SHEARSON FINANCIAL NETWORK INC
EXHIBIT 10.29
<DOCUMENT>
<TYPE>EX-10.29
<SEQUENCE>2
<FILENAME>ex10_29.htm
<DESCRIPTION>EXHIBIT 10.29
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    <div>&#160;</div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a name="ex10_29">Exhibit
        No. </a>10.29</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PROMISSORY
        NOTE CONVERSION AGREEMENT</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
        Promissory Note Conversion Agreement (the &#8220;Agreement&#8221;), dated as of January 29,
        2007, is entered into by and between Shearson Financial, Inc., a Nevada
        corporation (&#8220;Shearson&#8221;) and La Jolla Cove Investors, Inc., a California
        corporation (&#8220;LJCI&#8221;), with reference to the following:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">WHEREAS,
        LJCI has purchased, and/or will be purchasing, certain Promissory Notes
        (&#8220;Promissory Notes&#8221;) issued by Shearson to various individuals and/or entities,
        as set forth in more detail on Exhibit A attached hereto; and </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">WHEREAS,
        the parties desire to provide for certain conversion provisions relating
        to the
        Promissory Notes. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOW,
        THEREFORE, in consideration of the mutual promises and convenants contained
        herein, the receipt and sufficiency of which are hereby acknowledged, the
        parties hereto hereby agree as follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Conversion
        Right</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
        of
        LJCI and Shearson agree that each Promissory Note shall be converted or
        exchanged (each, a &#8220;Conversion&#8221;), in whole, up to the full principal balance
        thereof, into shares of the common stock of Shearson (the &#8220;Shearson Common
        Stock&#8221;) (calculated as to each such conversion to the nearest 1/100</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>th</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        of a
        share), within 60 days from the date of LJCI&#8217;s purchase of the Promissory Note.
        The number of shares of Shearson Common Stock into which the Promissory Notes
        may be converted is equal to the dollar amount of the Promissory Note being
        converted divided by the Conversion Price. The Conversion Price shall be
        equal
        to 82% of the average of the volume weighted average price of the shares
        of the
        Shearson Common Stock during the five trading days prior to LJCI&#8217;s election to
        convert.</font></div>
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      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Exercise
                  of Conversion Privilege</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Conversion
        of a Promissory Note may be exercised, within the allotted time, by LJCI
        by
        telecopying an executed and completed Conversion Notice to Shearson. Each
        date
        on which a Conversion Notice is telecopied to Shearson in accordance with
        the
        provisions of this Section shall constitute a Conversion Date. Shearson shall
        convert or exchange the Promissory Note and issue the Shearson Common Stock
        in
        the manner provided below in this Section, and all voting and other rights
        associated with the beneficial ownership of the Shearson Common Stock issued
        at
        Conversion shall vest with LJCI, effective as of the Conversion Date at the
        time
        specified in the Conversion Notice. The Conversion Notice also shall state
        the
        name or names (with addresses) of the persons who are to become the holders
        of
        the Shearson Common Stock issued at Conversion in connection with such
        Conversion. As promptly as practicable after the receipt of the Conversion
        Notice as aforesaid, but in any event not more than two business days after
        Shearson&#8217;s receipt of such Conversion Notice, Shearson shall (i) issue the
        Shearson Common Stock in accordance with the provisions of this Section and
        (ii)
        cause to be mailed for delivery by overnight courier to LJCI a certificate
        or
        certificate(s) representing the number of Shearson Common Shares to which
        LJCI
        is entitled by virtue of such Conversion. Such Conversion shall be deemed
        to
        have been effected at the time at which the Conversion Notice indicates,
        and at
        such time the rights of LJCI as the holder of the Promissory Note, as such
        (except if and to the extent that any principal amount thereof remains
        unconverted), shall cease and the person and persons in whose name or names
        the
        Shearson Common Stock issued at conversion shall be issuable shall be deemed
        to
        have become the holder or holders of record of the shares of common stock
        represented thereby, and all voting and other rights associated with the
        beneficial ownership of such shares of common stock shall at such time vest
        with
        such person or persons. The Conversion Notice shall constitute a contract
        between LJCI and Shearson, whereby LJCI shall be deemed to subscribe for
        the
        number of shares of Shearson Common Stock which it will be entitled to receive
        upon such Conversion and, in payment and satisfaction of such subscription,
        to
        surrender the Promissory Note and to release Shearson from all liability
        thereon
        (except if and to the extent that any principal amount of the Promissory
        Note
        remains unconverted). </font></div><br>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If,
        at
        any time after the date of this Agreement, (i) Shearson challenges, disputes
        or
        denies the right of LJCI to effect the Conversion of a Promissory Note into
        shares of Shearson Common Stock or otherwise dishonors or rejects any Conversion
        Notice delivered in accordance with this Section or (ii) any third party
        who is
        not and has never been an affiliate of LJCI commences any lawsuit or legal
        proceeding or otherwise asserts any claim before any court or public or
