Document:

Exhibit
10.3

Aspenwood Capital Investment Banking Division

Green Drake Capital Corp.

17 Battery Place, 11th Floor

New York, NY 10004

(212) 473-2409

(212) 473-2401 telecopy

February 7, 2007

Mr.
Daryl Yurek

Identity
Rehab Corporation

535
16th Street, Suite 820

Denver, CO  80202

Dear Daryl:

It is Aspenwood Capital’s (the “Placement Agent”)
understanding that Identity Rehab Corporation (“IRC”, “you,” or the “Company”)
will merge with a public company and form a single entity to be named Identity
Rehab Corporation.  Further, that it is
our understanding that immediately prior to, contemporaneously with or
immediately after the merger, the Company wishes to undertake a private
offering of convertible debentures and warrants in an effort to raise a maximum
of $3,500,000 for the Company. The Company 
hereby represents that (i) it has the authority to enter into this
agreement (the “Agreement”)  and (ii)
this Agreement is enforceable against it.

Aspenwood Capital, the investment banking division
of Green Drake Capital Corp. (Member 
NASD/SIPC) (“we” or “Aspenwood”), is pleased to represent IRC as its
exclusive financial advisor and placement agent in connection with the Company’s
proposed private placement.  The terms of
the engagement are set forth below.  We
look forward to working with you.

1.             Offering.  The
Company hereby engages Aspenwood to act as its exclusive financial advisor and
placement agent during the Term (as defined below) in connection with the sale
of the Company’s Convertible Secured Debentures (the “Convertible Debentures”)
in aggregate gross proceeds of $2,000,000 (“Minimum Amount”) and up to
$3,000,000 (“Maximum Amount”) with attached warrants (“Warrants”) (the “Offering”)
and an over-allotment allowance of $500,000.  
The terms and conditions of the Offering are set forth in the Summary of
Financing Terms attached hereto as Exhibit A and incorporated herein by
reference.  The actual terms of the
Offering will depend on market conditions, and will be subject to negotiation
between the Company, Aspenwood and prospective investors.  Aspenwood will conduct the Offering on a “best
efforts” basis.  In turn, during the Term
hereof, the Company agrees not to discuss, solicit, entertain, agree or
negotiate with any other third party, placement agent, financial advisor or
underwriter with respect to a private or public offering of the Company’s debt
or equity securities.   Aspenwood shall
be authorized to arrange for other broker-dealers to participate in the
Offering (“Participating Dealers”) with Aspenwood being responsible for the
payment of any agreed upon re-allowance to Participating Dealers out of the
Commissions (as defined below) paid to Aspenwood hereunder.  Blackmont Capital Inc. shall have first right
to act as Aspenwood’s Canadian agent in connection with this Offering and/or
subsequent offerings under this agreement.  Blackmont shall assist the
Company in obtaining a listing on the TSX Venture exchange.

The Company hereby warrants and represents to, and
covenants with, Aspenwood that there are no existing agreements between the
Company or any of its affiliates or subsidiaries and any other investment
banking firm, placement agent, financial advisor or other party to raise
capital (including additional debt) for the Company, and no other person or entity
is entitled to a finder’s fee or any type of brokerage commission in connection
with the transactions contemplated by this Agreement as a result of any
agreement or understanding with the Company or any of its affiliates or
subsidiaries.

2.             Compensation.  Concurrently with the closing of the Offering
(“Closing”), the Company shall pay Aspenwood a cash fee (“Commission”) equal to
10% of the gross proceeds received from the sale of securities in the
Offering.  It is anticipated that
Officers, Directors and acquaintances of the Company will participate in the
Offering.  The Company shall pay
Aspenwood a cash fee (“Commission”) equal to 5% of the gross proceeds received
from the sale of securities in the Offering from the first $500,000 received
from investors introduced to Aspenwood by the Company.    The Company also agrees to pay to
Aspenwood, as warrant solicitation agent for transactions involving the
exercise of any Warrants, which exercise is solicited by Aspenwood, a warrant
solicitation fee of 3% of the aggregate exercise price received (“Solicitation
Fees”).  The Solicitation Fees shall be
payable for so long as any Warrants are outstanding and notwithstanding the
termination or expiration of this Agreement.

In addition, at the Closing, the Company shall sell
and issue to Aspenwood or its designees warrants to purchase shares of the
Company’s common stock equal in number to 10% of the shares of the Company’s
common stock underlying the Convertible Debenture and Warrants sold in the
Offering (“Agent Warrants”).  Aspenwood
shall pay a “warrant cost” of $0.001 (one-tenth of a cent) per share to the
Company upon issuance of the Agent Warrants. 
Each Agent Warrant shall entitle the holder thereof to purchase one
share of the Company’s common stock.  The
Agent Warrants shall not be redeemable by the Company and shall be exercisable
at any time after the Closing at a price equal to the exercise price of the
Warrants issued to investors, on a net-issuance or cashless basis.  The Company hereby grants the same
registration rights to Aspenwood and its designees with respect to the shares
of the Company’s common stock underlying the Agent Warrants as are granted to
investors with respect to the shares of the Company’s common stock underlying
the Convertible Debentures and Warrants issued to investors in the
Offering.  Except as otherwise set forth
in this paragraph, the Agent Warrants shall be in the same form and exercisable
at the same prices as the Warrants and will expire five years from the date of
the Closing of the Offering.  The Company
agrees that Aspenwood shall be afforded the indemnification protections granted
to the investors in the Offering as part of the agreement governing the
registration of the securities sold to investors in the Offering, as a third
party beneficiary to such provisions.

Upon the Closing, the Company shall pay Aspenwood a
non-accountable expense allowance equal to 2% of the aggregate gross offering
proceeds received from the sale of securities in the Offering (“Allowance”).  The Company shall pay all costs and expenses
related to the Offering and/or the performance of the Company’s obligations
under this Agreement, including preparation of the offering materials, any
memoranda, preparation of related documentation, accounting fees, legal fees of
Company counsel, experts fees, consultants’ fees, escrow fees, filing fees with
the SEC and applicable states, any costs and expenses to qualify the securities
for sale in any state and any and all costs and expenses for investor or road
show presentations.  Aspenwood shall be
reimbursed for investor road show presentation expenses and are due upon
receipt.  Aspenwood’s road show expenses
shall not exceed an aggregate $15,000.

Notwithstanding the foregoing, the Company shall not
be responsible for any expenses of Aspenwood and Participating Dealers incurred
in connection with the Offering, including,  
operating expenses,  and other
incidental expenses incurred by Aspenwood and Participating Dealers; provided,
however, whether or not the Offering is completed, the Company shall reimburse
Aspenwood upon request for its actual out-of-pocket expenses incurred in
connection with this Offering, including but not limited to, its due diligence
investigation, attendance at road show and investor presentations, travel costs
related to the

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foregoing and Aspenwood’s costs for its legal counsel fees and
disbursements.  Such legal fees shall be
in an amount not exceeding $25,000, of which $10,000 will be paid within five
days of the execution of this Agreement.

No fee payable to any other person, whether payable
by the Company or any other party, in connection with the Offering shall reduce
or otherwise affect any fee payable hereunder.

3.             Term. 
The term of this Agreement shall be six months from the date of delivery
by the Company to Aspenwood of the completed Information (as defined herein) as
reviewed and approved by Aspenwood’s counsel 
(“Term”); provided, however, that either Aspenwood or the Company may
terminate this Agreement by providing five days prior written notice to the
Company.  Upon termination, Aspenwood
shall be entitled to collect all Commissions, Allowance, Solicitation Fees and
Warrants earned and all out-of-pocket expenses incurred through the date of
termination.  If this Offering is not
consummated during the Term hereof for any reason, and during the twelve months
following termination or expiration of this Agreement, the Company completes an
offering of its securities, the Company shall pay Aspenwood upon such closing
the Commissions, Allowance, Solicitation Fees and Warrants set forth in Section
2 above for any securities sold by Company to any person which Aspenwood
introduced to the Company or whom Aspenwood contacted during the Term hereof on
behalf of the Company (“Protected Investors”). 
Aspenwood shall provide in writing to the Company, within five business
days following termination or expiration of this Agreement, a proposed list of
Protected Investors, which list shall become binding unless the Company objects
to such list within five business days following its receipt of such list.  Any dispute involving the list of Protected
Investors shall be resolved in accordance with Section 10K hereof.  Further, in the case of a merger,
acquisition, joint venture or other strategic transaction with such person
during the Term hereof or the 12 months following the termination or expiration
of this Agreement, the cash fee payable to Aspenwood will be equal to 2% of the
enterprise value of the Company. 
Notwithstanding anything contained herein to the contrary, the
provisions of Sections 2, 3, 6, 7, 8 and 9 shall survive the termination or
expiration of this Agreement and the Closing of the Offering.

4.             Representations, Warranties and Covenants by Company.  The Company agrees that, in connection with
the Offering, the Company shall enter into subscription, registration rights
and other customary agreements, and that the Company’s counsel shall supply an
opinion letter on the transaction, all of which will be in form and substance
reasonably acceptable to, and addressed to, Aspenwood and the investors.  The Company further agrees that Aspenwood may
rely upon, and is a third party beneficiary of, the representations and
warranties, indemnities and applicable covenants, set forth in any agreements
with investors in the Offering.  The
Company acknowledges and agrees that any advice given by Aspenwood to the
Company is solely for benefit and use of the Board of Directors of the Company
and may not be used, reproduced, disseminated, quoted or referred to, without
Aspenwood’s prior written consent.  The
Company represents and warrants to Aspenwood that the Company has not engaged
in any public or private offering of securities or taken or failed to take any
action that would cause the Offering not to qualify for an exemption from
registration under the Securities Act of 1933, as amended (“Securities Act”).  Further, the Company agrees not to engage in
any general solicitation or general advertising with respect to the Offering or
take any action which might jeopardize the availability of any exemption under
the Securities Act.

5.             Diligence; Information.  The Company shall furnish Aspenwood with all
financial and other information requested or required by Aspenwood in
connection with its engagement and shall prepare and be responsible for the
accuracy of the offering materials, any memoranda and related documentation
furnished by it and used in connection with the Offering , including but not
limited to a Private Placement Memorandum (all such information so furnished by
the Company, whether furnished before or after the date of this Agreement,
being referred to herein as the “Information”). 
The Company also agrees to make available to Aspenwood such
representatives of the Company, including, among others, directors, officers,
employees, outside counsel and independent certified public accountants, as
Aspenwood may reasonably

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request. 
The Company will promptly advise Aspenwood of any material changes in
the Company’s business or finances.  The
Company represents and warrants that the Information provided or made available
to Aspenwood by the Company, at all times during the Term hereof, is and shall
be complete and true in all material respects and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements thereof not misleading in light of the
circumstances under which such statements are made.  The Company further represents and warrants
that any financial guidance provided to Aspenwood will have been prepared in
good faith and will be based upon assumptions that, in light of the
circumstances under which they are made, are reasonable.  The Company acknowledges and agrees that: (i)
in rendering its services hereunder, Aspenwood will be using and relying on the
Information and information available from generally recognized public sources,
(ii) Aspenwood does not assume responsibility for the accuracy of the
Information or such other information, and (iii) Aspenwood will not make any investigation,
verification or appraisal of the Information or any assets or liabilities owned
or controlled by the Company or its market competitors.

