SECOND AMENDMENT AND WAIVER AGREEMENT

(a)            Amendments .  Upon the Effective Date (as defined below):

(i)           Section 4(o)(iv) of the Securities Purchase Agreement shall be amended to read in full as follows:

“(iv)                      The restrictions contained in subsections (ii) and (iii) of this Section 4(o) shall not apply in connection with (a) the issuance of any Excluded Securities (as defined in the Notes), (b) the  issuance and sale by the Company to Onset Capital LLC, John Thomas Financial, Inc. (“ JTF ”), or such other party(ies) acceptable to the Required Holders and the Company, in their respective discretion, of one or more bridge loan notes (the “ Bridge Notes ”) in the aggregate principal amount of Two Hundred Fifty Thousand Dollars ($250,000), which Bridge Notes shall be substantially in the form of that Bridge Note attached as Exhibit K, or in some other form acceptable to the Required Holders and the Company (the “ Bridge Notes Issuance ”), (c) the issuance of up to 100,000 shares of Common Stock to JFT as compensation in connection with the provision by JTF to the Company of financial and strategic advisory services (the “ JTF Issuance ”), and (d) up to $1,000,000 of Series A Convertible Preferred Stock and accompanying warrants on substantially the terms as set forth in the Series A Convertible Preferred Stock Purchase Agreement attached hereto as Exhibit L (and the Certificate of Designation for the Series A Convertible Preferred Stock, and the form of Warrant, attached thereto), or in a similar form reasonably acceptable to the Required Holders and the Company (the “ Preferred Stock Issuance ”).”

(ii)          The form of Bridge Notes (as defined above) and the form of Series A Convertible Preferred Stock Purchase Agreement (as referenced above) (which are attached hereto as Exhibits A and B, respectively) shall be added to the Securities Purchase Agreement as Exhibits K and L, respectively.

(iii)         The third sentence of Section 9(e) of the Securities Purchase Agreement is hereby amended to read as follows:

“No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought; provided, however , that the holders of at least a majority of the aggregate number of Registrable Securities issued and issuable hereunder and under the Notes may waive a right for the benefit of all of the Buyers by signing an instrument in writing indicating such waiver.”

(b)            Consent . The Investors consent to the Bridge Notes Issuance and the Preferred Stock Issuance.

(c)            Waiver of Warrant Shares Adjustment .  Each Investor waives any adjustment to the number of Warrant Shares issuable upon exercise of the SPA Warrants that would occur as a result of the Bridge Loan Issuance and the Preferred Stock Issuance.

(d)            Effective Date .  This Agreement and the amendments, consents and waivers contained herein shall be effective at such time as agreements in the same form and substance as this Agreement other than the identity of the Investor are executed by the Company and the Required Holders and the holders of at least a majority of the aggregate number of Registrable Securities issued and issuable under the Securities Purchases Agreement and under the Notes (such time, the “ Effective Date ”).

(a)            Ratifications .  The Company hereby confirms and agrees that, except as otherwise expressly provided in this Agreement, the Securities Purchase Agreement and each other Transaction Document are, and shall continue to be, in full force and effect and are hereby ratified and confirmed in all respects, except that, on and after the Effective Date, (i) all references in the Securities Purchase Agreement or the other Transaction Documents to "this Agreement", "hereto", "hereof", "hereunder" or words of like import referring to the Securities Purchase Agreement shall mean the Securities Purchase Agreement as amended by this Agreement, (ii) all references in the Securities Purchase Agreement or the other Transaction Documents to “Notes” or “Note” or words of like import referring to the Notes or a Note shall mean the Notes as amended by this Agreement, (iii) the defined term “Transaction Documents” is hereby amended to include this Agreement.

(b)            Amendment to the Note s.  The definition of “Excluded Securities” set forth in Section (29)(l) of the Notes is amended to read as follows:

" Excluded Securities " means (A) any Common Stock issued or issuable: (i) in connection with any Approved Stock Plan; (ii) upon conversion of the Notes or upon the exercise of the Warrants; (iii) upon conversion, exercise or exchange of any Options or Convertible Securities which are outstanding on the day immediately preceding the Subscription Date, provided that the terms of such Options or Convertible Securities are not amended, modified or changed on or after the Subscription Date; or (iv) pursuant to a bona fide firm commitment underwritten public offering with a nationally recognized underwriter which generates gross proceeds to the Company in excess of $10,000,000 (other than an "at-the-market offering" as defined in Rule 415(a)(4) under the 1933 Act and "equity lines"), and (B) the securities issued pursuant to the JFT Issuance, the Bridge Notes Issuance, and the Preferred Stock Issuance.”

