Common use of Escrow of Common Stock Clause in Contracts

Escrow of Common Stock. As additional security for the transactions contemplated herein (and in the Note purchase agreements executed by the Company and third parties with respect to this offering(, the Company has agreed to place in escrow with the Escrow Agent 1,000,000 shares of non-restricted Common Stock ("Escrowed Shares"), in accordance with the terms of that escrow agreement attached to this Agreement as EXHIBIT B (the "Escrow Agreement"). With respect to the conversion of the Note, in addition to the provisions of Section 3.3 above, upon conversion of the Note into Common Stock in accordance with their terms, so long as a sufficient number of Escrowed Shares are held by the Escrow Agent to effect such a conversion, the Purchaser shall submit via facsimile a copy of each notice of conversion to the Escrow Agent, and the Escrow Agent shall transmit to the Purchaser via electronic transfer, or via delivery of one or more non-legended stock certificates (along with duly executed and Medallion guaranteed stock powers) representing, such number of Escrowed Shares as are specified in such notice of conversion. Such transfer, so long as in accordance with the terms of this Agreement, the Escrow Agreement and the notice of conversion delivered to the Escrow Agent, shall satisfy the conversion requirement of any portion of the Note so converted. If all (or such number that no further portion of the Note may be converted in full based upon the then-prevailing conversion price) of the Escrowed Shares are delivered to the Purchaser pursuant to conversion of the Note, but there is any portion of the Note still outstanding, the Purchaser may require the Company to place additional non-restricted Common Stock in escrow, which the Company shall place in escrow within three (3) business days after written request from the Purchaser to do so. The number of additional shares shall be equal to two and one-half times [(the outstanding principal of that portion of the Note not previously converted) divided by {(the then current bid price of the Common Stock, determined by taking the lowest closing bid price for the ten (10) trading days prior to such written request by Purchaser) multiplied by the ten applicable conversion rate as stated in the Notes}]. Likewise, the Company agrees, and does hereby reaffirm and covenant, that, should the Purchaser, in good faith, reasonably deem itself insecure upon examination and consideration of the outstanding principal amount due under the Note and the number of Escrowed Shares remaining with the Escrow Agent, then the Purchaser may give the Company written notice of such fact via facsimile, and the Company will immediately (but in any event within three (3) business days after such facsimile notice) place with the Escrow Agent sufficient additional Shares to provide reasonable security for the Purchaser. For purposes of this paragraph, "reasonable security" on any given date shall mean a sufficient number of Escrowed Shares that, if all of the then-remaining outstanding principal of the Note were converted on that date at the applicable discount rate, then there would be at least two hundred fifty percent (250%) of the required number of Escrow Shares to effect such conversion in full. Thus, FOR EXAMPLE, if there were a $50,000 balance remaining on the Note, and the closing bid price were $4.25 per share, and the conversion price were $3.40 per share, then the Purchaser would be "reasonably secure" so long as there were 36,765 Escrowed Shares on deposit with the Escrow Agent [50,000/3.40 X 2.5 = 36,765]. Upon conversion of all the outstanding principal amount of the Note, any and all remaining Escrow Shares shall be returned to the Company by the Escrow Agent in accordance with the terms of the Escrow Agreement or in accordance with the instructions of the Company.

