NOTE PURCHASE AGREEMENT

1.    Issuance of the Notes and Warrants .

 1.1    Note Terms . Subject to the terms and conditions set forth in this Agreement, and in reliance upon the representations and warranties contained herein, the Companies, in consideration for the receipt of the Investment Amount, agree to issue to Purchasers, and each Purchaser, severally and not jointly, agrees to purchase and accept from the Companies a Note in the amount of its Face Amount. Interest on the Face Amount shall accrue and be payable monthly in arrears until March 31, 2008, at which time all accrued and unpaid interest, and the unpaid Face Amount, shall become immediately due and payable. The Notes will be convertible into shares of Class A-2 Convertible Preferred Stock of the Parent (the “Class A-2 Preferred Stock”) at a conversion price of $1.00 per share. The Notes shall be substantially in the form of Exhibit B .

(a)    Stock Purchase Warrants . Concurrently with the issuance of the Notes, the Companies hereby agree to issue to each Purchaser a Class A-2 Preferred Stock Purchase Warrants (each a “Warrant” and collectively, the “Warrants”) providing fifty percent (50%) warrant coverage with respect to the Face Amount of such Purchaser’s Note and having an Exercise Price of $1.00 per share of Class A-2 Preferred Stock. The Warrants shall be substantially in the form of Exhibit C .

 1.2    Closing .

(a)    The initial closing of the issuance of the Notes and the Warrants (the “Closing”) shall take place remotely via exchange of the documents and signatures by 5:00 p.m. P.D.T. on April 20, 2007, at such other time and place as the Companies and Purchasers mutually agree upon, orally or in writing (which time and place and designated as the “Initial Closing”). In the event there is more than one closing, the term “Closing” shall apply to each such closing unless otherwise specified.

(b)    At each Closing, the Companies shall deliver the Notes and the Warrants to Purchasers, and Purchasers shall pay to the Companies their respective Investment Amounts.

(c)    The date of the Closing is referred to herein as the Closing Date.

2.    Security Interest .

 2.1    Grant of Security Interest . To secure prompt payment to Purchasers of the Obligations, each Company hereby assigns, pledges and grants to Purchasers, to the extent of their respective interests, a continuing security interest in and Lien upon all of the Collateral. The security interest granted to Purchasers hereunder shall be of even priority and in pari passu with the security interest granted to Purchasers pursuant to that certain Note Purchase Agreement, dated as of October 6, 2006, as amended.

 2.2    Perfection of Security Interest . Each Company hereby authorizes Purchasers, to the extent of their respective interests, to file any financing statements, continuation statements or amendments thereto that (a) indicate the Collateral (i) as all assets and personal property of such Company or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC of such jurisdiction, or (ii) as being of an equal or lesser scope or with greater detail, and (b) contain any other information required by Part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement, continuation statement or amendment.

 2.3    Non-Exclusive License . Each Company hereby grants to Purchasers, to the extent of their respective interests, an irrevocable, non-exclusive license (exercisable upon the termination of this Agreement due to an occurrence and during the continuance of an Event of Default without payment of royalty or other compensation to such Company) to use, transfer, license or sublicense any Intellectual Property now owned, licensed to, or hereafter acquired by such Company, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded.

3.    Purchaser’s Representations and Warranties . Each Purchaser, severally but not jointly, hereby represents and warrants to the Companies as follows:

 3.1    Investment Purposes; Compliance With Securities Act . Purchaser is acquiring its Note, and upon conversion thereof, the shares of Class A-2 Preferred Stock issuable upon such conversion (the “Note Shares”), and the Warrants, and upon exercise thereof, the shares of Class A-2 Preferred Stock issuable upon such exercise (the “Warrant Shares”) (collectively, the “Securities”) for its own account, for investment only and not with a view towards, or in connection with, the public sale or distribution thereof, except pursuant to sales registered under or exempt from the Securities Act of 1933, as amended (the “Securities Act”).

 3.2    Accredited Purchaser Status . Purchaser is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D. Purchaser is a sophisticated purchaser and has such knowledge and experience in financial and business matters that Purchaser is capable of evaluating the merits and risks of an investment made pursuant to this Agreement.

