares”), in substantially the form of Exhibit
      G, set
      forth opposite such Buyer’s name in column (4) on the Schedule of Buyers
      attached hereto.

    

    G.
      Contemporaneously with the execution and delivery of this Agreement, the parties
      hereto are executing and delivering an amended and restated Registration Rights
      Agreement, substantially in the form attached hereto as Exhibit B (the
“Registration Rights Agreement”) pursuant to which the Company
      has agreed to provide certain registration rights with respect to the Exchange
      Shares and the Warrant Shares under the 1933 Act and the rules and regulations
      promulgated thereunder, and applicable state securities laws.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    H.  The
      Notes, Warrants, Exchange Shares and Warrant Shares
      collectively are referred to herein as the
      "Securities".

    

    I.  The
      Notes will rank senior to all indebtedness of the Company incurred after April
      19, 2007, subject to Permitted Senior Indebtedness (as defined in the Notes)
      and
      will be secured by a perfected security interest in all of the assets of the
      Company and each of the Company’s subsidiaries, as evidenced by the security
      agreement attached hereto as Exhibit C (the "Security
      Agreement" and, together with the Pledge Agreement attached hereto as
Exhibit D, and any ancillary documents related thereto, collectively
      the
      "Security Documents").

    

    J.  To
      facilitate the Closing
      (as defined herein), each Buyer shall deposit into escrow its respective
      Purchase Price (as defined herein) with Gottbetter & Partners, LLP (the
“Escrow Agent”) pursuant to an Escrow Agreement, among the
      parties hereto.

    

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

    

    1.           PURCHASE
      AND SALE OF NOTES AND WARRANTS.

    

    (a)           Purchase
      of Notes and Warrants.

    

    (b)           Subject
      to the terms of this Agreement and the satisfaction (or waiver) of the
      conditions set forth in Sections 6 and 7 below, the Company shall issue and
      sell
      to each Buyer, and each Buyer severally, but not jointly, shall purchase from
      the Company, on the Closing Date (as defined below), a principal amount of
      Notes
      and number of Warrants as is set forth opposite such Buyer's name in column
      (3)
      and column (4) on the Schedule of Buyers (the
      "Closing").

    

    (i)           Closing.
       The Closing shall take place at 10:00 a.m., New York City time, at the
      offices of Gottbetter & Partners, LLP, 488 Madison Avenue, New York, NY
      10022, or at such other place or time as mutually agreed to by the parties,
      which shall be no later than the second business day after the satisfaction
      (or
      waiver) of the last to be satisfied (or waived) of the conditions to the Closing
      set forth in Sections 6 and 7 below (other than conditions that by their terms
      are to be satisfied on the Closing Date).  The date on which the
      Closing actually takes place is referred to as the "Closing
      Date."

    

    (ii)           Purchase
      Price.  The aggregate purchase price for the Notes and Warrants to be
      purchased by each Buyer at the Closing or a Subsequent Closing (as defined
      below), as the case may be, (the "Purchase Price"), shall be
      the amount set forth opposite such Buyer's name in column (3) of the Schedule
      of
      Buyers.

    

    (c)  Form
      of Payment.  On the Closing Date, (i) upon
      receipt of the Joint Written Directions (as defined in the Escrow Agreement),
      the Escrow Agent shall deliver each Buyer’s Purchase Price to the Company or
      designated third parties for the Notes and Warrants to be issued and sold to
      such Buyer at the Closing by wire transfer of immediately available funds in
      accordance with such Joint Written Directions, and (ii) the Company shall
      deliver to each Buyer the Notes (in the principal amounts as such Buyer shall
      have requested prior to the Closing) and Warrants which such Buyer is then
      purchasing, in each case duly executed on behalf of the Company and registered
      in the name of such Buyer or its permitted designee.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (d)           Subsequent
      Closing.  Subject to the terms and conditions of this Agreement,
      after the Closing and at any time on or prior to thirty (30) days following
      the
      Closing, at a subsequent closing (a “Subsequent Closing”), the
      Company may issue and sell to one or more individuals and entities approved
      by
      the Company’s Board of Directors (each an “Additional Buyer”
and collectively, the “Additional Buyers”) an aggregate
      principal amount of Notes and Warrants up to an aggregate of $11,000,000,
      including all previously issued Notes and Warrants, at the Purchase
      Price.  At a Subsequent Closing the representations and warranties of
      the Company set forth in Section 3 hereof shall speak as of the date of the
      Subsequent Closing (subject to any updates to the Disclosure Schedules as may
      be
      made by the Company), and the representations and warranties of the Additional
      Buyers shall speak as of the date of the respective Subsequent
      Closing.  At a Subsequent Closing, (i) each Additional Buyer and the
      Company shall execute a counterpart signature page hereto and to the relevant
      Transaction Documents, (ii) the Company shall cause the Schedule of Buyers
      hereto to be updated to reflect the purchases made by the Additional Buyers,
      (iii) each Additional Buyer shall become a “Buyer” hereunder and the Notes
      purchased by such Additional Buyer shall be deemed “Notes”, for purposes of this
      Agreement and the other Transaction Documents, and (iv) subject to the
      terms and conditions hereof, the Company will deliver to each of the Additional
      Buyers purchasing Notes and Warrants at a Subsequent Closing the applicable
      Notes and Warrants registered in the name of such Additional Buyer, against
      payment to the Company of the Purchase Price therefor in cash by wire transfer,
      check or other method acceptable to the Company.

    

    
      	
              2.  

            	
              BUYER'S
                REPRESENTATIONS AND WARRANTIES.

            

    

    

    As
      a
      material inducement to the Company to enter into this Agreement and sell the
      Notes and Warrants hereunder, each Buyer represents and warrants to the Company
      with respect to only itself as of the date hereof that:

    

    (a)           No
      Public Sale or Distribution.  Such Buyer is acquiring the Notes and
      Warrants for its own account and with the present intention of holding such
      securities for the purposes of investment, and not with a view towards, or
      for
      resale in connection with, the public sale or distribution thereof, except
      pursuant to sales registered or exempt from registration under the 1933 Act;
      provided, however, that by making the representations herein, such
      Buyer does not agree to hold any of the Securities for any minimum or other
      specific term and reserves the right to dispose of the Securities at any time
      in
      accordance with or pursuant to a registration statement or an exemption from
      registration under the 1933 Act.  Such Buyer does not presently have any
      agreement or understanding, directly or indirectly, with any Person to
      distribute any of the Securities.

    

    (b)           Accredited
      Investor Status.  Such Buyer is an "accredited investor" as that term
      is defined in Rule 501(a) of Regulation D under the 1933 Act.  Such Buyer
      is not a registered broker-dealer under Section 15 of the 1934 Act (as defined
      herein) or an entity engaged in the business of being a broker-dealer and is
      acquiring the Securities hereunder in the ordinary course of its
      business.

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

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

    

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

    

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

    

    (f)           Transfer
      or Resale.  Such Buyer understands that, except as provided for in the
      Registration Rights Agreement: (i) the Securities have not been and are not
      being registered under the 1933 Act or any state securities laws, and may not
      be
      offered for sale, sold, assigned or transferred unless (A) subsequently
      registered thereunder, (B) such Buyer shall have delivered to the Company an
      opinion of counsel, in a form reasonably acceptable to the Company, to the
      effect that such Securities to be sold, assigned or transferred may be sold,
      assigned or transferred (1) pursuant to an exemption from such registration,
      or
      (2) pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act, as amended
      (or any successor rule thereto); (ii) any sale of the Securities made in
      reliance on Rule 144 or Rule 144A may be made only in accordance with the terms
      of Rule 144 or Rule 144A, respectively, and further, if neither Rule 144 nor
      Rule 144A is applicable, any resale of the Securities under circumstances in
      which the seller (or the Person (as defined in Section 3(o) below) through
      whom
      the sale is made) may be deemed to be an underwriter (as that term is defined
      in
      the 1933 Act) may require compliance with some other exemption under the 1933
      Act or the rules and regulations of the SEC thereunder; and (iii) neither the
      Company nor any other Person is under any obligation to register the Securities
      under the 1933 Act or any state securities laws or to comply with the terms
      and
      conditions of any exemption thereunder.  The Securities may be pledged in
      connection with a bona fide margin account or other loan or financing
      arrangement secured by the Securities and such pledge of Securities shall not
      be
      deemed to be a transfer, sale or assignment of the Securities hereunder, and
      no
      Buyer effecting a pledge of Securities shall be required to provide the Company
      with any notice thereof or otherwise make any delivery to the Company pursuant
      to this Agreement or any other Transaction Document (as defined in Section
      3(b)), including, without limitation, this Section 2(f).

