PURE CAPITAL INC (Form: 6-K, Received: 02/08/2007 12:33:10)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of February 2007

Commission File Number: 000-29922

PURE CAPITAL INCORPORATED

(Translation of registrant's name into English)

250 Blairgowrie Place

Nanaimo, B.C. Canada V9T 4P5

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

[ X ] Form 20-F [ ] Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- _________

PURE CAPITAL INCORPORATED

On December 20, 2006, Pure Capital Incorporated, a Canadian Federal corporation (the “Company”), closed a series of financing transactions pursuant to various Stock Purchase Agreements (“Stock Purchase Agreements”). Pursuant to the terms of the Stock Purchase Agreements, each purchaser (the “Purchasers”) in consideration for the capital contribution (“Contribution”) may immediately convert the full amount of the Contribution to shares of the Company’s no par value common stock at a conversion rate of $0.10 per share. The Company shall issue shares converted under the Stock Purchase Agreement pursuant to exemptions from registration provided by Section 4(2) of the Securities Act of 1933 (the “Act”), as amended and Regulation D promulgated under the Act. The shares issued to the Purchasers shall not be registered, at the time of issuance, and may not be offered or sold absent registration, or an applicable exemption from registration, under the Act.

A summary of each financing transaction is set forth below:

Purchaser Financing Amount Conversion Rate Conversion Shares

John Doria $10,000.00 $0.10 100,000

Nicholas Scheidt $10,000.00 $0.10 100,000

Calvin Laiche $ 9,300.00 $0.10 93,000

Lillian Sherke $20,000.00 $0.10 200,000

On November 29, 2006, the Company entered into a Stock Purchase Warrant (the “Warrant”) with Mr. Alan Brown, the Company’s President, CEO, & Director. The Warrant allows Mr. Brown to purchase 8,000,000 shares of the Company’s common stock at a strike price of $0.10 per share and is immediately exercisable. Additionally, the Warrant grants “piggyback” registration rights with respect to the shares of the Company’s common stock issuable upon exercise of the Warrant. Mr. Brown is an “accredited investor” and the Company relied on exemptions from registration provided by Section 4(2) of the Securities Act of 1933, as amended and Regulation D promulgated under such Act in issuing the Warrant.

The exercise price of the Warrant is subject to adjustment based upon the occurrences of certain events described therein such as the declaration by the Company of a stock dividend, a subdivision or combination of its outstanding shares of common stock, a reclassification of the outstanding securities of the Company (including due to reorganization of the Company itself) or the issuance of common equity securities at a price less than the applicable conversion or exercise price.

Effective November 1, 2006, the Company entered into a Business Development Agreement (“BDA”) with Performance Capital Corporation, a Delaware corporation (“PCC”), under the terms of which PCC shall receive $40,000 upon the successful closing of a transaction identified by PCC and presented to the Company.

Additionally, in January 2007, Company issued a Convertible Promissory Note (the “Note”) to PCC. Under the terms of the Note, PCC will make available to the Company $100,000, on a drawdown basis, to be used for general corporate and operational purposes.

The foregoing summary is qualified in its entirety by any and all Agreements and all Appendices thereto referenced herein, and should be read in conjunction with the copies of such documents filed or incorporated by reference in this report as exhibits.

Exhibit No.		Description
10.1		Stock Purchase Agreement
10.2		Stock Purchase Warrant
10.3		Business Development Agreement
10.4		Convertible Promissory Note

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, thereunto duly authorized.

	Pure Capital Incorporated.
	(Registrant)

Date: February 8, 2007	By:	/s/ Alan M. Brown
		Alan M. Brown
	Title:	President

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement, ( the “Agreement”) is made and entered into as of December ___, 2006, by and between Pure Capital Incorporated, a Canadian Federal corporation (the “Company”) and ____________________________________________ (the “Purchaser”).

Whereas, the Company has authorized the sale of a Convertible Note (the “Note”) in an aggregate principal amount of ________________________________________________ ($_____________) dollars, convertible into shares of the Company’s common stock, no par value per share (the “Common Stock”);

Whereas, Purchaser desires to purchase the Note on the terms and conditions set forth herein;

Whereas, the Company desires to issue and sell the Note to Purchaser on the terms and conditions set forth herein;

Whereas , the Company and the Purchaser are executing and delivering this agreement in reliance upon the exemption from securities registration afforded by §4(2) of the Securities Act of 1933, as amended (the “Securities Act”).

Now therefore , in consideration of the foregoing recitals and the mutual promises, representations, warranties and covenants hereafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows.

1.1 Agreement to Sell and Purchase . Pursuant to the terms and conditions set forth in this Agreement, the Company agrees to sell to the Purchaser, and the Purchaser hereby agrees to purchase from the Company a Note in the amount of $___________________ convertible in accordance with the terms thereof into shares of the Common Stock. The Note purchased shall be known as the “Offering”. The Note will have a maturity date (as defined in the Note) twenty four months from the day of issuance. Collectively, the Note and Common Stock issuable in payment of the Note upon conversion of the Note are referred to as the “Securities”.