Escrow of Common Stock. As additional security for In accordance with Section 4(h) of the transactions contemplated herein (Securities Purchase Agreement, and based upon certain representations and warranties contained in the Note purchase agreements executed Securities Purchase Agreement, upon registration of the Registrable Securities, and from time to time as requested by the Company and third parties with respect to this offering(Buyer thereafter, the Company has agreed to shall place in escrow trust with the Escrow Agent 1,000,000 shares one or more stock certificates representing a number of non-restricted legended shares of Common Stock as specified in the Securities Purchase Agreement ("Escrowed Escrow Shares"), . The Escrow Agent shall hold the Escrow Shares in certificate form or in a brokerage account as the Escrow Agent deems appropriate to fulfill his duties under the Securities Purchase Agreement and hereunder. None of the Escrow Shares shall be disbursed other than in accordance with the terms of that escrow agreement attached to this Section 4(h) of the Securities Purchase Agreement as EXHIBIT B (and of the "Escrow Agreement"). With respect terms hereof, or in accordance with the written instructions of both the Company and the Buyer delivered to the Escrow Agent. In no event shall the Escrow Agent release or transfer any Escrow Shares to any party other than to the Buyer (or another buyer) or to the Company in accordance with this Agreement, absent express written instructions from the Company to transfer Escrow Shares to a third party. Upon a full or partial conversion of the Note, in addition the Buyer shall deliver via facsimile to the provisions of Section 3.3 above, upon conversion Escrow Agent a copy of the Note into Common Stock Notice of Conversion. The Escrow Agent shall use its reasonable best efforts to cause the delivery from escrow to the Buyer (in accordance with their terms, so long as a sufficient number of Escrowed Shares are held by the Escrow Agent to effect such a conversion, the Purchaser shall submit via facsimile a copy of each notice of conversion Buyer's written instructions to the Escrow Agent, and the Escrow Agent shall transmit to the Purchaser via electronic transfer, transfer or via delivery of one or more non-legended stock certificates (along with duly executed and Medallion guaranteed stock powers) representing, such number of Escrowed Shares as are specified in such notice of conversion. Such transfer, so long as in accordance with the terms of this Agreement, the Escrow Agreement and the notice of conversion delivered to the Escrow Agent, shall satisfy the conversion requirement of any portion of the Note so converted. If all (or such number that no further portion of the Note may be converted in full based upon the then-prevailing conversion priceotherwise) of the Escrowed Shares are delivered to the Purchaser pursuant to conversion number of the Note, but there is any portion shares of the Note still outstanding, the Purchaser may require the Company to place additional non-restricted Common Stock specified in escrow, which the Company shall place in escrow Notice of Conversion within three (3) business days after written request from the Purchaser to do soreceipt of such Notice of Conversion. The number of additional shares Escrow Agent shall not be equal to two and one-half times [(the outstanding principal of that portion of the Note not previously converted) divided by {(the then current bid price of the Common Stock, determined by taking the lowest closing bid price responsible for the ten (10) trading days prior to such written request by Purchaser) multiplied any breach by the ten applicable conversion rate as stated in the Notes}]. Likewise, the Company agrees, and does hereby reaffirm and covenant, that, should the Purchaser, in good faith, reasonably deem itself insecure upon examination and consideration of the outstanding principal amount due under the Note and the number of Escrowed Shares remaining with the Escrow Agent, then the Purchaser may give the Company written notice of such fact via facsimile, and the Company will immediately (but in any event within three (3) business days after such facsimile notice) place with the Escrow Agent its obligation to timely deliver sufficient additional Shares to provide reasonable security for the Purchaser. For purposes of this paragraph, "reasonable security" on any given date shall mean a sufficient number of Escrowed Shares that, if all of the then-remaining outstanding principal of the Note were converted on that date at the applicable discount rate, then there would be at least two hundred fifty percent (250%) of the required number of Escrow Shares to effect such a conversion in full. Thus, FOR EXAMPLE, if there were a $50,000 balance remaining on the Note, and the closing bid price were $4.25 per share, and the conversion price were $3.40 per share, then the Purchaser would be "reasonably secure" so long as there were 36,765 Escrowed Shares on deposit with the Escrow Agent [50,000/3.40 X 2.5 = 36,765]or exercise. Upon Buyer's receipt of all Common Stock due upon conversion of all the outstanding principal amount of the Note, any and all remaining Escrow Shares shall be returned Notes issued to the Company by Buyer, the Buyer shall inform the Escrow Agent in accordance with writing that the terms requirements of the Securities Purchase Agreement with respect to the Notes have been satisfied. The Company shall instruct the Escrow Agreement or Agent in writing as to the return to the Company of the remaining Escrow Shares, and the Escrow Agent shall as soon as practicable return such remaining Escrow Shares in accordance with the instructions of Company's instructions. Thereafter the Escrow Agent shall have no further obligation to any party with respect to the Escrow Shares, whether those delivered to the Buyer or those returned to the Company.

