Document:

GIANT MOTORSPORTS, INC.

                                AGENCY AGREEMENT

                                                               September 9, 2005

HCFP/Brenner Securities LLC
888 Seventh Avenue
New York, New York 10106

Ladies and Gentlemen:

      Giant Motorsports, Inc., a Nevada corporation ("Company") is offering for
sale in a private placement ("Offering") up to an aggregate of $2.5 million
(subject to increase in the mutual discretion of the Company and the Placement
Agent (as hereinafter defined)) of its 10% Series A Convertible Preferred Stock
("Preferred Stock") and common stock purchase warrants ("Warrants") at a
purchase price of $1,000 for one share of Preferred Stock, together with 2,000
Warrants. The conversion price of each share of Preferred Stock is $0.50. Each
Warrant is exercisable for one share of the Company's common stock ("Common
Stock") at an exercise price of $0.50 per share. The Preferred Stock and
Warrants are collectively referred to herein as the "Securities." The Securities
are offered on an "any-or-all best efforts" basis, in accordance with Section
4(2) of the Securities Act of 1933, as amended ("Securities Act"), and
Regulation D ("Reg D") promulgated thereunder, only to "accredited investors,"
as defined in Reg D. The minimum subscription amount is $100,000 (or 100 shares
of Preferred Stock and 200,000 Warrants), but subscriptions for amounts less
than $100,000 may be accepted at the discretion of the Placement Agent and with
the Company's consent.

      Officers, directors and shareholders of the Placement Agent and the
Company and their affiliates may purchase Securities in the Offering.

      The Preferred Stock and Warrants have the respective terms and conditions
contained in the forms of Certificate of Designation ("Certificate of
Designation") and Warrant Certificate and Warrant Agreement comprising a portion
of the Company's Subscription/Registration Rights Agreement to be delivered to
each purchaser of Preferred Stock and Warrants (all of such documents referred
to collectively herein as the "Offering Documents"). The provisions of this
Agreement shall apply to all offers and sales of Securities consummated prior to
the date hereof.

1. Appointment of Placement Agent; The Offering Period.

      1.1 Appointment of Placement Agent. HCFP/Brenner Securities LLC
("Placement Agent") is hereby appointed exclusive Placement Agent of the Company
during the offering period herein specified ("Offering Period") for the purpose
of assisting the Company in placing the Securities with purchasers who are
qualified accredited investors ("Subscribers"). The Placement Agent hereby
accepts such agency and agrees to assist the Company in placing the Securities
with the Subscribers. The Placement Agent's agency hereunder is not terminable
by the Company except upon termination of the Offering, a breach by the
Placement Agent of its material obligations hereunder or as otherwise provided
in Section 7 herein.

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      1.2 Offering Period. The Offering Period shall commence on the date hereof
("Commencement Date") and shall continue until September 30, 2005; provided,
however, that the Offering Period may be extended until October 31, 2005 or such
reasonable later date as mutually agreed to by the Placement Agent and the
Company without notice to any Subscriber (the last day of the Offering Period,
as it may be extended, is referred to as the "Termination Date"). When the
Company has received and accepted a subscription, a closing may be held with
respect to such Preferred Stock and Warrants and the Offering may be continued
and additional closings may be held from time to time until all shares of
Preferred Stock are sold, or the Termination Date, whichever occurs first. The
initial closing ("Initial Closing") and each subsequent closing, if any, are
each hereinafter referred to as a "Closing." The Placement Agent or the Company
may reject any subscription in whole or in part, at any time and for any reason.

      1.3 Purchase Option. At the election of the Placement Agent, the Company
shall issue and sell to the Placement Agent (and/or its designees) at the
Closing, for an aggregate purchase price of $10.00, an option ("Purchase
Option") to purchase 10% of the number of shares of Preferred Stock and/or 10%
of the number of Warrants issued to Subscribers at such Closing.

      1.4 Offering Documents. The Company will provide the Placement Agent with
a sufficient number of copies of the Offering Documents, including the form of
Subscription/Registration Rights Agreement to be executed by each Subscriber in
the Offering, for delivery to potential Subscribers and such other information,
documents and instruments that the Placement Agent deems necessary to act as
Placement Agent hereunder and to comply with the rules, regulations and judicial
and administrative interpretations respecting compliance with applicable state
and federal statutes related to the Offering.

      1.5 Segregation of Funds. Each Subscriber for Preferred Stock and Warrants
shall tender payment for the Preferred Stock and Warrants for which it is
subscribing by tendering cash (by check or wire transfer) in accordance with the
procedures set forth in the Offering Documents. Prior to a closing with respect
to the applicable subscriptions, cash funds shall be held by Blank Rome, LLP, as
escrow agent, in a segregated, non-interest-bearing bank account, as set forth
in the Offering Documents.

      1.6 No Firm Commitment. The Company understands and acknowledges that the
undertaking by the Placement Agent pursuant to this Agreement is not a "firm
commitment" offering and that the Placement Agent is not obligated in any way to
purchase or sell the Securities offered hereby.

      1.7 Participation by Selected Dealers. The Placement Agent may engage
other persons that are members of the National Association of Securities
Dealers, Inc. ("NASD") or registered representatives of such members to assist
the Placement Agent in the Offering (each such person being hereinafter referred
to as a "Selected Dealer") and the Placement Agent may allow such persons such
part of the compensation and payment of expenses payable to the Placement Agent
hereunder as the Placement Agent shall determine.

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2. Representations and Warranties of the Company. The Company hereby makes the
following representations and warranties to the Placement Agent and the Selected
Dealers upon the execution of this Agreement and again at the Initial Closing
and each subsequent Closing, qualified only by the information set forth in the
Schedule of Related Information and Exceptions attached hereto as Exhibit A:

      2.1 Due Incorporation and Qualification. The Company has been duly
incorporated, is validly existing and is in good standing under the laws of
Nevada and is duly qualified as a foreign corporation for the transaction of
business and is in good standing in each jurisdiction in which the ownership or
leasing of its properties or the conduct of its business requires such
qualification.

      2.2 Subsidiaries. The Company does not presently own an interest in any
corporation, association, or other business entity, other than as set forth in
the Schedule of Related Information and Exceptions. The Company is not a party
to any joint venture, partnership, or similar arrangement, other than as set
forth in the Schedule of Related Information and Exceptions. The Company owns
all of the issued and outstanding shares of common stock of all subsidiaries set
forth in the Schedule of Related Information and Exceptions and the Company
holds good and marketable title to such shares free and clear of all liens,
claims, charges, pledges, security interests, encumbrances and any and all
rights and claims of third parties whatsoever.

      2.3 Authorized Capital; Outstanding Securities. As of the date hereof, the
Company's capitalization, consisting of its authorized, issued and outstanding
shares of Common Stock, Preferred Stock and convertible securities (including
all options and warrants), is as described in the Company's most recent SEC
Filings (as hereinafter defined) and the Schedule of Related Information and
Exceptions. Except as set forth in the Company's most recent SEC Filings, the
Company does not have outstanding any option, warrant, convertible security, or
other right permitting or requiring it to issue, or otherwise to purchase or
convert any obligation into, shares of Common Stock or other securities of the
Company and the Company has not agreed to issue or sell any shares of Common
Stock or other securities of the Company. As of the Initial Closing and any
subsequent Closing, there will be no securities of the Company outstanding other
than as set forth in the most recent SEC Filings, except for (i) the securities
issued in the Offering and (ii) additional Common Stock issued upon conversion
or exercise of currently outstanding options and warrants. All of the issued and
outstanding securities of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable. None of the holders of such
outstanding securities is subject to personal liability solely by reason of
being such a holder. The offers and sales of all securities of the Company made
after January 16, 2004, and, to the Company's knowledge, such sales made from
the date three years prior to the date of this Agreement through January 16,
2004, were at all relevant times either registered under the Securities Act and
the applicable state securities or Blue Sky laws, or exempt from such
registration. At the time of the Initial Closing and any subsequent Closing, the
Company will have reserved for issuance a sufficient number of shares of Common
Stock to be issued upon conversion on the Preferred Stock and upon exercise of
the Warrants. As used herein "SEC Filings" shall mean all filings made by the
Company with the Securities and Exchange Commission (the "Commission").

      2.4 Registration Rights. Except as set forth in the Schedule of Related
Information and Exceptions, no holder of any of the Company's securities has any
"piggyback" or demand registration rights with respect to which the Company has
not already registered such securities and no party has any right to have any
securities owned by such party included on the registration statement which the
Company covenants to file with the Commission to register the securities sold
hereunder ("Offering Registration Statement").

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      2.5 Financial Statements. The financial statements of the Company,
including the notes thereto, included in the SEC Filings ("Financials") fairly
present, in all material respects, the financial position and results of
operations of the Company at the dates thereof and for the periods covered
thereby, subject, in the case of interim periods, to year-end adjustments and
normal recurring accruals and to the extent that such Financials may not include
footnotes. Such Financials have been prepared in conformity with generally
accepted accounting principles, consistently applied throughout the periods
involved except as may otherwise be stated therein and except that the notes in
the interim financial statements may be abbreviated and do not contain all of
the information in the notes to the audited financial statements. The Company
has no liabilities or obligations, contingent, direct, indirect or otherwise
except (i) as set forth in the latest balance sheet ("June 30, 2005 Balance
Sheet") included in the Financials or the footnotes thereto (the date of such
balance sheet being referred to as the "Balance Sheet Date") and (ii) those
incurred in the ordinary course of business since the Balance Sheet Date. Except
as may be disclosed in the Financials, there are no amounts due to any officers,
directors or 5% or greater stockholders of the Company, or to any of their
respective affiliates, other than salary and other compensation and expense
reimbursements.

      2.6 No Material Adverse Changes. Except as set forth in the SEC Filings,
since the date of the June 30, 2005 Balance Sheet, there has not been any
material adverse change in the condition, financial or otherwise, of the
Company.

      2.7 Taxes. The Company has filed all federal tax returns and all state and
municipal and local tax returns (whether relating to income, sales, franchise,
withholding, real or personal property or other types of taxes) required to be
filed under the laws of the United States and applicable states, and has paid in
full all taxes that have become due pursuant to such returns or claimed to be
due by any taxing authority. As used herein, "tax" or "taxes" include all taxes,
charges, fees, levies or other assessments imposed by any Federal, state, local,
or foreign taxing authority, including, without limitation, income, premium,
recapture, credit, excise, property, sales, use, occupation, service, service
use, leasing, leasing use, value added, transfer, payroll, employment, license,
stamp, franchise or similar taxes (including any interest earned thereon or
penalties or additions attributable thereto).

      2.8 Finder's Fees; Other Broker/Dealers. The Company is not obligated to
pay a finder's fee to anyone in connection with the introduction of the Company
to the Placement Agent or the consummation of the Offering contemplated
hereunder.

      2.9 No Pending Actions. Except as set forth in the Schedule of Related
Information and Exceptions, there is no action, suit, proceeding, claim or
investigation pending or currently threatened against the Company and/or its
subsidiaries which questions the validity of the Transaction Documents (as
defined in Section 2.11 hereof) or the right of the Company and/or its
subsidiaries to enter into any of them, or to consummate the transactions
contemplated hereby or thereby, or which would reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect (defined
below) or cause any change in the current equity ownership of the Company and/or
its subsidiaries, nor is the Company and/or its subsidiaries aware that there is
any basis for the foregoing. The foregoing includes, without limitation,
actions, pending or threatened (or any basis therefor known to the Company
and/or its subsidiaries), involving the prior employment of any of the Company's
and/or its subsidiaries' employees, their use in connection with the Company's
and/or its subsidiaries' business of any information or techniques allegedly
proprietary to any of their former employers, or their obligations under any
agreements with prior employers. The Company and/or its subsidiaries are not a
party or subject to the provisions of any order, writ, injunction, judgment, or
decree of any court or government agency or instrumentality. ("Material Adverse
Effect" shall mean a material adverse effect on the business, operations,
assets, financial condition, or prospects of the Company and its subsidiaries
taken as a whole.)

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      2.10 Private Offering Exemption; Offering Documents. The Offering
Documents and SEC Filings taken as a whole do not contain any untrue statement
of fact or omit to state a fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. Assuming that (i) a proper Form D is filed in
accordance with Rule 503 of Reg D, (ii) the offer and the sale of the Securities
is made in compliance with Rule 502(c) of Reg D and/or Section 4(2) of the
Securities Act, and (iii) the representations of the Subscribers in the
Subscription/Registration Rights Agreements signed by them are true and correct,
the sale of Securities in the Offering is exempt from registration under the
Securities Act and is in compliance with Reg D.

      2.11 Due Authorization. Except as disclosed in the Schedule of Related
Information and Exceptions, all corporate action on the part of the Company, its
officers, directors, and shareholders necessary for the (a) authorization,
execution, and delivery of (i) this Agreement, (ii) the Preferred Stock, (iii)
the Certificate of Designations, (iv) the Warrants, (v) the Purchase Option,
(vi) Warrant Agreement and (vii) Warrant Certificate (all of the foregoing
documents being collectively referred to in this Section 2 as the "Transaction
Documents"), (b) the performance of all obligations of the Company hereunder and
thereunder and (c) the authorization, issuance (or reservation for issuance),
and delivery of the Securities and Purchase Option, has been taken and the
Transaction Documents constitute valid and legally binding obligations of the
Company, enforceable in accordance with their respective terms, except (1) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, fraudulent transfer and other laws of general application
affecting enforcement of creditors' rights generally, (2) as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies, and (3) to the extent the indemnification and
contribution provisions contained in the Transaction Documents may be limited by
applicable federal or state laws.