(a)            Disclosure of Transactions and Other Material Information .  Within the timeframe required under the 1934 Act, the Company shall file a Current Report on Form 8-K describing the terms of this Agreement and attaching this Agreement, along with the Exhibits hereto (the “ 8-K Filing ”).  From and after the filing of the 8-K Filing with the SEC, the Investor shall not be in possession of any material, nonpublic information received from the Company, any of its Subsidiaries or any of their respective officers, directors, employees or agents, that is not disclosed in the 8-K Filing.  The Company shall not, and shall cause each of its Subsidiaries and its and each of their respective officers, directors, employees and agents, not to, provide the Investor with any material, nonpublic information regarding the Company or any of its Subsidiaries from and after the filing of the 8-K Filing with the SEC without the express written consent of the Investor.  Subject to the foregoing, neither the Company, its Subsidiaries nor the Investor shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided , however , that the Company shall be entitled, without the prior approval of the Investor, to make any press release or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law and regulations.

(b)            Fees and Expenses .  Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.

(c)            Proceeds of Company Financing .  The Company will use the proceeds of the Bridge Notes and the Preferred Stock Issuance for general corporate purposes and not for the repayment of any Indebtedness of the Company other than accounts payable; provided that the proceeds of the Preferred Stock Issuance may be used to pay off the Bridge Notes in accordance with their terms.

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

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

(c)            Severability .  If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties.  The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

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

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

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

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

(h)            Entire Agreement; Effect on Prior Agreements; Amendments .  Except for the Transaction Documents in effect prior to this Agreement (to the extent any such Transaction Document is not amended by this Agreement), this Agreement supersedes all other prior oral or written agreements between the Investor, the Company, their affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Investor makes any representation, warranty, covenant or undertaking with respect to such matters.  No provision of this Agreement may be amended other than by an instrument in writing signed by the Company.  No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought.  No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration also is offered to all of the parties to the Transaction Documents, holders of Notes or holders of the Warrants, as the case may be.  The Company has not, directly or indirectly, made any agreements with the Investor relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents.

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

if to the Company:

EnterConnect Inc.

100 Century Center Court

Suite 650

with a copy to:

Taylor English Duma LLC

1600 Parkway Circle, Suite 400

Atlanta, Georgia 30339

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

(j)             Successors and Assigns .  This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns in accordance with the terms of the Securities Purchase Agreement.

(k)            Survival .  The representations and warranties of the Company and the Investor contained herein and the agreements and covenants set forth herein shall survive the Effective Date.

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

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

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

[Signature Page to Second Amendment and Waiver Agreement]

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

[Signature Page to Second Amendment and Waiver Agreement]

This note has not been registered under the Securities Act of 1933, as amended, or applicable state securities laws.  This note has been acquired for investment and not with a view to distribution or resale, and may not be sold, mortgaged, pledged, hypothecated or otherwise transferred without an effective registration statement for such securities under the Securities Act of 1933, as amended, and any applicable state securities laws, or the availability of an exemption from the registration provisions of the Securities Act of 1933, as amended, and applicable state securities laws, as represented by an opinion of counsel reasonably satisfactory to the company if reasonably requested by the company.

This note is subject to those restrictions on transfer as set forth herein, and is negotiable only in compliance with the terms of this note.

FOR VALUE RECEIVED, the undersigned, EnterConnect Inc., a Nevada corporation (the “ Company ”), hereby promises to pay to _________________ (“ Payee ,” and, together with any permitted transferee then the duly endorsed and recorded holder hereof, the “ the Holder ”), the principal amount of ___________________________ and No/100 Dollars ($_______.00) plus interest at the rate provided for herein from the date hereof on such principal amount or such lesser amount as is then currently outstanding, in such currency of the United States of America as at the time will be legal tender for the payment of public and private debts, with principal and interest payable as herein provided.

5.              INTEREST RATE AND PAYMENT PROVISIONS.

(a)           Except as otherwise provided herein, the principal amount of this Convertible Promissory Note (this “ Note ”) outstanding from time to time will bear interest from the date hereof through the date on which the principal amount hereof and all accrued interest thereon are paid in full, at a simple interest rate equal to five percent (5%) per annum (the “ Note Rate ”).

(b)           Unless previously converted into Series A Securities (as defined below), all unpaid interest and principal on this Note will be due and payable by the Company in full on the first date on which the restrictions on payment of this Note under the terms of Section 2 below are no longer in effect, or (ii) immediately before a Liquidation Transaction (the “ Maturity Date ”); provided that such date may be extended by consent of the Company and the Holder.  For purposes hereof, a “ Liquidation Transaction ” means a liquidation, dissolution, or winding up of the Company, or the Company’s sale, lease, conveyance, or other disposition of all or substantially all of its property or business or merger with or into or consolidation with any other corporation, limited liability company or other entity (other than a wholly-owned subsidiary of the Company).  All payments made by the Company on this Note will be applied first to the payment of accrued but unpaid interest on this Note and then to the reduction of the unpaid principal amount of this Note.

(c)           If the principal amount of this Note, and all accrued but unpaid interest thereon, is not paid on the Maturity Date, then interest will accrue on such unpaid amount at the Note Rate plus five percent (5%) from and after any such date or occurrence to the date of the payment in full of the principal amount of this Note and all accrued but unpaid interest thereon.

