8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)   October 26, 2011

COUPON EXPRESS, INC.

(Exact name of registrant as specified in its charter)

Nevada     0-20317 33-0912085

(State or other jurisdiction of incorporation)        (Commission File Number)          (IRS Employer Identification No.)

303 Fifth Avenue, Suite 210, New York, New York 10016

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (914) 371-2441

PSI CORPORATION

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On October 26, 2011, the Company entered into a Cumulative Convertible Senior Note and Warrant Purchase Agreement (the “Purchase Agreement”) governing the issuance of up to $1,900,000 aggregate principal amount of Cumulative Convertible Senior Notes (“Senior Notes”) and Warrants.  This summary is not a complete description of all of the terms of the Purchase Agreement and is qualified in its entirety by reference to the Purchase Agreement filed as Exhibit 10.1 hereto, which is incorporated by reference into this Item 1.01.

The Senior Notes include customary events of default, including, among other things, payment defaults, covenant breaches, certain representations and warranties, defaults to certain indebtedness, certain events of bankruptcy, liquidation and material judgments.  If such an event of default occurs, the holders of the Senior Notes, may be entitled to take various actions, which may include the acceleration of amounts due under the Senior Notes.  In connection with the foregoing, certain holders of approximately $646,000 of the Company’s convertible debt (the “Subordinated Debt”) entered into subordination agreements in favor of the holders of Senior Notes, for a term of one year subject to extension for one additional year under certain circumstances.  The foregoing description is qualified in its entirety by reference to the form of Senior Note and Subordination Agreement filed as Exhibits 10.2 and 10.6, respectively hereto and are incorporated by reference into this Item 1.01.

The Senior Notes, which mature on October 24, 2012 (subject to a one-year extension at the option of the holders of a majority in principal amount of the Senior Notes), are convertible into shares of the Company’s Series A Preferred Stock (“Preferred Stock”) at a rate of one share of Preferred Stock for each $25,000 of Senior Notes.  Upon the conversion of the Subordinated Debt to Common Stock, or upon the consent of a majority in principal amount of the Senior Notes, the Senior Notes will be converted into shares of Preferred Stock.  The Senior Notes are secured obligations of Coupon Express and will bear interest at a rate of 7% per year.

The shares of Preferred Stock bear a cumulative dividend of 7% per annum.  Upon liquidation, and upon an acquisition of the Company, the holders of Preferred Stock are entitled to a liquidation preference equal to the greater of (i) the amount invested plus all accrued and unpaid dividends, and (ii) the amount the holders of Preferred Stock, would receive had they converted the Preferred Stock to Common Stock immediately prior to such event.  Each share of Preferred Stock is convertible into 1,250,000 shares of the Company’s Common Stock, subject to certain adjustments.  The holders of a majority of the Series A Preferred Stock, voting as a separate class, or (ii) if a majority of the outstanding aggregate principal amount of Senior Notes shall not have been converted into Preferred Stock at such time, the holders of a majority of the then outstanding aggregate principal balance of the Senior Notes, is entitled to elect one director to the Board of Directors.  Further, such holders also have the right, under the Investor Rights Agreement, to consent to a second independent board member, and the Company has agreed that the board otherwise shall be comprised of five members.

Without the consent of (i) the holders of a majority of the Series A Preferred Stock, voting as a separate class, or (ii) if a majority of the outstanding aggregate principal amount of Senior Notes shall not have been converted into Preferred Stock at such time, the holders of a majority of the then outstanding aggregate principal balance of the Senior Notes, the Company shall not:

1.

amend the Articles of Incorporation, by-laws, this Certificate of Designation or any other certificate of designation or file any new certificate of designation;

2.

issue any Common Stock, Preferred Stock, Common Stock Equivalents or other securities or amend the terms thereof;

3.

redeem any outstanding Common Stock, Preferred Stock, Common Stock Equivalents or other securities;

4.

incur or repay indebtedness for borrowed money;

5.

acquisitions or dispositions of material assets;

6.

enter into any Acquisition, merger, consolidation, reorganization or similar transaction;

7.

create subsidiaries or other affiliates;

8.

dissolve, liquidate or wind up or file any petition under insolvency or bankruptcy laws;

9.

enter into any contract or arrangement with any present or former director, executive officer, shareholder, partner, member, employee or affiliate of the Company or any of its subsidiaries, or any of such Person’s affiliates or immediate family members;

10.

change senior management of the Company;

11.

declare or pay dividends or declare or make other distributions other than the Base Dividends; or

12.

adopt or materially deviate from the business plan or budget adopted by the Board of Directors and (i) the holders of a majority of the Preferred Stock, voting as a separate class, or (ii) if a majority of the outstanding aggregate principal amount of Senior Notes shall not have been converted into Preferred Stock at such time, the holders of a majority of the then outstanding aggregate principal balance of the Senior Notes.

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The Warrants are exercisable until October 24, 2016 at a price of $.04 per share (subject to certain adjustments) and entitle the holder to purchase 1,250,000 shares of the Company’s Common Stock for each $25,000 of principal amount of Senior Notes.  The investors have also entered into an Investors’ Right Agreement which among other things, provides for Board representation, registration rights, and certain provisions regarding future sales of securities by the Company.  The foregoing description is qualified in its entirety by reference to the form of Investors’ Rights Agreement, Certificate of Amendment to Articles of Incorporation—Series A Preferred Stock Rights, Designations and Privileges, and Warrant filed as Exhibits 10.3, 3.1 and 10.4, respectively, hereto and are incorporated by reference into this Item 1.01.

Item 3.02 Unregistered Sales of Equity Securities

On October 26, 2011, the Company completed a private placement of $1.4625 million aggregate principal amount of Cumulative Convertible Senior Notes (“Senior Notes”) and Warrants to certain investors, that included the Company’s existing Series A Preferred Stockholders.  The offers and sales were made without registration under the Securities Act, or the securities laws of certain states, in reliance on the exemptions provided by Section 4(2) of the Securities Act and Regulation D under the Securities Act and in reliance on similar exemptions under applicable state laws.  No general solicitation or general advertising was used in connection with the offering of the Senior Notes and Warrants.  The Company disclosed to the investors, and the investors acknowledged, that the Senior Notes, Preferred Stock and Warrants and the underlying Common Stock could not be sold unless they are registered under the Securities Act or unless an exemption from registration is available, and the certificates representing the Senior Notes, Warrants and Preferred Stock included, and the certificates representing the Common Stock to be issued upon conversion of the Senior Notes, Warrants and Preferred Stock and exercise of the Warrant include, a legend to that effect.  

In connection with the private placement, the Company converted $1,700,000 of its currently outstanding debt into 36,347,120 shares of Common Stock.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Appointment of New Director

The Preferred Stock Certificate of Designations, as amended, provides the lead investor, NextLevel VIII, LLC, with the right to designate a representative to the Company’s Board of Directors.  Accordingly, on October 26, 2011 the Board of Directors appointed Joseph Heller as a Director of the Company.  Mr. Heller is a manager of NextLevel VIII, LLC.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change of Fiscal Year

In connection with the Purchase Agreement, the Company’s Articles of Incorporation was amended to include revised Rights, Designations and Privileges of the Company’s Preferred Stock so as to read in its entirety as set forth in Exhibit 3.1 hereto, which is incorporated by reference into this Item 5.03.

Item 7.01 Regulation FD Disclosure

On October 27, 2011, the Company issued a press release announcing the Company’s closing of the private placement.  A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein.  In accordance with General Instruction B.2 of Form 8-K, Exhibit 99.1 hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

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Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.

Description

3.1

Certificate to Amendment to Articles of Incorporation-Series A Preferred Stock Rights, Designation and Privileges

10.1

Cumulative Convertible Senior Note and Warrant Purchase Agreement dated as of October 24, 2011 between the Company and certain investors listed thereto.

10.2

Form of Cumulative Convertible Senior Note

10.3

Investors’ Rights Agreement dated as of October 24, 2011 between the Company and certain investors listed thereto.

10.4

Form of Common Stock Warrant

10.5

Form of Security Agreement dated as of October 24, 2011 between the Company and the Collateral Agent

10.6

Form of Subordination Agreement dated as of October 24, 2011

99.1

Press Release dated October 27, 2011

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SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

COUPON EXPRESS, INC.

(Registrant)

Date  November 1, 2011                                                               

/s/ Eric L. Kash

(Signature)

Eric L. Kash
Chief Executive Officer

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EX-3.1

EX-10.1

Exhibit No. 10.1

EXECUTION COPY

CUMULATIVE CONVERTIBLE SENIOR NOTE

AND WARRANT PURCHASE AGREEMENT

THIS CUMULATIVE CONVERTIBLE SENIOR NOTE AND WARRANT PURCHASE AGREEMENT (this “Agreement”) is made as of the 24^th day of October, 2011 by and among COUPON EXPRESS, INC., a Nevada corporation (the “Company”), and the investors listed on Schedule A attached to this Agreement as amended from time to time (each a “Purchaser” and together the “Purchasers”).

WHEREAS, the Company desires to issue and sell, and Purchasers desire to purchase, Cumulative Convertible Senior Notes in substantially the form attached to this Agreement as Exhibit A (the “Notes”) which shall be convertible on the terms stated therein into equity securities of the Company, and warrants to purchase Common Stock, $0.001 par value (“Common Stock”), of the Company in substantially the form attached to this Agreement as Exhibit B (the “Warrants”). The Notes, the Warrants, the Shares (as defined below) and the Common Stock issuable upon conversion or exercise of such foregoing are collectively referred to herein as the “Securities.”

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1.Purchase and Sale of Notes and Warrants.

1.1.Sale and Issuance of Notes and Warrants.

(a)The Company shall adopt and file with the Secretary of State of Nevada on or before the Closing (as defined below) the Amended Certificate of Incorporation in the form of Exhibit C attached to this Agreement (the “Amended Certificate”).

(b)Subject to the terms and conditions of this Agreement, each Purchaser agrees to purchase at the Closing, and the Company agrees to sell and issue to each Purchaser at the Closing, (i) a Note in the principal amount set forth opposite such Purchaser’s name on the signature page, and (ii) a Warrant to purchase One Million Two Hundred Fifty Thousand (1,250,000) shares of Common Stock for each $25,000 of principal amount of Notes. The aggregate purchase price (the “Purchase Price”) of each Note and the accompanying Warrants shall be equal to 100% of the principal amount of such Note.

(c)Each Purchaser has hereby delivered and paid concurrently herewith the aggregate Purchase Price set forth on the applicable signature page hereof required to purchase the Notes and Warrants subscribed for hereunder, which amount has been paid in U.S. Dollars by cash, wire transfer or check, subject to collection, to the order of the Company; provided, however, each Purchaser who is a holder of Series A Preferred Stock (as designated prior to the filing of the Amended

Certificate) has paid the relevant Purchase Price in the form of all of such shares of Series A Preferred Stock (as designated prior to the filing of the Amended Certificate).

(d)Each Purchaser understands and acknowledges that the subscription under this Agreement is part of a proposed placement by the Company of up to $1,900,000 of Notes.

1.2.Closing; Delivery.

(a)The purchase and sale of the Notes and Warrants hereunder shall take place remotely via the exchange of documents and signatures, at 12:00 p.m. Eastern Time on the date hereof, or at such other time and place as the Company and the Purchasers mutual agree upon, orally or in writing (which time(s) and place(s) are each designated as the “Closing”). In the event there is more than one Closing, the term “Closing” shall apply to each such closing, unless otherwise specified herein.

(b)At each Closing, the Company shall deliver to each Purchaser the Note and Warrant to be purchased by such Purchaser against (1) payment of the applicable Purchase Price therefore by check payable to the Company or by wire transfer to a bank designated by the Company, and (2) delivery of counterpart signature pages to such Note and Warrant.

1.3.Use of Proceeds. In accordance the Company’s budget approved by the Company's Board of Directors and acceptable to the Lead Purchaser, the Company will use the proceeds from the sale of the Notes and Warrants hereunder solely (a) to fund general corporate expenses of the Company in the ordinary course of business; (b) to fund capital expenditures of the Company; (c) to fund working capital for sales and marketing of the Company; and (d) except as set forth in Section 2.2(e) of the Disclosure Schedule, to repay indebtedness of the Company; provided, however, no more than 15% of the proceeds from the sale of the Notes and Warrants hereunder (excluding any proceeds received in connection with the exchange of any securities of the Company) shall be used to repay such indebtedness.

1.4.Defined Terms Used in this Agreement. In addition to the terms defined elsewhere in this Agreement, the following terms shall have the meanings set forth in this Section 1.4:

“Agreement” shall have the meaning set forth in the preamble to this Agreement.

“Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including, without limitation, any general partner, managing member, officer or director of such Person that is controlled by one or more general partners or managing members of, or shares the same management company with, such Person.

“Amended Certificate” shall have the meaning set forth in Section 1.1(a).

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“Anti-Dilution Adjustments” shall have the meaning set forth in Section 2.41.

“Audit Opinion” shall have the meaning set forth in Section 2.29.

“Closing” shall have the meaning set forth in Section 1.2(a).

“Company” shall have the meaning set forth in the preamble to this Agreement.

“Code” means the Internal Revenue Code of 1986, as amended.

“Common Stock” shall have the meaning set forth in the recital to this Agreement.

“Common Stock Equivalents” means the issuance of any warrants, options, subscription or purchase rights with respect to shares of Common Stock and the issuance of securities convertible into or exchangeable, directly or indirectly, for shares of Common Stock, or the issuance of any warrants, options, subscription or purchase rights with respect to such convertible or exchangeable securities.

“Company Intellectual Property” means all patents, trademarks, service marks, tradenames, copyrights, licenses, software, slogans, domain names and other similar intangible assets (including any and all applications, registrations, extensions and renewals relating thereto), and all of the rights, benefits and privileges associated therewith, that are used by or are material to the Company.

“Disclosure Schedule” shall have the meaning set forth in Section 2.

“Environmental Laws” shall have the meaning set forth in Section 2.19.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exchange Agreements” shall have the meaning set forth in Section 5.11.

“Hazardous Substance” shall have the meaning set forth in Section 2.19.

“Investors' Rights Agreement” means the agreement among the Company and the Purchasers and certain other stockholders of the Company dated as of the date of the Closing, in the form of Exhibit D attached to this Agreement.

“Key Employee” means each of the Company's Chief Executive Officer and the employees set forth in Section 1.4 of the Disclosure Schedule.

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“Knowledge,” including the phrase “to the Company's knowledge,” shall mean the actual knowledge of the Company's officers and directors with the assumption that such officers and directors have made inquiry of the matters presented that is reasonable in the context of a development stage company with a limited number of employees.

“Lead Purchaser” means the Purchaser who purchases $1,000,000 of the up to $1,900,000 principal amount of Notes being sold under the Transaction Documents.

“Lien” means any lien, charge, encumbrance, security interest, right of first refusal, preemptive right or other restrictions of any kind.

“Material Adverse Effect” shall have the meaning set forth in Section 2.1.

“Material Permits” shall have the meaning set forth in Section 2.18.

“Note” shall have the meaning set forth in the recital to this Agreement.

“PCBs” shall have the meaning set forth in Section 2.19.

“Person” means any individual, corporation, partnership, trust, limited liability company, association, joint venture, government (or an agency or subdivision thereof) or other entity of any kind.

“Preferred Stock” shall have the meaning set forth in Section 2.2(b).

“Prohibited Transaction” means any (i) Short Sale, whether or not against the box, (ii) “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act) with respect to the Common Stock, (iii) grant of any other right (including, without limitation, any put or call option) with respect to the Common Stock or with respect to any security that includes, relates to or derives any significant part of its value from the Common Stock or (iv) other attempt by a Person to hedge its position in the Common Stock.

“Purchase Price” shall have the meaning set forth in Section 1.1(b).

“Purchaser” shall have the meaning set forth in the preamble to this Agreement.

“Purchaser Party” shall have the meaning set forth in Section 6.3.

“Sarbanes Oxley” shall have the meaning set forth in Section 2.7.

“SEC” shall have the meaning set forth in Section 2.6.

“SEC Reports” shall have the meaning set forth in Section 2.29.

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“Security Agreement” means that certain Security Agreement, dated as of October 24, 2011, made by the Company in favor of the Purchasers.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Series A Preferred Stock” shall have the meaning set forth in Section 2.2(b).

“Shares” means the shares of Series A Preferred Stock issued or issuable at the Closing or upon the conversion or exercise of any Securities.

“Short Sales” shall include all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock). 

“Stock Plan” shall have the meaning set forth in Section 2.2(d).

“Subordination Agreement” means that certain Subordination Agreement, dated as of September 23, 2011, between the Company and the Purchasers.

“Trading Affiliate” means any Affiliate of a Purchaser which (i) had knowledge of the transactions contemplated hereby prior to the date hereof, (ii) has or shares discretion relating to such Purchaser’s investments or trading or information concerning such Purchaser’s investments, including in respect of the Notes, Shares and Warrants, or (iii) is subject to such Purchaser’s review or input concerning such Affiliate's investments or trading.

“Trading Day” means (i) a day on which the Common Stock is traded on a Trading Market or (ii) if the Common Stock is not listed or quoted on a Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported by the Pink OTC Markets Inc. (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i) and (ii) hereof, then Trading Day shall mean a Business Day.

“Trading Market” means whichever of The New York Stock Exchange, The American Stock Exchange, the NASDAQ Global Market, the NASDAQ Capital Market, the OTC Bulletin Board or other principal market on which the Common Stock is listed or quoted for trading on the date in question.

“Transaction Documents” means this Agreement, the Investors' Rights Agreement, the Security Agreement, the Subordination Agreement, the Notes, the Warrants, the Amended Certificate and all other documents and agreements executed in connection with the transactions contemplated hereunder.

“Variable Rate Transaction” shall have the meaning set forth in Section 7.4.

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“Warrant” shall have the meaning set forth in the recital to this Agreement.

2.Representations and Warranties of the Company. The Company hereby represents and warrants to each Purchaser that, except as set forth on the Disclosure Schedule attached as Exhibit E to this Agreement (the “Disclosure Schedule”), which exceptions shall be deemed to be part of the representations and warranties made hereunder, the following representations and warranties are true and complete as of the date of the Closing, except as otherwise indicated. The Disclosure Schedule shall be arranged in sections corresponding to the numbered and lettered sections and subsections contained in this Section 2, and the disclosures in any section or subsection of the Disclosure Schedule shall qualify other sections and subsections in this Section 2 only to the extent it is readily apparent from a reading of the disclosure that such disclosure is applicable to such other sections and subsections.

2.1.Organization. Good Standing, Corporate Power and Qualification. The Company is corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has all requisite corporate power and authority to own and use its properties and assets and to carry on its business as presently conducted and as proposed to be conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify could (i) have a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) have a material adverse effect on the results of operations, assets, prospects, business or condition (financial or otherwise) of the Company or (iii) adversely affect the Company’s ability to perform on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”). No proceeding has been initiated in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

2.2.Capitalization. The authorized capital of the Company will consist, immediately prior to the Closing, of:

(a)800,000,000 shares of Common Stock, 267,906,199 shares of which are issued and outstanding immediately prior to the Closing. All of the outstanding shares of Common Stock have been duly authorized, duly and validly issued, fully paid and nonassessable and were issued in compliance with all applicable federal and state securities laws.

(b)5,000,000 shares of preferred stock, par value $0.001 per share (“Preferred Stock”), (i) eighty (80), of which have been designated Series A Preferred Stock (“Series A Preferred Stock”). The rights, privileges and preferences of the Preferred Stock are as stated in the Amended Certificate and as provided by the Nevada General Corporation Law. All outstanding shares of Series A Preferred Stock as designated prior to the effectiveness of the Amended Certificate shall be exchanged for Notes on or prior to the initial Closing and the Company shall have no outstanding Series A Preferred Stock or Preferred Stock as of the initial Closing. The Company holds no treasury stock and no shares of Preferred Stock in its treasury. The Company has reserved seventy-six (76) shares of Series A Preferred Stock for issuance upon conversion of the Notes.

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(c)The Company has reserved (i) 95,000,000 shares of Common Stock for issuance upon exercise of the Warrants, (ii) 95,000,000 shares of Common Stock for issuance upon conversion of the Series A Preferred Stock issuable upon conversion of the Notes, (iii) 104,978,742 shares of Common Stock for issuance upon exercise of outstanding warrants, (iv) 750,000 shares of Common Stock for issuance as payment of interest on outstanding notes, and (v) 6,460,000 shares of Common Stock for issuance upon the conversion of outstanding notes. The amount of reserved shares of Common Stock indicated in this Section 2.2(c) does not include 10,000,000 shares of Common Stock issuable upon conversion of the Series A Preferred Stock (as designated prior to the filing of the Amended Certificate) existing prior to the Closing or 10,000,000 shares of Common Stock issuable upon exercise of warrants held by the holders of such Series A Preferred Stock, which in each case are being exchanged for Notes and Warrants under this Agreement in accordance with the Exchange Agreements.

(d)The Company has reserved 20,000,000 shares of Common Stock for issuance to officers, directors, employees and consultants of the Company pursuant to its 2011 Non-Qualified Stock Option Plan duly adopted by the Board of Directors, subject to the approval by the Company stockholders (the “Stock Plan”). No options have been granted under the Stock Plan. The Company has furnished to the Purchasers complete and accurate copies of the Stock Plan and forms of agreements used thereunder. The Company has reserved 10,000,000 shares of Common Stock for issuance to Eric L. Kash upon the exercise of stock options granted to him under the Employment Agreement, dated November 10, 2008, between the Company and Eric L. Kash.

(e)Section 2.2(e) of the Disclosure Schedule sets forth the capitalization of the Company immediately following the Closing, with such capitalization assuming the sale of $1,900,000 of Notes hereunder. Except for (i) the conversion privileges of the Notes and exercise privileges of the Warrants to be sold under this Agreement, (ii) the rights provided in the Investors' Rights Agreement, and (iii) the securities and rights described in Section 2.2(c), Section 2.2(d) and Section 4.13 of this Agreement and Section 2.2(e) of the Disclosure Schedule, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, Preferred Stock (including Series A Preferred Stock) or any securities convertible into or exchangeable for shares of Common Stock or Preferred Stock (including Series A Preferred Stock), or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of Common Stock, Preferred Stock (including Series A Preferred Stock) or any securities convertible into or exchangeable for shares of Common Stock or Preferred Stock (including Series A Preferred Stock) or redeem shares of Common Stock or Preferred Stock (including Series A Preferred Stock) or securities or rights convertible, exercisable or exchangeable into shares of Common Stock or Preferred Stock (including Series A Preferred Stock). The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement, except as disclosed in the SEC Reports (as defined below). The issue and sale of the Notes and Warrants under the Transaction Documents will not, immediately or with the passage of time, obligate the Company to issue shares of Common Stock, Preferred Stock (including Series A

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Preferred Stock) or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities or otherwise trigger anti-dilution or similar provisions.

(f)The offers and sales of each of the outstanding securities of the Company, including, without limitation, the Common Stock, the Preferred Stock (including the Series A Preferred Stock), warrants to purchase shares of Common Stock options to purchase Common Stock and other securities convertible into or exchangeable for shares of Common Stock or Preferred Stock (including Series A Preferred Stock) were at all relevant times either registered under the Securities Act and the applicable state securities or blue sky laws or, based in part on the representations and warranties of the purchasers of such securities, exempt from such registration requirements.

2.3. Subsidiaries. The Company does not own or control, directly or indirectly, any interest in any Person and is not a participant in any joint venture, partnership or similar arrangement.

2.4.Authorization. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise carry out its obligations hereunder and thereunder. All corporate action required to be taken by the Company's Board of Directors and stockholders in order to authorize the Company to execute and deliver each of the Transaction Documents and to consummate the transactions contemplated hereby and thereby, including but not limited to the sale and issuance of the Notes and Warrants at the Closing and the Securities issuable upon the conversion or exercise of Securities has been taken and no further action is required by the Company, the Board of Directors or the Company's stockholders in connection therewith. Each Transaction Document, to which the Company is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, shall constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors' rights generally, (ii) as the enforcement thereof may be limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, or (iii) to the extent the indemnification provisions contained in the Investors' Rights Agreement may be limited by applicable federal or state securities laws.