      2.12 Non-Contravention; Consents. The Company is not required to obtain
any consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other than
(a) a Form D in accordance with Reg D and applicable Blue Sky filings, and (b)
such filings with the NASD as may be required with respect to the listing of the
Warrants on the OTC Bulletin Board as contemplated by this Agreement.

      2.13 Valid Issuances. The Securities and Purchase Option when issued and
delivered in accordance with the terms of the Offering Documents and this
Agreement will be duly and validly issued. The shares of Common Stock issuable
upon conversion of and/or as dividends with respect to the Preferred Stock and
upon exercise of the Warrants and Purchase Option have been duly and validly
authorized and, when issued and delivered in accordance with the terms of this
Agreement, the Certificate of Designation and the Warrants and the Warrant
Agreement, will be duly and validly issued, fully paid and non-assessable. The
holders of the Securities and Purchase Option will not be subject to personal
liability by reason of being such holders and will not be subject to the
preemptive rights of any holders of any security of the Company or similar
contractual rights granted by the Company.

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      2.14 No Right to Receive or Purchase. Except as set forth in the Offering
Documents, the issuance of the Securities and Purchase Option in the Offering
and the issuance of Common Stock upon conversion of and/or as dividends with
respect to the Preferred Stock and upon exercise of the Warrants and Purchase
Option will not give any holder of any of the Company's outstanding shares of
Common Stock, options, warrants or other convertible securities or rights to
purchase securities of the Company (i) the right to receive or purchase any
additional shares of Common Stock or any other securities of the Company, or
(ii) the right to an anti-dilution adjustment to any outstanding securities of
the Company.

      2.15 No Regulatory Problems. The Company and each of its subsidiaries (i)
has not filed a registration statement that is the subject of any pending
proceeding or examination under Section 8 of the Securities Act, and is not and
has not been the subject of any refusal order or stop order thereunder; (ii) is
not subject to any pending proceeding under Rule 258 of the Securities Act or
any similar rule adopted under Section 3(b) of the Securities Act, or to an
order entered thereunder; (iii) has not been convicted of any felony or
misdemeanor in connection with the purchase or sale of any security or involving
the making of any false filing with the Commission; (iv) is not subject to any
order, judgment, or decree of any court of competent jurisdiction temporarily or
preliminarily restraining or enjoining, or any order, judgment, or decree of any
court of competent jurisdiction permanently restraining or enjoining, the
Company and/or its subsidiaries from engaging in or continuing any conduct or
practice in connection with the purchase or sale of any security or involving
the making of any false filing with the Commission; and (v) is not subject to a
United States Postal Service false representation order entered under Section
3005 of Title 39, United States Code or a temporary restraining order or
preliminary injunction entered under Section 3007 of Title 39, United States
Code, with respect to conduct alleged to have violated Section 3005 of Title 39,
United States Code. None of the Company's and/or its subsidiaries' current or
former directors or executive officers (i) has been convicted of any felony or
misdemeanor in connection with the purchase or sale of any security, involving
the making of a false filing with the Commission, or arising out of the conduct
of the business of an underwriter, broker, dealer, municipal securities dealer,
or investment advisor; (ii) is subject to any order, judgment or decree of any
court of competent jurisdiction temporarily or preliminarily enjoining or
restraining, or is subject to any order, judgment or decree of any court of
competent jurisdiction permanently enjoining or restraining, such person from
engaging in or continuing any conduct or practice in connection with the
purchase or sale of any security, or involving the making of a false filing with
the Commission, or arising out of the conduct of the business of an underwriter,
broker, dealer, municipal securities dealer, or investment adviser; (iii) is
subject to an order of the Commission entered pursuant to Section 15(b), 15B(a)
or 15B(c) of the Exchange Act, or is subject to an order of the Commission
entered pursuant to Section 203(e) or (f) of the Investment Advisers Act of
1940; (iv) is suspended or expelled from membership in, or suspended or barred
from association with a member of, an exchange registered as a national
securities exchange pursuant to Section 6 of the Exchange Act, an association
registered as a national securities association under Section 15A of the
Exchange Act, or a Canadian securities exchange or association for any act or
omission to act constituting conduct inconsistent with just and equitable
principles of trade; or (v) is subject to a United States Postal Service false
representation order entered under Section 3005 of Title 39, United States Code,
or is subject to a restraining order or preliminary injunction entered under
Section 3007 of Title 39, United States Code, with respect to conduct alleged to
have violated Section 3005 of Title 39, United States Code.

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      2.16 Material Contracts; No Defaults. The Company has filed with the
Commission all contracts, agreements, instruments, indentures, mortgages, loans,
leases, licenses, arrangements or undertakings of any nature, of the Company
and/or its subsidiaries that are required to be filed with the Commission
(collectively, "Contracts"). The Company and each of its subsidiaries is not a
party to any other Contracts that are required to be filed with the Commission.
Each of the Contracts is in full force and effect, the Company and/or its
subsidiaries have performed in all respects all of its obligations thereunder
and is not in default thereunder, and no party to a Contract has made a claim to
the effect that the Company and/or its subsidiaries have failed to perform any
obligations thereunder. There is no plan, intention, or indication of any
contracting party to a Contract to cause termination, cancellation or
modification of such Contract or to reduce or otherwise change its activity
thereunder so as to adversely affect in any material respect the benefits
derived or expected to be derived therefrom by the Company and/or its
subsidiaries. No event or state of facts exist that with notice or the passage
of time or both could cause the Company and/or its subsidiaries to be in default
under any Contract. Neither the Company nor any of its subsidiaries are in
violation of any term or provision of (i) its Certificate of Incorporation or
Bylaws or (ii) any Permit, or applicable Law.

      2.17 Conduct of Business; Compliance with Law. The Company and each of its
subsidiaries have all requisite corporate power and authority, and has all
necessary Permits, to own or lease its respective properties and conduct its
respective business as described in the SEC Filings. The Company and each of its
subsidiaries have been operating their respective businesses in compliance with
all such Permits. The disclosures in the SEC Filings concerning the effects of
federal, state and local regulation on the Company's and its subsidiaries
business as currently conducted and contemplated are correct in all respects and
do not omit to state a material fact. The Company and its subsidiaries are in
compliance with all Laws.

      2.18 Outstanding Indebtedness; Liens; Title to Property; Insurance. Except
as set forth in the Financial Statements or in the Schedule of Related
Information and Exceptions, the Company and each of its subsidiaries have no
outstanding indebtedness. Except as set forth in the SEC Filings or in the
Schedule of Related Information and Exceptions, none of the assets of the
Company and/or its subsidiaries are subject to any liens, encumbrances or
mortgages or similar interests, except for those which occur in the ordinary
course of business and do not materially impair the Company's and/or its
subsidiaries' ownership or use of such assets. The Company and/or its
subsidiaries have good and marketable title to, or valid and enforceable
leasehold estates in, all items of real and personal property (tangible and
intangible) owned or leased by them, free and clear of all liens, encumbrances,
claims, security interests, defects and restrictions of any material nature
whatsoever, except as reflected in the Financials. The Company and/or its
subsidiaries have adequately insured their respective properties against loss or
damage by fire or other casualty and maintain such insurance in adequate
amounts.

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      2.19 Intangibles. The Company and/or its subsidiaries have title and
ownership of, or has otherwise acquired rights with respect to, all patents,
trademarks, service marks, trade names, copyrights, trade secrets, information,
inventions, proprietary rights, and processes necessary for their business as
now conducted without any conflict with or infringement of the rights of others.
Except as set forth in the Schedule of Related Information and Exceptions, the
Company and/or its subsidiaries have not violated, received any communications
alleging that the Company and/or its subsidiaries have violated or, by
conducting its business would violate any of the patents, trademarks, service
marks, trade names, copyrights, or trade secrets, or other proprietary rights of
any other person or entity. None of the Company's and/or its subsidiaries'
employees, officers, or consultants 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 such employee's, officer's, or consultant's
efforts to promote the interests of the Company and/or its subsidiaries or that
would conflict with the Company's and/or its subsidiaries' business as
conducted. Neither the execution nor delivery of the Transaction Documents, nor
the carrying on of the Company's and/or its subsidiaries' business by the
employees of the Company and/or its subsidiaries, nor the conduct of the
Company's and/or its subsidiaries' business, 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 of such employees,
officers or consultants are now obligated. The Company and/or its subsidiaries
own, license or possess the licenses or rights to use all trademarks, service
marks, service names, trade names, patents, patent applications, and copyrights
used and to be used by the Company and/or its subsidiaries in their business
(collectively, "Intangibles"). The Company and/or its subsidiaries have in place
all confidentiality agreements with its employees, consultants and third parties
as are necessary to protect the Company's and/or its subsidiaries' Intangibles.
The Company and/or its subsidiaries own the Intangibles free and clear of all
liens, security interests or other encumbrances.

      2.20 Employee Matters.

                  (a) The Company and/or its subsidiaries currently enjoy
satisfactory employer-employee relationships with their employees and is in
compliance with all federal, state and local laws and regulations respecting the
employment of their employees and employment practices, terms and conditions of
employment and wages and hours relating thereto. There are no pending
investigations involving the Company and/or its subsidiaries by any government,
Department of Labor or any other governmental agency responsible for the
enforcement of employment laws and regulations. There is no unfair labor
practice charge or complaint against the Company and/or its subsidiaries pending
before a Labor Relations Board or any strike, picketing, boycott, dispute,
slowdown or stoppage pending or threatened against or involving the Company
and/or its subsidiaries or any predecessor entity and none has ever occurred. No
questions concerning representation exist respecting the employees of the
Company and/or its subsidiaries and no collective bargaining agreement or
modification thereof is currently being negotiated by the Company and/or its
subsidiaries. No grievance or arbitration proceeding is pending under any
expired or existing collective bargaining agreements of the Company and/or its
subsidiaries, if any. The Company and/or its subsidiaries is not liable for any
severance pay or other payments to any employee or former employee that remains
unsatisfied arising from the termination of employment.

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                  (b) Except as set forth in the Schedule of Related Information
and Exceptions, the Company and/or its subsidiaries neither maintain, sponsor
nor contribute to, nor are any of them required to contribute to, any program or
arrangement that is an "employee pension benefit plan," an "employee welfare
benefit plan," or a "multi-employer plan" as such terms are defined in Sections
3(2), 3(1) and 3(37), respectively, of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") ("ERISA Plans"). The Company and/or its
subsidiaries do not maintain or contribute to, and have at no time maintained or
contributed to, a defined benefit plan, as defined in Section 3(35) of ERISA. If
the Company and/or its subsidiaries do maintain or contribute to a defined
benefit plan, any termination of the plan on the date hereof would not give rise
to liability under Title IV of ERISA. No ERISA Plan (or any trust created
thereunder) has engaged in a "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1986, as
amended ("Code"), that could subject the Company and/or its subsidiaries to any
tax penalty for prohibited transactions and which has not been corrected. Each
ERISA Plan is in compliance with all reporting, disclosure and other
requirements of the Code and ERISA as they relate to any such ERISA Plan.
Determination letters have been received from the Internal Revenue Service with
respect to each ERISA Plan that is intended to comply with Code Section 401(a),
stating that such ERISA Plan and the attendant trust are qualified thereunder.
The Company and/or its subsidiaries have never completely or partially withdrawn
from a "multi-employer plan."

      2.21 Governmental Proceedings. There are no outstanding orders, judgments
or decrees of any court, governmental agency or other tribunal, domestic or
foreign, naming the Company and/or its subsidiaries and enjoining the Company
and/or its subsidiaries from taking, or requiring the Company and/or its
subsidiaries to take, any action, or to which the Company and/or its
subsidiaries properties or business is bound or subject.

      2.22 Exchange Act Reports. The Company is subject to the reporting
requirements of the Securities Act and Exchange Act and has timely filed all
reports and statements required under the Securities Act and Exchange Act on a
timely basis, and each report and statement was true and complete in all
respects and, when filed, did not contain an untrue statement of a fact or omit
to state a fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

      2.23 Accounting Controls. Subject to the requirements of SOX (defined
hereinafter) and the rules and regulations of the Commission promulgated under
SOX, the Company maintains a system of internal accounting controls sufficient
to provide 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.

      2.24 Compliance with Sarbanes-Oxley and Related Regulations. The Company
is in compliance with the Sarbanes-Oxley Act of 2002 ("SOX"), the rules and
regulations promulgated by the Commission under SOX, and the rules, regulations
and listing requirements of the principal trading market for its securities.

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3. Representations, Warranties and Certain Covenants of the Placement Agent and
Selected Dealers.

      3.1 Due Authorization. The Placement Agent represents and warrants that it
has full right, power and authority to enter into this Agreement and the Warrant
Agreement, and to perform all of its obligations hereunder and thereunder. This
Agreement and the Warrant Agreement constitute valid and legally binding
obligations of the Placement Agent, enforceable in accordance with their
respective terms, except (1) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, fraudulent transfer and other
laws of general application affecting enforcement of creditors' rights
generally, (2) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies, and (3) to the
extent the indemnification and contribution provisions contained in this
Agreement and/or the Warrant Agreement may be limited by applicable federal or
state laws.