 3.3    Reliance on Exemptions . Purchaser understands the Securities are being offered and sold to in reliance on specific exemptions from the registration requirements of the applicable United States federal and state securities laws and that the Companies are relying upon the truth and accuracy of, and each Purchaser’s compliance with, the representations, warranties, acknowledgments, understandings, agreements and covenants of Purchasers set forth herein in order to determine the availability of such exemptions and the eligibility of Purchasers to acquire the Securities.

 3.4    Information . Purchaser and the advisors of the Purchaser, if any, have been furnished with all material information relating to the business, finances and operations of the Company and material information relating to the offer and sale of the Securities that have been requested by the Purchaser. Purchaser and Purchaser’s advisors, if any, have been afforded the opportunity to ask all questions of the Companies as they have in their discretion deemed advisable.

 3.5    Transfer or Resale . Purchaser understands that: (i) none of the Securities has been registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless either (a) subsequently registered thereunder or (b) Purchaser shall have delivered to the Parent an opinion by counsel reasonably satisfactory to the Parent, in form, scope and substance reasonably satisfactory to the Parent, to the effect that the Note, the Note Shares, the Warrant or the Warrants Shares, as the case may be, to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, and (ii) except as expressly provided herein, neither the Companies nor any other person is under any obligation to register the Securities under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.

 3.6    Authority, Validity and Enforceability . This Agreement has been duly and validly authorized, executed and delivered by Purchaser and is the valid and binding agreement of Purchaser enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium, liquidation, or similar laws relating to, or affecting, generally the enforcement of creditors’ rights and remedies or by other equitable principles of general application.

4.    Representations and Warranties of the Company . Each Company, jointly and severally, hereby represents and warrants to Purchasers as follows:

 4.1    Organization and Qualification . It is a corporation, duly organized, validly existing and in good standing under the laws of its jurisdictions or organization. It has the corporate power and authority to own and operate its properties and assets and, insofar as it is or shall be a party thereto, (i) to execute and deliver this Agreement and the Ancillary Agreements, (ii) to issue and sell the Notes and the Notes Shares upon conversion of the Notes, (iii) to issue and sell the Warrants and the Warrant Shares upon exercise of the Warrants, and (iv) to carry out the provisions of this Agreement and the Ancillary Agreements and to carry on its business as presently conducted. It is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature or location of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so has not had, or could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 4.2    Capitalization .

(a)    The authorized capital stock of the Parent, as of the date hereof, consists of the following: 115,000,000 shares, of which 100,000,000 are shares of Common Stock, par value $0.001 per share, 5,410,575 shares of which are issued and outstanding, and [15,000,000] are shares of Convertible Preferred Stock, no par value, of which 12,000,000 shares of 6% Class A-1 Convertible Preferred Stock are authorized and 10,312,703 shares are issued and outstanding, 5,000,000 shares of 10% Class A Convertible Preferred Stock are authorized and 2,500,000 shares are issued and outstanding, and 2,500,000 shares of Class A-2 Convertible Preferred Stock are authorized and no shares are issued and outstanding.

(b)    Except as disclosed on Schedule 4.2 , other than: (i) the shares reserved for issuance upon the Parent’s stock option plans; and (ii) shares which may be issued pursuant to this Agreement and the Ancillary Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or arrangements or agreements of any kind for the purchase or acquisition from the Companies of any of its securities. Except as disclosed on Schedule 4.2 , neither the offer, issuance or sale of any of the Notes or Warrants or the issuance of any of the Note Shares or Warrant Shares, nor the consummation of any transaction contemplated hereby will result in a change in the price or number of any securities of the Companies outstanding, under anti-dilution or other similar provisions contained in or affecting any such securities.

(c)    All issued and outstanding shares of the Companies’ Common Stock and Preferred Stock: (i) have been duly authorized and validly issued and are fully paid and non-assessable; and (ii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities.