REPRESENTATIONS AND

WARRANTIES OF THE PURCHASER

2.1 Investment Representations . Purchaser understands that the Securities are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon the Purchasers representations contained in this Agreement, including, without limitation, that the Purchaser is an “Accredited Investor” within the meaning of Regulation D under the Securities Act.

2.2 Purchaser Bears Economic Risk . Purchaser has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that he is capable of evaluating the merits and risks of his investment in the Company, and has the capacity to protect his own interests. Purchaser must bear the economic risk of this investment until the Securities are sold pursuant to (i) an effective registration statement under the Securities Act, or (ii) an exemption from registration is available.

2.3 Acquisition for Own Account . Purchaser is acquiring the Note and the shares of Common Stock issuable upon conversion of the Note (the “Note Shares”) for Purchasers own account for investment only, and not with a view towards distribution.

2.4 Purchaser Can Protect His Interests . Purchaser represents that by reason of his business and financial experience, Purchaser has the capacity to protect his own interests in connection with the transactions contemplated in this Agreement.

2.5 Accredited Investor. Purchaser represents that he is an Accredited Investor within the meaning of Regulation D under the Securities Act.

(a) The Note shall bear substantially the following legend until the Note and Note Shares are covered by an effective registration statement filed with the Securities and Exchange Commission (“SEC”):

“THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR, IF APPLICABLE, STATE SECURITIES LAWS. THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE OR SUCH SHARES UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO PURE CAPITAL INCORPORATED THAT SUCH REGISTRATION IS NOT REQUIRED.”

(b) The Note Shares shall bear a legend which shall be in substantially the following form until such shares are covered by an effective registration statement filed with the SEC:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR IF APPLICABLE, STATE SECURITIES LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND APPLICABLE STATE LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO PURE CAPITAL INCORPORATED THAT SUCH REGISTRATION IS NOT REQUIRED.”

REPRESENTATIONS AND

WARRANTIES OF THE COMPANY

3.1 Representations and Warranties . The Company represents to the Purchaser that:

(a) Organization and Qualifications. The Company is duly organized and existing in good standing under the law of the jurisdiction in which it was incorporated, and has the requisite corporate power to own their properties and to carry on their business as now being conducted.

(b) Authorization Enforcement. (i) The Company has the requisite corporate power and authority to perform the Agreement, and to issue the Securities in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by the Company’s Board of Directors and no further consent or authorization of the Company, or its Board of Directors or stockholders is required, (iii) this Agreement has been duly executed and delivered, and (iv) the Agreement constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

(c) Issuance of Note. The Note is duly authorized and is validly issued, fully paid and non-assessable, free of any encumbrances, and are not subject to preemptive rights of stockholders of the Company.

(d) No Conflicts. The execution, delivery and performance of this Agreement and the Note by the Company and the consummation by the Company of the transactions contemplated hereby will not, (i) result in a violation of the Certificate of Incorporation or By-laws of the Company or its subsidiaries or (ii) conflict with, or constitute a default, (or an event which with notice or lapse of time or both could become a default) or to give others any rights of termination, amendment or cancellation of, any agreement, indenture or instrument to which the Company or any of its subsidiaries is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or any of its subsidiaries or by which any material property or asset of the Company or any of its subsidiaries is bound or affected.

(e) Third Party Consents. Except as specifically contemplated by this Agreement and as required under the Securities Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency or any regulatory or self regulatory agency in order for it to execute, deliver or perform any of its obligations under this Agreement in accordance with the terms hereof and thereof.

(f) Information Disclosure. All information related to the Company disclosed to the Purchaser, whether orally or in writing, does not contain any false or misleading statement of material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein not misleading. Except as otherwise disclosed to the Purchaser, neither the Company nor its subsidiaries has undertaken any liability or obligation, direct or contingent, except for liabilities or obligations undertaken in the ordinary course of business.

(g) Absence of Litigation. There is no action, suit, proceeding, inquiry, or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its subsidiaries, threatened against or affecting the Company or any of its subsidiaries that is reasonably likely to have a Material Adverse Effect. “Material Adverse Effect” means any material adverse effect on the business, properties, operations, assets, financial condition or results of operations of the Company taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith.