      3.2 Other representations, warranties and covenants. Each of the Placement
Agent and each Selected Dealer that the Placement Agent may from time to time
appoint, severally represents and warrants as follows:

            3.2.1 Due Incorporation. It is validly existing and is in good
standing under the laws of its state of incorporation.

            3.2.2 Broker/Dealer Registration. It is registered as a
broker-dealer under Section 15 of the Exchange Act.

            3.2.3 Good Standing. It is a member in good standing of the NASD.

            3.2.4 Sale in Certain Jurisdictions. Sales of Securities made by it
will be made only in such jurisdictions in which (i) it is a registered
broker-dealer or where an applicable exemption from such registration exists and
(ii) the offering and sale of the Securities is registered under, or is exempt
from, applicable registration requirements.

            3.2.5 Compliance with Laws. Offers and sales of the Securities made
by it will be made in compliance with the provisions of Rule 502(c) of Reg D and
Section 4(2) of the Securities Act, and it will furnish to each investor a copy
of the Offering Documents prior to accepting any payments for the Securities.

4. Closing.

      4.1 Closing. At any time prior to the Termination Date, upon the mutual
consent of the Company and the Placement Agent, one or more closings shall take
place at the offices of Blank Rome LLP, 405 Lexington Avenue, 24th Floor, New
York, New York 10174. At each Closing, payment for the Preferred Stock and
Warrants then being issued and sold by the Company (by certified check or wire
transfer payable to the order of the Company,) less the amount deductible by the
Placement Agent pursuant to Section 4.4 hereof, shall be made against delivery
of certificates representing such Preferred Stock and Warrants.

      4.2 Deliveries at Closing. At each Closing after the date hereof, and as a
condition to each such Closing, the Company shall deliver or cause to be
delivered to the Placement Agent:

                                       10
<PAGE>

            4.2.1 Opinion of Counsel. The opinion of Gusrae, Kaplan, Bruno &
Nusbaum PLLC, counsel to the Company, dated as of the date of each Closing, in
form attached hereto as Exhibit B.

            4.2.2 Officers' Certificate. A certificate of the Company, signed by
two executive officers thereof, stating (a) that the representations and
warranties contained in the Subscription/Registration Rights Agreement, the
Offering Documents and in Section 2 hereof are true and accurate at each Closing
as applied to the Company with the same effect as though expressly made at the
Closing, (b) that the Company has complied with all covenants and agreements
required to be complied with by it as of the Closing and (c) that the attached
Certificate of Designation was filed with the Secretary of State of Nevada.

            4.2.3 Subscription/Registration Rights Agreements.
Subscription/Registration Rights Agreements signed by the Company.

            4.2.4 Certificates. The certificates representing the Securities.

            4.2.5 NASD/Selling Shareholder Questionnaires. NASD/Selling
Shareholder Questionnaires completed and signed by each Subscriber in this
Offering as well as all officers and directors of the Company.

            4.2.6 Warrant Agreement. The Warrant Agreement signed by the
Company.

            4.2.7 Purchase Option. The Purchase Option signed by the Company.

            4.2.8 Other Documents. Such other closing documents as shall be
reasonably requested by the Placement Agent or its counsel.

      4.3 Conditions.

            4.3.1 Conditions to the Placement Agent's Obligations. The
obligations of the Placement Agent under this Agreement shall be subject to the
following conditions:

                  (1) All representations and warranties of the Company set
forth in this Agreement and in the Subscription/Registration Rights Agreements
shall be true and accurate as of each Closing with the same effect as though
expressly made at each Closing;

                  (2) The Company shall have complied with all covenants and
agreements required to be complied with pursuant to this Agreement and the
Subscription/Registration Rights Agreements as of the date of each Closing;

                  (3) The Company shall have obtained all consents of third
parties required to be obtained in connection with this Offering;

                  (4) The Company shall have filed the Certificate of
Designation with the Nevada Secretary of State.

                  (5) There shall be no action, lawsuit, administrative or other
proceeding pending or threatened that seeks to enjoin the transactions
contemplated by this Agreement.

                                       11
<PAGE>

            4.3.2 Conditions to Company's Obligations. The obligations of the
Company under this Agreement shall be subject to the conditions that:

                  (1) The representations and warranties of the Placement Agent
set forth in this Agreement are true and accurate as of each Closing with the
same effect as though expressly made at each Closing;

                  (2) The Placement Agent has complied with all covenants and
agreements required to be complied with as of each Closing; and

                  (3) There shall be no action, lawsuit, administrative or other
proceeding pending or threatened that seeks to enjoin the transactions
contemplated by this Agreement.

      4.4 Placement Agent's Fees and Expenses. At each Closing, the Company
shall pay to the Placement Agent cash commissions equal to 8% of the gross
proceeds of the sale of the Securities and a nonaccountable expense allowance
equal to 2% of the gross proceeds of the sale of the Securities. The Company
shall issue to the Placement Agent the Purchase Option to purchase 10% of the
number of shares of Preferred Stock and 10% of the Warrants issued to the
Subscribers at such Closing. At the Initial Closing (and if additional fees and
expenses are incurred by the Placement Agent then at subsequent Closings as
well), the Company also shall reimburse the Placement Agent for the expenses
described in Section 5.2 hereof. All the foregoing amounts and any other
expenses to be paid pursuant to Section 5.2 are payable at the Placement Agent's
direction directly to the parties who are owed same by deduction from the
aggregate purchase price of the Securities sold.

5. Covenants. The Company covenants and agrees that:

      5.1 Amendments to Offering Documents. Until the Offering has been
completed or terminated, if there shall occur any event relating to or
affecting, among other things, the Company or any affiliate, or the proposed
operations of the Company as described in the Offering Documents, as a result of
which it is necessary, in the reasonable opinion of counsel for the Company or
counsel for the Placement Agent, to amend or supplement the Offering Documents
in order that the Offering Documents will not contain an untrue statement of a
fact or omit to state a fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
the Company shall immediately prepare and furnish to the Placement Agent a
reasonable number of copies of an appropriate amendment of or supplement to the
Offering Documents, in form and substance satisfactory to counsel for the
Placement Agent.

      5.2 Expenses of Offering and Other Expenses. The Company shall be
responsible for, and shall pay, all fees, disbursements and expenses incurred in
connection with the Offering, including, but not limited to, the Company's legal
and accounting fees and disbursements, the Placement Agent's reasonable legal
fees, legal fees relating to Blue Sky filings, the costs of preparing, printing,
mailing, delivering and filing, where necessary, the Offering Documents and all
amendments and supplements thereto (all in such quantities as the Placement
Agent may reasonably require), preparing and printing the certificates for the
Securities, requested by the Placement Agent, the reasonable costs of any "due
diligence" meetings held by the Placement Agent and/or the Company, transfer
taxes, transfer agent and registrar fees. In addition to payment of the
Placement Agent's fees and expenses and regardless of whether the Offering is
consummated, the Company shall, from time to time promptly upon request
therefore, pay directly or otherwise reimburse the Placement Agent for all
reasonable expenses (including, without limitation, fees of up to $15,000 and
disbursements of Placement Agent's counsel and all travel, lodging and other
out-of-pocket expenses) incurred by the Placement Agent in connection with its
engagement hereunder. At the Initial Closing, the Company shall also prepay to
the Placement Agent's counsel the sum of $5,000 for legal fees in connection
with such counsel's engagement as special counsel for the Investors under the
Subscription Agreement/Registration Rights Agreement in connection with the
Offering Registration Statement provided for therein, against such counsel's
undertaking to review such Offering Registration Statement on behalf of
Investors. The Company's obligations with respect to all fees and expenses due
and payable to the Placement Agent pursuant to this Section 5 shall survive the
final Closing.

                                       12
<PAGE>

      5.3 Warrant Solicitation Fees. The Company hereby engages the Placement
Agent, on a non-exclusive basis, as its agent for the solicitation of the
exercise of the Warrants. The Company will (i) assist the Placement Agent with
respect to such solicitation, if requested by the Placement Agent, and (ii) at
the Placement Agent's request, provide the Placement Agent, and direct the
Company's transfer and warrant agent to provide to the Placement Agent, at the
Company's cost, lists of the record and, to the extent known, beneficial owners
of, the Warrants. The Company will pay the Placement Agent a commission of 5% of
the exercise price of the Warrants for each Warrant exercised, payable on the
date of such exercise, on the terms provided for in the Warrant Agreement, if
the Placement Agent solicited the exercise. It will be presumed that the
Placement Agent has solicited the exercise of the Warrants, unless the holders
of the Warrant affirmatively states in writing at the time of the exercise, that
the exercise was not solicited by the Placement Agent. The Placement Agent may
engage sub-agents in its solicitation efforts. The Company agrees to disclose
the arrangement to pay such solicitation fees to the Placement Agent in any
prospectus used by the Company in connection with the registration of the
Warrants and the shares of Common Stock underlying the Warrants.

      5.4 Blue Sky Requirements. The Company shall "Blue Sky" the Offering in
such states as the Placement Agent shall reasonably request and shall pay for
all blue sky filing fees and costs and expenses of any necessary blue sky
registration or qualification or notice filings associated with an exemption
from registration or qualification, including the fees and disbursements of
counsel. All blue sky work shall be undertaken by the Company and its counsel.

      5.5 Further Assurances. The Company will take such actions as may be
reasonably required or desirable to carry out the provisions of this Agreement
and the Transaction Documents and the transactions contemplated hereby and
thereby.

      5.6 Accuracy of Representations and Warranties. The Company hereby agrees
that, prior to the Termination Date or the final Closing, as the case may be, it
will not enter into any transaction or take any action, and will use its best
efforts to prevent the occurrence of any event, that could result in any of its
representations, warranties or covenants contained in this Agreement or any of
the Transaction Documents not to be true and correct, or not to be performed as
contemplated, at and as of the time immediately after the occurrence of such
transaction or event.

                                       13
<PAGE>

      5.7 Press Release. Commencing on the date of this Agreement and continuing
until five days after the final Closing, the Company shall not make any press
release or other public disclosures without first providing the Placement Agent
with a copy of each proposed press release or disclosure for Placement Agent's
review, comment and consent, which shall not be unreasonably withheld.

      5.8 Investor Registration Rights. As additional consideration for the
Agreement and the transactions contemplated hereby and as set forth in each
Subscriber's Subscription/Registration Rights Agreement, the Company will agree
with each Subscriber to grant such persons the registration rights set forth in
the Subscription/Registration Rights Agreements.

      5.9 Placement Agent Registration Rights. The Placement Agent (and/or other
placement agents and sub agents participating in the Offering) shall be afforded
registration rights identical to those afforded to investors in the
Subscription/Registration Rights Agreement with respect to the Common Stock
issuable upon conversion of the Preferred Stock and exercise of the Warrants
underlying the Purchase Option and the Warrants underlying the Purchase Option,
except for the delinquent filing and effectiveness cash penalties afforded such
investors thereunder.

      5.10 Lock-Up Agreements. The Company has caused to be executed legally
binding and enforceable agreements pursuant to which each of the officers and
directors of the Company (including their family members and affiliates)
(collectively, "Insiders"), agree not to offer, sell, transfer, pledge, assign,
hypothecate or otherwise encumber, or dispose of (collectively, "Sale") any
Preferred Stock, Common Stock, options or warrants of the Company now owned or
hereafter acquired, whether beneficially or of record, during the period
commencing on the Initial Closing and terminating on the later to occur of (i)
one (1) year following the date of the final Closing and (ii) the date on which
the Offering Registration Statement is declared effective by the Commission
("Initial Lock Up Period"). For one (1) year ("Additional Lock-Up Period") after
the expiration of the Initial Lock Up Period, the Insiders agree not to make a
Sale, in any 90-day period during the Additional Lock-Up Period, of shares of
Common Stock or other securities of the Company owned by the Insiders that are
convertible, redeemable, exchangeable into, or exercisable for, more than one
percent (1%) of the then outstanding shares of Common Stock as reported in the
Company's most recent Form 10-KSB or Form 10-QSB at the time of such Sale.

      5.11 Board Designee and Representative. For a period of five (5) years
from the date the Offering Registration Statement is declared effective by the
Commission, the Company shall appoint a designee of the Placement Agent to the
Company's Board of Directors. Such designee shall receive no more or less
compensation than is paid to other non-management directors of the Company. To
the extent permitted by law, the Company shall indemnify the Placement Agent and
its designee for the actions of such designee as a director of the Company. In
addition, from and after the date such designee is appointed, the Company shall
obtain and maintain a liability insurance policy affording coverage for the acts
of its officers and directors in an amount not less than $1,500,000 and will
include the Placement Agent's designee as an insured under such policy. In the
event that the Placement Agent has not exercised its option to designate a
member of the Company's Board of Directors as set forth above, for a period of
five (5) years from the date the Offering Registration Statement is declared
effective by the Commission, upon notice from the Placement Agent to the
Company, the Placement Agent shall have the right to send a representative (who
need not be the same individual from meeting to meeting) to observe each meeting
of the Board of Directors of the Company. The Company agrees to give the
Placement Agent written notice of all Board of Directors' meetings and to
provide the Placement Agent with an agenda of and minutes of such meetings no
later than it gives such notice and provides such items to the other directors,
and reimburse the Placement Agent's representative for his or her reasonable
out-of-pocket expenses incurred in connection with his or her attendance at such
meeting, including but not limited to, food, lodging and transportation.

