Document:

Unassociated Document

    GEEKS
      ON CALL AMERICA, INC.

    PLACEMENT
      AGENT AGREEMENT

    

    
      	 	
              Dated
                as of October 22,
                2007

            

    

     

    First
      Montauk Securities Corp. 

    Parkway
      109 Office Center

    328
      Newman Springs Road

    Red
      Bank,
      New Jersey 07701

    

    Re:
      Proposed Private Placement

    

    Ladies
      and Gentlemen:

     

    This
      agreement (this “Agreement”) sets forth the terms upon which First Montauk
      Securities Corp. (the “Placement Agent”) shall be engaged by Geeks on Call
      America, Inc., a Virginia corporation (the “Company”) to act as exclusive
      placement agent in connection with the private offering (the “Offering”)
      pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Act”),
      and/or Regulation D promulgated thereunder, of units (the “Units”) of a
      to-be-named publicly traded entity (“PubCo”), which is anticipated to become the
      publicly-traded parent of the Company upon the Initial Closing of the Offering.
      Each Unit consists of 5,000 shares of its Common Stock (the “Shares”) and (ii)
      warrants (the “Warrants”) to purchase 2,500 Shares. The Common Stock and
      Warrants to be offered and sold are sometimes referred to herein as the
“Securities”. The Offering is being conducted on a “best efforts, all or none”
basis for a minimum of $3,000,000 of gross proceeds (the “Minimum
      Offering”)
      and up
      to $5,000,000 of gross proceeds. The maximum number of Units to be sold is
      subject to an increase of up to $1,000,000 of gross proceeds (the
“Over-Allotment Amount.”) upon the agreement of the Company and the Placement
      Agent (as defined below) for an aggregate maximum offering of $6,000,000 (as
      so
      increased, the “Maximum Offering.”). Offers and sales of the Securities shall be
      made solely to Accredited Investors (as defined in Regulation D).

    

    PubCo
      will acquire by merger the business and capital stock of the Company
      concurrently with the Initial Closing (as defined below) of the Offering. In
      conjunction with such merger, PubCo will issue shares of its common stock,
      warrants and options to the Company’s then-existing securityholders and to the
      Prospective Investors (as defined below) in this Offering, as further described
      in the Memorandum (as defined below). Upon the merger of a newly formed Delaware
      subsidiary of PubCo and the Company, PubCo shall assume and reconfirm all
      obligations, of the Company hereunder and where indicated, make additional
      representation and warranties as provided herein in accordance with the
      Assignment and Assumption Agreement attached hereto as Exhibit A.

    

    l.
      Appointment of Placement Agent.

    

    On
      the
      basis of the representations and warranties contained herein, and subject to
      the
      terms and conditions set forth herein, the Company hereby appoints First Montauk
      as its Placement Agent (and upon the Initial Closing, will be the exclusive
      placement agent of PubCo, which will assume this Agreement pursuant to the
      Assignment and Assumption Agreement) and grants to First Montauk the exclusive
      right to offer, as its agent, the Securities through the Offering Period (as
      defined below). The Company expressly acknowledges and agrees that First
      Montauk’s obligations hereunder are not on a firm commitment basis and that the
      execution of this Agreement does not constitute a commitment by First Montauk
      to
      purchase the Securities and does not ensure the successful placement of the
      Securities or any portion thereof. Further, First Montauk’s obligation to use
      its best efforts to assist the Company in the Offering is subject to the
      completion of a due diligence review of the Company, PubCo the industry and
      the
      market for such securities generally, as well as general market conditions.
      On
      the basis of such representations and warranties, and subject to such
      conditions, First Montauk hereby accepts such appointment and agrees to use
      its
      best efforts to secure subscriptions for the purchase of Securities up to the
      Maximum Offering. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2. Terms
      of
      the Offering. 

    

    (a)
      The
      Company has prepared and delivered to the Placement Agent copies of a
      Confidential Private Placement Memorandum dated as of October 22, 2007 (as
      may
      be amended from time to time, and including the exhibits thereto, the
“Memorandum”), relating to, among other things, the business of the Company, its
      financial condition, the Securities and the terms of Offering. 

    

    (b)
       
      Pursuant
      to the Offering as further described in the Memorandum the Offering shall
      consists of Units with an aggregate purchase price of up to $5,000,000,
      exclusive of the over-allotment option for up to an additional $1,000,000 of
      gross proceeds. The minimum subscription amount per prospective investor
      (“Prospective Investor”) shall be $50,000. The Warrants will have a term of five
      (5) years from the Initial Closing as determined in Section 3(a) below and
      will
      be exercisable at an exercise price of $3.00 per share and shall provide for
      “Cashless Exercise” upon certain conditions. The investors shall be entitled to
      such “registration rights”, anti-dilution protection, and other rights as are
      described in the Offering Documents (as defined below).

    

    (c)
       The
      Offering shall commence on the date hereof and shall expire on November 19,
      2007; provided however, that if the Minimum Offering has not been deposited
      into
      escrow on or before November 19, 2007, the Company and Placement Agent may
      agree
      to extend the Offering until January 19, 2008. Such period, as the same may
      be
      so extended, shall hereinafter be referred to as the “Offering Period.”

    

    (d)
       Each
      Prospective Investor who desires to purchase Securities shall deliver to the
      Placement Agent a fully executed Subscription Agreement, Investor Questionnaire
      , and such other agreements as are required to be signed in connection with
      the
      Offering (together with the Memorandum, Subscription Agreement, Investor
      Questionnaire, and other exhibits thereto, the “Offering Documents”) along with
      payment in the form of immediately available funds for the Units that such
      Prospective Investor desires to purchase. Upon receipt of the executed Offering
      Documents, the Placement Agent shall forward such documents to the Company
      for
      review, keeping a copy of such documents for its records. The Placement Agent
      shall not have any obligation to independently verify the accuracy or
      completeness of any information contained in any Subscription Agreement or
      the
      authenticity, sufficiency, or validity of any check delivered by any Prospective
      Investor in payment for Securities.

    

    (e)
       The
      Placement Agent shall deliver all subscription funds received from a Prospective
      Investor to Signature Bank as escrow agent for deposit in a segregated escrow
      account pursuant to an escrow deposit agreement among the Company, Placement
      Agent and Signature Bank, as escrow agent, and shall deliver the executed copies
      of the Subscription Agreement received from such Prospective Investor to the
      Company. All funds shall be held in the segregated non-interest-bearing escrow
      account pending acceptance of the subscriptions aggregating to the Minimum
      Offering and no funds shall be released without execution of a written notice
      by
      the Company and the Placement Agent. The Company shall notify the Placement
      Agent promptly of the acceptance or rejection or any subscription.

    

    (f)
       Subject
      to the approval of the Company and the conditions set forth herein, which
      approval shall not be unreasonably withheld, First Montauk may engage other
      persons selected by First Montauk to assist First Montauk in the Offering (each
      such broker/dealers being hereinafter referred to as a “Selling Group Member”)
      and First Montauk may allow such Selling Group Member such part of the
      compensation and payment of expenses payable to First Montauk under Section
      5
      hereof as First Montauk shall determine. Any such Selling Group Member shall
      be
      a member firm in good standing as a broker-dealer under the rules of FINRA.
      The
      Company hereby agrees to make such representations and warranties to, and
      covenants and agreements with, any Selling Group Member (including an agreement
      to indemnify such Selling Group Member on terms substantially similar to Section
      12 hereof) as provided herein.

    
      
        
        

      

      
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    3.
      Closings: Release of Funds.

    

    (a)
       The
      date
      that cleared funds representing the Minimum Offering together with completed
      subscription agreements are received by the parties (including the funds held
      in
      escrow), and Prospective Investors of the Minimum Offering reconfirm their
      investment decision, pursuant to the procedures described in the Memorandum,
      or
      reasonably soon thereafter, the parties shall hold an initial closing for
      acceptance of subscriptions by the Company and the release of funds from the
      escrow account (the “Initial Closing”). At least one (1) day prior to the
      release of funds, the Company and the Placement Agent shall send written notice
      to each other, which notice shall state the amount of funds to be released,
      the
      name and address of each subscriber whose subscription has been accepted by
      the
      Company, and the amount of each subscription.

    

    (b) At
      any
      time prior to the expiration of the Offering Period following the Initial
      Closing and after acceptance by the Company of subscriptions for the sale of
      additional Securities up to the Maximum Offering (or the Over Allotment Amount,
      as the case may be), one or more closings (each an “Interim Closing”) shall take
      place in the manner herein set forth with respect to the Initial Closing. The
      final Interim Closing to be held in accordance herewith shall be deemed the
      “Final Closing” and the date thereof shall be the ”Final Closing Date”.
      References herein to a “Closing” shall mean the Initial Closing, any Interim
      Closing or the Final Closing, as the context requires, and the date thereof
      shall be referred to as a ”Closing Date”. Prior to each Closing, Placement Agent
      will furnish to the Company appropriate records indicating the name and address
      of each person subscribing in the Offering and a copy of the executed
      Subscription Agreement for each subscriber. The Company shall have discretion
      as
      to whether or not to accept any Subscription Agreement; provided,
      however, any rejection of a subscription shall be in good faith on the basis
      of
      a reasonable business purpose 

    

    4. Representations
      and Warranties of the Placement Agent.

    

    The
      Placement Agent represents, warrants to and agrees with the Company as
      follows:

    

    (a) The
      Placement Agent is duly incorporated and validly existing and in good standing
      under the laws of the State of New York.