Escrow of Common Stock. As additional security for the transactions contemplated herein (and in the Note purchase agreements executed by the Company and third parties with respect to this offering(herein, the Company has agreed to place in escrow with the Escrow Agent 1,000,000 5,000,000 shares of non-restricted Common Stock ("Escrowed Shares"), in accordance with the terms of that escrow agreement attached to this Agreement as EXHIBIT Exhibit B (the "Escrow Agreement"). With respect to the conversion of the Note, in addition to the provisions of Section 3.3 above, upon conversion of the Note into Common Stock in accordance with their terms, so long as a sufficient number of Escrowed Shares are held by the Escrow Agent to effect such a conversion, the Purchaser shall submit via facsimile a copy of each notice of conversion to the Escrow Agent, and the Escrow Agent shall transmit to the Purchaser via electronic transfer, or via delivery of one or more non-legended stock certificates (along with duly executed and Medallion guaranteed stock powers) representing, such number of Escrowed Shares as are specified in such notice of conversion. Such transfer, so long as in accordance with the terms of this Agreement, the Escrow Agreement and the notice of conversion delivered to the Escrow Agent, shall satisfy the conversion requirement of any portion of the Note so converted. If all (or such number that no further portion of the Note may be converted in full based upon the then-prevailing conversion price) of the Escrowed Shares are delivered to the Purchaser pursuant to conversion of the Note, but there is any portion of the Note still outstanding, the Purchaser may require the Company to shall place additional non-restricted Common Stock in escrow, which the Company shall place in escrow within three (3) business days after written request from the Purchaser original Escrow Shares were delivered pursuant to do soconversions. The number of additional shares shall be equal to two and one-half times [(the outstanding principal of that portion of the Note not previously converted) divided by {(the then current bid price of the Common Stock, determined by taking the lowest closing bid price for the ten (10) trading days prior to such written request by Purchaser) multiplied by the ten then applicable conversion rate as stated in the NotesNote}]. Likewise, the Company agrees, and does hereby reaffirm and covenant, that, should the Purchaser, in good faith, reasonably deem itself insecure upon examination and consideration of the outstanding principal amount due under the Note and the number of Escrowed Shares remaining with the Escrow Agent, then the Purchaser may give the Company written notice of such fact via facsimile, and the Company will immediately (but in any event within three (3) business days after such facsimile notice) place with the Escrow Agent sufficient additional Shares to provide reasonable security for the Purchaser. For purposes of this paragraph, "reasonable security" on any given date shall mean a sufficient number of Escrowed Shares that, if all of the then-remaining outstanding principal of the Note were converted on that date at the applicable discount rate, then there would be at least two hundred fifty percent (250%) of the required number of Escrow Escrowed Shares to effect such conversion in full. Thus, FOR EXAMPLEfor example, if there were a $50,000 balance remaining on the Note, and the closing bid price were $4.25 per share, and the conversion price were $3.40 per share, then the Purchaser would be "reasonably secure" so long as there were 36,765 Escrowed Shares on deposit with the Escrow Agent [50,000/3.40 X 2.5 = 36,765]. Upon conversion of all the outstanding principal amount of the Note, any and all remaining Escrow Shares shall be returned to the Company by the Escrow Agent in accordance with the terms of the Escrow Agreement or in accordance with the instructions of the Company.

Escrow of Common Stock. As additional security for In accordance with Section 4(h) of the transactions contemplated herein (Securities Purchase Agreement, and based upon certain representations and warranties contained in the Note purchase agreements executed Securities Purchase Agreement, upon registration of the Registrable Securities, and from time to time as requested by the Company and third parties with respect to this offering(Buyer thereafter, the Company has agreed to shall place in escrow trust with the Escrow Agent 1,000,000 shares one or more stock certificates representing a number of non-restricted legended shares of Common 77 Stock as specified in the Securities Purchase Agreement ("Escrowed Escrow Shares"), . The Escrow Agent shall hold the Escrow Shares in certificate form or in a brokerage account as the Escrow Agent deems appropriate to fulfill his duties under the Securities Purchase Agreement and hereunder. None of the Escrow Shares shall be disbursed other than in accordance with the terms of that escrow agreement attached to this Agreement as EXHIBIT B (the "Escrow Agreement"). With respect to the conversion Section 4(h) of the Note, in addition to the provisions of Section 3.3 above, upon conversion