(d)    The rights, preferences, privileges and restrictions of the shares of Common Stock and Preferred Stock are as stated in the Certificate of Incorporation, as amended by Certificate(s) of Designation (collectively, the “Charter”) of the Companies. The Note Shares and the Warrant Shares have been duly and validly reserved for issuance. When issued in compliance with the provisions of this Agreement and the Parent’s Charter, the Note Shares and the Warrant Shares will be validly issued, fully paid and non-assessable and will be free of any liens or encumbrances; provided, however, that such Note Shares and Warrant Shares may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed.

 4.3    Authorization; Binding Obligations . All corporate action on its part (including its officers and directors) necessary for the authorization of this Agreement and the Ancillary Agreements, the performance of all of its obligations hereunder and under the Ancillary Agreement on the Closing Date and, the authorization, issuance and delivery of the Notes and the Warrants have been taken or will be taken prior to the Closing Date. This Agreement and the Ancillary Agreements, when executed and delivered and to the extent it is a party there, will be its valid and binding obligations enforceable against it in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting the enforcement of creditors’ rights; and (ii) general principals of equity that restrict the availability of equitable or legal remedies. The issuance of the Notes and the subsequent conversion of the Notes for the Note Shares is not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with. The issuance of the Warrants and the subsequent exercise of the Warrants for the Warrant Shares is not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with.

 4.4    Liabilities . Neither it nor any of its Subsidiaries has any liability, except current liabilities incurred in the ordinary course of business and liabilities disclosed in any Exchange Act Filings.

 4.5    Agreements . Except as set forth on Schedule 4.5 or as disclosed in any Exchange Act Filings:

(a)    There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which it or any of its Subsidiaries is a party or to its knowledge by which it is bound which may involve: (i) obligations (contingent or otherwise) of, or payments to, it or any of its Subsidiaries in excess of $50,000 (other than obligations of, or payments to, it or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) the transfer or license of any patent, copyright, trade secret or other proprietary right to or from it (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, manufacture or distribution or its or any of its Subsidiaries’ products or services; or (iv) indemnification by it or any of its Subsidiaries with respect to infringements of proprietary rights.

(b)    Since December 31, 2006 (the “Balance Sheet Date”) neither it nor any of its Subsidiaries has: (i) declared or paid any dividend or authorized or made any distribution upon or with respect to any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or other liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate, except for draw downs under the existing credit facilities provided by Laurus Master Fund, Ltd. (“Laurus”) and Horizon Financial Services Group USA (“Horizon”); (iii) made any loans or advances to any Person not in excess, individually or in the aggregate, of $100,000, other than ordinary course advances for travel expenses; or (iv) sold, exchanged or otherwise disposed or any of its assets or rights, other than the sale of its inventory in the ordinary course of business.

 4.6    Title to Properties and Assets; Liens, Etc . Except as set forth on Schedule 4.6 , it and each of its Subsidiaries has good and marketable title to its and their respective properties and assets, and good title to its and their leasehold interests, in each case subject to no Liens. All facilities, Equipment, Fixtures, vehicles and other properties owned, leased or used by it or any of its Subsidiaries are in good operating condition and repair and are reasonably fit and usable for the purposes for which they are being used. Except as set forth on Schedule 4.6 , it and each of its Subsidiaries is in compliance with al material terms of each lease to which it is a party or otherwise bound.

 4.7    Intellectual Property .

(a)    It and each of its Subsidiaries owns or possesses sufficient legal rights to all Intellectual Property necessary for their respective businesses as now conducted and, to its knowledge as presently proposed to be conducted, without any known infringement of the right of others. There are no outstanding options, licenses or agreements of any kind relating to its or any of its Subsidiaries’ Intellectual Property, nor is it or any of its Subsidiaries bound by or a party to any options, licenses or agreements of any kind with respect to the Intellectual Property of any other Person other than such licenses or agreements arising from the purchase of “of the shelf” or standard products.

(b)    Neither it nor any of its Subsidiaries has received any communication alleging that it or any of its Subsidiaries has violated the Intellectual Property or other proprietary rights or any other Person, nor is it or any of its Subsidiaries aware of any basis therefore.