    

    (b) The
      Placement Agent is, and at the time of each Closing will be, duly registered
      as
      a broker/dealer pursuant to the Securities Exchange Act of 1934, as amended
      (the
“Exchange Act”) and a member in good standing of FINRA, and each of the
      Placement Agent’s representatives is, and at the time of each Closing will be,
      registered as an agent or salesman of the Placement Agent and in good standing
      with FINRA. 

    

    (c) Sales
      of
      Securities by the Placement Agent will only be made in such jurisdictions in
      which the Placement Agent is a registered broker-dealer or where an applicable
      exemption from such registration exists.

    
      
        
        

      

      
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    (d) Offers
      and sales of Securities by the Placement Agent will be made only in accordance
      with this Agreement and in compliance with the provisions of Rule 506 of
      Regulation D (it being understood and agreed that the Placement Agent shall
      be
      entitled to rely upon the information and statements provided by the Prospective
      Investors in the Subscription Agreement and Investor Questionnaires), and the
      Placement Agent will furnish to each Prospective Investor a copy of the Offering
      Documents prior to the receipt thereby of any Subscription Agreement from such
      Prospective Investor.

    

    (e) During
      the course of the Offering, the Placement Agent and its representatives will
      not
      make any untrue statement of a material fact or omit to state a material fact
      required to be stated, or necessary to make any statement made, by the Placement
      Agent or its representatives, not misleading concerning the Offering or any
      matters set forth in or contemplated by the Offering Documents (it being
      understood that the statements made in the Offering Documents are deemed to
      be
      made by the Company and not the Placement Agent, except for information set
      forth therein based upon written information provided by, or on behalf of,
      the
      Placement Agent or any of its representatives for inclusion
      therein).

    

    (f) Neither
      the Placement Agent nor any of its representatives or affiliates, has engaged
      or
      will engage, directly or indirectly, in any act or activity that may jeopardize
      the status of the Offering and sale of the Securities as an exempt transaction
      under the Act or under all applicable federal and/or state securities or blue
      sky laws of any jurisdiction in which the Securities may be offered or
      sold.

    

    5.
      Placement Agent Compensation. 

    

    (a) The
      Placement Agent shall be entitled, on each Closing Date, as compensation for
      its
      services as Placement Agent under this Agreement, to selling commissions equal
      to 10% of the gross proceeds received by the Company from the sale of the Units.
      All payments hereunder shall be effected at each Closing in immediately
      available funds. 

    

    (b)
       In
      addition to the forgoing cash compensation, the Placement Agent will be entitled
      to receive placement agent warrants to purchase a number of Shares in an amount
      equal to 8% of the number of shares of Common Stock included in the Units sold
      in the Offering and such Warrants shall have an exercise price equal to $3.00
      per share (the “Agent Warrants”). The Agent Warrants shall be on the same terms
      as the Investor Warrants and in the event that the Company shall not be in
      material compliance with its registration obligations set forth on Exhibit
      A of
      the Subscription Agreement, there the Agent Warrants shall be exercisable on
      a
“cashless exercise” basis on the same basis as available to investors. The
      shares of Common Stock underlying the Agent Warrants shall be included in the
      registration statement to be filed by the Company on behalf of the Prospective
      Investors in the Offering 9 subject to cutback in the event that the SEC shall
      determine that Rule 415 promulgated under the Act is applicable and that the
      number of shares included in the registration statement so filed are required
      to
      be reduced. The Placement Agent shall have the right, at its option, to
      request that the Agent Warrants be issued in the names of its officers,
      employees and registered representatives.

    

    (c)
       The
      Placement Agent shall also be entitled to receive, during the term of the
      Warrants, a warrant solicitation fee (“Solicitation Fee”) equal to five percent
      (5%) of the exercise price of the Warrants, which fee shall be payable within
      five business days of receipt by the Company of the exercise price from a holder
      of the Warrants. The Solicitation Fee shall be payable in accordance with the
      applicable rules of FINRA and the form of warrants issuable to investors shall
      disclose shall include appropriate disclosure regarding the payment of the
      Solicitation Fee upon terms acceptable to the Placement Agent. The Company
      shall
      not hire any other broker dealer firm other than the Placement Agent to assist
      it in connection with the solicitation of the exercise of the
      Warrants.

    
      
        
        

      

      
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    6.
      Representations and Warranties of the Company and PubCo. Each of the Company
      and/or PubCo, as the case may be, represents and warrants to, and agrees with,
      the Placement Agent that as of the date hereof and as of each Closing Date
      (except as disclosed in the Memorandum or contemplated therein):

    

    (a)
       Assuming
      the accuracy of the representations and warranties of the Prospective Investors
      set forth in the Subscription Agreement and Investor Questionnaire and the
      representations and warranties of the Placement Agent set forth herein, the
      Offering Documents (including, without limitation, the Company Documents as
      defined in clause (c) below) (i) contain at all times during the period from
      the
      date hereof to and including each Closing Date, all information required to
      be
      contained therein, if any, pursuant to a private offering to all “accredited
      investors“ under Rule 506 of Regulation D and all applicable federal and/or
      state securities and blue sky laws, and (ii) do not, and during such period
      will
      not, contain any untrue statement of a material fact or omit to state any
      material fact necessary in order to make the statements made therein, in the
      light of the circumstances in which they were made, not misleading. Each
      contract, agreement, instrument, lease, license, or other document required
      to
      be described in the Offering Documents shall be, and have been, accurately
      described therein in all material respects. 

    

    (b)
       The
      Memorandum does not and shall not contain any untrue statement of a material
      fact or omit to state any material fact necessary to make the statements made
      therein, in the light of the circumstances in which they were made, not
      misleading. 

    

    (c)
       The
      proposed authorized capital stock of PubCo is as set forth in the Memorandum
      as
      of the date set forth therein. All outstanding shares of capital stock of the
      Company are duly authorized, validly issued, fully paid and non-assessable.
      The
      Securities, when issued in accordance with the terms of the Offering, will
      be
      validly issued, fully paid and nonassessable and not subject to preemptive
      or
      any other similar rights and no personal liability will attach to the ownership
      thereof. The warrant shares, when issued in accordance with the terms of the
      Warrants, will be validly issued, fully paid and nonassessable and not subject
      to preemptive or any other similar rights and no personal liability will attach
      to the ownership thereof. 

    

    (d) Each
      statute, regulation, legal and governmental proceeding, contract, agreement,
      instrument, lease, license, or other document required to be described in the
      Memorandum has been accurately described therein in all material
      respects.

    

    (e) All
      prior
      offerings of the Company’s securities complied in all respects with the Act and
      the rules and regulations promulgated thereunder and all applicable blue sky
      laws. There are no existing claims, to the knowledge of the Company, which
      would
      require the Company to rescind or offer to rescind and outstanding securities
      of
      the Company. 

    

    (f) The
      Company and each controlled subsidiary (as defined below) is (a) a corporation
      duly organized, validly existing and in good standing under the laws of its
      state of their incorporation, has full power and authority to own or lease
      all
      of the assets owned or leased by each of them and to conduct their respective
      business as described in the Memorandum and (b) are duly qualified to do
      business and in good standing as a foreign corporation in all jurisdictions
      in
      which the nature of the activities conducted or the character of the assets
      owned or leased makes such qualification necessary, except where the failure
      to
      be so qualified would not have a material adverse effect on the Company’s
      presently conducted business (taken as a whole with the business of the
      Controlled Subsidiaries). Complete and correct copies of the certificate of
      incorporation and of the by-laws of the Company and its Controlled Subsidiaries
      as in effect on the date hereof have been delivered to First Montauk, and no
      changes therein will be made on or subsequent to the date hereof and prior
      to
      the Final Closing Date except as may be disclosed in the Offering Documents
      or
      required pursuant to this Agreement. For purposes hereof, the term “Controlled
      Subsidiaries” means any entity (whether a corporation, limited liability
      company, partnership or joint venture entity) of which the Company owns 50%
      or
      more of the voting securities or has the right to elect a majority of the Board
      of Directors (or similar group). 

    
      
        
        

      

      
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    (g)
       Since
      the
      dates as of which information is given in the Memorandum, other than as set
      forth or contemplated therein, (A) there has not been any material adverse
      change in the business, prospects, properties, management, financial condition
      or results of operations of the Company or its Controlled Subsidiaries, (B)
      the
      Company has not and will not have paid or declared any dividends or other
      distributions on its capital stock and (C) there has not been any change in
      the
      capital stock of the Company or any material change in the short-term or
      long-term debt of the Company or its Controlled Subsidiaries. 