2.5.Valid Issuance of Securities. The Notes and Warrants are duly authorized and, when issued, paid for and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens other than restrictions on transfer under the Transaction Documents and applicable state and federal securities laws. Assuming the accuracy of the representations and warranties of the Purchasers in Section 3 of this Agreement and subject to the filings described in Section 2.6(ii) below, the Notes and Warrants will be sold and issued in compliance with all applicable federal and state securities laws. The Shares and Common Stock issuable upon conversion or exercise of the Securities have been duly authorized and duly reserved for issuance, and upon issuance in accordance with the terms of the Amended Certificate, will be duly and validly

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issued, fully paid and nonassessable and free and clear of all Liens other than restrictions on transfer under the Transaction Documents and applicable federal and state securities laws. Based in part upon the representations and warranties of the Purchasers in Section 3 of this Agreement, and subject to Section 2.6 below, the Shares and Common Stock issuable upon conversion or exercise of the Securities will be issued in compliance with all applicable federal and state securities laws.

2.6.Approvals, Consents and Filings. The Company is not required to obtain any consent, waiver, approval, order or authorization of, give notice to, or make any filing or registration, qualification, designation, declaration with, any federal, state or local governmental authority, regulatory or self-regulatory authority or other Person in connection with the execution, delivery and consummation by the Company of the transactions contemplated by the Transaction Documents, except for (i) the filing of the Amended Certificate, which will have been filed with the Secretary of State of the State of Nevada as of the Closing and (ii) the filing of Form D with the Securities and Exchange Commission (the “SEC”), all of which have been made or will be made in a timely manner.

2.7.Litigation. Except as set forth in Section 2.7 of the Disclosure Schedule, there is no claim, action, suit, inquiry, proceeding, arbitration, complaint, charge or investigation pending or, to the Company's knowledge, threatened, (i) against or affecting the Company, its properties and assets or any officer, director or any Key Employee of the Company; (ii) that questions the legality, validity or enforceability of any of the Transaction Documents or the right of the Company to enter into them, or to consummate the transactions contemplated by the Transaction Documents, including, without limitation the issuance or sale of the Securities; or (iii) that could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. Neither the Company nor, to the Company's knowledge, any of its officers, directors or any Key Employee is a party or is named as subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality (in the case of officers, directors or any Key Employee, such as could have a Material Adverse Effect). There is no claim, action, suit, inquiry, proceeding, arbitration, complaint, charge or investigation by the Company pending or which the Company intends to initiate. The foregoing includes, without limitation, claims, actions, suits, inquiries, proceedings, arbitration, complaints, charges or investigations pending or, to the Company’s Knowledge, threatened involving the prior employment of any of the Company's employees, such employee’s services provided in connection with such employment, or any information or techniques allegedly proprietary to any of such employee’s prior employers, or such employee’s obligations under any agreements with any of such employee’s prior employers. Neither the Company nor any of its directors or officers, is or has been the subject of any action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the Company’s knowledge, there is not pending or contemplated, any investigation by the SEC involving the Company or any current or former director or officer of the Company. The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the Exchange Act or the Securities Act. No attorney representing the Company, whether or not employed by the Company, has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by the Company or any of its officers, directors, employees or agents to the Company’s Board of Directors or any

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committee thereof or to any director or officer of the Company pursuant to Section 307 of the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes Oxley”), and the SEC’s rules and regulations promulgated thereunder, and the Company is and, at all times has been in material compliance with all provisions of Sarbanes Oxley which are and have been applicable to it. Since October 31, 2010, there have been no internal investigations regarding accounting or revenue recognition discussed with, reviewed by or initiated at the direction of the Company’s chief executive officer, principal financial officer, the board or any committee thereof.

2.8.Intellectual Property. Section 2.8 of the Disclosure Schedule sets forth as of the date hereof, a true and complete list of the Company Intellectual Property. The Company owns, or has valid and enforceable licenses for, or other enforceable rights to use, the Company Intellectual Property that is used by or is material to the Company, except where the failure to own, license or have such enforceable rights could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Person has, to the Company's knowledge, rights to any Company Intellectual Property, except for, and to the extent of, the ownership rights of the owners of the Company Intellectual Property that is licensed to the Company and the license rights of any third parties to which any of the Company Intellectual Property is licensed. To the Company's knowledge, there is no infringement by any Person of any Company Intellectual Property. There is no pending or, to the Company's knowledge, threatened action, suit, proceeding, claim or other action by any Person challenging the Company's rights in or to any Company Intellectual Property, except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and the Company is unaware of any facts which could form a reasonable basis for any such action, suit, proceeding, claim or other action. The Company believes that it has the right to use, free and clear of material claims or rights of other persons, all of its customer lists, designs, computer software, systems, data compilations, and other information that are required for its products or its business as presently conducted or proposed to be conducted. There is no pending or, to the Company's knowledge, threatened action, suit, proceeding, claim or other action by any Person challenging the validity, enforceability or scope of any Company Intellectual Property, and the Company is unaware of any facts which could form a reasonable basis for any such action, suit, proceeding, claim or other action. There is no pending or, to the Company's knowledge, threatened action, suit, proceeding, claim or other action by any Person that the Company or any of its directors or employees infringes or otherwise violates, any patents, trademarks, service marks, tradenames, copyrights, licenses, software, slogans, domain names and other similar intangible assets (including any and all applications, registrations, extensions and renewals relating thereto), and all of the rights, benefits and privileges associated therewith, of others. The Company believes it has taken such reasonable steps as are required in accordance with sound business practice and business judgment to establish and preserve its ownership of all material Company Intellectual Property.

2.9.Title to Assets. The Company has good and marketable title in fee simple to all real property that is owned by it or that is material to its business and good and marketable title to all personal property owned by it or that is material to its business, in each case free and clear of all Liens, except for Liens that do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company. Any real property and facilities or personal property held under lease by the Company are held by it under valid, subsisting and

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enforceable leases or license agreements with which the Company is in compliance.

2.10.Compliance with Other Instruments. The Company is not in violation or default (and no event has occurred that with notice or lapse of time or both would become a default) (i) of any provisions of its Amended Certificate or Bylaws or other organizational or charter documents, (ii) of any instrument, judgment, order, writ or decree of any court, arbitrator or governmental, regulatory or self-regulatory authority to which the Company is subject, (iii) except to the extent of the indebtedness specified in Section 5.13, under any note, credit facility, indenture, debt or mortgage, or (iv) under any lease, agreement, contract, purchase order or other instrument to which the Company is a party or by which any property or assets of the Company is bound or affected that is required to be listed on the Disclosure Schedule or of any provision of federal or state statute, rule or regulation applicable to the Company, the violation of which could have a Material Adverse Effect.

2.11.No Conflicts. The execution, delivery and performance by the Company of the Transaction Documents, the issuance and sale of the Notes and Warrants and the consummation by the Company of the transactions contemplated by the Transaction Documents do not and will not (i) conflict with or violate any provision of the Company's Amended Certificate, Bylaws or other organizational or charter documents, (ii) except to the extent of the indebtedness specified in Section 5.13, conflict with, violate or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, indenture, debt or other instrument or other understanding to which the Company is a party or by which any property or assets of the Company is bound or affected, or (iii) conflict with or result in a violation of any law, statute, rule, regulation, ordinance, order, judgment, injunction, decree or other restriction of any court or governmental, regulatory or self-regulatory authority to which the Company is subject (including, without limitation, federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected.

2.12.Agreements; Actions.

(a)Except for the Transaction Documents, or as set forth in Section 2.12 of the Disclosure Schedule, there are no agreements, understandings, instruments, contracts or proposed transactions to which the Company is a party or by which any of the property or assets of the Company is bound that involve (i) obligations (contingent or otherwise) of, or payments to, the Company in excess of $25,000, (ii) the license of any patents, trademarks, service marks, tradenames, copyrights, licenses, software, slogans, domain names or other proprietary rights to or from the Company, (iii) the grant of rights to manufacture, produce, assemble, license, market, or sell its products to any other Person that limit the Company's exclusive right to develop, manufacture, assemble, distribute, market or sell its products, or (iv) indemnification by the Company with respect to infringements of any proprietary rights set forth in this Section 2.12.

(b)The Company has not, except to the extent of the indebtedness specified in Section 5.13, (i) declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii)

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incurred any outstanding indebtedness for money borrowed or incurred any other outstanding liabilities individually in excess of $25,000 or in excess of $100,000 in the aggregate, except as set forth in Section 2.13(b), (iii) made any loans or advances to any Person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. For the purposes of subsections (a) and (b) of this Section 2.12, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons the Company has reason to believe are affiliated with each other) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsection.

(c)The Company is not a guarantor or indemnitor of any indebtedness of any other Person.

2.13.Certain Transactions.

(a) Other than (i) standard employee benefits generally made available to all employees, (ii) the Transaction Documents (iii) approved in the written minutes of the Board of Directors (previously provided to the Purchasers or their counsel), or (iv) there are no agreements, understandings or proposed transactions between the Company and any of its current officers, directors, consultants or Key Employee, or any Affiliate thereof.

(b) Except for salary to the Chief Executive Officer, Eric L. Kash, the Company is not indebted, directly or indirectly, to any of its directors, officers or employees or to their respective spouses or children or to any Affiliate of any of the foregoing, other than in connection with expenses or advances of expenses incurred in the ordinary course of business or employee relocation expenses and for other customary employee benefits made generally available to all employees. None of the Company's directors, officers or employees, or any members of their immediate families, or any Affiliate of the foregoing are, directly or indirectly, indebted to the Company or, to the Company’s knowledge, have any (i) material commercial, industrial, banking, consulting, legal, accounting, charitable or familial relationship with any of the Company’s customers, suppliers, service providers, joint venture partners, licensees and competitors, (ii) direct or indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has a business relationship, or any firm or corporation which competes with the Company except that directors, officers or employees or stockholders of the Company may own stock in (but not exceeding two percent (2%) of the outstanding capital stock of) publicly traded companies that may compete with the Company or (iii) financial interest in any material contract with the Company.

2.14.Stockholders' Rights. Except as provided in the Investors' Rights Agreement, the Company is not under any obligation, and the transactions contemplated hereby will not trigger any obligation, to register under the Securities Act any of its currently outstanding securities or any securities issuable upon exercise or conversion of its currently outstanding securities, and no stockholder of the Company has entered into any agreement with the Company with respect to pre-emptive rights, right of participation, right of maintenance or similar right, or information and inspection rights. No stockholder

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of the Company has entered into any agreement with the Company with respect to the voting of capital shares of the Company. To the Company's knowledge, except as set forth in the Investors' Rights Agreement, no stockholder of the Company has entered into any agreement with any other stockholder of the Company with respect to rights of first refusal and co-sale rights.

2.15.Absence of Liens. The property and assets that the Company owns are free and clear of all mortgages, deeds of trust, liens, loans and encumbrances, except for statutory liens for the payment of current taxes that are not yet delinquent and encumbrances and liens that arise in the ordinary course of business and do not materially impair the Company's ownership or use of such property or assets. With respect to the property and assets it leases, the Company is in compliance with such leases and, to its knowledge, holds a valid leasehold interest free of any liens, claims or encumbrances other than those of the lessors of such property or assets.

2.16.Employee Matters.

(a)As of the date hereof, the Company employs 3 full-time employees and engages 6 consultants or independent contractors.

(b)None of the Company’s employees or consultants is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would materially interfere with such employee's or consultant's ability to promote the interest of the Company or that would conflict with the Company's business. Neither the execution or delivery of the Transaction Documents, nor the carrying on of the Company's business by the employees and consultants of the Company, nor the conduct of the Company's business as now conducted and as presently proposed to be conducted, will conflict with or result in a breach of the terms, conditions, or provisions of, or constitute a default under, any contract, covenant or instrument under which any such employee or consultant is now obligated.

(c)Except to its Chief Executive Officer, Eric L. Kash, the Company is not delinquent in payments to any of its employees, consultants, or independent contractors for any wages, salaries, commissions, bonuses, or other direct compensation for any service performed for it to the date hereof or amounts required to be reimbursed to such employees, consultants, or independent contractors. The Company has complied in all material respects with all applicable state and federal equal employment opportunity laws and with other laws related to employment, including those related to wages, hours, worker classification, and collective bargaining. The Company has withheld and paid to the appropriate governmental entity or is holding for payment not yet due to such governmental entity all amounts required to be withheld from employees of the Company and is not liable for any arrears of wages, taxes, penalties, or other sums for failure to comply with any of the foregoing.

(d)To the Company's knowledge, no Key Employee intends to terminate his employment with the Company or is otherwise likely to become unavailable to continue as a Key Employee, nor does the Company have a present intention to terminate the employment of any of the foregoing. Except as required by law, upon

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termination of the employment of any such employees, no severance or other payments will become due. The Company has no policy, practice, plan, or program of paying severance pay or any form of severance compensation in connection with the termination of employment services.

(e)The Company has not made any representations regarding equity incentives to any officer, employees, director or consultant that are inconsistent with the share amounts and terms set forth in the minutes of meetings of the Company's Board Of Directors.

(f)Section 2.16(f) of the Disclosure Schedule sets forth each employee benefit plan maintained, established or sponsored by the Company, or which the Company participates in or contributes to, which is subject to the Employee Retirement Income Security Act of 1974, as amended.

(g)The Company is not bound by or subject to (and none of its assets or properties is bound by or subject to) any written or oral, express or implied, contract, commitment or arrangement with any labor union, and no labor union has requested or, to the Company’s knowledge, has sought to represent any of the employees, representatives or agents of the Company. There is no strike or other labor dispute involving the Company pending, or to the Company's knowledge, threatened, which could have a Material Adverse Effect, nor is the Company aware of any labor organization activity involving its employees.

(h)To the Company’s knowledge, no Key Employee has been (a) subject to voluntary or involuntary petition under the federal bankruptcy laws or any state insolvency law or the appointment of a receiver, fiscal agent or similar officer by a court for his business or property; (b) convicted in a criminal proceeding or named as a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); (c) subject to any order, judgment, or decree (not subsequently reversed, suspended, or vacated) of any court of competent jurisdiction permanently or temporarily enjoining him from engaging, or otherwise imposing limits or conditions on his engagement in any securities, investment advisory, banking, insurance, or other type of business or acting as an officer or director of a public company; or (d) found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated any federal or state securities, commodities, or unfair trade practices law, which such judgment or finding has not been subsequently reversed, suspended, or vacated.

(i)The Company is in compliance with all federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

2.17.Insurance. The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company is engaged. The Company has in full force and effect fire and casualty insurance policies with coverage, sufficient in amount (subject to reasonable deductions) to allow it to replace any of its properties that might be damaged or destroyed. The Company has no reason to believe that it will not

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be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

2.18.Permits. The Company has all franchises, permits, licenses and any similar authority issued by the appropriate federal, state, local or foreign regulatory or self-regulatory authorities necessary for the conduct of its business, the lack of which could reasonably be expected to have a Material Adverse Effect (“Material Permits”). The Company is not in default under any of such franchises, permits, licenses or other similar authority and has not received any notice of proceeding relating to the revocation or modification of any Material Permit.

2.19.Environmental and Safety Laws. Except as could not reasonably be expected to have a Material Adverse Effect, to its knowledge (a) the Company is and has been in compliance with all Environmental Laws (as defined below); (b) there has been no release or threatened release of any pollutant, contaminant or toxic or hazardous material, substance or waste, or petroleum or any fraction thereof, (each a “Hazardous Substance”) on, upon, into or from any site currently or heretofore owned, leased or otherwise used by the Company; (c) there have been no Hazardous Substances generated by the Company that have been disposed of or come to rest at any site that has been included in any published federal, state or local “superfund” site list or any other similar list of hazardous or toxic waste sites published by any governmental authority in the United States; and (d) there are no underground storage tanks located on, no polychlorinated biphenyls (“PCBs”) or PCB-containing equipment used or stored on, and no hazardous waste as defined by the Resource Conservation and Recovery Act, as amended, stored on, any site owned or operated by the Company, except for the storage of hazardous waste in compliance with Environmental Laws. The Company has made available to the Purchasers true and complete copies of all material environmental records, reports, notifications, certificates of need, permits, pending permit applications, correspondence, engineering studies, and environmental studies or assessments.

For purposes of this Section 2.19, “Environmental Laws” means any federal, state, local or foreign law, regulation, or other applicable requirement relating to (a) releases or threatened release of Hazardous Substances; (b) pollution or protection of employee health or safety, public health or the environment; or (c) the manufacture, handling, transport, use, treatment, storage, or disposal of Hazardous Substances.

2.20.Directors and Officers. Immediately prior to the Closing, the directors of the Company will be Eric L. Kash, Herbert Sorocca, and James Tammaro, and as of the Closing, the authorized size of the Board of Directors of the Company shall be increased to five (5) members. As of the Closing, the Company shall (i) appoint the Lead Purchaser’s designee to the Board of Directors of the Company; (ii) add a fifth director, who will be independent, upon mutual agreement of the Lead Purchaser and the Company; and (iii) has no agreement, obligation or commitment with respect to the election of any individual or individuals to the Company's Board of Directors except as set forth in this Section 2.20, the Amended Certificate and Section 2.20 of the Disclosure Schedule. The Company covenants and agrees to take such actions a may be required to change the size of the Board of Directors of the Company in accordance with this Section 2.20. The only executive officer of the Company is Eric L. Kash. Eric L. Kash

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devotes his full business time and effort to the Company. All agreements, commitments and understandings of the Company, whether written or oral, with respect to any compensation to be provided to any of the Company’s directors or officers have been fully disclosed to the Purchasers.

2.21.Disclosure

(a)The Company confirms that neither it nor any Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that the Company believes constitutes material, non-public information; provided, however, that the Company makes no such representation with respect to the fact that the Company is entering into the Transaction Documents and intends to consummate the transactions contemplated hereby and thereby. The Company understands and confirms that the Purchasers will rely on the foregoing representations and covenants in effecting transactions in securities of the Company. Other than a confidentiality undertaking with respect to the transactions contemplated hereby, the Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3 hereof.

(b)Each of the disclosures furnished by or on behalf of the Company to the Purchasers regarding the Company, its business and the transactions contemplated by the Transaction Documents (including, without limitation, the representations and warranties of the Company herein) is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

2.22.Private Placement. Assuming the accuracy of the Purchasers' representations and warranties set forth in Section 3, no registration under the Securities Act or any state securities law is required for the offer and sale of the Notes and Warrants by the Company to the Purchasers as contemplated by the Transaction Documents, including the subsequent exercise of the Warrants, by virtue of the exemption provided by Rule 506 of the Securities Act.

2.23.No Integrated Offering. Assuming the accuracy of the Purchasers' representations and warranties set forth in Section 3, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Shares and Common Stock to be integrated with prior offerings of the Company for purposes of (i) the Securities Act, in a manner which would require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.

2.24.Registration Rights. Except as provided in the Investors' Rights Agreement, no holder of any securities of the Company has any rights to require registration of any securities of the Company (including “piggy-back” registration rights).

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2.25.No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Notes or Warrants by any form of general solicitation or general advertising. The Company has offered the Notes and Warrants for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 of the Securities Act.

2.26.Acknowledgement Regarding Purchasers' Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm's length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchaser's purchase of the Notes and Warrants. The Company further represents to each Purchaser that the Company's decision to enter into this Agreement and the Transaction Documents has been based solely on the independent evaluation of these transactions contemplated hereby by the Company and its representatives.

2.27.Foreign Corrupt Practices Act. Neither the Company, nor to the Company’s knowledge, any agent or other Person acting on behalf of the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any Person acting on its behalf of which the Company is aware), which is in violation of law or (iv) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended.

2.28.Rescission. No holder of any securities of the Company has any rights of rescission of similar rights with respect to such securities held by them.

2.29.SEC Reports; Financial Statements.

(a)The Company has filed or furnished all reports, schedules, forms, statements and other documents required to be filed or furnished by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, including its Quarterly Reports on Form 10-Q for the quarterly periods ended January 31, 2010, April 30, 2010, July 31, 2010, January 31, 2011, April 30, 2011 and July 31, 2011; and Annual Reports on Form 10-K for the years ended October 31, 2009 and October 31, 2010, copies of which have been made available to the Purchasers (the foregoing materials, including all exhibits thereto and documents incorporated by reference therein, copies of which have been made available to the Purchasers, being collectively referred to herein as the “SEC Reports”) on a timely basis or has timely filed a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or

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necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Except for Amendment No. 1 to the Quarterly Report on Form 10-Q for the quarterly period ended July 31, 2011, since the filing of the SEC Documents, no event has occurred that would require an amendment or supplement to any of the SEC Documents. The Company has not received any written comments from the SEC staff that have not been resolved to the satisfaction of the SEC staff.

(b)The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles in the United States applied on a consistent basis during the periods involved, except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. The Company is not required to file and will not be required to file any agreement, note, lease, mortgage, deed or other instrument entered into prior to the date hereof and to which the Company is a party or by which the Company is bound that has not been previously filed as an exhibit (including by way of incorporation by reference) to its report schedules, forms, statements or other documents filed or furnished to the SEC under the Exchange Act. [Patrick Rodgers, CPA, PA,] who has expressed his opinion with respect to the financial statements included in the Company’s annual report on Form 10-K for the fiscal year ended October 31, 2010 (the “Audit Opinion”), is independent of the Company pursuant to the standards set forth in Rule 2-01 of Regulation S-X promulgated by the SEC, and such firm is an independent registered public accounting firm that was otherwise qualified to render the Audit Opinion under applicable law and the rules and regulation of the SEC. There is no transaction, arrangement or other relationship between the Company and an unconsolidated or other off-balance-sheet entity that is required to be disclosed by the Company in its reports pursuant to the Exchange Act that has not been so disclosed in the SEC Reports. Since October 31, 2009, neither the Company nor, to the Company’s knowledge, any director, officer or employee of the Company, has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or its internal accounting controls, including any complaint, allegation, assertion or claim that the Company has engaged in questionable accounting or auditing practices.

2.30.Press Releases. The press releases disseminated by the Company during the one (1) year preceding the date of this Agreement do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made and when made, not misleading.

2.31.Material Changes. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in the SEC Reports, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has

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not incurred any liabilities (contingent or otherwise) other than trade payables, accrued expenses and other liabilities incurred in the ordinary course of business consistent with past practice, (iii) the Company has not altered its method of accounting or the identity of its auditors, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock incentive plans. The Company does not have pending before the SEC any request for confidential treatment of information. Except for the issuance and sale of the Notes and Warrants contemplated by this Agreement, no event, liability or development has occurred or exists with respect to the Company or its business, properties, operations or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made.

2.32.Internal Accounting Controls. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has timely filed and made available to the Purchasers all certifications and statements required by (x) Rule 13a-14 or Rule 15d-14 under the Exchange Act or (y) 18 U.S.C. Section 1350 (Section 906 of Sarbanes-Oxley) with respect to the Company’s SEC filings. The Company maintains disclosure controls and procedures required by Rule 13a-15 or Rule 15d-15 under the Exchange Act; such controls and procedures are effective to ensure that all material information concerning the Company is made known on a timely basis to the individuals responsible for the preparation of the Company’s SEC filings and other public disclosure documents; and the Company has evaluated the effectiveness of its internal accounting controls and disclosure controls and procedures in accordance with the Exchange Act and the rules and regulations promulgated thereunder and has disclosed any deficiencies or significant changes thereto in its SEC filings. The Company maintains internal control over financial reporting required by Rule 13a-14 or Rule 15d-14 under the Exchange Act; such internal control over financial reporting is effective and does not contain any material weaknesses.

2.33.Solvency. (i) The Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature; (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or

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in respect of its debt when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).

2.34.Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation with respect to any fees or with respect to any claims (other than such fees or commissions owed by an Purchaser pursuant to written agreements executed by such Purchaser which fees or commissions shall be the sole responsibility of such Purchaser) made by or on behalf of other Persons for fees of a type contemplated in this Section 2.34 that may be due in connection with the transactions contemplated by the Transaction Documents.

2.35.Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to the Company’s knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration. Except as specified in the SEC Reports, the Company has not, in the two (2) years preceding the date hereof, received notice from any Trading Market to the effect that the Company is not in compliance with the listing or maintenance requirements thereof. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with the listing and maintenance requirements for continued listing of the Common Stock on its current Trading Market. The issuance and sale of the Securities under the Transaction Documents does not contravene the rules and regulations of the Trading Market on which the Common Stock is currently listed or quoted, and no approval of the shareholders of the Company thereunder is required for the Company to issue and deliver to the Purchasers the maximum number of Securities contemplated by the Transaction Documents.

2.36.Investment Company. The Company is not, and is not an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

2.37.Application of Takeover Protections. The Company has taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Amended Certificate (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.

2.38.No Additional Agreements. The Company does not have any agreement or understanding with any Purchaser with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents.

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

2.40.Corporate Documents. The Amended Certificate and Bylaws of the Company are in the form provided to the Purchasers, have been duly authorized and adopted and are in full force and effect. The copy of the minute books of the Company provided to the Purchasers contains minutes of all meetings of directors and stockholders and all actions by written consent without a meeting by the directors and stockholders since the date of incorporation and accurately reflects all material respects all actions by the directors (and any committee of directors) and stockholders with respect to all transactions referred to in such minutes.