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (g)           Legends.
       Such Buyer understands that the certificates or other instruments
      representing the Notes and Warrants and the stock certificates representing
      the
      Exchange Shares and Warrant Shares, except as set forth below, shall bear any
      legend as required by federal law and the "blue sky" laws of any state and
      a
      restrictive legend in substantially the following form (and a stop-transfer
      order may be placed against transfer of such stock certificates):

    

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

    

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

    

    (h)           Authorization;
      Enforcement; Validity.  Such Buyer has the requisite power and
      authority to enter into and perform its obligations under this Agreement and
      each of the other Transaction Documents (as defined below) to which it is a
      party. This Agreement and each of the other Transaction Documents (as defined
      below) to which Buyer is a party has been duly and validly authorized, executed
      and delivered on behalf of such Buyer, and constitute the legal, valid and
      binding obligations of such Buyer enforceable against such Buyer in accordance
      with their respective terms, except as such enforceability may be limited by
      general principles of equity or to applicable bankruptcy, insolvency,
      reorganization, moratorium, liquidation and other similar laws relating to,
      or
      affecting generally, the enforcement of applicable creditors' rights and
      remedies.

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (i)           No
      Conflicts.  The execution, delivery and performance by such Buyer of
      this Agreement and the other Transaction Documents to which such Buyer is a
      party and the consummation by such Buyer of the transactions contemplated hereby
      and thereby will not (i) result in a violation of the organizational documents
      of such Buyer or (ii) conflict with, or constitute a default (or an event which
      with notice or lapse of time or both would become a default) under, or give
      to
      others any rights of termination, amendment, acceleration or cancellation of,
      any agreement, indenture or instrument to which such Buyer is a party, or (iii)
      result in a violation of any law, rule, regulation, order, judgment  or
      decree (including federal and state securities laws) applicable to such Buyer,
      except in the case of clauses (ii) and (iii) above, for such conflicts,
      defaults, rights or violations which would not, individually
      or in the aggregate, reasonably be expected to have a material adverse effect
      on
      the ability of such Buyer to perform its obligations hereunder.

    

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

    

    (k)           Independent
      Investment Decision.  Such Buyer has independently evaluated the merits
      of its decision to purchase the Securities pursuant to the Transaction
      Documents, and such Buyer confirms that it has not relied on the advice of
      any
      other Buyers’ business and/or legal counsel in making such decision.
 

    

    (l)           [Reserved]

    

    (m)           General
      Solicitation.  Such Buyer is not purchasing the Securities as a result
      of any advertisement, article, notice or other communication regarding the
      Securities published in any newspaper, magazine or similar media or broadcast
      over television or radio or presented at any seminar.

    

    (n)           Organization;
      Authority.  Such Buyer is an entity duly organized, validly existing
      and in good standing under the laws of the jurisdiction of its organization
      with
      the requisite corporate or partnership or other entity power and authority
      to
      enter into and to consummate the transactions contemplated by the Transaction
      Documents to which it shall be a party and otherwise to carry out its
      obligations thereunder.

    

    3.           REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY.

    

    As
      a
      material inducement to each Buyer to enter into this Agreement and purchase
      the
      Notes and Warrants hereunder, the Company represents and warrants to each of
      the
      Buyers as of the date hereof that, except as set forth in the Disclosure
      Schedule attached hereto (the "Disclosure
      Schedule"):

    

    (a)           Organization
      and Qualification.  The Company is a corporation duly organized and
      validly existing in good standing under the laws of the jurisdiction in which
      it
      is formed, and has the requisite power and authority to own its properties
      and
      to carry on its business as now being conducted.  The Company is duly
      qualified as a foreign entity to do business and is in good standing in every
      jurisdiction in which its ownership of property or the nature of the business
      conducted by it makes such qualification necessary, except to the extent that
      the failure to be so qualified or be in good standing would not have a Material
      Adverse Effect.  As used in this Agreement, "Material Adverse
      Effect" means any material adverse effect on the business, properties,
      assets, operations, results of operations, condition (financial or otherwise)
      or
      prospects of the Company, or on the transactions contemplated hereby and by
      the
      other Transaction Documents or by the agreements and instruments to be entered
      into in connection herewith or therewith, or on the authority or ability of
      the
      Company to perform its obligations under the Transaction Documents (as defined
      below).  The Company has no subsidiaries.

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    (b)           Authorization;
      Enforcement; Validity.  Except as set forth in Schedule 3(b),
      the Company has the requisite power and authority to enter into and perform
      its
      obligations under this Agreement, the Notes, the Warrants, the Security
      Documents, the Irrevocable Transfer Agent Instructions (in the form of Exhibit
      E
      annexed hereto), and each of the other agreements entered into by the Company
      in
      connection with the transactions contemplated by this Agreement (collectively,
      the "Transaction Documents") and to issue the Securities in
      accordance with the terms hereof and thereof.  The execution and
      delivery of this Agreement and the other Transaction Documents by the Company and the issuance of the Notes
      and Warrants has been,
      and the consummation by the Company of the transactions contemplated hereby
      and
      thereby, including, without limitation, the issuance of the Notes and Warrants,
      the reservation for issuance and the issuance of the Exchange Shares and Warrant
      Shares issuable upon exchange of the Notes and exercise of the Warrants and
      the
      granting of a security interest in the Collateral (as defined in the Security
      Documents), will be prior to Closing, duly authorized by the Company's Board
      of
      Directors and (other than (i) the filing of appropriate UCC financing statements
      with the appropriate states and other authorities pursuant to the Security
      Agreement, and (ii) the filing of a Form D under Regulation D of the 1933
      Act) no further filing, consent, or authorization is required by the Company,
      its Board of Directors or its stockholders.  This Agreement and each of the
      other Transaction Documents of even date herewith has been duly executed and
      delivered by the Company and constitutes the legal, valid and binding obligation
      of the Company enforceable against the Company in accordance with its terms,
      except as such enforceability may be limited by general principles of equity
      or
      to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
      and other similar laws relating to, or affecting generally, the enforcement
      of
      applicable creditors' rights and remedies.

    

    (c)           Issuance
      of Securities.  The Notes and Warrants are duly authorized and are free
      from all taxes, liens and charges with respect to the issue
      thereof.  A number of shares of Common Stock has been duly authorized
      and reserved for issuance which equals 200% of the maximum number of shares
      Common Stock issuable upon exchange of the Notes and exercise of the Warrants.
       Upon exchange in accordance with the Notes and exercise in accordance with
      the Warrants, the Exchange Shares and Warrant Shares will be validly issued,
      fully paid and nonassessable and free from all preemptive or similar rights,
      taxes, liens and charges with respect to the issue thereof, with the holders
      being entitled to all rights accorded to a holder of Common Stock.
 Assuming the truth and accuracy of the Buyers’ representations and
      warranties in this Agreement, the offer to the Buyers and issuance by the
      Company of the Securities is exempt from registration under the 1933
      Act.

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    (d)           No
      Conflicts.  The execution, delivery and performance of this Agreement
      and the other Transaction Documents by the Company and the consummation by
      the
      Company of the transactions contemplated hereby and thereby (including, without
      limitation, the issuance of the Notes and Warrants, the granting of a security
      interest in the Collateral and, reservation for issuance and issuance of the
      Exchange Shares and Warrant Shares) will not (i) result in a violation of its
      Certificate of Incorporation, any capital stock or bylaws of the Company
      (provided that it will not be a breach of this subsection until a judgment
      against the Company is obtained) or (ii) conflict with, or constitute a default
      (or an event which with notice or lapse of time or both would become a default)
      under, or give to others any rights of termination, amendment, acceleration
      or
      cancellation of, any agreement, indenture or instrument to which the Company
      is
      a party, or (iii) assuming the truth and accuracy of the Buyers’ representations
      and warranties in this Agreement, result in a violation of any law, rule,
      regulation, order, judgment or decree (including federal and state securities
      laws applicable to the Company or by which any property or asset of the Company
      is bound or affected) except, in the cases of clause (ii) and (iii) above,
      for
      such conflicts, defaults, rights or violations which would not, individually
      or
      in the aggregate, reasonably be expected to have a Material Adverse
      Effect.

    

    (e)           Consents.
       The Company is not required to obtain any consent, authorization or order
      of, or make any filing or registration with, any court, governmental agency
      or
      any regulatory or self-regulatory agency or any other Person in order for it
      to
      execute, deliver or perform any of its obligations under or contemplated by
      this
      Agreement or the other Transaction Documents, in each case in accordance with
      the terms hereof or thereof.  All consents, authorizations, orders, filings
      and registrations which the Company is required to obtain pursuant to the
      preceding sentence have been obtained or effected on or prior to the Closing
      Date, and the Company is unaware of any facts or circumstances which might
      prevent the Company from obtaining or effecting any of the registration,
      application or filings pursuant to the preceding sentence.