(c)    Neither it nor any of its Subsidiaries believes it is or will be necessary to utilize any inventions, trade secrets or proprietary information of any of its employees made prior to their employment by it or any of its Subsidiaries, except for inventions, trade secrets or proprietary information that have been rightfully assigned to it or any of its Subsidiaries.

 4.8    Compliance with Other Instruments . Neither it nor any of its Subsidiaries is in violation or default of (i) any term of its Charter or Bylaws, or (ii) any provisions of any indebtedness, mortgage, indenture, contract, agreement, or instrument to which it is a party or by which it is bound or any judgment, decree, order or writ, which violation or default, in the cause of this clause (ii) has had, or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. The execution, delivery and performance of and compliance with this Agreement and the Ancillary Agreements to which it is a party, and the issuance of the Notes and the Warrants and the other Securities each pursuant hereto and thereto, will not, with or without the passage of time or giving of notice, result in any such material violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any Lien upon any of its or any of its Subsidiary’s properties or assets or the suspension, revocation, impairment, forfeiture or non-renewal of any permit, license, authorization or approval applicable to it or any of its Subsidiaries, their businesses or operations or any of their assets or properties.

 4.9    Compliance with Laws; Permits . Neither it nor any of its Subsidiaries is in violation of the Sarbanes-Oxley Act of 2002 or any regulation or rule promulgated thereunder or any rule or regulation related thereto adopted at any time by the Securities and Exchange Commission (the “SEC”) or any other applicable statute, rule, regulation, order or restriction of any domestic or foreign government or any instrumentality or agency thereof in respect of the conduct of its business or the ownership of its properties which has had, or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. No governmental orders, permissions, consents, approvals or authorizations are required to be obtained and no registration or declarations are required to be filed in connection with the execution and delivery of this Agreement and any Ancillary Agreement and with the issuance of any of the Securities, except as such as have been duly and validly obtained or file, or with respect to any filings that must be made after the Closing Date, as will be filed in a timely manner. It and each of its Subsidiaries has all material franchises, permits, licenses and any similar authority necessary for the conduct of its business as now being conducted by it, the lack of which could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 4.10    SEC Reports . Except as set forth on Schedule 4.10 , the Companies have filed all proxy statements, reports and other documents required to be filed by it under the Securities Exchange Act of 1934 as amended (the “Exchange Act”). The Companies have furnished, or when they are filed will furnish, Purchasers with copies of: (i) its Annual Report on Form 10-K for the fiscal year ended December 31, 2006, and (ii) its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2007, (collectively, the “SEC Reports”). Except as set forth on Schedule 4.10 , each SEC Report was, at the time of its filing, in substantial compliance with the requirements of its respective form and none of the SEC Reports, nor the financial statements (and the notes thereto) included in the SEC Reports, as of their respective filing dates, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Such financial statements have been prepared in accordance with GAAP applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed) and fairly present in all material respects the financial condition, the results of operations and cash flows of the Companies and Subsidiaries, or a consolidated basis, as of, and for, the periods presented in each such SEC Report.

 4.11    Absence of Certain Changes . Since December 31, 2006, there has been no material adverse change in the business, properties,  operation, financial condition, results of operations or prospects of the Companies.

 4.12    Absence of Litigation . Except as set forth on Schedule 4.12 , there is no action, suit, proceeding, inquiry or investigation before or by any court, public board or body pending or, to the knowledge of the Company, threatened against or affecting the Company, wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect or which would adversely affect the validity or enforceability of, or the authority or ability of the Company to perform its obligations under, this Agreement or any of the documents contemplated herein.

 4.13    Registration Rights . Except as set forth on Schedule 4.13 , and except as disclosed in Exchange Act Filings, neither it nor any of its Subsidiaries is presently under any obligation, and neither it nor any of its Subsidiaries has granted any rights, to register any of its or any of its Subsidiaries’ presently outstanding securities or any of its securities that may hereafter be issued.