2.41. Anti-Dilution Waivers. The Company agrees to use its best efforts to obtain waivers of the application of the Anti-Dilution Adjustments from the holders of various instruments issued prior to the date hereof that contain certain “weighted average ratchet” anti-dilution adjustments (the “Anti-Dilution Adjustments”) within 90 days from the date hereof. Such waiver shall be in a form acceptable to the Lead Purchaser and shall include waivers of the right of such holders to adjustments in the exercise or conversion price of such instruments and the amount of Common Stock or Common Stock Equivalents issuable upon the conversion or exercise thereof upon the application of such Anti-Dilution Adjustments, whether the right of such application arose prior to the date hereof or arises on or after the date hereof.

3.Representations and Warranties of the Purchasers. Each Purchaser hereby represents and warrants to the Company, severally and not jointly, that:

3.1.Authorization. The Purchaser has full power and authority to enter into the Transaction Documents. The Transaction Documents to which the Purchaser is a party, when executed and delivered by the Purchaser, will constitute valid and legally binding obligations of the Purchaser, enforceable in accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors' rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, or (b) to the extent the indemnification provisions contained in the Investors' Rights Agreement may be limited by applicable federal or state securities laws.

3.2.Purchase Entirely for Own Account. This Agreement is made with the Purchaser in reliance upon the Purchaser's representations to the Company, which

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by the Purchaser's execution of this Agreement, the Purchaser hereby confirms, that the Securities to be acquired by the Purchaser will be acquired for investment for the Purchaser's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, the Purchaser further represents that the Purchaser does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person, with respect to any of the Securities. The Purchaser has not been formed for the specific purpose of acquiring the Securities.

3.3.Disclosure of Information. The Purchaser has had an opportunity to discuss the Company's business, management, financial affairs and the terms and conditions of the offering of the Notes and Warrants with the Company's management and has had an opportunity to review the Company's facilities. The foregoing, however, does not limit or modify the representations and warranties of the Company in Section 2 of this Agreement or the right of the Purchasers to rely thereon.

3.4.Restricted Securities. The Purchaser understands that the Securities have not been, and will not be, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser's representations as expressed herein. The Purchaser understands that the Notes and Warrants are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Purchaser must hold the Securities indefinitely unless they are registered with the SEC and qualified by state authorities, or an exemption from such registration and qualification requirements is available. The Purchaser acknowledges that the Company has no obligation to register or qualify the Securities, for resale except as set forth in the Investors' Rights Agreement. The Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Securities, and on requirements relating to the Company which are outside of the Purchaser's control, and which the Company is under no obligation and may not be able to satisfy.

3.5.No Public Market. The Purchaser understands that the public market for the Securities is either limited or does not exist, and that the Company has made no assurances that a public market will ever exist for the Securities.

3.6.Legends. The Purchaser understands that the Notes and Warrants and any securities issued in respect of or exchange for the Securities, may bear one or all of the following legends:

(a)“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT

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REQUIRED UNDER THE SECURITIES ACT OF 1933.”

(b)Any legend set forth in, or required by, the other Transaction Documents.

(c)Any legend required by the securities laws of any state to the extent such laws are applicable to the Securities represented by the certificate so legended.

3.7.Accredited Investor. Other than the Lead Purchaser, the Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

3.8.Foreign Investors. If the Purchaser is not a United States person (as defined by Section 7701(a)(30) of the Code), the Purchaser hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Shares or any use of this Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Shares. The Purchaser's subscription and payment for and continued beneficial ownership of the Shares will not violate any applicable securities or other laws of the Purchaser's jurisdiction.

3.9.Exculpation among Purchasers. The Purchaser acknowledges that it is not relying upon any Person, other than the Company and its officers and directors, in making its investment or decision to invest in the Company. The Purchaser agrees that neither any Purchaser nor the respective controlling Persons, officers, directors, partners, agents, or employees of any Purchaser shall be liable to any other Purchaser for any action heretofore taken or omitted to be taken by any of them in connection with the purchase of the Shares.

3.10.Residence. If the Purchaser is an individual, then the Purchaser resides in the state or province identified in the address of the Purchaser set forth on Schedule A attached to this Agreement; if the Purchaser is a partnership, corporation, limited liability company or other entity, then the office or offices of the Purchaser in which its principal place of business is identified in the address or addresses of the Purchaser set forth on Schedule A attached to this Agreement.

4.Additional Representations and Warranties of the Lead Purchaser. The Lead Purchaser hereby represents and warrants to the Company that (i) it has received the information required to be provided to it pursuant to Rule 502(b)(2) of the Securities Act, and (ii) it, alone or with its Purchaser Representative (as defined in Rule 501(h) of the Securities Act), has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the transactions contemplated by this Agreement and the other Transaction Documents.

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5.Conditions to the Purchasers' Obligations at Closing. The obligations of each Purchaser to purchase Shares at the Closing are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

5.1.Representations and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct in all respects as of the Closing.

5.2.Performance. The Company shall have performed and complied with all covenants, agreements, obligations and conditions contained in the Transaction Documents that are required to be performed or complied with by the Company on or before the Closing.

5.3.Compliance Certificate. The Chief Executive Officer of the Company shall deliver to the Purchasers at the Closing a certificate certifying that the conditions specified in Sections 5.1, 5.2, 5.4 and 5.5 have been fulfilled.

5.4.Qualifications. All authorizations, approvals or permits, if any, of any federal, state or local governmental authority, regulatory or self-regulatory authority or other Person that are required in connection with the lawful issuance and sale of the Securities pursuant to the Transaction Documents shall be obtained and effective as of the Closing.

5.5.No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

5.6.Adverse Changes. Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would be expected to have or result in a Material Adverse Effect.

5.7.No Suspensions of Trading in Common Stock; Listing. Trading in the Common Stock shall not have been suspended by the SEC or any Trading Market (except for any suspensions of trading of not more than one Trading Day solely to permit dissemination of material information regarding the Company) at any time since the date of execution of this Agreement, and the Common Stock shall have been at all times since such date listed for trading or quoted on a Trading Market.

5.8.Transaction Documents. The Company and each Purchaser shall have executed and delivered the Transaction Documents to which it is a party. The Company shall have delivered the Notes and the Warrants to the Purchasers and such other documents relating to the transactions contemplated by the Transaction Documents as the Purchasers may reasonably request.

5.9.Amended Certificate. The Company shall have filed the Amended Certificate with the Secretary of State of Nevada on or prior to the Closing, which shall continue to be in full force and effect as of the Closing.

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5.10.Consent of Holders of Series A Preferred Stock. The Company shall have delivered a Written Consent of the Holders of the Series A Preferred Stock of PSI Corporation in the form of Exhibit F attached to this Agreement executed by all holders of Series A Preferred Stock immediately prior to the Closing.

5.11.Secretary's Certificate. The Secretary of the Company shall have delivered to the Purchasers at the Closing a certificate certifying (i) the Bylaws of the Company, (ii) resolutions of the Board of Directors of the Company approving the Transaction Documents and the transactions contemplated under the Transaction Documents, (iii) resolutions of the Board of Directors of the Company approving the Amended Certificate, and (iv) the written consent of the holders of Series A Preferred Stock (as designated prior to the filing of the Amended Certificate) approving the filing of the Amended Certificate, executing, delivering and performing under the Exchange Agreements with such holders in the form attached to such written consent (collectively, the “Exchange Agreements”) and the transactions contemplated under the Transaction Documents.

5.12.Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to each Purchaser, and each Purchaser (or its counsel) shall have received all such counterpart copies of such documents as reasonably requested. Such documents may include good standing certificates.

5.13.Indebtedness. The Company shall have no more than $1,200,000 of existing indebtedness to the noteholders identified in Section 2.2(e) of the Disclosure Schedule as of the Closing (excluding any indebtedness to the Purchasers).

5.14.Business Plan and Budget. The Company shall have delivered a Business Plan and Budget acceptable to the Lead Purchaser and in the form attached hereto as Exhibit G.

6.Conditions of the Company's Obligations at Closing. The obligations of the Company to sell the Notes and Warrants to the Purchasers at the Closing are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

6.1.Representations and Warranties. The representations and warranties of each Purchaser contained in Section 3 shall be true and correct in all respects as of the Closing.

6.2.Performance. The Purchasers shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by them on or before the Closing.

6.3.Qualifications. All authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Notes and Warrants pursuant to this Agreement shall be obtained and effective as of the Closing.

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6.4.Investors' Rights Agreement. Each Purchaser shall have executed and delivered the Investors' Rights Agreement.

7.Other Agreements of the Parties.

7.1.Securities Laws Disclosure; Publicity. By 10:00 a.m. (New York City time) on the Trading Day immediately following the date of the Closing, the Company will issue a press release disclosing the execution of this Agreement. Within 4 business days of the date of the Closing, the Company will file with the SEC a Current Report on Form 8-K disclosing the material terms of the transactions contemplated hereby and including as exhibits thereto this Agreement (and the schedules thereto) and the form of Note attached hereto as Exhibit A, the form of Warrant attached hereto as Exhibit B and the form of Investors’ Rights Agreement. In addition, the Company will make such other filings and notices in the manner and time required by the SEC and the Trading Market on which the Common Stock is listed or quoted. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the SEC (other than the Registration Statement and any exhibits to filings made in respect of this transaction in accordance with periodic filing requirements under the Exchange Act) or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure.

7.2.Anti-Takeover Provisions. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser is an “Acquiring Person” (or analogous terminology) under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving any Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.

7.3.Indemnification of Purchasers. Subject to the provisions of this Section 7.3, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against a Purchaser, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is

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based upon a breach of such Purchaser’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser may have with any such stockholder or any violations by the Purchaser of state or federal securities laws or any conduct by such Purchaser which constitutes fraud, gross negligence, willful misconduct or malfeasance); provided; however, that with respect to indemnification rights arising out of claims not involving a third party, the Company’s total liability under this Section 7.3 shall be limited to the amount of investment in the Securities made by the Purchaser asserting rights hereunder plus the costs and expenses of such Purchaser for enforcing its rights hereunder. If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (i) for any settlement by an Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (ii) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents.

7.4.Subsequent Equity Sales. From the date hereof until the Lead Purchaser has terminated its beneficial ownership of any Securities, the Company shall be prohibited from effecting or entering into an agreement to effect any subsequent financing involving a “Variable Rate Transaction” without the prior written consent of the holders of (i) a majority of the Series A Preferred Stock, voting as a separate class, or (ii) if a majority of the outstanding aggregate principal amount of Notes shall not have been converted into Series A Preferred Stock at such time, a majority of the then outstanding aggregate principal balance of the Notes. The term “Variable Rate Transaction” shall mean a transaction in which the Company issues or sells (i) any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may sell securities at a future determined price. Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages. Nothing herein shall prevent the Company from entering into agreements to issue securities based on the performance of

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businesses other than the Company’s or based on the performance of parties other than the Company pursuant to milestones or other performance targets.

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

7.6.Prohibited Transactions; Confidentiality after the Date hereof. Prior to the earlier to occur of (i) the termination of this Agreement, and (ii) the filing by the Company of a Current Report on Form 8-K disclosing the closing of the transactions contemplated hereby, each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it nor any Trading Affiliate acting on its behalf or pursuant to any understanding with it shall not, and shall cause its Trading Affiliates not to, engage, directly or indirectly, in a Prohibited Transaction. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company as described in Section 7.1, such Purchaser will maintain the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction), subject to timely disclosure by the Company in the Form 8-K filing required by Section 7.1 of any material non-public information concerning the Company or the transactions contemplated by the Transaction Documents disclosed to the Purchasers. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser's assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser's assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Notes and Shares covered by this Agreement.

7.7.Insurance. Within 30 days after the date of the Closing, the Company shall amend its directors and officers insurance policy, including, without limitation, the amount of coverage thereunder, in a form and in such coverage amounts as acceptable to the Lead Purchaser.

7.8.Bylaws. Within 30 days after the date of the Closing, the Company shall amend its bylaws to conform to the Transaction Documents in a form acceptable to the Lead Purchaser.

8.Miscellaneous.

8.1.Expenses. Each Purchaser and the Company shall pay the

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respective costs, fees and expenses (including the costs, fees and expenses of such party’s advisers, counsel, accountants and other experts, if any) incurred by such party in connection with the negotiation, preparation, execution, delivery and performance of the Transaction Documents; provided, however, the Company shall pay the costs, fees and expenses (including legal and accounting costs, fees and expenses) incurred by the Lead Purchaser and its designee in connection with the negotiation, preparation, execution, delivery and performance of the Transaction Documents (including, without limitation, the preparation and submission of any SEC filings and in connection with matters related thereto, whether incurred before, at or after Closing). The Company shall pay all stamp and other taxes and duties levied in connection with the issuance, sale, exercise and conversion of the Securities.

8.2.Replacement of Shares or Warrants. If any certificate or instrument evidencing any Shares or Warrants is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction if requested, as well as any other documentation required by the Company's transfer agent. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Shares. If a replacement certificate or instrument evidencing any Shares or Warrants is requested due to a mutilation thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement

8.3.Survival of Representations and Warranties. Unless otherwise set forth in this Agreement, the representations and warranties of the Company and the Purchasers contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing and shall in no way be affected by any investigation or knowledge of the subject matter thereof made by or on behalf of the Purchasers or the Company.

8.4.Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

8.5.Governing Law; Consent to Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of law. EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN CONNECTION WITH ANY CLAIM, ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY IRREVOCABLY AGREES THAT ANY SUCH CLAIM, ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY NEW YORK STATE COURT OR UNITED STATES DISTRICT

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COURT SITTING IN THE CITY OF NEW YORK, AND WAIVES ANY OBJECTION TO THE VENUE OF THE AFORESAID COURTS.

8.6.Counterparts; Facsimile. This Agreement may be executed and delivered by facsimile or electronic (including PDF) signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

8.7.Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

8.8.Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by facsimile (with delivery confirmation) during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient's next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page or Schedule A attached to this Agreement, or to such facsimile number or address as subsequently modified by written notice given in accordance with this Section 8.8. If notice is given to the Company, a copy shall also he sent to Meyer, Suozzi, English & Klein, P.C., 990 Stewart Avenue, Suite 300, Garden City, New York 11530, Attention: Richard G. Satin, Esq., Facsimile: (516) 741-6706. If notice is given to the Lead Purchaser, a copy shall also be sent to Moses & Singer LLP, 405 Lexington Avenue, New York, New York 10174, Attention: Allan Grauberd, Esq., Facsimile: (917) 206-4381.

8.9.No Finder's Fees. Each party represents that it neither is nor will be obligated for any finder's fee or commission in connection with this transaction. Each Purchaser agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder's or broker's fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which each Purchaser or any of its officers, employees, or representatives is responsible. The Company agrees to indemnify and hold harmless each Purchaser from any liability for any commission or compensation in the nature of a finder's or broker's fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.

8.10.Amendments and Waivers. Except as otherwise set forth herein, any term of this Agreement may be amended, terminated or waived only with the written consent of the Company and either (i) the holders of a majority of the Series A Preferred Stock, voting as a separate class, or (ii) if a majority of the outstanding aggregate principal amount of Notes shall not have been converted into Series A Preferred Stock at such time, the holders of a majority of the then outstanding aggregate principal balance of the Notes. Any amendment or waiver effected in accordance with this Section 8.10 shall be binding upon the Purchasers.

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8.11.Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

8.12.Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

8.13.Entire Agreement. This Agreement (including the Schedules and Exhibits hereto), the Amended Certificate and the other Transaction Documents constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled.

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

8.15.Independent Nature of Purchaser's Obligations and Rights. The obligations of each Purchaser under the Transaction Documents are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under any Transaction Document. Each Purchaser, subject to any provision requiring the consent of a majority in interest to act, shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.

8.16.Moses & Singer. The Purchasers, other than the Lead Purchaser, acknowledge that Moses & Singer LLP has acted as legal counsel solely to the Lead

31

Purchaser and agree that they have had had adequate opportunity to seek legal representation to evaluate the transactions contemplated by this Agreement and the other Transaction Documents.

[Signature Pages Follow]

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Execution Page for Cumulative Convertible Senior Note and Warrant Purchase Agreement for Individuals:

IN WITNESS WHEREOF, Purchaser has caused this Cumulative Convertible Senior Note and Warrant Purchase Agreement to be executed as of the date indicated below.

$________________________________________ Principal Amount _________________________________________ Print or Type Name _________________________________________ Signature	_____________________________________ Principal Amount of Senior Notes _____________________________________ Print or Type Name (Joint-owner) _____________________________________ Signature (Joint-owner)
_________________________________________ Date _________________________________________ Social Security Number	_____________________________________ Date (Joint-owner) _____________________________________ Social Security Number (Joint-owner)
_________________________________________ _________________________________________ Address __Joint Tenancy	_____________________________________ _____________________________________ Address (Joint-owner) __Tenants in Common

____Tenancy by the Entirety

Wiring Instructions:

Bank Name:

ABA #:

Acct #:

Acct. Name:

33

Partnerships, Corporations or Other Entities Execution Page for Cumulative Convertible Senior Note and Warrant Purchase Agreement:

IN WITNESS WHEREOF, Purchaser has caused this Cumulative Convertible Senior Note and Warrant Purchase Agreement to be executed as of the date indicated below.

$______________________________________ Total Purchase Price _______________________________________ Print or Type Name of Entity	________________________________________ Principal Amount of Senior Notes
______________________________________________________________________ Address
_______________________________________ Taxpayer I.D. No. (if applicable) By:____________________________________	________________________________________ Date ________________________________________ Print or Type Name and Indicate Title or Position with Entity
_______________________________________ Signature (other authorized signatory)	________________________________________ Print or Type Name and Indicate Title or Position with Entity

Wiring Instructions:

Bank Name:

ABA #:

Acct #:

Acct. Name:

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Company Execution Page for Cumulative Convertible
Senior Note and Warrant Purchase Agreement

IN WITNESS WHEREOF, the Company has caused this Cumulative Convertible Senior Note and Warrant Purchase Agreement to be executed, and the foregoing subscription accepted, as of the date indicated below.

COUPON EXPRESS, INC.

By: /s/ Eric L. Kash                                

Name: Eric L. Kash

Title: Chief Executive Officer

Date: October 24, 2011

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EX-10.2

Exhibit 10.2

THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT”'), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

COUPON EXPRESS, INC.

CUMULATIVE CONVERTIBLE SENIOR NOTE

Original Principal Amount: [___________]

Issuance Date: October 24, 2011

FOR VALUE RECEIVED, Coupon Express, Inc., a Nevada corporation (the “Company”), promises to pay to [_______________________] or its registered assigns ("Investor"), in lawful money of the United States of America the principal sum of [________________________________], together with interest from the Issuance Date on the unpaid principal balance at a rate equal to seven (7%) percent per annum computed on the basis of the actual number of days elapsed and a year of 365 days. Unless this Note shall be converted pursuant to Section 4, all unpaid principal, together with any then unpaid and accrued interest and other amounts payable hereunder, shall be due and payable on the earlier of (i) the Maturity Date (as defined below), or (iii) in the event of the occurrence of an Event of Default (as defined below), such amounts are declared due and payable by the written consent of the holders of a majority of the aggregate outstanding principal amount of the Notes (as defined below) or made automatically due and payable, in each case, in accordance with the terms hereof. This Cumulative Convertible Senior Note (“Note”) is issued and sold under that certain Cumulative Convertible Senior Note and Warrant Purchase Agreement, dated as of October 24, 2011, by and among the Company and the other parties thereto (“Purchase Agreement”). Capitalized terms used herein but not defined herein (including Section 5 below) shall have the respective meanings set forth in the Purchase Agreement.

THE OBLIGATIONS DUE UNDER THIS NOTE ARE SECURED BY A SECURITY AGREEMENT (THE "SECURITY AGREEMENT") DATED AS OF THE DATE HEREOF AND EXECUTED BY THE COMPANY FOR THE BENEFIT OF INVESTOR AND OTHER PARTIES NAMED THEREIN. ADDITIONAL RIGHTS OF INVESTOR ARE SET FORTH IN THE SECURITY AGREEMENT.

The following is a statement of the rights of Investor and the conditions to which this Note is subject, and to which Investor, by the acceptance of this Note, agrees:

1.Voluntary Prepayments.This Note may not be prepaid, without the written consent of holders of a majority of the aggregate outstanding principal amount of the Notes. Any prepayment of this Note may only be made in connection with the prepayment of all Notes on a pro rata basis, based on the respective aggregate outstanding principal amounts of each such Note and any such prepayment will be applied first to interest accrued on the Notes, and second, to the payment of principal of this Note.

2.Events of Default. The occurrence of any of the following shall constitute an "Event of Default" under this Note and the other Transaction Documents:

(a)Failure to Pay. The Company shall fail to pay (i) when due any principal payment on the due date hereunder or (ii) any interest payment or other payment required under the terms of this Note or any other Transaction Document on the date due and such payment shall not have been made within five (5) business days of the Company's receipt of written notice to the Company of such failure to pay;

(b)Breaches of Covenants. The Company shall fail to observe or perform any other covenant, obligation, condition or agreement contained in this Note or the other Transaction Documents (other than those specified in Section 2(a)) and such failure shall continue for ten (10) business days after the Company's receipt of written notice of such failure;

(c)Representations and Warranties. Any representation, warranty, certificate, or other statement (financial or otherwise) made or furnished by or on behalf of the Company to Investor in writing in connection with this Note or any of the other Transaction Documents, or as an inducement to Investor to enter into this Note and the other Transaction Documents, shall be false, incorrect, incomplete or misleading in any material respect when made or furnished;

(d)Voluntary Bankruptcy or Insolvency Proceedings. The Company shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) admit in writing its inability to pay its debts generally as they mature, (iii) make a general assignment for the benefit of its or any of its creditors, (iv) be dissolved or liquidated, (v) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (vi) take any action for the purpose of effecting any of the foregoing;

(e)Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator or custodian of the Company, or of all or a material part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company, if any, or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within 45 days of commencement;

(f)Liquidation. In the event of any liquidation, dissolution or winding

2

up of the Company (other than as set forth in Sections 2(d) and 2(e)) or Acquisition (as defined in the Restated Certificate (as defined below)); or

(g)Suspension of Trading. The Common Stock shall be suspended from trading or fail to be listed on a Trading Market for a period of five (5) consecutive Trading Days or for more than an aggregate of ten (10) Trading Days in any 365-day period.

3. Rights of Investor upon Default; Waiver.

(a)Upon the occurrence of any Event of Default (other than an Event of Default described in Section 2(d) or 2(e)) and at any time thereafter during the continuance of such Event of Default, Investor may, with the written consent of the holders of a majority of the aggregate outstanding principal amount of the Notes issued and sold under Purchase Agreement, by written notice to the Company, declare all outstanding Obligations (as defined below) payable by the Company hereunder to be immediately due and payable, plus all accrued and unpaid interest, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Company, notwithstanding anything contained herein or in the other Transaction Documents to the contrary. Upon the occurrence of any Event of Default described in Section 2(d) or 2(e), immediately and without notice, all outstanding Obligations payable by the Company hereunder shall automatically become immediately due and payable, plus all accrued and unpaid interest, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, notwithstanding anything contained herein or in the other Transaction Documents to the contrary. In addition to the foregoing remedies, upon the occurrence and during the continuance of any Event of Default, Investor may, with the written consent of holders of a majority of the aggregate outstanding principal amount of the Notes, exercise any other right, power or remedy granted to it by the Transaction Documents or otherwise permitted to it by law, either by suit in equity or by action at law, or both.

(b)The holders of a majority of the aggregate outstanding principal amount of the Notes may waive, by written consent, any past Event of Default hereunder and its consequences, except an Event of Default (i) specified in Section 2(d) or 2(e); or (ii) in respect of a covenant or provision hereof which cannot be modified or amended without the consent of the Holder or assignee of the Note affected. No such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereon.

4.Conversion.

(a)Optional Conversion. At any time up to and including the Maturity Date, upon the written consent of the holders of a majority of the aggregate outstanding principal amount of the Notes, all or any portion of this Note may be converted into a number of shares of Series A Convertible Preferred Stock, par value $0.001 per share (“Series A Preferred Stock”), of the Company at the rate of one (1) share of Series A Preferred Stock for each $25,000 of Original Principal Amount to be converted, as appropriately and proportionately adjusted for any splits or combination with respect to the Series A Preferred Stock.

3

(b)Automatic Conversion. Upon the conversion of all of the Company’s convertible debt existing as of the Issuance Date set forth on Schedule 1 attached hereto, the entire outstanding principal balance of this Note shall be converted into the number of shares of Series A Preferred Stock at the rate of one (1) share of Series A Preferred Stock for each $25,000 of Original Principal Amount to be converted, as appropriately and proportionately adjusted for any splits or combination with respect to the Series A Preferred Stock.

