Common use of Representations of Lender Clause in Contracts

Representations of Lender. 5.1 Lender's representations in this Agreement are complete and accurate to the best of Lender's knowledge, and the Company may rely upon them. 5.2 Lender is able to bear the economic risk of an investment in the Note, warrant and the underlying common stock (individually and collectively, the "Securities") can afford the loss of the entire investment in the Securities, and will, after making an investment in the Securities, have sufficient means of providing for Lender's current needs and possible future contingencies. 5.3 The Securities will not be sold by Lender without registration under applicable securities acts or a proper exemption from such registration. 5.4 The Securities are being acquired for Lender's own account and risk, for investment purposes, and not on behalf of any other person or with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933. Lender is aware that there are substantial restrictions on the transferability of the Securities. 5.5 Lender has had access to any and all information concerning the Company that Lender and its financial, tax and legal advisors required or considered necessary to make a proper evaluation of this investment. Specifically, Lender has had the opportunity to review the Company's annual report on Form 10-KSB for the fiscal year ended March 31, 2004 and all subsequent filings by the Company with the Securities and Exchange Commission (the "Securities Filings"). Lender understands that the Company does not have sufficient working capital to execute its business plan, the Company has substantial debt obligations, the Company has not filed its 10-QSB for the quarterly period ended September 30, 2004 so the information in the Securities Filings is not current and that the Company has no agreements assuring the Company that it will obtain additional funding based on any specific valuation or at all. In making the decision to acquire the Securities, the Lender and its advisers have relied solely upon the Securities Filings and their own independent investigations, and fully understand that there are no guarantees, assurances or promises in connection with any investment hereunder and understand that the particular tax consequences arising from this investment in the Company will depend upon its individual circumstances. Lender further understands that no opinion is being given as to any securities or tax matters involving the offering. 5.6 Lender also understands and agrees that stop transfer instructions relating to the Securities will be placed in the Company's transfer ledger, and that the Securities will bear a legend in substantially the following form: THIS SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT. 5.7 Lender knows that the Securities are offered and sold pursuant to exemptions from registration under the Securities Act of 1933, and state securities law based, in part, on these warranties and representations, which are the very essence of this Agreement, and constitute a material part of the bargained-for consideration without which this Agreement would not have been executed. 5.8 Lender has the capacity to protect Lender's own interest in connection with this transaction or has a pre-existing personal or business relationship with the Company or one or more of its officers, directors or controlling persons consisting of personal or business contacts of a nature and duration such as would enable a reasonably prudent purchaser to be aware of the character, business acumen and general business and financial circumstances of such person with whom such relationship exists. 5.9 This Agreement when fully executed and delivered by the Company will constitute a valid and legally binding obligation of Lender, enforceable in accordance with its terms. Lender was not formed or organized for the specific purpose of acquiring the Securities. In the event Lender is an entity, the purchase of the Securities by Lender is a permissible investment in accordance with Lender's Articles of Incorporation or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person signing this document and all documents necessary to consummate the purchase of the Securities has all requisite authority to sign such documents on behalf of Lender. 5.10 Lender represents that Lender is a sophisticated and an "accredited investor" as defined under Rule 501 of Regulation D.

Representations of Lender. 5.1 Lender's representations in this Agreement are complete Lender hereby represents and accurate warrants to the best of Lender's knowledge, and the Company may rely upon them.Borrower as follows: 5.2 A. Lender is able to bear the economic risk of an investment in the Note, warrant and the underlying common stock (individually and collectively, the "Securities") can afford the loss of the entire investment in the Securities, and will, after making an investment in the Securities, have sufficient means of providing for Lender's current needs and possible future contingencies. 5.3 The Securities will not be sold by Lender without registration under applicable securities acts or a proper exemption from such registration. 5.4 The Securities are being acquired for Lender's own account and risk, for investment purposes, and not on behalf of any other person or with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933. Lender is aware that there are substantial restrictions on the transferability of the Securities. 5.5 Lender has had access to any and all information concerning the Company that Lender and its financial, tax and legal advisors required or considered necessary to make a proper evaluation of this investment. Specifically, Lender has had the opportunity to review the Company's annual report on Form 10-KSB for the fiscal year ended March 31, 2004 and all subsequent filings by the Company with the Securities and Exchange Commission (the "Securities Filings"). Lender understands that the Company does not have sufficient working capital to execute its business plan, the Company has substantial debt obligations, the Company has not filed its 10-QSB for the quarterly period ended September 30, 2004 so the information in the Securities Filings is not current and that the Company has no agreements assuring the Company that it will obtain additional funding based on any specific valuation or at all. In making the decision to acquire the Securities, the Lender and its advisers have relied solely upon the Securities Filings and their own independent investigations, and fully understand that there are no guarantees, assurances or promises in connection with any investment hereunder and understand that the particular tax consequences arising from this investment in the Company will depend upon its individual circumstances. Lender further understands that no opinion is being given Accredited Investor as to any securities or tax matters involving the offering. 5.6 Lender also understands and agrees that stop transfer instructions relating to the Securities will be placed in the Company's transfer ledger, and that the Securities will bear a legend in substantially the following form: THIS SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT. 5.7 Lender knows that the Securities are offered and sold pursuant to exemptions from registration defined under the Securities Act of 1933, as amended (the "Act"). Lender has been provided with and state securities law basedreviewed the SEC Filings and has made its own independent due diligence investigation of Borrower; provided, however, that such investigation shall not impact in partany manner Borrower's responsibility for the representations and warranties made hereunder. Lender is qualified to analyze the merits of an investment in Borrower. B. Lender acknowledges that the Term Loans and any Shares received by it upon conversion of the Term Loans and/or Commitments have not been registered under the Act and may not be transferred, on these warranties and representationsassigned or resold unless registered pursuant to the Act or pursuant to an exemption under the Act; provided, which are however, that the very essence of foregoing shall not impact in any manner Borrower's obligations under the Act. C. Lender has entered into this Agreement, issued the Commitments to make the Term Loans and constitute acquired the Conversion rights hereunder without a material part view towards sale or distribution thereof; provided, however, that, as set forth in Section 8.03 hereof, the distribution of any Shares acquired after Conversion of the bargained-for consideration without which this Agreement would not have been executed. 5.8 Lender has Term Loans and/or Commitments shall be in the capacity to protect Lender's own interest in connection with this transaction or has a pre-existing personal or business relationship with the Company or one or more of its officers, directors or controlling persons consisting of personal or business contacts of a nature sole control and duration such as would enable a reasonably prudent purchaser to be aware of the character, business acumen and general business and financial circumstances of such person with whom such relationship exists. 5.9 This Agreement when fully executed and delivered by the Company will constitute a valid and legally binding obligation of Lender, enforceable in accordance with its terms. Lender was not formed or organized for the specific purpose of acquiring the Securities. In the event Lender is an entity, the purchase of the Securities by Lender is a permissible investment in accordance with Lender's Articles of Incorporation or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person signing this document and all documents necessary to consummate the purchase of the Securities has all requisite authority to sign such documents on behalf discretion of Lender. 5.10 D. On each date of Conversion of the Term Loans and/or Commitments pursuant to Article X hereof, the representations and warranties of Lender represents that Lender is a sophisticated and an "accredited investor" as defined under Rule 501 of Regulation D.contained in this Article XI shall be deemed repeated.