6.             SUBORDINATION.  EXCEPT AS OTHERWISE PROVIDED HEREIN, THIS NOTE WILL BE SUBORDINATED IN RIGHT OF PAYMENT TO ALL OBLIGATIONS OF THE COMPANY OWING ON THOSE CERTAIN SENIOR SECURED NOTES ISSUED BY THE COMPANY PURSUANT TO THAT CERTAIN SECURITIES PURCHASE AGREEMENT, DATED AS OF DECEMBER 20, 2007, BY AND AMONG THE COMPANY, HIGHBRIDGE INTERNATIONAL LLC (“ HIGHBRIDGE ”), AND VARIOUS OTHER INVESTORS IN THE SENIOR NOTES, AS AMENDED BY THOSE CERTAIN AMENDMENTS ENTITLED AMENDMENT AND WAIVER AGREEMENT, DATED AS OF DECEMBER 17, 2008, AND SECOND AMENDMENT AND WAIVER AGREEMENT, DATED AS OF MARCH 9, 2009, BY AND AMONG THE COMPANY AND THE HOLDERS OF CONVERTIBLE PROMISSORY NOTES ISSUED PURSUANT TO THE SECURITIES PURCHASE AGREEMENT, AS AMENDED, REPRESENTING AT LEAST A MAJORITY OF THE AGGREGATE PRINCIPAL AMOUNT OF SUCH NOTES THEN OUTSTANDING (THE “ SENIOR NOTES PURCHASE AGREEMENT ”), NOW OR HEREAFTER ARISING, TOGETHER WITH ALL COSTS OF COLLECTING SUCH OBLIGATIONS (INCLUDING REASONABLE ATTORNEYS’ FEES), INCLUDING, WITHOUT LIMITATION, ALL INTEREST ACCRUING AFTER THE COMMENCEMENT BY OR AGAINST THE COMPANY OF ANY BANKRUPTCY, REORGANIZATION OR SIMILAR PROCEEDING, AND ALL OBLIGATIONS UNDER THE SENIOR NOTES PURCHASE AGREEMENT (THE “ SENIOR DEBT” ).  THE HOLDER WILL NOT DEMAND OR RECEIVE FROM THE COMPANY (AND THE COMPANY WILL NOT PAY TO THE HOLDER) ALL OR ANY PART OF THE AMOUNTS OWING UNDER THIS NOTE, BY WAY OF PAYMENT, PREPAYMENT, SETOFF, LAWSUIT OR OTHERWISE, NOR WILL THE HOLDER COMMENCE, PROSECUTE OR PARTICIPATE IN ANY ADMINISTRATIVE, LEGAL OR EQUITABLE ACTION ADVERSARIAL TO THE COMPANY IN RESPECT OF THIS NOTE, FOR SO LONG AS ANY PORTION OF THE SENIOR DEBT REMAINS OUTSTANDING AND UNTIL 91 DAYS AFTER ANY PORTION OF IT REMAINS OUTSTANDING.

7.              LOSS, THEFT, DESTRUCTION OR MUTILATION OF NOTE.  UPON RECEIPT OF EVIDENCE SATISFACTORY TO IT OF THE LOSS, THEFT, DESTRUCTION OR MUTILATION OF THIS NOTE OR ANY NOTE ISSUED IN EXCHANGE THEREFOR AND, IF REQUESTED IN THE CASE OF ANY SUCH LOSS, THEFT OR DESTRUCTION, UPON DELIVERY OF AN INDEMNITY AGREEMENT REASONABLY SATISFACTORY TO THE COMPANY, OR, IN THE CASE OF ANY SUCH MUTILATION, UPON SURRENDER AND CANCELLATION OF THIS NOTE, THE COMPANY WILL ISSUE A NEW NOTE OF LIKE TENOR AND AMOUNT AND DATED THE DATE OF THE ORIGINAL NOTE, IN LIEU OF SUCH LOST, STOLEN, DESTROYED OR MUTILATED NOTE.

8.             SERIES A FINANCING AND CONVERSION OF NOTE.

(a)           The parties acknowledge that (i) the Company is seeking to issue and sell, within the ninety (90) day period following the date hereof, shares of its Series A Convertible Preferred Stock, accompanied by warrants to purchase the Company’s Common Stock (collectively, the “ Series A Securities ”), to existing and potentially new investors in the Company, and that Payee, as a placement agent, and potentially other placement agents, may assist with the placement of the Series A Securities, and (ii) the Company will seek to raise a maximum of One Million Dollars ($1,000,000.00) of equity capital through such issuance and sale (the “ Financing ”).   The Holder will have the option, but not the obligation, concurrent with the closing of the Financing (whether the Financing occurs within such ninety (90) day period, or whether Company, in its sole discretion, extends the ninety (90) day period in order to raise the minimum amount), to convert the outstanding principal balance of this Note plus any unpaid accrued interest as of the date of the Financing into Series A Securities on the same terms and conditions as given to the other investors in the Financing.  The Company will give the Holder written notice of the Financing, which notice will include the material terms of the Financing, at least five (5) business days prior to the consummation of the Financing, which notice will be deemed waived by the Holder if the Holder converts this Note into Series A Securities as a part of the Financing.  At the closing of the Financing, if the Holder has elected to convert this Note as part of the Financing, the Holder will deliver to the Company this Note to be converted into Series A Securities, this Note will be canceled and of no further force and effect, and the Company will issue the Series A Securities to the Holder.