    

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

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    (g)           No
      General Solicitation.  None of the Company, its Affiliates, nor,
      to the Company’s knowledge, any Person acting on its or their behalf, has
      engaged in any form of general solicitation or general advertising (within
      the
      meaning of Regulation D) in connection with the offer or sale of the
      Securities.  The Company shall be responsible for the payment of any
      placement agent’s fees, financial advisory fees, consultancy fees or brokers’
commissions (other than for persons engaged by any Buyer or its investment
      advisor) relating to or arising out of the transactions contemplated
      hereby.  The Company shall pay, and hold each Buyer harmless against,
      any liability, loss or expense (including, without limitation, reasonable
      attorney’s fees and out-of-pocket expenses) arising in connection with any such
      claim (including any claim from the Consultant (as defined
      below)).  The Company acknowledges that it has engaged a consultant as
      set out in Schedule 3(g) (the “Consultant”) in connection with
      the sale of the Securities.  Other than the Consultant, the Company
      has not engaged any placement agent, consultant or other agent in connection
      with the sale of the Securities.

    

    (h)           No
      Integrated Offering.  None of the Company, its respective Affiliates
      nor any Person acting on its or their behalf has, directly or indirectly, made
      any offers or sales of any security, or solicited any offers to buy any
      security, under circumstances that would require registration of any of the
      Securities under the 1933 Act or cause this offering of the Securities to be
      integrated with prior offerings by the Company for purposes of the 1933 Act
      or
      any applicable stockholder approval provisions, including,
      without limitation, under the rules and regulations of any exchange or automated
      quotation system on which any of the securities of the Company are listed or
      designated.   None of the Company, its Affiliates or any Person acting
      on its or their behalf will take any action or steps referred to in the
      preceding sentence that would require registration of any of the Securities
      under the 1933 Act or cause the offering of the Securities to be integrated
      with
      other offerings in a manner that would require such registration.

    

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

    

    (j)           Financial
      Statements.  Except as disclosed in Schedule 3(j), the financial
      statements of the Company annexed hereto as Schedule 3(j), were prepared in
      accordance with generally accepted accounting principles, consistently applied,
      during the periods involved (except (i) as may be otherwise indicated in such
      financial statements or the notes thereto, or (ii) in the case of unaudited
      interim statements, to the extent they may exclude footnotes
      or may be condensed or summary statements) and fairly present in all material
      respects the financial position of the Company as of the dates thereof and
      the
      results of its operations and cash flows for the periods then ended (subject,
      in
      the case of unaudited statements, to normal year-end audit
      adjustments).  The Company does not have any material liability other
      than as set forth in the financial statements, incurred in the ordinary course
      of business, or as set forth on Schedule 3(j).

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (k)           Conduct
      of Business; Regulatory Permits.  Except as set forth in Schedule
      3(k), the Company (i) is not in violation of any term of or in default under
      its Articles of Incorporation or Bylaws and (ii) is not in violation of any
      judgment, decree or order or any law, statute, ordinance, rule or regulation
      applicable to the Company.  The Company possesses
      all certificates, authorizations and permits issued by the appropriate
      regulatory authorities necessary to conduct its business, except where the
      failure to possess such certificates, authorizations or permits would not have,
      individually or in the aggregate, a Material Adverse Effect, and the Company
      has
      not received any written notice of proceedings relating to the revocation or
      modification of any such certificate, authorization or permit.

    

    (l)           Foreign
      Corrupt Practices.  None of the Company, nor, to the knowledge of the
      Company, any director, officer, agent, or employee, in the course of its actions
      for, or on behalf of, the Company (i) used any corporate funds for any unlawful
      contribution, gift, entertainment or other unlawful expenses relating to
      political activity; (ii) made any direct or indirect unlawful payment to any
      foreign or domestic government official or employee from corporate funds of
      the
      Company; (iii) violated or is in violation of any provision of the U.S. Foreign
      Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe,
      rebate, payoff, influence payment, kickback or other unlawful payment to any
      foreign or domestic government official or employee.

    

    (m)            Transactions
      With Affiliates.  Other than the transactions disclosed
      on  Schedule 3(m), none of the officers, directors or employees
      of the Company is presently a party to any transaction with the Company (other
      than for ordinary course services as employees, officers or directors),
      including any contract, agreement, loans or other arrangement providing for
      the
      furnishing of services to or by, providing for rental of real or personal
      property to or from, including obligations to pay back pay, salaries, bonuses,
      etc. or otherwise requiring payments to or from any such officer, director
      or
      employee or, to the knowledge of the Company, any corporation, partnership,
      trust or other entity in which any such officer, director, or employee has
      a
      substantial interest or is an officer, director, trustee or
      partner.

    

    (n)           Equity
      Capitalization.  As of immediately prior to Closing, the authorized
      capital stock of the Company consists of (i) 150 million shares of Common Stock,
      of which as of the date hereof, 14,257,200 shares are issued and outstanding,
      and (ii) 40 million shares of Preferred Stock, of which as of the date hereof
      (A) 12 million are classified as Series A Preferred Stock, of which as of the
      date hereof, ________ are issued and outstanding and (B) 24 million are
      classified as Series B Preferred Stock, of which as of the date hereof
      10,414,653.9423 are issued and outstanding.  All currently issued and
      outstanding shares of Common Stock have been, or upon issuance will be, validly
      issued and are fully paid and nonassessable.  Except as disclosed herein or
      as disclosed in Schedule 3(n): (i) none of the Company's capital stock is
      subject to preemptive rights or any other similar rights or any liens or
      encumbrances suffered or permitted by the Company; (ii) there are no outstanding
      options, warrants, scrip, rights to subscribe to, calls or commitments of any
      character whatsoever relating to, or securities or rights convertible into,
      or
      exercisable or exchangeable for, any capital stock of the Company, or contracts,
      commitments, understandings or arrangements by which the Company is or may
      become bound to issue additional capital stock of the Company or options,
      warrants, scrip, rights to subscribe to, calls or commitments of any character
      whatsoever relating to, or securities or rights convertible into, or exercisable
      or exchangeable for, any capital stock of the Company; (iii) there are no
      outstanding debt securities, notes, credit or loan agreements, credit facilities
      or other agreements, documents or instruments evidencing Indebtedness (as
      defined below) of the Company or by which the Company is bound or may be
      affected; (iv) there are no financing statements securing obligations in any
      material amounts, either singly or in the aggregate, filed in connection with
      the Company; (v) there are no agreements or arrangements under which the Company
      is obligated to register the sale of any of their securities under the 1933
      Act;
      (vi) there are no outstanding securities or instruments of the Company which
      contain any redemption or similar provisions, and there are no contracts,
      commitments, understandings or arrangements by which the Company is or may
      become bound to purchase, repurchase, retire or redeem a security of the
      Company; (vii) there are no securities or instruments containing anti-dilution
      or similar provisions or reset provisions that will be triggered by the issuance
      of the Securities; and (viii) the Company does not have any stock appreciation
      rights or "phantom stock" plans or agreements or any similar plan or
      agreement.  The Company has furnished to the Buyer true, correct and
      complete copies of the Company's Articles of Incorporation, as amended and
      as in
      effect on the date hereof (the "Articles of Incorporation"),
      and the Company's Bylaws, as amended and as in effect on the date hereof (the
      "Bylaws"), and the terms of all securities convertible into, or
      exercisable or exchangeable for, shares of Common Stock and the material rights
      of the holders thereof.

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (o)           Indebtedness
      and Other Contracts.  Except as disclosed in Schedule 3(o), the
      Company (i) has no outstanding Indebtedness (as defined below), (ii) is not
      a
      party to any contract, agreement or instrument, the violation of which, or
      default under which, by the other party(ies) to such contract, agreement or
      instrument would result in a Material Adverse Effect, (iii) is not in violation
      of any term of or in default under any contract, agreement or instrument
      relating to any Indebtedness, except where such violations and defaults would
      not result, individually or in the aggregate, in a Material Adverse Effect,
      or
      (iv) is not a party to any contract, agreement or instrument relating to any
      Indebtedness, the performance of which, in the judgment of the Company's
      officers, has or is expected to have a Material Adverse Effect. Schedule
      3(p) provides a detailed description of the material terms of any such
      outstanding Indebtedness.  For purposes of this Agreement:  (x)
      "Indebtedness" of any Person means, without
      duplication (A) all indebtedness for borrowed money, (B) all obligations issued,
      undertaken or assumed as the deferred purchase price of property or services
      including (without limitation) "Capital Leases" in accordance with generally
      accepted accounting principles (other than trade payables entered into in the
      ordinary course of business), (C) all reimbursement or payment obligations
      with
      respect to letters of credit, surety bonds and other similar instruments, (D)
      all obligations evidenced by notes, bonds, debentures or similar instruments,
      including obligations so evidenced incurred in connection with the acquisition
      of property, assets or businesses, (E) all indebtedness created or arising
      under
      any conditional sale or other title retention agreement, or incurred as
      financing, in either case with respect to any property or assets acquired with
      the proceeds of such indebtedness (even though the rights and remedies of the
      seller or bank under such agreement in the event of default are limited to
      repossession or sale of such property), (F) all monetary obligations under
      any
      leasing or similar arrangement which, in connection with generally accepted
      accounting principles, consistently applied for the periods covered thereby,
      is
      classified as a capital lease, (G) all indebtedness referred to in clauses
      (A)
      through (F) above secured by (or for which the holder of such Indebtedness
      has
      an existing right, contingent or otherwise, to be secured by) any mortgage,
      lien, pledge, charge, security interest or other encumbrance upon or in any
      property or assets (including accounts and contract rights) owned by any Person,
      even though the Person which owns such assets or property has not assumed or
      become liable for the payment of such indebtedness, and (H) all Contingent
      Obligations in respect of indebtedness or obligations of others of the kinds
      referred to in clauses (A) through (G) above; (y) "Contingent
      Obligation" means, as to any Person, any direct or indirect liability,
      contingent or otherwise, of that Person with respect to any indebtedness, lease,
      dividend or other obligation of another Person if the primary purpose or intent
      of the Person incurring such liability, or the primary effect thereof, is to
      provide assurance to the obligee of such liability that such liability will
      be
      paid or discharged, or that any agreements relating thereto will be complied
      with, or that the holders of such liability will be protected (in whole or
      in
      part) against loss with respect thereto; and (z) "Person" means
      an individual, a limited liability company, a partnership, a joint venture,
      a
      corporation, a trust, an unincorporated organization and a government or any
      department or agency thereof.