6.             Right of First Refusal.  The Company hereby grants Aspenwood a  right of first refusal, during the two year
period following the Closing, (i) to act as the managing underwriter or
exclusive placement agent for any proposed public or private sale of debt or
equity securities (excluding sales to employees) of the Company, any subsidiary
or successor of the Company, and (ii) to act as the Company’s exclusive
financial advisor for any merger or acquisition involving the Company, any
subsidiary or successor of the Company. 
If Aspenwood fails to accept in writing any such proposal for such
public or private sale of securities or financial advisory engagement within 10
days after receipt of a written notice from the Company containing such
proposal, then Aspenwood shall have no claim or right with respect to any such
public or private sale or financial advisory engagement contained in any such
notice.  If, thereafter, such proposal is
modified in any material respect, the Company shall adopt the same procedure as
with respect to the original proposed public or private sale or financial
advisory engagement. Except for Aspenwood’s right to be re-offered a proposal
that changes in its material terms, once Aspenwood fails to accept a proposal
and the Company engages another person on the terms of the rejected proposal,
Aspenwood shall have no further rights under this Section 6.

7.             After Market Support Services.  Upon the Closing of the Offering, the Company
shall engage such firm or firms to provide investor relations and after market
support services to the Company for a period of one year following the Closing
under such terms and conditions as mutually agreed to by the Company and such
firm parties.  The Company agrees not to
engage any investor relations or after market support firm without the prior
written consent of Aspenwood.

8.             Indemnification; Contribution.

A.            The
Company agrees to indemnify and hold harmless Aspenwood, Green Drake Capital
Corp. (“Green Drake”), the Participating Dealers and their respective
affiliates, and their respective officers, directors, shareholders, members,
partners, employees, agents, consultants, advisors and affiliates and control
persons of any of the above (each an “Indemnified Person” and collectively, the
“Indemnified Persons”) from and against all actions (including, but not limited
to, any legal or administrative action, suit, proceeding, investigation or
inquiry, regardless of legal theory or the allegations made in connection
therewith), claims, liabilities, losses, damages, costs and expenses
(including, but not limited to, attorneys’ fees, disbursements and court costs,
and costs of any investigation or preparation), directly or indirectly, in
connection with, arising out of, based upon, or in any way related to: (i)
actions taken or omitted to be taken (including any untrue statements made or
any statements omitted to be made) by the Company, (ii) this Agreement, (iii)
the breach of any warranty, representation or covenant by the Company under
this Agreement, (iv) the services that are the subject of this Agreement, (v)
any Information, whether written or verbal, referred to herein or provided by
the Company to Aspenwood, investors or others, (vi) any filings made by or on
behalf of any party with any government agency in connection with the Offering,
or (vii)

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actions taken or omitted to be taken by an
Indemnified Person with the consent of or in conformity with the actions or
omissions of the Company, and the Company will on demand advance or pay
promptly such amounts as they are incurred by the Indemnified Person.  The obligation to advance or pay promptly on
demand all amounts as they are incurred shall exist irrespective of: the
capacity in which the Indemnified Person is involved (including, but not
limited to, that of a witness or defendant) or the ultimate final judicial
determination, and in the event of a dispute about the amounts owed, such
amounts shall be advanced as they are incurred pending resolution and final
judicial determination pursuant to Section 8.D.

B.            If
for any reason the foregoing indemnification is determined to be unavailable to
any Indemnified Person or insufficient to fully indemnify any such person, then
the Company shall contribute to the amount paid or payable by such person as a
result of any such loss, claim, damage, liability, cost or expense, in such
proportion as is appropriate to reflect not only the relationship between
Aspenwood’s fee on the one hand and the aggregate value of the Offering on the
other hand, but also the relative fault of the Indemnified Person, as well as
other relevant equitable considerations.

C.            The
Company’s indemnification obligations hereunder shall not apply to any loss,
claim, damage, liability or expense that is finally judicially determined on
the merits to have been caused solely by the gross negligence or intentional
misconduct of an Indemnified Person.  In
the event of such final judicial determination, the Company shall be entitled
to recover from such Indemnified Person costs or expenses paid on behalf of
such Indemnified Person pursuant to this indemnification obligation.  No Indemnified Person shall be liable to the
Company or to any other person claiming through the Company for any claim,
loss, damage, liability, cost or expense suffered by the Company or any such
person arising out of or related to Aspenwood’s 
engagement hereunder except for any claim, loss, damage, liability, cost
or expense that is finally judicially determined on the merits to have been
caused solely by the gross negligence or intentional misconduct of an
Indemnified Person, other than an action or failure to act undertaken at the
request or with the consent of the Company.

D.            Promptly
upon receipt by an Indemnified Person of notice of any complaint or the
assertion or institution of any claim with respect to which indemnification is
being sought hereunder, such Indemnified Person shall notify the Company in
writing of such complaint or of such assertion or institution, but failure to
so notify the Company shall not relieve the Company from any obligation it may
have hereunder, unless, and only to the extent that, such failure results in the
forfeiture by it of substantial rights and defenses, and such failure to so
notify the Company will not in any event relieve it from any other obligation
or liability it may otherwise have to any Indemnified Person under this
Agreement.  If the Company so elects or
is requested by such Indemnified Person, it will assume the defense of such
claim, including the employment of counsel reasonably satisfactory to such
Indemnified Person and the payment of the fees and expenses of such counsel.  In the event, however, that such Indemnified
Person reasonably determines in its sole judgment that having common counsel
would present such counsel with a conflict of interest or such Indemnified
Person concludes that there may be legal defenses available to it or other Indemnified
Persons different from or in addition to those available to the Company, then
such Indemnified Person may employ its own separate counsel to represent or
defend it in any such claim and the Company shall pay the fees and expenses of
such counsel.  Notwithstanding anything
herein to the contrary, if the Company fails timely or diligently to defend,
contest, or otherwise protect against any claim, the relevant Indemnified
Person shall have the right, but not the obligation, to defend, contest, compromise,
settle, assert crossclaims or counterclaims, or otherwise protect against the
same, and shall be fully indemnified by the Company therefor, including, but
not limited to, for the fees and expenses of its counsel and all amounts paid
as a result of such claim or the compromise or settlement thereof.  In any claim in which the Company assumes the
defense, the Indemnified Person shall have the right to participate in such
defense and to retain its own counsel therefor at its own expense.

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E.             The
Company agrees that it will not settle, compromise or discharge any suit,
claim, litigation, threatened litigation or threatened claim arising out of,
based upon, or in any way related to this Agreement or the Offering unless the
Company has obtained a written agreement, approved by Aspenwood and Green Drake
(which shall not be unreasonably withheld) and executed by each party to such
proposed settlement, compromise or discharge, releasing Aspenwood and Green
Drake from any and all liability.

F.             The
Company’s indemnity, contribution and reimbursement obligations under this
Section 8 shall be in addition, and shall in no way limit or otherwise
adversely affect any rights that an Indemnified Person may have at law or in
equity, and shall be binding upon, and inure to the benefit of and be
enforceable by the heirs, personal representatives, successors and assigns of
each Indemnified Person.  The provisions
of this Section 8 shall continue to apply and shall remain in full force and
effect regardless of any modification, termination, or expiration of this
Agreement, the completion of Aspenwood’s services hereunder or the Closing of
the Offering.

G.            Should
any Indemnified Person be required or be requested by the Company to provide
documentary evidence or testimony in connection with any proceeding arising
from or relating to Aspenwood’s engagement under the Agreement, the Company
agrees to pay all reasonable expenses (including, but not limited to, fees and
expenses of counsel) in complying therewith and customary fees for sworn
testimony or preparation thereof, payable in advance.

9.       Conditions
to Closing. The closing of the Offering shall be subject to the
following:

A.            Subscriptions
for the minimum offering amount shall be received in an escrow account
established by the Placement Agent.

B.            The
Company’s Board of Directors shall provide written documentation of its
approval of the Offering.

C.            A
reverse merger with a public entity shall have been consummated.

D.            The
Placement Agent shall complete its due diligence investigation to its
satisfaction, including but not limited to a background check of the current
directors and officers of Identity Rehab Corporation, the cost of which shall
be the responsibility of the Company.

E.             The
public entity the Company will be merging with shall be current with all of its
filings under the Securities Exchange Act of 1934, as amended (“Exchange Act”).

F.             Certain
officers and directors shall deliver lock-up agreements as reasonably requested
by the Placement Agent and Investors. 
Lock-up agreements will be for a period of six months from the effective
date of the resale registration statement of the securities underlying the
Convertible Secured Debenture and the Warrants.

G.            The
Company shall agree to implement an investor relations and aftermarket support
program with an investor relations firm acceptable to Placement Agent and a
budget of $300,000 over a twelve month period.

H.            The
Company agrees to a use of the Offering proceeds, which use of proceeds shall
be attached hereto as Exhibit B.

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10.           Miscellaneous

A.            Before the Company releases any
information referring to Aspenwood’s role as the Company’s financial advisor
under this Agreement or uses Aspenwood’s name in a manner which may result in
public dissemination thereof, the Company shall furnish drafts of all documents
or prepared oral statements to Aspenwood for comments, and shall not release
any information relating thereto without the prior written consent of
Aspenwood.  Nothing herein shall prevent
the Company from releasing any information to the extent that such release is
required by law.

B.            Nothing
in this Agreement shall be construed to limit the ability of Aspenwood or its
affiliates to pursue, investigate, analyze, invest in, or engage in investment
banking, financial advisory or any other business relationship with entities
other than the Company, notwithstanding that such entities may be engaged in a
business which is similar to or competitive with the business of the Company.

C.            The
Company agrees that, following the consummation of the Offering, Aspenwood
shall have the right to place advertisements in financial and other newspapers
and journals at the Company’s expense (not to exceed $10,000), describing its
services to the Company hereunder, provided that Aspenwood will submit a copy
of any such advertisements to the Company for its prior approval, which
approval shall not be unreasonably withheld.

D.            The Company
represents and warrants that this Agreement has been duly authorized and
represents the legal, valid, binding and enforceable obligation of the Company
and that neither this Agreement nor the consummation of any transactions
contemplated hereby requires the approval or consent of any governmental or
regulatory agency or violates or conflicts with any law, regulation, contract
or order binding the Company.

E.             The terms,
provision and conditions of this Agreement are solely for the benefit of the
Company and Aspenwood and the other Indemnified Persons and their respective
heirs, successors and permitted assigns and no other person or entity shall
acquire or have a right by virtue of this Agreement.  This Agreement may not be assigned by either
party without prior written consent of the other party.

F.             This Agreement
contains the entire understanding and agreement between the parties hereto with
respect to Aspenwood’s engagement hereunder, and all prior writings and
discussions are hereby merged into this Agreement.  This Agreement supercedes and replaces any and all prior
agreements to which Aspenwood and the Company are parties (“Prior Agreements”).

G.            No provision of this Agreement
may be waived or amended except in a
writing signed by both parties. A waiver or amendment of any term or provision
of this Agreement shall not be construed as a waiver or amendment of any other
term or provision.

H.            Each party represents and warrants that it will comply
with all applicable securities and other laws, rules and regulations relating
hereto and that it shall not circumvent or frustrate the intent of this
Agreement.

I.              This Agreement may be executed by facsimile or
electronic signatures and in multiple counterparts, each of which shall be
deemed an original. It shall not be necessary that each party executes each
counterpart, or that any one counterpart be executed by more than one party so
long as each party executes at least one counterpart.  In the event this Agreement
is executed in more than one language, the
English language version of this Agreement  shall be controlling in all cases.

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J.             This
Agreement shall be governed by and constructed under the laws of the State of
New York, U.S.A without regard to such state’s conflicts of law principles, and
may be amended, modified or supplemented only by written instrument executed by
parties hereto.