(b)           Any conversion under Section 4.1 above will be subject to all the terms and conditions of the Financing applicable to the holders of the Series A Securities to be issued to the other investors, including, but not limited to, the conversion rights or exercise rights, preemptive rights, registration rights and other protective rights granted and the benefit of any representations and warranties made in connection with the Series A Securities being issued in the Financing, and the Holder, upon conversion, will be entitled to all such benefits and rights of the purchaser(s) of Series A Securities.  Upon any conversion under Section 4.1 above, the Holder will become a party to and execute any agreements that are being entered into by the other purchasers of Series A Securities in connection with their issuance and sale.

(c)           Notwithstanding any other provisions herein, upon the closing of the Financing, if any amounts remain outstanding under this Note, the Company will pay the Holder all amounts owing under this Note out of the proceeds from the Financing.

9.            PAYEE REPRESENTATIONS.  THIS NOTE IS ISSUED TO PAYEE IN RELIANCE ON PAYEE’S REPRESENTATIONS TO THE COMPANY, AS FOLLOWS:

(a)           This Note is acquired for investment for its own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof, and Payee has no present intention of selling, granting participation in, or otherwise distributing this Note.

(b)           Payee has no contract, undertaking, agreement, or arrangement with any person to sell, transfer or grant participations to such person, or to any third person, with respect to this Note.

(c)           Payee understands that this Note has not been registered under the Securities Act of 1933 (the “ Act ”), because the issuance of this Note is exempt from registration under the Act, and the Company’s reliance on such exemption is predicated in part on Payee’s representations set forth herein.

(d)           Payee is experienced in evaluating early-stage companies such as the Company, is able to fend for itself in the transactions such as the issuance of this Note, has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment, has the ability to bear the economic risks of its investment, has had access, prior to the issuance of this Note, to all such information as it deemed necessary or appropriate (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense), has had, prior to the issuance of this Note, the opportunity to ask questions of, and receive answers from, the Company concerning the terms and conditions of the Company’s offering of this Note, (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify the accuracy of any information furnished to it or to which it had access.

10.            COMPANY REPRESENTATION.  COMPANY HEREBY REPRESENTS THAT IT HAS THE REQUISITE CORPORATE POWER AND AUTHORITY TO ISSUE AND SELL THIS NOTE TO PAYEE.

11.            RESTRICTION ON TRANSFER.  PAYEE ACKNOWLEDGES THAT NEITHER THIS NOTE,  NOR SERIES A SECURITIES THAT MAY BE PURCHASED BY THE HOLDER PURSUANT TO EXERCISE OF THE HOLDER’S OPTION DESCRIBED IN SECTION 4.1 ABOVE, MAY BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER THE ACT OR AN EXEMPTION THEREFROM, AND THAT, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING THIS NOTE OR THE PARTICULAR SERIES A SECURITIES IN QUESTION, OR AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT, THIS NOTE AND ANY SERIES A SECURITIES AS APPLICABLE MUST BE HELD INDEFINITELY.  THE HOLDER AGREES THAT IN NO EVENT WILL IT MAKE A TRANSFER OR DISPOSITION OF ANY OF THIS NOTE OR ANY SERIES A SECURITIES, UNLESS AND UNTIL (I) THE HOLDER WILL HAVE NOTIFIED THE COMPANY OF THE PROPOSED DISPOSITION AND THE CIRCUMSTANCES SURROUNDING THE DISPOSITION, AND (II) IF REQUESTED BY THE COMPANY, THE HOLDER WILL HAVE FURNISHED TO THE COMPANY, AT ITS EXPENSE, AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT.  PAYEE ACKNOWLEDGES THAT NO PUBLIC MARKET NOW EXISTS FOR THIS NOTE OR WILL EXIST FOR THE SERIES A SECURITIES, AND THAT THERE IS NO ASSURANCE THAT A PUBLIC MARKET WILL EVER EXIST FOR ANY SUCH SECURITIES.

12.            UNCONDITIONAL OBLIGATION; FEES, WAIVERS, ETC.

(a)           The obligations to make the payments provided for in this Note are absolute and unconditional and not subject to any defense, set-off, counterclaim, rescission, recoupment or adjustment whatsoever.

(b)           If the Holder will seek to enforce the collection of any amount of principal of or interest on this Note or the terms of this Note, there will be immediately due and payable from the Company, in addition to the then unpaid principal of, and accrued unpaid interest on, this Note, all costs and expenses incurred by the Holder in connection therewith, including, without limitation, reasonable attorneys’ fees and disbursements. Any such costs and expenses will be paid directly by the Company, or will be paid by the Company to the Holder as and when bills are received or such costs and expenses are incurred.