(c) Conversion Procedure. Before Investor shall be entitled to convert this Note into the applicable shares of Series A Preferred Stock in accordance with Section 4(a) or 4(b), it shall surrender this Note (or deliver a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement acceptable to the Company whereby the holder agrees to indemnify the Company from any loss incurred by it in connection with this Note) and give written notice to the Company at its principal corporate office of the election to convert the same pursuant to Section 4(a) or 4(b), and shall state therein the amount of the Original Principal Amount of this Note to be converted. The Company shall, as soon as practicable thereafter, issue and deliver to such Investor a certificate or certificates for the number of shares of Series A Preferred Stock to which Investor shall be entitled upon such conversion. Any conversion of this Note pursuant to Section 4(a)(i) or 4(b) shall be deemed to have been made upon the satisfaction of all of the conditions set forth in this Section 4(c)(i) and on and after such date, the Persons entitled to receive the shares of Series A Preferred Stock issuable upon such conversion and shall be treated for all purposes as the record holder of such shares of Series A Preferred Stock.

(d)Notices of Record Date. In the event of:

(i)Any taking by the Company of a record of the holders of any class of securities of the Company for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right;

(ii)Any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer of all or substantially all of the assets of the Company to any other Person or any consolidation or merger involving the Company; or

(iii)Any capital reorganizations of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer of all or substantially all of the assets of the Company to any other Person or any consolidation or merger involving the Company; or

(iv)Any voluntary or involuntary dissolution, liquidation or winding-up of the Company, the Company will mail to Investor at least ten (10) days prior to the earliest date specified therein, a notice specifying (A) the date on which any such record is to be taken for the purpose of such dividend, distribution or right and the amount and character of such dividend, distribution or right; or (B) the date on which any such reorganization,

4

reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up is expected to become effective and the record date for determining stockholders entitled to vote thereon.

(e)The Company shall at all times reserve and keep available out of its authorized but unissued shares of Series A Preferred Stock, solely for the purpose of issuance and delivery on the exercise of this Note, all shares of Series A Preferred Stock as shall from time to time be issuable on the exercise of this Note, and, upon such issuance, all of such shares of Series A Preferred Stock will be validly issued, fully paid and non-assessable. If at any time the number of authorized but unissued shares of Series A Preferred Stock shall not be sufficient to effect such exercise of this Note for the maximum number of shares of Series A Preferred Stock then issuable upon exercise hereunder, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Series A Preferred Stock to such number of shares as shall be sufficient for such purpose, including, without limitation, obtaining the requisite stockholder approval of any necessary amendment to the Company's Certificate of Incorporation (as amended from time to time). The Company will not at any time close its stock transfer books in a manner which prevents the timely exercise of this Note.

5.Definitions. As used in this Note, the following capitalized terms have the following meanings:

"Amended Certificate" shall mean that Amended Certificate of Incorporation, filed with the Secretary of State of the State of Nevada on October 21, 2011 in the form of Exhibit C attached to the Purchase Agreement.

Maturity Date” shall mean October 21, 2012; provided that the Maturity Date may be extended for one additional one-year period upon the written consent of the holders of a majority of the aggregate outstanding principal amount of the Notes issued and sold under Purchase Agreement.

"Notes" shall mean the Cumulative Convertible Senior Notes, dated as of the date hereof, issued by the Company pursuant to the Purchase Agreement, and secured by the Security Agreement.

"Obligations" shall mean and include all loans, advances, debts, liabilities and obligations, howsoever arising, owed by the Company to Investor of every kind and description, now existing or hereafter arising under or pursuant to the terms of this Note and the other Transaction Documents, including, all interest, fees, charges, expenses, attorneys' fees and costs and accountants' fees and costs chargeable to and payable by the Company hereunder and thereunder, in each case, whether direct or indirect, absolute or contingent, due or to become due, and whether or not arising after the commencement of a proceeding under Title 11 of the United States Code (11 U. S. C. Section 101 et seq.), as amended from time to time (including post-petition interest) and whether or not allowed or allowable as a claim in any such proceeding. Notwithstanding the foregoing, the term "Obligations" shall not include any obligations of Company under or with respect to any warrants to purchase Company's capital stock.

"Person" shall mean and include an individual, a partnership, a

5

corporation (including a business trust), a joint stock company, a limited liability company, an unincorporated association, a joint venture or a governmental authority or any other entity of any kind.

"Securities Act" shall mean the Securities Act of 1933, as amended.

"Transaction Documents" shall mean this Note, each of any other Notes, the Purchase Agreement, the Investors’ Rights Agreement, the Subordination Agreement, the Warrants, the Restated Certificate, the Security Agreement and all other documents and agreements executed in connection with the transactions contemplated by the Purchase Agreement.

"Warrants" shall mean the warrants, dated as of the date hereof, issued by the Company to the holders of the Notes pursuant to the Purchase Agreement.

6.Miscellaneous.

(a)Successors and Assigns; Transfer of this Note or Securities Issuable on Conversion Hereof.

(i)Subject to the restrictions on transfer described in this Section 6(a), the rights and obligations of the Company and Investor shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.

(ii)With respect to any offer, sale or other disposition of this Note or securities into which such Note may be converted, Investor will give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of Investor's counsel, or other evidence if reasonably satisfactory to the Company, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect). Upon receiving such written notice and reasonably satisfactory opinion, if so requested, or other evidence, the Company, as promptly as practicable, shall notify Investor that Investor may sell or otherwise dispose of this Note or such securities, all in accordance with the terms of the notice delivered to the Company. If a determination has been made pursuant to this Section 6(a) that the opinion of counsel for Investor, or other evidence, is not reasonably satisfactory to the Company, the Company shall so notify Investor promptly after such determination has been made. Each Note thus transferred and each certificate representing the securities thus transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.

(iii)Subject to Section 6(a)(ii), transfers of this Note shall be registered upon registration books maintained for such purpose by or on behalf of the Company as provided in the Purchase Agreement. Prior to presentation of this Note for registration of transfer, the Company shall treat the registered holder hereof as the owner and holder of this Note for the purpose of receiving all payments of principal and interest hereon and for all other purposes whatsoever, whether or not this Note shall be overdue

6

and the Company shall not be affected by notice to the contrary.

(iv)Neither this Note nor any of the rights, interests or obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior written consent of holders of a majority of the aggregate outstanding principal amount of the Notes.

(b)Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Company and consent of holders of a majority of the aggregate outstanding principal amount of the Notes; provided, however, that no such amendment, waiver or consent shall: (i) reduce the principal amount of this Note without Investor's written consent, or (ii) reduce the rate of interest of this Note without Investor's written consent.

(c)Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by facsimile or electronic mail (if to Investor) or otherwise delivered by hand, messenger or courier service addressed:

(i)if to Investor, to Investor's address, facsimile number or electronic mail address as shown in the Company's records, as may be updated in accordance with the provisions hereof, or, until such holder so furnishes an address, facsimile number or electronic mail address to the Company, then to the address, facsimile number or electronic mail address of the last holder of this Note for which the Company has contact information in its records; or

(ii)if to the Company, to the attention of the Chief Executive Officer of the Company at 303 Fifth Avenue, New York, New York 10016, or at such other current address as the Company shall have furnished to Investor, with a copy (which shall not constitute notice) to Richard G. Satin, Esq., Meyer, Suozzi, English & Klein, P.C., 990 Stewart Avenue, Suite 300, Garden City, New York 11530.

Each such notice or other communication shall for all purposes of this Note be treated as effectiveor having been given (i) if delivered by hand, messenger or courier service, when delivered (or if sent viaa nationally-recognized overnight courier service, freight prepaid, specifying next-business-day delivery,one business day after deposit with the courier), or (ii) if sent via mail, at the earlier of its receipt or fivedays after the same has been deposited in a regularly-maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid, or (iii) if sent via facsimile, upon confirmation of facsimile transfer or, if sent via electronic mail, upon confirmation of delivery when directed to the relevant electronic mail address, if sent during normal business hours of the recipient, or if not sent during normal business hours of the recipient, then on the recipient's next business day. In the event of any conflict between the Company's books and records and this Note or any notice delivered hereunder, the Company's books and records will control absent fraud or error.

(d)Junior or Pari Passu Obligations. The Obligations shall rank senior in payment to any present or future indebtedness of the Company. The Company shall not, directly or indirectly, cause or permit the Obligations to rank pari

7

passu or junior in right of payment to any present or future indebtedness of the Company (or to be paid as such). Investor acknowledges and agrees that the payment of all or any portion of the outstanding principal amount of this Note and all interest hereon shall be pari passu in right of payment and in all other respects to any other Notes. In the event Investor receives payments in excess of its pro rata share of the Company's payments to the holders of all of the Notes, then Investor shall hold in trust all such excess payments for the benefit of the holders of the other Notes and shall pay such amounts held in trust to such other holders upon demand by such holders.

(e)Currency. Unless converted into the Company's equity securities pursuant to the terms hereof, payment shall be made in lawful tender of the United States.

(f)Usury. In the event any interest is paid on this Note which is deemed to be in excess of the then legal maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against the principal of this Note.

(g)Waivers. The Company hereby waives notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor and all other notices or demands relative to this instrument.

(h)Governing Law. This Note and all actions arising out of or in connection with this Note shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of law provisions of the State of New York, or of any other state. EACH OF THE COMPANY AND INVESTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN CONNECTION WITH ANY CLAIM, ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE AND THE OTHER TRANSACTION DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY IRREVOCABLY AGREES THAT ANY SUCH CLAIM, ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY NEW YORK STATE COURT OR UNITED STATES DISTRICT COURT SITTING IN THE CITY OF NEW YORK, AND WAIVES ANY OBJECTION TO THE VENUE OF THE AFORESAID COURTS.

(d)Waiver of Jury Trial. BY ACCEPTANCE OF THIS NOTE, INVESTOR HEREBY AGREES AND THE COMPANY HEREBY AGREES TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE OR ANY OF THE TRANSACTION DOCUMENTS.

(e)Counterparts. This Note may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Note.

(signature page follows)

8

Exhibit 10.2

The Company has caused this Note to be issued as of the date first written above.

COUPON EXPRESS, INC.,

a Nevada corporation

By:________________________________

Name:_____________________________

Title:______________________________

INVESTOR

___________________________________

(Print investor name)

___________________________________

(Signature)

___________________________________

(Print name of signatory, if signing for an entity)

___________________________________

(Print title of signatory, if signing for an entity)

___________________________________

(Street address)

___________________________________

(City, state and zip)

(Signature page for Note)

EX-10.3

Exhibit 10.3

INVESTORS' RIGHTS AGREEMENT

THIS INVESTORS' RIGHTS AGREEMENT (this "Agreement") is made as of the 24^th day of October, 2011, by and among COUPON EXPRESS, INC., a Nevada corporation (the “Company"), each of the investors listed on Schedule A hereto, each of which is referred to in this Agreement as an "Investor," have purchased Cumulative Convertible Senior Notes (“Senior Notes”) and Warrants (“Warrants”) of the Company.

RECITALS

WHEREAS, the Senior Notes are convertible into the Company’s Series A Preferred Stock, par value $0.001 (“Preferred Stock”);

WHEREAS, the Preferred Stock is convertible into, and the Warrants are exercisable for, the Company’s Common Stock, $0.001 par value; and

WHEREAS, the parties desire for this Agreement to govern the rights of the Investors to cause the Company to register shares of Common Stock issuable to the Investors, to receive certain information from the Company, and to participate in future equity offerings by the Company, and to govern certain other matters as set forth in this Agreement.

NOW, THEREFORE, the parties hereby agree as follows:

1.

Definitions.  For purposes of this Agreement:

1.1

“Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including without limitation any general partner, managing member, officer or director of such Person or any venture capital fund now or hereafter existing that is controlled by one or more general partners or managing members of, or shares the same management company with, such Person.

1.2

“Common Stock” means shares of the Company's common stock, par value $0.001 per share.

1.3

“Damages” means any loss, damage, or liability (joint or several) to which a party hereto may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, or liability (or any action in respect thereof) arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.

1.4

“Derivative Securities” means any securities or rights convertible into, or exercisable or exchangeable for (in each case, directly or indirectly), Common Stock, including options and warrants.

1.5

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

1.6

“Excluded Registration” means (i) a registration relating to the sale of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, or similar plan; (ii) a registration relating to an SEC Rule 145 transaction; or (iii) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities.

1.7

“Form S-1” means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC.

1.8

 “GAAP” means generally accepted accounting principles in the United States.

1.9

“Holder” means any holder of Registrable Securities who is a party to this Agreement.

1.10

“Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, of a natural person referred to herein.

1.11

“Initiating Holders” means, collectively, Holders who properly initiate a registration request under this Agreement.

1.12

 “Major Investor” means any Investor that, individually or together with such Investor's Affiliates, holds at least 50% of the Registrable Securities then outstanding.

1.13

“New Securities” means, collectively, equity securities of the Company, whether or not currently authorized, as well as rights, options, or warrants to purchase such equity securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity securities.

1.14

“Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

1.15

“Purchase Agreement” means that certain Cumulative Convertible Senior Note and Warrant Purchase Agreement, dated October 21, 2011, between the Company and the purchasers party thereto.

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1.16

“Registrable Securities” means (i) the Common Stock issuable or issued upon conversion of the Preferred Stock which in turn is issuable upon conversion of the Senior Notes; (ii) any Common Stock, or any Common Stock issued or issuable (directly or indirectly) upon conversion and/or exercise of any other securities of the Company, held by the Investors as of the date hereof; and (iii) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares referenced in clauses (i) and (ii) above; excluding in all cases, however, (A) any Registrable Securities sold by a Person in a transaction in which the applicable rights under this Agreement are not assigned pursuant to Section 5.1 and (B) shares that have been sold pursuant to SEC Rule 144 or under a registration statement, and excluding for purposes of Section 2 any shares for which registration rights have terminated pursuant to Section 2.13 of this Agreement.

1.17

“Registrable Securities then outstanding” means the number of shares determined by adding the number of shares of outstanding Common Stock that are Registrable Securities and the number of shares of Common Stock that are Registrable Securities  issuable (directly or indirectly) pursuant to then exercisable and/or convertible securities.

1.18

“Restricted Securities” means the securities of the Company required to bear the legend set forth in Section 2.12(b) hereof.

1.19

“SEC” means the Securities and Exchange Commission.

1.20

“SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.

1.21

“SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.

1.22

 "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

1.23

“Selling Expenses” means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel borne and paid by the Company as provided in Section 2.6.

1.24

“Senior Notes” shall have the meaning specified in the preamble.

1.25

“Warrants” shall have the meaning specified in the preamble.

2.

Registration Rights. The Company covenants and agrees as follows:

2.1

Demand Registration.

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(a)

Form S-1 Demand. If at any time the Company receives a request from the Holders of a majority of the Registrable Securities then outstanding that the Company file a Form S-1 registration statement with respect to Registrable Securities, then the Company shall (i) within ten (10) days after the date such request is given, give notice thereof (the "Demand Notice") to all Holders other than the Initiating Holders; and (ii) as soon as practicable, and in any event within ninety (90) days after the date such request is given by the Initiating Holders, file a Form S-1 registration statement (or other form the Company is eligible to file to effect the registration of the Registrable Securities specified in the Demand Notice under the Securities Act covering all Registrable Securities, in accordance with the intended method of disposition specified in such Demand Notice, that the Initiating Holders requested to be registered and any additional Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Section 2.1(b) and Section 2.3.

(b)

Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting a registration pursuant to this Section 2.1 a certificate signed by the Company's chief executive officer stating that in the good faith judgment of the Company's Board of Directors it would be materially detrimental to the Company and its stockholders for such registration statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than ninety (90) days after the request of the Initiating Holders is given; provided, however, that the Company may not invoke this right more than once in any twelve (12) month period.

(c)

The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(a) (i) during the period that is thirty (30) days before the Company's good faith estimate of the date of filing of, and ending on a date that is ninety (90) days after the effective date of, a Company-initiated registration, provided, that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective, and provided further such registration does not include securities owned by directors and officers of the Company and is not otherwise an Excluded Registration; or (ii) after the Company has effected one registration pursuant to Section 2.1(a); A registration shall not be counted as "effected" for purposes of this Section 2.1(c) until such time as the applicable registration statement has been declared effective by the SEC and such registration statement has remained effective for a period of not less than one year, with such period extended to the extent any stop order, injunction or other commission or governmental agency orders precludes the use of such registration statement by the Holders, unless the Initiating Holders withdraw their request for such registration, elect not to pay the registration expenses therefor, and forfeit their right to one demand registration statement pursuant to Section 2.6, in which case such withdrawn registration

4

statement shall be counted as "effected" for purposes of this Section 2.1(c).

2.2

Company Registration. If the Company proposes to register (including, for this purpose, a registration effected by the Company for stockholders other than the Holders) any of its Common Stock under the Securities Act in connection with the public offering of such securities solely for cash (other than in an Excluded Registration), the Company shall, at such time, promptly give each Holder notice of such registration. Upon the request of each Holder given within twenty (20) days after such notice is given by the Company, the Company shall, subject to the provisions of Section 2.3, cause to be registered all of the Registrable Securities that each such Holder has requested to be included in such registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 before the effective date of such registration, whether or not any Holder has elected to include Registrable Securities in such registration. The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by the Company in accordance with Section 2.6.

2.3

Underwriting Requirements.

(a)

If, pursuant to Section 2.1, the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to Section 2.1, and the Company shall include such information in the Demand Notice. The underwriter(s) will be selected by the Company and shall be reasonably acceptable to a majority in interest of the Initiating Holders. In such event, the right of any Holder to include such Holder's Registrable Securities in such registration shall be conditioned upon such Holder's participation in such underwriting and the inclusion of such Holder's Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in Section 2.4(e)) enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting. Notwithstanding any other provision of this Section 2.3, if the managing underwriter(s) advise(s) the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, then the Initiating Holders shall so advise all Holders of Registrable Securities that otherwise would be underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be allocated among such Holders of Registrable Securities, including the Initiating Holders, in proportion (as nearly as practicable) to the number of Registrable Securities owned by each Holder or in such other proportion as shall mutually be agreed to by all such selling Holders; provided, however, that the number of Registrable Securities held by the Holders to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest 100 shares.

(b)

In connection with any offering involving an underwriting of shares of the Company's capital stock pursuant to Section 2.2, the Company shall not be required to include any of the Holders' Registrable Securities in such underwriting unless the Holders accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters in their sole

5

discretion determine will not jeopardize the success of the offering by the Company. If the total number of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities to be sold (other than by the Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering. If the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be allocated among the selling Holders in proportion (as nearly as practicable to) the number of Registrable Securities owned by each selling Holder or in such other proportions as shall mutually be agreed to by all such selling Holders. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest 100 shares. Notwithstanding the foregoing, in no event shall the number of Registrable Securities included in the offering be reduced unless all other securities (other than securities to be sold by the Company) are first entirely excluded from the offering. For purposes of the provision in this Section 2.3(b) concerning apportionment, for any selling Holder that is a partnership, limited liability company, or corporation, the partners, members, retired partners, retired members, stockholders, and Affiliates of such Holder, or the estates and Immediate Family Members of any such partners, retired partners, members, and retired members and any trusts for the benefit of any of the foregoing Persons, shall be deemed to be a single "selling Holder," and any pro rata reduction with respect to such "selling Holder" shall be based upon the aggregate number of Registrable Securities owned by all Persons included in such "selling Holder," as defined in this sentence.

(c)

For purposes of Section 2.1(c) a registration shall not be counted as "effected" if, as a result of an exercise of the underwriter's cutback provisions in Section 2.3(a), fewer than all of the total number of Registrable Securities that Holders have requested to be included in such registration statement are actually included, unless otherwise agreed to by the Holders of a majority of the Registrable Securities then outstanding.

2.4

Obligations of the Company. Whenever required under this Section 2 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

(a)

prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one year or, if earlier, until the distribution contemplated in the registration statement has been completed; provided, however, that such one year period shall be extended for a period of time equal to the period the Holder refrains, at the request of an underwriter of Common Stock (or other securities) of the Company, from selling any securities included in such registration;

(b)

prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with

6

such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered by such registration statement;

(c)

furnish to the selling Holders such numbers of copies of a prospectus, including a preliminary prospectus, as required by the Securities Act, and such other documents as the Holders may reasonably request in order to facilitate their disposition of their Registrable Securities;

(d)

use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling Holders; provided that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

(e)

in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering;

(f)

use its commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;

(g)

provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

(h)

promptly make available for inspection by the selling Holders, any managing underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company's officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith;

(i)

notify each selling Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed; and

(j)

after such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement such registration statement or prospectus.

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(k)

make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of a registration statement, or the lifting of any suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction, as soon as practicable;

(l)

cooperate with the selling Holders and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends unless required by applicable law; and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters may request at least two business days prior to the closing of any sale of Registrable Securities to the underwriters; and

(m)

enter into such agreements (including an underwriting agreement) and take all such other reasonable actions in connection therewith in order to expedite or facilitate the disposition of such Registrable Securities and in connection therewith, whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration, (i) make such representations and warranties to the Holders of such Registrable Securities with respect to the registration statement, prospectus and documents incorporated by reference, if any, in form, substance and scope as are customarily made by issuers in similar offerings and confirm the same if and when requested; (ii) obtain opinions of counsel to the Company (which may be the general counsel) and updates thereof in the form, scope and substance as are customary in similar offerings; (iii) in the case of an underwritten offering, enter into an underwriting agreement in form, scope and substance as is customary in underwritten offerings; (iv) furnish to each selling Holder a signed counterpart, addressed to such Holder (and the underwriters, if any) of a “comfort” letter, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, dated the date of the closing under the underwriting agreement), signed by the independent public accountants who have certified the Company’s financial statements included in such registration statement, covering the matters with respect to such registration statement (and the prospectus included therein) and with respect to events subsequent to the date of such financial statements, as are customarily covered in accountants’ letters delivered to the underwrites in underwritten public offerings of securities and such other financial matters as such Holder (or the underwrites, if any) may reasonably request; (v) if an underwriting agreement is entered into, the same shall set forth in full the indemnification provisions and procedures of Section 2.8 with respect to all parties to be indemnified pursuant to such section, with such other indemnification provisions as are customary and acceptable to the underwriters, the selling Holders and the Company; and (vi) the Company shall deliver such documents and certificates as may be requested by the selling Holders and the managing underwriters, if any, to evidence compliance with this paragraph (k) and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company.  The above shall be done at each closing under such underwriting or similar agreement or as and to the extent required thereunder.

2.5

Preparation; Reasonable Investigation.  In connection with the preparation and filing of each registration statement under the Securities Act pursuant to this Agreement, the Company shall give the selling Holders, their underwriters, and their respective counsel and accountants, a reasonable opportunity to participate in the

8

preparation of such registration statement, each prospectus included therein or filed with the Commission, and each amendment thereof or supplement thereto (other than documents filed under the Exchange Act and incorporated by reference therein), and shall give each of them such access to its books and records and such opportunities to discuss the business of the Company with its officers and the independent public accountants who have certified its financial statements as shall be necessary in the opinion of such Holders’ and such underwiters’ respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act.

2.6

Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably required to effect the registration of such Holder's Registrable Securities.  

2.7

Expenses of Registration. All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to Section 2, including all registration, filing, and qualification fees; printers' and accounting fees; fees and disbursements of counsel for the Company; and the reasonable fees and disbursements of one counsel for the selling Holders (“Selling Holder Counsel"), shall be borne and paid by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2.1 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one registration pursuant to Section 2.1(a). All Selling Expenses relating to Registrable Securities registered pursuant to this Section 2 shall be borne and paid by the Holders pro rata on the basis of the number of Registrable Securities registered on their behalf.

2.8

Indemnification.  If any Registrable Securities are included in a registration statement under this Section 2:

(a)

To the extent permitted by law, the Company will indemnify and hold harmless each selling Holder, and the partners, members, officers, directors, and stockholders of each such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the Securities Act) for each such Holder; and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any such

9

Holder, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration.

(b)

To the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities Act), any other Holder selling securities in such registration statement, and any controlling Person of any such underwriter or other Holder, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of such selling Holder expressly for use in connection with such registration; and each such selling Holder will pay to the Company and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.8(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided further that in no event shall the aggregate amounts payable by any Holder by way of indemnity or contribution under Sections 2.8(b) and 2.8(d) exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of fraud or willful misconduct by such Holder.