Securities Purchase Agreement and of the Note into Common Stock terms hereof, or in accordance with their terms, so long as a sufficient number the written instructions of Escrowed Shares are held by both the Company and the Buyer delivered to the Escrow Agent. In no event shall the Escrow Agent release or transfer any Escrow Shares to effect such any party other than to the Buyer (or another buyer) or to the Company in accordance with this Agreement, absent express written instructions from the Company and the Buyer to transfer Escrow Shares to a conversionthird party. Upon a full or partial conversion of Preferred Stock or exercise of the Option, the Purchaser Buyer shall submit deliver via facsimile to the Escrow Agent a copy of each notice the Notice of conversion Conversion (and along with it, if applicable, the Option exercise form). Likewise, should the Buyer exercise the Warrant in full or in part, the Buyer shall deliver to the Escrow Agent a copy of such exercise form. The Escrow Agent shall use its reasonable best efforts to cause the delivery from escrow to the Buyer (in accordance with the Buyer's written instructions to the Escrow Agent, and the Escrow Agent shall transmit to the Purchaser via electronic transfer, transfer or via delivery of one or more non-legended stock certificates (along with duly executed and Medallion guaranteed stock powers) representing, such number of Escrowed Shares as are specified in such notice of conversion. Such transfer, so long as in accordance with the terms of this Agreement, the Escrow Agreement and the notice of conversion delivered to the Escrow Agent, shall satisfy the conversion requirement of any portion of the Note so converted. If all (or such number that no further portion of the Note may be converted in full based upon the then-prevailing conversion priceotherwise) of the Escrowed Shares are delivered to the Purchaser pursuant to conversion number of the Note, but there is any portion shares of the Note still outstanding, the Purchaser may require the Company to place additional non-restricted Common Stock specified in escrowthe Notice of Conversion (and Option exercise notice, which if applicable) or the Company shall place in escrow Warrant exercise form within three (3) business days after written request from the Purchaser to do soreceipt of such Notice of Conversion (and Option exercise notice) or Warrant exercise form. The number of additional shares Escrow Agent shall not be equal to two and one-half times [(the outstanding principal of that portion of the Note not previously converted) divided by {(the then current bid price of the Common Stock, determined by taking the lowest closing bid price responsible for the ten (10) trading days prior to such written request by Purchaser) multiplied any breach by the ten applicable conversion rate as stated in the Notes}]. Likewise, the Company agrees, and does hereby reaffirm and covenant, that, should the Purchaser, in good faith, reasonably deem itself insecure upon examination and consideration of the outstanding principal amount due under the Note and the number of Escrowed Shares remaining with the Escrow Agent, then the Purchaser may give the Company written notice of such fact via facsimile, and the Company will immediately (but in any event within three (3) business days after such facsimile notice) place with the Escrow Agent its obligation to timely deliver sufficient additional Shares to provide reasonable security for the Purchaser. For purposes of this paragraph, "reasonable security" on any given date shall mean a sufficient number of Escrowed Shares that, if all of the then-remaining outstanding principal of the Note were converted on that date at the applicable discount rate, then there would be at least two hundred fifty percent (250%) of the required number of Escrow Shares to effect such a conversion in full. Thus, FOR EXAMPLE, if there were a $50,000 balance remaining on the Note, and the closing bid price were $4.25 per share, and the conversion price were $3.40 per share, then the Purchaser would be "reasonably secure" so long as there were 36,765 Escrowed Shares on deposit with the Escrow Agent [50,000/3.40 X 2.5 = 36,765]or exercise. Upon Buyer's receipt of all Common Stock due upon conversion of all the outstanding principal amount of the Note, any and all remaining Escrow Shares shall be returned Preferred Stock issued to the Company by Buyer, including also any Option Shares to be issued upon exercise of the Option, or upon exercise of the Warrant, the Buyer shall inform the Escrow Agent in accordance with writing that the terms requirements of the Securities Purchase Agreement with respect to the Preferred Stock have been satisfied. The Company shall instruct the Escrow Agreement or Agent in writing as to the return to the Company of the remaining Escrow Shares, and the Escrow Agent shall as soon as practicable return such remaining Escrow Shares in accordance with the instructions of Company's instructions. Thereafter the Escrow Agent shall have no further obligation to any party with respect to the Escrow Shares, whether those delivered to the Buyer or those returned to the Company.