    

    (h) The
      consolidated unaudited financial statements, together with related notes and
      schedules of the Company and its Controlled Subsidiaries, included as part
      of
      the Offering Documents (including the financial statements contained in the
      Company Documents), present fairly the financial position of the Company and
      its
      Controlled Subsidiaries in all material respects as of the respective dates
      and
      for the periods indicated therein. Except as stated in the Memorandum, the
      unaudited statements contained in the Offering Documents are consistent with,
      and have been prepared from the books and records kept by the Company in a
      manner consistent with past practice and fairly and accurately represent the
      financial condition of the Company. 

    

    (i) Except
      as
      described in the Memorandum, there is no action, suit, investigation or
      proceeding pending or, to the Company’s knowledge, threatened before or by any
      Federal or state court, commission, regulatory body, administrative agency
      or
      other governmental body, domestic or foreign, or arbitrator to which the Company
      or its Controlled Subsidiaries is or may become a party or of which any property
      of the Company or its Controlled Subsidiaries is subject or affected that (i)
      might affect the consummation of the transactions contemplated under this
      Agreement, including the issuance or validity of the Securities offered or
      (ii)
      would have a material adverse effect on the financial condition, properties,
      results of operations or businesses of the Company and its Controlled
      Subsidiaries, taken as a whole (“Material Adverse Effect”).

    

    (j) The
      Company has all approvals, licenses, franchises, authorizations and permits
      (collectively, “permits”) necessary under all applicable statutes, codes, rules,
      regulations, orders and decrees of governments or governmental bodies
      (collectively, “laws”), which are material to the ownership, lease or use of
      their respective properties or the conduct of their respective businesses as
      described in the Memorandum. The Company has received no notice of any
      proceedings relating to the revocation or modification of any such permits
      which, singly or in the aggregate, would have a Material Adverse Effect, and
      each of the Company and its Controlled Subsidiaries is in all material respects
      in compliance with such permits and laws.

    

    (k) The
      Company owns or is licensed to use all patents, patent applications, inventions,
      trademarks, trade names, applications for registration of trademarks,
      copyrights, know-how, trade secrets, licenses and rights in any thereof
      (“Proprietary Rights”) which are material to the business of the Company and its
      Controlled Subsidiaries taken as a whole as now conducted and as proposed to
      be
      conducted, in each case as described in the Memorandum. Except as described
      in
      the Memorandum:

    
      
        
        

      

      
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    (i)
      the
      Company has no knowledge of any, and the Company has not given or received
      any
      notice of any pending conflict with or infringement of, the rights of others
      with respect to any Proprietary Rights or with respect to any license of
      Proprietary Rights;

    

    (ii)
      no
      action, suit, arbitration, or legal, administrative or other proceeding, or
      domestic or foreign governmental investigation is pending or, to the best of
      the
      Company’s knowledge, threatened, which involves any Proprietary Rights and would
      have a Material Adverse Effect;

    

    (iii)
      the
      Company is subject to no judgment, order, writ, injunction or decree of any
      court or any Federal, state, local, foreign or other governmental department,
      commission, board, bureau, agency or instrumentality, domestic or foreign,
      or
      any arbitrator, which restricts or impairs the use of any such Proprietary
      Rights in a manner which would have a Material Adverse Effect on the use of
      any
      of the Proprietary Rights;

    

    (iv)
      no
      Proprietary Rights used by the Company and no services or products sold by
      the
      Company, conflict with or infringe upon, to the knowledge of the Company, any
      proprietary rights available to any third party;

    

    (v)
      the
      Company has entered into no consent, indemnification, forbearance to sue or
      settlement agreement with respect to Proprietary Rights other than in the
      ordinary course of business;

    

    (vi)
      to
      the best knowledge of the Company, no claims have been asserted by any person
      with respect to the validity of or the Company’s ownership of or right to use
      the Proprietary Rights and, to the best knowledge of the Company, there is
      no
      reasonable basis for any such claim;

    

    (vii)
      to
      the best knowledge of the Company, the Proprietary Rights are valid and
      enforceable and no registration relating thereto has lapsed, expired or been
      abandoned or canceled or is the subject of cancellation or other adversarial
      proceedings which would have a Material Adverse Effect, and any applications
      therefore are pending and are in good standing;

    

    (viii)
      the Company and its Controlled Subsidiaries have complied, in all material
      respects, with their respective contractual obligations relating to the
      protection of the Proprietary Rights used pursuant to licenses; and

    

    (ix)
      to
      the best knowledge of the Company, no person is infringing on or violating
      the
      Proprietary Rights owned or used by the Company or its Controlled
      Subsidiaries.

    

    (l)
       Except
      as
      described in the Memorandum, there are no contracts, agreements or
      understandings between the Company and any person granting such person the
      right
      to require the Company to file a registration statement under the Act with
      respect to any securities of the Company owned or to be owned by such person
      or
      to require the Company to include such securities in the securities being
      registered pursuant to any registration statement filed by the Company under
      the
      Act.

    

    (m) All
      offers and sales of securities of the Company issued during the three year
      period prior to the date hereof were at all relevant times duly registered
      or
      exempt from the registration requirements of the Act and the rules and
      regulations thereunder and were duly registered or the subject of an available
      exemption from the registration requirements of the applicable state securities
      or Blue Sky laws. The Company has not, directly or indirectly, solicited any
      offer to buy or offered to sell any securities during the twelve-month period
      ending on the date hereof which, to the knowledge of the Company, would be
      integrated with the Offering. 

    
      
        
        

      

      
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    (n) The
      Company is not (i) in violation of its certificate of incorporation or bylaws,
      (ii) to the best knowledge of the Company, in violation of any statute, law,
      rule, code, administrative regulation, ordinance, judgment, order or decree
      of
      any government, governmental instrumentality, court, domestic or foreign, or
      arbitration panel or other body applicable to it where such violation would
      have
      a Material Adverse Effect or (iii) to the best knowledge of the Company, in
      default in the performance or observance of any obligation, agreement, covenant
      or condition contained in any indenture, mortgage, deed of trust, voting
      agreement, voting trust agreement, loan agreement, bond, debenture, note or
      other evidence of indebtedness, lease, sublease, license agreement, contract
      or
      other agreement or instrument to which it is a party or by which it or any
      of
      its respective properties are bound or affected (“Contracts”), where such
      defaults, singly or in the aggregate, would have a Material Adverse Effect.
      To
      the knowledge of the Company, no other party under any Contract is in default
      in
      any material respect thereunder which affects the Company.

    

    (o) The
      Company has all requisite power and authority to execute, deliver and perform
      its obligations under this Agreement. This Agreement, has been or will be duly
      and validly authorized, executed and delivered by the Company, and each such
      agreement constitutes a legal, valid and binding agreement of the Company
      enforceable against the Company in accordance with its respective terms, except
      as rights to indemnity and contribution hereunder and thereunder may be limited
      by the securities laws and public policy of the United States and except as
      such
      enforceability may be limited by bankruptcy, insolvency, reorganization or
      similar laws or equitable principles affecting the enforcement of creditors'
      rights generally.

    

    (p) [intentionally
      omitted]

    

    (q) No
      consent, approval, authorization, license or order of or from, or registration,
      qualification, declaration or filing with, federal, state, local, foreign or
      other governmental authority or any person or court, administrative agency,
      or
      other body is required for the consummation of the transactions contemplated
      in
      this Agreement, or the Offering Documents, except as may have been made, are
      required to be made prior to the Initial Closing, or may be required to be
      obtained under any state securities or blue sky laws or pursuant to Regulation
      D.

    

    (r) The
      Company is in compliance in all material respects with all applicable federal,
      state and local environmental laws and regulations (collectively, the
“Environmental Laws”), except for any material noncompliance as may be described
      in the Memorandum, and to the best of the Company’s knowledge, there are no
      circumstances that would prevent, interfere with, or materially increase the
      cost of such compliance in the future. Except as set forth in the Offering
      Documents, there is no claim under any Environmental Law, including common
      law
      (“Environmental Claim”), pending or, to the knowledge of the Company, threatened
      against or affecting the Company and, to the best of the Company’s knowledge,
      there are no past or present actions, activities, circumstances, events or
      incidents, including, without limitation, releases of any material into the
      environment, that could form the basis of any Environmental Claim against or
      affecting the Company.

    

    (s) The
      Company has good and marketable title to all property owned by it, in each
      case
      free and clear of all liens, charges, encumbrances or restrictions except as
      described in the Offering Documents or such as do not materially affect the
      value of such property and do not interfere with the use made and proposed
      to be
      made of such property by the Company. Except as described in the Offering
      Documents, all material Contracts to which the Company is a party or by which
      the Company or any of its properties or assets are bound are valid, subsisting
      and enforceable and are in full force and effect.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    (t) The
      Company (A) has paid all federal, state, local and foreign taxes for which
      it is
      liable and has furnished all information returns it is required to furnish
      pursuant to the Internal Revenue Code of 1986, as amended, (B) has established
      adequate reserves for such taxes which are not due and payable and (C) does
      not
      have any tax deficiency or claims outstanding, proposed or assessed against
      it.