                                       14
<PAGE>

6. Indemnification and Contribution.

      6.1 Indemnification of the Placement Agent by the Company. The Company
agrees to indemnify and hold harmless the Placement Agent and each person, if
any, who controls the Placement Agent within the meaning of the Securities Act
and/or the Exchange Act against any losses, claims, damages or liabilities,
joint or several, to which such Placement Agent or controlling person may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of a material fact
contained (A) in the Transaction Documents, or (B) in any blue sky application
or other document executed by the Company specifically for blue sky purposes or
based upon any other written information furnished by the Company or on its
behalf to any state or other jurisdiction in order to qualify any or all of the
Shares under the securities laws thereof (any such application, document or
information being hereinafter called a "Blue Sky Application"), (ii) any breach
by the Company of any of its representations, warranties or covenants contained
herein or in any of the Transaction Documents, (iii) the omission or alleged
omission by the Company to state in the Transaction Documents or in any Blue Sky
Application a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading or (iv) any liability incurred by the Placement Agent
arising from the Escrow Agreement between the Company and the Escrow Agent not
due to a Placement Agent Non-Indemnity Event (hereinafter defined); and will
reimburse the Placement Agent and each such controlling person for any legal or
other expenses reasonably incurred by the Placement Agent or such controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action, whether arising out of an action between the
Placement Agent and the Company or the Placement Agent and a third party;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon (i) an untrue statement or omission made in reliance upon and in conformity
with written information regarding the Placement Agent that is furnished to the
Company by the Placement Agent specifically for inclusion in the Offering
Documents or any such Blue Sky Application or (ii) any breach by the Placement
Agent of the representations, warranties or covenants contained herein
(together, (i) and (ii) above are referred to as the "Placement Agent
Non-Indemnity Events").

      6.2 Indemnification of the Company by the Placement Agent. The Placement
Agent agrees to indemnify and hold harmless the Company, each of its directors
and executive officers and each person, if any, who controls the Company within
the meaning of the Securities Act and/or the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which the Company or such
director, executive officer, or controlling person may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
Placement Agent Non-Indemnity Event; and will reimburse the Company and each
such director, executive officer or controlling person for any legal or other
expenses reasonably incurred by the Company or such director, executive officer
or controlling person in connection with investigating or defending any such
loss, claim, damage, liability or action, provided that such loss, claim, damage
or liability is found ultimately to arise out of or be based upon any Placement
Agent Non-Indemnity Event.

                                       15
<PAGE>

      6.3 Indemnification of the Selected Dealers by the Company. The Company
agrees to indemnify and hold harmless each Selected Dealer and each person, if
any, who controls a Selected Dealer within the meaning of the Securities Act
and/or the Exchange Act against any losses, claims, damages or liabilities,
joint or several, to which such Selected Dealer or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of a material fact
contained (A) in the Offering Documents, or (B) in any Blue Sky Application,
(ii) any breach by the Company of any of its representations, warranties or
covenants contained herein or in any of the Offering Documents, or (iii) the
omission or alleged omission by the Company to state in the Offering Documents
or in any Blue Sky Application a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and will reimburse each Selected Dealer
and each such controlling person for any legal or other expenses reasonably
incurred by such Selected Dealer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action,
whether arising out of an action between such Selected Dealer and the Company or
such Selected Dealer and a third party; provided, however, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon (i) an untrue statement or omission
made in reliance upon and in conformity with written information regarding such
Selected Dealer specifically for inclusion in the Offering Documents or any such
Blue Sky Application or (ii) any breach by such Selected Dealer of the
representations, warranties or covenants contained herein (together, (i) and
(ii) above are referred to as the "Selected Dealer Non-Indemnity Events").

      6.4 Indemnification of the Company by the Selected Dealers. The Selected
Dealers, severally and not jointly, agree to indemnify and hold harmless the
Company and each person, if any, who controls the Company within the meaning of
the Securities Act and/or the Exchange Act against any losses, claims, damages
or liabilities, joint or several, to which the Company or such controlling
person may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any Selected Dealer Non-Indemnity Event; and will
reimburse the Company and each such controlling person for any legal or other
expenses reasonably incurred by the Company or such controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action provided that such loss, claim, damage or liability is found
ultimately to arise out of or be based upon any Selected Dealer Non-Indemnity
Event.

      6.5 Procedure. Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying party
under this Section 6, notify in writing the indemnifying party of the
commencement thereof; and the omission so to notify the indemnifying party will
not relieve the indemnifying party from any liability under this Section 6 as to
the particular item for which indemnification is then being sought, except and
to the extent that the indemnifying party is materially prejudiced thereby, from
any other liability that it may have to any indemnified party. In case any such
action is brought against any indemnified party, and it notifies an indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent that it may wish, jointly with any other
indemnifying party, similarly notified, to assume the defense thereof, with
counsel who shall be to the reasonable satisfaction of such indemnified party,
and after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section 6 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. Any such
indemnifying party shall not be liable to any such indemnified party on account
of any settlement of any claim or action effected without the consent of such
indemnifying party.

                                       16
<PAGE>

      6.6 Contribution. If the indemnification provided for in this Section 6 is
unavailable to any indemnified party (other than as a result of the failure to
notify the indemnifying party as provided in Section 6.5 hereof) in respect to
any losses, claims, damages, liabilities or expenses referred to therein, then
the indemnifying party, in lieu of indemnifying such indemnified party, will
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand, and the Placement Agent or Selected Dealer, on the other hand,
from the Offering, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above, but also the
relative fault of the Company, on the one hand, and of the Placement Agent or
Selected Dealer, on the other hand, in connection with the statements or
omissions that resulted in such losses, claims, damages, liabilities or expenses
as well as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Placement Agent or Selected
Dealer, on the other hand, shall be deemed to be in the same proportion as the
total proceeds from the Offering received by the Company bear to the commissions
received by the Placement Agent or Selected Dealer. The relative fault of the
Company, on the one hand, and the Placement Agent or Selected Dealer, on the
other hand, will be determined with reference to, among other things, whether
the untrue or statement of a material fact or the omission to state a material
fact relates to information supplied by the Company, on the one hand, and the
Placement Agent or Selected Dealer, on the other hand, and their relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. Notwithstanding the foregoing, the Placement Agent's
obligations under this Section 6.6 shall not exceed the actual commissions
received by the Placement Agent.

      6.7 Equitable Considerations. The Company, the Placement Agent and each
Selected Dealer agree that it would not be just and equitable if contribution
pursuant to this Section 6 were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.

      6.8 Attorneys' Fees. The amount payable by a party under this Section 6 as
a result of the losses, claims, damages, liabilities or expenses referred to
above will be deemed to include any reasonable legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim (including, without limitation, fees and disbursements of
counsel incurred by an indemnified party in any action or proceeding between the
indemnifying party and indemnified party or between the indemnified party and
any third party or otherwise). Notwithstanding the foregoing, with respect to
any third party action, fees and disbursements of separate counsel for the
indemnified party shall only be paid by the indemnifying party if there is a
conflict of interest between the indemnified party and the indemnifying party
and, in such, case, only with respect to one counsel for all the indemnified
parties.

                                       17
<PAGE>

7. Termination. The Placement Agent reserves the right not to proceed with the
Offering for any reason, including if: (i) adverse information known to
management and not previously disclosed to the Placement Agent by the Company
comes to the Placement Agent's attention relating to the Company, its management
or its position in the industry which would preclude a successful Offering; (ii)
a material adverse change not yet reported in the Company's public filings or
otherwise disclosed in the Offering Documents has occurred in the financial
condition, business or prospects of the Company; or (iii) the Company has
breached any of its material representations, warranties or obligations
hereunder, or failed to expeditiously proceed with the Offering. If the
Placement Agent elects not to proceed with the Offering as a result of the
conditions enumerated in the clauses above, or, if the Company elects not to
proceed with the Offering for any reason, then the Company, in full satisfaction
of its obligations to the Placement Agent hereunder the Company shall pay all of
Placement Agent's fees and expenses, including legal fees.

8. Right of First Refusal. For a period of two (2) years following the final
Closing of the offering, the Placement Agent shall have a right of first refusal
to underwrite or place any public or private sale of equity securities of the
Company or any subsidiaries or successors of the Company, offered for sale by
the Company or any of its subsidiaries, successors or affiliates.

9. Notices. Any notice hereunder shall be in writing and shall be effective when
delivered in person or by facsimile transmission or mailed by certified mail,
postage prepaid, return receipt requested, to the appropriate party or parties,
at the following addresses: if to the Placement Agent, to HCFP/Brenner
Securities LLC, 888 Seventh Avenue, New York, New York 10106, Attention: Ira
Scott Greenspan, Vice Chairman and General Counsel (fax no. 212-707-0378); with
a copy to Blank Rome LLP, The Chrysler Building, 405 Lexington Avenue, New York,
New York 10174, Attention: Robert J. Mittman, Esq. (Fax No. (917) 332-3800); if
to the Company, to Giant Motorsports, Inc., 13134 State Route 62, Salem, OH
44460, Attention: Gregory A. Haehn, President and Chief Operating Officer (Fax
No. 330-332-4727); with a copy to Gusrae, Kaplan, Bruno & Nusbaum, PLLC, 120
Wall Street, New York, NY, Attention: Lawrence G. Nussbaum, Esq. (Fax No.
212-809-5449); or, in each case, to such other address as the parties may
hereinafter designate by like notice.

10. Parties. This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. Neither party may
assign this Agreement or its obligations hereunder without the prior written
consent of the other party. This Agreement is intended to be, and is, for the
sole and exclusive benefit of the parties hereto and the persons described in
Sections 6.1 through 6.4 hereof and their respective successors and assigns, and
for the benefit of no other person, and no other person will have any legal or
equitable right, remedy or claim under, or in respect of this Agreement.

                                       18
<PAGE>

11. Amendment and/or Modification. Neither this Agreement, nor any term or
provision hereof, may be changed, waived, discharged, amended, modified or
terminated orally, or in any manner other than by an instrument in writing
signed by each of the parties hereto.

12. Further Assurances. Each party to this Agreement will perform any and all
acts and execute any and all documents as may be necessary and proper under the
circumstances in order to accomplish the intents and purposes of this Agreement
and to carry out its provisions.

13. Validity. In case any term of this Agreement will be held invalid, illegal
or unenforceable, in whole or in part, the validity of any of the other terms of
this Agreement will not in any way be affected thereby.

14. Waiver of Breach. The failure of any party hereto to insist upon strict
performance of any of the covenants and agreements herein contained, or to
exercise any option or right herein conferred in any one or more instances, will
not be construed to be a waiver or relinquishment of any such option or right,
or of any other covenants or agreements, and the same will be and remain in full
force and effect.

15. Entire Agreement. This Agreement contains the entire agreement and
understanding of the parties with respect to the subject matter hereof, and
there are no representations, inducements, promises or agreements, oral or
otherwise, not embodied in this Agreement. Any and all prior discussions,
negotiations, commitments and understanding relating to the subject matter of
this Agreement are superseded by this Agreement.

16. Counterparts. This Agreement may be executed in counterparts and each of
such counterparts will for all purposes be deemed to be an original, and such
counterparts will together constitute one and the same instrument.

17. Law. Pursuant to Section 5-401 of the New York General Obligation Law, this
Agreement will be governed as to validity, interpretation, construction, effect
and in all other respects by the internal law of the State of New York. The
Company and the Placement Agent each (i) agree that any legal suit, action or
proceeding arising out of or relating to this Agreement shall be instituted
exclusively in the New York State Supreme Court, County of New York, or in the
United States District Court for the Southern District of New York, (ii) waives
any objection to the venue of any such suit, action or proceeding, and the right
to assert that such forum is an inconvenient forum, and (iii) irrevocably
consents to the jurisdiction of the New York State Supreme Court, County of New
York, and the United States District Court for the Southern District of New York
in any such suit, action or proceeding. The Company and the Placement Agent
further agree to accept and acknowledge service of any and all process that may
be served in any such suit, action or proceeding in the New York State Supreme
Court, County of New York, or in the United States District Court for the
Southern District of New York and agree that service of process upon either of
them mailed by certified mail to their respective addresses shall be deemed in
every respect effective service of process in any such suit, action or
proceeding.

                                       19
<PAGE>

18. Representations, Warranties and Covenants to Survive Delivery. The
respective representations, indemnities, agreements, covenants, warranties and
other statements of the Company and the Placement Agent shall survive execution
of this Agreement and delivery of the Securities and/or the termination of this
Agreement prior thereto.

      If you find the foregoing is in accordance with our understanding, kindly
sign and return to us a counterpart hereof, whereupon this instrument along with
all counterparts will become a binding agreement between us.

                                       Very truly yours,

                                       GIANT MOTORSPORTS, INC.

                                       By: /s/ Gregory A. Haehn
                                           -------------------------------------
                                           Gregory A. Haehn
                                           President and Chief Operating Officer

AGREED:

HCFP/BRENNER SECURITIES LLC

By: /s/ Avi Lipsker
    ---------------------
Name:  Avi Lipsker
Title: Managing Director

                                       20
<PAGE>

                                    EXHIBIT A

                 SCHEDULE OF RELATED INFORMATION AND EXCEPTIONS

Schedule 2.2 - Subsidiaries

      1.    Chicago Cycle, Inc. incorporated in Nevada, is wholly owned by the
            Company

      2.    W.W.Cycles, Inc. incorporated in Ohio, is wholly owned by the
            Company

      3.    Giant Motorsports Acceptance Group, Inc. incorporated in Delaware,
            is a wholly owned by the Company

Schedule 2.4 - Registration Rights

      In connection with services rendered during the merger of W.W. Cycles and
the Company a warrant to purchase One Million (1,000,000) shares of the
Company's common stock was issued to Moneta Capital, LLC. This warrant was
subsequently assigned to various other persons and all warrants provide for
standard piggyback registration rights.