    

    (p)           Absence
      of Litigation.  There is no action, suit, proceeding, inquiry or
      investigation before or by any court, public board, government agency,
      self-regulatory organization or body pending or, to the knowledge of the
      Company, threatened against or affecting the Company, the Common Stock or any
      of
      the or any of the Company's officers or directors, except as set forth in
Schedule 3(p).

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    (q)           Insurance.
       The Company is insured by insurers of recognized financial responsibility
      against such losses and risks and in such amounts as management of the Company
      believes to be prudent and customary in the businesses in which the Company
      is
      engaged. The Company has not, within the past two (2) years, been refused any
      insurance coverage sought or applied for.

    

    (r)           Employee
      Relations.

    

    (i)
      The
      Company is not a party to any collective bargaining agreement and does not
      employ any member of a union.  Except as disclosed in Schedule 3(r),
      no executive officer of the Company (as defined in Rule 501(f) of the 1933
      Act)
      has notified the Company that such officer intends to leave the Company or
      otherwise terminate such officer's employment with the Company.  No
      executive officer of the Company, to the knowledge of the Company, is in
      violation of any material term of any employment contract, confidentiality,
      disclosure or proprietary information agreement, non-competition agreement,
      or
      any other contract or agreement or any restrictive covenant, and the continued
      employment of each such executive officer does not subject the Company to any
      liability with respect to any of the foregoing matters.

    

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

    

    (s)           Title.
      Except as disclosed in Schedule 3(s), the Company has good and marketable
      title in fee simple to all real property owned by it and
      good and marketable title to all personal property owned by it which is, in
      each
      case, material to the business of the Company, free and clear of all liens,
      encumbrances and defects except such as do not materially affect the value
      of
      such property and do not interfere with the use made and proposed to be made
      of
      such property by the Company.   Any real property and facilities held
      under lease by the Company is 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 facilities by
      the
      Company.

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    (t)           Intellectual
      Property Rights.  The Company owns or possesses adequate rights or
      licenses to use all trademarks, trade names, service marks, service mark
      registrations, service names, patents, patent rights, copyrights, inventions,
      licenses, approvals, governmental authorizations, trade secrets and other
      intellectual property rights necessary to conduct its business as now conducted
      and as proposed to be conducted ("Intellectual Property
      Rights"), provided, that the representation in this sentence
      shall not apply to mechanical publishing rights.  Except as set forth
      in Schedule 3(t), none of the Company's Intellectual Property Rights have
      expired or terminated, or are expected to expire or terminate, within three
      years from the date of this Agreement.  The Company does not have any
      knowledge of any infringement by the Company of Intellectual Property Rights
      of
      others.  There is no claim, action or proceeding being made or brought or,
      to the knowledge of the Company, being threatened, against the Company regarding
      its Intellectual Property Rights.  The Company (x) is unaware of any
      facts or circumstances which might give rise to any of the foregoing
      infringements or claims, actions or proceeding, except as set forth in the
      proviso to the first sentence of this Section and (y) has taken reasonable
      security measures to protect the secrecy, confidentiality and value of all
      of
      its Intellectual Property Rights.

    

    (u)           Environmental
      Laws.  The Company (i) is in compliance with any and all Environmental
      Laws (as hereinafter defined), (ii) has received all permits, licenses or other
      approvals required of them under applicable Environmental Laws to conduct its
      respective businesses and (iii) is in compliance with all terms and conditions
      of any such permit, license or approval where, in each of the foregoing clauses
      (i), (ii) and (iii), the failure to so comply could be reasonably expected
      to
      have, individually or in the aggregate, a Material Adverse Effect.  The
      term "Environmental Laws" means all federal, state, local or
      foreign laws relating to pollution or protection of human health or the
      environment (including, without limitation, ambient air, surface water,
      groundwater, land surface or subsurface strata), including, without limitation,
      laws relating to emissions, discharges, releases or threatened releases of
      chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes
      (collectively, "Hazardous Materials") into the environment, or
      otherwise relating to the manufacture, processing, distribution, use, treatment,
      storage, disposal, transport or handling of Hazardous Materials, as well as
      all
      authorizations, codes, decrees, demands or demand letters, injunctions,
      judgments, licenses, notices or notice letters, orders, permits, plans or
      regulations issued, entered, promulgated or approved thereunder.

    

    (v)           Investment
      Company.  The Company is not, and is not an Affiliate of, an
      "investment company" within the meaning of the Investment Company Act of 1940,
      as amended.

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    (w)           Tax
      Status.  Except as disclosed on Schedule 3(w), the Company (i)
      has made or filed all foreign, federal and state income and all other tax
      returns, reports and declarations required by any jurisdiction to which it
      is
      subject, (ii) has paid all taxes and other governmental assessments and charges
      that are material in amount, shown or determined to be due on such returns,
      reports and declarations, except those being contested in good faith and (iii)
      has set aside on its books provision reasonably adequate for the payment of
      all
      taxes for periods subsequent to the periods to which such returns, reports
      or
      declarations apply.  Except as disclosed on Schedule 3(w), 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.  Except as disclosed on Schedule 3(w), no liens
      have been filed and no claims are being asserted by or against the Company
      with
      respect to any taxes (other than liens for taxes not yet due and payable).
      The
      Company has not received notice of assessment or proposed assessment of any
      taxes of a material amount claimed to be owed by it or any other Person on
      its
      behalf. Except as disclosed on Schedule 3(w), the Company is not a party
      to any tax sharing or tax indemnity agreement or any other agreement of a
      similar nature that remains in effect. Except as disclosed on Schedule
      3(w), the Company has complied in all material respects with all applicable
      legal requirements relating to the payment and withholding of taxes and, within
      the time and in the manner prescribed by law, has withheld from wages, fees
      and
      other payments and paid over to the proper governmental or regulatory
      authorities all amounts required.

    

    (x)           Ranking
      of Notes.  Except as set forth on Schedule 3(x), no Indebtedness
      of the Company is senior to or ranks pari passu with the Notes in right
      of payment, whether with respect of payment of redemptions, interest, damages
      or
      upon liquidation or dissolution or otherwise.

    

    (y)           Transfer
      Taxes.  On the Closing Date, all stock transfer or other taxes (other
      than income or similar taxes) which are required to be paid in connection with
      the sale and transfer of the Securities to be sold to each Buyer hereunder
      will
      be, or will have been, fully paid or provided for by the Company, and all laws
      imposing such taxes will be or will have been complied with.

    

    (z)           U.S.
      Real Property Holding Corporation.  The Company is not, nor has ever
      been, a U.S. real property holding corporation within the meaning of Section
      897
      of the Internal Revenue Code of 1986, as amended, and the Company shall so
      certify upon Buyer's request.

    

    4.           COVENANTS.

    

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

    

    (b)           Form
      D and Blue Sky.  The Company agrees to file a Form D with
      respect to the Securities as required under Regulation D and to provide a copy
      thereof to each Buyer promptly after such filing.  The Company shall
      make all filings and reports relating to the offer and sale of the Securities
      required under applicable securities or “Blue Sky” laws of the states of the
      United States, whether before or after the Closing Date.

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    (c)           Reporting
      Status.  After the date on which the Company is required to file
      periodic reports with the SEC pursuant to the 1934 Act and until the date on
      which the Holders shall have sold a sufficient number of shares such that,
      collectively, they own less than 5% of the total outstanding shares of common
      stock of the Company (the "Reporting Period"), the Company
      shall file 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 and all
      exhibits included therein and financial statements, notes and schedules thereto
      and documents incorporated by reference therein being hereinafter referred
      to as
      the "SEC Documents") and the Company shall not terminate its
      status as an issuer required to file reports under the 1934 Act even if the
      1934
      Act or the rules and regulations thereunder would otherwise permit such
      termination.