(h) Patents, Copyrights, etc. The Company: (i) owns or has the right to use, free and clear of all liens, claims, encumbrances, pledges, security interests, and other adverse interests of any kind whatsoever, all patents, inventions, know-how, trade secrets, trademarks, service marks, trade names, copyrights, technology, and all other licenses and rights with respect to the foregoing, used in the conduct of its business as now conducted or proposed to be conducted without, to the best knowledge of the Company and its subsidiaries, infringing upon or otherwise acting adversely to the right or claimed right of any person, company or other entity; (ii) is not obligated or under any liability whatsoever to make any payment by way of royalties, fees or otherwise to any owner or licensee of, or other claimant to, any patent, trademark, service mark, trade name, copyright, know-how, technology or other intangible asset, with respect to the use thereof or in connection with the conduct of its business or otherwise; and (iii) has not received any notice of infringement of or conflict with asserted rights of others with respect to any of the foregoing which, singly or in the aggregate, are the subject of an unfavorable decision, ruling or finding, that might have a Material Adverse Effect.

(h) Taxes. The Company and it subsidiaries have filed or caused to be filed all income tax returns which are required to be filed and have paid or have caused to be paid all taxes and all assessments received by them to the extent that such taxes and assessments have become due, except taxes and assessments the validity or amount of which is being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been set aside, and except for such returns for which the failure to file would not have a Material Adverse Effect upon the Company and its subsidiaries taken as a whole. The Company and its subsidiaries have paid or caused to be paid, or has established reserves that the Company reasonably believes to be adequate in all material respects, for all federal income tax liabilities and state income tax liabilities applicable to the Company and its subsidiaries for all fiscal years which have not been examined and reported on by the taxing authorities (or closed by applicable statutes).

CONVERSION OF CONVERTIBLE NOTE

4.1 Mechanics of Conversion .

(a) Provided the Purchaser has notified the Company of the Purchaser’s intention to sell the Note Shares and the Note Shares are included in an effective registration statement or are otherwise exempt from registration when sold: (i) Upon the conversion of the Note or part thereof, the Company shall, at its own cost and expense, take all necessary action (including the issuance of an opinion of counsel) to assure that the Company’s transfer agent shall issue stock certificates in the name of the Purchaser (or its nominee) or such other persons as designated by the Purchaser and in such denominations to be specified representing the number of Note Shares issuable upon such conversion; and (ii) The Company warrants that no instructions other than these instructions have been or will be given to the transfer agent of the Common Stock and that the Note Shares issued will be un-legended, free-trading, and freely transferable, and will not contain a legend restricting the resale or transferability of the Note Shares.

(b) Purchaser will give notice of his decision to exercise his right to convert the Note or part thereof, which is within his sole discretion at his opinion, by telecopying or otherwise delivering an executed and complete written notice of the number of shares to be converted to the Company (the “Notice of Conversion”). The Purchaser will not be required to surrender the Note until the Purchaser receives a certificate or certificates, as the case may be, representing the Note Shares or until the Note has been fully satisfied. Each date on which a Note of Conversion is telecopied or delivered to the Company in accordance with the provisions hereof shall be deemed a “Conversion Date”. The Company will or will cause the transfer agent to transmit the Common Stock certificates representing the shares issuable upon conversion of the Note (and a certificate representing the balance of the Note not so converted, if requested by Purchaser) to the Purchaser via express courier for receipt by such Purchaser within three business days after receipt by the Company of the Notice of Conversion (the “Delivery Date”).

REGISTRATION RIGHTS

5.1 Piggyback Registration Rights. If at any time the Company shall determine to file with the SEC a registration statement relating to an offering for its own account or the account of others under the Security Act of any of its equity securities (other than on Form S-4 or Form S-8 or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of an entity or business or equity securities issuable in connection with stock option or other bona fide, employee benefit plans), the Company shall send each Purchaser who is entitled to registration rights under this Section 5, written notice of such determination and, if within fifteen days after the effective date of such notice, such Purchasers shall so request in writing, the Company shall include in such registration statement all or any part of the Securities such Purchaser requests to be registered, except that if, in connection with any underwritten public offering for the account of the Company the managing underwriter(s) thereof shall impose a limitation on the number of shares of Common Stock which may be included in the registration statement because, in such underwriter(s) judgment marketing or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such registration statement only such limited portion of the Securities with respect to which such Purchaser has requested inclusion hereunder as the underwriter shall permit. An exclusion of Securities shall be made pro rata among the Purchasers seeking to include Securities in proportion to the number of Securities sought to be included by such Purchaser; provided however , that the Company shall not exclude any Securities unless the Company has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities in such registration statement or are not entitled to pro rata inclusion with the Securities; provided, further, however , that, after giving affect to the immediately preceding proviso, any exclusion of the Securities shall be made pro rata with holders of other securities having the right to include such securities in the registration statement other than holders of securities entitled to inclusion of their securities in such registration statement by reason of demand registration rights. If an offering in connection with a Purchaser is entitled to registration under this Section 5 is an underwritten offering, then each Purchaser whose Securities are included in such registration statement shall, unless otherwise agreed by the Company, offer and sell such Securities in an underwritten offering using the same underwriter or under writers on the same terms and conditions that other shares of common stock included in such underwritten offering. Any costs associated with this piggy back registration shall be paid by the Company.