Escrow of Common Stock. As additional security for the transactions contemplated herein (and in the Note purchase agreements executed by the Company and third parties with respect to this offering(herein, the Company has agreed to place in escrow with the Escrow Agent 1,000,000 8,000,000 shares of non-restricted Common Stock ("Escrowed Shares"), in accordance with the terms of that escrow agreement attached to this Agreement as EXHIBIT Exhibit B (the "Escrow Agreement"). With respect to the conversion of the Note, in addition to the provisions of Section 3.3 above, upon conversion of the Note into Common Stock in accordance with their terms, so long as a sufficient number of Escrowed Shares are held by the Escrow Agent to effect such a conversion, the Purchaser shall submit via facsimile a copy of each notice of conversion to the Escrow Agent, and the Escrow Agent shall transmit to the Purchaser via electronic transfer, or via delivery of one or more non-legended stock certificates (along with duly executed and Medallion guaranteed stock powers) representing, such number of Escrowed Shares as are specified in such notice of conversion. Such transfer, so long as in accordance with the terms of this Agreement, the Escrow Agreement and the notice of conversion delivered to the Escrow Agent, shall satisfy the conversion requirement of any portion of the Note so converted. If all (or such number that no further portion of the Note may be converted in full based upon the then-prevailing conversion price) of the Escrowed Shares are delivered to the Purchaser pursuant to conversion of the Note, but there is any portion of the Note still outstanding, the Purchaser may require the Company to place additional non-restricted Common Stock in escrow, which the Company shall place in escrow within three (3) business days after written request from the Purchaser to do so. The number of additional shares shall be equal to two and one-half times [(the outstanding principal of that portion of the Note not previously converted) divided by {(the then current bid price of the Common Stock, determined by taking the lowest closing bid price for the ten (10) trading days prior to such written request by Purchaser) multiplied by the ten then applicable conversion rate as stated in the NotesNote}]. Likewise, the Company agrees, and does hereby reaffirm and covenant, that, should the Purchaser, in good faith, reasonably deem itself insecure upon examination and consideration of the outstanding principal amount due under the Note and the number of Escrowed Shares remaining with the Escrow Agent, then the Purchaser may give the Company written notice of such fact via facsimile, and the Company will immediately (but in any event within three (3) business days after such facsimile notice) place with the Escrow Agent sufficient additional Shares to provide reasonable security for the Purchaser. For purposes of this paragraph, "reasonable security" on any given date shall mean a sufficient number of Escrowed Shares that, if all of the then-remaining outstanding principal of the Note were converted on that date at the applicable discount rate, then there would be at least two hundred fifty percent (250%) of the required number of Escrow Escrowed Shares to effect such conversion in full. Thus, FOR EXAMPLEfor example, if there were a $50,000 balance remaining on the Note, and the closing bid price were $4.25 per share, and the conversion price were $3.40 per share, then the Purchaser would be "reasonably secure" so long as there were 36,765 Escrowed Shares on deposit with the Escrow Agent [50,000/3.40 X 2.5 = 36,765]. Upon conversion of all the outstanding principal amount of the Note, any and all remaining Escrow Shares shall be returned to the Company by the Escrow Agent in accordance with the terms of the Escrow Agreement or in accordance with the instructions of the Company.