Representations of Lender. 5.1 Lender hereby represents and warrants to Borrower as follows: (a) Lender understands that the investment in the Promissory Note (and the securities issued hereunder and issuable on conversion of the Promissory Note) is a speculative investment and represents that Lender is aware of the business affairs and financial condition of Borrower and has acquired sufficient information about Borrower to reach an informed and knowledgeable decision to acquire the Promissory Note. Moreover Lender acknowledges that the Promissory Note is being acquired for investment for Lender's representations in this Agreement are complete own account, not as a nominee or agent, and accurate not with a view to the best resale or distribution of any part thereof, and that Lender has no present intention of selling, granting any participation in, or otherwise distributing the same. Lender further understands that the Promissory Note has not been registered under the Securities Act of 1933, as amended (the "Act"), or applicable state securities laws by reason of specific exemptions therefrom, which exemptions depend on, among other things, the bona fide nature of Lender's knowledge, and the Company may rely upon theminvestment intent as expressed herein. 5.2 (b) Lender acknowledges that he has received and reviewed the Promissory Note and all the information Lender considers necessary or appropriate for deciding whether to make the investment contemplated herein and accept the Promissory Note. Lender further represents that Lender has had an opportunity to ask questions and receive answers from Borrower regarding the business, properties, prospects and financial condition of Borrower. (c) Lender is able to an investor in securities of companies in the development stage and acknowledges that he can bear the economic risk of an investment in the Note, warrant and the underlying common stock (individually and collectively, the "Securities") can afford the loss of the entire investment in the Securitiesits investment, and will, after making an investment has such knowledge and experience in financial or business matters that he is capable of evaluating the Securities, have sufficient means merits and risks of providing for Lender's current needs and possible future contingenciesthis investment. 5.3 The Securities will not be sold by (d) Lender without registration under applicable securities acts or a proper exemption from such registration. 5.4 The Securities are being acquired for Lender's own account and risk, for investment purposes, and not on behalf of any other person or with a view to, or for resale in connection with, any distribution thereof is an "accredited investor" within the meaning of the Securities Act of 1933. Lender is aware that there are substantial restrictions on the transferability of the Securities. 5.5 Lender has had access to any and all information concerning the Company that Lender and its financial, tax and legal advisors required or considered necessary to make a proper evaluation of this investment. Specifically, Lender has had the opportunity to review the Company's annual report on Form 10-KSB for the fiscal year ended March 31, 2004 and all subsequent filings by the Company with the U.S. Securities and Exchange Commission (the "Securities FilingsSEC"). ) Rule 501 of Regulation D, as presently in effect. (e) Lender understands that the Company does securities issuable on conversion of the Promissory Note will be characterized as "restricted securities" under the United States federal securities laws inasmuch as they would be acquired from Borrower in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Act only in certain limited circumstances. In this connection, Lender represents that Lender is familiar with SEC Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Act. Lender understands and acknowledges that Borrower has no obligation to insure that Lender will be afforded the rights set forth in Rule 144, and specifically acknowledges that Borrower will have sufficient working capital no obligation to execute its business planinsure that public information is available with respect to Borrower. (f) It is understood that the certificates evidencing the securities issuable hereunder and upon conversion of the Promissory Note may bear , inter alia, the Company has substantial debt obligations, the Company has not filed its 10-QSB for the quarterly period ended September 30, 2004 so the information in the Securities Filings is not current and that the Company has no agreements assuring the Company that it will obtain additional funding based on any specific valuation or at all. In making the decision to acquire the Securities, the Lender and its advisers have relied solely upon the Securities Filings and their own independent investigations, and fully understand that there are no guarantees, assurances or promises in connection with any investment hereunder and understand that the particular tax consequences arising from this investment in the Company will depend upon its individual circumstances. Lender further understands that no opinion is being given as to any securities or tax matters involving the offering. 5.6 Lender also understands and agrees that stop transfer instructions relating to the Securities will be placed in the Company's transfer ledger, and that the Securities will bear a legend in substantially the following formlegend: THIS "THESE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDEDAMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE THE SECURITIES UNDER SUCH THE ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH THE ACT. 5.7 Lender knows that the Securities are offered and sold pursuant to exemptions from registration under the Securities Act of 1933, and state securities law based, in part, on these warranties and representations, which are the very essence of this Agreement, and constitute a material part of the bargained-for consideration without which this Agreement would not have been executed. 5.8 Lender has the capacity to protect Lender's own interest in connection with this transaction or has a pre-existing personal or business relationship with the Company or one or more of its officers, directors or controlling persons consisting of personal or business contacts of a nature and duration such as would enable a reasonably prudent purchaser to be aware of the character, business acumen and general business and financial circumstances of such person with whom such relationship exists. 5.9 This Agreement when fully executed and delivered by the Company will constitute a valid and legally binding obligation of Lender, enforceable in accordance with its terms. Lender was not formed or organized for the specific purpose of acquiring the Securities. In the event Lender is an entity, the purchase of the Securities by Lender is a permissible investment in accordance with Lender's Articles of Incorporation or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person signing this document and all documents necessary to consummate the purchase of the Securities has all requisite authority to sign such documents on behalf of Lender. 5.10 Lender represents that Lender is a sophisticated and an "accredited investor" as defined under Rule 501 of Regulation D.

Representations of Lender. 5.1 Lender's representations in this Agreement are complete and accurate to the best of Lender's knowledge, and the Company may rely upon them. 5.2 Lender is able to bear the economic risk of an investment in the Note, warrant Note and the underlying common stock (individually and collectively, the "Securities") can afford the loss of the entire investment in the Securities, and will, after making an investment in the Securities, have sufficient means of providing for Lender's current needs and possible future contingencies. 5.3 The Securities will not be sold by Lender without registration under applicable securities acts or a proper exemption from such registration. 5.4 The Securities subscribed for herein are being acquired for Lender's own account and risk, for investment purposes, and not on behalf of any other person or with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933. Lender is aware that there are substantial restrictions on the transferability of the Securities. 5.5 Lender has had access to any and all information concerning the Company that Lender and its his financial, tax and legal advisors required or considered necessary to make a proper evaluation of this investment. Specifically, Lender has had the opportunity to review the Company's annual report on Form 10-KSB for the fiscal year ended March December 31, 2004 and all subsequent filings by the Company with the Securities and Exchange Commission (the "Securities Filings")Commission. Lender understands that the The Company does not have sufficient working capital assets to execute its business plan, repay the Company Loan and has substantial debt obligations, the Company has not filed its 10-QSB for the quarterly period ended September 30, 2004 so the information had minimal operations in the Securities Filings is not current and that the Company has no agreements assuring the Company that it will obtain additional funding based on any specific valuation or at allpast years. In making the decision to acquire the Securities, the Lender and its his advisers have relied solely upon the Securities Filings and their own independent investigations, and fully understand that there are no guarantees, assurances or promises in connection with any investment hereunder and understand that the particular tax consequences arising from this investment in the Company will depend upon its his individual circumstances. Lender further understands that no opinion is being given as to any securities or tax matters involving the offering. 5.6 Lender also understands and agrees that stop transfer instructions relating to the Securities will be placed in the Company's transfer ledger, and that the Securities will bear a legend in substantially the following form: THIS SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT. 5.7 Lender knows that the Securities are offered and sold pursuant to exemptions from registration under the Securities Act of 1933, and state securities law based, in part, on these warranties and representations, which are the very essence of this Agreement, and constitute a material part of the bargained-for consideration without which this Agreement would not have been executed. 5.8 Lender has the capacity to protect Lender's own interest in connection with this transaction or has a pre-existing personal or business relationship with the Company or one or more of its officers, directors or controlling persons consisting of personal or business contacts of a nature and duration such as would enable a reasonably prudent purchaser to be aware of the character, business acumen and general business and financial circumstances of such person with whom such relationship exists. 5.9 This Agreement when fully executed and delivered by the Company will constitute a valid and legally binding obligation of Lender, enforceable in accordance with its terms. Lender was not formed or organized for the specific purpose of acquiring the Securities. In the event Lender is an entity, the purchase of the Securities by Lender is a permissible investment in accordance with Lender's Articles of Incorporation or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person signing this document and all documents necessary to consummate the purchase of the Securities has all requisite authority to sign such documents on behalf of Lender. 5.10 Lender represents that Lender is a sophisticated and an "accredited investor" as defined under Rule 501 of Regulation D.

Representations of Lender. 5.1 Lender's representations in this Agreement are complete and accurate to the best of Lender's knowledge, and the Company may rely upon them. 5.2 Lender is able to bear the economic risk of an investment in the Note, warrant Note and the underlying common stock Common Stock into which the Notes are convertible (individually the "Shares," and collectivelytogether with the Note, the "Securities") can afford the loss of the entire investment in the Securities, and will, after making an investment in the Securities, have sufficient means of providing for Lender's current needs and possible future contingencies. 5.3 The Securities will not be sold by Lender without registration under applicable securities acts or a proper exemption from such registration. 5.4 The Securities are being acquired for Lender's own account and risk, for investment purposes, and not on behalf of any other person or with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933Act. Lender is aware that there are substantial restrictions on the transferability of the Securities. 5.5 Lender has had access to any and all information concerning the Company that Lender and its Lender's financial, tax and legal advisors required or considered necessary to make a proper evaluation of this investment. Specifically, Lender (i) has had the opportunity to review the Company's annual report on Form 10-KSB for the fiscal year ended March December 31, 2004 and all subsequent filings by the Company (the "Filings") with the Securities and Exchange Commission ("SEC") and (ii) is aware that Jack Shaw, Brian Holden and their affiliates delivered $200,000 to txx Xxxxxxy xxxx xxx xxxended to be a loan, but the "Securities Filings"). Lender understands that parties have been unable to reach agreement on the Company does not have sufficient working capital to execute its business plan, the Company loan terms and litigation has substantial debt obligations, the Company has not filed its 10-QSB for the quarterly period ended September 30, 2004 so the information in the Securities Filings is not current and that the Company has no agreements assuring the Company that it will obtain additional funding based on any specific valuation or at allbeen threatened. In making the decision to acquire the Securities, the Lender and its Lender's advisers have relied solely upon the Securities Filings and their own independent investigations, the Filings and the information provided in this Agreement, and fully understand that there are no guarantees, assurances or promises in connection with any investment hereunder and understand understands that the particular tax consequences arising from this investment in the Company will depend upon its Lender's individual circumstances. Lender further understands that no opinion is being given as to any securities or tax matters involving the offering. 5.6 Lender also understands and agrees that stop transfer instructions relating to the Securities will be placed in the Company's transfer ledger, and that the Securities will bear a restrictive legend in substantially the following form: THIS SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACTpursuant to Rule 144. 5.7 Lender knows that the Securities are offered and sold pursuant to exemptions from registration under the Securities Act of 1933, and state securities law based, in part, on these warranties and representations, which are the very essence of this Agreement, and constitute a material part of the bargained-for consideration without which this Agreement would not have been executed. 5.8 Lender has the capacity to protect Lender's own interest in connection with this transaction or has a pre-existing personal or business relationship with the Company or one or more of its Lender's officers, directors or controlling persons consisting of personal or business contacts of a nature and duration such as would enable a reasonably prudent purchaser to be aware of the character, business acumen and general business and financial circumstances of such person with whom such relationship exists. 5.9 This Agreement when fully executed and delivered by the Company will constitute a valid and legally binding obligation of Lender, enforceable in accordance with its terms. Lender was not formed or organized for the specific purpose of acquiring the Securities. In the event Lender is an entity, the purchase of the Securities by Lender is a permissible investment in accordance with Lender's Articles of Incorporation or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person signing this document and all documents necessary to consummate the purchase of the Securities has all requisite authority to sign such documents on behalf of Lender. 5.10 Lender represents that Lender is a sophisticated and an "accredited investor" as defined under Rule 501 of Regulation D.