K.            All disputes, controversies or claims (“Disputes”)
arising out of or relating to this Agreement shall in the first instance be the
subject of a meeting between a representative of each party who has
decision-making authority with respect to the matter in question. Should the
meeting either not take place or not result in a resolution of the Dispute
within 20 business days following notice of the Dispute to the other party,
then the Dispute shall be resolved in a binding arbitration proceeding to be
held in New York, New York, U.S.A. in accordance with the international rules
of the American Arbitration Association. The arbitrators may award attorneys’ fees and other
related arbitration expenses, as well as pre- and post-judgment interest on any
award of damages, to the prevailing party, in their sole discretion. The parties agree that a panel of three arbitrators
shall be required, all of whom shall be fluent in the English language, and
that the arbitration proceeding shall be conducted entirely in the English
language. Any award of the arbitrators shall be
deemed confidential information, except to the extent public disclosure of such
information is required by applicable securities laws or regulations.

[Remainder of this page intentionally
left blank.]

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If the forgoing correctly sets forth the entire
understanding and agreement between the Company and Aspenwood, please so
indicate by executing this Agreement as indicated below and returning an
executed copy to Aspenwood, whereupon this Agreement shall constitute a binding
agreement as of the date first above written.

	
  

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Green Drake Capital Corp.

  
	
   

  	
   

  	
  For Aspenwood Capital, its Investment Banking
  Division

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Barry E. Silbert

  	
   

  
	
   

  	
   

  	
  Barry E.
  Silbert, Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACCEPTED AND AGREED TO:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Identity Rehab Corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Daryl Yurek

  	
   

  	
   

  	
   

  
	
  Daryl Yurek, Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
								

 

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EXHIBIT A

Identity Rehab
Corporation

Summary of
Financing Terms

	
  Securities:

  	
   

  	
  Two-Year 9% Convertible Debenture (“Convertible
  Debentures”) with detachable Warrants to
  purchase common stock of the
  Company (“Common Stock”).

  
	
   

  	
   

  	
   

  
	
  Amount:

  	
   

  	
  Gross proceeds from the sale of the Convertible
  Debentures in this offering (“Offering”) of $2,000,000 minimum (the “Minimum
  Amount”) and up to$3,500,000 maximum.

  
	
   

  	
   

  	
   

  
	
  Investors:

  	
   

  	
  The Convertible Debentures will only be offered and
  sold to accredited investors in the United States and persons who are not
  “U.S. persons” as defined in Regulation S under the Securities Act of 1933,
  as amended (“Securities Act”). The securities under this Offering will be
  sold pursuant to certain exemptions from registration under the Securities
  Act including the exemptions afforded by Regulation D and Regulation S
  promulgated under the Securities Act.

  
	
   

  	
   

  	
   

  
	
  Closing Date:

  	
   

  	
  Immediately after satisfaction of all conditions of
  closing including the sale of the Minimum Amount.

  
	
   

  	
   

  	
   

  
	
  Interest:

  	
   

  	
  Interest shall be paid on the Convertible Debentures
  quarterly at the rate of 9% per annum.

  
	
   

  	
   

  	
   

  
	
  Voluntary Conversion:

  	
   

  	
  The Investors may elect to convert the Convertible
  Debentures into Common Stock of the Company (the “Conversion Shares”) at the
  Conversion Price at any time following the Closing Date.

  
	
   

  	
   

  	
   

  
	
  Mandatory Conversion:

  	
   

  	
  The Convertible Debentures shall be converted into
  Conversion Shares automatically on the date which is (i) ninety (90) days
  after the effective date of a registration statement registering the
  Conversion Shares and (ii) the shares of Common Stock of the Company are
  quoted on the OTC Bulletin Board. Until conversion of the debentures, the
  Company shall agree not to effect any other borrowings except with the
  consent of holders of a majority of the outstanding debentures.

  
	
   

  	
   

  	
   

  
	
  Conversion Price:

  	
   

  	
  The Conversion Price shall be $.28 per share (based on a $6,000,000 fully diluted pre-money
  valuation and 22,150,000 shares of common stock outstanding on a fully
  diluted basis) and will be adjusted as provided below.

  

 

 10
 

 

	
  

  	
   

  	
  If the Company issues Common Stock or any type of
  securities giving rights to Common Stock at a price below the then applicable
  Conversion Price, the holders will be extended full ratchet anti-dilution
  protection on any outstanding unconverted Convertible Debenture. Anti-dilution
  protection will not apply to shares (or options to purchase shares) issued to
  employees, directors and consultants as
  part of a pre-existing equity incentive plan or agreement adopted by the
  Company’s board and approved by the stockholders (“Equity Incentive Plan”).

  
	
   

  	
   

  	
   

  
	
  Mandatory Redemption:

  	
   

  	
  Upon the occurrence of a Change of Control (as
  defined below), the Company’s failure to remain subject to the reporting
  requirement under the Exchange Act, the Company’s failure to comply with the
  reporting requirements under the Exchange Act, which non-compliance continues
  for more than thirty days, the Company’s Common Stock no longer being quoted
  on the OTC BB or listed or quoted on a national exchange, the Company will
  redeem the Convertible Debentures in an amount equal to 130% of Face Amount
  of the Convertible Debenture. “Change of Control” means the existence or
  occurrence of any of the following: (a) the sale, conveyance or disposition
  of all or substantially all of the assets of the Company; (b) the effectuation
  of a transaction or series of related transactions in which more than 50% of
  the voting power of the Company is disposed of (other than as a direct result
  of normal, uncoordinated trading activities in the Common Stock generally);
  (c) the consolidation, merger or other business combination of the Company
  with or into any other entity, immediately following which the prior
  stockholders of the Company fail to own, directly or indirectly, at least 50%
  of the voting equity of the surviving entity; (d) a transaction or series of
  transactions in which any person or “group” (as such term is used in Sections
  13(d) and 14(d) of the Exchange Act) acquires more than 50% of the voting
  equity of the Company; or (e) a transaction or series of transactions that
  constitutes or results in a “going private transaction” (as defined in
  Section 13(e) of the Exchange Act and the regulations thereunder.

  
	
   

  	
   

  	
   

  
	
  Warrants:

  	
   

  	
  100% Warrant Coverage based on the number of shares
  issuable upon conversion of the Convertible Debentures at the initial
  Conversion Price. 50% of such number of Warrants shall have an exercise price equal to 150% of the Conversion
  Price (“Class A Exercise Price”) and 50% of such number of Warrants shall
  have an exercise price equal to 200% of the Conversion Price (“Class B
  Exercise Price” and together with the Class A Exercise Price, the “Exercise
  Price”). The Warrants shall have a five-year term and may be exercised at any
  time following the issuance thereof. The Exercise Price applicable to
  any unexercised Warrants shall be subject to standard adjustments for stock
  splits and other customary changes in capital structure, to full ratchet
  anti-dilution

  

 

 11
 

 

	
  

  	
   

  	
  adjustments for issuances at less than the Exercise
  Price and to adjustments in the event the Exercise Price is adjusted under
  the re-set provisions set forth above. The Warrants may be exercised on a
  cashless basis beginning one year after the Closing Date if the Company fails
  to have a current prospectus available for immediate resale of the Conversion
  Shares and the Common Stock underlying the Warrants. Subject to 30 business
  days’ prior notice to the holders of the Warrants, and provided an effective
  registration statement is in effect covering the Common Stock underlying the
  Warrants, all, but not less than all, of the Warrants will be callable by the
  Company at $0.01 per share at any time after the closing price for the
  Company’s Common Stock exceeds 250% of the Conversion Price for any 20
  consecutive trading days and average daily volume during the same period
  exceeds 200,000 shares per day.

  
	
   

  	
   

  	
   

  
	
  Registration Rights:

  	
   

  	
  The Company will prepare and file a registration
  statement on Form SB-2 or such other form as may be required or available (the “Registration Statement”) covering 150% of
  the Conversion Shares and the shares of
  Common Stock underlying the Warrants and Agent Warrants for resale (the
  “Underlying Securities”) within 30 days of the closing of the Offering
  (“Closing”). The Company will use its best efforts to have the Registration
  Statement declared effective by the SEC within 150 days of Closing. In the
  event that the Registration
  Statement is not filed within 30 days after the Closing or declared effective
  prior to 150 days after the Closing,
  or if at any time after the effectiveness, the Registration Statement
  is suspended (except during such periods as the Company has filed a
  post-effective amendment and is awaiting SEC clearance of same), the holders
  will be entitled to receive a payment equal to 1.5% of the Stated Value of
  their Convertible Debentures (payable in cash or Common Stock as mutually
  agreed to prior to Closing) for each 30 day period following the applicable filing and registration deadlines until such
  filing or effectiveness is achieved or resumed, subject to a maximum of nine
  months. No other shares of Common Stock of the Company may be included on
  such Registration Statement (other than the shares of Common Stock underlying
  the Agent Warrants). The Company shall pay all costs of registration.

  
	
   

  	
   

  	
   

  
	
  Voting Rights:

  	
   

  	
  The holders of Convertible Debentures shall be
  entitled to vote with the holders of Common Stock on an as-converted basis on
  all matters on which the holders of Common Stock are entitled to vote, except
  as otherwise required by applicable law.

  
	
   

  	
   

  	
   

  
	
  Conditions to Closing:

  	
   

  	
  The closing of the Offering shall be subject to
  subscriptions for the Minimum Amount being received in an escrow account
  established by the Placement Agent. There may be more than one closing. Each
  closing of the Offering shall be subject to satisfaction of the following
  conditions, among others: (i) the approval of the

  

 

 12
 

 

	
  

  	
   

  	
  Offering by the Company’s board of directors; (ii)
  the satisfactory completion of due diligence by the Placement Agent; (iii) the public entity the Company is merging
  with is current with all of its filings under the Securities Exchange
  Act of 1934, as amended (“Exchange Act”); (iv) the delivery of certain
  lock-up agreements from the executive officers and directors of the Company
  as reasonably requested by the Placement Agent and Investors; and (v) the
  Company agreeing to implement an investor relations and aftermarket support
  program with an investor relations firm acceptable to Placement Agent and a
  budget of $300,000 over a twelve month period.

  
	
   

  	
   

  	
   

  
	
  Sufficient Authorized Shares:

  	
   

  	
  At all times throughout the life of the Convertible
  Debentures and the Warrants, the Company shall have sufficient amount of
  authorized and unissued common stock available in order to satisfy full
  conversion of the Convertible Debentures and Warrants. In case such amount of
  Common Stock is reasonably considered potentially insufficient, the Company
  shall call and hold a special proxy meeting to increase the number of
  authorized common stock. Management of the Company shall recommend to
  shareholders to vote in favor of increasing the number of authorized common
  stock. Management shall also vote all of its shares in favor of increasing
  the number of common shares authorized.

  
	
   

  	
   

  	
   

  
	
  Protective Provisions:

  	
   

  	
  The Convertible Debentures shall include a provision
  which states that for so long as the Convertible Debentures are outstanding,
  among other things, the Company shall not declare or pay any cash dividends.

  

 

 13Exhibit
10.4

SECURITIES
PURCHASE AGREEMENT

IDENTITY
REHAB CORPORATION

THIS
SECURITIES PURCHASE AGREEMENT (this “Agreement”) is executed and
delivered, as of the date set forth on the signature page hereof, by and
between Identity Rehab Corporation, a corporation organized and existing under
the Colorado Business Corporation Act (the “Company”), and the
undersigned investor (the “Investor”).

RECITAL

The
Company is engaged in developing and offering for sale certain products and
services related to and for the benefit of persons who have or may have been
victims of stolen identity.  The Company
seeks additional capital to promote these development efforts and to promote
the business of the Company and for that purpose desires to raise up to
$3,500,000 in a private placement of convertible debentures and common stock
purchase warrants.  The Company is
offering (the “Offering”) the convertible debentures and warrants to a
limited number of “accredited investors” (as that term is defined by Rule
501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities
Act”).  The Investor desires to
participate in such offering.