6.1 Entire Agreement . This Agreement, the exhibits and schedules hereto, the related agreements and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein and therein.

6.2 Notices . All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified; (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day; (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one day after deposit with a nationally recognized over night courier, specifying next day delivery, with written verification off receipt. All communications shall be sent to the Company at the address as set forth on the signature page hereof and to the Purchaser at the address set forth on the signature page hereto for such Purchaser, or at such other addresses as the Company or the Purchaser may designate by ten days advance written notice to other parties hereto.

6.3 Titles and Subtitles . The titles of the sections and subsection s of the Agreement are for the convenience of reference only and are not to be considered in construing this agreement.

6.4 Facsimile Signatures; Counterparts . This Agreement may be executed by facsimile signatures and in any number of counterparts, each of which shall be original, but all of which together shall constitute one instrument.

6.5 Brokers Fees . Each party hereto represents and warrants that no agent, investment banker, broker, person or firm acting on behalf of or under the authority of such party hereto is or will be entitled to any broker’s or finder’s fee or any other commission directly or indirectly in connection with the transaction contemplated herein, except as specified herein with respect to the Company. Each party hereto further agrees to indemnify each other party for any, claims losses or expenses inured by such other party as a result of the representation in this section 6.5 being untrue, other than for a breach of representation or warranty made by the Company herein.

6.6 Construction . Each party acknowledges that its legal counsel participated in the preparation of this Agreement and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this agreement to favor any party against the other.

6.7 Governing Law . THIS AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN SAN DIEGO COUNTY, CALIFORNIA WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY REGISTERED FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER THIS AGREEMENT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING REASONABLE ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE.

IN WITNESS WHEREOF, the parties hereto have executed this SECURITIES PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof.

PURE CAPITAL INCORPORATED _______________________ (“Purchaser”)

By:_________________________________ By:__________________________________

The Purchaser is an Accredited Investor because the Purchaser is (check appropriate item):

_____ a bank, insurance company, registered investment company, business development company, or small business investment company;

_____ a charitable organization, corporation, or partnership with assets exceeding $5 million;

_____ a director, executive officer, or general partner of the company selling the securities;

_____ a business in which all the equity owners are accredited investors;

_____ a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase;

_____ a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or

_____ a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.

THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO PURE CAPITAL INCORPORATED THAT SUCH REGISTRATION IS NOT REQUIRED. CERTIFICATES REPRESENTING ANY SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE SHALL INCLUDE A LEGEND TO SIMILAR EFFECT AS THE FOREGOING.

CONVERTIBLE NOTE

FOR VALUE RECEIVED , Pure Capital Incorporated, a Canadian Federal corporation (the “Company”) hereby promises to pay _________________, (the “Holder”) on order, without demand, the sum of ____________________________ ($_________________) dollars, (the “Principal Amount”) within twenty-four months from the date of this Note (the “Maturity Date”).

The following terms apply to this Note (“Note”):

1.1	Conversion Privileges. The Conversion Privileges set forth in Article II shall remain in full force and effect immediately from the date hereof and until the Note is paid in full.

1.2	Interest Rate. There shall be no interest payable due on this Note.

CONVERSION RIGHTS

The Holder, within his own discretion and at his option, shall have the right to convert the Principal Amount into shares of the Company’s common stock as set forth below. If the Holder does not elect to convert the Principal Amount due under this Note, then the Principal Amount must be paid on or before the Maturity Date.

2.1	Conversion of the Company’s Common Stock.

(a) The Holder shall have the option, within his sole discretion, from and after the issuance of this Note, and then at any time until this Note is paid, to convert any outstanding and unpaid Principal portion of this Note, (the date of giving such notice of conversion being the “Conversion Date”) into fully paid, non-assessable shares of common stock of the Company as such stock exists on the date of issuance of this Note, or any shares of capital stock of the Company into which such stock shall hereafter be changed or reclassified, (the “Common Stock”) at the conversion price as defined in section 2.1(b) hereof, (the “Conversion Price”) determined as provided herein. Upon delivery to the Company of a Notice of Conversion, as described in Section 4 of the Purchase Agreement entered into between the Company and Holder relating to this Note, (the “Purchase Agreement”) of the Holders written request for conversion, the Company shall issue and deliver to the Holder within three business days from the Conversion Date that number of shares of Common Stock for the portion of the Note converted in accordance with the foregoing. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing that portion of the Principal of the Note to be converted by the Conversion Price.

(b) The Conversion Price per share shall be $0.10 per shares of the Company’s Common Stock or the equivalent of ___________________________________________ (______________) shares of Common Stock.