Representations of Lender. 5.1 Lender's representations in Lender represents and warrants to the Borrower that: (a) Lender is acting for its own account, and has made its own independent decision to enter into the Agreement and as to whether the Agreement is appropriate or proper for it based upon its own judgment and upon advice of such advisors as it deems necessary. Lender acknowledges and agrees that it is not relying, and has not relied, upon any communication (written or oral) of Borrower or any affiliate of Borrower with respect to the legal, accounting, tax or other implications of the Agreement and that it has conducted its own analyses of the legal, accounting, tax and other implications of the Agreement; it being understood that information and explanations related to the terms and conditions of the Agreement shall not be considered investment advice or a recommendation to enter into the Agreement. The Lender hereby represents that it has consulted its own legal, tax and accounting advisors with respect to any legal, tax or accounting implications of the Agreement, has consulted Xxxxx Xxxx LLP with respect to any tax implications of this Agreement are complete and accurate has not relied on Borrower or any of its affiliates in any manner with respect to the best legal, tax or accounting implications of the Agreement. The foregoing representations and warranties are in addition to Lender's knowledge’s representations contained in Section 10.2 and 10.3 of the Agreement. (b) Lender is entering into the Agreement with a full understanding of all of the terms and risks of the Agreement (economic and otherwise) and is capable of evaluating and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks. Lender is also capable of assuming (financially and otherwise), and assumes, those risks. (c) Lender acknowledges that neither Borrower nor any affiliate of Borrower is acting as a fiduciary for or an advisor to Lender in respect of the Agreement. 4. Section 10.6 of the Agreement is hereby amended by adding the following at the end of the sentence: “For the avoidance of doubt, the Securities borrowed by Borrower from Lender that are held by Borrower pursuant the Pledge Agreement shall continue to be “Eligible Collateral” as defined in the Pledge Agreement. 5. Section 11.1(b) of the Agreement shall be deleted in its entirety. 6. A new Section 28 is added to the Agreement as follows: 28. Netting and Set-off (a) If on any date cash would otherwise be payable or Shares (as defined in the Confirmation between Lender and Borrower dated as of March 22, 2006 and the Supplemental Confirmation dated April 19, 2006, (Reference: NY-22087) setting forth the terms and conditions of a forward transaction between the parties, as amended from time to time (together with the Agreement, as defined therein, the “Transaction Agreement”)), or other property would otherwise be deliverable, pursuant to the Agreement, the Transaction Agreement or the Pledge Agreement by and between Lender and Borrower dated as of March 22, 2006, as amended from time to time (the “Pledge Agreement”), by Borrower to Lender and by Lender to Borrower and the type of property required to be paid or delivered by each such party on such date is the same, then, on such date, each such party’s obligation to make such payment or delivery will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable or deliverable by one such party exceeds the aggregate amount that would otherwise have been payable or deliverable by the other such party, replaced by an obligation upon the party by whom the larger aggregate amount would have been payable or deliverable to pay or deliver to the other party the excess of the larger aggregate amount over the smaller aggregate amount. (b) In addition to and without limiting any termination rights and rights of set-off that a party to the Agreement may have as a matter of law, pursuant to contract or otherwise, upon the occurrence of an Event of Default, Additional Event of Default, Termination Event or Additional Termination Event (each as defined in the Transaction Agreement) or an event giving rise to a payment obligation under the Transaction Agreement pursuant to Section 9.7 of the Equity Definitions (as defined in the Transaction Agreement), Borrower shall have the right to terminate, liquidate and otherwise close out the transactions contemplated by the Agreement, the Transaction Agreement, each outstanding Confirmation (as defined in the Transaction Agreement) and the Pledge Agreement pursuant to the terms hereof and thereof, and to set off any obligation that Borrower or any affiliate of Borrower may have to Lender, including without limitation any obligation to make any release, delivery or payment to Lender pursuant to the Pledge Agreement or the Agreement, against any right Borrower or any of its affiliates may have against Lender, including without limitation any right to receive a payment or delivery pursuant to any provision of the Agreement or the Transaction Agreement. In the case of a set-off of any obligation to release, deliver or pay assets against any right to receive assets of the same type, such obligation and right shall be set off in kind. In the case of a set-off of any obligation to release, deliver or pay assets against any right to receive assets of any other type, the value of each of such obligation and such right shall be determined by Borrower and the result of such set-off shall be that the net obligor shall pay or deliver to the other party an amount of cash or assets, at the net obligor’s option, with a value (determined, in the case of a delivery of assets, by Borrower) equal to that of the net obligation. In determining the value of any obligation to release or deliver Shares (as defined in the Transaction Agreement) or right to receive Shares, the value at any time of such obligation or right shall be determined by reference to the market value of the Shares at such time. If an obligation or right is unascertained at the time of any such set-off, Borrower may in good faith estimate the amount or value of such obligation or right, in which case set-off will be effected in respect of that estimate, and the Company may rely upon them. 5.2 Lender is able to bear the economic risk of an investment in the Note, warrant and the underlying common stock (individually and collectively, the "Securities") can afford the loss of the entire investment in the Securities, and will, after making an investment in the Securities, have sufficient means of providing for Lender's current needs and possible future contingencies. 5.3 The Securities will not be sold by Lender without registration under applicable securities acts or a proper exemption from such registration. 5.4 The Securities are being acquired for Lender's own relevant party shall account and risk, for investment purposes, and not on behalf of any other person or with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933. Lender is aware that there are substantial restrictions on the transferability of the Securities. 5.5 Lender has had access to any and all information concerning the Company that Lender and its financial, tax and legal advisors required or considered necessary to make a proper evaluation of this investment. Specifically, Lender has had the opportunity to review the Company's annual report on Form 10-KSB for the fiscal year ended March 31, 2004 and all subsequent filings by the Company with the Securities and Exchange Commission (the "Securities Filings"). Lender understands that the Company does not have sufficient working capital to execute its business plan, the Company has substantial debt obligations, the Company has not filed its 10-QSB for the quarterly period ended September 30, 2004 so the information in the Securities Filings is not current and that the Company has no agreements assuring the Company that it will obtain additional funding based on any specific valuation or at all. In making the decision to acquire the Securities, the Lender and its advisers have relied solely upon the Securities Filings and their own independent investigations, and fully understand that there are no guarantees, assurances or promises in connection with any investment hereunder and understand that the particular tax consequences arising from this investment in the Company will depend upon its individual circumstances. Lender further understands that no opinion is being given as to any securities or tax matters involving the offering. 5.6 Lender also understands and agrees that stop transfer instructions relating to the Securities will be placed in other party at the Company's transfer ledger, and that the Securities will bear a legend in substantially the following form: THIS SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACTtime such obligation or right is ascertained. 5.7 Lender knows that the Securities are offered and sold pursuant to exemptions from registration under the Securities Act of 1933, and state securities law based, in part, on these warranties and representations, which are the very essence of this Agreement, and constitute a material part of the bargained-for consideration without which this Agreement would not have been executed. 5.8 Lender has the capacity to protect Lender's own interest in connection with this transaction or has a pre-existing personal or business relationship with the Company or one or more of its officers, directors or controlling persons consisting of personal or business contacts of a nature and duration such as would enable a reasonably prudent purchaser to be aware of the character, business acumen and general business and financial circumstances of such person with whom such relationship exists. 5.9 This Agreement when fully executed and delivered by the Company will constitute a valid and legally binding obligation of Lender, enforceable in accordance with its terms. Lender was not formed or organized for the specific purpose of acquiring the Securities. In the event Lender is an entity, the purchase of the Securities by Lender is a permissible investment in accordance with Lender's Articles of Incorporation or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person signing this document and all documents necessary to consummate the purchase of the Securities has all requisite authority to sign such documents on behalf of Lender. 5.10 Lender represents that Lender is a sophisticated and an "accredited investor" as defined under Rule 501 of Regulation D.