      The Company granted standard piggyback registration rights to the holder
of the Bridge Note (discussed in Schedule 2.16) hereafter, with respect to the
100,000 shares of common stock issuable upon exercise of the warrant issued to
such holder.

      In August 2004, the Company granted to each of Russell A. Haehn and
Gregory A. Haehn options to purchase 1,000,000 shares of Common Stock and
500,000 shares of Common Stock, respectively, at an exercise price of $1.25 per
share. The Company agreed to register the shares of Common Stock underlying such
options, pursuant to a Registration Statement on Form S-8 by August 2005. The
Company has not yet filed a Registration Statement to register such shares of
Common Stock.

Schedule 2.16 - Material Contracts

      On April 30, 2004, the Company paid $1,675,000 of the purchase price for
its Chicago Cycles subsidiary by issuing to Kings Motorsports a 6% $1,675,000
aggregate principal amount note (the "Note"), which Note initially provided for
payment as follows: (i) $500,000 on July 29, 2004, (ii) $250,000 on October 27,
2004, and (iii) the remaining $925,000, plus accrued but unpaid interest on
April 30, 2005. As of September 9, 2005, the Company had paid a total of
$825,000 of the principal amount payable under the Note. The Note is secured by
a second lien on Chicago Cycles' assets, and personally guaranteed by Russell
Haehn and Gregory Haehn. The Company attempted to negotiate an extended payment
plan for the payment of the outstanding balance, but have not entered into any
such agreement with the Holder of the Note. Although the holder of the Note has
not declared the Company in default under the Note, the Company may be deemed to
be technically in default, and there is no assurance that the holder of the Note
will not demand full payment of outstanding principal and accrued but unpaid
interest.

                                                                      __________
                                                                       Initials
                                       1
<PAGE>

      On April 20, 2004, pursuant to a $500,000 aggregate principal amount
promissory note bearing interest at the rate of fourteen (14%) percent per annum
(the "Bridge Note"), the Company received, from a third party, an aggregate
principal amount bridge loan (the "Bridge Loan"). All outstanding principal on
the Bridge Note was due on October 15, 2004. To secure the repayment of
principal and interest on the Bridge Note, each of Russell Haehn and Gregory
Haehn (i) pledged to the lender 150,000 shares (300,000 shares in the aggregate)
of common stock owned by each of them, and (ii) guaranteed all of the Company's
payment obligations to the lender. As partial consideration for the Bridge Loan,
the Company issued to the lender a five-year warrant to purchase 100,000 shares
of common stock, at an exercise price of $2.25 per share. We also granted the
lender certain piggyback registration rights with respect to the shares of
common stock underlying the warrant. We used the $500,000 Bridge Loan proceeds
for working and operating capital. On October 15, 2004, we repaid $250,000 of
the principal amount outstanding under the Bridge Loan. Pursuant to a letter
agreement entered into with the lender on October 6, 2004, payment of the
remaining $250,000 of principal and all accrued interest thereon was extended
until January 15, 2005. The Company paid the lender $2,500 in consideration for
the extension. The Company has not made any additional payments of principal
through September 9, 2005, however, it has continued to make monthly interest
payments at the rate of 14% per annum. Although the holder of the Bridge Note
has not declared the Company in default under the Bridge Note, the Company may
be deemed to be technically in default, and there is no assurance that the
holder of the Bridge Note will not demand full payment of outstanding principal
and accrued but unpaid interest.

Schedule 2.20(b) - Employee Matters

      W.W. Cycles, Inc., one of the Company's subsidiaries, maintains a 401(k)
plan.

                                                                      __________
                                                                       Initials
                                       2EXHIBIT
      10.5

    

    ESCROW/LOCK-UP
      AGREEMENT

    

    This
      Escrow/Lock-Up Agreement (this “Agreement”)
      dated
      as of January 10, 2006, is made by and among Telecomm Sales Network, Inc., a
      Delaware corporation (“Pubco”),
      Daniel Ferguson, an individual, in his capacity as Shareholder Agent (as defined
      below), EnviroSystems, Inc., a Nevada corporation (the “Company”
or
      “EnviroSystems”),
      and
      Jerold K. Levien, Esq., as Escrow Agent (the “Escrow
      Agent”).

    

    RECITALS

    

    WHEREAS,
      pursuant to an Agreement and Plan of Merger, made and entered into as of
      November 11, 2005, by and among Pubco, TSN Acquisition Corporation, a Nevada
      corporation and an indirect wholly owned subsidiary of Pubco (“Merger
      Sub”)
      and
      the Company (the "Merger
      Agreement"),
      at
      the Effective Time, Merger Sub will be merged with and into the Company (the
      “Merger”),
      with
      the Company as the surviving corporation in accordance with the terms of the
      Merger Agreement.

    

    WHEREAS,
      pursuant to Section
      2.11
      of the
      Merger Agreement all shares of Pubco Common Stock to be issued (and/or reserved
      for issuance) to (i) holders of EnviroSystems Preferred Stock in the Merger
      and
      (ii) upon exercise of EnviroSystems Options and Warrants, if exercised, for
      Pubco Common Stock in the future (each a “Shareholder”
      and
      collectively the “Shareholders”)
      shall
      be deposited directly by Pubco into an Escrow Account and held by the Escrow
      Agent;

    

    WHEREAS,
      the
      Shareholders have appointed Daniel Ferguson, to act as their agent (the
“Shareholder
      Agent”);

    

    WHEREAS,
      pursuant to Section
      7.5(b)
      of the
      Merger Agreement, Pubco, MV Nanotech and any of their respective affiliates
      shall have a claim against the Escrow Shares held in the Escrow Account for
      the
      benefit of the prior holders of EnviroSystems Preferred Stock or EnviroSystems
      Options and Warrants in order to satisfy any claims for Losses;

    

    WHEREAS,
      a
      material condition to the consummation of the transactions contemplated by
      the
      Merger Agreement is that the parties hereto enter into this
      Agreement.

    

    AGREEMENT

    

    NOW
      THEREFORE,
      as a
      material inducement to Pubco, Merger Sub and the Company to consummate the
      transactions contemplated by the Merger Agreement, and for other good and
      valuable consideration, the receipt and adequacy of which is hereby
      acknowledged, the parties hereby agree as follows:

     

    SECTION
      1.DEFINED
      TERMS

     

    Capitalized
      terms used herein without definition shall have the meanings ascribed to them
      in
      the Merger Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    SECTION
      2.  CONSENT
      OF SHAREHOLDERS

     

    The
      Merger Agreement and this Agreement were approved by the shareholders of the
      Company at the Company’s Annual Meeting of Stockholders held on December 28,
      2005, and, accordingly, the Shareholders shall be deemed to have consented,
      without any further act of any such Shareholder, to (i) the establishment of
      an
      escrow account (the "Escrow
      Account")
      pursuant to this Agreement to (x) provide for the limitations on sales and
      transfers of Escrow Shares pursuant to the Pubco Lock-Up, and (y) to secure
      the
      indemnification obligations of the prior holders of EnviroSystems Preferred
      Stock and EnviroSystems Options and Warrants pursuant to Section
      7.5
      of the
      Merger Agreement, (ii) the appointment of the Shareholder Agent as agent for
      the
      Shareholders in all respects, (iii) the taking by the Shareholder Agent of
      any
      and all actions, including the execution by the Shareholder Agent of any and
      all
      agreements, instruments or other documents, (iv) the appointment of the Escrow
      Agent, and (v) all of the other terms and conditions of this
      Agreement.

     

    SECTION
      3.  ESCROW

     

    3.1.    SHARES
      TO
      BE PLACED IN ESCROW. 

     

    (a)  Pursuant
      to Section
      2.11
      of the
      Merger Agreement, on the Closing Date, Pubco shall issue certificates for the
      aggregate number of shares of Pubco Common Stock issuable (and/or reserved
      for
      issuance) to holders of (i) EnviroSystems Preferred Stock in the Merger and
      (ii)
      upon exercise of Envirosystems Options and Warrants, if exercised, for Pubco
      Common Stock in the future (the "Escrow
      Shares")
      in the
      name of the Escrow Agent evidencing the shares of Pubco Common Stock to be
      held
      in the Escrow Account in accordance with this Agreement. The Escrow Shares
      shall
      be held by the Escrow Agent in the Escrow Account in accordance with the
      provisions of this Agreement and shall not be subject to any lien, attachment,
      trustee process or any other judicial process of any creditor of any party
      hereto or the Shareholders.

     

    (b)  The
      Escrow Shares allocable to each Shareholder shall be as set forth opposite
      each
      Shareholder’s name on Exhibit
      A
      hereto.
      Such Exhibit A shall set forth (i) the name of each Shareholder, (ii) the number
      of shares of Pubco Common Stock received by such Shareholder in the Merger
      or
      receivable upon the exercise, if any, of Envirosystems Options and Warrants,
      and
      (iii) the number of Escrow Shares subject to the indemnification obligations
      set
      forth in Section
      7.5
      of the
      Merger Agreement and Section
      5,
      hereof.

     

    3.2.    ADJUSTMENT
      OF EXHIBIT A. If and when Pubco changes the Escrow Shares as provided in
Section
      4.3
      hereof,
      or otherwise deposits additional Escrow Shares with the Escrow Agent, Escrow
      Agent, shall revise Exhibit
      A, subject
      to Pubco’s review and consent, to reflect such change or deposit. In the event
      of any prior release of Escrow Shares to an Indemnified Party pursuant to
Section
      5,
      hereof,
      or otherwise pursuant to Section
      6,
      hereof,
      Escrow Agent shall revise Exhibit
      A,
      as
      pro
      rata appropriate, subject to Pubco’s review and consent, to reflect such release
      by reducing the number of Indemnity Escrow Shares (as hereinafter defined)
      opposite the appropriate Shareholder’s name. Escrow Agent shall deliver any
      revised Exhibit
      A
      in
      accordance with Section
      13.4
      hereof.
      Upon such delivery, any such revised Exhibit
      A
      (i)
      shall be deemed appended to this Agreement in replacement of the prior
Exhibit
      A
      and (ii)
      shall constitute Exhibit
      A
      for all
      purposes under this Agreement.

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    SECTION
      4.  SHAREHOLDER
      RIGHTS

     

    4.1.    VOTING
      OF
      ESCROW SHARES. The Shareholders shall be entitled to vote the number of Escrow
      Shares set forth opposite their names forth on Exhibit
      A,
      as
      amended from time to time. Pubco shall give the Shareholder Agent at least
      as
      much notice of meetings of shareholders as it gives its shareholders generally.
      The Shareholder Agent shall promptly inform each Shareholder of each such
      meeting and of the matters to be considered at such meeting. The Shareholder
      Agent shall, in accordance with the instructions received from the Shareholders,
      direct the Escrow Agent in writing as to the exercise of voting rights
      pertaining to the Escrow Shares as to which such voting instructions have been
      received, and the Escrow Agent shall comply with any such written instructions.
      In the absence of such instructions, the Escrow Agent shall not vote any of
      the
      Escrow Shares. The Shareholder Agent shall have no obligation to solicit
      consents or proxies from the Shareholders for purposes of any such
      vote.

     

    4.2.    DIVIDENDS.
      Any cash, securities (other than Pubco Common Stock) or other property
      distributed as a dividend in respect of any Escrow Shares shall be paid by
      Pubco
      directly to the Shareholders.

     

    4.3.    CHANGE
      IN
      ESCROW SHARES. If, after the date of this Agreement, the Escrow Shares shall
      have been changed into a different number of shares or a different type or
      class
      of securities, by reason of any stock dividend, subdivision, reclassification,
      recapitalization, split, combination, merger or exchange of shares, such
      different number of shares or type or class of securities shall be held in
      the
      Escrow Account subject to the provisions of this Agreement to the same extent
      as
      the Escrow Shares, and the provisions of this Agreement shall be correspondingly
      adjusted to the extent appropriate to reflect equitably such stock dividend,
      subdivision, reclassification, recapitalization, split, combination, merger
      or
      exchange of shares.

     

    4.4.    TRANSFERABILITY.
      The interests of the Shareholder Agent and the Shareholders in the Escrow
      Account and in the Escrow Shares shall not be assignable or transferable, other
      than by operation of law. No transfer of any of such interests by operation
      of
      law shall be recognized or given effect until Pubco and Escrow Agent shall
      have
      received written notice of such transfer.