 4.14    Valid Offering . Assuming the accuracy of the representations and warranties of Purchasers contained in this Agreement, the offer and issuance of the Notes and the Warrants, the offer and issuance of the Note Shares upon the conversion of the Notes, and the offer issuance of the Warrant Shares upon exercise of the Warrants, will be exempt for the registration requirements of the Securities Act, and will have been registered or qualified (or exempt from registration and qualification) under the registration, permit or qualification requirement of all applicable state securities laws.

 4.15    No Integrated Offering . Neither it nor any of its subsidiaries or Affiliates, nor any Person acting on its or their behalf, has directly or indirectly made ay offers or sales of any security or solicited any offers to buy any security under circumstances that would cause the offering of the Securities pursuant to this Agreement or any Ancillary Agreement to be integrated with prior offerings by it for purposes of the Securities Act which would prevent it from issuing such Securities, or any of them, pursuant to Rule 506 under the Securities Act, or any applicable exchange-related stockholder approval provisions, nor will it or any of its Affiliates or Subsidiaries take any action or steps that would cause the offering of the Securities to be integrated with other offerings.

 4.16    Stop Transfer . The Securities are restricted securities as of the date of this Agreement. Neither Company will issue any stop transfer order or other order impeding the sale and delivery of any of the Securities at such time as the Securities are registered for public sale or an exemption form registration is available, except as required by state and federal securities laws.

 4.17    Dilution . It specifically acknowledges that the Parent’s obligation to issue the Note Shares upon conversion of the Notes and the Warrant Shares upon exercise of the Warrants is binding upon the Parent and enforceable regardless of the dilution such issuances may have on the ownership interests of other shareholders of the Parent.

 4.18    Patriot Act . It certifies that, to the best of its knowledge, neither it nor any of its Subsidiaries, has been designated, nor is or shall be owned or controlled, by a “suspected terrorist” as defined in Executive Order 13224. It hereby acknowledges that Purchasers seek to comply with all applicable laws concerning money laundering and related activities. In furtherance of those efforts, it hereby represents and warrants and covenants that: (i) none of the cash or property that it or any of its Subsidiaries will pay or will contribute to Purchasers has been or shall be derived from, or related to, any activity that is deemed criminal under United States law; and (ii) no contribution or payment by it or any of its Subsidiaries to Purchasers, to the extent that they are within its or any such Subsidiary’s control shall cause Purchasers to be in violation of the United States Bank Secrecy Act, the United States International Money Laundering Control Act of 1986 or the United States International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001. It shall promptly notify Purchasers if any of these representations, warranties and covenants cease to be true and accurate regarding it or any of its Subsidiaries. It shall provide Purchasers with any additional information regarding it and each Subsidiary thereof that Purchasers deem necessary or convenient to ensure compliance with all applicable laws concerning money laundering and similar activities. It understands and agrees that if at any time it is discovered that any of the foregoing representations, warranties and covenants are incorrect, or if otherwise required by applicable law or regulation related to money laundering or similar activities, Purchasers may undertake appropriate action to ensure compliance with applicable law and regulation, including, but not limited to, segregation and/or redemption of Purchasers’ investment in it. It further understands that Purchasers may release confidential information about it and its Subsidiaries and, if applicable, any underlying beneficial owners, to proper authorities if Purchasers, in their sole discretion, determine that it is in their best interests in light of relevant rules and regulations under the laws set for in subsection (ii) above.

 4.19    Company Name; Location of Offices . Schedule 4.19 sets forth each Company’s name as its appears in official filings in the state of its organization, the type of entity of each Company, the organizational identification number issued by each Company’s state of organization or a statement that no such number has been issued, each Company’s state of organization, and the location of each Company’s chief executive office, corporate offices, warehouses, other locations of Collateral and locations where records with respect to Collateral are kept (including in each case the county of such locations) and, except as set forth on Schedule 4.19 , such locations have not changed during the preceding twelve months. As of the Closing Date, during the prior five years, except as set forth on Schedule 4.19 , no company has been known as or conducted business in any other name (including trade names). Each Company has only one state of organization.