ARTICLE 1

OFFER TO PURCHASE AND ACCEPTANCE

1.1           Subject to the terms and conditions
set forth in this Agreement, the Investor desires to purchase and hereby
subscribes for the dollar amount set forth on the signature page hereto (the “Purchase
Price”) to purchase the Company’s Convertible Debentures (the “Debentures”),
convertible into shares of the Company’s Common Stock, no par value per share
(the “Conversion Shares”) and warrants (the “Warrants”) to purchase shares of
the Company’s Common Stock (the “Warrant Shares”) (the Conversion Shares and
Warrant Shares together are referred to as the “Underlying Shares” and the
Debentures, the Warrants and the Underlying Shares are referred to as the “Securities”).

1.2           The Company, in consideration of and
in reliance on the representations, warranties, covenants, and agreements of
the Investor and payment of the Purchase Price, hereby accepts the offer of the
Investor, subject to the terms and conditions of this Agreement, and agrees to
issue to the Investor Debentures and Warrants in the amounts subscribed for
hereunder upon the closing of the Escrow into which the Investor has deposited the
Purchase Price, as provided herein.

ARTICLE
2

INVESTOR’S REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.

The Investor hereby
represents and warrants to, and covenants and agrees with, the Company as
follows:

2.1           The Investor acknowledges that the
Securities have not been registered under the U.S. Securities Act of 1933, as
amended (the “Securities Act”), or the securities laws of any state, and
understands that in selling and issuing the Securities, the Company has relied
upon an exemption from registration provided in the Securities Act which is
dependent in part on the Investor’s investment intention.  In this connection, the Investor hereby
represents that the Investor is purchasing the Securities for the Investor’s
own account for investment purposes only and not with a view toward the resale
or distribution to others and has no contract, undertaking, agreement or other
arrangement, in existence or contemplated, to sell, pledge, assign or otherwise
transfer the Securities to any other person. 
The Investor, if an entity, also represents that it was not formed for
the purpose of purchasing the Securities. 
The Investor acknowledges that the Company has therefore also relied
upon all of the representations and warranties of the Investor herein.

2.2           The forms of each of the Securities
will bear legends in substantially the following form:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER
THE SECURITIES LAWS OF ANY STATE.  THESE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY
NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.  THE ISSUER OF THESE SECURIITES MAY REQUIRE AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS.

The Investor agrees not
to sell, transfer or dispose of any of the Securities (except pursuant to an
effective registration statement under the Securities Act), without complying
with the requirements of such legend.

2.3           The Investor acknowledges that no
market for the Debentures or Warrants or the Underlying Shares exists, and
unless and until a registration statement registering the Underlying Shares is
filed under the Securities Act, and becomes effective, no such market is
anticipated to develop and therefore investment in the Securities of the
Company will not be liquid unless and until such a registration statement
becomes effective and a market for such Shares develops.

 2
 

2.4           The Investor is an “accredited
investor” as that term is defined in Regulation D promulgated under the
Securities Act because of one or more of the following:

(INITIAL ALL APPROPRIATE
PARAGRAPHS BELOW,

YOU MUST INITIAL AT LEAST ONE PARAGRAPH)

____       The Investor is a private business
development company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940;

_____    The Investor is a corporation, a business
trust, a partnership, or an organization described in Section 501(c)(3) of the
Internal Revenue Code, not formed for the specific purpose of acquiring the
Shares offered, with total assets in excess of US$5,000,000;

_____    The Investor is a director or executive
officer of the Company;

_____    The Investor is a natural person whose
individual net worth, or joint net worth with his or her spouse, at the time of
his or her purchase exceeds US$1,000,000;

_____    The Investor is a natural person who had an
individual income in excess of US$200,000 in each of the two most recent years
or joint income with his or her spouse in excess of US$300,000 in each of those
years and the Investor has a reasonable expectation of reaching the same income
level in the current year;

_____    The Investor is a trust, with total assets
in excess of US$5,000,000 not formed for the specific purpose of acquiring the
Securities offered, whose purchase is directed by a sophisticated person as described
in SEC Rule 506.(b)(2)(ii) of the Act; or

_____    The Investor is an entity in which all of
the equity owners are accredited investors.

2.5           The Investor hereby represents that
the Investor has received from the Company, and has read, the Private Placement
Memorandum dated May 4, 2007, describing the Company, its business and plans
for development of its business, including audited financial statements and a
description of risk factors that should be considered when evaluating a
possible investment in the Company, a form of Escrow Agreement with Continental
Stock Transfer and Trust Company as Escrow Agent (the “Escrow Agent”), and the
proposed forms of Debentures and Warrants. 
Such documents, together with this Securities Purchase Agreement, are
referred to as the “Offering Documents” Additionally, the Investor has been
furnished all information regarding the Company which the Investor has
requested.  The Investor has been advised
by the Company that the Company is a development stage corporation which is
still developing its business and that the Investor risks the loss of the
entire investment should the Company not succeed in its business.  The Investor acknowledges that the Investor
has been afforded the opportunity to ask questions of and receive answers from
officers and other representatives of the Company about the Company and
concerning the terms and conditions of the offering and any additional
information which the Investor has requested.

 3
 

2.6           The Investor acknowledges that
investment in the Company involves a substantial degree of risk and is suitable
only for persons with adequate means who have no need for liquidity in their
investments and who can bear the loss of their entire investment.

2.7           The Investor has, or has sought
advice from someone who has, knowledge and experience in financial and business
matters, including experience in investing in restricted securities of small,
development-stage companies, and is capable of evaluating the merits and risks
of an investment in the Company and the suitability of the investment for the
Investor.

2.8           The Investor has adequate means for
providing for current needs and any foreseeable contingency; and the Investor
has no need to sell the Securities in the foreseeable future.

2.9           The Investor, if a corporation,
partnership, trust or other entity, is duly organized, and is authorized and
otherwise duly qualified to purchase and hold the Shares, and such entity has
its principal place of business at the address set forth on the signature page
hereof.

2.10         The Investor, if an individual, is at
least 21 years of age, has the legal capacity to execute, deliver and perform
this Agreement, and has his or her residence at the address set forth on the
signature page hereof.

2.11         The Investor acknowledges that no
federal or state agency has made any finding or determination as to the
fairness of this investment, nor any recommendation or endorsement of an
investment in the Securities.

2.12         All information which the Investor has
provided to the Company concerning Investor, the Investor’s financial position
and knowledge of financial and business matters, or, in the case of a
corporation, partnership, trust or other entity, the knowledge of financial and
business matters of the person making the investment decision on behalf of such
entity, including all information contained herein, is true and complete as of
the date set forth at the end hereof, and if there should be any adverse change
in such information prior to this offer being accepted, the Investor will immediately
provide the Company with accurate and complete information concerning any such
change.

2.13         The Investor certifies, under penalties
of perjury, (i) that the social security or Federal taxpayer identification
number shown on the signature page of this Agreement is true and complete and
(ii) that the Investor is not subject to backup withholding, either because
Investor has not been notified that he or she is subject to backup withholding
as a result of a failure to report all interest or dividends, or the Internal
Revenue Service has notified Investor that he or she is no longer subject to
backup withholding.

2.14         The representations, warranties and
agreements of the Investor contained herein and in any other writing delivered
in connection with the transactions contemplated hereby shall be true and
correct in all respects on and as of the Closing Date of the sale of the
Securities to the Investor as if made on and as of such date and shall survive
the execution and delivery of this Agreement and the purchase of the
Securities.

 4
 

2.15         The Investor acknowledges that
Aspenwood Capital Investment Banking Division of Green Drake Capital Corp. (the
“Placement Agent”) (including any Participating Dealers, as provided for in the
Placement Agent Agreement, and any members, managers, employees, agents or
representatives of the Placement Agent or any Participating Dealers) has not
made any representations or warranties to the Investor concerning the Company
and its businesses, condition (financial or otherwise) or prospects.  The Placement Agent shall be entitled to rely
upon the representations, warranties and covenants of the Investor set forth in
this Agreement.

2.16         The Investor understands that the
Offering is contingent upon investment of at least $2,000,000 (including an
investment of up to $500,000 by an affiliate of the Company) in the Debentures
and Warrants for the closing to occur (the “Minimum Offering”), and the Company
may not close on the Investor’s offer unless it receives offers and investments
of the affiliate totaling at least the amount of the Minimum Offering.  The maximum investment in this Offering
(including the affiliate’s investment, if any) will be $3,500,000 (the “Maximum
Offering”) but the Company is under no obligation to, and there can be no
assurance that the Company will receive or accept offers for the Maximum
Offering.

ARTICLE 3

REPRESENTATIONS BY AND COVENANTS OF THE COMPANY

The
Company hereby represents and warrants to and covenants and agrees with the
Investor that, except as set forth in the Schedules hereto:

3.1           Corporate Organization, Status and
Merger.  The Company is a corporation
duly organized, validly existing and in good standing under the laws of
Colorado, and has the requisite corporate power and authority to own or lease
its properties and to carry on its business as now being conducted.  The Company is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction, if
any, in which the property owned or leased by it 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 in good standing could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.  For purposes of this Agreement, “Material
Adverse Effect” shall mean, as to any entity, any material adverse effect on
the business, operations, conditions (financial or otherwise), assets, results
of operations or prospects of the Company as a whole.

3.2           Capitalization; Organizational
Documents.  Under the Articles of
Incorporation of the Company the authorized capital stock of the Company
consists of 60,000,000 shares of capital stock, of which 50,000,000 shares are
Common Stock, no par value, and 10,000,000 shares are Preferred Stock, no par
value.   As of the date of the Private Placement
Memorandum, 17,817,334 shares of Common Stock are issued and outstanding and no
shares of Preferred Stock have been issued. 
The Company has reserved 3,566,666 shares of Common Stock for issuance
upon the exercise or conversion of outstanding options and convertible
securities.  All of the outstanding
shares of capital stock have been duly and validly issued and are fully paid
and nonassessable and have been issued in accordance with all applicable
federal and state securities laws.  No
shares of capital stock are subject to any liens suffered or permitted by the
Company.  Except as disclosed in the
Offering Documents, as of the date hereof, there are no outstanding 

 5
 

options, warrants, scripts, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into, any shares of capital stock of the Company, or
contracts, commitments, understandings or arrangements by which the Company is
or may become bound to issue additional shares of capital stock.  There are no preemptive rights or rights of
first refusal or similar rights which are binding on the Company permitting any
person to subscribe for or purchase from the Company shares of its capital
stock pursuant to any provision of law, the Articles of Incorporation or the
By-laws or by agreement or otherwise. 
There are no securities or instruments containing anti-dilution or
similar provisions that will be triggered by the issuance of the
Securities.  Except as set forth in the
Confidential Private Placement Memorandum and pursuant to the Offering, no
person holds any right to require the Company to register any securities of the
Company under the Act or to participate in any such registration.

3.3           Authorization to Issue the
Securities.  The Securities have been
duly authorized and upon issuance of the Underlying Shares upon the conversion
of the Debentures or exercise of the Warrants, and payment of the purchase
price therefor in accordance with the terms of the Warrants, the Underlying
Shares will be duly authorized, validly issued, fully paid and nonassessable,
and free and clear of any restrictions on transfer and any taxes, claims, or
other rights or interests of any other person (other than restrictions under
the Securities Act).

3.4           Authorization; Enforcement.  The Company has the requisite corporate power
and authority to enter into and perform its obligations under this Agreement,
the securities purchase agreements with the other Investors (together with the
Investor, the “Investors”) and to issue and sell the Securities and
perform its obligations with respect thereto in accordance with the terms
hereof.  The execution and delivery of
the Securities Purchase Agreements by the Company and the consummation by it of
the transactions contemplated hereby have been duly authorized by the Board of
Directors of the Company and no further consent or authorization is required by
the Company, its Board of Directors or stockholders, and this Agreement has
been duly executed and delivered by the Company.  This Agreement constitutes a 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 applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally,
the enforcement of creditors’ rights and remedies.