     

    4.5.    FRACTIONAL
      SHARES. No fractional shares of Pubco Common Stock shall be retained in or
      released from the Escrow Account pursuant to this Agreement. In connection
      with
      any release of Escrow Shares from the Escrow Account, any Shareholder who would
      otherwise be entitled to receive a fraction of a share of Pubco Common Stock
      (after aggregating all fractional shares of Pubco Common Stock issuable to
      such
      Shareholder) shall be paid by Pubco in cash the dollar amount (rounded to the
      nearest whole cent), without interest, determined by multiplying such fraction
      by the greater
      of (1) the Pubco PIPE Share Price, and (2) if the Pubco Common Stock is listed
      or quoted for trading on an exchange or quotation system, the average closing
      bid price (or last sale price) of the Pubco Common Stock for the twenty (20)
      trading days prior to the date such of such calculation, and
      such
      fraction of a share shall be returned to Pubco.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    4.6.    ESCROW
      SHARE REGISTRATION RIGHTS. In the event that following the earlier to occur
      of
      the expiration of the Pubco Lock-Up or the release of Escrow Shares pursuant
      to
Sections
      6.2,
      6.3
      or
6.4
      hereof,
      such Escrow Shares are not then freely tradable by the holders thereof, such
      holders shall have a one (1) time right to demand that Pubco file a registration
      statement (the "Pubco
      Escrow Shares Registration Statement"),
      covering the resale of such Escrow Shares at Pubco's expense. Such demand must
      be made no later than sixty (60) days prior to or one (1) year following the
      expiration date of the Pubco Lock-Up, or the date such Escrow Shares were
      released from Escrow Account and must be made in writing and signed by holders
      owning no less than 50.1% of all of the Escrow Shares not then freely tradable.
      Pubco will use its best efforts to cause such Pubco Escrow Shares Registration
      Statement to be declared effective by the Commission as soon as possible, but
      in
      no event later than 150 days from the date of such demand.

     

    SECTION
      5.  INDEMNIFICATION;
      CLAIM PROCEDURES

     

    5.1.    INDEMNIFICATION.
      Pursuant to Section
      7.5
      of the
      Merger Agreement, from and after the Closing Date, and for the one (1) year
      period following the Closing Date, those Escrow Shares issued or issuable to
      prior holders of Envirosystems Preferred Stock or Envirosystems Options and
      Warrants (such holders shall be referred to collectively as the “Indemnity
      Shareholders”
and
      such Escrow Shares shall be collectively referred to as the “Indemnity
      Escrow Shares”)
      shall
      be available to compensate each Indemnified Party for Losses incurred by such
      Indemnified Party resulting from a Damage Event. The Company, and the
      Shareholder Agent on behalf of the Shareholders, expressly agree that the
      Indemnity Escrow Shares (i) shall be security for such indemnity obligation,
      subject to the limitations and in the manner provided for in this Agreement
      and
      (ii) are subject to release to any Indemnified Party upon the terms set forth
      herein.

     

    5.2.    CLAIM
      PROCEDURE.

     

    (a)  If
      any
      Indemnified Party determines in good faith that there is or has been a Damage
      Event giving rise to an indemnification obligation under Section
      7.5
      of the
      Merger Agreement, and such Indemnified Party wishes to make a claim against
      the
      Indemnity Escrow Shares with respect to such possible Damage Event, then such
      Indemnified Party shall deliver to the Shareholder Agent (with a copy to the
      Escrow Agent) a written notice of such possible Damage Event (a "Claim
      Notice")
      setting forth (i) a brief description of the circumstances supporting such
      Indemnified Party's belief that such possible Damage Event exists or has
      occurred, and (ii) a non-binding, preliminary estimate of the aggregate dollar
      amount of all Losses that have arisen and may arise as a direct or indirect
      result of such possible Damage Event (such aggregate amount being referred
      to as
      the "Claim
      Amount").

     

    (b)  If
      the
      Shareholder Agent shall object in good faith to any portion of any Claim Amount
      specified in any Claim Notice, the Shareholder Agent shall, within thirty (30)
      calendar days after the deemed delivery by the Indemnified Party to the
      Shareholder Agent of such Claim Notice in accordance with Section
      13.4,
      deliver
      to the Escrow Agent (with a copy to the Indemnified Party) a certificate,
      executed by the Shareholder Agent (a "Certificate
      of Objections"):

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    

    (i)
      specifying each such amount to which the Shareholder Agent objects in good
      faith; and

    

    (ii)
      specifying in reasonable detail the nature and basis for each such good faith
      objection.

     

    (c)  If
      the
      Escrow Agent shall not have received a Certificate of Objections objecting
      to a
      Claim Amount within thirty (30) calendar days after delivery to the Shareholder
      Agent of a Claim Notice specifying such Claim Amount, the Shareholders and
      the
      Shareholder Agent shall be deemed to have acknowledged that the Claim Amount
      claimed on such Claim Notice is correct and final and the Escrow Agent shall,
      transfer to such Indemnified Party from the Indemnity Escrow Shares (such
      transfer to be applied and deducted from the Indemnity Escrow Shares pro rata
      in
      accordance with each Indemnity Shareholder's pro rata share of the Indemnity
      Escrow Shares) that number
      of
      Indemnity Escrow Shares having a value equal to the quotient of (i) the
      aggregate Losses suffered or incurred by such Indemnified Party, divided by
      (ii)
      the greater of (1) the Pubco PIPE Share Price, and (2) the average closing
      bid
      price (or last sale price) of the Pubco Common Stock for the twenty (20) trading
      days prior to the date such Losses were incurred (the “Escrow
      Share Value”).

     

    (d)  If
      a
      Certificate of Objections delivered by the Shareholder Agent in response to
      a
      Claim Notice contains instructions to the effect that Indemnity Escrow Shares
      having an Escrow Share Value equal to a specified portion (but not the entire
      amount) of the Claim Amount set forth in such Claim Notice are to transferred
      to
      an Indemnified Party, then (i) the Escrow Agent shall be authorized to transfer
      to such Indemnified Party that number of Indemnity Escrow Shares having an
      Escrow Share Value equal to such specified portion of such Claim Amount, and
      (ii) the procedures set forth in Section
      5.2(e)
      below
      shall be followed with respect to the remaining portion of such Claim
      Amount.

     

    (e)  If
      the
      Escrow Agent shall have received a Certificate of Objections within thirty
      (30)
      calendar days after delivery to the Shareholder Agent of a Claim Notice,
      disputing all or a portion of the Claim Amount set forth in such Claim Notice
      (such Claim Amount or the disputed portion thereof being referred to as the
      "Disputed
      Amount"),
      then,
      notwithstanding anything contained in Section
      6
      hereof,
      the Escrow Agent shall continue to hold in the Escrow Account (in addition
      to
      any other Escrow Shares permitted to be retained in the Escrow, whether in
      connection with any other dispute or otherwise), Escrow Shares having an Escrow
      Share Value equal to 100% of the Disputed Amount. Such Escrow Shares shall
      continue to be held in the Escrow Account until such time as (i) the applicable
      Indemnified Party and the Shareholder Agent execute a settlement agreement
      containing instructions regarding the release of such shares, and a copy of
      such
      settlement agreement is provided to Escrow Agent, or (ii) the Escrow Agent
      receives a copy of a final, non-appealable court order of a court of competent
      jurisdiction containing instructions to the Escrow Agent regarding the release
      of such Escrow Shares. The Escrow Agent shall thereupon release such Escrow
      Shares from the Escrow Account in accordance with the instructions set forth
      in
      such settlement agreement or court order.

     

    (f)  Notwithstanding
      anything to the contrary set forth in this Section
      5,
      the
      Escrow Agent shall not release to an Indemnified Party, and no Indemnified
      Party
      shall be entitled to receive, any Escrow Shares in respect of indemnification
      obligations under Section
      7.5
      of the
      Merger Agreement unless and until the aggregate Losses incurred by all
      Indemnified Parties resulting from one or more Damage Events exceeds the Damage
      Threshold of $100,000.

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    SECTION
      6.  PUBCO
      LOCK-UP; RELEASE OF SHARES TO SHAREHOLDERS

     

    6.1.    PUBCO
      LOCK-UP. 

     

    (a)  The
      Escrow Shares shall be held by the Escrow Agent and the Shareholders shall
      not,
directly
      or indirectly, offer, sell, pledge, hypothecate, contract to sell (including
      any
      short sale), grant any option to purchase, enter into any contract to sell
      or
      otherwise dispose of or transfer any Escrow Shares for the period commencing
      on
      the date hereof and ending on
      the
      date that is the later to occur of (a) twelve (12) months after the date of
      the
      Merger Closing and (b) nine (9) months from the date the Commission declares
      the
      Pubco Registration Statement effective (the "Pubco
      Lock-Up Termination Date"),
      provided, however, that in no event shall the Pubco Lock-Up Termination Date
      be
      later than fifteen (15) months after the Merger Closing and further provided
      that any such Escrow Shares held and reserved for issuance upon exercise of
      EnviroSystems Options and Warrants shall be held by the Escrow Agent until
      the
      latter of the Pubco Lock-Up Termination Date or the exercise or the date upon
      which all such EnviroSystems Options and Warrants have been exercised and/or
      have expired. 

     

    (b)  Upon
      any
      exercise of EnviroSystems Options and Warrants prior to the Pubco Lock-Up
      Termination Date, the shares of Pubco Common Stock issuable upon such exercise
      shall become Escrow Shares and shall be held by the Escrow Agent for the benefit
      of the holder exercising such EnviroSystems Option and Warrant and delivered
      to
      such Person as provided in Section
      6.2
      below.
      Upon any exercise of EnviroSystems Options and Warrants on or after the Pubco
      Lock-Up Termination Date, the shares of Pubco Common Stock issuable upon such
      exercise shall be delivered by the Escrow Agent to the holder exercising such
      EnviroSystems Option and Warrant. All cash or other consideration payable upon
      exercise of the EnviroSystems Options and Warrants shall be paid to the Escrow
      Agent for the benefit of the holders of EnviroSystems Preferred Stock. The
      Escrow Agent shall distribute all such consideration to the holders of
      EnviroSystems Preferred Stock pro rata as their percentage interests appear
      on
Exhibit
      C
      attached
      hereto at such time as such consideration becomes available by reason of the
      exercise of an EnviroSystems Option and Warrant. 

     

    6.2.    RELEASE
      UPON TERMINATION OF PUBCO LOCK-UP. On the first business day following the
      Pubco
      Lock-Up Termination Date, the Escrow Agent shall release to the Shareholders
      from the Escrow Account all Escrow Shares then held in the Escrow Account other
      than (i) Escrow Shares that at the time are the subject of a Claim Notice or
      Dispute Notice and (ii) Escrow Shares held for issuance upon exercise of
      EnviroSystems Options and Warrants From and after the Pubco Lock-Up Termination
      Date (i) any Escrow Shares remaining that are subject of a Claim Notice or
      Dispute Notice, and not held for issuance upon exercise of EnviroSystems Options
      and Warrants, shall be released upon the resolution of the dispute providing
      the
      basis for the Claim Notice or Dispute Notice in accordance with Section
      5.2(e), and
      (ii)
      Escrow Shares reserved for issuance upon exercise of EnviroSystems Options
      and
      Warrants shall be issued to the holders thereof upon their exercise. Any Escrow
      Shares remaining after the exercise and/or expiration of all EnviroSystems
      Options and Warrants shall be distributed to the holders of EnviroSystems
      Preferred Stock pro rata as their percentage interests appear on Exhibit
      C
      attached
      hereto.

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    6.3.    RELEASE
      UPON EXERCISE OF MV NANOTECH WARRANT BY MV NANOTECH AND SALE OF UNDERLYING
      SHARES. Notwithstanding anything to the contrary contained in Section
      6.1
      above,
      in the event that MV Nanotech exercises the MV Nanotech Warrant and sells the
      underlying shares of common stock, in full or any part, MV Nanotech shall
      promptly send notice of such exercise and sale to the Shareholder Agent with
      a
      Copy to the Escrow Agent (an “Exercise
      Notice”).
      Upon
      receipt of an Exercise Notice, the Escrow Agent shall release Escrow Shares,
      other than Indemnity Escrow Shares, which shall remain subject to Section
      5
      and
Section
      6
      hereof,
      to the Shareholders. At such time as any such Escrow Shares released pursuant
      to
      this Section
      6.3,
      no
      longer constitute Indemnity Escrow Shares subject to Section
      5,
      the
      Escrow Agent shall thereupon release such Escrow Shares to the
      Shareholders.

     

    6.4.    RELEASE
      UPON EXERCISE OF MV NANOTECH WARRANT BY TRANSFEREES AND SALE OF UNDERLYING
      SHARES. Notwithstanding anything to the contrary contained in Section
      6.1
      above,
      MV Nanotech may, at any time, sell, assign or otherwise transfer (collectively
      a
“Transfer”)
      all or
      a portion of the MV Nanotech Warrant and such Transfer of the MV Nanotech
      Warrant will not cause the Pubco Lock-Up to be released. In connection with
      any
      such Transfer, MV Nanotech shall require as a condition of Transfer that the
      transferee agree to provide an Exercise Notice in the event of an exercise
      of
      the MV Nanotech Warrant and sale of the underlying shares as provided in
Section
      6.3
      above.
      If a Transfer is to an Affiliate of MV Nanotech, any subsequent exercise of
      all
      or a portion of the MV Nanotech Warrant and sale of the underlying shares by
      the
      MV Nanotech Affiliate will cause the Pubco Lock-Up to be released in accordance
      with Section
      6.3
      above.
      If a Transfer is to a Person that is not an Affiliate of MV Nanotech, then
      upon
      any subsequent exercise of the MV Nanotech Warrant and sale of the underlying
      shares by such non-Affiliate of MV Nanotech, the Pubco Lock-Up shall be released
      as to such number of Escrow Shares as shall equal the product of (i) the number
      of shares of Pubco Common Stock then subject to the Pubco Lock-Up by, (ii)
      a
      fraction (a) the numerator of which equals the number shares of Pubco Common
      Stock sold following any such exercise and (b) the denominator of which is
      the
      total number of shares of Pubco Common Stock underlying the MV Nanotech
      Warrant). Any partial release of the Pubco Lock-Up shall be made pro rata among
      the Escrow Shares, excluding Indemnity Escrow Shares. 