(c) The Conversion Price described in Section 2.1(b) above and the number and kind of shares or other securities to be issued upon conversion determined pursuant to Section 2.1(a) and 2.1(b), shall be subject to adjustment from time to time upon the happening of certain events while this conversion right remains outstanding as follows:

(i) Merger, Sale of Assets, etc. If the Company at any time shall consolidate with, merge into, sell or convey all or substantially all its assets to any other corporation, this Note, as to the unpaid Principal portion thereof, shall thereafter be deemed to evidence the right to purchase such number and kind of shares or other securities and property as would have been issuable or distributable on account of such consolidation, merger, sale, or conveyance, upon or with respect to the securities subject to the conversion or purchase right immediately prior to such consolidation, merger, sale, or conveyance. The foregoing provision shall similarly apply to successive transactions of similar nature by any such successor or purchaser. Without limiting the generality of the foregoing, the provisions of Section 2.1(c)(iii) shall apply to such securities of such successor or purchaser after any such consolidation, merger, sale, or conveyance.

(ii) Reclassification, etc. If the Company at any time shall, by reclassification or otherwise change the Common Stock into the same or different number of securities of any class or classes, this Note, as to the unpaid Principal portion thereof shall thereafter be deemed to evidence the right to purchase an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change.

(iii) Stock Splits, Combinations and Dividends. If the shares of Common Stock are subdivided or combined into greater or smaller number of shares of Common Stock, or if a dividend is paid on the Common Stock in shares of Common Stock, the Conversion Price shall be proportionately reduced in the case of a subdivision of shares or stock dividend or proportionately increased in the case of a combination of shares, in each such case by the ratio which the total number of shares of Common Stock outstanding immediately after such event bears to the total number of shares of Common Stock outstanding immediately prior to such event.

(iv) During the period the conversion right exists, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the full conversion of this Note. The Company represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. The Company agrees that its issuance of this Note shall constitute full authority to its, officers, agents, and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note.

2.2 Method of Conversion. This Note may be converted by the Holder in whole or in part as described in section 2.1(a) hereof and the Purchase Agreement. Upon partial conversion of this Note, a new Note containing the same date and provisions as this Note shall, at the request of the Holder, be issued by the Company to the Holder for the Principal balance of this Note which shall not have been converted or paid.

3.1 Notices. Any notice herein required or permitted to be given shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party notified; (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day; (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Company at the address as set forth on the signature page to the Purchase Agreement executed in connection herewith and to the Holder at the address set forth on the signature page to the Purchase Agreement for such Holder, or at such other address as the Company or the Holder may designate by ten days advance written notice to the other parties hereto. A Notice of Conversion shall be deemed given when made to the Company pursuant to the Purchase Agreement.

IN WITNESS WHEREOF, the Company has caused this Note to be signed in its name effective as of __________________________________, 2006.

PURE CAPITAL INCORPORATED ________________________ (“Holder”)

By:_________________________________ By:__________________________________

NOTICE OF CONVERSION

(To be executed by the Holder in order to convert the Note)

The undersigned hereby elects to convert $__________________, the principal due on the Note issued by PURE CAPITAL INCORPORATED (the “Company”) on _________________________________, 2006 into Shares of Common Stock of the Company according to the conditions set forth in such Note & the related Securities Purchase Agreement, as of the date written below.

Date of Conversion:

Conversion Price:	$0.10

Shares To Be Delivered:

Signature:

Print Name:

Address:

WARRANT AGREEMENT BETWEEN

PURE CAPITAL INCORPORATED

AND

ALAN BROWN

STOCK PURCHASE WARRANT

Neither this Warrant nor the Warrant Shares as defined herein have been registered under the Securities Act of 1933, as amended, or any applicable state securities laws. Neither this Warrant nor the Warrant Shares may be sold or transferred in the absence of such registration or any exemption from such registration. Any sale or transfer of this Warrant or the Warrant Shares must comply with the restrictions on transfer set forth herein.

Right to Purchase 8,000,000 Shares of Common Stock

Dated as of November __, 2006

Pure Capital Incorporated, a Canadian Federal corporation (the “ Company ”), grants Alan Brown, an Individual residing at ______________________ (“Brown” and each of his successors and assigns, a “ Holder ”) a warrant (this “ Warrant ”) to purchase the Warrant Shares at the Purchase Price. Capitalized terms not otherwise defined have the definitions set forth in Appendix A .

1. Exercise and Expiration of Warrant .

(a) This Warrant is immediately exercisable and will expire upon the five year anniversary of the date hereof. “ Exercise Period ” shall mean the period of time between the date hereof and the expiration of this Warrant in accordance with the terms hereof.