3.5           No Conflicts.  The execution, delivery and performance of
this Agreement by the Company, and the consummation by the Company of the
transactions contemplated hereby will not (a) result in a violation of the
Articles of Incorporation or By-laws of the Company, or (b) violate or conflict
with, or result in a breach of, any provision of, or constitute a default (or
an event which, with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of any lien on or against any of the
properties of the Company pursuant to, any note, bond, mortgage, agreement,
license, indenture or instrument to which the Company is a party, or result in
a violation of any statute, law, rule, regulation, writ, injunction, order,
judgment or decree applicable to the Company or by which any property or asset
of the Company is bound or affected, except where such violation, conflict,
breach or other consequence would not have a Material Adverse Effect.  Except
as disclosed in the Offering Documents, the Company is not in violation of any
material term of or in default under its Articles of Incorporation, By-laws or 

 6
 

other organizational documents or in violation of any
material term of, or in default under, any material contract, agreement,
mortgage, indebtedness, indenture, instrument, judgment, decree or order or any
statute, rule or regulation applicable to the Company.  Except as specifically contemplated by this
Agreement and the consummation of the transactions contemplated hereby, the
Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court or governmental or regulatory
or self-regulatory agency in order for it to execute, deliver or perform any of
its obligations under or contemplated by this Agreement in accordance with the
terms hereof, other than (i) filings pursuant to federal and state securities
laws in connection with the sale of the Debentures and Warrants and (ii) the
registration of the Registrable Securities (as defined in Section 5.1(h))
with the SEC and filings pursuant to state securities laws.  All consents, authorizations, orders, filings
and registrations that the Company is required to obtain pursuant to the
preceding sentence have been obtained or effected on or prior to the date
hereof, and those which are required to be made after the Closing, will be duly
made on a timely basis.

3.6           Financial Statements.  Included in the Private Placement Memorandum
are balance sheets of the Company as of December 31, 2005 and December 31,
2006, and statements of operations of ownership deficit and of cash flow, for
the periods then ended (the “Financial Statements”).  As of their respective dates, the Financial
Statements complied as to form in all material respects with applicable
accounting requirements and applicable rules and regulations with respect
thereto.  The Financial Statements have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except (a) as may be
otherwise indicated therein or in the notes thereto, or (b) 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).  Except as set forth in the Offering
Documents, the Company has incurred no material liabilities, whether accrued,
absolute, contingent or otherwise or entered into any material transactions
except in the ordinary course of business and in connection with financing
activities, including preparation for this Offering.

3.7           Securities Law Exemption. 
Assuming the truth and accuracy of the Investor’s representations and
warranties in this Agreement and the truth and accuracy of each of the other
Investors’ representations and warranties set forth in the securities purchase
agreements executed by such other Investors, the offer, sale and issuance of
the Securities as contemplated by this Agreement and the other securities
purchase agreements are exempt from the registration requirements of the Act
and applicable state securities laws, and neither the Company nor any
authorized agent acting on its behalf has taken or will take any action
hereafter that would cause the loss of such exemption.

3.8           Litigation.  There is no action, suit, arbitration or
other proceeding or investigation pending or, to the Company’s best knowledge,
threatened against the Company that would have a Material Adverse Effect on the
Company, or that questions this Agreement or the right of the Company to
execute, deliver and perform its obligations hereunder.  There are no actions, proceedings, claims or
investigations before or by any court or governmental authority (or any state
of facts which management of the Company has concluded could give rise thereto)

 7
 

pending or, to the best knowledge of the Company,
threatened, against the Company’s officers or directors which, if determined
adversely to such officer or director, could have a Material Adverse Effect or
adversely affect the transactions contemplated by this Agreement or the
enforceability thereof or which are required to be disclosed to the Investor
under the Securities Act, the Exchange Act or any SEC rules or regulations
promulgated thereunder or are material to an Investor’s evaluation of the
Company.

3.9           Intellectual Property.  Except as set forth in the Offering
Documents, the Company owns or possesses adequate and enforceable rights to use
all patents, patent applications, trademarks, service marks, trade names,
logos, corporate names, copyrights, trade secrets, processes, mask works,
licenses, inventions, formulations, technology and  know-how and other intangible property used
or proposed to be used in the conduct of its business as described in or
contemplated by the Offering Documents (the “Proprietary Rights”).
Except as set forth in the Offering Documents, the Company or the entities from
whom the Company has acquired rights has taken all necessary action to protect
all of the Proprietary Rights.  Except as
set forth in the Offering Documents, the Company has received no notice of, and
there are not any facts known to the Company which indicate the existence of
(i) any infringement or misappropriation by any third party of any of the
Proprietary Rights, (ii) any claim by a third party contesting the validity of
any of the Proprietary Rights or (iii) any infringement, misappropriation or
violation by the Company or any of their employees of any Proprietary Rights of
third parties.  To the best of the
Company’s knowledge, neither the Company nor any of their employees has
infringed, misappropriated or otherwise violated any Proprietary Rights of any
third parties.  To the Company’s best
knowledge, neither the Proprietary Rights, products or services currently sold
by the Company or currently under development by the Company nor the conduct of
the Company’s business as currently contemplated infringe, copy, misappropriate
or violate any intellectual property rights of any third party.  Except as set forth in the Offering
Documents, the Company is not aware that any of its employees are obligated
under any contract (including licenses, covenants or commitments of any nature)
or other agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of the employee’s best
efforts to promote the interests of the Company or that would conflict with the
Company’s business as currently conducted or as proposed to be conducted.  To the Company’s best knowledge, neither the
execution nor delivery of this Agreement, nor the carrying on of the Company’s
business by the employees of the Company, nor the conduct of the Company’s
business, as currently conducted or as proposed to be conducted, will conflict
with or result in a breach of the terms, conditions or provisions of, or
constitute a default under, any contract, covenant or instrument under which
any such employee is now obligated.

3.10         Title to Property and Assets. 
The Company has good and marketable title to or, in the case of leases
and licenses, has valid and subsisting leasehold interests or licenses in, all
of its properties and assets (whether real or personal, tangible or intangible)
free and clear of any liens or other encumbrances, except for liens or other
encumbrances that do not, individually or in the aggregate, have a Material
Adverse Effect.  With respect to property leased by the Company, the
Company has a valid leasehold interest in such property pursuant to leases
which are in full force and effect, and the Company is in compliance in all
material respects with the provisions of such leases.

 8
 

3.11         Compliance with Laws.  Except as set forth in the Offering
Documents, the Company is and has been in compliance in all material respects
with all laws, rules, regulations, orders, judgments or decrees that are
applicable to it, the conduct of its business as presently conducted and as
proposed to be conducted, and the ownership of its property and assets
(including, without limitation, all Environmental Laws (as defined below), laws
related to occupational safety, health, wage and hour, and employment
discrimination), and the Company is not aware of any state of facts, events,
conditions or occurrences which may now or hereafter constitute or result in a
violation of any of such laws, rules, regulations, orders, judgments or decrees
or which may give rise to the assertion of any such violation, except where
such violation or violations do not have a Material Adverse Effect.  All required reports and filings with
governmental authorities have been properly made as and when required, except
where the failure to report or file would not, individually or in the
aggregate, have a Material Adverse Effect. 
“Environmental Laws” means all federal, state, local and foreign
laws, ordinances, treaties, rules, regulations, guidelines and permit
conditions relating to contamination or pollution of the environment (including
ambient air, surface water, ground water, land surface or subsurface strata) or
the protection of human health and worker safety, including, without
limitation, laws and regulations relating to transportation, storage, use,
manufacture, disposal or release of, or exposure of employees or others to,
Hazardous Materials (as defined below) or emissions, discharges, releases or
threatened releases of Hazardous Materials. 
“Hazardous Materials” means any substance that has been
designated by any governmental entity or by applicable Environmental Laws to be
radioactive, toxic, hazardous or otherwise a danger to health or the environment,
including, without limitation, PCBs, asbestos, petroleum, urea formaldehyde and
all substances listed as hazardous substances pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, or
defined as a hazardous waste pursuant to the Resource Conservation and Recovery
Act of 1976, as amended, and the regulations promulgated pursuant to
Environmental Laws, but excluding office and janitorial supplies maintained in
accordance with Environmental Laws.

3.12         Licenses and Permits.  The Company has obtained and maintains all
federal, state, local and foreign licenses, permits, consents, approvals,
registrations, authorizations and qualifications required to be maintained in
connection with the operations of the Company as presently conducted and as
proposed to be conducted, except where the failure to obtain or maintain such
licenses, permits, consents, approvals, registrations, authorizations and
qualifications could not have a Material Adverse Effect.  The Company is not in default in any material
respect under any of such licenses, permits, consents, approvals,
registrations, memberships, authorizations and qualifications.  To
the best of the Company’s knowledge, the conduct of its business as presently and
proposed to be conducted is not presently subject to continuing oversight,
supervision, regulation or examination by any governmental official or body of
the United States or any other jurisdiction wherein the Company conducts or
proposes to conduct such business, except as described in the Offering
Documents and except such regulation as is applicable to commercial enterprises
generally.

3.13         Changes.  Since December 31, 2006, except as set forth
in the Offering Documents, the Company has operated its business in the
ordinary course of business and, to the best knowledge of the Company, there
has not been, or the Company has not (as the case may be):

 9
 

(a)           any Material Adverse Effect;

(b)           any damage, destruction or loss,
whether or not covered by insurance, which would have a Material Adverse
Effect;

(c)           any waiver or compromise by the
Company of a valuable right or of a material debt owed it;

(d)           sold, encumbered, assigned or
transferred any material assets or properties of the Company, other than in the
ordinary course of business;

(e)           incurred any liability, whether
accrued, absolute, contingent or otherwise, and whether due or to become due,
other than (i) in the ordinary course of business; (ii) in connection with
preparation for this Offering; or (iii) liabilities that are not,
individually or in the aggregate, material to the business, operations,
condition (financial or otherwise), assets, results of operations or prospects
of the Company;

(f)            created, incurred, assumed or
guaranteed any indebtedness or subjected any of its assets to any lien or
encumbrance, except for indebtedness, liens or encumbrances that are not,
individually or in the aggregate, material to the business, operations,
condition (financial or otherwise), assets, results of operations or prospects
of the Company;

(g)           declared, set aside or paid any
dividends or made any other distributions in cash or property on the Company’s
capital stock;

(h)           directly or indirectly redeemed,
purchased or otherwise acquired any shares of capital stock of the Company;

(i)            suffered any resignation or
termination of employment of any key officers or employees;

(j)            except in the ordinary course of business, materially
increased the compensation payable or to become payable by the Company to any
of its officers, employees or directors or materially increased any bonus,
insurance, pension or other employee benefit plan, payment or arrangement made
by the Company for or with any such officers, employees or directors;

(k)           made any direct or indirect loan to any
stockholder, employee, officer or director of the Company, other than advances
made in the ordinary course of business;

(l)            changed any agreement to which it is
a party which would have a Material Adverse Effect; or

(m)          entered into any agreement or commitment
to do any of the things described in this Section 3.13.

3.14         Employee Benefit Plans.  All “employee benefit plans,” as such term is
defined in the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
to which the 

 10
 

Company has any liability or obligation, contingent or
otherwise, comply in all material respects and have been maintained and
administered in material compliance with ERISA, the Internal Revenue Code of
1986, as amended (the “Code”), and all other statutes, orders and governmental
rules and regulations applicable to such employee benefit plans.  To the
Company’s best knowledge, the Company has not incurred any liability pursuant
to ERISA or the penalty or excise tax provisions of the Code relating to
employee benefit plans (as defined in ERISA), and no event, transaction or
condition has occurred or exists that could reasonably be expected to result in
the incurrence of any such liability by the Company, or in the imposition of
any lien on any of the rights, properties or assets of the Company pursuant to
ERISA or to such penalty or excise tax provisions of the Code.  The Company does not maintain or contribute
to, nor has it maintained or contributed to, any “multiemployer plan,” as such
term is defined in ERISA.