    

    (d)           Use
      of Proceeds.  The Company will use the proceeds from the sale of the
      Securities as set forth on Schedule 4(d).

    

    (e)           Transfer
      Agent Instructions.  The Company shall file a Form 10SB (or
      similar form) within 45 days following the Closing and shall use its best
      efforts to have it declared effective as soon as possible.  Upon the
      earlier of effectiveness of such Form 10SB or sixty (60) days following its
      filing with the SEC, the Company shall employ the services of Continental Stock
      Transfer and Trust Co. as its designated transfer agent (“Transfer
      Agent”) and execute and cause it to execute the Irrevocable Transfer
      Agent Instructions in substantially similar form to Exhibit E, attached
      hereto.

    

    (f)           [
      Reserved. ]

    

    (g)           Fees.
       The Company shall pay (i) to Gottbetter & Partners, LLP
      (“G&P”), an hourly fee for the preparation of the
      Transaction Documents; (ii) to G&P, $5,000 plus its usual hourly rates for
      serving as escrow agent, and (iii) to Gottbetter Capital Finance, LLC., $10,000
      for serving as Collateral Agent, all plus reasonable expenses which shall be
      withheld by such Buyer from its Purchase Price at the Closing.  The
      Company shall be responsible for the payment of any placement agent's fees,
      financial advisory fees, consultancy fees or broker's commissions (other than
      for Persons engaged by any Buyer) relating to or arising out of the transactions
      contemplated by the Transaction Documents including, without limitation, any
      fees or commission payable to the Consultant. The Company shall pay, and hold
      each Buyer harmless against, any liability, loss or expense (including, without
      limitation, reasonable attorney's fees and out-of-pocket expenses) arising
      in
      connection with any claim against a Buyer relating to any such payment.
 Except as otherwise set forth in the Transaction Documents, each party to
      this Agreement shall bear its own expenses in connection with the sale of the
      Securities to the Buyers.

     

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

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    (i)           [
      Reserved. ] 

    

    (j)           Restriction
      on Redemption and Cash Dividends.  So long as any Notes are
      outstanding, the Company shall not, directly or indirectly, redeem, or declare
      or pay any cash dividend or distribution on, the Common Stock without the prior
      express written consent of the Required Holders (as defined in the
      Notes).

    

    (k)           Additional
      Notes; Variable Securities; Dilutive Issuances.  So long as any Buyer
      beneficially owns any Securities, the Company will not issue any Notes (other
      than as contemplated hereby) and the Company shall not issue any other
      securities that would cause a breach or default under the Notes.  For
      so long as any Notes remain outstanding, the Company shall not, in any manner,
      issue or sell any rights, warrants or options to subscribe for or purchase
      Common Stock or other securities directly or indirectly convertible into or
      exchangeable or exercisable for Common Stock at a price which varies or may
      vary
      with the market price of the Common Stock, including by way of one or more
      reset(s) to any fixed price unless the conversion, exchange or exercise price
      of
      any such security cannot be less than the then applicable Exchange Price (as
      defined in the Notes) with respect to the Common Stock into which any Note
      is
      exchangeable and Exercise Price (as defined in the Warrants) with respect to
      the
      Common Stock into which any Warrants is exercisable.  For so long as any
      Notes or Warrants remain outstanding, the Company shall not, in any manner,
      enter into or affect any Dilutive Issuance (as defined in the Notes and
      Warrants) if the effect of such Dilutive Issuance is to cause the Company to
      be
      required to issue upon exchange of any Note or exercise of any Warrant any
      shares of Common Stock in excess of that number of shares of Common Stock which
      the Company has authorized and reserved for purposes of such exchanges or
      exercises or which the Company may issue upon exchange of the Notes or exercise
      of the Warrants.

    

    (l)           Corporate
      Existence.  So long as any Buyer beneficially owns any Securities, the
      Company shall not be party to any Fundamental Transaction (as defined in the
      Notes) unless the Company is in compliance with the applicable provisions
      governing Fundamental Transactions set forth in the Notes.

    

    (m)           Reservation
      of Shares.  So long as any Buyer owns any Securities, the Company shall
      take all action necessary to at all times have authorized, and reserved for
      the
      purpose of issuance, no less than 200% of the number of shares of Common Stock
      issuable upon exchange of all of the Notes and exercise of the Warrants then
      outstanding (without taking into account any limitations on the exchange of
      the
      Notes or exercise of the Warrants).

    

    (n)           [
      Reserved. ]

    

    (o)           Additional
      Issuances of Securities.

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

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

    

    (1)           "Convertible
      Securities" means any stock or securities (other than Options)
      convertible into or exercisable or exchangeable for shares of Common
      Stock.

    

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

     

    (3)  "Common
      Stock Equivalents" means, collectively, Options and Convertible
      Securities.

    

    (ii)           From
      the date hereof until the date that is one year after the Company is required
      to
      file reports with the SEC (the "Trigger Date"), except (A) with
      respect to any sale of Notes and Warrant Shares pursuant to this Agreement,
      (B)
      any transaction described in Schedule 4(o), (C) with respect to any
      issuance to an officer, director or employee pursuant to an employee or director
      stock incentive plan, or (D) with respect to an issuance of Excluded Securities
      (as defined in the Notes), the Company will not, directly or indirectly, offer,
      sell, grant any option to purchase, or otherwise dispose of (or announce any
      offer, sale, grant or any option to purchase or other disposition of) any of
      its
      equity or equity equivalent securities, including without limitation any debt,
      preferred stock or other instrument or security that is, at any time during
      its
      life and under any circumstances, convertible into or exchangeable or
      exercisable for shares of Common Stock or Common Stock Equivalents (any such
      offer, sale, grant, disposition or announcement being referred to as a
      "Subsequent Placement"), unless the Company shall have complied
      with Section 4(o)(iii).

    

    (iii)           Prior
      to the Trigger Date, the Company will not, directly or indirectly, effect any
      Subsequent Placement unless the Company shall have first complied with this
      Section 4(o)(iii).

    

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

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    (2)           To
      accept an Offer, in whole or in part, such Buyer must deliver a written notice
      to the Company prior to the end of the tenth (10th) day after
      such
      Buyer's receipt of the Offer Notice (the "Offer Period"),
      setting forth the portion of such Buyer's Basic Amount that such Buyer elects
      to
      purchase and, if such Buyer shall elect to purchase all of its Basic Amount,
      the
      Undersubscription Amount, if any, that such Buyer elects to purchase (in either
      case, the "Notice of Acceptance").  If the Basic Amounts
      subscribed for by all Buyers are less than the total of all of the Basic
      Amounts, then each Buyer who has set forth an Undersubscription Amount in its
      Notice of Acceptance shall be entitled to purchase, in addition to the Basic
      Amounts subscribed for, the Undersubscription Amount it has subscribed for;
      provided, however, that if the Undersubscription Amounts
      subscribed for exceed the difference between the total of all the Basic Amounts
      and the Basic Amounts subscribed for (the "Available Undersubscription
      Amount"), each Buyer who has subscribed for any Undersubscription
      Amount shall be entitled to purchase only that portion of the Available
      Undersubscription Amount as the Basic Amount of such Buyer bears to the total
      Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts,
      subject to rounding by the Company to the extent its deems reasonably
      necessary.

    

    (3)           The
      Company shall have thirty (30) Business Days from the expiration of the Offer
      Period above to offer, issue, sell or exchange all or any part of such Offered
      Securities as to which a Notice of Acceptance has not been given by the Buyers
      (the "Refused Securities"), but only to the offerees described
      in the Offer Notice (if so described therein) or any investor introduced to
      the
      Company by a placement agent described in the Offer Notice and only upon terms
      and conditions (including, without limitation, unit prices and interest rates)
      that are not more favorable to the acquiring person or persons or less favorable
      to the Company than those set forth in the Offer Notice.

    

    (4)           In
      the event the Company shall propose to sell less than all the Refused Securities
      (any such sale to be in the manner and on the terms specified in Section
      4(o)(iii)(3) above), then each Buyer may, at its sole option and in its sole
      discretion, reduce the number or amount of the Offered Securities specified
      in
      its Notice of Acceptance to an amount that shall be not less
      than the number or amount of the Offered Securities that such Buyer elected
      to
      purchase pursuant to Section 4(o)(iii)(2) above multiplied by a fraction, (i)
      the numerator of which shall be the number or amount of Offered Securities
      the
      Company actually proposes to issue, sell or exchange (including Offered
      Securities to be issued or sold to Buyers pursuant to Section 4(o)(iii)(3)
      above
      prior to such reduction) and (ii) the denominator of which shall be the original
      amount of the Offered Securities.  In the event that any Buyer so elects to
      reduce the number or amount of Offered Securities specified in its Notice of
      Acceptance, the Company may not issue, sell or exchange more than the reduced
      number or amount of the Offered Securities unless and until such securities
      have
      again been offered to the Buyers in accordance with Section 4(o)(iii)(1)
      above.