(c)

Promptly after receipt by an indemnified party under this Section 2.8 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.8, give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.8, to the extent that such failure materially prejudices the indemnifying party's ability to defend such action. The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.8.

(d)

To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 2.8 but it is judicially determined (by the entry of a final judgment or decree by a court of

10

competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 2.8 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Section 2.8, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case, (x) no Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11 (f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall a Holder's liability pursuant to this Section 2.8(d), when combined with the amounts paid or payable by such Holder pursuant to Section 2.8(b), exceed the proceeds from the offering received by such Holder (net of any Selling Expenses) paid by such Holder), except in the case of willful misconduct or fraud by such Holder.

(e)

Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

(f)

Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Company and Holders under this Section 2.8 shall survive the completion of any offering of Registrable Securities in a registration under this Section 2, and otherwise shall survive the termination of this Agreement.

2.9

Reports Under Exchange Act. With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration, the Company shall:

(a)

make and keep available adequate current public information, as those terms are understood and defined in SEC Rule 144;

(b)

use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after the Company has become subject to such reporting requirements); and

11

(c)

furnish to any Holder, so long as the Holder owns any Registrable Securities, promptly upon request (i) to the extent accurate, a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144; (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company; and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration.

2.10

Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of a majority of the Registrable Securities then outstanding enter into any agreement with any holder or prospective holder of any securities of the Company that (i) would provide to such holder the right to include securities in any registration on other than a subordinate basis after all Holders have had the opportunity to include in the registration and offering all shares of Registrable Securities that they wish to so include or (ii) allow such holder or prospective holder to initiate a demand for registration of any securities held by such holder or prospective holder.

2.11

"Market Stand-off' Agreement. Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the registration by the Company for its own behalf of shares of its Common Stock or any other equity securities under the Securities Act on a registration statement on Form S-1, and ending on the date specified by the Company and the managing underwriter not to exceed ninety (90) days (which may be extended for such longer period, not to exceed 34 days after the expiration of the 90-day period, as the underwriters of the Company shall request in order to facilitate compliance with NASD Rule 2711 or NYSE Member Rule 472 or any successor or similar rules of regulations)), (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock (whether such shares or any such securities are then owned by the Holder or are thereafter acquired) or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash, or otherwise. The foregoing provisions of this Section 2.11 shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, and shall be applicable to the Holders only if all officers and directors are subject to the same restrictions and the Company uses commercially reasonable efforts to obtain a similar agreement from all stockholders individually owning more than two percent (2%) of the Company's outstanding Common Stock (after giving effect to conversion into Common Stock of all outstanding Preferred Stock). The underwriters in connection with such registration are intended third-party beneficiaries of this Section 2.11 and shall have the right, power, and authority to enforce the provisions hereof as though they were a party hereto. Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in connection with such registration that are consistent with this Section 2.11 or that are necessary to give further effect thereto. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply pro rata to all Holders subject to such

12

agreements, based on the number of shares subject to such agreements.  The Company represents and warrants that as of the date hereof, there are no agreements granting registration rights to any Person other than this Agreement.

2.12

Restrictions on Transfer.

(a)

The Preferred Stock and the Registrable Securities shall not be sold, pledged, or otherwise transferred, and the Company shall not recognize and shall issue stop-transfer instructions to its transfer agent with respect to any such sale, pledge, or transfer, except upon the conditions specified in this Agreement, which conditions are intended to ensure compliance with the provisions of the Securities Act. A transferring Holder will cause any proposed purchaser, pledgee, or transferee of the Preferred Stock and the Registrable Securities held by such Holder to agree to take and hold such securities subject to the provisions and upon the conditions specified in this Agreement.

(b)

Each certificate or instrument representing (i) the Preferred Stock, (ii) the Registrable Securities, and (iii) any other securities issued in respect of the securities referenced in clauses (i), (ii) and (iii), upon any stock split, stock dividend, recapitalization, merger, consolidation, or similar event, shall (unless otherwise permitted by the provisions of Section 2.12(c)) be stamped or otherwise imprinted with a legend substantially in the following form:

THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT BE SOLD, PLEDGED, OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR A VALID EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.

THE SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

The Holders consent to the Company making a notation in its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer set forth in Sections 2.11 and 2.12.

(c)

The holder of each certificate representing Restricted Securities, by acceptance thereof, agrees to comply in all respects with the provisions of this Section 2. Before any proposed sale, pledge, or transfer of any Restricted Securities, unless there is in effect a registration statement under the Securities Act covering the proposed transaction, the Holder thereof shall give notice to the Company of such Holder's intention to effect such sale, pledge, or transfer. Each such notice shall describe the manner and circumstances of the proposed sale, pledge, or transfer in sufficient detail and, if reasonably requested by the Company, shall be accompanied at such Holder's expense by either (i) a written opinion of legal counsel who shall, and whose legal opinion shall, be reasonably satisfactory to the Company, addressed to the

13

Company, to the effect that the proposed transaction may be effected without registration under the Securities Act; (ii) a "no action" letter from the SEC to the effect that the proposed sale, pledge, or transfer of such Restricted Securities without registration will not result in a recommendation by the staff of the SEC that action be taken with respect thereto; or (iii) any other evidence reasonably satisfactory to counsel to the Company to the effect that the proposed sale, pledge, or transfer of the Restricted Securities may be effected without registration under the Securities Act, whereupon the Holder of such Restricted Securities shall be entitled to sell, pledge, or transfer such Restricted Securities in accordance with the terms of the notice given by the Holder to the Company. The Company will not require such a legal opinion or "no action" letter (x) in any transaction in compliance with SEC Rule 144 or (y) in any transaction in which such Holder distributes Restricted Securities to an Affiliate of such Holder for no consideration; provided that each transferee agrees in writing to be subject to the terms of this Section 2.12.  Each certificate or instrument evidencing the Restricted Securities transferred as above provided shall bear, except if such transfer is made pursuant to SEC Rule 144, the appropriate restrictive legend set forth in Section 2.12(b), except that such certificate shall not bear such restrictive legend if, in the opinion of counsel for such Holder and the Company, such legend is not required in order to establish compliance with any provisions of the Securities Act.

2.13

Termination of Registration Rights. The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Section 2.1 or Section 2.2 shall terminate upon the earliest to occur of:

(a)

when all of such Holder's Registrable Securities could be sold without restriction under SEC Rule 144 during any 90-day period; and

(b)

the tenth anniversary of the date of this Agreement.

3.

Information and Board Rights.

3.1

Delivery of Financial Statements. Commencing after the first anniversary of the date hereof, the Company, upon written request, shall deliver to each Investor, provided that the Board of Directors has not reasonably determined that such Investor is a competitor of the Company:

(a)

as soon as practicable, but in any event within ninety (90) days after the end of each fiscal year of the Company, (i) a balance sheet as of the end of such year, (ii) statements of income and of cash flows for such year, and (iii) a statement of stockholders' equity as of the end of such year;

(b)

as soon as practicable, but in any event within forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company, unaudited statements of income and of cash flows for such fiscal quarter, and an unaudited balance sheet and a statement of stockholders' equity as of the end of such fiscal quarter, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year­end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with GAAP);

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(c)

as soon as practicable, but in any event within forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company, a statement showing the number of shares of each class and series of capital stock and securities convertible into or exercisable for shares of capital stock outstanding at the end of the period, the Common Stock issuable upon conversion or exercise of any outstanding securities convertible or exercisable for Common Stock and the exchange ratio or exercise price applicable thereto, and the number of shares of issued stock options and stock options not yet issued but reserved for issuance, if any, all in sufficient detail as to permit the Major Investors to calculate their respective percentage equity ownership in the Company, and certified by the chief financial officer or chief executive officer of the Company as being true, complete, and correct;

(d)

as soon as practicable, but in any event within thirty (30) days of the end of each month, an unaudited income statement and statement of cash flows for such month, and an unaudited balance sheet and statement of stockholders' equity as of the end of such month, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with GAAP);

(e)

as soon as practicable, but in any event thirty (30) days before the end of each fiscal year, a budget and business plan for the next fiscal year (collectively, the "Budget"), approved by the Board of Directors and prepared on a monthly basis, including balance sheets, income statements, and statements of cash flow for such months and, promptly after prepared, any other budgets or revised budgets prepared by the Company;

(f)

with respect to the financial statements called for in Section 3.1(a), Section 3.1(b) and Section 3.1(d), an instrument executed by the chief financial officer and chief executive officer of the Company certifying that such financial statements were prepared in accordance with GAAP consistently applied with prior practice for earlier periods (except as otherwise set forth in Section 3.1(b) and Section 3.1(d)) and fairly present the financial condition of the Company and its results of operation for the periods specified therein; and

(g)

 such other information relating to the financial condition, business, prospects, or corporate affairs of the Company as any Major Investor may from time to time reasonably request; provided, however, that the Company shall not be obligated under this Section 3.1 to provide information (i) that the Company reasonably determines in good faith to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in form acceptable to the Company) or (ii) the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

If, for any period, the Company has any subsidiary whose accounts are consolidated with those of the Company, then in respect of such period the financial statements delivered pursuant to the foregoing sections shall be the consolidated and consolidating financial statements of the Company and all such consolidated subsidiaries.

Notwithstanding anything else in this Section 3.1 to the contrary, the Company may

15

cease providing the information set forth in this Section 3.1 during the period starting with the date sixty (60) days before the Company's good-faith estimate of the date of filing of a registration statement if it reasonably concludes it must do so to comply with the SEC rules applicable to such registration statement and related offering; provided that the Company's covenants under this Section 3.1 shall be reinstated at such time as the Company is no longer actively employing its commercially reasonable efforts to cause such registration statement to become effective.

3.2

Inspection. The Company shall permit each Major Investor (provided that the Board of Directors has not reasonably determined that such Major Investor is a competitor of the Company), at such Major Investor's expense, to visit and inspect the Company's properties; examine its books of account and records; and discuss the Company's affairs, finances, and accounts with its officers, during normal business hours of the Company as may be reasonably requested by the Major Investor; provided, however, that the Company shall not be obligated pursuant to this Section 3.2 to provide access to any information that it reasonably and in good faith considers to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in form acceptable to the Company) or the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

3.3

Observation Rights.  The holders of (i) a majority of the Series A Preferred Stock, voting as a separate class, or (ii) if a majority of the outstanding aggregate principal amount of Notes shall not have been converted into Series A Preferred Stock at such time, a majority of the then outstanding aggregate principal balance of the Notes, shall be entitled to have one representative attend all meetings of the Board of Directors of the Company in a nonvoting observer capacity and to receive notice, consents, minutes and other materials that it provides to its Board of Directors; provided, that the Major Investor shall, and shall cause each of its representatives who may have access to any of the information made available at any meeting of the Company’s Board of Directors or provided by the Company to its Board of Directors, hold in confidence and not disclose or use, directly or indirectly any such information, other than in connection with the investment in the Company; provided further, that the Company reserves the right not to provide information to the Major Investor or its representatives and to exclude them from any meeting or portion thereof if attendance at such meeting by them would adversely affect the attorney-client privilege between the Company and its counsel or if the Major Investor or its representatives is or becomes a competitor, or affiliated in any manner with a competitor, of the Company.

3.4

Confidentiality. Each Investor agrees that such Investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement (including notice of the Company's intention to file a registration statement), unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Section 3.4 by such Investor), (b) is or has been independently developed or conceived by the Investor without use of the Company's confidential information, or (c) is or has been made known or disclosed to the Investor by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that an Investor may disclose confidential information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their

16

services in connection with monitoring its investment in the Company; (ii) to any prospective purchaser of any Registrable Securities from such Investor, if such prospective purchaser agrees to be bound by the provisions of this Section 3.4; (iii) to any existing Affiliate, partner, member, stockholder, or wholly owned subsidiary of such Investor in the ordinary course of business, provided that such Investor informs such Person that such information is confidential and directs such Person to maintain the confidentiality of such information; or (iv) as may otherwise be required by law, provided that the Investor promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure.  Company agrees not to divulge any confidential information to any Investor without such Investor’s prior consent.

4.

Additional Covenants.

4.1

Matters Requiring Director Approval. The Company shall not, without approval of the Board of Directors (in addition to any approval required under the Preferred Stock):

(a)

make, or permit any subsidiary to make, any loan or advance to, or own any stock or other securities of, any subsidiary or other corporation, partnership, or other entity unless it is wholly owned by the Company;

(b)

make, or permit any subsidiary to make, any loan or advance to any Person, including, without limitation, any employee or director of the Company or any subsidiary, except advances and similar expenditures in the ordinary course of business or under the terms of an employee stock or option plan approved by the Board of Directors;

(c)

guarantee, directly or indirectly, or permit any subsidiary to guarantee, directly or indirectly, any indebtedness except for trade accounts of the Company or any subsidiary arising in the ordinary course of business;

(d)

make any investment inconsistent with any investment policy approved by the Board of Directors;

(e)

incur any aggregate indebtedness in excess of $100,000 that is not already included in a budget approved by the Board of Directors, other than trade credit incurred in the ordinary course of business;

(f)

otherwise enter into or be a party to any transaction with any director, officer, or employee of the Company or any "associate" (as defined in Rule 12b-2 promulgated under the Exchange Act) of any such Person, except for transactions contemplated by this Agreement, the Purchase Agreement; transactions resulting in payments to or by the Company in an aggregate amount less than $100,000 per year; or transactions made in the ordinary course of business and pursuant to reasonable requirements of the Company's business and upon fair and reasonable terms that are approved by a majority of the Board of Directors;

(g)

hire, terminate, or change the compensation of the executive officers, including approving any option grants or stock awards to executive officers;

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(h)

change the principal business of the Company, enter new lines of business, or exit the current line of business;

(i)

sell, assign, license, pledge, or encumber material technology or intellectual property, other than licenses granted in the ordinary course of business; or

(j)

enter into any corporate strategic relationship involving the payment, contribution, or assignment by the Company or to the Company of money or assets greater than $100,000.

4.2

Board Matters. The Board of Directors shall be comprised of five (5) directors and meet at least quarterly in person in accordance with an agreed-upon schedule. The Company shall reimburse the directors for all reasonable out-of-pocket travel expenses incurred (consistent with the Company's travel policy) in connection with attending meetings of the Board of Directors. In addition to any manner of calling for special meetings of the Board of Directors in the Company’s Bylaws, the holders of (i) a majority of the Series A Preferred Stock, voting as a separate class, or (ii) if a majority of the outstanding aggregate principal amount of Notes shall not have been converted into Series A Preferred Stock at such time, a majority of the then outstanding aggregate principal balance of the Notes, may call a special meeting of the Board of Directors at any time by written notice to the Board of Directors, provided that the right to call a special meeting in accordance with this Section 4.2, shall be limited to two (2) meetings within any twelve month period.

4.3

Independent Director.  One director shall at all times (i) be independent of the Company, its executive officers and directors and their respective affiliates and (ii) approved by the holders of (i) a majority of the Series A Preferred Stock, voting as a separate class, or (B) if a majority of the outstanding aggregate principal amount of Notes shall not have been converted into Series A Preferred Stock at such time, a majority of the then outstanding aggregate principal balance of the Notes. The Board of Directors shall take all actions in support of such designee for election to the Board of Directors, whether at an annual shareholders meeting, a special meeting or action by written consent.

4.4

Successor Indemnification. If the Company or any of its successors or assignees consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger, then to the extent necessary, proper provision shall be made so that the successors and assignees of the Company assume the obligations of the Company with respect to indemnification of members of the Board of Directors as in effect immediately before such transaction, whether such obligations are contained in the Company's Bylaws, its Certificate of Incorporation, or elsewhere, as the case may be.

4.5

Annual Budget and Business Plan.  Prior to the beginning of each fiscal year, the Board shall prepare a business plan and budget for the succeeding fiscal year that shall be approved by the holders of (i) a majority of the Series A Preferred Stock, voting as a separate class, or (ii) if a majority of the outstanding aggregate

18

principal amount of Notes shall not have been converted into Series A Preferred Stock at such time, a majority of the then outstanding aggregate principal balance of the Notes.

4.6

Right of First Refusal.  The Company hereby grants to each Investor the right of first refusal to purchase that portion of all “New Securities” (as defined below) from the date hereof until the later of (i) three years or (ii) that date when the Holders own, in the aggregate, less than 25% of the Shares of Common Stock (on an as converted or exercised basis) owned by the Investors, in the aggregate, on the closing of the transactions effected in connection with the purchase of Senior Notes  by the Investors party hereto (the date hereof referred to as the “Closing”) as the number of shares owned and/or issuable or purchasable under convertible debt, equity securities, options, warrants or other rights held by each such  Investor on the date that each receives the “Offer” (as defined below) bears to the total number of shares of the Company issued and outstanding on the date of the Offer on the following terms and conditions (the “Preemptive Rights”);

(a)

“New Securities” shall mean any capital stock of the Company issued after the Closing, whether now authorized or not, and rights, options, or warrants to purchase said capital stock, and securities of any type whatsoever that are, or may become, convertible into said common stock or preferred stock of the Company issued after the Closing; provided, however, that “New Securities” shall not include (i) existing indebtedness of the Company which is convertible into shares of the Company’s Common Stock and the shares issuable thereunder, (ii) options and/or warrants to employees and consultants of the Company at exercise prices no less than fair market value on date of grant (adjusted appropriately for stock splits, combinations and the like), and (iii) any Common Stock or other securities issued or issuable under the Transaction Documents (as defined in the Purchase Agreement) or the anti-dilution provisions thereof.

(b)

If the Company intends to issue New Securities after the Closing, it shall give written notice of its intention, describing the type of New Securities, the price, and the terms upon which the Company proposes to issue the same (the “Offer”).  With respect to any New Securities proposed to be issued for assets or property other than cash, the price set forth in the notice shall be based upon the fair market value of such assets or property as determined by the Board of Directors of the Company in its reasonable good faith judgment.  The Investors shall each have twenty (20) days from the effective date of such notice to agree to purchase its respective portion of the New Securities for the cash equivalent price and upon the other general terms specified in the Offer by giving written notice to the Company and stating therein the quantity of New Securities to be purchased accompanied by the cash equivalent purchase price as set forth in the Offer.

(c)

If any Investor fails to notify the Company during such twenty (20) day notice period of its respective election to exercise its respective Preemptive Rights, the Company will give notice to those Investors who have exercised their respective Preemptive Rights who will then have an additional ten (10) day period (the “Secondary Preemptive Right”) to purchase such portion of the New Securities as to

19

which Investors have not initially exercised their rights to purchase, pro-rata in proportion to those exercising the Secondary Preemptive Right,.  If the Company fails to sell such portion of the New Securities for which Preemptive Rights have not been exercised on the terms set forth in the Offer within ninety (90) days after the termination of such thirty (30) day notice period, it must once again comply with the Preemptive Rights provisions set forth herein.

4.7

Right of Co-Sale.  

(a)

In the event that the individuals set forth in Exhibit A (“Seller”) proposes to sell, assign, transfer or otherwise convey (herein a “sale”) any shares of Common Stock or securities convertible into, exchangeable for or exercisable for Common Stock (“Co-Sale Securities”), the Seller shall offer in writing to the Investors the right to participate in such sale on the same terms and conditions available to the Seller.  Upon written notice to the Seller within fifteen (15) days of receipt by the Investor of notification from the Seller of the proposed sale, each Investor may sell that number of shares of Co-Sale Securities equal to the total number of shares to be sold by the Seller  in the transaction, multiplied by (b) a fraction, the numerator of which is the number of shares of Co-Sale Securities held by the Investor and the denominator of which is the number of shares of Co-Sale Securities held by all Investors exercising co-sale rights plus the Seller.  To the extent the Investor exercises such right of participation, the number of shares of Co-Sale Securities that the Seller may sell in the transaction shall be correspondingly reduced.  For purposes of this Section 4.7(a), the number of shares of Co-Sale Securities other than Common Stock shall be that number of shares of Common Stock the Co-Sale Securities are, directly or indirectly,  convertible into, exchangeable for, or exercisable for.

(b)

The amount of Co-Sale Securities so transferred shall not include the sale, assignment, transfer or other conveyance  of Co-Sale Securities by the Seller:  (a) to the Seller’s spouse or former spouse, parents, or children or other members of the Seller’s family (including relatives by marriage), or to a custodian, trustee or other fiduciary for the company or other entity or person in connection with a bona fide estate planning transaction; (b) by way of bequest or inheritance upon death;; (c) by way of a bona fide gift or (d) by way of any pledge of Co-Sale Securities made by the Seller pursuant to a bona fide loan transaction with an established financial institution that creates a mere security interest; provided, however, that any transferees pursuant to this Section 4.7(b) shall receive and hold such Co-Sale Securities subject in all respects to the provisions of this Agreement including, for sake of clarity, the provisions of Section 4.7(a), and that there shall no further transfer of such shares except in accordance herewith.

4.8

In the event that a sale under this paragraph 4.9 is deemed a liquidation under Article 3 of the Company’s Amended and Restated Articles of Incorporation, the provision of such Section shall control the allocation of consideration between the participating Investors and the Seller under this paragraph 4.8.

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5.

Miscellaneous.

5.1

Successors and Assigns. The rights under this Agreement may be assigned (but only with all related obligations) by a Holder to a transferee of Registrable Securities that (i) is an Affiliate of a Holder; (ii) is a Holder’s Immediate Family Member or trust for the benefit of an individual Holder or one or more of such Holder’s Immediate Family Members; or (iii) after such transfer, holds at least five percent (5%) of the shares of Registrable Securities then outstanding; provided, however, that (x) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee and the Registrable Securities with respect to which such rights are being transferred; and (y) such transferee agrees in a written instrument delivered to the Company to be bound by and subject to the terms and conditions of this Agreement, including the provisions of Section 2.11. For the purposes of determining the number of shares of Registrable Securities held by a transferee, the holdings of a transferee (1) that is an Affiliate or stockholder of a Holder; (2) who is a Holder’s Immediate Family Member; or (3) that is a trust for the benefit of an individual Holder or such Holder’s Immediate Family Member shall be aggregated together and with those of the transferring Holder; provided further that all transferees who would not qualify individually for assignment of rights shall have a single attorney-in-fact for the purpose of exercising any rights, receiving notices, or taking any action under this Agreement. The terms and conditions of this Agreement inure to the benefit of and are binding upon the respective successors and permitted assignees of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein.

5.2

Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.

5.3

Counterparts; Facsimile. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may also be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

5.4

Titles and Subtitles. The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement.

5.5

Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (i) personal delivery to the party to be notified; (ii) when sent, if sent by electronic mail or facsimile during the recipient’s normal business hours, and if not sent during normal business hours, then on the recipient’s next business day; (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) business day after the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next-day delivery, with written verification of receipt.  All communications shall be sent to the

21

respective parties at their addresses as set forth on Schedule A hereto, or to the principal office of the Company and to the attention of the Chief Executive Officer, in the case of the Company, or to such email address, facsimile number, or address as subsequently modified by written notice given in accordance with this Section 5.5. If notice is given to the Company, a copy shall also be sent to Meyer, Suozzi, English & Klein, P.C., 990 Stewart Avenue, Suite 300, Garden City, New York  11530, Attention:  Richard G. Satin, Esq., Facsimile:  (516) 741-6706.   If notice is to be given to the Investors at their address as provided to the Company and in case of a notice to the Lead Purchaser (as defined in the Purchase Agreement of even date herewith), with a copy to:  Allan Grauberd, Esq., Moses & Singer LLP, 405 Lexington Avenue, New York, NY  10174-1299, Facsimile:  212-554-7700.

5.6

Amendments and Waivers.  Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Company and the holders of a majority of the Registrable Securities then outstanding; provided that Sections 3.3, 4.2, 4.3 and 4.5 may only be amended with the written consent of the holders of (i) a majority of the Series A Preferred Stock, voting as a separate class, or (B) if a majority of the outstanding aggregate principal amount of Notes shall not have been converted into Series A Preferred Stock at such time, a majority of the then outstanding aggregate principal balance of the Notes; provided further that the Company may in its sole discretion waive compliance with Section 2.12(c) (and the Company’s failure to object promptly in writing after notification of a proposed assignment allegedly in violation of Section 2.12(c) shall be deemed to be a waiver); and provided further that any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent of any other party. Notwithstanding the foregoing, this Agreement may not be amended or terminated and the observance of any term hereof may not be waived with respect to any Investor without the written consent of such Investor, unless such amendment, termination, or waiver applies to all Investors in the same fashion (it being agreed that a waiver of the provisions of Section 4 with respect to a particular transaction shall be deemed to apply to all Investors in the same fashion if such waiver does so by its terms, notwithstanding the fact that certain Investors may nonetheless, by agreement with the Company, purchase securities in such transaction). The Company shall give prompt notice of any amendment or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, termination, or waiver. Any amendment, termination, or waiver effected in accordance with this Section 5.6 shall be binding on all parties hereto, regardless of whether any such party has consented thereto. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.