(b) This Warrant may be exercised during the Exercise Period by the Holder, in whole or in part, by delivering this Warrant to the Company with payment of the Purchase Price in U.S. dollars. In lieu of such cash payment, the Holder may exercise the Warrant by delivery to the Company of written notice of an election to effect a cashless exercise for Warrant Shares pursuant to this Section 1(b) (“Cashless Exercise”). To effect a Cashless Exercise, the Holder will surrender this Warrant for that number of shares of Common Stock determined by multiplying the number of Warrant Shares to which it would otherwise be entitled by a fraction, the numerator if which shall be the difference between (i) the then current Market Price of a share of Common Stock on the date of exercise and (ii) the Purchase Price, and the denominator of which shall be the then current Market Price per share of Common Stock. In the event that this Warrant in not exercised in full immediately prior to the end of the Exercise Period and at such time the then current Market Price of a share of Common Stock is greater than the Purchase Price, this Warrant shall be deemed automatically exercised as to the remaining Warrant Shares as such time by Cashless Exercise without delivery of any notice from the Holder.

(c) Upon exercise of this Warrant, the Company will issue to the Holder (i) a certificate or certificates for the number of full Warrant Shares to which the Holder shall be entitled upon such exercise plus the value of any fractional share to which the Holder would otherwise be entitled, and (ii) in case such exercise is in part only, a new warrant or warrants representing the remaining Warrant Shares.

(d) Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant shall have been surrendered pursuant to Section 1(b).

2. Representations .

(a) By the Holder. The Holder represents and warrants to the Company as follows:

(i) It is an “accredited investor” within the meaning of Rule 501 of the Securities Act. This Warrant is acquired for the Holder’s own account for investment purposes and not with a view to any offering or distribution within the meaning of the Securities Act of 1933 (“Securities Act”) and any applicable state securities laws. The Holder has no present intention of selling or otherwise disposing of the Warrant or the Warrant Shares in violation of such laws; and

(ii) The Holder has sufficient knowledge and expertise in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Company. The Holder acknowledges that it has received all the information it considers necessary or appropriate for deciding whether to make this investment. The Holder understands that this investment involves a high degree of risk and could result in a substantial or complete loss of its investment. The Holder is capable of bearing the economic risks of such investment.

(iii) This Warrant has been authorized by all necessary corporate action of the Holder and constitutes a valid and legally binding obligation of the Holder, enforceable in accordance with its terms.

The Holder acknowledges that the Company has indicated that the Warrant and the Warrant Shares have not been registered under the Securities Act by reason of their issuance in a transaction exempt from the registration requirements thereof, and that the Warrant Shares will bear a legend stating that such securities have not been registered under the Securities Act and may not be sold or transferred in the absence of such registration or an exemption from such registration.

(b) By the Company. The Company represents and warrants that:

(i) It (A) is a corporation duly organized, validly existing and in good standing under the laws of the state or province of its organization, (B) has all requisite power and authority to conduct its business as now conducted and as presently contemplated and to consummate the transactions contemplated hereby and (C) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary.

(ii) It has outstanding as of the date hereof but before giving effect to this Warrant, that number of shares of Common Stock, calculated on a fully diluted basis, giving effect to the conversion of all options, warrants, rights and other securities convertible into, or exchangeable for, Common Stock as shall be provided to Holder by the Company in writing as promptly as practicable following the date hereof.

(iii) The execution, delivery and performance by the Company of this Warrant (A) has been duly authorized by all necessary corporate action, (B) does not and will not contravene the Company’s charter or bylaws or any other organizational document and (C) does not and will not contravene any applicable law or any contractual restriction binding on or otherwise affecting the Company or any of its properties or result in a default under any agreement or instrument to which the Company is a party or by which the Company or its properties may be subject.

(iv) This Warrant has been duly executed and delivered by the Company, and is a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, moratorium and other laws affecting the rights of creditors generally and general principles of equity.

(v) Assuming the accuracy of the representations made by the Holder in Section 2(a) hereof, no authorization, consent, approval, license, exemption or other action by, and no registration, qualification, designation, declaration or filing with, any governmental authority is or will be necessary in connection with the execution and delivery by the Company of this Warrant, the issuance by the Company of the Warrant Shares, the consummation of the transactions contemplated hereby, the performance of or compliance with the terms and conditions hereof, or to ensure the legality, validity, and enforceability hereof.

(vi) The Company has reserved solely for issuance and delivery upon the exercise of this Warrant, such number of shares of Common Stock to provide for the exercise in full of this Warrant.

(vii) 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 require registration, or the filing of a prospectus qualifying the distribution, of this Warrant being issued hereby under the Securities Act or cause the issuance of this Warrant to be integrated with any prior offering of securities of the Company for purposes of the Securities Act.

3. Certain Agreements of the Company . The Company agrees as follows:

(a) Shares to be Fully Paid. All Warrant Shares will, upon issuance in accordance with the terms of this Warrant, be validly issued, fully paid, and nonassessable and free from all taxes, liens, claims and encumbrances.

(b) Authorization and Reservation of Shares. During the Exercise Period, the Company shall have duly authorized a sufficient number of shares of Common Stock, free from preemptive rights and from any other restrictions imposed by the Company without the consent of the Holder, to provide for the exercise in full of this Warrant. The Company shall at all times during the Exercise Period reserve and keep available out of such authorized but unissued shares of Common Stock such number of shares to provide for the exercise in full of this Warrant.