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    (5)           Upon
      the closing of the issuance, sale or exchange of all or less than all of the
      Refused Securities, the Buyers shall acquire from the Company, and the Company
      shall issue to the Buyers, the number or amount of Offered Securities specified
      in the Notices of Acceptance, as reduced pursuant to Section 4(o)(iii)(3) above
      if the Buyers have so elected, upon the terms and conditions specified in the
      Offer Notice.  The purchase by the Buyers of any Offered Securities is
      subject in all cases to the preparation, execution and delivery by the Company
      and the Buyers of a purchase agreement relating to such Offered Securities
      reasonably satisfactory in form and substance to the Buyers and their respective
      counsel and to the Company and its counsel.

    

    (6)           Any
      Offered Securities not acquired by the Buyers or other persons in accordance
      with Section 4(o)(iii)(3) above may not be issued, sold or exchanged until
      they
      are again offered to the Buyers under the procedures specified in this
      Agreement.

    

    (iv)           The
      restrictions contained in subsections (ii) and (iii) of this Section 4(o) shall
      not apply in connection with the issuance of any Excluded Securities (as defined
      in the Notes).

    

    (p)           Additional
      Registration Statements.  Until the Effective Date (as defined in the
      Registration Rights Agreement), the Company will not file a registration
      statement under the 1933 Act relating to securities that are not the
      Securities.

    

    (q)           No
      Short Position. For so long as the Notes remain outstanding, none of the
      Buyers or any of its Affiliates shall have an open short position in the Common
      Stock.

    

    (r)           [reserved]

    

    (s)           Transactions
      With Affiliates.  So long as any Note is outstanding, the Company
      shall not enter into, amend, modify or supplement any agreement, transaction,
      commitment, or arrangement with any of its officers, directors, persons who
      were
      officers or directors as of the Issue Date, stockholders who beneficially own
      five percent (5%) or more of the Common Stock, or Affiliates (as defined below),
      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
      five
      percent (5%) or more beneficial interest (each a "Related
      Party"), except (a) for customary employment arrangements and benefit
      programs on reasonable terms, (b) relating to the transactions described in
      Schedule 4(s), or (c) for this Agreement and the agreements referred to
      herein and contemplated hereby.  For purposes of this Section 4(s)
      only, "Affiliate" means, with respect to any person or entity, another person
      or
      entity that, directly or indirectly, (i) has a ten percent (10%) or more equity
      interest in that person or entity, (ii) has ten percent (10%) or more common
      ownership with that person or entity, (iii) controls that person or entity,
      or
      (iv) shares common control with that person or entity.  "Control"
      or "controls" for purposes hereof means that a person or entity has the power,
      direct or indirect, to conduct or govern the policies of another person or
      entity.

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    (t)           Collateral
      Agent.

     

    (i)  Each
      Buyer hereby (a) appoints Gottbetter Capital Finance, LLC as the collateral
      agent hereunder and under the other Security Documents (in such capacity, the
      “Collateral Agent”), and (b) authorizes the Collateral Agent
      (and its officers, directors, employees and agents) to take such action on
      such
      Buyer’s behalf in accordance with the terms hereof and thereof.  The
      Collateral Agent shall not have, by reason hereof or any of the other Security
      Documents, a fiduciary relationship in respect of any Buyer.  Neither
      the Collateral Agent nor any of its officers, directors, employees and agents
      shall have any liability to any Buyer for any action taken or omitted to be
      taken in connection hereof or any other Security Document except to the extent
      caused by its own gross negligence or willful misconduct, and each Buyer agrees
      to defend, protect, indemnify and hold harmless the Collateral Agent and all
      of
      its officers, directors, employees and agents (collectively, the
“Collateral Agent Indemnitees”) from and against any losses,
      damages, liabilities, obligations, penalties, actions, judgments, suits, fees,
      costs and expenses (including, without limitation, reasonable attorneys’ fees,
      costs and expenses) incurred by such Collateral Agent Indemnitee, whether
      direct, indirect or consequential, arising from or in connection with the
      performance by such Collateral Agent Indemnitee of the duties and obligations
      of
      Collateral Agent pursuant hereto or any of the Security Documents.

     

    (ii)  The
      Collateral Agent shall be entitled to rely upon any written notices, statements,
      certificates, orders or other documents believed by it in good faith to be
      genuine and correct and to have been signed, sent or made by the proper Person,
      and with respect to all matters pertaining to this Agreement or any of the
      other
      Transaction Documents and its duties hereunder or thereunder, upon advice of
      counsel selected by it.

     

    (iii)  The
      Collateral Agent may resign from the performance of all its functions and duties
      hereunder and under the Notes and the Security Documents at any time by giving
      at least ten (10) Business Days prior written notice to the Company and each
      holder of the Notes.  Such resignation shall take effect upon the
      acceptance by a successor Collateral Agent of appointment as provided
      below.  Upon any such notice of resignation, the holders of a majority
      of the outstanding principal under the Notes shall appoint a successor
      Collateral Agent.  Upon the acceptance of the appointment as
      Collateral Agent, such successor Collateral Agent shall succeed to and become
      vested with all the rights, powers, privileges and duties of the retiring
      Collateral Agent, and the retiring Collateral Agent shall be discharged from
      its
      duties and obligations under this Agreement, the Notes and the other Security
      Documents.  After any Collateral Agent’s resignation hereunder, the
      provisions of this Section 4(t) shall inure to its benefit.  If a
      successor Collateral Agent shall not have been so appointed within said ten
      (10)
      Business Day period, the retiring Collateral Agent shall then appoint a
      successor Collateral Agent who shall serve until such time, if any, as the
      holders of a majority of the outstanding principal under the Notes appoint
      a
      successor Collateral Agent as provided above.

    

    (u)           Appointment
      of Directors.  So long as any of the Notes remain outstanding or
      the original purchasers of the Notes beneficially own at least 5% of the Common
      Stock of the Company, calculated in accordance with Section 13(d) of the 1934
      Act and Regulation 13D-G thereunder, the Required Holders (as defined in the
      Notes) shall have the right to nominate two individuals to the Company’s Board
      of Directors, the initial nominees being Scott A. Stagg and Amir
      Khan.  The Company shall use its best efforts to cause such nominees
      to be elected to the Board of Directors of the Company.  Such nominees
      agree to resign as directors when none of the Notes remain outstanding and
      the
      original purchasers of the Notes beneficially own less than 5% of the Common
      Stock of the Company calculated in accordance with Section 13(d) of the 1934
      Act
      and Regulation 13D-G thereunder.

    

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    (v)           Proxy
      and Voting.  Buyers agree that in connection with meetings of
      stockholders, they shall grant the Company a proxy, on a pro rata basis based
      upon the total number of shares owned, to vote any shares owned by them in
      excess of 20%, collectively, of the total outstanding shares of voting stock
      of
      the Company.

    

    5.           [
      Reserved. ]

    

    6.           CONDITIONS
      TO THE COMPANY'S OBLIGATION TO SELL.

    

    The
      obligation of the Company hereunder to issue and sell the Notes and Warrants
      to
      each Buyer and to otherwise cause the transactions contemplated by this
      Agreement to be consummated is subject to the satisfaction, at or before the
      Closing Date, of each of the following conditions, provided that these
      conditions are for the Company's sole benefit and may be waived by the Company
      at any time in its sole discretion by providing each Buyer with prior written
      notice thereof:

    

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

    

    (ii)           Such
      Buyer and each other Buyer shall have delivered to the Company the Purchase
      Price less any amount withheld in satisfaction of the Company's obligations
      pursuant to Section 4(g) for the Notes and Warrants being purchased by such Buyer at the Closing or Subsequent
      Closing by wire
      transfer of immediately available funds pursuant to the wire instructions
      provided by the Company.

    

    (iii)           The
      representations and warranties of each Buyer shall be true and correct with
      respect to those matters that are qualified by material adverse effect or by
      any
      other materiality standard and shall be true and correct in all material
      respects with respect to all matters that are not so qualified, in each case
      as
      of the date hereof and as of the Closing Date as though made at that time
      (except to the extent any such representation or warranty expressly speaks
      as of
      an earlier date, in which case such representation and warranty shall be true
      and correct or true and correct in all material respects, as applicable, as
      of
      such earlier date), and each Buyer shall have performed, satisfied and complied
      in all material respects with the covenants, agreements and conditions required
      by the Transaction Documents to be performed, satisfied or complied with by
      such
      Buyer at or prior to the Closing Date.