5.7

Severability.  In case any one or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and such invalid, illegal, or unenforceable provision shall be reformed and construed so that it will be valid, legal, and enforceable to the maximum extent permitted by law.

5.8

Aggregation of Stock. All shares of Registrable Securities held or

22

acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement and such Affiliated persons may apportion such rights as among themselves in any manner they deem appropriate.

5.9

Entire Agreement. This Agreement (including any Schedules and Exhibits hereto) constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled.

5.10

Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power, or remedy of such nonbreaching or nondefaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach or default, or to any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. All remedies, whether under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

[Remainder of page intentionally left blank. Signature pages follow. ]

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IN WITNESS WHEREOF, the parties have executed this Investors’ Rights Agreement as of the date first written above.

COMPANY:

COUPON EXPRESS, INC.

By: /s/ Eric L. Kash                                      

Name:  Eric L. Kash

Title: Chief Executive Officer

INVESTORS:

[Signature of Investor]

[Name of Investor]

[Signature Page of Investors’ Rights Agreement.]

24

Principal Amount of

Name and Address

Cumulative Convertible Senior Notes

25

EX-10.4

Exhibit 10.4

THE WARRANT REPRESENTED HEREBY AND THE COMMON STOCK OR OTHER SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER THIS WARRANT NOR THE COMMON STOCK OR OTHER SECURITIES ISSUABLE UPON THE EXERCISE HEREOF NOR ANY INTEREST THEREIN MAY BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT AND SUCH LAWS AND THE RULES AND REGULATIONS THEREUNDER.

Warrant No. PS-1

Dated: October 24, 2011

COMMON STOCK WARRANT

COUPON EXPRESS, INC.

THIS IS TO CERTIFY THAT for value received, [______________________] (the “Holder”), is entitled, subject to the terms and conditions set forth below, to purchase from Coupon Express, Inc., a Nevada corporation (the “Company”), [____________________] shares (the “Warrant Shares”) of common stock, par value $0.001 per share, of the Company (“Common Stock”), at a price per share equal to $0.04 (the “Exercise Price”). The number of Warrant Shares purchasable upon exercise of this warrant (this “Warrant”) and the Exercise Price shall be subject to adjustment from time to time as described herein. This Warrant is being issued in connection with the purchase of Cumulative Convertible Senior Notes pursuant to that certain Cumulative Convertible Senior Note and Warrant Purchase Agreement, dated as of October 24, 2011 (“Purchase Agreement”), by and among the Company, the Holder and the other parties thereto.

1.Manner of Exercise: Expiration Date.

(a)This Warrant shall be exercisable in accordance with this Section 1 and Section 2 below from and after the date hereof until 5:00 p.m., New York time on October 24, 2016 (the “Expiration Date”). The Holder may, at any time and from time to time to and until the Expiration Date, exercise this Warrant, for all or any part of the Warrant Shares purchasable at such time hereunder, by delivering to the Company at its principal office on any business day (i) a written notice of the Holder's election to exercise this Warrant (an “Exercise Notice”), which Exercise Notice shall be irrevocable and shall specify the number of Warrant Shares to be purchased, (ii) payment of the aggregate Exercise Price for the applicable number of Warrant Shares to be purchased by check or wire transfer of immediately available funds to an account then specified by the Company and (iii) this Warrant (the date on which the foregoing items are delivered to the Company being hereinafter referred to as the “Exercise Date”). Such Exercise Notice shall be in the form of Annex A hereto, duly executed by the Holder or its duly authorized agent.

(b)Upon receipt of the items specified in Section 1(a), the Company shall, as promptly as practicable, and in any event within five (5) business days thereafter, execute (or cause to be executed) and deliver (or cause to be

delivered) to the Holder or its designee a certificate or certificates representing the aggregate number of full Warrant Shares issuable upon such exercise, together with cash in lieu of any fraction of a share, as hereafter provided. The Company understands that a delay in the delivery of the Warrant Shares could result in economic loss to the Holder. This Warrant shall be deemed to have been exercised and such certificate or certificates shall be deemed to have been issued, and the Holder or its designee shall be deemed to have become a Holder of record of such Warrant Shares for all purposes, as of the Exercise Date.

(c)If this Warrant is exercised in part, the Company shall, at its expense, at the time of delivery of the certificate or certificates representing the Warrant Shares being issued, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant. Such new Warrant shall in all other respects be identical to this Warrant.

(d)The Company shall pay any and all issue and other taxes (other than income taxes) that may be payable in respect of the issuance of this Warrant or any issuance or delivery of Warrant Shares on exercise of this Warrant; provided, however, that the Company shall not be obligated to pay any transfer taxes resulting from any transfer requested by the Holder of record of this Warrant in connection with any such exercise.

(e)The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of issuance and delivery on the exercise of this Warrant, all shares of Common Stock as shall from time to time be issuable on the exercise of this Warrant, and, upon such issuance, all of such shares of Common Stock will be validly issued, fully paid and non-assessable. If at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect such exercise of this Warrant for the maximum number of shares of Common Stock then issuable upon exercise hereunder, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose, including, without limitation, obtaining the requisite stockholder approval of any necessary amendment to the Company's Certificate of Incorporation (as amended from time to time). The Company will not at any time close its stock transfer books in a manner which prevents the timely exercise of this Warrant.

(f)No fractional shares shall be issued upon the exercise of this Warrant. All shares of Common Stock (including fractions thereof) issuable upon exercise of this Warrant as to each share of Common Stock shall be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional shares. If, after the aforementioned aggregation, the exercise of this Warrant would result in the issuance of a fraction of a share of Common Stock, the Company shall, in lieu of issuing any fractional share, pay the Holder a sum of cash equal to the Fair Market Value (as defined below) of such fraction on the Exercise Date.

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2.Net Exercise. Notwithstanding any provisions herein to the contrary, if the Fair Market Value of one share of Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Exercise Notice in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula:

X = Y (A-B) A

Where X	=	the number of Warrant Shares to be issued to the Holder
Y	=	the number of Warrant Shares purchasable under this Warrant or, if only a portion of this Warrant is being exercised, the portion of this Warrant being exercised (at the date of such calculation)
A	=	the Fair Market Value of one share of Common Stock (at the date of such calculation)
B	=	Exercise Price (as adjusted to the date of such calculation)

For purposes of the above calculation, the “Fair Market Value” of one share of Common Stock shall be:

(a)the average daily closing Market Price (as defined below) during the period of the most recent 10 trading days, ending on the last business day before the effective date of exercise of this Warrant, on which the national securities exchanges or over-the-counter market in which the shares of Common Stock is quoted were open for trading. If the Common Stock is traded on a national securities exchange or admitted to unlisted trading privileges on such an exchange, or is quoted on the NASDAQ Global Market, the NASDAQ Capital Market, the OTC Bulletin Board or by OTC Markets Group, Inc. (each, a ”Trading Market”), the Market Price as of a specified day shall be the last reported sale price of Common Stock on such exchange or on the applicable Trading Market on such date or if no such sale is made on such day, the mean of the closing bid and asked prices for such day on such exchange or on the applicable Trading Market (the “Market Price”); or

(b)if the Common Stock is not then listed or admitted to trading on any national securities exchange or quoted on any Trading Market, the Fair Market Value shall be determined in good faith by the mutual agreement of the Holder and the Board of Directors of the Company. In the event of any dispute between the Holder and the Company regarding the determination of Fair Market Value, at the option of the Holder, the Company shall engage a consulting firm or investment banking firm selected by the Holder to prepare an independent appraisal of the Fair Market Value, which appraisal shall be deemed for purposes

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hereof to be a conclusive, final and binding determination of the Fair Market Value. The expenses of such appraisal shall be borne by the Company.

3.Adjustments. Subject and pursuant to the provisions of this Section 3, the Exercise Price and number of Warrant Shares subject to this Warrant shall be subject to adjustment from time to time as set forth hereinafter.

(a)If the Company shall, at any time or from time to time while this Warrant is outstanding, pay a dividend or make a distribution on its Common Stock in shares of Common Stock, subdivide its outstanding shares of Common Stock into a greater number of shares or combine its outstanding shares of Common Stock into a smaller number of shares or issue by reclassification of its outstanding shares of Common Stock any shares of its capital stock, then the number of Warrant Shares purchasable upon exercise of this Warrant and the Exercise Price in effect immediately prior to the date upon which such change shall become effective, shall be adjusted by the Company so that the Holder thereafter exercising this Warrant shall be entitled to receive the number of shares of Common Stock or other capital stock which the Holder would have received if this Warrant had been exercised immediately prior to such event upon payment of a Exercise Price that has been adjusted to reflect a fair allocation of the economics of such event to the Holder. Such adjustments shall be made successively whenever any event listed above shall occur.

(b)If any capital reorganization, reclassification of the capital stock of the Company (other than a transaction covered in Section 3(a) above), consolidation or merger of the Company with another corporation in which the Company is not the survivor (or if it is the survivor, the shares of Common Stock outstanding prior to such event are converted into cash, securities or other property in connection therewith), or sale, transfer or other disposition of all or substantially all of the Company’s assets to another individual, corporation, partnership, trust, limited liability company, association, joint venture or other entity or group of any kind (each, a "Person") shall be effected, then, as a condition of such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition, lawful and adequate provision shall be made whereby the Holder shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions herein specified and in lieu of the Warrant Shares immediately theretofore issuable upon exercise of this Warrant, such cash, securities or other property as would have been issuable or payable with respect to or in exchange for a number of Warrant Shares equal to the number of Warrant Shares immediately theretofore issuable upon exercise of this Warrant, had such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition not taken place, and in any such case appropriate provision shall be made with respect to the rights and interests of each Holder to the end that the provisions hereof (including, without limitation, provision for adjustment of the Exercise Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any securities or property thereafter deliverable upon the exercise hereof. The Company shall not effect any such consolidation, merger, sale, transfer or other disposition unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger, or the Person purchasing or otherwise acquiring such assets or other appropriate

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Person shall assume by written instrument the obligation to deliver to the Holder, at the last address of the Holder appearing on the books of the Company, such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to purchase, and the other obligations under this Warrant. The provisions of this Section 3(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, transfers or other dispositions.

(c)In case the Company shall fix a payment date for the making of a distribution to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of consolidated earnings or earned surplus or dividends or distributions referred to in Section 3(a)), or subscription rights or warrants, the Exercise Price to be in effect after such payment date shall be determined by multiplying the Exercise Price in effect immediately prior to such payment date by a fraction, the numerator of which shall be the total number of shares of Common Stock outstanding multiplied by the Market Price per share of Common Stock immediately prior to such payment date, less the fair market value (as determined below) of said assets or evidences of indebtedness so distributed, or of such subscription rights or warrants, and the denominator of which shall be the total number of shares of Common Stock outstanding multiplied by such Market Price per share of Common Stock immediately prior to such payment date. The fair market value of said assets or evidences of indebtedness so distributed shall be determined in good faith by the mutual agreement of the Holder and the Board of Directors of the Company. In the event that the Board of Directors of the Company and the Holder are unable to agree upon the fair market value in respect of this Section 3(c), the Company and the Holder shall jointly select an appraiser, who is experienced in such matters. The decision of such appraiser shall be final and conclusive, and the cost of such appraiser shall be borne equally by the Company and the Holder. Such adjustment shall be made successively whenever such a payment date is fixed.

(d)An adjustment to the Exercise Price shall become effective immediately after the payment date in the case of each dividend or distribution and immediately after the effective date of each other event which requires an adjustment.

(e)In the event that, as a result of an adjustment made pursuant to this Section 3, the Holder shall become entitled to receive any shares of capital stock of the Company other than shares of Common Stock, the number of such other shares so receivable upon exercise of this Warrant shall be subject thereafter to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Warrant Shares contained in this Warrant.

(f)Except as provided in Section 3(g), if and whenever the Company shall issue or sell, or is, in accordance with any of Sections 3(f)(i) through 3(f)(vi), deemed to have issued or sold, any shares of Common Stock for no consideration or for a consideration per share less than the lesser of (i) the Trigger Issuance Price (as defined below) in effect immediately prior to the time

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of such issue or sale and (ii) $0.02, then and in each such case (a "Trigger Issuance") the then-existing Exercise Price, shall be reduced, as of the close of business on the effective date of the Trigger Issuance, by multiplying the then-existing Exercise Price by a ratio where the numerator is the Net Consideration Per Share (as defined below), if any, with respect to such Trigger Issuance and the denominator is the lesser of (i) the Trigger Issuance Price in effect immediately prior to the time of such Trigger Issuance and (ii) $0.02; provided, however, that in no event shall the Exercise Price after giving effect to such Trigger Issuance be greater than the Exercise Price in effect prior to such Trigger Issuance. For example, in the case of a Trigger Issuance with consideration of $.01 per share and a then-existing Exercise Price of $.04, the Exercise Price would be reduced to $.02 ((.01/.02) X .04). “Trigger Issuance Price” shall mean the lesser of (i) the Exercise Price in effect immediately prior to any Trigger Issuance, and (ii) the lowest Net Consideration Per Share from all Trigger Issuances from and after the issuance date of this Warrant.

For purposes of this Section 3(f), the following Sections 3(f)(i) to (f)(vi) shall also be applicable:

i.Issuances of Warrants, Options and Rights to Common Stock or Convertible Securities.

1.For the purposes of this Section 3(f), the issuance of any warrants, options, subscription or purchase rights with respect to shares of Common Stock and the issuance of securities convertible into or exchangeable for shares of Common Stock, or the issuance of any warrants, options, subscription or purchase rights with respect to such convertible or exchangeable securities (collectively, "Common Stock Equivalents"), shall be deemed an issuance of Common Stock.

2.Any obligation, agreement or undertaking to issue Common Stock Equivalents at any time in the future shall be deemed to be an issuance at the time of such obligation, agreement or undertaking is made or arises.

3.No adjustment of the Exercise Price shall be made under this Section 3(f)(i) upon the issuance of any shares of Common Stock which are issued pursuant to the exercise, conversion or exchange of any Common Stock Equivalents if any adjustment shall previously have been made upon the issuance of such Common Stock Equivalents as above provided. No adjustment shall be made upon exercise, conversion or exchange of any Common Stock Equivalents if no adjustment was required by the initial issuance of the Common Stock Equivalents.

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ii."Net Consideration Per Share" shall mean (i) with in case of an issuance of Common Stock, the amount equal to the total amount of consideration, if any, received by the Company for such issuance divided by the aggregate number of shares of Common Stock issued, and (ii) in the case of an issuance of Common Stock Equivalents, the total amount of consideration, if any, received by the Company for such issuance plus the minimum amount of consideration, if any, payable to the Company upon exercise, conversion or exchange thereof, divided by the aggregate number of shares of Common Stock that would be issued if all such Common Stock Equivalents were exercised, exchanged or converted for Common Stock. The Net Consideration Per Share which may be received by the Company shall be determined in each instance as of the date of issuance of Common Stock Equivalents, without giving effect to any possible future upward price adjustments or rate adjustments which may be applicable with respect to such Common Stock Equivalents.

iii.Adjustments for Cancellation or Expiration of Common Stock Equivalents. Any adjustment of the Exercise Price with respect to this paragraph which relates to Common Stock Equivalents shall be disregarded if, as and when all of such Common Stock Equivalents expire or are canceled without being exercised, so that the Exercise Price immediately upon such cancellation or expiration shall be equal to the Exercise Price in effect at the time of the issuance of the expired or canceled Common Stock Equivalents, with such additional adjustments as would have been made to the Exercise Price had the expired or canceled Common Stock Equivalents not been issued.

iv.Should the Net Consideration Per Share of any Common Stock Equivalents be decreased from time to time, then, upon the effectiveness of each such change, the Exercise Price will be that which would have been obtained (y) had the adjustments made upon the issuance of such Common Stock Equivalents been made upon the basis of the actual Net Consideration Per Share of such securities, and (z) had adjustments made to the Exercise Price since the date of issuance of such Common Stock Equivalents been made to such Exercise Price as adjusted pursuant to (y) above.

v.Stock Dividends for Holders of Capital Stock other than Common Stock. In the event that the Company shall make or issue, or shall fix a record date for the determination of holders of any capital stock of the Company (other than Common Stock) entitled to receive a dividend or other distribution payable in Common Stock or Common Stock Equivalents, then such Common Stock or Common Stock Equivalents issued in payment of such dividend shall be deemed to have been issued without consideration.

vi.Consideration other than Cash. For purposes of this Section 3(f), if a part or all of the consideration received by the Company in connection with the issuance of shares of the Common Stock or Common Stock Equivalents consists of property other than cash, such

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consideration shall be deemed to have a fair market value as is reasonably determined in good faith by the Board of Directors and Holder. In the event of any dispute between the Holder and the Board of Directors regarding the determination of fair market value, at the option of the Holder, the Company shall engage a consulting firm or investment banking firm selected by the Holder to prepare an independent appraisal of the fair market value of such property to be distributed, which appraisal shall be deemed for purposes hereof to be a conclusive, final and binding determination of the fair market value of such property. The expenses of such appraisal shall be borne by the Company.

(g)Exceptions. Section 3(f) shall not apply to, and the Company shall not be required to make any adjustment to the Exercise Price in connection with the issuance of (w) up to an aggregate amount of twenty million (20,000,000) shares of Common Stock, or options exercisable therefor (such number to be equitably adjusted in the event of stock splits, stock dividends, recapitalizations or other similar events) issued to officers, directors, consultants or employees of the Company or any subsidiary in connection with services performed or to be performed, pursuant to the Company’s 2011 Non-Qualified Stock Option Plan or any other qualified or non-qualified stock option plan or agreement, stock purchase plan or agreement, employee stock ownership plan, consulting agreement or other arrangements, agreements or plans approved by a majority of the Board of Directors and the holders of a majority of the outstanding shares of Series A Convertible Preferred Stock, par value $.0001 per share; (x) any shares of Common Stock issuable upon conversion, exercise or exchange of Common Stock Equivalents that are issued and outstanding as date of the Purchase Agreement; provided such Common Stock Equivalents are not amended after the date of the Purchase Agreement; (y) any shares issuable in accordance with the terms of the (i) Yellow Box Master Lease Agreement dated as of June 17, 2011; (ii) SB Communications, Inc. Consulting Agreement dated as of October 5, 2009; and (z) any of the circumstances in which an adjustment is made under Sections 3(a)-3(c).

(h)Record Date. In case the Company shall take a record of the holders of its Common Stock for the purpose of entitling them (i) to receive a dividend or other distribution payable in Common Stock or Common Stock Equivalents, or (ii) to subscribe for or purchase Common Stock or Common Stock Equivalents, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.

(i)Treasury Shares. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company or any of its wholly-owned subsidiaries, if any, and the disposition of any such shares (other than the cancellation or retirement thereof) shall be considered an issue or sale of Common Stock for the purpose of Section 3(f).

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(j)Upon any adjustment to the Exercise Price pursuant to Section 3(f), the number of Warrant Shares purchasable hereunder shall be adjusted by multiplying such number of Warrant Shares by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to such adjustment and the denominator of which shall be the Exercise Price in effect immediately thereafter.

(k)No Avoidance. The Company shall not, by amendment of its Certificate of Incorporation, By-Laws or other organizational documents, or through any reorganization, transfer of assets, consolidation, merger, dissolution, sale of securities or other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Section 3 by the Company, but shall at all times in good faith assist in the carrying out of all provisions of this Section 3. Without limiting the generality of the foregoing, the Company shall not consolidate with or merge into any other Person or permit any such Person to consolidate with or merge into the Company (if the Company is not the surviving Person) or transfer all or substantially all of the assets of the Company to another Person, unless such other Person shall expressly assume in writing and will be bound by all of the terms of this Warrant, including the provisions of Section 3(b). If any event occurs as to which the other provisions of this Section 3 are not strictly applicable or, if strictly applicable, would not fairly protect the rights of the Holder in accordance with the essential intent and principles of this Warrant, then the Board of Directors shall make an adjustment in the provisions of this Warrant, in accordance with such essential intent and principles, so as to protect such rights.

(l)The Company acknowledges that the Holder has acquired the Warrant in reliance on a pre-investment capitalization of 456,344,941 shares (the “Baseline Shares”) of Common Stock outstanding, on a fully diluted and as converted and exercised basis, as of the date of the Purchase Agreement. The Company has undertaken to obtain waivers of the application of the Anti-Dilution Adjustments (as defined below) from the holders of various instruments previously issued that contain certain “weighted average ratchet” anti-dilution adjustments (the “Anti-Dilution Adjustments”). The Corporation agrees that if, on the date which is 90 days after the closing of those transactions contemplated by the Transaction Documents (as defined in the Purchase Agreement) (the “Measurement Date”) the total number of shares of Common Stock issued or issuable upon conversion or exercise of any Common Stock Equivalents outstanding immediately prior but after giving effect to the transactions contemplated by the Purchase Agreement is, or becomes, as a result of any issuances of Common Stock or Common Stock Equivalents up to and through the date of the investments made pursuant to the Transaction Documents, greater than the Baseline Shares as a result of the operation of the Anti-Dilution Adjustments (such number hereinafter referred to as the “Additional Common Stock Equivalent Shares”), the Exercise Price as of the date of the Purchase Agreement (the “Initial Exercise Price”) shall be decreased, retroactive to the date of the Purchase Agreement, to reflect the same valuation based on the adjusted amount of shares of Common Stock issued or issuable as follows: The Initial Exercise Price shall be adjusted by multiplying (i) the Initial Exercise Price by (ii) the quotient of (A) 1 divided by (B) the quotient of (x) the sum of 456,344,941 plus the total number of Additional Common Stock Equivalent Shares divided by (y) 456,344,941. For example, given the .04 Initial Exercise

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Price, if the total number of shares of Common Stock issued or issuable upon conversion or exercise of any Common Stock Equivalents, as of the measurement Date, exceeds the Baseline Shares by 30,000,000 shares, the Exercise Price would be adjusted to 0.03753 (.04 X (1/((456,344,941 + 30,000,000)/456,344,941). The adjustments, if any, to the Initial Exercise Price pursuant to this Section 3(L) shall also apply to applications, if any, of the Anti-Dilution Adjustments after the Measurement Date. Any adjustments otherwise provided for elsewhere in this Warrant shall be recalculated using the decreased Initial Exercise Price, once the decrease (if any) has been determined (whether at the Measurement Date or at any time thereafter and for as many times as applicable), so that such other adjustments (if any) will only be those that would have been made had the decreased Initial Exercise Price been in effect on the date of the Purchase Agreement. In the case of any adjustments to the Initial Exercise Price, the Baseline Trigger Issuance Price shall also be decreased to an amount equal to the Initial Exercise Price as adjusted pursuant to this Section 3(l) multiplied by 0.5. For purposes of the Warrant “Baseline Trigger Issuer in Price” shall mean $.02, as adjusted by this Section 3(l). In no event shall the number of Baseline Shares be deemed to have been reduced as a result of any cancellation of Common Stock or Common Stock Equivalents or any other factors, and all such Baseline Shares shall be deemed outstanding for purposes of the adjustments set forth herein.

4.Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

5.Notices to Holder. Upon the happening of any event requiring an adjustment of the Exercise Price, the Company shall promptly give written notice thereof to the Holder at the address appearing in the records of the Company, stating the adjusted Exercise Price and the adjusted number of Warrant Shares resulting from such event and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Failure to give such notice to the Holder or any defect therein shall not affect the legality or validity of the event giving rise to, or the, subject adjustment.

6.Remedies. The Company stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate, and that such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise.

7.Negotiability, Registration Rights, etc. This Warrant is issued upon the following terms, all of which the Holder hereof by the taking hereof consents and agrees:

(a)The Holder shall be entitled to pledge, mortgage, transfer, endorse or otherwise convey this Warrant (a “Transfer”), in whole or in part, without the prior written consent of the Company. The Holder and its direct and indirect transferees may Transfer all or any portion of this Warrant by

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surrendering this Warrant to the Company together with a completed assignment in the form attached hereto as Annex B. Upon such surrender, the Company shall deliver a new Warrant or Warrants to the person or persons entitled thereto and, if applicable, shall deliver to Holder a new Warrant evidencing the right of Holder to purchase the balance of the Warrant Shares subject to purchase hereunder. The term “Holder” as used herein shall include any transferee to whom this Warrant has been transferred in accordance with this Section 6.