(c)           No forbearance, indulgence, delay or failure to exercise any right or remedy with respect to this Note will operate as a waiver, or as acquiescence in any default, nor will any single or partial exercise of any right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy.

(d)           This Note may be amended only upon the written agreement of the Company and the Holder.  Compliance with a provision of this Note may be waived (either generally or in a particular instance and either retroactively or prospectively), only in writing by the party exercising the waiver.

(e)           The Company hereby expressly waives demand and presentment for payment, notice of nonpayment, notice of dishonor, protest, notice of protest, bringing of suit, and diligence in the Holder’s taking any action to collect amounts called for hereunder, and will be directly and primarily liable for the payment of all sums owing and to be owing hereon, regardless of and without any notice, diligence, act or omission with respect to the collection of any amount called for hereunder.

13.            MISCELLANEOUS.

(a)           The headings of the various paragraphs of this Note are for convenience of reference only and will in no way modify any of the terms or provisions of this Note.

(b)           All notices, demands and other communications provided for hereunder will be in writing and will be deemed effective: (a) upon personal delivery to the party to be noticed; (b) upon electronic confirmation when sent via facsimile; or (c) one (1) business day after deposit with a nationally recognized overnight carrier, specifying next day delivery, with written verification of receipt.  All communications and notices will be sent as follows:

or to such other address as such party (or, where applicable, the Holder) will designate in writing, and will be deemed given when received.

(c)           This Note and the obligations of the Company and the rights of the Holder will be governed by and construed in accordance with the laws of the New York, without giving effect to its principles regarding conflicts of law.

(d)           This Note may be transferred or assigned only upon its surrender to the Company for registration of transfer, duly endorsed, accompanied by a duly executed written instrument of transfer in a form reasonably satisfactory to the Company.  Thereupon, this Note will be reissued to, and registered in the name of, the transferee, or a new Note for like principal amount and interest will be issued to, and registered in the name of, the transferee.  Interest and principal will be paid solely to the registered Holder of this Note.  Such payment will constitute full discharge of the Company’s obligation to pay such interest and principal.  Neither this Note nor any of the rights, interests or obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior written consent of the Holder.

(e)           This Note will be binding upon and will inure to the benefit of the Company, the Payee, and their respective successors and permitted assigns.

IN WITNESS WHEREOF, the Company has executed and delivered this Convertible Promissory Note as of the date first written above.

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

1.              PURCHASE AND SALE OF SERIES A STOCK AND WARRANTS.

(a)            Purchase of Series A Stock and Warrants .

(b)            Accredited Investor Status .  Such Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.

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

(d)            Information .  Such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities that have been requested by such Buyer.  Such Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company.  Neither such inquiries nor any other due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect such Buyer's right to rely on the Company's representations and warranties contained herein.  Such Buyer understands that its investment in the Securities involves a high degree of risk and is able to afford a complete loss of such investment.  Such Buyer has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities, and is not relying on the Company in that regard.

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

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

(g)            Legends .  Such Buyer understands that the certificates or other instruments representing the Series A Stock and the Warrants and, until such time as the resale of the Conversion Shares and the Warrant Shares have been registered under the 1933 Act, the stock certificates representing the Conversion Shares and the Warrant Shares, except as set forth below, shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

[ NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [ CONVERTIBLE ] [ EXERCISABLE ] HAVE BEEN ][ THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN ] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

(h)            Validity; Enforcement .  This Agreement a has been duly and validly authorized, executed and delivered on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer enforceable against such Buyer in accordance with its terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.

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

(j)            Residency .  Such Buyer is a resident of that jurisdiction specified below its address in column 2 on the Schedule of Buyers.

(k)            Certain Trading Activities .  Other than with respect to the transactions contemplated herein, since the time that such Buyer was first contacted by the Company or any other Person regarding this investment in the Company, neither the Buyer nor any affiliate of such Buyer that (x) had knowledge of the transactions contemplated hereby, (y) has or shares discretion relating to such Buyer's investments or trading or information concerning such Buyer's investments and (z) is subject to such Buyer's review or input concerning such affiliate's investments or trading (collectively, “ Trading Affiliates ”) has directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Buyer or Trading Affiliate, effected or agreed to effect any transactions in the securities of the Company.  Such Buyer hereby covenants and agrees not to, and shall cause its Trading Affiliates not to, engage, directly or indirectly, in any transactions in the securities of the Company or involving the Company's securities during the period from the date hereof until such time as (i) the transactions contemplated by this Agreement are first publicly announced as described in Section 4(i) hereof or (ii) this Agreement is terminated in full pursuant to Section 8 hereof.