Representations of Lender. 5.1 Lender's The initial Lender makes the following representations in as the basis for its undertakings hereunder: (a) The Lender is a [ ]. (b) The Lender has full power and authority to (i) enter into this Agreement, (ii) make the loan under this Agreement are complete and accurate acquire the Bond as evidence of such loan, (iii) perform the transactions contemplated hereby and (iv) carry out its obligations hereunder, and by proper action has duly authorized, executed and delivered this Agreement. (c) The Lender understands and acknowledges (i) that the scope of engagement of Xxxxxx Xxxxxxx Xxxxx LLP, Richmond, Virginia, as Bond Counsel with respect to this Agreement and the Bond, will be limited to matters set forth in their opinion based on their review of such proceedings and documents as they deem necessary to approve the validity of the Bond and this Agreement and the tax-exempt status of the interest on the Bond and (ii) that Bond Counsel has not been engaged and will not undertake to prepare or express an opinion as to the best of Lender's knowledge, and the Company may rely upon them. 5.2 Lender is able to bear the economic risk of an investment in the Note, warrant and the underlying common stock (individually and collectively, the "Securities") can afford the loss of the entire investment in the Securities, and will, after making an investment in the Securities, have sufficient means of providing for Lender's current needs and possible future contingencies. 5.3 The Securities will not be sold by Lender without registration under applicable securities acts accuracy or a proper exemption from such registration. 5.4 The Securities are being acquired for Lender's own account and risk, for investment purposes, and not on behalf completeness of any other person information that may have been furnished to the Lender or with a view to, or for resale relied upon by it in connection with, any distribution thereof within the meaning of the Securities Act of 1933. Lender is aware that there are substantial restrictions on the transferability of the Securities. 5.5 Lender has had access to any and all information concerning the Company that Lender and its financial, tax and legal advisors required or considered necessary to make a proper evaluation of this investment. Specifically, Lender has had the opportunity to review the Company's annual report on Form 10-KSB for the fiscal year ended March 31, 2004 and all subsequent filings by the Company with the Securities and Exchange Commission (the "Securities Filings"). Lender understands that the Company does not have sufficient working capital to execute its business plan, the Company has substantial debt obligations, the Company has not filed its 10-QSB for the quarterly period ended September 30, 2004 so the information in the Securities Filings is not current and that the Company has no agreements assuring the Company that it will obtain additional funding based on any specific valuation or at all. In making the decision to enter into this Agreement and acquire the Securities, the Lender and its advisers have relied solely upon the Securities Filings and their own independent investigations, and fully understand that there are no guarantees, assurances or promises in connection with any investment hereunder and understand that the particular tax consequences arising from this investment in the Company will depend upon its individual circumstances. Lender further understands that no opinion is being given as to any securities or tax matters involving the offeringBond. 5.6 (d) The Lender also understands and agrees acknowledges that stop transfer instructions relating to (i) the Securities will be placed in the Company's transfer ledger, and that the Securities will bear a legend in substantially the following form: THIS SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT. 5.7 Lender knows that the Securities are offered and sold pursuant to exemptions from registration Bond (A) has not been registered under the Securities Act of 1933, as amended, (B) has not been registered or otherwise qualified for sale under the securities laws of any state or (C) will not be listed on any securities exchange and state securities law based(ii) there is no established market for the Bond and none is likely to develop. The Lender understands and acknowledges that (x) its acquisition of the Bond is not intended to be subject to the requirements of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, in part, on these warranties and representations, which are the very essence of this Agreementas amended, and constitute a material part (y) in connection with its acquisition of the bargained-for consideration without which this Agreement would Bond, the Authority has not have been executed. 5.8 prepared or caused to be prepared, any official statement, private placement memorandum or other offering document. The representations and certifications of the Lender has contained in the capacity to protect Lender's own interest Certificate of Lender dated [ , 2022], and delivered in connection with this transaction or has a pre-existing personal or business relationship with the Company or one or more of its officers, directors or controlling persons consisting of personal or business contacts of a nature Agreement are hereby incorporated by reference and duration such as would enable a reasonably prudent purchaser to be aware of the character, business acumen and general business and financial circumstances of such person with whom such relationship existssupplement those representations set forth above. 5.9 This Agreement when fully executed and delivered by the Company will constitute a valid and legally binding obligation of Lender, enforceable in accordance with its terms. Lender was not formed or organized for the specific purpose of acquiring the Securities. In the event Lender is an entity, the purchase of the Securities by Lender is a permissible investment in accordance with Lender's Articles of Incorporation or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person signing this document and all documents necessary to consummate the purchase of the Securities has all requisite authority to sign such documents on behalf of Lender. 5.10 Lender represents that Lender is a sophisticated and an "accredited investor" as defined under Rule 501 of Regulation D.

Representations of Lender. 5.1 Lender's representations in this Agreement are complete and accurate to the best of Lender's knowledge, and the Company may rely upon them. 5.2 Lender is able to bear the economic risk of an investment in the Note, warrant Note and the underlying common stock (individually and collectively, the "Securities") can afford the loss of the entire investment in the Securities, and will, after making an investment in the Securities, have sufficient means of providing for Lender's current needs and possible future contingencies. 5.3 The Securities will not be sold by Lender without registration under applicable securities acts or a proper exemption from such registration. 5.4 The Securities subscribed for herein are being acquired for Lender's own account and risk, for investment purposes, and not on behalf of any other person or with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933. Lender is aware that there are substantial restrictions on the transferability of the Securities. 5.5 Lender has had access to any and all information concerning the Company that Lender and its financial, tax and legal advisors required or considered necessary to make a proper evaluation of this investment. Specifically, Lender has had the opportunity to review the Company's annual report on Form 10-KSB for the fiscal year ended March December 31, 2004 2003 and all subsequent filings by the Company with the Securities and Exchange Commission (the "Securities FilingsSEC"). Lender understands that the The Company does not have sufficient working capital assets to execute its business planrepay the Loan and has had minimal operations in past years. The Company has advised Lender that (i) there have been material developments that are not described in the Company's filings with the SEC, (ii) the Company's financial statements and other information contained in such filings do not reflect material changes that have occurred since the date of the financial statements in said filing and (iii) the Company believes that updated financial and business information would be material to Lender's investment decision. Notwithstanding the foregoing, Lender has substantial debt obligationsdeclined to review, the Company has not filed its 10-QSB for the quarterly period ended September 30, 2004 so the accept or consider additional information in the Securities Filings is not current and that the Company has no agreements assuring the Company that it will obtain additional funding based on any specific valuation or at allmaking an investment decision. In making the decision to acquire the Securities, the Lender and its advisers have relied solely upon the Securities Filings and their own independent investigations, and fully understand that there are no guarantees, assurances or promises in connection with any investment hereunder and understand that the particular tax consequences arising from this investment in the Company will depend upon its individual circumstances. Lender further understands that no opinion is being given as to any securities or tax matters involving the offering. 5.6 Lender also understands and agrees that stop transfer instructions relating to the Securities will be placed in the Company's transfer ledger, and that the Securities will bear a legend in substantially the following form: THIS SECURITIES REPRESENTED REPREENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT. 5.7 Lender knows that the Securities are offered and sold pursuant to exemptions from registration under the Securities Act of 1933, and state securities law based, in part, on these warranties and representations, which are the very essence of this Agreement, and constitute a material part of the bargained-for consideration without which this Agreement would not have been executed. 5.8 Lender has the capacity to protect Lender's own interest in connection with this transaction or has a pre-existing personal or business relationship with the Company or one or more of its officers, directors or controlling persons consisting of personal or business contacts of a nature and duration such as would enable a reasonably prudent purchaser to be aware of the character, business acumen and general business and financial circumstances of such person with whom such relationship exists. 5.9 This Agreement when fully executed and delivered by the Company will constitute a valid and legally binding obligation of Lender, enforceable in accordance with its terms. Lender was not formed or organized for the specific purpose of acquiring the Securities. In the event Lender is an entity, the purchase of the Securities by Lender is a permissible investment in accordance with Lender's Articles of Incorporation or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person signing this document and all documents necessary to consummate the purchase of the Securities has all requisite authority to sign such documents on behalf of Lender. 5.10 Lender represents that Lender is a sophisticated and an "accredited investor" as defined under Rule 501 of Regulation D.

Representations of Lender. 5.1 Lender's representations in this Agreement are complete and accurate to the best of Lender's knowledge, and the Company may rely upon them. 5.2 Lender is able to bear the economic risk of an investment in the Note, warrant Warrant and the underlying common stock securities (individually and collectively, the "Securities") can afford the loss of the entire investment in the Securities, and will, after making an investment in the Securities, have sufficient means of providing for Lender's current needs and possible future contingencies. 5.3 The Securities will not be sold by Lender without registration under applicable securities acts or a proper exemption from such registration. 5.4 The Securities are subscribed for herein is being acquired for Lender's own account and risk, for investment purposes, and not on behalf of any other person or with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933. Lender is aware that there are substantial restrictions on the transferability of the Securities. 5.5 Lender has had access to any and all information concerning the Company that Lender and its financial, tax and legal advisors required or considered necessary to make a proper evaluation of this investment. Specifically, Lender has had the opportunity to review the Company's annual report on Form 10-KSB for the fiscal year ended March 31, 2004 and all 1996. The Company has been delinquent on filing subsequent required filings by the Company with the Securities and Exchange Commission (the "Securities Filings"). Lender understands that the Company Commission, does not have sufficient working capital assets to execute its business planrepay the Loan and has had minimal operations over the past two years. The Company has advised Lender that (i) there have been material developments that are not described in such filings, (ii) the Company's financial statements and other information contained in such filings do not reflect material changes that have occurred since the date of the financial statements in said filing and (iii) the Company believes that updated financial and business information would be material to Lender's investment decision. Notwithstanding the foregoing, Lender has substantial debt obligationsdeclined to review, the Company has not filed its 10-QSB for the quarterly period ended September 30, 2004 so the accept or consider additional information in the Securities Filings is not current and that the Company has no agreements assuring the Company that it will obtain additional funding based on any specific valuation or at allmaking an investment decision. In making the decision to acquire the Securities, the Lender and its advisers have relied solely upon the Securities Filings and their own independent investigations, and fully understand that there are no guarantees, assurances or promises in connection with any investment hereunder and understand that the particular tax consequences arising from this investment in the Company will depend upon its individual circumstances. Lender further understands that no opinion is being given as to any securities or tax matters involving the offering. 5.6 Lender also understands and agrees that stop transfer instructions relating to the Securities will be placed in the Company's transfer ledger, and that the Securities will bear a legend in substantially the following form: THIS SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT. 5.7 Lender knows that the Securities are offered and sold pursuant to exemptions from registration under the Securities Act of 1933, and state securities law based, in part, on these warranties and representations, which are the very essence of this Agreement, and constitute a material part of the bargained-for consideration without which this Agreement would not have been executed. 5.8 Lender has the capacity to protect Lender's own interest in connection with this transaction or has a pre-existing personal or business relationship with the Company or one or more of its officers, directors or controlling persons consisting of personal or business contacts of a nature and duration such as would enable a reasonably prudent purchaser to be aware of the character, business acumen and general business and financial circumstances of such person with whom such relationship exists. 5.9 This Agreement when fully executed and delivered by the Company will constitute a valid and legally binding obligation of Lender, enforceable in accordance with its terms. Lender was not formed or organized for the specific purpose of acquiring the Securities. In the event Lender is an entity, the purchase of the Securities by Lender is a permissible investment in accordance with Lender's Articles of Incorporation or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person signing this document and all documents necessary to consummate the purchase of the Securities has all requisite authority to sign such documents on behalf of Lender. 5.10 Lender represents that Lender is a sophisticated and an "accredited investor" as defined under Rule 501 of Regulation D.