Escrow of Common Stock. As additional security for the transactions contemplated herein (and in the other Note purchase agreements executed by the Company and third parties with respect to this offering(), the Company has agreed to place in escrow with the Escrow Agent 1,000,000 650,000 shares of non-restricted Common Stock ("Escrowed Shares"), in accordance with the terms of that escrow agreement attached to this Agreement as EXHIBIT Exhibit B (the "Escrow Agreement"). With respect to the conversion of the Note, in addition to the provisions of Section 3.3 above, upon conversion of the Note into Common Stock in accordance with their terms, so long as a sufficient number of Escrowed Shares are held by the Escrow Agent to effect such a conversion, the Purchaser shall submit via facsimile a copy of each notice of conversion to the Escrow Agent, and the Escrow Agent shall transmit to the Purchaser via electronic transfer, or via delivery of one or more non-legended stock certificates (along with duly executed and Medallion guaranteed stock powers) representing, such number of Escrowed Shares as are specified in such notice of conversion. Such transfer, so long as in accordance with the terms of this Agreement, the Escrow Agreement and the notice of conversion delivered to the Escrow Agent, shall satisfy the conversion requirement of any portion of the Note so converted. If all (or such number that no further portion of the Note may be converted in full based upon the then-prevailing conversion price) of the Escrowed Shares are delivered to the Purchaser pursuant to conversion of the Note, but there is any portion of the Note still outstanding, the Purchaser may require the Company to place additional non-restricted Common Stock in escrow, which the Company shall place in escrow within three (3) business days after written request from form the Purchaser to do so. The number of additional shares shall be equal to two one and one-half times [(the outstanding principal of that portion of the Note not previously converted) divided by {(the then current bid price of the Common Stock, determined by taking the lowest closing bid price for the then ten (10) trading days prior to such written request by Purchaser) multiplied by the ten then applicable conversion rate as stated in the NotesNote}]. Likewise, the Company agrees, and does hereby reaffirm and covenant, that, should the Purchaser, in good faith, reasonably deem itself insecure upon examination and consideration of the outstanding principal amount due under the Note and the number of Escrowed Shares remaining with the Escrow Agent, then the Purchaser may give the Company written notice of such fact via facsimile, and the Company will immediately (but in any event within three (3) business days after such facsimile notice) place with the Escrow Agent sufficient additional Shares to provide reasonable security for the Purchaser. For purposes of this paragraph, "reasonable security" on any given date shall mean a sufficient number of Escrowed Shares that, if all of the then-remaining outstanding principal of the Note were converted on that date at the applicable discount rate, then there would be at least two one hundred fifty percent (250150%) of the required number of Escrow Escrowed Shares to effect such conversion in full. Thus, FOR EXAMPLEfor example, if there were a $50,000 balance remaining on the Note, and the closing bid price were $4.25 per share, and the conversion price were $3.40 per share, then the Purchaser would be "reasonably secure" so long as there were 36,765 22,059 Escrowed Shares on deposit with the Escrow Agent [50,000/3.40 50,000/3.4 X 2.5 1.5 = 36,76522,059]. Upon conversion of all the outstanding principal amount of the Note, any and all remaining Escrow Shares additional shares of Common Stock shall be returned to the Company by the Escrow Agent in accordance with the terms of the Escrow Agreement or in accordance with the instructions of the CompanyAgreement.

Escrow of Common Stock. As additional security for In accordance with Section 4(h) of the transactions contemplated herein (Securities Purchase Agreement, and based upon certain representations and warranties contained in the Note purchase agreements executed Securities Purchase Agreement, upon registration of the Registrable Securities, and from time to time as requested by the Company and third parties with respect to this offering(Buyer thereafter, the Company has agreed to shall place in escrow trust with the Escrow Agent 1,000,000 shares one or more stock certificates representing a number of non-restricted legended shares of Common Stock as specified in the Securities Purchase Agreement ("Escrowed Escrow Shares"), . The Escrow Agent shall hold the Escrow Shares in certificate form or in a brokerage account as the Escrow Agent deems appropriate to fulfill his duties under the Securities Purchase Agreement and hereunder. None of the Escrow Shares shall be disbursed other than in accordance with the terms of that escrow agreement attached to this Agreement as EXHIBIT B (the "Escrow Agreement"). With respect to the conversion Section 4(h) of the Note, in addition