     

    6.5.    RELEASE
      BY PUBCO. Notwithstanding anything to the contrary herein contained, the Pubco
      Lock-Up may be released by Pubco, subject to the express prior written consent
      of MV Nanotech, which may be withheld in MV Nanotech’s sole
      discretion.

     

    6.6.    PROCEDURES
      FOR RELEASING SHARES.

     

    (a)  In
      the
      event that the Escrow Agent is required to release Escrow Shares to the
      Shareholders in accordance with Sections
      6.2, 6.3, 6.4 or 6.5
      hereof,
      the Escrow Agent shall be authorized to transfer to each Shareholder, and shall
      so transfer and release to each Shareholder, that number of Escrow Shares,
      subject to Section
      4.6
      hereof,
      as listed opposite each Shareholders name on Exhibit A, as adjusted to the
      date
      of such release.

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

     

    (b)  Any
      release of Escrow Shares to the Shareholders pursuant to Section
      6
      hereof
      may be effected by mailing a stock certificate to the Shareholders certified
      mail, return receipt requested.

     

    6.7.    SALE
      OF
      ESCROW SHARES NOT RELEASED PURSUANT TO THIS SECTION 6. After the occurrence
      of
      an event described in Sections
      6.2, 6.3,
      and/or
6.4
      above,
      any Escrow Shares that are not released by the Escrow Agent pursuant to those
      Sections, Shareholder Agent may, upon written instructions from the Shareholders
      that beneficially own such Escrow Shares, sell such Escrow Shares on behalf
      of
      such Shareholders, provided that all proceeds from such sales are retained
      in
      the Escrow Account until such time as the underlying Escrow Shares would be
      eligible for release to the respective Shareholders pursuant to this Agreement.
      At such time, Escrow Agent shall release the escrowed funds to the proper
      Shareholders. The Shareholders, Shareholder Agent and Escrow Agent hereby
      expressly agree that Pubco shall have no direct and/or indirect liability and/or
      obligations whatsoever (including, but not limited to, indemnification rights
      and/or obligations provided in Section
      7
      of this
      Agreement), and hereby fully discharge and release Pubco from and hereby waive
      and relinquish, any and all claims, demands, contentions, and causes of action
      by reason of any matter or thing arising out of or in any way connected with
      or
      related to, directly or indirectly, any event relating to a sale of Escrow
      Shares.

     

    SECTION
      7.  FEES
      AND EXPENSES

     

    7.1.    ESCROW
      AGENT FEES AND EXPENSES. The Escrow Agent's fees, as set forth on Exhibit
      B
      hereto
      shall be, payable by Pubco. It is understood that the fees and usual charges
      agreed upon for services of the Escrow Agent shall be considered compensation
      for ordinary services as contemplated by this Agreement. In the event that
      the
      conditions of this Agreement are not promptly fulfilled, or if the Escrow Agent
      renders any service not provided for in this Agreement, or if the parties
      request a substantial modification of its terms, or if any controversy arises,
      or if the Escrow Agent is made a party to, or intervenes in, any litigation
      pertaining to this Agreement or its subject matter, the Escrow Agent shall
      be
      reasonably compensated for such extraordinary services and reimbursed for all
      reasonable costs, attorneys' fees, including allocated costs of in-house
      counsel, and expenses occasioned by such default, delay, controversy or
      litigation, and the Escrow Agent shall have the right to retain all documents
      and/or other things of value at any time held by the Escrow Agent in the Escrow
      Account until such compensation, fees, costs and expenses are paid. Any such
      extraordinary fees, costs and expenses shall be payable 50% by Pubco and 50%
      by
      the Shareholders pro rata by way of a sale of the Escrow Shares, which are
      not
      at that time Indemnity Escrow Shares, and disbursement of the proceeds from
      the
      Escrow Account at which time the amounts due by Shareholders hereunder shall
      then become due and payable. 

     

    7.2.    SHAREHOLDER
      AGENT'S FEES AND EXPENSES. All of Shareholder Agents (i) reasonable fees
      relating to its/his/her services performed in such capacity and (ii) all
      reasonable costs and expenses, including those of any legal counsel or other
      professional retained by the Shareholder Agent, in connection with the
      acceptance and administration of the Shareholder Agent's duties hereunder,
      up to
      a maximum of $25,000, shall be reimbursed to the Shareholder Agent by Pubco,
      upon presentment to Pubco of appropriate written documentation, reasonably
      acceptable to Pubco, itemizing such fees and expenses, with such supporting
      documentation that Pubco may reasonably request. Thereafter, any of such
      Shareholder Agent fees and expenses in excess of $25,000, shall be reimbursed
      to
      the Shareholder Agent by the Shareholders pro rata by way of a sale of the
      Escrow Shares, which are not at that time Indemnity Escrow Shares, and
      disbursement of the proceeds from the Escrow Account at which time the amounts
      due by the Shareholders hereunder shall then become due and payable. Pubco
      shall
      not be obligated to reimburse the Shareholder Agent for any fees charged or
      expenses (including attorneys' fees) incurred by the Shareholder Agent in
      connection with the Shareholder Agent's performance of his duties hereunder,
      in
      excess of $25,000. The Shareholder Agent hereby agrees that he shall not seek
      payment or reimbursement of any such fees and expenses in excess of $25,000,
      if
      any, from Pubco, the Surviving Corporation or the Company. Shareholder Agent
      agrees to only seek payment or reimbursement of all such fees and expenses,
      in
      excess of $25,000, from the Shareholders, or, in Shareholder Agent’s discretion,
      from the Escrow Account, provided, however, that if Shareholder Agent seeks
      reimbursement from the Escrow Account, the Escrow Shares that Shareholder Agent
      acquires as reimbursement shall remain subject to the Pubco-Lock
      Up.

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    

    7.3.    LIMITATION
      ON PUBCO LIABILITY. In the event of a sale of Escrow Shares pursuant to
Sections
      7.1
      and
7.2
      above,
      the Shareholders, Shareholder Agent and Escrow Agent hereby expressly agree
      that
      Pubco shall have no direct and/or indirect liability and/or obligations
      whatsoever (including, but not limited to, indemnification rights and/or
      obligations provided in Section
      7
      of this
      Agreement), and hereby fully discharge and release Pubco from and hereby waive
      and relinquish, any and all claims, demands, contentions, and causes of action
      by reason of any matter or thing arising out of or in any way connected with
      or
      related to, directly or indirectly, any event relating to a sale of Escrow
      Shares.

     

    SECTION
      8.  TERMINATION
      

     

    This
      Agreement shall terminate on the later of: (a) the date on which all
      EnviroSystems Options and Warrants have been exercised and/or have become
      unexercisable or (b) there are no Escrow Shares or other property remaining
      in
      the Escrow Account. 

     

    SECTION
      9.  ESCROW
      AGENT; LIMITATION OF ESCROW AGENT'S LIABILITY

     

    9.1.    DUTIES
      OF
      THE ESCROW AGENT. The Escrow Agent shall have no duties or responsibilities
      other than those expressly set forth in this Agreement, and no implied duties
      or
      obligations shall be read into this Agreement against the Escrow Agent. The
      Escrow Agent shall have no duty to enforce any obligation of any person, other
      than as provided herein. The Escrow Agent shall be under no liability to anyone
      by reason of any failure on the part of any party hereto or any maker, endorser
      or other signatory of any document or any other person to perform such person's
      obligations under any such document.

     

    9.2.    LIABILITY
      OF THE ESCROW AGENT.

     

    (a)  In
      performing any duties under this Agreement, the Escrow Agent shall not be liable
      to any party for consequential damages, (including, without limitation lost
      profits) losses, or expenses, except for gross negligence or willful misconduct
      on the part of the Escrow Agent. The Escrow Agent shall not incur any such
      liability for any act or failure to act made or omitted in good faith or for
      any
      action taken or omitted in reliance upon any instrument, including any written
      statement or affidavit provided for in this Agreement that the Escrow Agent
      shall in good faith believe to be genuine, nor will the Escrow Agent be liable
      or responsible for forgeries, fraud, impersonations, or determining the scope
      of
      any representative authority. In addition, the Escrow Agent may consult with
      legal counsel in connection with the Escrow Agent's duties under this Agreement
      and shall be fully protected in any act taken, suffered, or permitted by him/her
      in good faith in accordance with the advice of counsel. The Escrow Agent is
      not
      responsible for determining and verifying the authority of any person acting
      or
      purporting to act on behalf of any party to this Agreement. The Escrow Agent
      shall not be responsible for the authenticity of any instructions, or be in
      any
      way liable for any unauthorized instruction or for acting on such an
      instruction, whether or not the person giving the instruction was, in fact,
      an
      authorized representative of Pubco and the Shareholder Agent.

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

     

    (b)  In
      no
      event shall the Escrow Agent be liable to the parties for any consequential,
      special, or exemplary damages, including but not limited to lost profits, from
      any cause whatsoever arising out of, or in any way connected with acting upon
      instructions believed by the Escrow Agent to be genuine. 

     

    (c)  Pubco
      and
      the Shareholders agree, to the extent of 50% for Pubco and 50% for the
      Shareholders, to jointly and severally indemnify and hold the Escrow Agent
      harmless against any and all losses, claims, damages, liabilities, and expenses,
      including reasonable costs of investigation, counsel fees, including allocated
      costs of in-house counsel and disbursements that may be imposed on the Escrow
      Agent or incurred by the Escrow Agent in connection with the performance of
      its/his/her duties under this Agreement, including but not limited to any
      litigation arising from this Agreement or involving its subject matter, except
      in the case of the Escrow Agent's gross negligence or willful misconduct. Any
      such indemnity obligation of the Shareholders shall be borne by the Shareholders
      pro rata by way of a sale of the Escrow Shares and disbursement of the proceeds
      from the Escrow Account. 

     

    (d)  If
      any
      controversy arises between the parties to this Agreement, or with any other
      party, concerning the subject matter of this Agreement, its terms or conditions,
      the Escrow Agent will not be required to determine the controversy or to take
      any action regarding it. The Escrow Agent may hold all documents and may wait
      for settlement of any such controversy by final appropriate legal proceedings
      or
      other means as, in the Escrow Agent's discretion, the Escrow Agent may require,
      despite what may be set forth elsewhere in this Agreement. In such event, the
      Escrow Agent will not be liable for interest or damage. Furthermore, the Escrow
      Agent may at its option, file an action of interpleader requiring the parties
      to
      answer and litigate any claims and rights among themselves. In such event,
      the
      Escrow Agent is authorized to deposit with the clerk of the court all documents
      and funds held in the Escrow Account. Upon initiating such action, the Escrow
      Agent shall be fully released and discharged of and from all obligations and
      liability imposed by the terms of this Agreement.

     

    9.3.    SUCCESSOR
      ESCROW AGENT. In the event the Escrow Agent becomes unavailable or unwilling
      to
      continue in its capacity herewith, the Escrow Agent may resign and be discharged
      from its duties or obligations hereunder by giving the parties to this Agreement
      written notice 60 days' prior to the date when such resignation shall take
      effect. Pubco may appoint a successor Escrow Agent without the consent of the
      Shareholder Agent so long as such successor is a bank with assets of at least
      $100 million, and may appoint any other successor Escrow Agent with the consent
      of the Shareholder Agent, which consent shall not be unreasonably withheld.
      If,
      within such notice period, Pubco provides to the Escrow Agent written
      instructions with respect to the appointment of a successor Escrow Agent and
      directions for the transfer of any Escrow Shares then held by the Escrow Agent
      to such successor, the Escrow Agent shall act in accordance with such
      instructions and promptly transfer such Escrow Shares to such designated
      successor.

     

    9.4.    CHANGE
      OF
      CONTROL OF ESCROW AGENT. Any company into which the Escrow Agent may be merged
      or with which it may be consolidated, or any company to whom the Escrow Agent
      may transfer a substantial amount of its business, shall be the successor to
      the
      Escrow Agent without the execution or filing of any paper or any further act
      on
      the part of any of the parties, anything herein to the contrary
      notwithstanding.

     

    SECTION
      10.  SHAREHOLDER
      AGENT; LIMITATION OF SHAREHOLDER AGENT'S
      LIABILITY

     

    10.1.    DUTIES
      OF
      THE SHAREHOLDER AGENT. The Shareholder Agent shall have no duties or
      responsibilities other than those expressly set forth in this Agreement, and
      no
      implied duties or obligations shall be read into this Agreement against the
      Shareholder Agent. The Shareholder Agent shall have no duty to enforce any
      obligation of any person, other than as provided herein. The Shareholder Agent
      shall be under no liability to anyone by reason of any failure on the part
      of
      any party hereto or any maker, endorser or other signatory of any document
      or
      any other person to perform such person's obligations under any such
      document.

     

    10.2.    LIABILITY
      OF THE SHAREHOLDER AGENT.

     

    (a)  In
      performing any duties under this Agreement, the Shareholder Agent shall not
      be
      liable to any party for consequential damages, (including, without limitation
      lost profits) losses, or expenses, except for gross negligence or willful
      misconduct on the part of the Shareholder Agent. The Shareholder Agent shall
      not
      incur any such liability for any act or failure to act made or omitted in good
      faith or for any action taken or omitted in reliance upon any instrument,
      including any written statement or affidavit provided for in this Agreement
      that
      the Shareholder Agent shall in good faith believe to be genuine, nor will the
      Shareholder Agent be liable or responsible for forgeries, fraud, impersonations,
      or determining the scope of any representative authority. In addition, the
      Shareholder Agent may consult with legal counsel in connection with the
      Shareholder Agent's duties under this Agreement and shall be fully protected
      in
      any act taken, suffered, or permitted by him/her in good faith in accordance
      with the advice of counsel. The Shareholder Agent is not responsible for
      determining and verifying the authority of any person acting or purporting
      to
      act on behalf of any party to this Agreement. 