    

    (u) The
      Company maintains insurance of the types and in amounts which it deems adequate
      for its business taken as a whole, all of which are in full force and
      effect.

    

    (v) Other
      than as set forth herein or in the Offering Documents, there are no claims,
      payments, issuances, arrangements or understandings, whether oral or written,
      for services in the nature of a finder's or origination fee with respect to
      the
      sale of the Securities.

    

    (w) Neither
      the Company, nor to the best of the Company’s knowledge any of the Company’s
      officers, employees, agents or any other person acting on behalf of, at the
      direction of or for the benefit of the Company has, directly or indirectly,
      given or agreed to give any money, gift or similar benefit (other than legal
      price concessions to customers in the ordinary course of business) to any
      customer, supplier, employee or agent of a customer or supplier, or official
      or
      employee of any governmental agency (domestic or foreign) or instrumentality
      of
      any government (domestic or foreign) or any political party or candidate for
      office (domestic or foreign) or other person who was, is, or may be in a
      position to help or hinder the business of the Company (or assist the Company
      in
      connection with any actual or proposed transaction) which (a) might subject
      the
      Company or any other such person to any damage or penalty in any civil, criminal
      or governmental litigation or proceeding (domestic or foreign), (b) if not
      given
      in the past, might have had a Material Adverse Effect or (c) if not continued
      in
      the future, might result in a Material Adverse Effect. The Company's internal
      accounting controls are sufficient to cause the Company to comply with the
      Foreign Corrupt Practices Act of 1977, as amended. 

    

    (x) To
      the
      best knowledge of the Company, during the past five years, none of the current
      officers or directors of the Company have been:

    

    (i) The
      subject of a petition under the federal bankruptcy laws or any state insolvency
      law filed by or against them, or by a receiver, fiscal agent or similar officer
      appointed by a court for their business or property, or any partnership in
      which
      any or them was a general partner at or within two years before the time of
      such
      filing, or any corporation or business association of which any of them was
      an
      executive officer at or within two years before the time of such
      filing;

    

    (ii) Convicted
      in a criminal proceeding or a named subject of a pending criminal proceeding
      (excluding traffic violations and other minor offenses);

    

    (iii) The
      subject of any order, judgment, or decree not subsequently reversed, suspended
      or vacated, of any court of competent jurisdiction, permanently or temporarily
      enjoining any of them from, or otherwise limiting, any of the following
      activities:

    

    (iv) acting
      as
      a futures commission merchant, introducing broker, commodity trading advisor,
      commodity pool operator, floor broker, leverage transaction merchant, any other
      person regulated by the Commodity Futures Trading Commission, or an associated
      person of any of the foregoing, or as an investment adviser, underwriter, broker
      or dealer in securities, or as an affiliated person, director or employee of
      any
      investment company, bank, savings and loan association or insurance company,
      or
      engaging in or continuing any conduct or practice in connection with any such
      activity;

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    (v)
       engaging
      in any type of business practice; or

    

    (vi) engaging
      in any activity in connection with the purchase or sale of any security or
      commodity or in connection with any violation of federal or state securities
      law
      or federal commodity laws.

    

    (vii) the
      subject of any order, judgment or decree, not subsequently reversed, suspended
      or vacated of any federal or state authority barring, suspending or otherwise
      limiting for more than sixty (60) days their right to engage in any activity
      described in paragraph (c)(i) above, or be associated with persons engaged
      in
      any such activity;

    

    (viii) found
      by
      any court of competent jurisdiction in a civil action or by the Securities
      and
      Exchange Commission to have violated any federal or state securities law, and
      the judgment in such civil action or finding by the Commission has not been
      subsequently reversed, suspended or vacated; or

    

    (ix) found
      by
      a court of competent jurisdiction in a civil action or by the Commodity Futures
      Trading Commission to have violated any federal commodities law, and the
      judgment in such civil action or finding by the Commodity Futures Trading
      Commission has not been subsequently reversed, suspended or
      vacated.

    

    (x) found
      by
      a court or an administrative agency to have or is alleged to have violated
      any
      foreign securities laws.

    

    (y) Neither
      the Company nor, to the knowledge of the Company, any of its affiliates has,
      directly or through any agent, sold, offered for sale or solicited offers to
      buy
      any security of the Company, nor will any of the foregoing directly buy any
      security of the Company.

    

    (z) Neither
      the Company nor any of its officers, directors, or affiliates, has engaged
      or
      will engage, directly or indirectly, in any act or activity that may jeopardize
      the status of the Offering and sale of the Securities as an exempt transaction
      under the Act or under all applicable federal and/or state securities or blue
      sky laws of any jurisdiction in which the Securities may be offered or sold.
      

    

    (aa) The
      Company maintains a system of internal accounting and other controls sufficient
      to provide reasonable assurances that: (i) transactions are executed in
      accordance with management’s general or specific authorizations, (ii)
      transactions are recorded as necessary to permit preparation of reliable
      financial statements in conformity with United States generally accepted
      accounting principles and to maintain accountability for assets, (iii) access
      to
      assets is permitted only in accordance with management’s general or specific
      authorization, and (iv) the recorded accounting for assets is compared with
      existing assets at reasonable intervals and appropriate action is taken with
      respect to any material differences. 

    

    (bb) Neither
      the Company nor any of its Subsidiaries has violated or is currently in
      violation of any provisions of: (a) any federal or state environmental law,
      (b)
      Employee Retirement Income Security Act of 1974, as amended, including the
      regulations and published interpretations thereunder (“ERISA”), (c) the Bank
      Secrecy Act, as amended, (d) the Money Laundering Control Act of 1986, as
      amended, (e) the Foreign Corrupt Practices Act, or (f) the Uniting and
      Strengthening of America by Providing Appropriate Tools Required to Intercept
      and Obstruct Terrorism (“USA Patriot Act”) Act of 2001, and the rules and
      regulations promulgated under any such law, or any successor law, except for
      such violations which, singly or in the aggregate, would not have a Material
      Adverse Effect.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    (cc) [intentionally
      omitted] 

     

    (dd) No
      later
      than five (5) business days prior to the proposed consummation of the merger
      between the Company and a newly formed subsidiary of PubCo, the Company and
      PubCo shall deliver to the Prospective Investors a supplement to the Memorandum
      (which may be in the form of a Current Report on Form 8-K), which supplement
      shall contain: (i) a description of PubCo and the material terms of the proposed
      merger with the Company; (ii) description of consideration to be issued in
      connection with the merger; (iii) a pro forma capitalization chart reflecting
      the consummation of the merger in reasonable detail; (iii) terms of any
      employment or consulting arrangements entered into in connection with the
      merger; and (iv) pro forma financial statements of PubCo and the
      Company.

    

    7. Covenants
      of the Company. 

    

    The
      Company, covenants that it will: 

    

    (a)
      Notify First Montauk immediately, and confirm such notice in writing, (i) when
      any event shall have occurred during the period commencing on the date hereof
      and ending on the Final Closing Date, as a result of which the Offering
      Documents would include any untrue statement of a material fact or omit to
      state
      any material fact necessary to make the statements made therein, in the light
      of
      the circumstances under which they were made, not misleading, and (ii) of the
      receipt of any notification with respect to the modification, rescission,
      withdrawal, or suspension of the qualification or registration of the
      Securities, or of an exemption from such registration or qualification, in
      any
      jurisdiction. The Company will use its reasonable best efforts to prevent the
      issuance of any such modification, rescission, withdrawal, or suspension, and
      at
      Placement Agent's request, to use reasonable best efforts to obtain the lifting
      thereof as promptly as possible.

    

    (b)
      Not
      make any supplement or amendment to the Offering Documents unless such
      supplement or amendment complies with the requirements of the Act and Regulation
      D and the applicable federal and/or state securities and blue sky laws and
      unless the Placement Agent shall have approved of such supplement or amendment.
      If, at any time during the period commencing on the date hereof and ending
      on
      the Final Closing Date, any event shall have occurred as a result of which
      the
      Offering Documents contain any untrue statement of a material fact or omit
      to
      state any material fact necessary to make the statements made therein, in the
      light of the circumstances in which they were made, not misleading, or if,
      in
      the reasonable opinion of counsel to the Company or counsel to the Placement
      Agent, it is necessary at any time to supplement or amend the Offering Documents
      to comply with the Act, Regulation D, or any applicable securities or blue
      sky
      laws, the Company will promptly prepare an appropriate supplement or amendment
      (in form and substance satisfactory to the Placement Agent) which will correct
      such statement or omission or which will effect such compliance.