Representations of Lender. 5.1 Lender's representations in this Agreement are complete and accurate to the best of Lender's knowledge, and the Company may rely upon them. 5.2 Lender is able to bear the economic risk of an investment in the Note, warrant Note and the underlying common stock (individually and collectively, the "Securities") can afford the loss of the entire investment in the Securities, and will, after making an investment in the Securities, have sufficient means of providing for Lender's current needs and possible future contingencies. 5.3 The Securities will not be sold by Lender without registration under applicable securities acts or a proper exemption from such registration. 5.4 The Securities subscribed for herein are being acquired for Lender's own account and risk, for investment purposes, and not on behalf of any other person or with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933. Lender is aware that there are substantial restrictions on the transferability of the Securities. 5.5 Lender has had access to any and all information concerning the Company that Lender and its financial, tax and legal advisors required or considered necessary to make a proper evaluation of this investment. Specifically, Lender has had the opportunity to review the Company's annual report on Form 10-KSB for the fiscal year ended March December 31, 2004 2003 and all subsequent filings by the Company with the Securities and Exchange Commission (the "Securities FilingsSEC"). Lender understands that the The Company does not have sufficient working capital assets to execute its business planrepay the Loan and has had minimal operations in past years. The Company has advised Lender that (i) there have been material developments that are not described in the Company's filings with the SEC, (ii) the Company's financial statements and other information contained in such filings do not reflect material changes that have occurred since the date of the financial statements in said filing and (iii) the Company believes that updated financial and business information would be material to Lender's investment decision. Notwithstanding the foregoing, Lender has substantial debt obligationsdeclined to review, the Company has not filed its 10-QSB for the quarterly period ended September 30, 2004 so the accept or consider additional information in the Securities Filings is not current and that the Company has no agreements assuring the Company that it will obtain additional funding based on any specific valuation or at allmaking an investment decision. In making the decision to acquire the Securities, the Lender and its advisers have relied solely upon the Securities Filings and their own independent investigations, and fully understand that there are no guarantees, assurances or promises in connection with any investment hereunder and understand that the particular tax consequences arising from this investment in the Company will depend upon its individual circumstances. Lender further understands that no opinion is being given as to any securities or tax matters involving the offering. 5.6 Lender also understands and agrees that stop transfer instructions relating to the Securities will be placed in the Company's transfer ledger, and that the Securities will bear a legend in substantially the following form: THIS SECURITIES REPRESENTED REPREENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT. 5.7 Lender knows that the Securities are offered and sold pursuant to exemptions from registration under the Securities Act of 1933, and state securities law based, in part, on these warranties and representations, which are the very essence of this Agreement, and constitute a material part of the bargained-for consideration without which this Agreement would not have been executed. 5.8 Lender has the capacity to protect Lender's own interest in connection with this transaction or has a pre-existing personal or business relationship with the Company or one or more of its officers, directors or controlling persons consisting of personal or business contacts of a nature and duration such as would enable a reasonably prudent purchaser to be aware of the character, business acumen and general business and financial circumstances of such person with whom such relationship exists. 5.9 This Agreement when fully executed and delivered by the Company will constitute a valid and legally binding obligation of Lender, enforceable in accordance with its terms. Lender was not formed or organized for the specific purpose of acquiring the Securities. In the event Lender is an entity, the purchase of the Securities by Lender is a permissible investment in accordance with Lender's Articles of Incorporation or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person signing this document and all documents necessary to consummate the purchase of the Securities has all requisite authority to sign such documents on behalf of Lender. 5.10 Lender represents that Lender is a sophisticated and an "accredited investor" as defined under Rule 501 of Regulation D.D. SECTION 6

Representations of Lender. 5.1 Lender's representations In connection with the execution and delivery of this Note, Lxxxxx specifically represents, as of the date hereof, to Parent by acceptance of this Note as follows: (a) Lender is an “accredited investor” as defined in this Agreement are complete Rule 501(a) of Regulation D promulgated under the Securities Act and accurate to is (a) an “accredited investor” for the best purposes of Lender's knowledgeNational Instrument 45-106 – Prospectus Exemptions of the Canadian Securities Regulators, and (b) acquiring the Company may rely upon them. 5.2 Subordinate Voting Shares as principal and is not resident in British Columbia for the purposes of BC Instrument 72-305 – Distribution of Securities Outside of British Columbia. Lender is able to bear the economic risk of an investment in the Note, warrant acquiring this Note and the underlying common stock (individually and collectively, Subordinate Voting Shares of Parent to be issued upon the "Securities") can afford the loss of the entire investment in the Securities, and will, after making an investment in the Securities, have sufficient means of providing for Lender's current needs and possible future contingencies. 5.3 The Securities will not be sold by Lender without registration under applicable securities acts or a proper exemption from such registration. 5.4 The Securities are being acquired for Lender's own account and risk, conversion hereof for investment purposesfor its own account, as principal, and not on behalf of any other person or with a view totowards, or for resale in connection with, any the public sale or distribution thereof within of this Note or the meaning Subordinate Voting Shares of Parent, except pursuant to sales registered or exempted under the Securities Act of 1933. Lender is aware that there are substantial restrictions on the transferability of the Securitiesand Applicable Securities Legislation. 5.5 Lender has had access to any and all information concerning the Company that Lender and its financial, tax and legal advisors required or considered necessary to make a proper evaluation of this investment. Specifically, Lender has had the opportunity to review the Company's annual report on Form 10-KSB for the fiscal year ended March 31, 2004 and all subsequent filings by the Company with the Securities and Exchange Commission (the "Securities Filings"). b) Lender understands and acknowledges that this Note and the Company does not have sufficient working capital Subordinate Voting Shares of Parent to execute its business plan, the Company has substantial debt obligations, the Company has not filed its 10-QSB for the quarterly period ended September 30, 2004 so the information in the Securities Filings is not current and that the Company has no agreements assuring the Company that it will obtain additional funding based on any specific valuation or at all. In making the decision to acquire the Securities, the Lender and its advisers have relied solely be issued upon the Securities Filings conversion hereof are “restricted securities” under the federal securities laws inasmuch as they are being acquired from Parent in a transaction not involving a public offering and their own independent investigationsthat, under such laws and fully understand that there are no guaranteesapplicable regulations, assurances or promises in connection with any investment hereunder and understand that the particular tax consequences arising from this investment in the Company will depend upon its individual circumstances. Lender further understands that no opinion is being given as to any such securities or tax matters involving the offering. 5.6 Lender also understands and agrees that stop transfer instructions relating to the Securities will may be placed in the Company's transfer ledger, and that the Securities will bear a legend in substantially the following form: THIS SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT. 5.7 Lender knows that the Securities are offered and sold pursuant to exemptions from resold without registration under the Securities Act of 1933only in certain limited circumstances. In addition, Lxxxxx represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and state securities law based, understands the resale limitations imposed thereby and by the Securities Act. (c) Lender acknowledges that it can bear the economic and financial risk of its investment for an indefinite period and has such knowledge and experience in part, on these warranties financial or business matters that it is capable of evaluating the merits and representations, which are risks of the very essence investment in this Note and the Subordinate Voting Shares of Parent. Lender has had an opportunity to ask questions and receive answers from Parent regarding the terms and conditions of this AgreementNote and the business, and constitute a material part of the bargained-for consideration without which this Agreement would not have been executed. 5.8 Lender has the capacity to protect Lender's own interest in connection with this transaction or has a pre-existing personal or business relationship with the Company or one or more of its officersproperties, directors or controlling persons consisting of personal or business contacts of a nature and duration such as would enable a reasonably prudent purchaser to be aware of the character, business acumen and general business prospects and financial circumstances condition of such person Parent. Concurrently with whom such relationship existsany notice to Parent given under Section 2(a), Lender shall provide a Representation Letter to Parent. 5.9 This Agreement when fully executed and delivered by the Company will constitute a valid and legally binding obligation of Lender, enforceable in accordance with its terms. Lender was not formed or organized for the specific purpose of acquiring the Securities. In the event Lender is an entity, the purchase of the Securities by Lender is a permissible investment in accordance with Lender's Articles of Incorporation or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person signing this document and all documents necessary to consummate the purchase of the Securities has all requisite authority to sign such documents on behalf of Lender. 5.10 Lender represents that Lender is a sophisticated and an "accredited investor" as defined under Rule 501 of Regulation D.