3.15         Taxes.  The Company has timely filed all tax returns
and reports (federal, state and local) required to be filed and these returns
and reports are true and correct in all material respects.  The Company has paid all taxes and other
assessments shown to be due on such returns or reports.  Neither the Internal Revenue Service nor any
state or local taxing authority has, during the past three (3) years, examined
or informed the Company that it is in the process of examining any such tax
returns and reports.  The provision for
taxes of the Company, as shown on the financial statements included in the most
recent Offering Documents, is adequate for taxes due or accrued as of the date
thereof and since that date the Company has provided adequate accruals in
accordance with generally accepted accounting principals in its financial
statements for any taxes incurred that have not been paid, whether or not shown
as being due on any tax returns.  The
Company has not elected, pursuant to the Code, to be treated as a collapsible
corporation pursuant to Section 341(f) of the Code, nor has it made any other
elections pursuant to the Code (other than elections that relate solely to
methods of accounting, depreciation or amortization) that would have a Material
Adverse Effect.

3.16         Insurance.  The Company presently has in full force and
effect fire, casualty and liability insurance policies, with extended coverage,
sufficient in amount (subject to reasonable deductibles) to allow the Company
to replace any of its properties that might be damaged or destroyed to the
extent and in the manner customary for companies in similar business.

3.17         Employees.  The Company has no collective bargaining
agreement with any of its employees.  There is no labor union organizing
activity pending or, to the Company’s best knowledge, threatened with respect
to the Company.  To the Company’s best
knowledge, no officer or key employee intends to terminate their employment
with the Company, nor does the Company have a present intention to terminate
the employment of any of the foregoing. 
All material employment arrangements existing or proposed to exist with
the Company’s officers and prospective officers have been fully disclosed in
the Offering Documents.  To the best
knowledge of the Company, none of the Company’s full-time employees has entered
into any non-competition, non-disclosure, confidentiality or other similar
agreement with any party other than the Company.

3.18         Material Contracts.  All contracts, agreements, instruments,
leases, licenses, arrangements, understandings or other documents to which the
Company is a party or by which it may be bound which are material to the
business of the Company (the “Material Contracts”) are valid and in full
force and effect as to the Company, and, to the Company’s best knowledge, to 

 11
 

the other parties thereto.  The Company is not in violation of, or
default under (and there does not exist any event or condition which, after
notice or lapse of time or both, would constitute such a default under), the
Material Contracts, except to the extent that such violations or defaults,
individually or in the aggregate, could not reasonably be expected to (a)
affect the validity of this Agreement or the other Offering Documents, (b) have
a Material Adverse Effect, or (c) impair the ability of the Company to perform
fully on a timely basis any material obligation which the Company has or will
have under this Agreement or any other Offering Document.  To the Company’s best knowledge, except as
set forth in the Offering Documents, none of the other parties to any Material
Contract are in violation of or default under any Material Contract in any
material respect.  The Company has not
received any notice of cancellation or any written communication threatening
cancellation of any Material Contract by any other party thereto.  The Company is not a party to and is not
bound by any contract, agreement or instrument, or subject to any restriction
under its certificate of incorporation, by-laws or other governing documents
that would have a Material Adverse Effect.

3.19         Customers and Suppliers.  Except as set forth in the Offering
Documents, no customer or supplier that was material to the Company during the
previous twenty-four (24) months has terminated, materially reduced or threatened
to terminate or materially reduce its purchases from or provision of products
or services to the Company.

3.20         Disclosure.  This Agreement, the Schedules and Exhibits
hereto (including, without limitation, the Offering Documents) and all other
documents delivered to the Investor in connection herewith at the Closing, do
not contain any untrue statement of a material fact, or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.  There are no facts that, individually or in
the aggregate, would have a Material Adverse Effect that have not been
disclosed in the Offering Documents (including the Schedules and Exhibits
thereto) or other documents delivered to the Investor in connection herewith or
therewith at the Closing.

3.21         No Integrated Offering.  Except for
the private placement described in the Offering Documents (which Offering is
made solely to accredited investors), neither the Company nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would require registration under the
Securities Act of the issuance of the Securities to the Investors.  The issuance of the Securities to the
Investors in the private placement described in the Offering Documents will not
be integrated with any past issuance of the Company’s securities for purposes
of the Securities Act.

3.22         Offering Documents.  Each of the Offering Documents has been
diligently prepared by the Company, in conjunction with its legal counsel, and
is in compliance, in all material respects, with Regulation D, the Act and the
requirements of all other rules and regulations of the SEC relating to
offerings of the type contemplated by the Offering, and the applicable
securities laws and the rules and regulations of those jurisdictions wherein
the Securities are to be offered and sold. 
The Securities will be offered and sold pursuant to the registration
exemption provided by Rule 506 under Regulation D and Section 4(2) of the Act
as a transaction not involving a public offering and the requirements of any
other applicable state securities laws and the respective rules and regulations
thereunder in those jurisdictions in which 

 12
 

the Securities are being offered for sale.  The Offering Documents describe all material
aspects, including attendant risks, of an investment in the Company.  The Company has not taken and will not take
any action which conflicts with the conditions and requirements of, or which
would make unavailable with respect to the Offering, the exemption(s) from
registration available pursuant to Regulation D or Section 4(2) of the Act and
knows of no reason why any such exemption would be otherwise unavailable to
it.  None of the Company or its
predecessors or affiliates has been subject to any order, judgment or decree of
any court of competent jurisdiction temporarily, preliminarily or permanently
enjoining such persons for failing to comply with Section 503 of Regulation D.

3.23         Finders.  Except for the amounts due and owing to the
Placement Agent pursuant to its engagement letter with the Company dated
February 7, 2007, as amended, (the “Placement Agency Agreement”), the
Company is not obligated to pay a finder’s or origination fee or similar fee in
connection with the Offering and agrees to indemnify the Investor from any such
claim made by any other person.

3.23.1      Books and Records; Internal Controls.  The books, records and accounts of the
Company and the Subsidiary accurately and fairly reflect, in reasonable detail,
the transactions in, and dispositions of, the assets of, and the results of
operations of, the Company, all to the extent required by generally accepted
accounting principles.  The Company
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s
general or specific authorization, and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.  The Company maintains and will continue to maintain
a standard system of accounting established and administered in accordance with
GAAP and the applicable requirements of the 1934 Act.

ARTICLE 4

TERMS OF PURCHASE

4.1           The minimum purchase by any single
Investor shall be $10,000; provided that the Company reserves the right to
accept, at the discretion of the Company and the Placement Agent, purchases for
a lesser amount.  The Offering shall
terminate at the earlier of (i) 11:59 p.m. New York City time on June 30,
2007 (subject to extension at the Company’s discretion until July 31,
2007, without notice to Investor) or (ii) such other date on which the maximum
amount of the Offering is subscribed. 
The Company may conduct the closing upon receipt of a properly executed
copy of this Agreement from the Investor and other Investors in the aggregate,
to the Minimum Offering amount.  In the
event the Company shall not have obtained offers (including this offer) for the
Minimum Offering amount on or before the termination date set forth above, then
this offer shall be void and all funds paid hereunder by the Investor, without
interest, shall be returned to the Investor as set forth in Section 4.4.

 13
 

4.2           Pending the sale of the Debentures
and Warrants, all funds paid hereunder shall be deposited in escrow with the
Escrow Agent.

4.3           The Investor hereby authorizes and
directs the Company to deliver the Securities to be issued to the Investor
pursuant to this Agreement to the address indicated on the signature page
hereto or to any customer account maintained with the Placement Agent.

4.4           The Investor hereby authorizes and
directs the Company to return, without interest, any funds for unaccepted
offers (including any offers that were not accepted as a result of the
termination of the Offering) to the same account from which the funds were
drawn, including any customer account maintained with the Placement Agent.

4.5           The Company’s agreement with each
Investor is a separate agreement and the sale of Securities to each Investor is
a separate sale.

ARTICLE 5

CONDITIONS TO OBLIGATIONS OF THE INVESTOR

5.1           The Investor’s obligation to purchase
Securities at the Closing is subject to the fulfillment on or prior to the
Closing of the following conditions, which conditions may be waived at the
option of the Investor to the extent permitted by law:

(a)           Representations and Warranties
Correct.  The representations and
warranties made by the Company in Article 3 hereof shall be true and
correct in all material respects when made, and shall be true and correct in
all material respects on the Closing Date with the same force and effect as if
they had been made on and as of said date.

(b)           Covenants.  All covenants, agreements and conditions
contained in this Agreement to be performed by the Company on or prior to such
purchase shall have been performed or complied with in all material respects.

(c)           No Legal Order Pending.  There shall not then be in effect any legal
or other order enjoining or restraining the transactions contemplated by this
Agreement.

(d)           No Law Prohibiting or Restricting
Such Sale.  There shall not be in
effect any law, rule or regulation prohibiting or restricting such sale or
requiring any consent or approval of any person which shall not have been
obtained to issue the Securities (except as otherwise provided in this
Agreement).

(e)           Legal Opinion.  The Investors shall have received a legal
opinion from the Company’s counsel covering such matters as reasonably
requested by the Placement Agent.

 14

ARTICLE 6

REGISTRATION RIGHTS

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

(a)           “Affiliate” shall mean, with
respect to any Person (as defined below), any other Person controlling,
controlled by or under direct or indirect common control with such Person (for
the purposes of this definition “control,” when used with respect to any
specified Person, shall mean the power to direct the management and policies of
such Person, directly or indirectly, whether through ownership of voting
securities, by contract or otherwise; and the terms “controlling” and “controlled”
shall have meanings correlative to the foregoing).

(b)           “Business Day” shall mean a
day Monday through Friday on which banks are generally open for business in New
York.

(c)           “Holders” shall mean the
Investor, all other Investors in the Securities in this Offering, and any
Person holding Registrable Securities or any Person to whom the rights under Article
6 have been transferred in accordance with Section 6.10 hereof.

(d)           “Person” shall mean any
person, individual, corporation, limited liability company, partnership, trust
or other nongovernmental entity or any governmental agency, court, authority or
other body (whether foreign, federal, state, local or otherwise).

(e)           The terms “register,” “registered”
and “registration” refer to the registration effected by preparing and
filing a registration statement in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such registration statement.

(f)            “Registrable Securities”
shall mean the Underlying Shares; provided, however, that securities shall only
be treated as Registrable Securities if and only for so long as they (A) have
not been disposed of pursuant to a registration statement declared effective by
the SEC; (B) have not been sold in a transaction exempt from the registration
and prospectus delivery requirements of the Act so that all transfer
restrictions and restrictive legends with respect thereto are removed upon the
consummation of such sale; (C) are held by a Holder or a permitted transferee
pursuant to Section 6.10; or (D) have not become eligible for sale
pursuant to Rule 144(k) (or any successor thereto) under the Act.

(g)           “Registration Expenses” shall
mean all expenses incurred by the Company in complying with Section 6.2 and
6.3 hereof, including, without limitation, all registration, qualification
and filing fees, printing expenses, escrow fees, fees and expenses of counsel
for the Company, blue sky fees and expenses and the expense of any special
audits incident to or required by any such registration, and the fees of legal
counsel for the Holders up to $10,000.

(h)           “Registration Period” shall
have the meaning ascribed to such term in Section 6.2.

 15
 

(i)            “Registration Statement”
shall mean any registration statement of the Company filed under the Securities
Act that covers the resale of any of the Registrable Securities pursuant to the
provisions of this Agreement, amendments and supplements to such Registration
Statement, including post-effective amendments, all exhibits and all material
incorporated by reference in such Registration Statement.