3.              REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  The Company represents and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date:

(a)            Organization and Qualification .  The Company is duly organized and validly existing and, to the extent legally applicable, in good standing under the laws of the state of Nevada, and has the requisite power and authorization to own its properties and to carry on its business as now being conducted.  The Company is duly qualified as a foreign entity to do business and to the extent legally applicable, is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect.  As used in this Agreement, “ Material Adverse Effect ” means any material adverse effect on the business, properties, assets, operations, results of operations, condition (financial or otherwise) or prospects of the Company, individually or taken as a whole, or on the transactions contemplated hereby or in the other Transaction Documents or by the agreements and instruments to be entered into in connection herewith or therewith, or on the authority or ability of the Company to perform its obligations under the Transaction Documents (as defined below).  The Company has no “subsidiaries” (which for purposes of this Agreement means any joint venture or any entity in which the Company, directly or indirectly, owns any of the capital stock or holds an equity or similar interest).

(b)            Authorization; Enforcement; Validity .  The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and the Warrants and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the “ Transaction Documents ”) and to issue the Securities in accordance with the terms hereof and thereof.  The execution and delivery of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Series A Stock and the Warrants, the reservation for issuance and the issuance of the Conversion Shares   issuable upon conversion of the Series A Stock and the reservation for issuance and issuance of Warrant Shares issuable upon exercise of the Warrants have been duly authorized by the Company's Board of Directors and no further filing, consent, or authorization is required by the Company, its Board of Directors or its stockholders.  This Agreement and the other Transaction Documents of even date herewith have been duly executed and delivered by the Company, and constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.

(c)            Issuance of Securities .  Upon issuance in accordance with the terms of the Transaction Documents, the Series A Stock and the Warrants shall be free from all taxes, liens and charges with respect to the issue thereof.  As of the Closing, a number of shares of Common Stock shall have been duly authorized and reserved for issuance to the holders of the Series A Stock and the Warrants which equals or exceeds 130% of the aggregate of the maximum number of shares of Common Stock issuable (i) upon conversion of the Series A Stock, and (ii) upon exercise of the Warrants.  Upon conversion or exercise in accordance with the Series A Stock or the Warrants, as the case may be, the Conversion Shares and the Warrant Shares, respectively, will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens and charges with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock.  Assuming the accuracy of each of the representations and warranties set forth in Section 2 of this Agreement, the offer and issuance by the Company of the Securities is exempt from registration under the 1933 Act.

(d)            No Conflicts .  The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Series A Stock and Warrants and reservation for issuance and issuance of the Conversion Shares and the Warrant Shares) will not (i) result in a violation of any article of incorporation, certificate of formation, any certificate of designations or other constituent documents of the Company, any capital stock of the Company or bylaws of the Company or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) in any respect under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree, including foreign, federal and state securities laws and regulations and the rules and regulations of The OTC Bulletin Board (the “ Principal Market ”) applicable to the Company or by which any property or asset of the Company is bound or affected.

(e)            Consents .  The Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case in accordance with the terms hereof or thereof.

(f)             No General Solicitation; Placement Agent's Fees .  Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Securities.  The Company intends to utilize one or more placement agents in connection with its efforts to issue and sell the Securities, and shall be responsible for the payment of any placement agent's fees, financial advisory fees, or brokers' commissions (other than for persons engaged by any Buyer or its investment advisor) relating to or arising out of the transactions contemplated hereby.  The Company anticipates that it may pay placement agent fees up to an amount equal to 10% of the purchase price for the Securites sold, plus an amount up to 3% in non-accountable expenses, plus warrants to acquire equity in the Company.

(g)            No Integrated Offering .  None of the Company, any of its affiliates, or any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of any of the Securities under the 1933 Act, or cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or designated.  None of the Company, its affiliates or any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would require registration of any of the Securities under the 1933 Act or cause the offering of the Securities to be integrated with other offerings.

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

(i)             Application of Takeover Protections; Rights Agreement .  The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Articles of Incorporation or the laws of the state of its incorporation which is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the Company's issuance of the Securities and any Buyer's ownership of the Securities.  The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of Common Stock or a change in control of the Company.

(j)             SEC Documents; Financial Statements .  Since the effectiveness of the Company's Registration Statement on the Form SB-2, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “ SEC Documents ”).  The Company has delivered to the Buyers or their respective representatives true, correct and complete copies of the SEC Documents not available on the EDGAR system.  As of their respective filing dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  As of their respective filing dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto.  Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).  No other information provided by or on behalf of the Company to the Buyers which is not included in the SEC Documents, including, without limitation, information referred to in Section 2(d) of this Agreement or in any disclosure schedules, contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstance under which they are or were made, not misleading.

(k)            No Undisclosed Events, Liabilities, Developments or Circumstances .  No event, liability, development or circumstance has occurred or exists, or is contemplated to occur with respect to the Company or its respective business, properties, prospects, operations or financial condition, that would be required to be disclosed by the Company under applicable securities laws on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been publicly announced.