Representations of Lender. 5.1 7.1 Lender's representations in this Agreement are complete and accurate to the best of Lender's knowledge, and the Company may rely upon them. 5.2 7.2 Lender is able to bear the economic risk of an investment in the Note, warrant Note and the underlying common stock (individually and collectively, the "Securities") can afford the loss of the entire investment in the Securities, and will, after making an investment in the Securities, have sufficient means of providing for Lender's current needs and possible future contingencies. 5.3 7.3 The Securities will not be sold by Lender without registration under applicable securities acts or a proper exemption from such registration. 5.4 7.4 The Securities are subscribed for herein is being acquired for Lender's own account and risk, for investment purposes, and not on behalf of any other person or with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933. Lender is aware that there are substantial restrictions on the transferability of the Securities. 5.5 7.5 Lender has had access to any and all information concerning the Company that Lender and its financial, tax and legal advisors required or considered necessary to make a proper evaluation of this investment. Specifically, Lender has had the opportunity to review the Company's annual report on Form 10-KSB for the fiscal year ended March 31, 2004 and all subsequent filings by the Company with the Securities and Exchange Commission (the "Securities Filings"). Lender understands that the Company does not have sufficient working capital to execute its business plan, the Company has substantial debt obligations, the Company has not filed its 10-QSB for the quarterly period ended September 30, 2004 so the information in the Securities Filings is not current and that the Company has no agreements assuring the Company that it will obtain additional funding based on any specific valuation or at all. In making the decision to acquire the Securities, the Lender and its advisers have relied solely upon the Securities Filings and their own independent investigations, and fully understand that there are no guarantees, assurances or promises in connection with any investment hereunder and understand that the particular tax consequences arising from this investment in the Company will depend upon its individual circumstances. Lender further understands that no opinion is being given as to any securities or tax matters involving the offering. 5.6 7.6 Lender also understands and agrees that stop transfer instructions relating to the Securities will be placed in the Company's transfer ledger, and that the Securities will bear a legend in substantially the following form: THIS SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT. 5.7 7.7 Lender knows that the Securities are offered and sold pursuant to exemptions from registration under the Securities Act of 1933, and state securities law based, in part, on these warranties and representations, which are the very essence of this Agreement, and constitute a material part of the bargained-for consideration without which this Agreement would not have been executed. 5.8 7.8 Lender has the capacity to protect Lender's own interest in connection with this transaction or has a pre-existing personal or business relationship with the Company or one or more of its officers, directors or controlling persons consisting of personal or business contacts of a nature and duration such as would enable a reasonably prudent purchaser to be aware of the character, business acumen and general business and financial circumstances of such person with whom such relationship exists. 5.9 7.9 This Agreement when fully executed and delivered by the Company will constitute a valid and legally binding obligation of Lender, enforceable in accordance with its terms. Lender was not formed or organized for the specific purpose of acquiring the Securities. In the event Lender is an entity, the purchase of the Securities by Lender is a permissible investment in accordance with Lender's Articles of Incorporation or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person signing this document and all documents necessary to consummate the purchase of the Securities has all requisite authority to sign such documents on behalf of Lender. 5.10 7.10 Lender represents that Lender is a sophisticated and an "accredited investor" as defined under Rule 501 of Regulation D.

Representations of Lender. 5.1 Lender's representations Lender represents, warrants and covenants as follows: a. Lender is familiar with the business and affairs of the Corporation and realizes an investment in this Agreement are complete the Shares involves a high degree of risk. b. Lender has been advised that there will be no public market for the Shares, it may not be possible to readily liquidate his/her investment; the shares have not been registered or qualified under Federal or State laws governing the issuance of securities; and accurate to the best Corporation has no intention of Lender's knowledgeregistering the Shares or reporting under the Act or any comparable or related Federal or State law. c. Lender acknowledges that the issuance of stock hereunder is a private transaction, and the Company may rely upon themhereby waives all claim and causes of action of any kind or nature relating to any subsequent assertion that this transaction is not private. 5.2 d. Lender acknowledges that his/her overall commitment to investments which are not readily marketable is not disproportionate to his/her net worth, and his/her investment in the Shares will not cause such overall commitment to become excessive; that Lender has adequate means of providing for his/her current needs and personal contingencies, and has no need for liquidity of this investment; that Lender has evaluated the risk of investing in the Corporation; that Lender is aware of the financial risks and possible financial hazards of purchasing the Shares and he/she has carefully considered these risks and hazards; and that Lender is able to bear the economic risk of an investment in the Noteinvestment, warrant and including the underlying common stock (individually and collectively, the "Securities") can afford the possibility of a complete loss of the entire investment in the Securities, and will, after making an investment in the Securities, have sufficient means of providing for Lender's current needs and possible future contingencies.thereof 5.3 e. The Securities will not be sold by Lender without registration under applicable securities acts or a proper exemption from such registration. 5.4 The Securities Shares are being acquired solely for Lender's own account and riskthe purpose of investment; are not being purchased for distribution, for investment purposessubdivision, sale or fractionalization thereof to the public generally; Lend has no contract, undertaking, agreement or arrangement with any person to sell, transfer or pledge to anyone else the Shares or any part the Lender has no present plans to enter into such contract, undertaking, agreement or arrangement, and not on behalf of any other person or with a view to, or for resale Lender is the sole party in connection with, any distribution thereof within the meaning interest of the Securities Act of 1933. Shares and as such is vested with all legal and equitable rights in such shares. f. Lender is aware that there are substantial restrictions on agrees the Corporation will restrict the transferability of the SecuritiesShares and will cause the certificate evidencing the Shares to bear a legend stating such reasonable and agreed upon restrictions against transfer. In this regard, Lender will notify the Corporation within thirty days of any sale or transfer of the Shares and will cause the purchaser to execute a Stock Agreement in form acceptable to Corporation prior to any sale or transfer. 5.5 g. Lender has had access acknowledges that all documents, records and books pertaining to any and all information concerning the Company that this investment have been made available for inspection by Lender, his or her attorney, accountant and/or agent for purchase. Lender and its financial, tax and legal advisors required or considered necessary to make a proper evaluation of this investment. Specifically, Lender has and/or his/her representative have had the opportunity to review ask questions of, and receive answers from, the Companyofficers of the Corporation concerning the operation of the Corporation's annual report on Form 10-KSB for business, and to obtain any additional information which the fiscal year ended March 31, 2004 officers of the Corporation possess or can acquire without unreasonable effort or expense which is necessary to verify the accuracy of the information requested and all subsequent filings by the Company with the Securities and Exchange Commission (the "Securities Filings")given to Lender. Lender understands that is purchasing the Company does not have sufficient working capital to execute its business plan, the Company has substantial debt obligations, the Company has not filed its 10-QSB for the quarterly period ended September 30, 2004 so the information in the Securities Filings is not current and that the Company has no agreements assuring the Company that it will obtain additional funding based on Shares without being furnished any specific valuation offering literature or at all. In making the decision to acquire the Securities, the Lender and its advisers have relied solely upon the Securities Filings and their own independent investigations, and fully understand that there are no guarantees, assurances or promises in connection with any investment hereunder and understand that the particular tax consequences arising from this investment in the Company will depend upon its individual circumstances. Lender further understands that no opinion is being given as to any securities or tax matters involving the offeringprospectus. 5.6 Lender also understands and agrees that stop transfer instructions relating to the Securities will be placed in the Company's transfer ledger, and that the Securities will bear a legend in substantially the following form: THIS SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT. 5.7 Lender knows that the Securities are offered and sold pursuant to exemptions from registration under the Securities Act of 1933, and state securities law based, in part, on these warranties and representations, which are the very essence of this Agreement, and constitute a material part of the bargained-for consideration without which this Agreement would not have been executed. 5.8 Lender has the capacity to protect Lender's own interest in connection with this transaction or has a pre-existing personal or business relationship with the Company or one or more of its officers, directors or controlling persons consisting of personal or business contacts of a nature and duration such as would enable a reasonably prudent purchaser to be aware of the character, business acumen and general business and financial circumstances of such person with whom such relationship exists. 5.9 This Agreement when fully executed and delivered by the Company will constitute a valid and legally binding obligation of Lender, enforceable in accordance with its terms. Lender was not formed or organized for the specific purpose of acquiring the Securities. In the event Lender is an entity, the purchase of the Securities by Lender is a permissible investment in accordance with Lender's Articles of Incorporation or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person signing this document and all documents necessary to consummate the purchase of the Securities has all requisite authority to sign such documents on behalf of Lender. 5.10 Lender represents that Lender is a sophisticated and an "accredited investor" as defined under Rule 501 of Regulation D.