        governmental authority which seeks to challenge, deny, enjoin, limit, modify,
        delay or dispute the right of LJCI hereof to effect any Conversion of the
        Promissory Note into shares of Shearson Common Stock, then LJCI shall have
        the
        right, but not the obligation, by written notice to Shearson, to require
        Shearson to promptly redeem the Promissory Note for cash at one hundred and
        ten
        percent (110%) of the principal amount thereof, together with all accrued
        and
        unpaid interest thereon to the date of redemption. Under any of the
        circumstances set forth above, Shearson shall be responsible for the payment
        of
        all costs and expenses of LJCI, including reasonable legal fees and expenses,
        as
        and when incurred in defending itself in any such action or pursuing its
        rights
        hereunder (in addition to any other rights of LJCI).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">LJCI
        shall be entitled to exercise its conversion privilege set forth herein
        notwithstanding the commencement of any case under the Bankruptcy Code. In
        the
        event Shearson is a debtor under the Bankruptcy Code, Shearson hereby waives
        to
        the fullest extent permitted any rights to relief it may have under 11 U.S.C.
&#167;
362 in respect of LJCI&#8217;s conversion privilege. Shearson hereby waives to the
        fullest extent permitted any rights to relief it may have under 11 U.S.C.
&#167; 362
        in respect of the conversion of the Promissory Notes. Shearson agrees, without
        cost or expense to LJCI, to take or consent to any and all action necessary
        to
        effectuate relief under 11 U.S.C. &#167; 362.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shearson
          shall provide LJCI, at its expense, any Rule 144(k) legal opinion in accordance
          with customary rules and regulations as enforced by the SEC, and in form
          and
          substance acceptable to LJCI that would be required to enable LJCI to sell
          the
          shares of Shearson Common Stock issued at any Conversion.</font></div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Adjustments</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Conversion Price and the number of shares deliverable upon conversion of
        the
        Promissory Notes are subject to adjustment from time to time as
        follows:</font></div><br>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Reclassification,
        Etc</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        case
        Shearson shall reorganize its capital, reclassify its capital stock, consolidate
        or merge with or into another company (where Shearson is not the survivor
        or
        where there is a change in or distribution with respect to the common stock
        of
        Shearson), sell, convey, transfer or otherwise dispose of all or substantially
        all its property, assets or business to another person or company, or effectuate
        a transaction or series of related transactions in which more than fifty
        percent
        (50%) of the voting power of Shearson is disposed of (each, a </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#8220;Fundamental
        Corporate Change&#8221;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">)
        and,
        pursuant to the terms of such Fundamental Corporate Change, shares of common
        stock of the successor or acquiring corporation, or any cash, shares of stock
        or
        other securities or property of any nature whatsoever (including warrants
        or
        other subscription or purchase rights) in addition to or in lieu of common
        stock
        of the successor or acquiring corporation (</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#8220;Other
        Property&#8221;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">)
        are to
        be received by or distributed to the holders of Shearson Common Stock, then
        LJCI
        shall have the right thereafter, at its sole option, to (x) require Shearson
        to
        prepay the Promissory Notes for cash at one hundred and ten percent (110%)
        of
        the principal amount thereof, together with all accrued and unpaid interest
        thereon to the date of prepayment, (y)&#160;receive the number of shares of
        common stock of the successor or acquiring corporation or of Shearson, if
        it is
        the surviving corporation, and Other Property as is receivable upon or as
        a
        result of</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>&#160;</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">such
        Fundamental Corporate Change by a holder of the number of shares of common
        stock
        into which the outstanding portion of the Promissory Notes may be converted
        at
        the Conversion Price applicable immediately prior to such Fundamental Corporate
        Change or (z)&#160;require Shearson, or such successor, resulting or purchasing
        corporation, as the case may be, to, without benefit of any additional
        consideration therefor, execute and deliver to LJCI a debenture with substantial
        identical rights, privileges, powers, restrictions and other terms as the
        Promissory Notes and the rights of conversion and/or exchange as set forth
        in
        this Agreement in an amount equal to the amount outstanding under the Promissory
        Notes immediately prior to such Fundamental Corporate Change. For purposes
        hereof, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#8220;common
        stock of the successor or acquiring corporation&#8221;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        shall
        include stock of such corporation of any class which is not preferred as
        to
        dividends or assets over any other class of stock of such corporation and
        which
        is not subject to prepayment and shall also include any evidences of
        indebtedness, shares of stock or other securities which are convertible into
        or
        exchangeable for any such stock, either immediately or upon the arrival of
        a
        specified date or the happening of a specified event and any warrants or