(j)            “Selling Expenses” shall mean
all underwriting discounts and selling commissions applicable to the sale of
Registrable Securities and, to the extent set forth in the definition of
Registration Expenses, all fees and expenses of legal counsel for any Holder.

6.2           Initial Registration.  Subject to the terms herein, the Company
will, as soon as practicable but not later than thirty (30) days following the
Closing (the thirtieth (30th) day following the final Closing is referred to as
the “Initial Filing Date”); (1) file with the SEC a Registration Statement
under the Securities Act on the appropriate form of registration statement as
is then available to effect a registration for resale of the Registrable
Securities by the Holders and use its best efforts to have such Registration
Statement declared effective by the SEC within one hundred and fifty (150) days
of the Closing (the “Effective Date”) and will cause an appropriate response to
any comments on the form or content of the Registration Statement thereafter
from the staff of the SEC to be submitted to the SEC within 30 days after
receipt by the Company or its counsel of such comments; and (2) cause such
Registration Statement to remain effective (the “Registration Period”) until
the earlier of (i) such date as the holders of the Registrable Securities have
completed the distribution described in such Registration Statement or (ii) at
such time that all such shares have become eligible for sale pursuant to Rule
144(k) (or any successor thereto) under the Act.  To the extent permissible, such Registration
Statement also shall cover, to the extent allowable under the Act and the rules
promulgated thereunder (including Rule 416 under the Act), such indeterminate
number of additional shares of Common Stock resulting from stock splits, stock
dividends or similar transactions with respect to such Registrable Securities.  If a Registration Statement covering such
Registrable Securities is not filed with the SEC on or prior to the Initial
Filing Date, or if the Registration Statement covering the Registrable
Securities is not declared effective by the SEC prior to the Effective Date, or
if, at any time after the SEC has declared such Registration Statement
effective, such Registration Statement is suspended (except during such periods
as the Company has filed a post-effective amendment and as awaiting SEC
clearance of same), then the Company shall pay each Holder of Registrable
Securities a payment equal to 1.5% of the stated value of the Debentures
convertible into such Registrable Securities (payable in cash or Common Stock
as mutually agreed by the Investors and the Company prior to the Closing) for
each thirty (30) day period (or partial period, as the case may be) following
the applicable filing and effectiveness deadlines until such filing or
effectiveness is achieved or resumed, provided, however, in the event that the
Company receives comments from the SEC pertaining to Rule 415 and the
reason for the delay of the registration statement being declared effective
relates to Rule 415, then the Company will not be obligated to pay the
Liquidated Damages; provided, further, the aggregate amount of the Liquidated
Damages that shall be payable by the Company will not exceed nine months;
provided, further, that the Company shall be obligated to file a subsequent
registration statement if the SEC will not allow all the Underlying Securities
to be registered on the initial Registration Statement.  Up to 4,000,000 shares of Common Stock of the
Company held by non-affiliates of the Company may be included in the initial
Registration Statement.  The Company
shall pay all costs of registration.

 16
 

6.3           Registration Expenses.  All Registration Expenses incurred in
connection with any registration, qualification, exemption or compliance
pursuant to Section 6 shall be borne by the Company.  All Selling Expenses relating to the sale of
securities registered by or on behalf of Holders shall be borne by such
Holders.

6.4           Registration Procedures.  In the case of the registration,
qualification, exemption or compliance effected by the Company pursuant to this
Agreement, the Company shall, upon reasonable request, inform each Holder as to
the status of such registration, qualification, exemption and compliance.  At its expense the Company shall:

(a)           use its best efforts to keep such
registration, and any qualification, exemption or compliance under state or
federal securities laws which the Company determines to obtain, continuously
effective until the termination of the Registration Period; and

(b)           advise the Holders as soon as
practicable:

(i)            when such Registration Statement or
any amendment thereto has been filed with the Commission and when such
Registration Statement or any post-effective amendment thereto has become
effective;

(ii)           of any request by the Commission for
amendments or supplements to such Registration Statement or the prospectus
included therein or for additional information;

(iii)          of the issuance by the Commission of
any stop order suspending the effectiveness of such Registration Statement or
the initiation of any proceedings for such purpose;

(iv)          of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Securities included therein for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and

(v)           of the happening of any event that
requires the making of any changes in such Registration Statement or the
prospectus so that, as of such date, the statements therein are not misleading
and do not omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the prospectus, in the
light of the circumstances under which they were made) not misleading;

(c)         make every reasonable effort to obtain
the withdrawal of any order suspending the effectiveness of any Registration
Statement at the earliest possible time;

(d)         furnish to each Holder, without charge,
at least one copy of such Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, and, if the
Holder so requests in writing, all exhibits (including those incorporated by
reference) in the form filed with the Commission;

(e)         during the applicable Registration
Period, make available to each Holder, without charge, as many copies of the
prospectus included in such Registration Statement and any amendment or
supplement thereto as such Holder may reasonably request or cause the 

 17
 

prospectus delivery requirements under the Act to be satisfied; and the
Company consents to the use, consistent with the provisions hereof, of the
prospectus or any amendment or supplement thereto by each of the selling
Holders of Registrable Securities in connection with the offering and sale of
the Registrable Securities covered by the prospectus or any amendment or
supplement thereto.  In addition, upon
the reasonable request of the Holder and subject in all cases to
confidentiality protections reasonably acceptable to the Company, the Company
will meet with a Holder or a representative thereof at the Company’s
headquarters to discuss all information relevant for disclosure in such
registration statement covering the Registrable Securities, and will otherwise
cooperate with any Holder conducting an investigation for the purpose of
reducing or eliminating such Holder’s exposure to liability under the Act,
including the reasonable production of information at the Company’s
headquarters;

(f)          prior to any public offering of
Registrable Securities pursuant to any Registration Statement, register or
qualify or obtain an exemption for the offer and sale under the securities or
blue sky laws of such jurisdictions as any such Holders reasonably request in
writing, provided that the Company shall not for any such purpose be required
to qualify generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general service of
process in any such jurisdiction, and do any and all other acts or things
reasonably necessary or advisable to enable the offer and sale in such
jurisdictions of the Registrable Securities covered by such Registration
Statement;

(g)         cooperate with the Holders to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold pursuant to any Registration Statement free
of any restrictive legends to the extent not required, subject to transfer
agent procedures and receipt of appropriate representations from the Holders,
at such time and in such denominations and registered in such names as Holders
may request at least five (5) business days prior to sales of Registrable Securities
pursuant to such registration statement;

(h)         upon the occurrence of any event
contemplated by Section 5.5(b)(v) above, the Company shall promptly
prepare a post-effective amendment to such Registration Statement or a
supplement to the related prospectus, or file any other required document so
that the prospectus will not include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and

(i)          use its best efforts to comply with
all applicable rules and regulations of the SEC, and use its best efforts to
make generally available to the Holders not later than 45 days (or 90 days if
the fiscal quarter is the fourth fiscal quarter) after the end of its fiscal
quarter in which the first anniversary date of the effective date of such
Registration Statement occurs, an earnings statement satisfying the provisions
of Section 11(a) of the Act.

6.5           No Right To Enjoin.  The Holders shall have no right to take any
action to restrain, enjoin or otherwise delay any registration pursuant to this
Article 6 as a result of any controversy that may arise with respect to
the interpretation or implementation of this Agreement.

 18
 

6.6           Indemnification.

(a)           To the extent permitted by law, the
Company shall indemnify each Holder, each underwriter of the Registrable
Securities and each person controlling such Holder within the meaning of
Section 15 of the Act, with respect to which any registration, qualification or
compliance has been effected pursuant to this Agreement, against all claims,
losses, damages and liabilities (or action in respect thereof), including any
of the foregoing incurred in settlement of any litigation, commenced or threatened
(subject to Section 6.7(c) below), arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in such
Registration Statement, or any amendment or supplement thereof, incident to any
such registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in light of
the circumstances in which they were made, and will reimburse each Holder, each
underwriter of the Registrable Securities and each person controlling such
Holder, for reasonable legal and other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage, liability
or action as incurred; provided that the Company will not be liable in any such
case to the extent that any untrue statement or omission or allegation thereof
is made in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Holder and stated to be specifically for
use in preparation of such Registration Statement, prospectus or offering
circular; provided, further, that the Company will not be liable in any such
case where the claim, loss, damage or liability arises out of or is related to
the failure of the Holder to comply with the covenants and agreements contained
in this Agreement respecting sales of Registrable Securities.

(b)           Each Holder will severally, if
Registrable Securities held by such Holder are included in the securities as to
which such registration, qualification or compliance is being effected,
indemnify the Company, each of its directors and officers, each underwriter of
the Registrable Securities and each person who controls the Company within the
meaning of Section 15 of the Act, against all claims, losses, damages and
liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened (subject to Section
6.7(c) below), arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any registration statement,
prospectus or offering circular, or any amendment or supplement thereof,
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
light of the circumstances in which they were made, and will reimburse the
Company, such directors and officers, each underwriter of the Registrable
Securities and each person controlling the Company for reasonable legal and any
other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action as incurred, in
each case to the extent, but only to the extent, that such untrue statement or
omission or allegation thereof is made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such Holder and
stated to be specifically for use in preparation of such registration
statement, prospectus or offering circular; provided that the indemnity shall
not apply to the extent that such claim, loss, damage or liability results from
the fact that a current copy of the prospectus was not made available to the
Holder and such current copy of the prospectus would have cured the defect
giving rise to such loss, claim, damage or liability.  Notwithstanding the foregoing, in no event
shall a Holder be liable for any such claims, 

 19
 

losses, damages or liabilities in excess of the net proceeds received
by such Holder in the offering, except in the event of fraud by such Holder.

(c)           Each party entitled to
indemnification under this Section 6.6 (the “Indemnified Party”) shall
give notice to the party required to provide indemnification (the “Indemnifying
Party”) promptly after such Indemnified Party has actual knowledge of any claim
as to which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom,
provided that counsel for the Indemnifying Party, who shall conduct the defense
of such claim or litigation, shall be approved by the Indemnified Party (whose
approval shall not unreasonably be withheld), and the Indemnified Party may
participate in such defense at such Indemnified Party’s expense, and provided
further that the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this
Agreement, unless such failure is materially prejudicial to the Indemnifying
Party in defending such claim or litigation. 
An Indemnifying Party shall not be liable for any settlement of an action
or claim effected without its written consent (which consent will not be
unreasonably withheld).

(d)           If the indemnification provided for
in this Section 6.6 is held by a court of competent jurisdiction to be
unavailable to an Indemnified Party with respect to any loss, liability, claim,
damage or expense referred to therein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party thereunder, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such loss, liability,
claim, damage or expense in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party on the one hand and of the Indemnified
Party on the other in connection with the statements or omissions which resulted
in such loss, liability, claim, damage or expense as well as any other relevant
equitable considerations.  The relative
fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.  Notwithstanding the foregoing, in no event
shall a Holder be liable for any such claims, losses, damages or liabilities
pursuant to this paragraph 6.6(d) in excess of the net proceeds received
by such Holder in the Offering, except in the event of fraud by such Holder.

6.7           Obligations of Holders.

(a)           Each Holder agrees that, upon receipt
of any notice from the Company of the happening of any event requiring the
preparation of a supplement or amendment to a prospectus relating to
Registrable Securities so that such prospectus shall not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, each
Holder will forthwith discontinue disposition of Registrable Securities
pursuant to a Registration Statement contemplated by Section 6.2 until
its receipt of copies of the supplemented or amended prospectus from the
Company, such prospectus to be made available promptly to the Investor by the
Company or effectively cause the prospectus delivery requirements under the Act
to be satisfied, and, if so directed by the Company, each Holder shall deliver
to the Company all copies, other than 

 20
 

permanent file copies then in such Holder’s possession, of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice.