    

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

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

    

    (v)           No
      temporary restraining order, preliminary or permanent injunction or other order
      preventing the consummation of the transaction contemplated by this Agreement
      shall have been issued by any court of competent jurisdiction or other
      government body and remain in effect, and there shall not be any legal
      requirement enacted or deemed applicable to the transactions contemplated hereby
      that makes the consummation of such transactions illegal.

    

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

    

    7.           CONDITIONS
      TO EACH BUYER'S OBLIGATION TO PURCHASE.

    

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

    

    (i)  The
      Company shall have executed and delivered to such Buyer (A) each of the
      Transaction Documents and (B) the Notes (in such principal amounts as such
      Buyer
      shall request) and Warrants being purchased by such Buyer at the Closing
      pursuant to this Agreement;

    

    (ii)  The
      Company shall have delivered to such Buyer a certificate, executed by the
      Corporate Secretary of the Company and dated as of the Closing Date, as to
      (i) the resolutions consistent with Section 3(b), including the election of
      Scott A. Stagg and Amir Khan to the Board of Directors of the Company in a
      form
      reasonably acceptable to such Buyer, (ii) the Certificate of Incorporation
      and
      (iii) the Bylaws, each as in effect at the Closing, in the form attached hereto
      as Exhibit F .

    

    (iii)  The
      representations and warranties of the Company shall be true and correct in
      all
      material respects (other than representations and warranties that are already
      qualified by materiality or Material Adverse Effect which shall be true and
      correct in all respects) as of the date when made and as of the Closing Date
      as
      though made at that time (except for representations and warranties that speak
      as of a specific date) and the Company shall have performed, satisfied and
      complied in all respects with the covenants, agreements and conditions required
      by the Transaction Documents to be performed, satisfied or complied with by
      the
      Company at or prior to the Closing Date.  Such Buyer shall have received a
      certificate, executed by the Corporate Secretary of the Company, dated as of
      the
      Closing Date, to the foregoing effect and as to such other matters as may be
      reasonably requested by such Buyer.

    

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

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

    

    (vii)  The
      following persons shall have pledged and delivered the following number of
      shares of Common Stock or shares convertible into Common Stock as existing
      on or
      before February 14, 2007 to Gottbetter Capital Finance, LLC, as collateral
      agent:

     

    
      	 	 	 	 
	
              Julie
                Ackerman

            	 	 	
              120,000

            	 
	
              John
                Boehmer

            	 	 	
              120,000

            	 
	
              Bob
                Gordon

            	 	 	
              50,000

            	 
	
              Orville
                Hagler

            	 	 	
              200,000

            	 
	
              Christopher
                LoPresti

            	 	 	
              150,000

            	 
	
              Joseph
                T. Mohen

            	 	 	
              3,381,000

            	 
	
              Antaeus
                Capital Partners

            	 	 	
              753,847

            	 
	
              Mohen,
                Inc.

            	 	 	
              1,840,000

            	 

    

    

    (viii)                      Prior
      to Closing, the Company shall have delivered or caused to be delivered to each
      Buyer (A) true copies of UCC search results, listing all effective financing
      statements which name the Company as debtor filed in the prior five years to
      perfect an interest in any assets thereof, together with copies of such
      financing statements, none of which, except as otherwise agreed in writing
      by
      the Buyers, shall cover any Collateral (as defined in the Security Documents)
      and the results of searches for any tax lien and judgment lien filed against
      the
      Company or its property, which results, except as otherwise agreed to in writing
      by the Buyers, shall not show any such Liens (as defined in the Security
      Documents).

    

    8.           TERMINATION.
       

    

    This
      Agreement may be terminated prior to the Closing Date by mutual written consent
      of the Company and each Buyer.  If this Agreement is terminated
      pursuant to this Section 8, the Company shall remain obligated to reimburse
      the
      non-breaching Buyers for the expenses described in Section 4(g)
      above.

    

    9.           MISCELLANEOUS.

    

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

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    
 

    (b)           Counterparts.
       This Agreement may be executed in two or more identical counterparts, all
      of which shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party; provided that a facsimile signature shall be considered due
      execution and shall be binding upon the signatory thereto with the same force
      and effect as if the signature were an original, not a facsimile
      signature.

    

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

    

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

    

    (e)           Entire
      Agreement; Amendments.  This Agreement and the other Transaction
      Documents supersede all other prior oral or written agreements between the
      Buyers, the Company, their Affiliates and Persons acting on their behalf with
      respect to the matters discussed herein, and this Agreement, the other
      Transaction Documents and the instruments referenced herein and therein contain
      the entire understanding of the parties with respect to the matters covered
      herein and therein and, except as specifically set forth herein or therein,
      neither the Company nor any Buyer makes any representation, warranty, covenant
      or undertaking with respect to such matters.  No provision of this
      Agreement may be amended other than by an instrument in writing signed by the
      Company and the Required Holders, and any amendment to this Agreement made
      in
      conformity with the provisions of this Section 9(e) shall be binding on all
      Buyers and holders of securities, as applicable.  No provision hereof may
      be waived other than by an instrument in writing signed by the Required Holders.
       No such amendment shall be effective to the extent that it applies to less
      than all of the holders of the applicable Securities then outstanding.  No
      consideration shall be offered or paid to any Person to amend or consent to
      a
      waiver or modification of any provision of any of the Transaction Documents
      unless the same consideration also is offered to all of the parties to the
      Transaction Documents, holders of Notes.  The Company has not, directly or
      indirectly, made any agreements with any Buyers relating to the terms or
      conditions of the transactions contemplated by the Transaction Documents except
      as set forth in the Transaction Documents.

    

    (f)           Notices.
      Any notices, consents, waivers or other communications required or permitted
      to
      be given under the terms of this Agreement must be in writing and will be deemed
      to have been delivered:  (i) upon receipt, when delivered personally; (ii)
      upon receipt, when sent by facsimile (provided confirmation of transmission
      is
      mechanically or electronically generated and kept on file by the sending party);
      or (iii) one Business Day after deposit with an overnight courier service,
      in
      each case properly addressed to the party to receive the same.  The
      addresses and facsimile numbers for such communications shall be:

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    If
      to the
      Company:

    Mohen,
      Inc. d/b/a Spiral Frog

    95
      Morton
      Street

    Ground
      Fl.

    New
      York,
      NY 10014

    Attention: Chief
      Executive Officer

    

    With
      a copy
      to:                                     Gottbetter
& Partners, LLP

    488
      Madison Avenue,

    New
      York,
      NY 10022

    Attention:  D.
      Morgan Burkett, Esq.

    Telephone:  (212)
      400-6900

    Facsimile:  (212)
      400-6901

    

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

    

    If
      to the
      Collateral Agent:

    Gottbetter
      Capital Finance,
      LLC

    488
      Madison Avenue

    12th
      Floor

    New
      York, New York 10022

    Attention:  Jason
      M.
      Rimland

    Telephone: (212)
      400-6990

    Facsimile:  (212)
      400-6999

    

    

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

    

    (g)           Successors
      and Assigns.  This Agreement shall be binding upon and inure to the
      benefit of the parties and their respective successors and assigns, including
      any purchasers of the Notes.  The Company shall not assign this
      Agreement or any rights or obligations hereunder without the prior written
      consent of the Required Holders (unless the Company is in compliance with the
      applicable provisions governing Fundamental Transactions set forth in the
      Notes).  A Buyer may assign some or all of its rights hereunder
      without the consent of the Company, in which event such assignee shall be deemed
      to be a Buyer hereunder with respect to such assigned rights; provided that
      such
      assignee agrees in writing to be bound by all of the provisions contained
      herein.

    

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

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

    

    (i)           Survival.
      Unless this Agreement is terminated under Section 8, (x) the representations
      and
      warranties of the Buyers contained in Section 2, (y) the representations and
      warranties of the Company contained in Section 3, and (z) the covenants and
      agreements of the parties contained in Sections 4 and 9 shall survive for so
      long as any of the Notes remain outstanding or the original purchasers of the
      Notes beneficially own at least 5% of the Common Stock of the Company,
      calculated in accordance with Section 13(d) of the 1934 Act and Regulation
      13D-G
      thereunder.  Each Buyer shall be responsible for its own
      representations, warranties, agreements and covenants hereunder.