(l)             Conduct of Business; Regulatory Permits .  The Company is not in violation of any term of or in default under its Articles of Incorporation, any certificate of designations of any outstanding series of preferred stock of the Company or the Bylaws or their organizational charter or bylaws, respectively.  The Company is not in violation of any judgment, decree or order or any material statute, ordinance, rule or regulation applicable to the Company, and the Company will not conduct its business in violation of any of the foregoing, except for possible violations which could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Without limiting the generality of the foregoing, the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and has no knowledge of any facts or circumstances that would reasonably lead to delisting or suspension of the Common Stock by the Principal Market in the foreseeable future.  Since November 30, 2007 (i) the Common Stock has been designated for quotation on the Principal Market, (ii) trading in the Common Stock has not been suspended by the SEC or the Principal Market and (iii) the Company has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the Common Stock from the Principal Market.  The Company possesses all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Material Adverse Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit.

(m)           Equity Capitalization .  Immediately prior to the Closing, the authorized capital stock of the Company consists of (i) 10,000,000   shares of Preferred Stock, $0.001 par value, of which as of that time none   are issued and outstanding, and (ii) 100,000,000 shares of Common Stock, $.001 par value, of which as of that time 27,205,261 shares are issued and outstanding. All of the Company’s outstanding shares have been validly issued and are fully paid and nonassessable.

(n)            Intellectual Property Rights .  The Company owns or possesses adequate rights or licenses to use all trademarks, service marks and all applications and registrations therefor, trade names, patents, patent rights, copyrights, original works of authorship, inventions, trade secrets and other intellectual property rights necessary to conduct its business as now conducted.

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

(p)            Tax Status .  The Company (i) has made or filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.

(q)            Investment Company Status .  The Company is not, and upon consummation of the sale of the Securities will not be, an “investment company,” a company controlled by an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company” as such terms are defined in the Investment Company Act of  1940, as amended.

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

(s)             U.S. Real Property Holding Corporation .  The Company is not, nor has it ever been, a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended.

(t)             Bank Holding Company Act.   The Company is not subject to the Bank Holding Company Act of 1956, as amended (the " BHCA ") and to regulation by the Board of Governors of the Federal Reserve System (the " Federal Reserve ").  The Company does not own or control, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five (25%) or more of the total equity of a bank or any equity that is subject to the BHCA and to regulation by the Federal Reserve.  Neither the Company nor any of its affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

(u)            Disclosure .  The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their agents or counsel with any information that constitutes or could reasonably be expected to constitute material, nonpublic information.  The Company understands and confirms that each of the Buyers will rely on the foregoing representations in effecting transactions in securities of the Company.  All disclosure provided to the Buyers regarding the Company, their business and the transactions contemplated hereby, including the Schedules to this Agreement, furnished by or on behalf of the Company is true and correct and does 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 under which they were made, not misleading.  No event or circumstance has occurred or information exists with respect to the Company or its or properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed.

(v)            Acknowledgement Regarding Buyers' Trading Activity .  Anything in this Agreement or elsewhere herein to the contrary notwithstanding, but subject to compliance by the Buyers with applicable law and the provisions of Section 2(k) hereto, it is understood and acknowledged by the Company (i) that none of the Buyers have been asked by the Company to agree, nor has any Buyer agreed with the Company, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) that past or future open market or other transactions by any Buyer, including, without limitation, short sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company's publicly-traded securities; (iii) that any Buyer, and counter parties in “derivative” transactions to which any such Buyer is a party, directly or indirectly, presently may have a “short” position in the Common Stock, and (iv) that each Buyer shall not be deemed to have any affiliation with or control over any arm's length counter-party in any “derivative” transaction.  The Company further understands and acknowledges that (a) one or more Buyers may engage in hedging and/or trading activities at various times during the period that the Securities are outstanding, including, without limitation, during the periods that the value of the Conversion Shares   and the Warrant Shares deliverable with respect to Securities are being determined and (b) such hedging and/or trading activities (if any) can reduce the value of the existing stockholders' equity interest in the Company at and after the time the hedging and/or trading activities are being conducted.  The Company acknowledges that such aforementioned hedging and/or trading activities do not constitute a breach of this Agreement, the Warrants or any of the documents executed in connection herewith.

4.              COVENANTS.

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

(b)            Form D and Blue Sky .  The Company agrees to file a Form D, if required under U.S. securities laws, with respect to the Securities as required under Regulation D and to provide a copy thereof to each Buyer promptly after such filing.  The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Securities for sale to the Buyers at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyers on or prior to the Closing Date.  The Company shall make all filings and reports relating to the offer and sale of the Securities required under applicable securities or “Blue Sky” laws of the states of the United States following the Closing Date.

(c)            Use of Proceeds .  The Company will use the proceeds from the sale of the Securities for general corporate purposes, including general and administrative expenses and not for (i) the repayment of any outstanding Indebtedness of the Company or (ii) the redemption or repurchase of any of its equity securities.

(d)            Fees .  The Company shall be responsible for the payment of any Agents’ fees relating to or arising out of the transactions contemplated herebyt.  The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorney's fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment.