    

    (c)
      Deliver without charge to the Placement Agent such number of copies of the
      Offering Documents and any supplement or amendment thereto as may reasonably
      be
      requested by the Placement Agent.

    

    (d)
      Not,
      directly or indirectly, solicit any offer to buy from, or offer to sell to
      any
      person any Securities, or any other securities (whether debt or equity) of
      the
      Company except through the Placement Agent.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    (e)
      Use
      its best efforts to establish an exemption from qualification and registration
      under the securities or blue sky laws of the jurisdictions as may be required
      by
      the Placement Agent in connection with the offer and sale of the Securities
      and
      retain counsel in making any required filings; provided, however, that the
      Company will not be obligated to qualify to do business or register as a dealer
      in securities, or otherwise subject itself to general service of process, in
      any
      jurisdiction in which it is not so qualified. The Company shall cooperate with
      counsel to the Placement Agent to make a Form 99 (if necessary) and State Notice
      filing with the State of New York prior to the commencement of the Offering
      and
      timely file a Form D and such other required notice with all state blue sky
      authorities and the SEC related to the Offering. PubCo and the Company shall
      provide copies of all blue sky filings and the Form D as filed wit the SEC,
      to
      the Placement Agent within ten (10) days of each filing.

    

    (f)
      At
      all times during the period commencing on the date hereof and ending on the
      Final Closing Date, provide to each Prospective Investor or his Purchaser
      Representative (as defined in Regulation D), if any, on request, such
      information (in addition to that contained in the Offering Documents) concerning
      the Offering, the Company and any other relevant matters, as it possesses or
      can
      acquire without unreasonable effort or expense, and to extend to each
      Prospective Investor or his Purchaser Representative, if any, the opportunity
      to
      ask questions of, and receive answers from, the President or other executive
      officers of the Company concerning the terms and conditions of the Offering
      and
      the business of the Company and to obtain any other additional information,
      to
      the extent it possesses the same or can acquire it with reasonable effort or
      expense, and in conformity with existing laws and regulations of federal and
      state and other regulatory bodies and agencies as such Prospective Investor
      or
      Purchaser Representative may consider necessary in making an informed investment
      decision or in order to verify the accuracy of the information furnished to
      such
      Prospective Investor or Purchaser Representative, as the case may be.
      Notwithstanding, anything in this Section 7(f) to the contrary, the Prospective
      Investor and/or his Purchaser Representative, as the case may be, shall only
      rely on such information in making an investment decision, to the extent it
      has
      been provided to them in the Offering Documents or otherwise provided by the
      Company in writing.

    

    (g) [intentionally
      omitted] 

    

    (h)
      Not,
      directly or indirectly, engage in any act or activity which may jeopardize
      the
      status of the offering and sale of the Securities as exempt transactions under
      the Act or under the securities or blue sky laws of any jurisdiction in which
      the Offering maybe made. Without limiting the generality of the foregoing,
      and
      notwithstanding anything contained herein to the contrary, the Company shall
      not, directly or indirectly, engage in any offering of securities which, if
      integrated with the Offering in the manner prescribed by Rule 502(a) of
      Regulation D and applicable releases of the Commission, may jeopardize the
      status of the offering and sale of the Securities as exempt transactions under
      Regulation D.

    

    (i)
      [intentionally omitted]. 

    

    (j)
      Not,
      during the period commencing on the date hereof and ending on the Final Closing
      Date, issue any press release or other communication, or hold any press
      conference with respect to the Company, its financial condition, results of
      operations, business, properties, assets, or liabilities, or the Offering,
      without First Montauk’s prior written consent, not to be unreasonably withheld,
      except as required by applicable securities laws and except as may be related
      to
      the marketing and sale of its products in the normal course of business. The
      foregoing shall not prohibit the Company from holding informational meetings
      with accredited investors who have a pre-existing relationship with the Company
      during which the materials and information disseminated will be limited to
      the
      information contained in the Offering Documents or from making disclosures
      required by law. 

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    8.
      Payment of Expenses. The Company hereby agrees to pay all fees, charges, and
      expenses incident to the performance by the Company of its obligations
      hereunder, including, without limitation, all fees, charges, and expenses in
      connection with: (i) the preparation, printing, copying and mailing of the
      Offering Documents; (ii) filing fees for all blue sky filings and the fees
      of
      counsel to the Placement Agent for the legal work for all such filings, at
      the
      rate of $400 per state.; (iii) the filing fees for the offer and sale under
      the
      securities laws of such states and other jurisdictions as Placement Agent may
      designate; (iv) Placement Agent’s counsel fees for services rendered in
      connection with the Offering, in an amount equal to $35,000, of which $10,000
      has previously been paid prior to the date hereof; (v) the expense of the escrow
      account which expenses shall equal $3,500 and be payable to the escrow agent
      in
      advance; (vi) the filing fees payable to FINRA for any filings made pursuant
      to
      FINRA Rule 2710 as well as the expenses of the Placement Agent’s counsel in the
      amount of $10,000 for review of the registration statement to be filed after
      the
      Offering and the required filing under FINRA Rule 2710,which fees shall be
      paid
      prior to filing of the registration statement and (vii) a visit to the Company’s
      facilities (to include travel and lodging expenses). To the extent that
      Placement Agent wishes to incur any such costs or fees on the Company’s behalf,
      with the exception of FINRA Rule 2710, blue sky filing fees, and counsel fees
      as
      provided for in the preceding sentence, all such expenses must be approved
      by
      Company prior to their incurrence. 

     

    9. Conditions
      of Placement Agent’s Obligations.

    

    The
      obligations of the Placement Agent pursuant to this Agreement shall be subject,
      in its discretion, to the continuing accuracy in all material respects of the
      representations and warranties of the Company and PubCo contained herein and
      in
      each certificate and document contemplated under this Agreement to be delivered
      to the Placement Agent, as of the date hereof and as of each Closing Date,
      with
      respect to the performance in all material respects by each of the Company
      and
      PubCo of their respective obligations hereunder, and to the following
      conditions:

    

    (a)
      At
      the Initial Closing and each additional Closing, the Placement Agent shall
      have
      received the favorable opinion ( or a bringdown opinion for subsequent closings)
      of
      Haynes & Boone, LLP,
      counsel
      (which may rely upon other counsel for certain matters or an opinion of local
      counsel may be delivered in lieu thereof) for the Company and PubCo, dated
      each
      Closing Date, addressed to the Placement Agent, and in form and scope reasonably
      satisfactory to counsel for the Placement Agent, substantially to the effect
      that: 

    

    (i)
      Each
      of the Company and PubCo is a corporation validly existing, and in good standing
      under the laws of the State of its incorporation, with the requisite corporate
      power to own and operate its properties and assets, and to carry on its business
      as described in the Offering Documents.;

    

    (ii)
      Each
      of the Company and PubCo has all requisite corporate power and authority to
      execute, deliver, and perform this Agreement, and to consummate the transactions
      contemplated hereby. All necessary corporate proceedings of the Company and
      PubCo have been taken to authorize the execution, delivery, and performance
      by
      the Company of this Agreement, and the consummation of the transactions
      contemplated hereby. This Agreement has been duly authorized, executed, and
      delivered by the Company and PubCo, is the legal, valid, and binding obligation
      of the Company and PubCo, and is enforceable against the Company and PubCo
      in
      accordance with its terms, except as such enforceability may be limited by
      applicable bankruptcy, insolvency, reorganization, moratorium and other laws
      of
      general application now or hereafter in effect relating to or affecting the
      enforcement of creditors' right generally and the application of general
      equitable principles in any action, legal or equitable and then except, as
      to
      those provisions relating to indemnity or contribution, such opinion shall
      be
      limited as effected by any Federal or state securities laws regarding indemnity
      and/or contribution; 

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    (iii)
      upon receipt of payment therefore in accordance with the Offering Documents,
      the
      Securities shall be validly authorized, validly issued, fully paid, and
      nonassessable;

    

    (iv)
      assuming that (i) the Offering was made in the manner and by the means
      contemplated by the Offering Documents and the Units were sold only to
      accredited investors, (ii) a proper Form D is filed in accordance with Rule
      503
      of Regulation D, (iii) that the offer and sale of the Securities by the
      Placement Agent was made in accordance with Regulation D and the Offering
      Documents including, but not limited to, only accredited investors in compliance
      with Rule 506 of Regulation D without any advertising and/or general
      solicitation, (iv) the Placement Agent’s representations, warranties and
      covenants set forth herein are true and correct, (v) the Company’s
      representations, warranties and covenants set forth herein are true and correct,
      and (vi) the representations of the Prospective Investors in the Subscription
      Agreements and Investors Questionnaire signed by them are true and correct
      (which facts will not be independently verified by such counsel), the sale
      of
      Securities in the Offering is exempt from registration under the
      Act.

    

    (v)
      the
      merger between PubCo, a wholly-owned subsidiary o PubCo and the Company has
      been
      duly authorized by each of the Company and PubCo and has been consummated in
      accordance with its terms and in accordance with the laws of the States of
      their
      respective incorporation.