        other
        rights to subscribe for or purchase any such stock. The foregoing provisions
        shall similarly apply to successive Fundamental Corporate Changes. </font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Certain
        Conversion Limits</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
        the
        conversion period, if and to the extent that, on any date, the holding by
        LJCI
        of the Promissory Notes would result in LJCI being deemed the beneficial
        owner</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">of
        more
        than 9.99% of the then outstanding shares of Shearson common stock, then
        LJCI
        shall not have the right, and Shearson shall not have the obligation, to
        convert
        or exchange any portion of the Promissory Notes as shall cause LJCI to be
        deemed
        the beneficial owner of more than 9.99% of the then outstanding shares of
        Shearson Common Stock. If any court of competent jurisdiction shall determine
        that the foregoing limitation is ineffective to prevent LJCI from being deemed
        the beneficial owner of more than 9.99% of the then outstanding shares of
        Shearson Common Stock, then Shearson shall prepay such portion of the Promissory
        Notes as shall cause LJCI not to be deemed the beneficial owner of more than
        9.99% of the then outstanding shares of Shearson Common Stock. Upon such
        determination by a court of competent jurisdiction, LJCI shall have no interest
        in or rights under such portion of the Promissory Notes that is so prepaid.
        Such
        prepayment shall be for cash at a prepayment price of one hundred and ten
        percent (110%) of the principal amount thereof, together with all accrued
        and
        unpaid interest thereon to the date of prepayment.</font></div><br>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Representations
        and Warranties of Shearson</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        connection with the transactions provided for herein, Shearson hereby represents
        and warrants to LJCI that:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Organization,
        Good Standing and Qualification</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shearson
        is a 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 carry on its business as now conducted. Shearson is duly qualified
        to transact business and is in good standing in each jurisdiction in which
        the
        failure to so qualify would have a material adverse effect on its business
        or
        properties.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Authorization</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
        corporate action has been taken on the part of Shearson, its officers, directors
        and stockholders necessary for the authorization, execution and delivery
        of this
        Agreement and the conversion or exchange of the Promissory Notes. Except
        as may
        be limited by applicable bankruptcy, insolvency, reorganization, or similar
        laws
        relating to or affecting the enforcement of creditors&#8217; rights, Shearson has
        taken all corporate action required to make all of the obligations of Shearson
        reflected in the provisions of this Agreement, and the Promissory Notes,
        the
        valid and enforceable obligations they purport to be. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>[</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Except
        as
        otherwise indicated in this Section&#160;5, the conversion or exchange of the
        Promissory Notes into shares of Shearson Common Stock as contemplated herein,
        will not be subject to the preemptive rights of any stockholder of the
        Company.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shearson
        has authorized sufficient shares of Shearson Common Stock to allow for
        conversion or exchange of the Promissory Notes as described in Section 1
        and
        Section 2.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Compliance
        with Other Instruments</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Neither
        the authorization, execution and delivery of this Agreement, nor the issuance
        and delivery of the shares of Shearson Common Stock upon the conversion or
        exchange of the Promissory Notes, will constitute or result in a material
        default or violation of any law or regulation applicable to Shearson or any
        material term or provision of Shearson&#8217;s current Articles of Incorporation or
        bylaws or any material agreement or instrument by which it is bound or to
        which
        its properties or assets are subject.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Issuance
        of Common Stock</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        shares of Shearson Common Stock to be issued and delivered upon Conversion
        of
        the Promissory Notes will be duly and validly issued, fully paid and
        nonassessable and will be issued in compliance with all applicable federal
        and
        state securities laws. The offer, sale and issuance of the shares of Shearson
        Common Stock to be issued and delivered upon Conversion of the Promissory
        Notes
        will be exempt from the registration requirements of the Securities Act,
        and
        will have been registered or qualified (or are exempt from registration and
        qualification) under the registration, permit or qualification requirements
        of
        all applicable state securities laws and federal securities laws.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Litigation</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">There
        is
        no action, suit, proceeding or investigation pending or currently threatened
        against Shearson that questions the validity of the Promissory Notes or this
        Agreement, or the right of Shearson to convert or exchange the Promissory
        Notes,
        or to consummate the transactions contemplated hereby, or that might result,
        either individually or in the aggregate, in any material adverse change in
        the
        assets, business, properties, prospects, or financial condition of Shearson.