to the provisions of Section 3.3 above, upon conversion Securities Purchase Agreement and of the Note into Common Stock terms hereof, or in accordance with their terms, so long as a sufficient number the written instructions of Escrowed Shares are held by both the Company and the Buyer delivered to the Escrow Agent. In no event shall the Escrow Agent release or transfer any Escrow Shares to effect such any party other than to the Buyer (or another buyer) or to the Company in accordance with this Agreement, absent express written instructions from the Company and the Buyer to transfer Escrow Shares to a conversionthird party. Upon a full or partial conversion of Preferred Stock, exercise of the Option and/or exercise of the Warrant, the Purchaser Buyer shall submit deliver via facsimile to the Escrow Agent a copy of each notice the Notice of conversion Conversion simultaneously with its delivery to the Company. Likewise, should the Buyer exercise the Warrant in full or in part, the Buyer shall deliver to the Escrow Agent a copy of such exercise form. The Escrow Agent shall use its reasonable best efforts to cause the delivery from escrow to the Buyer (in accordance with the Buyer's written instructions to the Escrow Agent, and the Escrow Agent shall transmit to the Purchaser via electronic transfer, transfer or via delivery of one or more non-legended stock certificates (along with duly executed and Medallion guaranteed stock powers) representing, such number of Escrowed Shares as are specified in such notice of conversion. Such transfer, so long as in accordance with the terms of this Agreement, the Escrow Agreement and the notice of conversion delivered to the Escrow Agent, shall satisfy the conversion requirement of any portion of the Note so converted. If all (or such number that no further portion of the Note may be converted in full based upon the then-prevailing conversion priceotherwise) of the Escrowed Shares are delivered to the Purchaser pursuant to conversion number of the Note, but there is any portion shares of the Note still outstanding, the Purchaser may require the Company to place additional non-restricted Common Stock specified in escrow, which the Company shall place in escrow Notice of Conversion or the Warrant exercise form within three (3) business days after written request from the Purchaser to do soreceipt of such Notice of Conversion or Warrant exercise form. The number of additional shares Escrow Agent shall not be equal to two and one-half times [(the outstanding principal of that portion of the Note not previously converted) divided by {(the then current bid price of the Common Stock, determined by taking the lowest closing bid price responsible for the ten (10) trading days prior to such written request by Purchaser) multiplied any breach by the ten applicable conversion rate as stated in the Notes}]. Likewise, the Company agrees, and does hereby reaffirm and covenant, that, should the Purchaser, in good faith, reasonably deem itself insecure upon examination and consideration of the outstanding principal amount due under the Note and the number of Escrowed Shares remaining with the Escrow Agent, then the Purchaser may give the Company written notice of such fact via facsimile, and the Company will immediately (but in any event within three (3) business days after such facsimile notice) place with the Escrow Agent its obligation to timely deliver sufficient additional Shares to provide reasonable security for the Purchaser. For purposes of this paragraph, "reasonable security" on any given date shall mean a sufficient number of Escrowed Shares that, if all of the then-remaining outstanding principal of the Note were converted on that date at the applicable discount rate, then there would be at least two hundred fifty percent (250%) of the required number of Escrow Shares to effect such a conversion in full. Thus, FOR EXAMPLE, if there were a $50,000 balance remaining on the Note, and the closing bid price were $4.25 per share, and the conversion price were $3.40 per share, then the Purchaser would be "reasonably secure" so long as there were 36,765 Escrowed Shares on deposit with the Escrow Agent [50,000/3.40 X 2.5 = 36,765]or exercise. Upon Buyer's receipt of all Common Stock due upon conversion of all the outstanding principal amount of the Note, any and all remaining Escrow Shares shall be returned Preferred Stock issued to the Company by Buyer or upon exercise of the Option or of the Warrant, the Buyer shall inform the Escrow Agent in accordance with writing that the terms requirements of the Securities Purchase Agreement with respect to the Preferred Stock and the Warrants have been satisfied. The Company shall instruct the Escrow Agreement or Agent in writing as to the return to the Company of the remaining Escrow Shares, if any, and the Escrow Agent shall as soon as practicable return such remaining Escrow Shares in accordance with the instructions of Company's instructions. Thereafter the Escrow Agent shall have no further obligation to any party with respect to the Escrow Shares, whether those delivered to the Buyer or those returned to the Company.