    

    In
      rendering such opinion, counsel for the Company may (A) base such opinions
      on
      such assumptions, qualifications, limitations and conditions as required by
      the
      opinion committee of such counsel, (B) rely as to matters of fact, on
      certificates of responsible officers of the Company; (C) to the extent they
      deem
      proper, upon written statements or certificates of officers of departments
      of
      various jurisdictions having custody of documents respecting the corporate
      existence or good standing of the Company, provided that copies of any such
      statements or certificates shall be delivered to counsel for the Placement
      Agent; and (D) rely upon such other opinions of other counsel to the Company
      as
      it deems necessary.

    

    (b)
      On or
      prior to the Initial Closing the Placement Agent shall have been furnished
      such
      information, documents, certificates, and opinions as it may reasonably require
      for the purpose of enabling it to review the matters referred to in Section
      6,
      and in order to evidence the accuracy, completeness, or satisfaction of any
      of
      the representations, warranties, covenants, agreements, or conditions herein
      contained, or as it may otherwise reasonably request.

    

    (c)
      At
      the Initial Closing and at each additional Closing, the Placement Agent shall
      have received one or more certificates of the chief executive officer and of
      the
      chief financial officer of the Company, dated the applicable Closing Date to
      the
      effect that, as of the date of this Agreement and as of the applicable Closing
      Date the representations and warranties of the Company contained herein were
      and
      are accurate, and that as of the Closing Date the obligations to be performed
      by
      the Company hereunder on or prior thereto have been fully performed. In
      addition, the parties shall deliver such other certificates or closing documents
      as are customarily used by the Placement Agent in offerings of this
      nature.

    

    (d)
      All
      proceedings taken in connection with the issuance, sale, and delivery of the
      Securities shall be satisfactory in form and substance to First Montauk and
      First Montauk’s counsel.

    

    (e)
      Concurrently with the Initial Closing, PubCo and the Placement Agent shall
      enter
      into the Assignment and Assumption Agreement substantially in the form of
      Exhibit A 

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    (f)
      Any
      certificate or other document signed by any officer of the Company and/or PubCo
      and delivered to First Montauk or to First Montauk counsel at a Closing shall
      be
      deemed a representation and warranty by the Company and/or PubCo hereunder
      as to
      the statements made therein.

    

    10. Conditions
      of Obligations of the Company. 

    

    The
      obligations of the Company pursuant to this Agreement shall be subject, in
      its
      discretion in good faith, to the performance by the Placement Agent in all
      material respects of its obligations hereunder. 

    

    11. Termination.

    

    If
      subscriptions for the Offering are not received into escrow during the Offering
      Period, or Placement Agent has committed a material breach of this Agreement,
      the Company may terminate the Agreement and the agency relationship created
      hereby upon prior written notice to First Montauk. First Montauk may terminate
      this Agreement and the agency created hereby for any reason upon written notice
      to the Company. In either case, neither party shall have any liability or
      continuing obligation to the other except that, regardless of which party elects
      to terminate, (i) the Company agrees to reimburse First Montauk for, or
      otherwise pay and bear, the expenses and fees to be paid and borne by the
      Company as provided for in Section 8 above to reimburse First Montauk for the
      full amount of its actual out-of-pocket expenses (which shall include, without
      limitation, the fees and disbursements of First Montauk’s counsel (up to the
      limits set forth in Section 8), travel and lodging expenses, mailing, printing
      and reproduction expenses, less amounts previously paid to First Montauk in
      reimbursement for such expenses, such expenses not to exceed the sum of$250
      individually without the approval of the Company and (ii) the provisions of
      paragraph 8 and the Indemnification Provisions in Section 12 shall remain in
      full force and effect. Upon any such termination, the Company agrees to cease
      to
      use any Offering materials that represent First Montauk as placement agent.
      In
      the event that any Securities are sold, Sections 5, 8, 12, 13 and 14 shall
      survive the termination of this Agreement. Furthermore, notwithstanding anything
      to the contrary in this Agreement, in the event that the Company refuses to
      complete the Offering without any failure of the condition set forth in Section
      10, then First Montauk shall be entitled to a fee of $150,000 which shall be
      deemed liquidated damages, plus actual legal fees and expenses incurred by
      First
      Montauk and First Montauk shall have not other rights hereunder.

    

    12. Indemnification
      and Contribution. 

    

    (a)
      The
      Company agrees to indemnify and hold harmless the Placement Agent, its officers,
      directors, partners, employees, agents, and counsel, and each person, if any,
      who controls the Placement Agent within the meaning of Section 15 of the Act
      or
      Section 20(a) of the Exchange Act , against any and all loss, liability, claim,
      damage, and expense whatsoever (which shall include, for all purposes of this
      Section 12, but not be limited to, reasonable attorneys' fees and any and all
      reasonable expense whatsoever incurred in investigating, preparing, or defending
      against any litigation, commenced or threatened, or any claim whatsoever and
      any
      and all amounts paid in settlement of any claim or litigation) as and when
      incurred arising out of, based upon, or in connection with (i) any untrue
      statement or alleged untrue statement of a material fact contained in the
      Offering Documents or in any document delivered or written statement made
      pursuant to Section 7(f), or in any application or other document or
      communication (it being understood that neither the Company nor any officer,
      director or employee shall provide any information to any Prospective Investor
      which is not contained or referred to in the Offering Documents) (in this
      Section 12 collectively called an "application") executed by or on behalf of
      the
      Company and/or PubCo or based upon written information furnished by or on behalf
      of the Company and/or PubCo filed in any jurisdiction in order to register
      or
      qualify the Securities under the blue sky or securities laws thereof or in
      order
      to secure an exemption from such registration or qualification or filed with
      the
      Commission; or any omission or alleged omission to state a material fact
      necessary to make the statements made therein, in the light of the circumstances
      in which they were made, not misleading, unless such statement or omission
      was
      made in reliance upon and in conformity with written information furnished
      to
      the Company as stated in Section 12(b) with respect to the Placement Agent
      expressly for inclusion in the Offering Documents or in any application, as
      the
      case may be; and (ii) any breach of any representation, warranty, covenant,
      or
      agreement of the Company and/or PubCo contained in this Agreement.
      The
      foregoing agreement to indemnify shall be in addition to any liability the
      Company and/or PubCo may otherwise have, including liabilities arising under
      this Agreement. 

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    If
      any
      action is brought against the Placement Agent or any of its officers, directors,
      partners, employees, agent, or counsel, or any controlling persons of the
      Placement Agent (an "indemnified party"), in respect of which indemnify may
      be
      sought against the Company and/or PubCo pursuant to the foregoing paragraph,
      such indemnified party or parties shall promptly notify the Company (the
      "indemnifying party") in writing of the institution of such action (but the
      failure so to notify shall not relieve the indemnifying party from any liability
      it may have unless the indemnifying party is prejudiced by such failure) and
      the
      indemnifying party shall promptly assume the defense of such action, including
      the employment of counsel (reasonably satisfactory to such indemnified party
      or
      parties) and payment of expenses. Such indemnified party shall have the right
      to
      employ its own counsel in any such case, but the fees and expense of such
      counsel shall be at the expense of such indemnified party unless the employment
      of such counsel shall have been authorized in writing by the indemnifying party
      in connection with the defense of such action, in which event such fees and
      expenses shall be borne by the indemnifying party. Anything in this paragraph
      to
      the contrary notwithstanding, the indemnifying party shall not be liable for
      any
      settlement of any such claim or action effected without its written consent.
      The
      Company and/or PubCo agrees promptly to notify the Placement Agent of the
      commencement of any litigation or proceedings against the Company or any of
      its
      officers or directors in connection with the sale of the Securities, the
      Offering Documents, or any application. 

    

    (b)
      The
      Placement Agent agrees to indemnify and hold harmless the Company, PubCo, their
      respective officers, directors, employees, agents, and counsel, and each other
      person, if any, who controls the Company and/or PubCo within the meaning of
      Section 15 of the Act or Section 20(a) of the Exchange Act, to the same extent
      as the foregoing indemnity from the Company to the Placement Agent in Section
      12(a), with respect to any and all loss, liability, claim, damage, and expense
      whatsoever (which shall include, for all purposes of this Section 12, but not
      be
      limited to, attorneys' fees and any and all expense whatsoever incurred in
      investigating, preparing, or defending against any litigation, commenced or
      threatened, or any claim whatsoever and any and all amounts paid in settlement
      of any claim or litigation) as and when incurred arising out of, based upon,
      or
      in connection with (i) statements or omissions, if any, made in the Offering
      Documents in reliance upon and in conformity with written information furnished
      to the Company and/or
      PubCo
      by or on
      behalf of Placement Agent expressly for inclusion in the Offering Documents;
      (ii) the failure of the Placement Agent or its representatives to comply with
      the provisions of Section 4(c) hereof or with the federal, blue sky or
      securities laws of the jurisdictions in which the Placement Agent solicits
      offers to buy or offers to sell any Securities; or (iii) any breach of any
      representation, warranty, covenant or agreement of the Placement Agent contained
      in this Agreement. If any action shall be brought against the Company and/or
      PubCo or any other person indemnified under this Section 12(b) in respect of
      which indemnity may be sought against the Placement Agent pursuant to this
      Section 12, the Placement Agent shall have the rights and duties given to the
      indemnifying party, and the Company and each other person so indemnified shall
      have the rights and duties given to the indemnified parties, by the provisions
      of Section 12(a) hereof.