        The
        foregoing includes, without limitation, any action, suit, proceeding, or
        investigation pending or currently threatened involving the negotiations
        by
        Shearson with potential backers of, or investors in, Shearson or its proposed
        business. Shearson is not a party to, or to the best of its knowledge, named
        in
        the order, writ, injunction, judgment, or decree of any court, government
        agency, or instrumentality. There is no action, suit, or proceeding by Shearson
        currently pending or that Shearson currently intends to initiate.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Governing
        Law</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
        Agreement shall in all respects be construed, interpreted and enforced in
        accordance with and governed by the laws of the State of California, United
        States of America.</font></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">4</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Consent
        to Jurisdiction</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        parties (i) hereby irrevocably submit to the jurisdiction of the United States
        District Court sitting in the District of San Diego and the courts of the
        State
        of California located in San Diego county for the purposes of any suit, action
        or proceeding arising out of or relating to this Agreement or the transactions
        contemplated hereunder and (ii) hereby waive, and agree not to assert in
        any
        such suit, action or proceeding, any claim that it is not personally subject
        to
        the jurisdiction of such court, that the suit, action or proceeding is brought
        in an inconvenient forum or that the venue of</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        the
        suit, action or proceeding is improper. The parties consent to process being
        served in any such suit, action or proceeding by mailing a copy thereof to
        such
        party at the address in effect for notices to it under this Agreement and
        agree
        that such service shall constitute good and sufficient service of process
        and
        notice thereof. Nothing in this section shall affect or limit any right to
        serve
        process in any other manner permitted by law.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Waiver
        of Jury Trial</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
        the
        fullest extent permitted by law, each of the parties hereto hereby knowingly,
        voluntarily and intentionally waives its respective rights to a jury trial
        of
        any claim or cause of action based upon or arising out of this Agreement
        or any
        other document or any dealings between them relating to the subject matter
        of
        this Agreement and other documents. Each party hereto (i) certifies that
        neither
        of their respective representatives, agents or attorneys has represented,
        expressly or otherwise, that such party would not, in the event of litigation,
        seek to enforce the foregoing waivers and (ii) acknowledges that it has been
        induced to enter into this Agreement by, among other things, the mutual waivers
        and certifications herein.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Attorneys'
        Fees</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        the
        event of any legal action between the parties with respect to this Agreement
        or
        the subject matter hereof, the prevailing party shall be entitled to recover
        reasonable attorneys' fees in addition to court costs and litigation expenses
        incurred in said legal action, regardless of whether such legal action is
        prosecuted to judgment.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Notices</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
        notice, demand or other communication required or permitted under this Agreement
        shall be deemed given and delivered when in writing and (a) personally served
        upon the receiving party, or (b) upon hand delivery by telex (with correct
        answer back received), telecopy or facsimile at the address or number designated
        below (if delivered on a business day during normal business hours where
        such
        notice is to be received), or (c) upon the third (3rd) calendar day after
        mailing to the receiving party by either United States registered or certified
        mail, postage prepaid, or (d) the next delivery day after mailing to the
        receiving party by FedEx or other comparable overnight delivery service,
        delivery charges prepaid, and addressed as follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 144pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                  Shearson:</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shearson
                  Financial Network, Inc.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 144pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2470
        St.