(c) Listing. In connection with the Holder’s exercise of Registration Rights hereunder, the Company shall use its best efforts to promptly secure the listing of the shares of Common Stock issuable upon exercise of this Warrant upon each national securities exchange or automated quotation system, if any, upon which shares of Common Stock are then listed or become listed (subject to official notice of issuance upon exercise of this Warrant) and shall maintain such listing for so long as any other shares of Common Stock shall be so listed.

(d) Certain Actions Prohibited. The Company will not, by amendment of its charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder of this Warrant in order to protect the exercise privilege of the Holder of this Warrant against dilution or other impairment, consistent with the tenor and purpose of this Warrant.

(e) Successors and Assigns. Except as expressly provided otherwise herein, this Warrant will be binding upon any entity succeeding to the Company by merger, consolidation, or acquisition of all or substantially all of the Company’s assets.

(f) Blue Sky Laws. The Company shall, on or before the date of issuance of any Warrant Shares, take such actions as the Company shall reasonably determine are necessary to qualify the Warrant Shares for, or obtain exemption for the Warrant Shares for, sale to the Holder of this Warrant upon the exercise hereof under applicable securities or “blue sky” laws of the states of the United States, and shall provide written evidence of any such action so taken to the Holder of this Warrant prior to such date; provided, however, that the Company shall not be required to qualify as a foreign corporation or file a general consent to service of process in any such jurisdiction.

(g) Rule 144 Reports. For so long as the Company is subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”) the Company agrees to use its best efforts to take all actions reasonably necessary to enable the Holder to sell the Registrable Securities without registration under the Securities Act within the limitations of the exemptions provided by Rule 144 under the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC, including filing on a timely basis all reports required to be filed by the Exchange Act. Upon the request of the Holder, the Company shall deliver to the Holder a written statement as to whether it has complied with such requirements.

4. Antidilution Adjustments . The Purchase Price and the number of Warrant Shares may be adjusted from time to time as set forth in Appendix B .

5. Registration Rights . The Warrant shall have the Registration Rights set forth in Appendix C . Notwithstanding anything to the contrary contained herein (including in Appendix C ), the Holder agrees not to exercise any of the registration rights set forth in Appendix C at any time that it is able to sell all of its Registrable Securities pursuant to Rule 144 of the Securities Act in any three (3) month period.

6. Mergers; Transfer of Assets . If there shall occur any capital reorganization or reclassification of the Company’s Common Stock (other than a subdivision or combination as provided for in paragraph (b) of Appendix B ), or any consolidation or merger of the Company with or into another corporation, or a transfer of all or substantially all of the assets of the Company, then, as part of any such reorganization, reclassification, consolidation, merger or sale, as the case may be, lawful provision shall be made so that the Holder of this Warrant shall have the right thereafter to receive upon the exercise hereof the kind and amount of shares of stock or other securities or property which such Holder would have been entitled to receive if, immediately prior to any such reorganization, reclassification, consolidation, merger or sale, as the case may be, such Holder had held the number of shares of Common Stock which were then purchasable upon the exercise of this Warrant. In any such case, appropriate adjustment (as reasonably determined in good faith by the Board) shall be made in the application of the provisions set forth herein with respect to the rights and interests thereafter of the Holder of this Warrant, such that the provisions set forth herein shall thereafter be applicable, as nearly as is reasonably practicable, in relation to any shares of stock or other securities or property thereafter deliverable upon the exercise of this Warrant.

7. Transfer, Exchange, and Replacement

(a) Transferability.

(i) The Holder covenants not to transfer this Warrant or the Warrant Shares except in compliance with this Section 7(a). Subject to compliance with the transfer restrictions set forth in clause (ii) of this Section 7(a), this Warrant (in whole only), the Warrant Shares (in whole or in part) and the rights granted to the Holder hereof are freely transferable upon surrender of this Warrant, together with an assignment form, at the office or agency of the Company referred to in Section 8 below.

(ii) This Warrant shall not be transferable except (a) in whole in the event of a sale of the Holder, (b) in whole to any Affiliate of the Holder or (c) in whole to any qualified financial institution; provided that a Holder that is a qualified financial institution may only transfer this Warrant to another qualified financial institution. For purposes of this Section 7, “qualified financial institution” means a registered broker-dealer or commercial bank organized and licensed under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $300 million. The Holder shall not effect any transfer except pursuant to a transaction either registered, or exempt from registration, under the Securities Act. Prior to any transfer in reliance upon an exemption from such registration other than Rule 144 of the Securities Act, the Holder shall provide to the Company an opinion letter from counsel to the Holder (which counsel may include in-house counsel), reasonably satisfactory to the Company, opining that such transfer does not require registration under the Securities Act. The transferee, by acceptance of this Warrant, acknowledges that it takes such warrant subject to the terms and conditions hereof. Until due presentment for registration of transfer on the books of the Company, the Company may treat the registered Holder hereof as the owner hereof for all purposes, and the Company shall not be affected by any notice to the contrary.