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    

    (c)
      To
      provide for just and equitable contribution, if (i) an indemnified party makes
      a
      claim for indemnification pursuant to Section 12(a) or 12(b) hereof but it
      is
      found in a final judicial determination, not subject to further appeal, that
      such indemnification may not be enforced in such case, even though this
      Agreement expressly provides for indemnification in such case, or (ii) any
      indemnified or indemnifying party seeks contribution under the Act, the Exchange
      Act, or otherwise, then the Company and/or PubCo (including for this purpose
      any
      contribution made by or on behalf of any officer, director, employee, agent,
      or
      counsel of the Company and/or PubCo, or any controlling person of the Company
      and/or PubCo), on the one hand, and the Placement Agent (including for this
      purpose any contribution by or on behalf of an indemnified party), on the other
      hand, shall contribute to the losses, liabilities, claims, damages, and expenses
      whatsoever to which any of them may be subject, in such proportions as are
      appropriate to reflect the relative benefits received by the Company and PubCo,
      on the one hand, and the Placement Agent, on the other hand; provided, however,
      that if applicable law does not permit such allocation, then other relevant
      equitable considerations such as the relative fault of the Company and PubCo
      on
      the one hand and the Placement Agent on the other hand in connection with the
      facts which resulted in such losses, liabilities, claims, damages, and expenses
      shall also be considered. The relative benefits received by the Company, on
      the
      one hand, and the Placement Agent, on the other hand, shall be deemed to be
      in
      the same proportion as (x) the total proceeds from the Offering (net of
      compensation payable to the Placement Agent pursuant to Section 5 hereof but
      before deducting expenses) received by the Company and/or PubCo, and (y) the
      compensation received by the Placement Agent pursuant to Section 5 (a) hereof.
      

    

    The
      relative fault, in the case of an untrue statement, alleged untrue statement,
      omission, or alleged omission, shall be determined by, among other things,
      whether such statement, alleged statement, omission, or alleged omission relates
      to information supplied by the Company and/or PubCo or by the Placement Agent,
      and the parties' relative intent, knowledge, access to information, and
      opportunity to correct or prevent such statement, alleged statement, omission,
      or alleged omission. Each of the Company, PubCo and the Placement Agent agree
      that it would be unjust and inequitable if the respective obligations of the
      Company and the Placement Agent for contribution were determined by pro rata
      or
      per capita allocation of the aggregate losses, liabilities, claims, damages,
      and
      expenses or by any other method of allocation that does not reflect the
      equitable considerations referred to in this Section 12(c). In no case shall
      the
      Placement Agent be responsible for a portion of the contribution obligation
      in
      excess of the compensation received by it pursuant to Section 5 hereof. No
      person guilty of a fraudulent misrepresentation shall be entitled to
      contribution from any person who is not guilty of such fraudulent
      misrepresentation. For purposes of this Section 12(c), each person, if any,
      who
      controls the Placement Agent within the meaning of Section 15 of the Act or
      Section 20(a) of the Exchange Act and each officer, director, partners,
      employee, agent, and counsel of the Placement Agent, shall have the same rights
      to contribution as the Placement Agent, and each person, if any, who controls
      the Company and/or PubCo within the meaning of Section 15 of the Act or Section
      20(a) of the Exchange Act and each officer, director, partner, employee, agent,
      and counsel of the Company and/or PubCo, shall have the same rights to
      contribution as the Company, subject in each case to the provisions of this
      Section 12(c). Anything in this Section 12(c) to the contrary notwithstanding,
      no party shall be liable for contribution with respect to the settlement of
      any
      claim or action effected without its written consent. This Section 12(c) is
      intended to supersede any right to contribution under the Act, the Exchange
      Act,
      or otherwise.

    

    13. Solicitation
      Prohibition. 

    

    Each
      of
      the Company and PubCo agrees that, if it were to receive any additional capital
      within 24 months from date of the Initial Closing, from (A) any investor in
      the
      Offering, or (B) from any Source contacted by the Placement Agent for the
      purpose of investing in the Offering, the Company shall pay to First Montauk
      a
      cash fee in an amount equal to 10% of the amount raised at the closing of any
      such financing and warrants to purchase shares of Common Stock equal to 8%
      of
      the equity (or securities convertible into equity) sold in such financings.
      The
      Company also agrees that, for a period of three years from the date hereof,
      it
      shall not, directly or indirectly, solicit offers to buy or sell any securities
      of the Company or any other entity form or to any Source(s) contacted by Montauk
      who purchases securities in connection with the Securities financing, or provide
      the name of any such person to any other securities broker or dealer or selling
      agent. Additionally, in the event the Company or any affiliates, directly or
      indirectly, solicits offers to buy from or offers to sell to any Sources any
      securities, or provides the names of any Sources to any other securities broker
      or dealer or selling agent, and such Source purchases securities or purchases
      securities from any other securities broker or selling agent, the Company shall
      pay to the Placement Agent a cash fee in an amount equal to 10% of the aggregate
      purchase price of the securities so purchased by such Source and the Company
      shall pay to the Placement Agent an amount equal to 10% of the stock issued
      to
      such Source. As used herein, “Source” shall include, without limitation, any
      corporation, company, institution, partnership, individual and all of the
      Source’s affiliates that are directly or indirectly contacted by the Placement
      Agent for the purpose of investing in the Offering. Prior to the Final Closing,
      First Montauk will provide to the Company a list of all Sources. This provision
      shall survive the termination of this Agreement.

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    

    14. Right
      of
      First Refusal.

    

    The
      Company hereby grants to the Placement Agent an irrevocable right of first
      refusal for a period commencing on the date of the Initial Closing and ending
      12
      months from the effectiveness of the registration statement filed in connection
      with the Securities sold in the Offering to purchase for its account or to
      sell
      for the account of the Company or any subsidiary of or successor to the Company
      securities that the Company or any subsidiary or successor may seek to sell
      through an underwriter, placement agent or broker-dealer whether pursuant to
      registration under the Act or otherwise, or any securities sold directly by
      the
      Company. The Company and any subsidiary or successor will consult with the
      Placement Agent with regard to any such offering and will offer to the Placement
      Agent the exclusive opportunity to purchase or sell any such securities on
      terms
      not more favorable to the Company, any subsidiary or success than it or they
      can
      secure elsewhere as presented by a bona fide written offer from a registered
      broker-dealer firm or investor. If the Placement Agent fails to accept such
      offer within 15 business day after the mailing of a notice containing all of
      the
      material terms of such offer (including a copy of an executed term sheet or
      letter of intent) by overnight courier, then the Placement Agent shall have
      no
      further claim or right, with the exception of any other rights detailed in
      this
      Agreement with respect to the financing proposal contained in such notice.
      If
      the terms of such offer are subsequently modified in any material respect,
      the
      preferential right referred to herein shall apply to such modified proposal
      as
      if the original proposal had not been made. The Placement Agent’s failure to
      exercise its preferential right with respect to any particular proposal shall
      not affect its preferential rights relative to future proposals. The Company
      represents and warrants that there are presently no other rights of first
      refusal for future financings now outstanding. In the event the Company requests
      the Placement Agent waive the provisions of this Section 14, the Placement
      Agent
      shall agreement to such waiver provided the Company pays the Placement Agent
      a
      fee of $150,000 as a liquidated damages fee and the Placement Agent shall have
      not further rights hereunder. This paragraph shall survive the termination
      of
      this Agreement.

    

    15.
       Representations
      and Agreements to Survive Delivery.

    

    All
      representations, warranties, covenants, and agreements contained in this
      Agreement shall be deemed to be representations, warranties, covenants, and
      agreements at the Closing Date and, such representations, warranties, covenants,
      and agreements, including the indemnification and contribution agreements
      contained in Section 12, shall remain operative and in full force and effect
      regardless of any investigation made by or on behalf of the Placement Agent
      or
      any indemnified person, or by or on behalf of the Company or any person or
      entity which is entitled to be indemnified under Section 12(b), and shall
      survive termination of this Agreement or the issuance, sale, and delivery of
      the
      Securities. In addition, notwithstanding any election hereunder or any
      termination of this Agreement, and whether or not the terms of this Agreement
      are otherwise carried out, the provisions of Sections 5, 8, 11, 12, 13 and
      14
      shall survive termination of this Agreement and shall not be affected in any
      way
      by such election or termination or failure to carry out the terms of this
      Agreement or any part thereof.