        Rose Parkway, Suite 314</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 144pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Henderson,
        NV 89074</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 144pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Facsimile:
        702-868-7945 </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 144pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                  LJCI:</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">La
                  Jolla Cove Investors, Inc.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 144pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7817
        Herschel Avenue, Suite 200</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 144pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">La
        Jolla,
        CA 92037</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 144pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Facsimile:
        (858) 551-8779</font></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">5</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Severability</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        the
        event that any provision of this Agreement becomes or is declared by a court
        of
        competent jurisdiction to be illegal, unenforceable or invalid, then this
        Agreement shall continue in full force and effect without said provision.
        If
        this Agreement continues in full force and effect as provided above, the
        parties
        shall replace the invalid provision with a valid provision which corresponds
        as
        far as possible to the spirit and purpose of the invalid provision.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Counterparts</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
        Agreement may be executed in any number of counterparts, each of which may
        be
        executed by less than all of the parties hereto, each of which shall be
        enforceable against the parties actually executing such counterparts, and
        all of
        which together shall constitute one document. Facsimile execution shall be
        deemed originals.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">13.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Entire
        Agreement</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
        Agreement constitute the entire agreement between the parties with respect
        to
        the subject matter hereof, and supersede all prior oral or written agreements,
        representations or warranties between the parties other than those set forth
        herein or herein provided for.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Successors
        and Assigns</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        provisions hereof shall inure to the benefit of, and be binding upon, the
        permitted successors and assigns, heirs, executors, and administrators of
        the
        parties hereto.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Amendment
        and Waiver</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">No
        modification or waiver of any provision of this Agreement shall be binding
        upon
        the party against whom it is sought to be enforced, unless specifically set
        forth in writing signed by an authorized representative of that party. A
        waiver
        by any party of any of the terms or conditions of this Agreement in any one
        instance shall not be deemed or construed to be a waiver of such terms or
        conditions for the future, or of any subsequent breach thereof. The failure
        by
        any party hereto at any time to enforce any of the provisions of this Agreement,
        or to require at any time performance of any of the provisions hereof, shall
        in
        no way to be construed to be a waiver of such provisions or to affect either
        the
        validity of this Agreement or the right of any party to thereafter enforce
        each
        and every provision of this Agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">IN
        WITNESS WHEREOF, Shearson and LJCI have duly executed this Agreement as of
        the
        date first above written.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="25%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shearson
                  Financial Network, Inc.</font></div>
              </td>
              <td align="left" valign="top" width="25%">&#160;</td>
              <td align="left" valign="top" width="25%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">La
                  Jolla Cove Investors, Inc.</font></div>
              </td>
              <td align="left" valign="top" width="25%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="25%">&#160;</td>
              <td align="left" valign="top" width="25%">&#160;</td>
              <td align="left" valign="top" width="25%">&#160;</td>
              <td align="left" valign="top" width="25%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="25%">&#160;</td>
              <td align="left" valign="top" width="25%">&#160;</td>
              <td align="left" valign="top" width="25%">&#160;</td>
              <td align="left" valign="top" width="25%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="25%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:
                  /s/ Michael A. Barron</font></div>
              </td>
              <td align="left" valign="top" width="25%">&#160;</td>
              <td align="left" valign="top" width="25%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:
                  /s/ Travis W. Huff</font></div>
              </td>
              <td align="left" valign="top" width="25%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="25%">&#160;</td>
              <td align="left" valign="top" width="25%">&#160;</td>
              <td align="left" valign="top" width="25%">&#160;</td>
              <td align="left" valign="top" width="25%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="25%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Name:
                  Michael A. Barron</font></div>
              </td>
              <td align="left" valign="top" width="25%">&#160;</td>
              <td align="left" valign="top" width="25%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Name:
                  Travis W. Huff</font></div>
              </td>
              <td align="left" valign="top" width="25%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="25%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Title:
                  CEO</font></div>
              </td>
              <td align="left" valign="top" width="25%">&#160;</td>
              <td align="left" valign="top" width="25%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Title:
                  Portfolio Manager</font></div>
              </td>
              <td align="left" valign="top" width="25%">&#160;</td>
            </tr>

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      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">6</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>EXHIBIT
        A</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Promissory
        Notes</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Promissory
        Note between Shearson and Ed Hollander dated as of June 1, 2004 in the principal
        amount of $141,780.03.</font></div>
    </div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">7</font></div>
    <div>
      <div>
        <hr style="COLOR: black" align="left" noshade size="2" width="100%">
      </div>
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