Representations of Lender. 5.1 Lender's representations in this Agreement are complete Lender hereby represents and accurate warrants to the best of Lender's knowledge, and the Company may rely upon them.as follows: 5.2 (a) Lender is able to bear acquiring the economic risk of an investment in the Note, warrant and the underlying common stock (individually and collectively, the "Securities") can afford the loss of the entire investment in the Securities, and will, after making an investment in the Securities, have sufficient means of providing Debentures for Lender's current needs and possible future contingencies. 5.3 The Securities will not be sold by Lender without registration under applicable securities acts or a proper exemption from such registration. 5.4 The Securities are being acquired for Lender's its own account and riskaccount, for investment purposes, and not on behalf of any other person or with a view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the Securities Act, and applicable state securities laws. (b) Lender understands that (A) the Debentures and the shares of Common Stock into which such Debentures are convertible (1) have not been registered under the Securities Act or any state securities laws, (2) will be issued in reliance upon an exemption from the registration and prospectus delivery requirements of 1933the Securities Act pursuant to Section 4(2) and/or Regulation D thereof and (3) will be issued in reliance upon exemptions from the registration and prospectus delivery requirements of state securities laws which relate to private offerings, and (B) the Lender must therefore bear the economic risk of such investment indefinitely unless a subsequent disposition thereof is registered under the Securities Act and applicable state securities laws or is exempt therefrom. Lender is aware further understands that there are substantial restrictions on such exemptions depend upon, among other things, the transferability bona fide nature of the Securitiesinvestment intent of the Lender expressed herein. Pursuant to the foregoing, the Lender acknowledges that the certificates representing the shares of Common Stock into which the Debentures are convertible shall bear a restrictive legend substantially as follows: "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND STATE SECURITIES LAWS, AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS (I) REGISTERED UNDER THE APPLICABLE SECURITIES LAWS OR (II) AN OPINION OF COUNSEL, WHICH OPINION AND COUNSEL ARE BOTH REASONABLY SATISFACTORY TO THE COMPANY, HAS BEEN DELIVERED TO THE COMPANY AND SUCH OPINION STATES THAT THE SHARES MAY BE TRANSFERRED WITHOUT SUCH REGISTRATION." 5.5 (c) The Lender has had access knowledge, skill and experience in financial, business and investment matters relating to any an investment of this type and all information concerning is capable of evaluating the Company merits and risks of such investment and protecting the Lender's interest in connection with the acquisition of the Debentures. The Lender understands that the acquisition of the Debentures is a speculative investment and involves substantial risks and that the Lender could lose its entire investment in the Debentures. To the extent deemed necessary by the Lender, it has retained, at its own expense, and its financialrelied upon, appropriate professional advice regarding the investment, tax and legal advisors required or considered necessary to make a proper evaluation merits and consequences of this investmentpurchasing and owning the Debentures. Specifically, The Lender has had the opportunity ability to review bear the Company's annual report economic risks of its investment in the Borrower, including a complete loss of the investment, and the Lender has no need for liquidity in such investment. (d) The Lender has been furnished by the Borrower all information (or provided access to all information) regarding the business and financial condition of the Borrower, its expected plans for future business activities, the attributes of the Debentures and the merits and risks of an investment in the Borrower which the Lender has requested or otherwise need to evaluate the investment in the Borrower. (e) Lender is in receipt of and has carefully read and understands the following items: (i) Annual Report on Form 10-KSB K for the fiscal year ended March period ending December 31, 2004 and all subsequent filings 2002, filed by the Company with the Securities and Exchange Commission on March 31, 2003 (ii) Quarterly Reports on Form 10-Q for each of the periods ending March 31, 2003 and June 30, 2003, filed by the Company with the Securities and Exchange Commission on May 15, 2003 and August 13, 2003, respectively (iii) Definitive Proxy Statement on Form 14A, filed by the Company with the Securities and Exchange Commission on August 25, 2003; and (iv) Current Reports on Form 8-K filed by the Company with the Securities and Exchange Commission on April 9, 2003 and June 6, 2003; (v) Term sheet with respect to a proposed transaction with Schlumberger; and (vi) Term sheet with respect to a proposed transaction with Halliburton (collectively, items (i) through (vi), the "Securities FilingsDisclosure Documents"). Lender understands that the Company does not have sufficient working capital to execute its business plan, the Company has substantial debt obligations, the Company has not filed its 10-QSB for the quarterly period ended September 30, 2004 so the information in the Securities Filings is not current and that the Company has no agreements assuring the Company that it will obtain additional funding based on any specific valuation or at all. . (f) In making the decision to acquire proposed investment decision, the Securities, Lender is relying solely on investigations made by the Lender and its advisers representatives. The offer to sell the Debentures was communicated to the Lender in such a manner that the Lender was able to ask questions of and receive answers from the management of the Borrower concerning the terms and conditions of the proposed transaction and that at no time was the Lender presented with or solicited by or through any leaflet, public promotional meeting, television advertisement or any other form of general or public advertising or solicitation. (g) The Lender acknowledges that it has been advised that: (i) Neither the Debentures nor the shares of Common Stock into which the Debentures are convertible have relied solely been approved or disapproved by the SEC or any state securities commission nor has the SEC or any state securities commission passed upon the Securities Filings and their own independent investigations, and fully understand that there are no guarantees, assurances accuracy or promises in connection with adequacy of any investment hereunder and understand that representations by the particular tax consequences arising from this investment in Borrower. Any representation to the Company will depend upon its individual circumstances. Lender further understands that no opinion contrary is being given as to any securities or tax matters involving the offeringa criminal offense. 5.6 Lender also understands and agrees that stop transfer instructions relating (ii) Neither the Debentures nor the shares of Common Stock into which the Debentures are convertible have been recommended by any federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of any representation. Any representation to the Securities will be placed in contrary is a criminal offense. (iii) The Debentures and the Company's transfer ledger, and that shares of Common Stock into which the Debentures are convertible are "Restricted Securities" within the meaning of Rule 144 under the Securities will bear a legend in substantially the following form: THIS SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933Act, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT. 5.7 Lender knows that the Securities are offered subject to restrictions on transferability and sold pursuant to exemptions from registration resale and may not be transferred or resold except as permitted under the Securities Act of 1933, and applicable state securities law basedlaws, in part, on these warranties and representations, which are the very essence of this Agreement, and constitute a material part of the bargained-for consideration without which this Agreement would not have been executedpursuant to registration or exemption therefrom. 5.8 (h) The Lender has the capacity to protect Lender's own interest in connection with this transaction or has a pre-existing personal or business relationship with the Company or one or more of its officers, directors or controlling persons consisting of personal or business contacts of a nature further represents and duration such as would enable a reasonably prudent purchaser to be aware of the character, business acumen and general business and financial circumstances of such person with whom such relationship exists. 5.9 This Agreement when fully executed and delivered by the Company will constitute a valid and legally binding obligation of Lender, enforceable in accordance with its terms. Lender was not formed or organized for the specific purpose of acquiring the Securities. In the event Lender warrants that it is an entity, the purchase of the Securities by Lender is a permissible investment in accordance with Lender's Articles of Incorporation or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person signing this document and all documents necessary to consummate the purchase of the Securities has all requisite authority to sign such documents on behalf of Lender. 5.10 Lender represents that Lender is a sophisticated and an "accredited investor" as defined under within the meaning of Rule 501 of Regulation D.D under the Securities Act.

Representations of Lender. 5.1 Lender's representations Lender represents, warrants and covenants as follows: a. Lender is familiar with the business and affairs of the Corporation and realizes an investment in this Agreement are complete the Shares involves a high degree of risk. b. Lender has been advised that there will be no public market for the Shares; it may not be possible to readily liquidate his/her investment; the shares have not been registered or qualified under Federal or State laws governing the issuance of securities; and accurate to the best Corporation has no intention of Lender's knowledgeregistering the Shares or reporting under the Act or any comparable or related Federal or State law. c. Lender acknowledges that the issuance of stock hereunder is a private transaction, and the Company may rely upon themhereby waives all claims and causes of action of any kind or nature relating to any subsequent assertion that this transaction is not private. 5.2 d. Lender acknowledges that his/her overall commitment to investments which are not readily marketable is not disproportionate to his/her net worth, and his/her investment in the Shares will not cause such overall commitment to become excessive; that Lender has adequate means of providing for his/her current needs and personal contingencies, and has no need for liquidity of this investment; that Lender has evaluated the risk of investing in the Corporation; that Lender is aware of the financial risks and possible financial hazards of purchasing the Shares and he/she has carefully considered these risks and hazards; and that Lender is able to bear the economic risk of an investment in the Noteinvestment, warrant and including the underlying common stock (individually and collectively, the "Securities") can afford the possibility of a complete loss of the entire investment in the Securities, and will, after making an investment in the Securities, have sufficient means of providing for Lender's current needs and possible future contingenciesthereof. 5.3 e. The Securities will not be sold by Lender without registration under applicable securities acts or a proper exemption from such registration. 5.4 The Securities Shares are being acquired solely for Lender's own account and riskthe purpose of investment; are not being purchased for distribution, for investment purposessubdivision, sale or fractionalization thereof to the public generally; Lender has no contract, undertaking, agreement or arrangement with any person to sell, transfer or pledge to anyone else the Shares or any part thereof, Lender has no present plans to enter into such contract, 3 undertaking, agreement or arrangement, and not on behalf of any other person or with a view to, or for resale Lender is the sole party in connection with, any distribution thereof within the meaning interest of the Securities Act of 1933. Shares and as such is vested with all legal and equitable rights in such shares. f. Lender is aware that there are substantial restrictions on agrees the Corporation will restrict the transferability of the SecuritiesShares and will cause the certificate evidencing the Shares to bear a legend stating such reasonable and agreed upon restrictions against transfer. In this regard, Lender will notify the Corporation within thirty days of any sale or transfer of the Shares and will cause the purchaser to execute a Stock Agreement in form acceptable to Corporation prior to any sale or transfer. 5.5 g. Lender has had access acknowledges that all documents, records and books pertaining to any and all information concerning the Company that this investment have been made available for inspection by Lender, his or her attorney, accountant and/or agent for purchase. Lender and its financial, tax and legal advisors required or considered necessary to make a proper evaluation of this investment. Specifically, Lender has and/or his/her representative have had the opportunity to review ask questions of, and receive answers from, the Companyofficers of the Corporation concerning the operation of the Corporation's annual report on Form 10-KSB for business, and to obtain any additional information which the fiscal year ended March 31, 2004 officers of the Corporation possess or can acquire without unreasonable effort or expense which is necessary to verify the accuracy of the information requested and all subsequent filings by the Company with the Securities and Exchange Commission (the "Securities Filings")given to Lender. Lender understands that is purchasing the Company does not have sufficient working capital to execute its business plan, the Company has substantial debt obligations, the Company has not filed its 10-QSB for the quarterly period ended September 30, 2004 so the information in the Securities Filings is not current and that the Company has no agreements assuring the Company that it will obtain additional funding based on Shares without being furnished any specific valuation offering literature or at all. In making the decision to acquire the Securities, the Lender and its advisers have relied solely upon the Securities Filings and their own independent investigations, and fully understand that there are no guarantees, assurances or promises in connection with any investment hereunder and understand that the particular tax consequences arising from this investment in the Company will depend upon its individual circumstances. Lender further understands that no opinion is being given as to any securities or tax matters involving the offeringprospectus. 5.6 h. Lender also understands and agrees acknowledges that stop transfer instructions relating to the Securities will be placed in the Company's transfer ledger, and that the Securities will bear a legend in substantially the following form: THIS SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT. 5.7 Lender knows that the Securities are offered and sold pursuant to exemptions from registration under the Securities Act of 1933, and state securities law based, in part, on these warranties and representations, which are the very essence of this Agreement, and constitute a material part he/she has obtained disclosure of the bargained-for consideration without which this Agreement would not have been executed. 5.8 Lender has financial information of the capacity to protect Lender's own interest in connection with this transaction or has a pre-existing personal or business relationship with the Company or one or more of its officersCorporation, directors or controlling persons consisting of personal or business contacts of a nature and duration such as would enable a reasonably prudent purchaser to be that he/she is aware of the characterfact that the debts of the Corporation currently exceed his/her investment, business acumen that lawsuits have been threatened and general business and financial circumstances of such person with whom such relationship existscommenced regarding alleged outstanding liabilities. 5.9 This Agreement when fully executed i. Lender has been advised that this is a start-up corporation in its early stages of development and delivered by marketing. Further, Lender has been advised that he/she should retain an attorney to represent his/her individual interest and provide proper counseling as to the Company will constitute a valid risks and legally binding obligation of Lender, enforceable in accordance with its terms. Lender was not formed or organized for the specific purpose of acquiring the Securities. In the event Lender is an entity, the purchase proper analysis of the Securities by Lender is a permissible investment in accordance with Lender's Articles of Incorporation or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person signing this document and all documents necessary to consummate the purchase of the Securities has all requisite authority to sign such documents on behalf of Lenderinvestment. 5.10 Lender represents that Lender is a sophisticated and an "accredited investor" as defined under Rule 501 of Regulation D.