 4.20    Full Disclosure . Neither this Agreement or the Ancillary Agreements nor the exhibits or schedules hereto or thereto nor any other document delivered by it to Purchasers or their attorneys or agents in connection herewith or therewith or with the transactions contemplated hereby or thereby, contain any untrue statement of a material fact not omit to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances in which they are made, not misleading.

5.    Negative Covenants . So long as any Obligations are owed under the Notes, without the prior written consent of Purchasers holding at least a majority in Face Amount of the Notes issued hereunder (the “Majority Purchasers”), neither of the Companies shall:

 5.1    Incur Indebtedness . Incur any debt for borrowed money except for indebtedness owing to Laurus, Horizon and St. Cloud Capital Partners, L.P. (“St. Cloud”) as such facilities may exist from time to time, including any extensions or modifications thereto, and existing obligations owed to Eddy Goldwasser;

 5.2    Distributions . Make any cash payments in respect of its capital stock whether by dividends, redemption or otherwise;

 5.3    Sell or Encumber Assets . Sell, transfer, mortgage, assign, pledge, lease, exchange, grant a security interest in, or encumber any such Company’s assets, except to Purchasers, Laurus, St. Cloud or otherwise in the ordinary course of business;

 5.4    Change of Business . Engage in any business activities substantially different than those in which such Company is presently engaged, or cease operations, liquidate, merge, transfer, acquire, or consolidate with any other entity or dissolve;

 5.5    Change Name or Location . Change its legal name or trade name or any location of it chief executive offices, corporate offices, warehouses or other locations of Collateral.

6.    Conditions to Issuance and Acceptance of the Notes and the Warrants .

 6.1    Conditions to Companies’ Obligations to Issue the Notes and the Warrants . The obligations of the Companies hereunder are subject to the satisfaction, on or before the Closing, unless otherwise specified, of each of the following conditions, provided that these conditions are for the Companies’ sole benefit and may be waived by the Companies at any time in its sole discretion:

(a)    Each Company and Purchaser shall have executed this Agreement and all of the Ancillary Agreements as to which it is a party.

(b)    The representations and warranties of Purchasers shall be true and correct in all material respects as of the Closing as though made at that time (except for representations and warranties that speak as of a specific date). Purchasers shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement and the Ancillary Agreements to be performed, satisfied or complied with by Purchasers at or prior to the Closing.

(c)    No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction or any self regulatory organization having authority over the matters contemplated hereby which restricts or prohibits the consummation of any of the transactions contemplated herein.

(d)    All consents, approval, authorizations and orders required to be obtained and all registrations, filings and notices required to be made with or given to any regulatory authority or person as provided herein shall have been made.

(e)    Purchasers shall execute such reasonable subordination agreements with Laurus, St. Cloud and the Goldwassers necessary to affirm that the Obligations of the Company under the Notes are and will continue to be subordinated to existing indebtedness owed to Laurus, St. Cloud and the Goldwassers.

(f)    The Companies shall have received the requisite consent and approval from the holders of the Class A-1 Convertible Preferred Stock to the creation of the Class A-2 Preferred Stock.

 6.2    Conditions to Purchasers’ Obligation to Accept the Notes and the Warrants . The obligations of Purchasers are subject to the satisfaction, on or before the Closing, unless otherwise specified, of each of the following conditions, provided that these conditions are for the sole benefit of Purchasers and may be waived by Purchasers at any time in their sole discretion:

(a)    Each Company and Purchaser shall have executed this Agreement and all Ancillary Agreements as to which it is a party.

(b)    The representations and warranties of the Companies shall be true and correct in all material respects as of the Closing (except for representations and warranties that speak as of a specific date). The Companies shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement and the Ancillary Agreements to be performed, satisfied or complied with by the Companies at or prior to the Closing. The Purchaser may require a certificate, executed by the Chief Executive Officer of each of the Companies, dated as of the Closing, to the foregoing effect and as to such other matters as may be reasonably requested by Purchasers.

(c)    No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction or any self regulatory organization having authority over the matters contemplated hereby which restricts or prohibits the consummation of any of the transactions contemplated herein.

(