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

    16.
      Notices.

    

    All
      communications hereunder, except as may be otherwise specifically provided
      herein, shall be in writing and, if sent to the Placement Agent, shall be mailed
      by certified mail, hand delivered, or sent by overnight courier service, to
      First Montauk Securities Corp., Parkway 109 Office Center, 328 Newman Springs
      Road, Red Bank, New Jersey 07701 Attention: Ernest Pellegrino, with a copy
      to
      Ellenoff Grossman & Schole LLP, 370 Lexington Avenue, 19th
      Floor,
      New York, New York 10017, Attention: Brian C. Daughney, Esq.; or if sent to
      the
      Company to Geeks On Call America, Inc., 814 Kempsville Road, Northfork, VA
      23502, Attention: Richard T. Cole, Chief Executive Officer, with a copy to
      Haynes and Boone, LLP, 153 East 53rd
      Street,
      49th
      Floor,
      New York, New York 10022, Attention: Harvey J. Kesner, Esq. All notices
      hereunder shall be effective upon delivery to the party to which it is
      addressed.

    

    17.
      Parties.

    

    This
      Agreement shall inure solely to the benefit of, and shall be binding upon,
      the
      Placement Agent and the Company and the persons and entities referred to in
      Section 12 who are entitled to indemnification or contribution, and their
      respective successors, legal representatives, and assigns (which shall not
      include any purchaser, as such, of Securities), and no other person shall have
      or be construed to have any legal or equitable right remedy, or claim under
      or
      in respect of or by virtue of this Agreement or any provision herein contained.
      This Agreement supercedes and replaces in full the Engagement Agreement and
      Term
      Sheet dated as of September 12, 2007.

    

    18.
      Governing Law. Submission to Jurisdiction.

    

    The
      validity and interpretation of this Agreement shall be governed by the laws
      of
      the State of New York applicable to agreements made and to be fully performed
      therein. Each of First Montauk and the Company (a) agrees that any legal suit,
      action or proceeding arising out of or relating to this Agreement shall be
      instituted exclusively in New York State Supreme Court, County of New York,
      or
      in the United States District Court for the Southern District of New York,
      (b)
      waives any objection which the Company may have now or hereafter to the venue
      of
      any such suit, action or proceeding, and (c) irrevocably consents to the
      jurisdiction of the foregoing named courts in any such suit, action or
      procedure. Each of the Company and First Montauk further agrees to accept and
      acknowledge service of any and all process which may be served in any suit,
      action or proceeding in the foregoing courts, and agrees that service of process
      upon the Company or First Montauk mailed by certified mail to the address set
      forth in Section 16 hereof shall be deemed in every respect effective service
      of
      process upon the Company in any such suit, action or proceeding. In the event
      of
      litigation between the parties arising hereunder, the prevailing party shall
      be
      entitled to costs and reasonable attorney's fees.

    

    [remainder
      of page intentionally left blank]

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    [signature
      page to Placement Agent Agreement]

    

    19.
      Counterparts.

    

    This
      Agreement may be executed in counterparts, each of which shall constitute an
      original and all of which, when taken together, shall constitute one agreement.
      The parties hereto agree to accept a facsimile transmission copy of their
      respective actual signatures as evidence of their actual signatures to this
      Agreement.

    

    20. No
      Fiduciary Relationship. 

    

    The
      Company acknowledges and agrees that: (i) the sale and issuance of the
      Securities pursuant to this Agreement is an arm’s-length commercial transaction
      between the  Company and the Placement Agent; (ii) in connection therewith
      and with the process leading to the Offering, the Placement Agent is acting
      solely as a principal and not the agent or fiduciary of the  Company; (iii)
      the Placement Agent has not assumed an advisory or fiduciary responsibility
      in
      favor of the Company or any subscriber or investor with respect to the Offering
      contemplated hereby or the process leading thereto, including any negotiation
      related to the pricing of the Securities; and (iv) the Company has consulted
      its
      own legal and financial advisors to the extent it has deemed appropriate in
      connection with this Agreement and the Offering

    

    If
      the
      foregoing correctly sets forth the understanding between us, please so indicate
      in the space provided below for that purpose, whereupon this letter shall
      constitute a binding agreement among us. 

    

    
      	
              Very
                truly yours,

            
	 
	
              GEEKS
                ON CALL AMERICA, INC.

            
	 	 
	
              By:
                

            	
              /s/
                Richard T. Cole

            
	 	
              Richard
                T. Cole

            
	 	
              Chief Executive Officer

            

    

    

    
      	
              Accepted
                as of the date

            
	
              first
                above written:

            
	 
	
              FIRST
                MONTAUK SECURITIES CORP.

            
	 
	
              By:

            	
              /s/
                Victor K. Kurylak

            
	
              Name:
                Victor K. Kurylak

            
	
              Title:
                President & CEO

            

    

    
      
        
        

      

      
        20PLACEMENT
      AGENT AGREEMENT

    AMENDMENT
      NO.1

     

    This
      Amendment No.1 to Placement Agent Agreement is made as of the 18th day of
      January, 2008 by and between Geeks on Call America, Inc., a Virginia
      corporation, having its principal offices at 814 Kempsville Road, Suite 104,
      Norfolk, Virginia 23502 (the “Company”), First Montauk Securities Corp. with its
      principal offices located at Parkway 109 Office Center, 328 Newman Springs
      Road,
      Red Bank, New Jersey (“FMSC” or the “Placement Agent”).

    

    WHEREAS,
      FMSC and the Company are parties to that certain Placement Agent Agreement
      dated
      as of October 22, 2007 by and between FMSC and the Company (“Original
      Agreement”); and

    

    WHEREAS,
      the parties desire to amend the Original Agreement to provide for the extension
      of the Offering Period, to provide for a consulting arrangement and to amend
      the
      provisions set forth in Section 14 of the Original Agreement related to the
      right of First Refusal. 

    

    NOW
      THEREFORE, for good and valuable consideration, the parties hereby agree as
      follows.

    

    1. All
      terms
      not defined herein shall have the meaning ascribed to such terms in the Original
      Agreement.

    

    2. Section
      2
      (c) of the Original Agreement is hereby amended and restated to
      read:

    

    The
      Offering shall commence on the date hereof and shall expire on January 31,
      2008.
      Such period, as the same may be so extended, shall hereinafter be referred
      to as
      the “Offering Period.” 

    

    3. The
      first
      sentence of Section 14 of the Original Agreement is hereby amended and restated
      to read as follows:

    

    The
      Company hereby grants to the Placement Agent an irrevocable right of first
      refusal for a period commencing on the date of the Initial Closing and ending
      on
      June 30, 2008 to purchase for its account or to sell for the account of the
      Company or any subsidiary of or successor to the Company securities that the
      Company or any subsidiary or successor may seek to sell through an underwriter,
      placement agent or broker-dealer whether pursuant to registration under the
      Act
      or otherwise, or any securities sold directly by the Company.

    

    The
      remainder of Section 14 shall remain as set forth in the Original
      Agreement.

    

    4. Effective
      upon the Final Closing, the Company and the Placement Agent shall enter into
      a
      consulting agreement, substantially in the form of the Consulting Agreement
      attached hereto as Exhibit A, to provide that the Placement Agent shall be
      retained by the Company to provide consulting services in consideration for
      the
      payment, payable and issuable at the Final Closing, of 150,000 restricted shares
      of the Common Stock of the Company and otherwise upon the terms and conditions
      contained therein.

    

    5. The
      parties shall provide a Supplement to the Memorandum advising investors of
      the
      change to the Offering Period as described herein and such other matters as
      the
      parties and their counsel may determine are necessary and advisable.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6. All
      other
      terms, covenants and conditions of the Original Agreement shall remain in full
      force and effect.  

    

    7. The
      validity and interpretation of this Agreement shall be governed by the laws
      of
      the State of New York applicable to agreements made and to be fully performed
      therein. 

    

    8.
      Counterparts.

    

    This
      Agreement may be executed in counterparts, each of which shall constitute an
      original and all of which, when taken together, shall constitute one agreement.
      The
      parties hereto agree to accept a facsimile transmission copy of their respective
      actual signatures as evidence of their actual signatures to this
      Agreement

    

    If
      the
      foregoing correctly sets forth the understanding between us, please so indicate
      in the space provided below for that purpose, whereupon this agreement shall
      constitute a binding agreement among us. 

    

    
      	
              Very
                truly yours,

            
	 	 
	
              GEEKS
                ON CALL AMERICA, INC.

            
	 	 
	
              By:  

            	
              /s/
                Richard T. Cole

            
	
               

            	
              Richard
                T. Cole

            
	 	
              Chief
                Executive Officer

            

    

    

    Accepted
      as of the date

    first
      above written:

    

    FIRST
      MONTAUK SECURITIES CORP.

     

    
      	By:
	
              /s/
                Victor K. Kurylak

            
	Name:
              Victor K. Kurylak
	Title:
              President & CEO

    

     

    
      
        
        

      

      
        2

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