Escrow of Common Stock. As additional security for In accordance with Section 4(h) of the transactions contemplated herein (Securities Purchase Agreement, and based upon certain representations and warranties contained in the Note purchase agreements executed Securities Purchase Agreement, upon registration of the Registrable Securities, and from time to time as requested by the Company and third parties with respect to this offering(Buyer thereafter, the Company has agreed to shall place in escrow trust with the Escrow Agent 1,000,000 shares one or more stock certificates representing a number of non-restricted legended shares of Common 79 Stock as specified in the Securities Purchase Agreement ("Escrowed Escrow Shares"), . The Escrow Agent shall hold the Escrow Shares in certificate form or in a brokerage account as the Escrow Agent deems appropriate to fulfill his duties under the Securities Purchase Agreement and hereunder. None of the Escrow Shares shall be disbursed other than in accordance with the terms of that escrow agreement attached to this Agreement as EXHIBIT B (the "Escrow Agreement"). With respect to the conversion Section 4(h) of the Note, in addition to the provisions of Section 3.3 above, upon conversion Securities Purchase Agreement and of the Note into Common Stock terms hereof, or in accordance with their terms, so long as a sufficient number the written instructions of Escrowed Shares are held by both the Company and the Buyer delivered to the Escrow Agent. In no event shall the Escrow Agent release or transfer any Escrow Shares to effect such any party other than to the Buyer (or another buyer) or to the Company in accordance with this Agreement, absent express written instructions from the Company and the Buyer to transfer Escrow Shares to a conversionthird party. Upon a full or partial conversion of Preferred Stock or exercise of the Option, the Purchaser Buyer shall submit deliver via facsimile to the Escrow Agent a copy of each notice the Notice of conversion Conversion (and along with it, if applicable, the Option exercise form). Likewise, should the Buyer exercise the Warrant in full or in part, the Buyer shall deliver to the Escrow Agent a copy of such exercise form. The Escrow Agent shall use its reasonable best efforts to cause the delivery from escrow to the Buyer (in accordance with the Buyer's written instructions to the Escrow Agent, and the Escrow Agent shall transmit to the Purchaser via electronic transfer, transfer or via delivery of one or more non-legended stock certificates (along with duly executed and Medallion guaranteed stock powers) representing, such number of Escrowed Shares as are specified in such notice of conversion. Such transfer, so long as in accordance with the terms of this Agreement, the Escrow Agreement and the notice of conversion delivered to the Escrow Agent, shall satisfy the conversion requirement of any portion of the Note so converted. If all (or such number that no further portion of the Note may be converted in full based upon the then-prevailing conversion priceotherwise) of the Escrowed Shares are delivered to the Purchaser pursuant to conversion number of the Note, but there is any portion shares of the Note still outstanding, the Purchaser may require the Company to place additional non-restricted Common Stock specified in escrowthe Notice of Conversion (and Option exercise notice, which if applicable) or the Company shall place in escrow Warrant exercise form within three (3) business days after written request from the Purchaser to do soreceipt of such Notice of Conversion (and Option exercise notice) or Warrant exercise form. The number of additional shares Escrow Agent shall not be equal to two and one-half times [(the outstanding principal of that portion of the Note not previously converted) divided by {(the then current bid price of the Common Stock, determined by taking the lowest closing bid price responsible for the ten (10) trading days prior to such written request by Purchaser) multiplied any breach by the ten applicable conversion rate as stated in the Notes}]. Likewise, the Company agrees, and does hereby reaffirm and covenant, that, should the Purchaser, in good faith, reasonably deem itself insecure upon examination and consideration of the outstanding principal amount due under the Note and the number of Escrowed Shares remaining with the Escrow Agent, then the Purchaser may give the Company written notice of such fact via facsimile, and the Company will immediately (but in any event within three (3) business days after such facsimile notice) place with the Escrow Agent its obligation to timely deliver sufficient additional Shares to provide reasonable security for the Purchaser. For purposes of this paragraph, "reasonable security" on any given date shall mean a sufficient number of Escrowed Shares that, if all of the then-remaining outstanding principal of the Note were converted on that date at the applicable discount rate, then there would be at least two hundred fifty percent (250%) of the required number of Escrow Shares to effect such a conversion in full. Thus, FOR EXAMPLE, if there were a $50,000 balance remaining on the Note, and the closing bid price were $4.25 per share, and the conversion price were $3.40 per share, then the Purchaser would be "reasonably secure" so long as there were 36,765 Escrowed Shares on deposit with the Escrow Agent [50,000/3.40 X 2.5 = 36,765]or exercise. Upon Buyer's receipt of all Common Stock due upon conversion of all the outstanding principal amount of the Note, any and all remaining Escrow Shares shall be returned Preferred Stock issued to the Company by Buyer, including also any Option Shares to be issued upon exercise of the Option, or upon exercise of the Warrant, the Buyer shall inform the Escrow Agent in accordance with writing that the terms requirements of the Securities Purchase Agreement with respect to the Preferred Stock have been satisfied. The Company shall instruct the Escrow Agreement or Agent in writing as to the return to the Company of the remaining Escrow Shares, and the Escrow Agent shall as soon as practicable return such remaining Escrow Shares in accordance with the instructions of Company's instructions. Thereafter the Escrow Agent shall have no further obligation to any party with respect to the Escrow Shares, whether those delivered to the Buyer or those returned to the Company.