(b)Except as set forth in the Purchase Agreement, the Holder of this Warrant shall not be entitled to vote or to receive dividends or to be deemed the Holder of Common Stock that may at any time be issuable upon exercise of this Warrant for any purpose whatsoever, nor shall anything contained herein be construed to confer upon the Holder any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance or reclassification of stock, change of par value or change of stock to no par value, consolidation, merger or conveyance or otherwise), or to receive notice of meetings, or to receive dividends or subscription rights, until the Holder shall have exercised this Warrant and been issued shares of Common Stock in accordance with the provisions hereof.

(c)Neither this Warrant nor any shares of Common Stock or other securities purchased pursuant to this Warrant have been registered under the Act or applicable state securities laws. Therefore, the transfer or exchange of this Warrant or such shares may be made only in a transaction permitted under the Act and applicable state securities laws or pursuant to an exemption therefrom. Prior to registration, the certificates evidencing the Warrant Shares or other securities issued on the exercise of this Warrant shall bear a legend to the effect that the shares evidenced by such certificates have not been registered under the 1933 Act and applicable state securities laws. This Warrant, and the shares of Common Stock issuable upon exercise hereof, shall be “Registrable Securities” pursuant to that certain Investors' Rights Agreement, dated the date hereof (the “Investors’ Rights Agreement”), by and among the Company and the parties thereto, as the same may be amended from time to time.

(d)The initial Holder of this Warrant (and certain assignees thereof) is entitled to the benefit of such registration rights in respect of the Warrant Shares as are set forth in the Investors’ Rights Agreement.

(e)Until this Warrant is transferred on the books of the Company, the Company may treat the record Holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

8.Investment Representations. The Holder represents and warrants to the Company that the representations and warranties in Sections 3.2 through 3.8 of the Purchase Agreement made by the Holder as a Purchaser (as defined in the Purchase Agreement) under the Purchase Agreement are true and correct as of the date hereof.

9.Successors. All the covenants and provisions hereof by or for the benefit of the Holder shall bind and inure to the benefit of its respective successors and permitted

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assigns and transferees hereunder and shall be binding upon any corporation or other entity succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company’s assets (to the extent provided in Section 3(b)), and all of the obligations of the Company relating to the Warrant Shares shall survive the exercise, conversion and termination of this Warrant, and all of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the Holder. The Company will, at the time of the exercise of this Warrant, in whole or in part, upon request of the Holder but at the Company’s expense, acknowledge in writing its continuing obligation to the Holder in respect of any rights (including, without limitation, any right to registration of the Warrant Shares) to which the Holder shall continue to be entitled after such exercise in accordance with this Warrant; provided that the failure of the Holder to make any such request shall not affect the continuing obligation of the Company to the Holder hereof in respect of such rights.

10.Notices, etc. All notices and other communications from the Company to the Holder of this Warrant shall be in writing and sent by facsimile or overnight courier or shall be mailed by first class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company in writing by such Holder or, until any such Holder furnishes to the Company an address, then to, and at the address of, the last Holder of this Warrant who has so furnished an address to the Company. All such notices and communications shall, when mailed, be effective when deposited in the mails and, when sent by facsimile or overnight courier, delivered, be effective when received.

11.Amendments. This Warrant and any term hereof may be changed, waived, discharged or terminated only with the consent of holders of Warrants representing a majority of the aggregate Common Stock issuable upon the exercise of all then outstanding Warrants issued under the Purchase Agreement.

12.Governing Law. This Warrant shall be construed and enforced in accordance with and governed by the laws of the State of New York without regard to the laws that might be applied under any conflict of laws principles.

13.Headings. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.

14.Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by a duly authorized officer as of the date first written above.

COUPON EXPRESS, INC.

By:__________________________________

Name: Eric L. Kash

Title: Chief Executive Officer

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Annex A

Form of Exercise Notice

(To be executed if Holder desires to exercise this Warrants evidenced by this Warrant Certificate).

TO COUPON EXPRESS, INC.

ð

The undersigned hereby (1) irrevocably elects to exercise this Warrant for ___________ Warrant Shares represented by this Warrant, (2) makes payment in full of the aggregate Exercise Price for such Warrant Shares by enclosure of a certified or bank cashier's check therefor, upon condition that a new Warrant be issued for the balance of the Warrant Shares remaining, if any, and (3) requests that a certificate for the shares of Common Stock purchased hereunder be issued in the name of and delivered to:

ð

The undersigned hereby elects to purchase _______ Warrant Shares, by net exercise of this Warrant pursuant to the provisions of Section 2 of this Warrant.

(Please print name and address)

The undersigned hereby reaffirms, as of the date hereof, the investment representations in Section 8 of this Warrant.

If such number of Warrant Shares not be all of the Warrant Shares evidenced by this Warrant Certificate, a new Warrant for the balance remaining of such Warrant Shares shall be registered in the name of and delivered to:

(Please print name and address)

Dated:__________________

Signature________________________________

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Annex B

Form of Assignment

(To be executed by the registered Holder if such Holder desires to transfer the attached Warrant.)

FOR VALUE RECEIVED, hereby sells, assigns, and transfers unto a Warrant to purchase shares of common stock, par value $0.001 per share, of Coupon Express, Inc., a Nevada corporation (the “Company”), together with all right, title, and interest therein, and does hereby irrevocably constitute and appoint attorney to transfer such Warrant on the books of the Company, with full power of substitution.

The undersigned represents, unless the sale of this Warrant has been registered under the Securities Act of 1933, as amended (the “Securities Act”), that the undersigned is acquiring such Warrant for its own account for investment and not with a view to or for sale in connection with any distribution thereof (except for any resale pursuant to a Registration Statement under the Securities Act).

Dated:__________________

Signature________________________________

853223

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EX-10.5

Exhibit 10.5

SECURITY AGREEMENT

This SECURITY AGREEMENT, dated as of October 24, 2011 (as amended, supplemented or otherwise modified from time to time in accordance with the provisions hereof, this "Agreement"), made by and among Coupon Express, Inc., a Nevada corporation (the "Grantor"), in favor of the Lead Purchaser, as collateral agent for the Purchasers (each a “Secured Party”, and collectively, the "Secured Parties") under that certain Cumulative Convertible Senior Note and Warrant Purchase Agreement (the “Purchase Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Purchase Agreement.

WHEREAS, pursuant to the Purchase Agreement, the Secured Parties have made loans and other extensions of credit to the Grantor (the "Loans"), evidenced by those certain Cumulative Convertible Senior Notes of even date herewith (as amended, supplemented or otherwise modified from time to time, the "Senior Notes") made by the Grantor and payable to the order of the Secured Parties.; and

WHEREAS, it is a condition to the obligations of the Secured Parties to make the Loans under the Senior Notes that the Grantor (a) grant a first priority security interest in the Collateral (as defined below) in favor of the Lead Purchaser, for its benefit and the benefit of the Secured Parties, to secure the payment and performance of all of the Secured Obligations and (b) execute and deliver this Agreement;

NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.Definitions.

(a)Unless otherwise specified herein, all references to Sections and Schedules herein are to Sections of this Agreement.

(b)Unless otherwise defined herein, terms used herein that are defined in the UCC shall have the meanings assigned to them in the UCC. However, if a term is defined in Article 9 of the UCC differently than in another Article of the UCC, the term has the meaning specified in Article 9.

(c)For purposes of this Agreement, the following terms shall have the following meanings:

"Collateral" has the meaning set forth in Section 2.

"Event of Default" has the meaning set forth in the Senior Notes.

"First Priority" means, with respect to any lien and security interest purported to be created in any Collateral pursuant to this Agreement, such lien and security interest is the most senior lien and security interest to which such Collateral is subject.

"Lead Purchaser" means the Purchaser who holds a majority of the outstanding principal balance of the Senior Notes at the date hereof. If at any time, such Purchaser does not hold a majority of the outstanding principal balance of the Senior Notes, the Purchaser who at that time does hold the majority of the then outstanding principal balance of the Senior Notes shall automatically become the Lead Purchaser and succeed to the role of the Lead Purchaser as Collateral Agent hereunder.

"Perfection Certificate" has the meaning set forth in Section 5.

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"Proceeds" means "proceeds" as such term is defined in section 9-102 of the UCC and, in any event, shall include, without limitation, all dividends or other income from the Collateral, collections thereon or distributions with respect thereto.

"Secured Obligations" has the meaning set forth in Section 3.

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"Transaction Documents" means this Agreement, the Investors' Rights Agreement, the Security Agreement, the Subordination Agreement, the Senior Notes, the Warrants, the Restated Certificate and all other documents and agreements executed in connection with the transactions contemplated thereunder.

"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York or, when the laws of any other state govern the method or manner of the perfection or enforcement of any security interest in any of the Collateral, the Uniform Commercial Code as in effect from time to time in such state.

2.Grant of Security Interest. The Grantor hereby pledges and grants to the Lead Purchaser, for its benefit and the benefit of the Secured Parties, and hereby creates a continuing First Priority lien and security interest in favor of the Lead Purchaser, for its benefit and the benefit of the Secured Parties, in and to all of its right, title and interest in and to all property and rights of the Grantor, wherever located, whether now existing or hereafter from time to time arising or acquired (collectively, the "Collateral"), including but not limited to the following:

(a)all of its Accounts;

(b)all Real Property and Fixtures;

(c)all of its Commercial Tort Claims;

(d)all of its Deposit Accounts;

(e)all of its General Intangibles and all recourse, indemnification, repurchase and other rights of the Grantor thereunder);

(f)all Goods, including, without limitation, Inventory and Equipment;

(g)all of its Investment Property (including all of its Securities and Securities Accounts);

(h)all of letters of credit, Letter-of-Credit Rights, Instruments, Promissory Notes and Chattel Paper (including electronic chattel paper and tangible Chattel Paper);

(i)all contracts, contract rights, Chattel Paper, Instruments and Documents of the Grantor;

(j)all rights, claims or choses in action of the Grantor;

(k)all of the Grantor’s interest in insurance policies and bonds held by the Grantor (whether singly or jointly);

(l)all money or other assets of the Grantor that now or hereafter come into the possession, custody, or control of the Secured Parties;

(m)all of the Grantor’s books and records (including customer lists, credit files, computer print outs, and other computer materials and records of the Grantor) pertaining to the Collateral;

(n)all accessions to, substitutions for and all replacements, products and cash and non-cash proceeds of (a) through (m) above, including proceeds of and unearned premiums with respect to insurance policies insuring any of the Collateral; and

(o)the Proceeds and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance covering any or all of the foregoing, and any and all Accounts, books and records, Deposit Accounts, Equipment, Fixtures, General Intangibles, Inventory, Investment Property, Negotiable Collateral, Supporting Obligations, money, or other real or personal, tangible or intangible Property resulting from the sale, exchange, collection, or other disposition of any of the foregoing, or any portion thereof or interest therein, and the proceeds thereof; together with all assets and interests in assets and proceeds thereof now owned or hereafter acquired by the Secured Parties in or upon which a lien is granted under any of the Transaction Documents.

3.Secured Obligations. The Secured Parties’ security interest in the Collateral shall secure the payment and performance of the following (all such obligations, liabilities, sums and expenses set forth in this Section 3 being herein collectively called the "Secured Obligations"):

(a)the obligations of the Grantor from time to time arising under the Senior Note, this Agreement, the other Transaction Documents or otherwise with respect to the due and punctual payment of (i) the principal of and premium, if any, and interest on the Loans (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (ii) all other monetary obligations, including fees, costs, attorneys' fees and disbursements, reimbursement obligations, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Grantor under the Senior Note, this Agreement, the other Transaction Documents or otherwise; and

(b)all other agreements, duties, indebtedness, obligations and liabilities of any kind of the Grantor under, out of, or in connection with the Senior Note, this Agreement, the other Transaction Documents or any other document made, delivered or given in connection with any of the foregoing, in each case whether now existing or hereafter arising, whether evidenced by a note or other writing, whether allowed in any bankruptcy, insolvency, receivership or other similar proceeding, whether arising from an extension of credit, issuance of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several.

4.Perfection of Security Interest and Further Assurances.

(a)The Grantor shall, from time to time, as may be required by the Secured Parties with respect to all Collateral, take all actions as may be requested by the Lead Purchaser to perfect the security interest of the Secured Party in the Collateral, including, without limitation, with respect to all Collateral over which control may be obtained within the meaning of sections 8-106, 9-104, 9-105, 9-106 and 9-107 of the UCC, section 201 of the federal Electronic Signatures in Global and National Commerce Act and, as the case may be, section 16 of the Uniform Electronic Transactions Act, as applicable. The Grantor shall take all actions as may be requested from time to time by the Lead Purchaser so that control of such Collateral is obtained and at all times held by the Lead Purchaser, for its benefit and the benefit of the Secured Parties. All of the foregoing shall be at the sole cost and expense of the Grantor.

(b)The Grantor hereby irrevocably authorizes the Lead Purchaser at any time and from time to time to file in any relevant jurisdiction any financing statements and amendments thereto that contain the information required by Article 9 of the UCC of each applicable jurisdiction for the filing of any financing statement or amendment relating to the Collateral, including any financing or continuation statements or other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting

the security interest granted by the Grantor hereunder, without the signature of the Grantor where permitted by law, including the filing of a financing statement describing the Collateral as all assets now owned or hereafter acquired by the Grantor, or words of similar effect. The Grantor agrees to provide all information required by the Secured Parties pursuant to this Section promptly to the Secured Parties upon the request of the Lead Purchaser.

(c)The Grantor hereby further authorizes the Lead Purchaser to file with the United States Patent and Trademark Office and the United States Copyright Office (and any successor office and any similar office in any state of the United States or in any other country) this Agreement and other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting the security interest granted by the Grantor hereunder, without the signature of the Grantor where permitted by law.

(d)If the Grantor shall at any time hold or acquire any certificated securities, Promissory Notes, tangible Chattel Paper, negotiable documents or warehouse receipts relating to the Collateral, the Grantor shall indorse, assign and deliver the same to the Lead Purchaser, accompanied by such instruments of transfer or assignment duly executed in blank as the Lead Purchaser may from time to time specify.

(e)If any Collateral is at any time in the possession of a bailee, the Grantor shall promptly notify the Secured Parties thereof and, at the Lead Purchaser 's request and option, shall promptly obtain an acknowledgment from the bailee, in form and substance satisfactory to the Lead Purchaser, that the bailee holds such Collateral for the benefit of the Lead Purchaser and the bailee agrees to comply, without further consent of the Grantor, at any time with instructions of the Lead Purchaser as to such Collateral.

(f)The Grantor agrees that at any time and from time to time, at the expense of the Grantor, the Grantor will promptly execute and deliver all further instruments and documents, obtain such agreements from third parties, and take all further action, that may be necessary or desirable, or that the Lead Purchaser may reasonably request, in order to perfect and protect any security interest granted hereby or to enable the Lead Purchaser to exercise and enforce its rights and remedies hereunder, for its benefit and the benefit of the Secured Parties) or under any other agreement with respect to any Collateral.

5.Representations and Warranties. The Grantor represents and warrants as follows:

(a)It has previously delivered to the Lead Purchaser a certificate signed by the Grantor and entitled "Perfection Certificate" ("Perfection Certificate"), and that: (i) the Grantor's exact legal name is that indicated on the Perfection Certificate and on the signature page hereof, (ii) the Grantor is an organization of the type, and is organized in the jurisdiction, set forth in the Perfection Certificate, (iii) the Perfection Certificate accurately sets forth the Grantor's organizational identification number (or accurately

states that the Grantor has none), the Grantor's place of business (or, if more than one, its chief executive office), and its mailing address, (iv) all other information set forth on the Perfection Certificate relating to the Grantor is accurate and complete and (v) there has been no change in any such information since the date on which the Perfection Certificate was signed by the Grantor.

(b)All information set forth on the Perfection Certificate relating to the Collateral is accurate and complete and there has been no change in any such information since the date on which the Perfection Certificate was signed by the Grantor.

(c)None of the Collateral constitutes, or is the proceeds of, "farm products" as defined in section 9-102(a)(34) of the UCC. None of the account debtors or other persons obligated on any of the Collateral is a governmental authority covered by the Federal Assignment of Claims Act or like federal, state or local statute or rule in respect of such Collateral. The Grantor has at all times operated its business in compliance with all applicable provisions of the federal Fair Labor Standards Act, as amended, and with all applicable provisions of federal, state and local statutes and ordinances dealing with the control, shipment, storage or disposal of hazardous materials or substances.

(d)At the time the Collateral becomes subject to the lien and security interest created by this Agreement, the Grantor will be the sole, direct, legal and beneficial owner thereof, free and clear of any lien, security interest, encumbrance, claim, option or right of others except for the security interest created by this Agreement.

(e)The pledge of the Collateral pursuant to this Agreement creates a valid and perfected First Priority security interest in the Collateral, securing the payment and performance when due of the Secured Obligations.

(f)It has full power, authority and legal right to borrow the Loans and pledge the Collateral pursuant to this Agreement.

(g)Each of this Agreement and the Senior Notes has been duly authorized, executed and delivered by the Grantor and constitutes a legal, valid and binding obligation of the Grantor enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and subject to equitable principles (regardless of whether enforcement is sought in equity or at law).

(h)No authorization, approval, or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the borrowing of the Loans and the pledge by the Grantor of the Collateral pursuant to this Agreement or for the execution and delivery of the Senior Notes and this Agreement by the Grantor or the performance by the Grantor of its obligations thereunder.

(i)The execution and delivery of the Senior Notes and this Agreement by the Grantor and the performance by the Grantor of its obligations thereunder, will not violate any provision of any applicable law or regulation or any order, judgment, writ, award or decree of any court, arbitrator or governmental authority, domestic or foreign, applicable to the Grantor or any of its property, or the organizational or governing documents of the Grantor or any agreement or instrument to which the Grantor is party or by which it or its property is bound.

(j)The Grantor has taken all action required on its part for control (as defined in sections 8-106, 9-104, 9-105, 9-106 and 9-107 of the UCC, [section 201 of the federal Electronic Signatures in Global and National Commerce Act and, as the case may be, section 16 of the Uniform Electronic Transactions Act,] as applicable) to have been obtained by the Lead Purchaser, for its benefit and the benefit of the Secured Parties, over all Collateral with respect to which such control may be obtained pursuant to the UCC. No person other than the Lead Purchaser has control or possession of all or any part of the Collateral.

6.Voting, Distributions and Receivables.

(a)The Lead Purchaser agrees that unless an Event of Default shall have occurred and be continuing, the Grantor may, to the extent the Grantor has such right as a holder of the Collateral consisting of securities, other Equity Interests or indebtedness owed by any obligor, vote and give consents, ratifications and waivers with respect thereto, except to the extent that, in the Lead Purchaser's reasonable judgment, any such vote, consent, ratification or waiver could detract from the value thereof as Collateral or which could be inconsistent with or result in any violation of any provision of the Senior Notes or this Agreement, and from time to time, upon request from the Grantor, the Lead Purchaser shall deliver to the Grantor suitable proxies so that the Grantor may cast such votes, consents, ratifications and waivers.

(b)The Lead Purchaser agrees that the Grantor may, unless an Event of Default shall have occurred and be continuing, receive and retain all dividends and other distributions with respect to the Collateral consisting of securities, other Equity Interests or indebtedness owed by any obligor.

(c)If any Event of Default shall have occurred and be continuing, the Lead Purchaser may, or at the request and option of the Lead Purchaser the Grantor shall, notify account debtors and other persons obligated on any of the Collateral of the security interest of the Secured Parties in any account, chattel paper, general intangible, instrument or other Collateral and that payment thereof is to be made directly to the Lead Purchaser.

7.Covenants. The Grantor covenants as follows:

(a)The Grantor will not, without providing at least sixty (60) days' prior written notice to the Lead Purchaser, change its legal name, identity, type of organization, jurisdiction of organization, corporate structure, location of its chief executive office or its principal place of business or its organizational identification number. The Grantor will, prior to any change described in the preceding sentence, take all actions reasonably requested by the Lead Purchaser to maintain the perfection and priority of the Secured Parties' security interest in the Collateral.

(b)The Collateral, to the extent not delivered to the Lead Purchaser pursuant to Section 4, will be kept at those locations listed on the Perfection Certificate and the Grantor will not remove the Collateral from such locations without providing at least sixty (60) days' prior written notice to the Lead Purchaser. The Grantor will, prior to any change described in the preceding sentence, take all actions reasonably required by the Lead Purchaser to maintain the perfection and priority of the Secured Parties’ security interest in the Collateral.

(c)The Grantor shall, at its own cost and expense, defend title to the Collateral and the First Priority lien and security interest of the Secured Parties therein against the claim of any person claiming against or through the Grantor and shall maintain and preserve such perfected First Priority security interest for so long as this Agreement shall remain in effect.

(d)The Grantor will not sell, offer to sell, dispose of, convey, assign or otherwise transfer, grant any option with respect to, restrict, or grant, create, permit or suffer to exist any mortgage, pledge, lien, security interest, option, right of first offer, encumbrance or other restriction or limitation of any nature whatsoever on, any of the Collateral or any interest therein, except as expressly provided for in the Senior Notes or with the prior written consent of the Lead Purchaser.

(e)The Grantor will keep the Collateral in good order and repair and will not use the same in violation of law or any policy of insurance thereon. The Grantor will permit the Lead Purchaser, or its designee, to inspect the Collateral at any reasonable time, wherever located.

(f)The Grantor will pay promptly when due all taxes, assessments, governmental charges, and levies upon the Collateral or incurred in connection with the use or operation of the Collateral or incurred in connection with this Agreement.

8.Lead Purchaser Appointed Attorney-in-Fact. The Grantor hereby appoints the Lead Purchaser the Grantor's attorney-in-fact, with full authority in the place and stead of the Grantor and in the name of the Grantor or otherwise, from time to time during the continuance of an Event of Default in the Lead Purchaser 's discretion to take any action and to execute any instrument which the Lead Purchaser may deem necessary or advisable to accomplish the purposes of this Agreement (but the Lead Purchaser shall not

be obligated to and shall have no liability to the Grantor or any third party for failure to do so or take action). This appointment, being coupled with an interest, shall be irrevocable. The Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof.

9.Lead Purchaser May Perform. If the Grantor fails to perform any obligation contained in this Agreement, the Lead Purchaser may itself perform, or cause performance of, such obligation, and the expenses of the Lead Purchaser incurred in connection therewith shall be payable by the Grantor; provided that the Lead Purchaser shall not be required to perform or discharge any obligation of the Grantor.

10.Reasonable Care. The Lead Purchaser shall have no duty with respect to the care and preservation of the Collateral beyond the exercise of reasonable care. The Lead Purchaser shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which the Lead Purchaser accords its own property, it being understood that the Lead Purchaser shall not have any responsibility for (a) ascertaining or taking action with respect to any claims, the nature or sufficiency of any payment or performance by any party under or pursuant to any agreement relating to the Collateral or other matters relative to any Collateral, whether or not the Lead Purchaser has or is deemed to have knowledge of such matters, or (b) taking any necessary steps to preserve rights against any parties with respect to any Collateral. Nothing set forth in this Agreement, nor the exercise by the Lead Purchaser of any of the rights and remedies hereunder, shall relieve the Grantor from the performance of any obligation on the Grantor's part to be performed or observed in respect of any of the Collateral.

11.Remedies Upon Default. If any Event of Default shall have occurred and be continuing:

(a)The Lead Purchaser, for its benefit and the benefit of the Secured Parties, without any other notice to or demand upon the Grantor, may assert all rights and remedies of a secured party under the UCC or other applicable law, including, without limitation, the right to take possession of, hold, collect, sell, lease, deliver, grant options to purchase or otherwise retain, liquidate or dispose of all or any portion of the Collateral. If notice prior to disposition of the Collateral or any portion thereof is necessary under applicable law, written notice mailed to the Grantor at its notice address as provided in Section 15 hereof ten (10) days prior to the date of such disposition shall constitute reasonable notice, but notice given in any other reasonable manner shall be sufficient. So long as the sale of the Collateral is made in a commercially reasonable manner, the Lead Purchaser may sell such Collateral on such terms and to such purchaser(s) as the Lead Purchaser in its absolute discretion may choose, without assuming any credit risk and without any obligation to advertise or give notice of any kind other than that necessary under applicable law. Without precluding any other methods of sale, the sale of the Collateral or any portion thereof shall have been made in a commercially reasonable

manner if conducted in conformity with reasonable commercial practices of creditors disposing of similar property. At any sale of the Collateral, if permitted by applicable law, the Lead Purchaser and any other Secured Party may be the purchaser, licensee, assignee or recipient of the Collateral or any part thereof and shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold, assigned or licensed at such sale, to use and apply any of the Secured Obligations as a credit on account of the purchase price of the Collateral or any part thereof payable at such sale. To the extent permitted by applicable law, the Grantor waives all claims, damages and demands it may acquire against the Lead Purchaser or other Secured Parties arising out of the exercise by it or them of any rights hereunder. The Grantor hereby waives and releases to the fullest extent permitted by law any right or equity of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling the Collateral and any other security for the Secured Obligations or otherwise. At any such sale, unless prohibited by applicable law, the Lead Purchaser and any other Secured Party or any custodian may bid for and purchase all or any part of the Collateral so sold free from any such right or equity of redemption. None of the Lead Purchaser, the other Secured Parties nor any custodian shall be liable for failure to collect or realize upon any or all of the Collateral or for any delay in so doing, nor shall it be under any obligation to take any action whatsoever with regard thereto.