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

(f)             Disclosure of Transactions and Other Material Information .  On or before 8:30 a.m., New York City time, on the first Business Day following the date of this Agreement, the Company shall issue a press release and file a Current Report on Form 8-K describing the terms of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching the material Transaction Documents (including, without limitation, this Agreement, the Series A Designation, and the form of Warrant as exhibits to such filing (including all attachments, the “ 8-K Filing ”).  From and after the filing of the 8-K Filing with the SEC, no Buyer shall be in possession of any material, nonpublic information received from the Company or any of its officers, directors, employees or agents that is not disclosed in the 8-K Filing.  The Company shall not, and shall cause its officers, directors, employees and agents, not to, provide any Buyer with any material, nonpublic information regarding the Company from and after the filing of the 8-K Filing with the SEC without the express prior written consent of such Buyer.  If a Buyer has, or believes it has, received any such material, nonpublic information regarding the Company, it shall provide the Company with written notice thereof.  Subject to the foregoing, neither the Company nor any Buyer shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of any Buyer, to make any press release or other public disclosure with respect to such transactions in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law and regulations.

(g)            Restriction on Redemption and Cash Dividends .  So long as any Series A Stock is outstanding, the Company shall not, directly or indirectly, redeem, or declare or pay any cash dividend or distribution on, the Common Stock without the prior written consent of the holders of a majority of the Series A Stock.

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

(i)             Reservation of Shares .  The Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance to the holders of the Series A Stock and the Warrants, no less than 130% of the sum of  the number of shares of Common Stock issuable (i) upon conversion of the Series A Stock issued at the Closing and (ii) upon exercise of the Warrants issued at the Closing (without taking into account any limitations on the Conversion of the Series A Stock or exercise of the Warrants set forth in the Series A Designation and Warrants, respectively).

(j)             Closing Documents .  On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or cause to be delivered, to each Buyer executed copies of the Transaction Documents, Securities and other document required to be delivered to any party pursuant to Section 7 hereof.

5.              REGISTER; TRANSFER AGENT INSTRUCTIONS.

(a)            Register .  The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice to each holder of Securities), a register for the Series A Stock and the Warrants in which the Company shall record the name and address of the Person in whose name the Series A Stock and   the Warrants have been issued (including the name and address of each transferee), the number of shares of Series A Stock held by such Person, the number of Conversion Shares issuable upon conversion of the Series A Stock and the number of Warrant Shares issuable upon exercise of the Warrants held by such Person.  The Company shall keep the register open and available at all times during business hours for inspection of any Buyer or its legal representatives.

(b)            Transfer Agent Instructions .  The Company shall issue irrevocable instructions to its transfer agent, and any subsequent transfer agent, to issue certificates or credit shares to the applicable balance accounts at The Depository Trust Company (“ DTC ”), registered in the name of each Buyer or its respective nominee(s), for the Conversion Shares and the Warrant Shares issued at the Closing or upon conversion of the Series A Stock or exercise of the Warrants in such amounts as specified from time to time by each Buyer to the Company upon conversion of the Series A Stock or exercise of the Warrants in the form of Exhibit C attached hereto (the “ Irrevocable Transfer Agent Instructions ”).  The Company warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5(b), and stop transfer instructions to give effect to Section 2(g) hereof, will be given by the Company to its transfer agent, and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the other Transaction Documents.  If a Buyer effects a sale, assignment or transfer of the Securities in accordance with Section 2(f), the Company shall permit the transfer and shall promptly instruct its transfer agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC in such name and in such denominations as specified by such Buyer to effect such sale, transfer or assignment.  In the event that such sale, assignment or transfer involves Conversion Shares or Warrant Shares sold, assigned or transferred pursuant to an effective registration statement or pursuant to Rule 144, the transfer agent shall issue such Securities to the Buyer, assignee or transferee, as the case may be, without any restrictive legend.  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to a Buyer.  Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 5(b), that a Buyer shall be entitled to seek, in addition to all other available remedies, an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required.

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

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

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

(ii)           The Company shall have obtained all governmental, regulatory or third party consents, approvals, waivers or amendments to agreements or instruments, if any, necessary for the sale of the Securities.

(iii)          Such Buyer and each other Buyer shall have delivered to the Company the Purchase Price for the Series A Stock and the related Warrants being purchased by such Buyer at the Closing by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company.

(iv)          The representations and warranties of such Buyer shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specified date), and such Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Buyer at or prior to the Closing Date.

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

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

(i)            The Company shall have duly executed and delivered to such Buyer (i) each of the Transaction Documents and (ii) the certificates representing the shares of Series A Stock being purchased by such Buyer at the Closing pursuant to this Agreement, and (iii) the related Warrants being purchased by such Buyer at the Closing pursuant to this Agreement.

(ii)           The Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form of Exhibit C attached hereto, which instructions shall have been delivered to and acknowledged in writing by the Company's transfer agent.

(iii)          The representations and warranties of the Company shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specified date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Closing Date.

(iv)   &n