    

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

    

    (k)           Indemnification.
       In consideration of each Buyer’s execution and delivery of the Transaction
      Documents and acquiring the Securities thereunder, and in addition to all of
      the
      Company’s other obligations under the Transaction Documents, the Company shall
      defend, protect, indemnify and hold harmless each Buyer and all of their
      stockholders, partners, members, officers, directors, employees 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 expenses in connection therewith, and including reasonable attorneys' fees
      and disbursements (the "Indemnified Liabilities"), incurred by
      any Indemnitee as a result of, or arising out of, or relating to (a) any
      misrepresentation or breach of any representation or
      warranty made by the Company in the Transaction Documents or any other
      certificate, instrument or document contemplated hereby or thereby, (b) any
      breach of any covenant, agreement or obligation of the Company contained in
      the
      Transaction Documents or any other certificate, instrument or document
      contemplated hereby or thereby or (c) any cause of action, suit or claim brought
      or made against such Indemnitee by a third party (including for these purposes
      a
      derivative action brought on behalf of the Company) and arising out of or
      resulting from (i) the execution, delivery, performance or enforcement of the
      Transaction Documents or any other certificate, instrument or document
      contemplated hereby or thereby, (ii) any transaction financed or to be financed
      in whole or in part, directly or indirectly, with the proceeds of the issuance
      of the Securities, or (iii) the status of such Buyer or holder of the Securities
      as an investor in the Company pursuant to the transactions contemplated by
      the
      Transaction Documents.  To the extent that the foregoing undertaking
      by the Company may be unenforceable for any reason, the Company shall make
      the
      maximum contribution to the payment and satisfaction of each of the Indemnified
      Liabilities which is permissible under applicable law.  Except as otherwise
      set forth herein, the mechanics and procedures with respect to the rights and
      obligations under this Section 9(k) shall be the same as those set forth in
      Section 6 of the Registration Rights Agreement.

    

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

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

    

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

    

    (n)           Rescission
      and Withdrawal Right. Notwithstanding anything to the contrary contained in
      (and without limiting any similar provisions of) the Transaction Documents,
      whenever any Buyer exercises a right, election, demand or option under a
      Transaction Document and the Company does not timely perform its related
      obligations within the periods therein provided, then such Buyer may rescind
      or
      withdraw, in its sole discretion from time to time upon written notice to the
      Company, any relevant notice, demand or election in whole or in part without
      prejudice to its future actions and rights.

    

    (o)           Payment
      Set Aside.  To the extent that the Company makes a payment or payments
      to the Buyers hereunder or pursuant to any of the other Transaction Documents
      or
      the Buyers enforce or exercise their rights hereunder or thereunder, and such
      payment or payments or the proceeds of such enforcement or exercise or any
      part
      thereof are subsequently invalidated, declared to be fraudulent or preferential,
      set aside, recovered from, disgorged by or are required to be refunded, repaid
      or otherwise restored to the Company, a trustee, receiver or any other Person
      under any law (including, without limitation, any bankruptcy law, foreign,
      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.

    

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

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

    

    (q)  Litigation
      Expenses.  In the event of any judgment of a court or arbitration
      body on any dispute hereunder or in connection herewith or with any transaction
      contemplated hereby or discussed herein that is not appealed within thirty
      (30)
      days of such judgment, the prevailing party in such judgment may recover its
      reasonable expenses in obtaining such judgment (including without limitation
      amounts paid in settlement, interest, court costs, costs of investigators,
      fees
      and expenses of attorneys, accountants, financial advisors and other experts,
      and other expenses of litigation), provided that if such prevailing party
      prevails on several motions in the judgment and does not prevail on others,
      it
      shall be in the discretion of a court or arbitration body to determine what
      percentage of such reasonable expenses the prevailing party is entitled to
      receive.

    

    

    [Signature
      Page Follows]

    

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

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

     

    
      	 	MOHEN,
              INC.	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ 	 
	 	 	
              Name:
                Orville Hagler

              Title:   Corporate
                Secretary

            	 
	 	 	 	 
	 	 	 	 

    

    
 

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

     

    
      	 	
              BUYER:

            	 
	 	 	 	 
	
              Date

            	
               

            	 	 
	 	 	Print
              Name 	 
	 	 	 	 
	 	 	 	 

    

    

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

     

    SCHEDULE
      OF BUYERS

     

    
      	
              (1)

            	
               

            	
              (2)

            	
               

            	
              (3)

            	
              (4)

            	
              (5)

            
	
              Buyer

            	
               

            	
              Address
                and

              Facsimile
                Number

            	
               

            	
              Aggregate

              Purchase
                Price

            	
               

               

              Warrants

            	
              Legal
                Representative’s

              Address
                and

              Facsimile
                Number

            
	
               

            	
               

            	
               

            	
               

            	
               

            	 	
               

            
	
              Scott
                A. Stagg

               

            	 	
              7
                Castle Brooke Rd.

              West
                Harrison, NY 10604

            	 	
              $3,000,000

            	
              1,636,364

            	 
	
               

              Amir
                Khan

               

               

               

              Mark
                Focht

               

               

              Robert
                A. Noble

            	 	
               

              40
                Liberty St

              Wilton

              CT
                06897

               

              4
                Fortune Way

              Montebello
                NY 10901

               

              276
                Jefferson Avenue

              Island
                Park, NY 11558

            	 	
               

              $1,000,000

               

               

               

              $250,000

               

               

              $100,000

            	
               

              545,455

               

               

               

              136,364

               

               

              54,545

            	 
	
               

              Paul
                Schulman

            	 	
               

              2997
                Kensington Place

              Tarpin,
                FL  34688

            	 	
               

              $102,000

            	
               

              55,636

            	 
	
               

              Anteaus
                Capital, Inc.

            	 	
               

              9952
                South Santa Monica Blvd., Suite 210

              Beverly
                Hills, CA  90212

            	 	
               

              $146,000

            	
               

              79,636

            	 
	
               

              Lionel
                Amron

            	 	
               

              Antaeus
                Capital Inc.

              9952
                South Santa Monica Blvd., Suite 210

              Beverly
                Hills, CA  90212

            	 	
               

              $10,000

            	
               

              5,455

            	 
	
               

              Golden
                Den Corp.

            	 	
               

              RDR
                Group

              2000
                E. Winston Road

              Anaheim,
                CA  92806

            	 	
               

              $50,000

            	
               

              27,273

            	 
	
              Agape
                World Inc.

            	 	
              150
                Motor Parkway Suite 106

              Hauppausge,
                NY 11788

              Attn:
                President

              (631)
                231-5616

            	 	
              342,000

            	
              186,545

            	 
	
              Mark
                P. Stagg

            	 	 	 	
              $500,000

            	
              272,727

            	 
	 	 	 	 	 	 	 
	
              Derek
                A Jerina

            	 	 	 	
              $250,000

            	
              136,364

            	 
	 	 	 	 	 	 	 
	
              Robert
                DiForio

            	 	 	 	
              $200,000

            	
              109,091

            	 
	 	 	 	 	 	 	 
	
              Kevin
                A. Stagg

            	 	 	 	
              $25,000

            	
              13,636

            	 
	 	 	 	 	 	 	 
	
              Thomas
                E. Stagg

            	 	 	 	
              $25,000

            	
              13,636

            	 
	 	 	 	 	 	 	 
	
              Distressed
                High Yield Trading Opportunities Fund, Ltd.

            	 	 	 	
              $5,000,000

            	
              2,727,273

            	 

    

    

    

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    

     

    EXHIBITS

    
      
        	
                Exhibit
                  A

              	
                Form
                  of Notes

              
	
                Exhibit
                  B

              	
                Registration
                  Rights Agreement

              
	
                Exhibit
                  C

              	
                Form
                  of Security Agreement

              
	
                Exhibit
                  D

              	
                Form
                  of Pledge Agreement

              
	
                Exhibit
                  E

              	
                Irrevocable
                  Transfer Agent Instructions

              
	
                Exhibit
                  F

              	
                Form
                  of Resolutions, Articles of Incorporation and By-Laws

              
	
                Exhibit
                  G

              	
                Form
                  of Warrants

              

      

    

     

    SCHEDULES

    
      
        	
                Schedule
                  3(a)

              	
                Qualification

              
	
                Schedule
                  3(b)

              	
                Authorization,
                  Enforcement, Validity

              
	
                Schedule
                  3(d)

              	
                No
                  Conflicts

              
	
                Schedule
                  3(e)

              	
                Consents

              
	
                Schedule
                  3(g)

              	
                Consultant

              
	
                Schedule
                  3(j)

              	
                Financial
                  Statements

              
	
                Schedule
                  3(k)

              	
                Conduct
                  of Business; Regulatory Permits

              
	
                Schedule
                  3(m)

              	
                Transactions
                  with Affiliates

              
	
                Schedule
                  3(n)

              	
                Equity
                  Capitalization

              
	
                Schedule
                  3(o)

              	
                Indebtedness
                  and Other Contracts

              
	
                Schedule
                  3(p)

              	
                Absence
                  of Litigation

              
	
                Schedule
                  3(r)

              	
                Employee
                  Relations

              
	
                Schedule
                  3(s)

              	
                Title

              
	
                Schedule
                  3(t)

              	
                Intellectual
                  Property Rights

              
	
                Schedule
                  3(w)

              	
                Tax
                  Status

              
	
                Schedule
                  3(x)

              	
                Ranking
                  of Notes

              
	
                Schedule
                  4(d)

              	
                Use
                  of Proceeds

              
	
                Schedule
                  4(o)

              	
                Additional
                  Issuances of Securities

              
	
                Schedule
                  4(s)

              	
                Transactions
                  with Affiliates

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]