(b)All rights of the Grantor to (i) exercise the voting and other consensual rights it would otherwise be entitled to exercise pursuant to Section 6(a) and (ii) receive the dividends and other distributions which it would otherwise be entitled to receive and retain pursuant to Section 6(b), shall immediately cease, and all such rights shall thereupon become vested in the Lead Purchaser, for its benefit and the benefit of the Secured Parties, which shall have the sole right to exercise such voting and other consensual rights and receive and hold such dividends and other distributions as Collateral.

(c)Any cash held by the Lead Purchaser as Collateral and all cash Proceeds received by the Lead Purchaser in respect of any sale of, collection from, or other realization upon all or any part of the Collateral shall be applied in whole or in part by the Lead Purchaser to the payment of expenses incurred by the Lead Purchaser and the other Secured Parties in connection with the foregoing, including reasonable attorneys' fees, and the balance of such proceeds shall be applied or set off against all or any part of the Secured Obligations in such order as the Lead Purchaser shall elect. Any surplus of such cash or cash Proceeds held by the Lead Purchaser and remaining after payment in full of all the Secured Obligations shall be paid over to the Grantor or to whomsoever may be lawfully entitled to receive such surplus. The Grantor shall remain liable for any deficiency if such cash and the cash Proceeds of any sale or other realization of the Collateral are insufficient to pay the Secured Obligations and the fees and other charges of any attorneys employed by the Lead Purchaser to collect such deficiency.

(d)If the Lead Purchaser shall determine to exercise its rights to sell all or any of the Collateral pursuant to this Section, the Grantor agrees that, upon request of the Lead Purchaser, the Grantor will, at its own expense, do or cause to be done all such acts and things as may be necessary to make such sale of the Collateral or any part thereof valid and binding and in compliance with applicable law.

12.No Waiver and Cumulative Remedies. The Lead Purchaser shall not by any act (except by a written instrument pursuant to Section 14), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. All rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies provided by law.

13.Security Interest Absolute. All rights of the Lead Purchaser and the other Secured Parties and liens and security interests hereunder, and all Secured Obligations of the Grantor hereunder, shall be absolute and unconditional irrespective of:

(a)any illegality or lack of validity or enforceability of any Secured Obligation or any related agreement or instrument;

(b)any change in the time, place or manner of payment of, or in any other term of, the Secured Obligations, or any rescission, waiver, amendment or other modification of the Senior Notes, this Agreement or any other agreement, including any increase in the Secured Obligations resulting from any extension of additional credit or otherwise;

(c)any taking, exchange, substitution, release, impairment or non-perfection of any Collateral or any other collateral, or any taking, release, impairment, amendment, waiver or other modification of any guaranty, for all or any of the Secured Obligations;

(d)any manner of sale, disposition or application of proceeds of any Collateral or any other collateral or other assets to all or part of the Secured Obligations;

(e)any default, failure or delay, wilful or otherwise, in the performance of the Secured Obligations;

(f)any defense, set-off or counterclaim (other than a defense of payment or performance) that may at any time be available to, or be asserted by, the Grantor against the Secured Party; or

(g)any other circumstance (including, without limitation, any statute of limitations) or manner of administering the Loans or any existence of or reliance on any representation by the Secured Party that might vary the risk of the Grantor or otherwise operate as a defense available to, or a legal or equitable discharge of, the Grantor or any other grantor, guarantor or surety.

14.Amendments. None of the terms or provisions of this Agreement may be amended, modified, supplemented, terminated or waived, and no consent to any departure by the Grantor therefrom shall be effective unless the same shall be in writing and signed by the Lead Purchaser and the Grantor, and then such amendment, modification, supplement, waiver or consent shall be effective only in the specific instance and for the specific purpose for which made or given.

15.Addresses For Notices. All notices and other communications provided for in this Agreement shall be in writing and shall be given in the manner and become effective as set forth in the Senior Notes, and addressed to the respective parties at their addresses as specified on the signature pages hereof or as to either party at such other address as shall be designated by such party in a written notice to each other party.

16.Continuing Security Interest; Further Actions. This Agreement shall create a continuing First Priority lien and security interest in the Collateral and shall subject to Section 17, remain in full force and effect until payment and performance in full of the Secured Obligations.

17.Termination; Release. On the date on which all Secured Obligations have been paid and performed in full and all commitments of the Secured Parties to lend or make any extensions of credit shall have terminated, the Secured Party will, at the request and sole expense of the Grantor, (a) duly assign, transfer and deliver to or at the direction of the Grantor (without recourse and without any representation or warranty) such of the Collateral as may then remain in the possession of the Lead Purchaser, together with any monies at the time held by the Lead Purchaser hereunder, and (b) execute and deliver to the Grantor a proper instrument or instruments acknowledging the satisfaction and termination of this Agreement.

18.Governing Law; Jurisdiction. This Agreement and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement (except, as to the Senior Note, as expressly set forth therein) and the transactions contemplated hereby shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the conflicts of law provisions of the State of New York, or of any other state. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN CONNECTION WITH ANY CLAIM, ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY IRREVOCABLY AGREES THAT ANY SUCH CLAIM, ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY NEW YORK STATE COURT OR UNITED STATES DISTRICT COURT SITTING IN THE

CITY OF NEW YORK AND WAIVES ANY OBJECTION TO THE VENUE OF THE AFORESAID COURTS.

19.Assignment. This Agreement shall (i) be binding upon the Grantor, its respective successors and assigns and (ii) inure, together with the rights and remedies of the Lead Purchaser and other Secured Parties hereunder, to the benefit of the Lead Purchaser and the other Secured Parties and each of their successors, transferees and assignees; provided that the Grantor may not assign or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the Lead Purchaser. No other Persons (including any other creditor of the Grantor) shall have any interest herein or any right or benefit with respect hereto. Without limiting the generality of the foregoing clause (ii), the Lead Purchaser may assign or otherwise transfer any indebtedness held by it that is secured by this Agreement to any other Person who at the time of such assignment, holds the majority of the outstanding principal balance of the Senior Notes, and such other person shall thereupon become vested with all the benefits in respect thereof granted to the Lead Purchaser herein.

20.Severability. Should any one or more of the provisions of this Agreement be determined to be illegal or unenforceable, all other provisions shall remain effective and binding on the parties hereto.

21.Counterparts; Entire Agreement. This Agreement and any amendments, waivers, consents or supplements hereto may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or in electronic (i.e., "pdf" or "tif") format shall be effective as delivery of a manually executed counterpart of this Agreement. This Agreement constitutes the entire contract among the parties with respect to the subject matter hereof and supersede all previous agreements and understandings, oral or written, with respect thereto.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

COUPON EXPRESS, INC.,
as Grantor

By_____________________

Name:

Title:

Address for Notices:

____________________, as collateral agent
for the Secured Parties

By_____________________

Name:

Title:

Address for Notices:

854402

EX-10.6

Exhibit 10.6

SUBORDINATION AGREEMENT

THIS SUBORDINATION AGREEMENT is made and entered into as of the _____ day of ____________, 2011, by and between PSI Corporation, a Nevada corporation (“Borrower”) and _____________________ (“Creditor”).

RECITALS

WHEREAS, Creditor is the holder of a 14% Convertible Note in the principal sum of _________________ ($____________) issued by the Borrower that matured on ________________, 2010;

WHEREAS, in order to induce NextLevel Group (“NLG”), certain investors set forth on Schedule 1 attached hereto (“Investors”) and Existing Series A Preferred Stockholders (“Preferred Holders”) (hereinafter NLG, Investors and Preferred Holders are collectively referred to as the “Senior Lenders”) at any time, or from time to time, at their option, to make loans or extend credit or other accommodations or benefits to or for the account of Borrower, with or without security, or to purchase or extend credit upon any instrument or writing in respect of which the Borrower may be liable in any capacity in such manner and amount and upon terms and conditions as the Senior Lenders may deem advisable, and in consideration of any such loan, renewal or extension of credit which the Senior Lenders may make, the undersigned Creditor does hereby wholly subordinate, as hereinafter provided, (x) any and all present and future indebtedness of Borrower to Creditor, absolute or contingent, and any instrument, negotiable or otherwise, evidencing any such indebtedness, and all claims, rights and remedies therefor (such indebtedness under clause (x) being hereinafter referred to as “Subordinated Indebtedness“) to (y) any and all indebtedness of Borrower to the Senior Lenders, whether now existing or hereafter arising, direct or indirect, absolute or contingent, joint, several, or joint and several, secured and unsecured, due or not due, and whether arising directly between Borrower and the Senior Lenders, or acquired outright, conditionally or as collateral security from another by the Senior Lenders, and any amendments, renewals, modifications or extensions thereof, any interest thereon (including any interest accruing thereon after the commencement of a Proceeding (as defined below), without regard to whether or not such interest is an allowed claim), and all costs of collecting the same, including, but not limited to reasonable attorneys’ fees incurred by the Senior Lenders (such indebtedness under clause (y) being hereinafter referred to as “Superior Indebtedness“). So long as Borrower is indebted to the Senior Lenders on account of Superior Indebtedness, and so long as the Senior Lenders are committed to make any advances or other extensions of credit or otherwise make any financial accommodations whatsoever to Borrower in connection therewith, the parties hereto undertake and agree as follows:

NOW, THEREFORE, the parties hereby agree as follows:

1.Subordinated Indebtedness shall, at all times and in all respects, be wholly subordinate and inferior in claim and right to the Superior Indebtedness, and all claims, rights and remedies therefor are hereby subordinated and made subsequent and inferior to the Superior Indebtedness and any claims, rights and remedies arising out of, or in connection therewith.

2.Creditor will not take any Enforcement Action (as defined below) until the earlier of (i) all Superior Indebtedness having been fully paid in cash and all commitments of the Senior Lenders to make any advances or other extensions of credit or otherwise make any financial accommodations whatsoever to Borrower having been terminated, or (ii) one (1) year from the date hereof (“First Extension”), subject to an additional one (1) year extension in the event the Borrower on the First Extension does not meet its “Cash Flow Target.” For purposes of this Subordination Agreement, (x) “Enforcement Action“ shall mean (a) to take from or for the account of Borrower, by set-off or in any other manner, the whole or any part of any moneys which may now or hereafter be owing by Borrower with respect to the Subordinated Indebtedness, (b) to sue for payment of, or to initiate or participate with others in any suit, action or proceeding against Borrower to (i) enforce payment of or to collect the whole or any part of the Subordinated Indebtedness or (ii) commence judicial enforcement of any of the rights and remedies under any documents or agreements evidencing the Subordinated Indebtedness or applicable law with respect to the Subordinated Indebtedness, (c) to accelerate the Subordinated Indebtedness, (d) to exercise any put option or to cause Borrower to honor any redemption or mandatory prepayment obligation under any documents or agreements evidencing the Subordinated Indebtedness, (e) to notify account debtors or directly collect accounts receivable or other payment rights of Borrower, (f) to take any action under the provisions of any state or federal law, including, without limitation, the Uniform Commercial Code, or under any contract or agreement, to enforce, foreclose upon, take possession of or sell any property or assets of Borrower, or (g) to otherwise ask, demand, sue for, take or receive from Borrower the whole or any part of Subordinated Indebtedness, or any security therefor; and (y) “Cash Flow Target” shall mean that Borrower shall have cash reserves equal to or greater than the sum of the Superior Indebtedness plus the amount of all other indebtedness of Borrower.

3.In the event of any distribution, division, or application, partial or complete, voluntary or involuntary, by operation of law or otherwise, or all or any part of the assets of Borrower, or the proceeds thereof, to creditors of Borrower, by reason of the liquidation, dissolution, or other winding up of Borrower's business, or in the event of any sale, receivership, insolvency or bankruptcy proceedings by or against Borrower, or assignment for the benefit of creditors, or of any proceedings by or against Borrower for any relief under any bankruptcy or insolvency laws, or relating to the relief of debtors, readjustment or indebtedness, reorganizations, arrangements, compositions or extensions, or in the event of the death of Borrower or Creditor, or any partners thereof, or of any other event whereby it becomes necessary or desirable to file or present claims against Borrower for the purpose of receiving payment thereof, or on account thereof (any such proceeding, a “Proceeding”), then and in any such event, any payment or distribution of any kind or character, either in cash or other property, which shall be made or shall be payable with respect to any Subordinated Indebtedness shall be paid over to the Senior Lenders for application to the payment of the Superior

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Indebtedness, whether due or of due, and no payments shall be made upon or in respect of Subordinated Indebtedness unless and until the Superior Indebtedness shall have been paid and satisfied in full in cash and all commitments of the Senior Lenders to make any advances or other extensions of credit or otherwise make any financial accommodations whatsoever to Borrower shall have been terminated. In any such event, all claims of the Senior Lenders and all claims of the Creditor shall, at the option of the Senior Lenders, forthwith become due and payable without demand or notice.

4.Without the prior written consent of the Senior Lenders, Borrower will not pay to Creditor any sum on account of Subordinated Indebtedness, nor give Creditor any security for the payment thereof, nor lend any sums to Creditor, nor accept any surrender or release, in whole or in part, of any said claims hereby subordinated nor deliver any negotiable instruments to evidence the Subordinated Indebtedness, nor in any way, directly or indirectly, transfer or pay any money to Creditor. Without the prior written consent of the Senior Lenders, Creditor hereby agrees that it shall not accept from Borrower any sum on account of Subordinated Indebtedness, nor accept from Borrower any security for the payment thereof, nor borrow any sums from Borrower, nor make any surrender or release, in whole or in part, of any said claims hereby subordinated nor accept any negotiable instruments to evidence the Subordinated Indebtedness, nor in any way, directly or indirectly, accept any money from Borrower.

5.No renewal, modification or extension of time of payment of the Superior Indebtedness, and no release or surrender of any security for the Superior Indebtedness, or the obligations of any endorsers, sureties or guarantors thereof, or release from the terms of this or any other subordination agreement of any claims subordinated, and no delay or omission in exercising any right or power on account of or in connection with the Superior Indebtedness, or under this Subordination Agreement, shall, in any manner, impair or affect the rights and duties of the Senior Lenders, the Creditor and Borrower. The Senior Lenders, in their uncontrolled discretion, may waive or release any right or option under this Subordination Agreement without the consent of Borrower or Creditor, and without otherwise in any way affecting the obligations of Borrower and Creditor hereunder. Creditor hereby waives notice of the creation, existence, renewal, or modification or extension of the time of payment, of the Superior Indebtedness.

6.The Creditor and Borrower agree to make and maintain in their books of account notations satisfactory to the Senior Lenders of the rights and priorities of the Senior Lenders hereunder. Such note or notes, together with any previously existing notes or other instruments evidencing Subordinated Indebtedness, shall be marked with a specific statement that the indebtedness thereby evidenced is subject to the provisions of this Subordination Agreement.

7.This Subordination Agreement shall be a continuing agreement and the Senior Lenders may continue, without notice to Creditor, to lend monies, extend credit and make other accommodations to or for the account of Borrower on the faith hereof and until a written revocation, signed by Creditor, is received by the Senior Lenders. Such revocation, however, shall not affect this Subordination Agreement with respect to any obligations or liabilities of Borrower then existing in connection with Superior Indebtedness and, as to such obligations and liabilities, such revocation shall not become effective unless and until such obligations and liabilities of Borrower to the Senior Lenders shall have been paid in full in cash.

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8.Creditor agrees that the Senior Lenders, at any time from time to time, either before or after any such notice of revocation, may enter into such agreement or agreements with Borrower, as the Senior Lenders may deem proper, extending the time of payment or renewing or otherwise altering the terms of all or any of the obligations of Borrower to the Senior Lenders, or affecting any security underlying any or all of such obligations, or may exchange, sell or surrender or otherwise deal with any such security, or may release any balance of funds of Borrower with the Senior Lenders, without notice to Creditor and without in any way impairing or affecting this Subordination Agreement.

9. Creditor consents and agrees that all Superior Indebtedness shall be deemed to have been made or incurred at the request of Creditor and in reliance upon this Subordination Agreement; provided, however, that neither the foregoing provision, nor any other provision contained in this Subordination Agreement, shall be deemed or construed to constitute, either directly or by implication, a guaranty by Creditor of any debts, obligations or liabilities incurred by Borrower to the Senior Lenders.

10.Any modification or waiver of any provision of this Subordination Agreement, or any consent to any departure by any party from the terms hereof, shall not be effective in any event unless the same is in writing and signed by (or on behalf of) each of the Senior Lenders, Borrower and Creditor, and then such modification, waiver or consent shall be effective only in the specific instance and for the specific purpose given and shall in no way impair the rights of the Senior Lenders or the obligations of Creditor to the Senior Lenders in any other respect at any other time. Any notice to or demand on any party hereto in any event not specifically required hereunder shall not entitle the party receiving such notice or demand to any other or further notice or demand in the same, similar or other circumstances unless specifically required hereunder.

11.This Subordination Agreement shall inure to the benefit of the Senior Lenders and the successors and assigns of the Senior Lenders, and any financing institution joining in making said loan(s) or extending said line(s) of credit, or committing itself to make any advances in connection therewith, or which may now, or hereafter, participate therein. Notice of acceptance of this Subordination Agreement is hereby waived and this Subordination Agreement shall be binding upon the Creditor and Borrower and each of their respective heirs, personal representatives, successors and assigns, as the case may be.

12.Creditor agrees not to commence or join with any other creditor of Borrower in commencing any bankruptcy, reorganization or insolvency proceedings against the Borrower.

13.The parties to this Subordination Agreement agree to keep the terms strictly confidential and not to disclose the terms hereof to any third party without the written consent of the Senior Lenders; provided, however, that this provision shall not apply to information which, at the time of disclosure, is already part of the public domain and information that is required to be disclosed by law.

14.This Subordination Agreement shall be deemed to have been executed, delivered and performed in New York, and construed according to the laws of the State of New York. Creditor and Borrower waive notice of acceptance hereof and all other notices or demands whatsoever. Each of Creditor and Borrower hereby consents to the jurisdiction of any state or federal court located within the County of New York, State of New York, and irrevocably agrees that, subject to the election of the Senior Lenders, all

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actions or proceedings arising out of or relating to this Subordination Agreement shall be litigated in such courts. Each of Creditor and Borrower expressly submits and consents to the jurisdiction of the aforesaid courts and waives any defense of forum non conveniens.

15.In the event of a breach of any covenant or agreement made herein by either Creditor or Borrower, the Senior Lenders may, at their option, declare all of the Superior Indebtedness and/or Subordinated Indebtedness immediately due and payable.

16.This Subordination Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. One or more counterparts of this Subordination Agreement may be delivered by facsimile or electronic transmission of a PDF copy, with the intention that they shall have the same effect as an original counterpart hereof.

17.In the event that any provision of this Subordination Agreement is deemed to be invalid, illegal or unenforceable by reason of the operation of any law or by reason of the interpretation placed thereon by any court or governmental authority, the validity, legality and enforceability of the remaining provisions of this Subordination Agreement shall not in any way be affected or impaired thereby, and the affected provision shall be modified to the minimum extent permitted by law so as most fully to achieve the intention of this Subordination Agreement

18.The words ‘Creditor’ and ‘Borrower’ as herein used shall include the plural as well as the singular and, if Creditor or Borrower includes two (2) or more, they shall be jointly and severally bound hereby.

IN WITNESS WHEREOF, this Subordination Agreement has been duly executed this ____ day of ______________, 2011.

PSI CORPORATION

[CREDITOR]

By:_________________

By:_____________________

847119

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EX-99.1

Exhibit 99.1

Coupon Express (formerly PSI Corp.) Raises $1.4625 Million

Of Convertible Senior Notes and Connects

$1.7 Million of Debt to Equity

NEW YORK, N.Y., October 26, 2011 Coupon Express, Inc. (Pink Sheets :PSCP) today announced the successful completion of a private placement of $1.4625 million aggregate principal amount of Cumulative Convertible Senior Notes (“Senior Notes”) and Warrants to certain investors, that included the Company’s existing Series A Preferred Stockholders. NextLevel Venture Partners is the lead investor in this round of financing. The Senior Notes, which mature on October 24, 2012 (subject to a one-year extension under certain circumstances), are convertible into shares of the Company’s Series A Preferred Stock (“Preferred Stock”) at a rate of one share of Preferred Stock for each $25,000 of Senior Notes.  Upon the conversion of the Company’s remaining convertible debt, or upon the consent of a majority in principal amount of the Senior Notes, the Senior Notes will be converted into shares of Preferred Stock.  The Senior Notes are secured obligations of Coupon Express and will bear interest at a rate of 7% per year.

“Coupon Express is a pioneer in the couponing industry creating what we believe to be the best delivery mechanism for couponing in the supermarket space.  Their couponing and advertising kiosks create a huge win for customers, store owners and consumer product companies”, says Joseph Heller, Managing Director at NextLevel Venture Partners.

The shares of Preferred Stock bear a cumulative dividend of 7% per annum. Upon liquidation, and upon an acquisition of the Company, the holders of Preferred Stock are entitled to a liquidation preference equal to the greater of (i) the amount invested plus all accrued and unpaid dividends, or the amount the holders of Preferred Stock would receive had they converted the Preferred Stock to Common Stock immediately prior to such event. Each share of Preferred Stock is convertible into 1,250,000 shares of the Company’s Common Stock, subject to certain adjustments..  

The Warrants are exercisable until October 24, 2016 at a price of $.04 per share (subject to certain adjustments) and entitle the holder to purchase 1,250,000 shares of the Company’s Common Stock for each $25,000 of principal amount of Senior Notes.  The investors have entered into an Investors’ Rights Agreement which among other things, provides for Board representation, registration rights, and certain provisions regarding future sales of securities by the Company.

Coupon Express intends to use the net proceeds from the offering for general corporate purposes, sales and marketing, working capital, and to extinguish approximately $219,375 of its currently outstanding debt.

Mr. Kash, the Company’s CEO, also announced that in connection with the Private Placement, the Company converted $1,700,000 of its currently outstanding debt into 36,347,120 shares of Common Stock and that Joseph Heller would be joining the Company’s Board of Directors as the lead purchaser’s representative.

The securities sold in this private placement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws, and accordingly may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. This release does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state.  Any offering of the securities under a resale registration statement will only be by means of a prospectus.

About Coupon Express, Inc.

Coupon Express, Inc. provides innovative interactive customer communications systems and applications that support targeted marketing programs with unique point-of-purchase (POP) services and information that serve shoppers and distributors while building loyalty and revenue for the Company’s primary clients. Through its proprietary multifunction kiosks and services, we provide in-store customized couponing, in multiple languages, for immediate impact in regional, independent retailers in the grocery and convenience store industries, enabling retailers to quickly determine ideal price-points for new products and mitigate losses from hard-to-sell items. Through a joint marketing agreement with Midax, Inc. a leading systems integrator for the independent grocery and convenience store industries. Coupon Express, Inc. provides a seamless transaction for issuing, redeeming and reporting coupons, as well as creating a state-of-the-art loyalty program and shopping list service.

Forward-Looking Statements Disclosure

This press release may contain “forward-looking statements” within the meaning of the federal securities laws.  In this context, forward-looking statements may address the Company’s expected future business and financial performance and often contain words such as “anticipates,” “believes,” “estimates,” “expects,” “hopes,” “intends,” “plans,” “seeks,” “will,” and other terms with similar meaning, including but not limited to, statements regarding the possibility of commitments for the Coupon Express from other national brands, creation of state-of-the-art loyalty programs and the possibility of increased revenue. These forward-looking statements by their nature address matters that are, to different degrees, uncertain. Although the Company believes that the assumptions upon which its forward-looking statements are based are reasonable, it can provide no assurances that these assumptions will prove to be correct.  In connection with the “safe harbor” provisions of the federal securities laws, including the Private Securities Litigation Reform Act of 1995, important factors that, among others, could cause or result in actual results and experience to differ materially from the Company’s anticipated results, projections, or other expectations are disclosed in the Company’s filings with the Securities and Exchange Commission. All forward-looking statements in this press release are expressly qualified by such cautionary statements, risks, and uncertainties, and by reference to the underlying assumptions.

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CONTACT: Eric Kash - CEO

914-371-2441

eric@couponexpressinc.com

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