Representations of Lender. 5.1 Lender's representations in this Agreement are complete and accurate to the best of Lender's knowledge, and the Company may rely upon them. 5.2 Lender is able to bear the economic risk of an investment in the Note, warrant Warrant and the underlying common stock securities (individually and collectively, the "Securities") can afford the loss of the entire investment in the Securities, and will, after making an investment in the Securities, have sufficient means of providing for Lender's current needs and possible future contingencies. 5.3 The Securities will not be sold by Lender without registration under applicable securities acts or a proper exemption from such registration. 5.4 The Securities are subscribed for herein is being acquired for Lender's own account and risk, for investment purposes, and not on behalf of any other person or with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933. Lender is aware that there are substantial restrictions on the transferability of the Securities. 5.5 Lender has had access to any and all information concerning the Company that Lender and its financial, tax and legal advisors required or considered necessary to make a proper evaluation of this investment. Specifically, Lender has had the opportunity to review the Company's annual report on Form 10-KSB for the fiscal year ended March 31, 2004 and all 1996. The Company has been delinquent on filing subsequent required filings by the Company with the Securities and Exchange Commission (the "Securities Filings"). Lender understands that the Company Commission, does not have sufficient working capital assets to execute its business planrepay the Loan and has had minimal operations over the past two years. The Company has advised Lender that (i) there have been material developments that are not described in such filings, (ii) the Company's financial statements and other information contained in such filings do not reflect material changes that have occurred since the date of the financial statements in said filing and (iii) the Company believes that updated financial and business information would be material to Lender's investment decision. Notwithstanding the foregoing, Lender has substantial debt obligationsdeclined to review, the Company has not filed its 10-QSB for the quarterly period ended September 30, 2004 so the accept or consider additional information in the Securities Filings is not current and that the Company has no agreements assuring the Company that it will obtain additional funding based on any specific valuation or at allmaking an investment decision. In making the decision to acquire the Securities, the Lender Company and its advisers have relied solely upon the Securities Filings and their own independent investigations, and fully understand that there are no guarantees, assurances or promises in connection with any investment hereunder and understand that the particular tax consequences arising from this investment in the Company will depend upon its individual circumstances. Lender further understands that no opinion is being given as to any securities or tax matters involving the offering. 5.6 Lender also understands and agrees that stop transfer instructions relating to the Securities will be placed in the Company's transfer ledger, and that the Securities will bear a legend in substantially the following form: THIS SECURITIES REPRESENTED REPREENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT. 5.7 Lender knows that the Securities are offered and sold pursuant to exemptions from registration under the Securities Act of 1933, and state securities law based, in part, on these warranties and representations, which are the very essence of this Agreement, and constitute a material part of the bargained-for consideration without which this Agreement would not have been executed. 5.8 Lender has the capacity to protect Lender's own interest in connection with this transaction or has a pre-existing personal or business relationship with the Company or one or more of its officers, directors or controlling persons consisting of personal or business contacts of a nature and duration such as would enable a reasonably prudent purchaser to be aware of the character, business acumen and general business and financial circumstances of such person with whom such relationship exists. 5.9 This Agreement when fully executed and delivered by the Company will constitute a valid and legally binding obligation of Lender, enforceable in accordance with its terms. Lender was not formed or organized for the specific purpose of acquiring the Securities. In the event Lender is an entity, the purchase of the Securities by Lender is a permissible investment in accordance with Lender's Articles of Incorporation or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person signing this document and all documents necessary to consummate the purchase of the Securities has all requisite authority to sign such documents on behalf of Lender. 5.10 Lender represents that Lender is a sophisticated and an "accredited investor" as defined under Rule 501 of Regulation D.

Representations of Lender. 5.1 Lender's representations in this Agreement are complete and accurate to the best of Lender's knowledge, and the Company may rely upon them. 5.2 Lender is able to bear the economic risk of an investment in the Note, warrant Note and the underlying common stock Common Stock into which the Notes are convertible (individually the "Shares," and collectivelytogether with the Note, the "Securities") can afford the loss of the entire investment in the Securities, and will, after making an investment in the Securities, have sufficient means of providing for Lender's current needs and possible future contingencies. 5.3 The Securities will not be sold by Lender without registration under applicable securities acts or a proper exemption from such registration. 5.4 The Securities are being acquired for Lender's own account and risk, for investment purposes, and not on behalf of any other person or with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933Act. Lender is aware that there are substantial restrictions on the transferability of the Securities. 5.5 Lender has had access to any and all information concerning the Company that Lender and its Lender's financial, tax and legal advisors required or considered necessary to make a proper evaluation of this investment. Specifically, Lender has had the opportunity to review the Company's annual report on Form 10-KSB for the fiscal year ended March December 31, 2004 and all subsequent filings by the Company (the "Filings") with the Securities and Exchange Commission (the "Securities FilingsSEC"). Lender also understands that the Company does not have sufficient working capital to execute its business plan, is delinquent in timely filing required reports with the Company has substantial debt obligations, the Company has not filed its 10-QSB for the quarterly period ended September 30, 2004 so the information in the Securities Filings is not current and that the Company has no agreements assuring the Company that it will obtain additional funding based on any specific valuation or at allSEC. In making the decision to acquire the Securities, the Lender and its Lender's advisers have relied solely upon the Securities Filings and their own independent investigations, the Filings and the information provided in this Agreement, and fully understand that there are no guarantees, assurances or promises in connection with any investment hereunder and understand understands that the particular tax consequences arising from this investment in the Company will depend upon its Lender's individual circumstances. Lender further understands that no opinion is being given as to any securities or tax matters involving the offering. 5.6 Lender also understands and agrees that stop transfer instructions relating to the Securities will be placed in the Company's transfer ledger, and that the Securities will bear a restrictive legend in substantially the following form: THIS SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACTpursuant to Rule 144. 5.7 Lender knows that the Securities are offered and sold pursuant to exemptions from registration under the Securities Act of 1933, and state securities law based, in part, on these warranties and representations, which are the very essence of this Agreement, and constitute a material part of the bargained-for consideration without which this Agreement would not have been executed. 5.8 Lender has the capacity to protect Lender's own interest in connection with this transaction or has a pre-existing personal or business relationship with the Company or one or more of its Lender's officers, directors or controlling persons consisting of personal or business contacts of a nature and duration such as would enable a reasonably prudent purchaser to be aware of the character, business acumen and general business and financial circumstances of such person with whom such relationship exists. 5.9 This Agreement when fully executed and delivered by the Company will constitute a valid and legally binding obligation of Lender, enforceable in accordance with its terms. Lender was not formed or organized for the specific purpose of acquiring the Securities. In the event Lender is an entity, the purchase of the Securities by Lender is a permissible investment in accordance with Lender's Articles of Incorporation or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person signing this document and all documents necessary to consummate the purchase of the Securities has all requisite authority to sign such documents on behalf of Lender. 5.10 Lender represents that Lender is a sophisticated and an "accredited investor" as defined under Rule 501 of Regulation D.