(b)           Each Holder shall suspend, upon
request of the Company, any disposition of Registrable Securities pursuant to a
registration statement contemplated by Section 6.2 during (i) any period
not to exceed two 30-day periods within any one 12-month period the Company
requires in connection with a primary underwritten offering of equity
securities and (ii) any period, when the Company determines in good faith that
offers and sales pursuant thereto should not be made by reason of the presence
of material undisclosed circumstances or developments with respect to which the
disclosure that would be required in such a prospectus is premature, would have
an adverse effect on the Company or is otherwise inadvisable.

(c)           As a condition to the inclusion of
its Registrable Securities, each Holder shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing or as shall be required in
connection with any registration, qualification or compliance referred to in
this Article 6.

(d)           Each Holder hereby covenants with the
Company not to make any sale of the Registrable Securities without effectively
causing the prospectus delivery requirements under the Act to be satisfied.

(e)           Each Holder acknowledges and agrees
that the Registrable Securities sold pursuant to a Registration Statement described
in this Article 6 are not transferable on the books of the Company
unless the stock certificate submitted to the transfer agent evidencing such
Registrable Securities is accompanied by a certificate reasonably satisfactory
to the Company to the effect that (i) the Registrable Securities have been sold
in accordance with such Registration Statement and (ii) the requirement of
delivering a current prospectus has been satisfied.

(f)            Each Holder agrees not to take any
action with respect to any distribution deemed to be made pursuant to a
Registration Statement which would constitute a violation of Regulation M under
the Exchange Act or any other applicable rule, regulation or law.

(g)           At the end of the period during which
the Company is obligated to keep a Registration Statement current and effective
as described above, the Holders of Registrable Securities included in such
Registration Statement shall discontinue sales of shares pursuant to such
Registration Statement upon receipt of notice from the Company of its intention
to remove from registration the shares covered by such Registration Statement
which remain unsold, and such Holders shall notify the Company of the number of
shares registered which remain unsold immediately upon receipt of such notice from
the Company.

6.8           Rule 144 Reporting.  With a view to making available to the
Holders the benefits of certain rules and regulations of the SEC which at any
time permit the sale of the Registrable Securities to the public without
registration, the Company shall use its reasonable best efforts to:

(a)           make and keep public information
available, as those terms are understood and defined in Rule 144 under the Act,
at all times;

 21
 

(b)           file with the SEC in a timely manner
all reports and other documents required of the Company under the Exchange Act;
and

(c)           so long as a Holder owns any
unregistered Registrable Securities, furnish to such Holder, upon any
reasonable request, a written statement by the Company as to its compliance
with Rule 144 under the Act, and of the Exchange Act, a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
of the Company as such Holder may reasonably request in availing itself of any
rule or regulation of the Commission allowing a Holder to sell any such
securities without registration.

6.9           Assignment of Rights.  The rights to cause the Company to register
Registrable Securities granted to the Holders by the Company under this Article
6 may be assigned in full by a Holder in connection with a transfer by such
Holder of its Registrable Securities, provided, however, that (i) such transfer
may otherwise be effected in accordance with applicable securities laws; (ii)
such Holder gives prior written notice to the Company; and (iii) such transferee
agrees to comply with the terms and provisions of this Agreement, and such
transfer is otherwise in compliance with this Agreement.  Except as specifically permitted by this Section
5.9, the rights of a Holder with respect to Registrable Securities as set
out herein shall not be transferable to any other Person, and any attempted
transfer shall cause all rights of such Holder therein to be forfeited.

6.10         Listing of Shares.  The Company shall use its best efforts to
cause all Registrable Securities covered by a Registration Statement to be
listed on each securities exchange, interdealer quotation system or other
market on which similar securities issued by the Company are then listed.

6.11         Waivers.  With the written consent of the Company and
the Holders holding at least a majority of the Registrable Securities that are
then outstanding, any provision of this Article 6 may be waived
(either generally or in a particular instance, either retroactively or
prospectively and either for a specified period of time or indefinitely) or
amended.  Upon the effectuation of each
such waiver or amendment, the Company shall promptly give written notice
thereof to the Holders, if any, who have not previously received notice thereof
or consented thereto in writing.

ARTICLE 7

MISCELLANEOUS

7.1           Confidential Information.  The Investor acknowledges that the
information, observations and data obtained by him or her during the course of
his or her ownership of any interest in the Company concerning the business and
affairs of the Company are the property of the Company.  Therefore, the Investor agrees not to
disclose to any unauthorized person or use for the Investor’s own account any
of such information, observations or data without the written consent of the
Company unless and to the extent that the aforementioned matters become
generally known to and available for use by the public other than as a result
of the Investor’s acts or omissions.

 22
 

7.2           Headings.  The headings throughout this Agreement are
for convenience of reference only, and shall in no way be deemed to define,
limit, or add to the meaning of any of the provisions of this Agreement.

7.3           Acceptance.  Execution and delivery of this Agreement and
tender of final payment for the Shares being purchased shall constitute an
irrevocable offer to purchase (subject to the conditions stated in the Private
Placement Memorandum, including that the Company receives the minimum purchases
specified), which offer may be accepted or rejected by the Company, in its sole
discretion for any cause or for no cause. 
The Company shall indicate acceptance of this Agreement by signing as
indicated on the signature page hereof within thirty (30) days of the date
received by the Company, or by issuance of the Securities to the Investor.

7.4           Counterparts.  This Agreement may be executed in
counterparts, in facsimile or original form, both of which when taken together
shall be deemed one original.

7.5           No Waiver.  Notwithstanding any of the representations,
warranties, acknowledgments or agreements made herein by the Investor, the
Investor does not thereby or in any other manner waive any of the rights
granted to him or her under federal or state securities laws.

7.6           Entire Agreement; Modification.  This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof,
and neither this Agreement nor any of the provisions hereof shall be waived,
changed, discharged or terminated except by an instrument in writing signed by
the party against whom any waiver, change, discharge or termination is sought.

7.7           Notice.  Notices required or permitted to be given
under this Agreement shall be in writing and shall be deemed to be sufficiently
given on the third (3rd) business day following deposit of such
notice in the mail if sent by registered or certified mail, postage prepaid, or
on the next business day if such notice is sent by electronic transmission or
by facsimile, sent to the other party at the address, electronic address or
facsimile number of such party set forth on the signature page to this
agreement, or to such other address or facsimile number furnished by notice
given in accordance with this paragraph.

7.8           Binding Effect.  Except as otherwise provided herein, this
Agreement shall be irrevocable and binding upon and inure to the benefit of the
parties hereto and their respective heirs, executors, administrators,
successors, legal representatives and assigns. 
If the Investor is more than one person, the obligations of the Investor
shall be joint and several and the agreements, representations, warranties and
acknowledgments herein contained shall be deemed to be made by and be binding
upon each such person and his or her respective heirs, executors,
administrators, successors, legal representatives and assigns.

7.9           Assignability.  Except as provided in Section 6.9,
Investor agrees not to transfer or assign this Agreement, or any of Investor’s
interest herein without the written consent of the Company, which consent may
be withheld in its sole discretion, and any such transfer or assignment in
violation of this Agreement shall be null and void ab  initio.

 23
 

7.10         Applicable Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Colorado.

[Signature pages
follow.]

 24
 

EXECUTION
BY INDIVIDUAL INVESTOR(S)

THE
UNDERSIGNED HEREBY SWEARS AND AFFIRMS THAT HE OR SHE HAS READ THE FOREGOING,
UNDERSTANDS, AND IS FAMILIAR WITH THE CONTENTS THEREOF AND THAT THE
REPRESENTATIONS CONTAINED THEREIN ARE TRUE AND ACCURATE.

Dated this      
of              ,
2007.          Number of Shares      

	
  

  	
   

  
	
  Signature

  

 

	
  

  	
   

  	
   

  	
   

  
	
  Investor Name
  (Please Print)

  	
   

  	
  Tax ID or Social
  Security Number

  

 

	
  Address: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Telephone No.: 

  	
   

  	
   

  
	
  Fax No.: 

  	
   

  	
   

  
					

 

If
Joint Ownership (Joint Tenants or Tenants in Common)

	
  

  	
   

  
	
  Signature

  

 

	
  

  	
   

  	
   

  	
   

  
	
  Second Investor
  Name (Please Print)

  	
   

  	
  Second Investor
  Tax ID or Social Security No.

  

 

	
  Address: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Telephone No.: 

  	
   

  	
   

  
	
  Fax No.: 

  	
   

  	
   

  
					

 

	
  

  
	
  IDENTITY REHAB
  CORPORATION

  
	
   

  
	
  ACCEPTED THIS    
  DAY OF        , 2007.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  

 

 25
 

EXECUTION
BY ENTITY INVESTOR

NOTE: COMPLETE THE FOLLOWING ONLY
IF INVESTOR IS A CORPORATION, TRUST, CUSTODIANSHIP, PARTNERSHIP OR LIMITED
LIABILITY COMPANY.

THE
UNDERSIGNED HEREBY SWEARS AND AFFIRMS THAT HE/SHE/IT HAS READ THE FOREGOING,
UNDERSTANDS, AND IS FAMILIAR WITH THE CONTENTS THEREOF AND THAT THE
REPRESENTATIONS CONTAINED THEREIN ARE TRUE AND ACCURATE.

Dated this    
of               ,
2007.           Number of Shares                

The signature(s)
should be of the person(s) with the authority to make the investment decisions
on behalf of the corporation, trust, custodianship, partnership or limited
liability company.

	
  

  	
   

  
	
  Name of
  Corporation, Trust, Custodianship, Partnership or Limited Liability Company

  

 

	
  

  	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print Name

  	
   

  	
  Print Name

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Tax I.D. No. of
  Investor

  	
   

  	
  Telephone #

  
						

 

	
  

  	
   

  
	
  State in which
  principal business office is located:

  	
  IDENTITY REHAB CORPORATION

  
	
   

  	
   

  
	
   

  	
  ACCEPTED THIS     DAY OF        ,
  2007.

  
	
  Investor Mailing
  Address:

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  

 

 26
 

Manner in which Title is
to be Held (Check One):

	
  o

  	
   

  	
  Individual Ownership

  	
   

  	
  o

  	
   

  	
  Company (include a copy of Partnership Agreement,
  and any amendments, as applicable, and a resolution with authorization
  signature)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  Joint Tenants with Rights of Survivorship (both
  parties must sign)

  	
   

  	
  o

  	
   

  	
  Trust (include name of the trust, name of trustee
  and date trust was formed)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  Tenants in Common (both parties must sign)

  	
   

  	
  o

  	
   

  	
  Corporation (include certified corporate resolution
  with authorization signature)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  Community

  	
   

  	
  o

  	
   

  	
  Other (please specify) 

                           

                                  

  

 

 27
 

Exception
Schedule

Section 3.9             Intellectual Property.  Management of the Company has recommended
that the name of the Company be changed with a preference for a name containing
the word “Watchdog.”  The Company is
informed that another entity has a registered trademark also containing that word.  When completing its investigation of
available names, the Company may use an assumed name containing that word.  This could expose the Company to a lawsuit
seeking to enjoin further use of the name or damages for use of a conflicting
name.

Section 3.13           Changes.

(i)            Richard Hall, who was President and
a director of the Company, resigned in February 2007.  He remains a member of the Advisory Board of
the Company.

Section 3.19           Customers and Suppliers.  In May 2006, Credco, one of our suppliers of
credit reports from which we derive part of our Identity Snapshot product,
terminated our contract with them because they categorized our business as a “credit
repair” organization, and therefore prohibited us from maintaining an account
with them.

 28

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