     

    (b)  Any
      and
      all losses, claims, damages, liabilities, and expenses, including reasonable
      costs of investigation, counsel fees, including allocated costs of in-house
      counsel and disbursements that may be imposed on the Shareholder Agent or
      incurred by the Shareholder Agent in connection with the performance of
      its/his/her duties under this Agreement, including but not limited to any
      litigation arising from this Agreement or involving its subject matter, except
      in the case of the Shareholder Agent's gross negligence or willful misconduct,
      shall be borne by the Shareholders pro rata by way of a sale of the Escrow
      Shares and disbursement of the proceeds from the Escrow Account.

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

     

    10.3.    SUCCESSOR
      SHAREHOLDER AGENT. In the event the Shareholder Agent becomes unavailable to
      continue in its capacity herewith, the Shareholder Agent may resign and be
      discharged from its duties or obligations hereunder by giving the parties to
      this Agreement written notice 60 days' prior to the date when such resignation
      shall take effect. After such notice and prior to the date when such resignation
      shall take effect, the Shareholders shall appoint a successor Shareholder Agent
      by majority vote of the Escrow Shares. 

     

    SECTION
      11.  RESOLUTION
      OF CONFLICTS

     

    11.1.    In
      case
      the Shareholder Agent shall timely object in writing to any claim or claims
      by a
      Pubco Indemnified Party made in any Claim Notice, as provided in Section
      5
      hereof,
      the Shareholder Agent and the Indemnified Party shall attempt in good faith
      for
      thirty (30) calendar days following delivery of the Certificate of Objections
      to
      agree upon the rights of the respective parties with respect to each of such
      claims. If the Shareholder Agent and the Indemnified Party should so agree,
      a
      memorandum setting forth such agreement shall be prepared and signed by both
      parties and shall be furnished to the Escrow Agent. The Escrow Agent shall
      be
      entitled to rely on any such memorandum and shall distribute amounts from the
      Escrow Fund in accordance with the terms thereof.

     

    11.2.    If
      no
      such agreement can be reached after good faith negotiation, either the Pubco
      Indemnified Party or the Shareholder Agent may, by written notice to the other,
      demand arbitration of the matter unless the amount of the damage or loss is
      at
      issue in pending litigation with a third party, in which event arbitration
      shall
      not be commenced until such amount is ascertained or both parties agree to
      arbitration; and in either such event the matter shall be settled by arbitration
      conducted by a single arbitrator. The arbitrator shall be jointly selected
      by
      the Indemnified Party and the Shareholder Agent within fifteen (15) calendar
      days after such written notice is sent, or absent such agreement, such
      arbitrator shall be appointed pursuant to the Commercial Arbitration Rules
      then
      in effect of the American Arbitration Association. The decision of the
      arbitrator as to the validity and amount of any claim in such Indemnification
      Notice shall be binding and conclusive upon the parties to this Agreement and
      the Escrow Agent shall be entitled to act in accordance with such decision
      and
      make or withhold payments out of the Escrow Fund in accordance
      therewith.

     

    11.3.    Any
      such
      arbitration shall be held in New York, New York under the Commercial Arbitration
      Rules then in effect of the American Arbitration Association. For purposes
      of
      this Section
      11,
      in any
      arbitration hereunder in which any claim or the amount thereof stated in the
      Indemnification Notice is at issue, the Pubco Indemnified Party shall be deemed
      to be the "Non-Prevailing Party" unless the arbitrator awards the Pubco
      Indemnified Party more than one-half (1/2) of the amount in dispute; otherwise,
      the Shareholder Agent (on behalf of the Shareholders) shall be deemed to be
      the
      Non-Prevailing Party. The Non-Prevailing Party to an arbitration shall pay
      its
      own expenses, the fees of the arbitrator, the administrative fee of the American
      Arbitration Association, and the expenses, including without limitation,
      attorneys' fees and costs, reasonably incurred by the other party to the
      arbitration. Judgment upon any award rendered by the arbitrators may be entered
      in any court having jurisdiction.

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

     

    SECTION
      12.  TAX
      MATTERS

     

    12.1.    The
      parties agree to treat the Escrow Shares in the Escrow Account as owned by
      the
      applicable Shareholders in all cases, and to file all tax returns on a basis
      consistent with such treatment.

     

    12.2.    All
      earnings on the Escrow Shares, if any, shall be treated as having been received
      by the applicable Shareholders for United States federal income tax purposes
      whether or not such amounts are currently distributed to the applicable
      Shareholders. Unless otherwise required by law, the parties agree that, for
      United States federal income tax purposes, the applicable Shareholders shall
      report their pro rata shares of any earnings as their income.

     

    12.3.    The
      Escrow Agent annually shall file any applicable information returns with the
      IRS
      and provide payee statements to the Shareholders documenting any earnings.
      The
      Shareholders shall provide to the Escrow Agent within thirty (30) days after
      the
      Closing Date all forms and information necessary to complete such information
      returns and payee statements (including, without limitation, IRS Forms W-8
      or
      W-9, as applicable). In the event that the Escrow Agent becomes liable for
      the
      payment of Taxes relating to Earnings or any payment made hereunder (including,
      but not limited to, withholding Taxes), the Escrow Agent may deduct such Taxes
      from the amounts payable to the Shareholders from the Escrow Account, if any,
      or, to the extent no such amounts are payable to the Shareholders, the Escrow
      Agent may collect such Taxes directly from the applicable Shareholders. Except
      as otherwise provided in this Agreement, the Escrow Agent shall have no
      obligation to prepare or file any other tax returns, nor to pay any taxes or
      estimated taxes.

     

    SECTION
      13.  GENERAL

     

    13.1.    INSPECTION.
      The Escrow Shares shall at all times be clearly identified as being held by
      the
      Escrow Agent hereunder. Any party hereto may at any time during the Escrow
      Agent's business hours (with reasonable notice) inspect any records or reports
      relating to the Escrow Shares.

     

    13.2.    CONTROLLING
      DOCUMENT. To the extent provisions of the Merger Agreement are inconsistent
      with
      the provisions contained herewith, the Merger Agreement shall supersede this
      Agreement and be the controlling document; provided, however, that the
      provisions of Section
      9
      of this
      Agreement shall control for all purposes with regard to the Escrow Agent's
      duties.

     

    13.3.    OTHER
      AGREEMENTS. Nothing in this Agreement is intended to limit any of Pubco's or
      any
      other Indemnified Party’s rights, or any obligation of the Company or any
      Shareholder, under the Merger Agreement or under any other agreement entered
      into in connection with the transactions contemplated by the Merger
      Agreement.

     

    13.4.    NOTICES.
      Any notice or other communication required or permitted to be delivered to
      any
      party under this Agreement shall be in writing and shall be deemed properly
      delivered, given and received when delivered (by hand, by registered mail,
      by
      courier or express delivery service or by facsimile) to the address or facsimile
      telephone number set forth beneath the name of such party below (or to such
      other address or facsimile telephone number as such party shall have specified
      in a written notice given to the other parties hereto). Such notices shall
      be
      deemed delivered hereunder: (a) if delivered by hand or facsimile, when
      delivered; (b) if delivered by registered mail, three (3) business days after
      deposit in the United States Mail; or (c) if delivered by courier or express
      delivery service, one (1) business day following deposit with the courier or
      delivery service:

     

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

    

    if
      to the
      Escrow Agent:

    

    Jerold
      K.
      Levien, Esq.

    81
      E.
      Hamilton Avenue

    Englewood,
      NJ 07631

    

    if
      to
      Pubco:

    

    Telecomm
      Sales Network, Inc.

    1900
      Wyatt Drive, Suite 15

    Santa
      Clara, CA 94054

    Attention:
      J. Lloyd Breedlove

    

    with
      a
      copy to:

    

    Gusrae,
      Kaplan, Bruno & Nusbaum PLLC

    120
      Wall
      Street

    New
      York,
      NY 10005

    Attention:
      Lawrence Nusbaum

     

    if
      to the
      Shareholder Agent:

    

    Daniel
      Ferguson

    17
      Bay
      Tree Lane

    Los
      Altos, CA 94022

    

    with
      a
      copy to:

    

    Perkins
      Coie LLP

    101
      Jefferson Drive

    Menlo
      Park, CA 94025

    Attention:
      Michael Glazer

     

    13.5.    COUNTERPARTS.
      This Agreement may be executed in two or more counterparts, each of which shall
      be deemed an original, and all of which together shall constitute one and the
      same instrument.

     

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

     

    13.6.    HEADINGS.
      The underlined headings contained in this Agreement are for convenience of
      reference only, shall not be deemed to be a part of this Agreement and shall
      not
      be referred to in connection with the construction or interpretation of this
      Agreement.

     

    13.7.    GOVERNING
      LAW; VENUE. This Agreement shall be governed by and construed in accordance
      with
      the internal laws of the State of New York without regard to the conflicts
      of
      laws principles thereof. Subject to Section
      11
      hereof,
      the parties hereto hereby irrevocably agree that any suit or proceeding arising
      directly and/or indirectly pursuant to or under this Agreement, shall be brought
      solely in a federal or state court located in the City, County and State of
      New
      York. By its execution hereof, the parties hereby covenant and irrevocably
      submit to the in personam
      jurisdiction of the federal and state courts located in the City, County and
      State of New York and agree that any process in any such action may be served
      upon any of them personally, or by certified mail or registered mail upon them
      or their agent, return receipt requested, with the same full force and effect
      as
      if personally served upon them in New York City. The parties hereto expressly
      and irrevocably waive any claim that any such jurisdiction is not a convenient
      forum for any such suit or proceeding and any defense or lack of in
      personam
      jurisdiction with respect thereto. In the event of any such action or
      proceeding, the party prevailing therein shall be entitled to payment from
      the
      other party hereto of its reasonable counsel fees and disbursements.

     

    13.8.    AMENDMENTS.
      This Agreement may not be amended, modified, altered or supplemented other
      than
      by means of a written instrument duly executed and delivered on behalf of Pubco,
      the Shareholder Agent and the Escrow Agent.

     

    13.9.    SEVERABILITY.
      In the event that any provision of this Agreement, or the application of any
      such provision to any Person or set of circumstances, shall be determined to
      be
      invalid, unlawful, void or unenforceable to any extent, the remainder of this
      Agreement, and the application of such provision to Persons or circumstances
      other than those as to which it is determined to be invalid, unlawful, void
      or
      unenforceable, shall not be impaired or otherwise affected and shall continue
      to
      be valid and enforceable to the fullest extent permitted by law.

     

    13.10.    ENTIRE
      AGREEMENT. This Agreement and the Merger Agreement and the other agreements
      contemplated in the Merger Agreement set forth the entire understanding of
      the
      parties relating to the subject matter hereof and thereof and supersede all
      prior agreements and understandings among or between any of the parties relating
      to the subject matter hereof and thereof.

     

    13.11.    CONSTRUCTION.

     

    (a)  For
      purposes of this Agreement, whenever the context requires: the singular number
      shall include the plural, and vice versa; the masculine gender shall include
      the
      feminine and neuter genders; the feminine gender shall include the masculine
      and
      neuter genders; and the neuter gender shall include the masculine and feminine
      genders.

     

    (b)  The
      parties hereto agree that any rule of construction to the effect that
      ambiguities are to be resolved against the drafting party shall not be applied
      in the construction or interpretation of this Agreement.

     

    (c)  As
      used
      in this Agreement, the words "include" and "including," and variations thereof,
      shall not be deemed to be terms of limitation, but rather shall be deemed to
      be
      followed by the words "without limitation."

     

    (d)  Except
      as
      otherwise indicated, all references in this Agreement to "Sections" are intended
      to refer to Sections of this Agreement.

     

     

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the date first
      above written.

    

    TELECOMM
      SALES NETWORK, INC.

     

    By:  
      /s/
      J.
      Lloyd Breedlove

    
      

    

    Name:
      J.
      Lloyd Breedlove

    Title:
      President

     

    Address:  
      1900
      Wyatt Drive, Suite 15

    Santa
      Clara, CA 94054

     

    ESCROW
      AGENT

     

    /s/
      Jerold K. Levien

    
      

    

    Name:
      Jerold K. Levien

     

    Address:   
      81
      E.
      Hamilton Avenue

    Englewood,
      NJ 07631

     

     

    ENVIROSYSTEMS,
      INC.

     

    By:  
      /s/
      Stephen A. Schneider

    
      

    

    Name:

    Title:

     

    Address:

     

    
      
         

      

      
        -15-

        
          

        

      

      
         

      

    

     

    SHAREHOLDER
      AGENT

     

    /s/
      Daniel Ferguson

    
      

    

    Name:
      Daniel Ferguson

    Title:

     

    Address:

     

    As
      to
      Sections 6.3 and 6.4 only:

     

    MV
      NANOTECH CORP.

     

    By:  
      /s/
      Robert Hersch

    
      
        

      

      Name:
        Robert Hersch

      Title:

       

      Address:

    

     

    
      
         

      

        -16-

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