(b) Replacement of Warrant. Upon 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, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu thereof, a new Warrant of like tenor.

(c) Cancellation; Payment of Expenses. Upon the surrender of this Warrant in connection with any transfer or replacement as provided in this Section 7, this Warrant shall be promptly canceled by the Company. The Company shall pay all taxes (other than securities transfer taxes) and all other customary expenses (other than legal expenses, if any, incurred by the Holder or transferee) and charges payable in connection with the preparation, execution, and delivery of warrants pursuant to this Section 7.

(d) Warrant Register. The Company shall maintain, at its principal executive offices (or such other office or agency of the Company as it may designate by notice to the Holder hereof), a register for this Warrant, in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each transferee and each prior owner of this Warrant.

8. Notices . Any notices required or permitted to be given under the terms of this Warrant shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier or by confirmed telecopy, and shall be effective five days after being placed in the mail, if mailed, or upon receipt or refusal of receipt, if delivered personally or by courier, or by confirmed telecopy, in each case addressed to a party. The addresses for such communications shall be:

If to the Company: Pure Capital Incorporated 250 BLAIRGOWRIE PLACE NANAIMO A1 V9T 4P5 Tel. (604) xxx-xxxx Fax (604) xxx-xxxx	If to Brown or Holder: Alan Brown
With a Copy to: SteadyLaw Group, LLP 3411 Villa Terrace San Diego, CA 92104 Tel. (619) 399-3090 Fax (619) 330-1888

If to any other Holder, at such address as such Holder shall have provided in writing to the Company, or at such other address as any Holder furnishes by notice given in accordance with this Section 8.

9. Governing Law; Jurisdiction and Venue . This Warrant shall be governed by the laws of the State of California, without regard to conflicts or choice of law rules or principles. Each of the Company and the Holder submits to the jurisdiction and venue of the federal and state courts of San Diego, California, to resolve all issues that may arise out of or relate to this Warrant. The parties waive any right to a jury trial.

10. Miscellaneous .

(a) Amendments. This Warrant and any provision hereof may only be amended by an instrument in writing signed by the Company and the Holder hereof.

(b) U.S. Dollars. All references in this Warrant to “ dollars ” or “ $ ” shall mean the U.S. dollar.

(c) Fractional Shares. The Company shall not be required upon the exercise of this Warrant to issue any fractional shares, but shall make an adjustment therefor in cash on the basis of the fair market value per share of Common Stock, as determined in good faith by the Board.

(d) Descriptive Headings. The descriptive headings of the several sections of this Warrant are inserted for purposes of reference only, and shall not affect the meaning or construction of any of the provisions hereof.

(e) Business Day. For purposes of this Warrant, the term “ business day ” means any day, other than a Saturday or Sunday or a day on which banking institutions in New York, New York or the city and state provided in Section 8 hereof for notices to the Company, are authorized or obligated by law, regulation or executive order to close.

(f) Counterparts. This agreement may be executed in counterparts, and any such executed counterpart shall be, and shall be deemed to be, an original instrument.

(g) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it shall be deemed replaced with a valid and enforceable provision, which comes as close as possible to the economic purpose of the invalid, void or unenforceable provision, and the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

(h) Successors and Assigns. This Agreement shall be binding on, and shall inure to the benefit of, the parties hereto and their respective successors and assigns.

(i) Survival. The representations, warranties and covenants made by the parties hereto shall survive the execution and delivery of this Agreement.

(j) No Stockholder Rights. Prior to the exercise of this Warrant, the Holder shall not be entitled to any rights of a stockholder with respect to the Warrant Shares, including without limitation the right to vote the Warrant Shares, receive dividends or other distributions thereon, or be notified of a stockholder meeting or receive any notice or communication regarding the business or affairs of the Company.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned have executed this Warrant as of the date first written above.

PURE CAPITAL INCORPORATED

___________________________

By:

Its:

Dated:

ALAN BROWN

___________________________

By:

Dated:

Appendix A — Definitions

“ Affiliate ” shall mean any entity directly or indirectly controlled by, controlling or under common control with another entity.

“ Board ” shall mean the Board of Directors of the Company.

“ Cashless Exercise ” shall have the meaning specified in Section 1(b) of the Warrant.

“ Company ” shall have the meaning specified in the initial paragraph of the Warrant.

“ Common Stock ” shall mean the common shares of the Company.

“ Exercise Period ” shall have the meaning specified in Section 1(a) of the Warrant.

“ Holder ” shall have the meaning specified in the initial paragraph of the Warrant.

“ Market Price ” shall mean the following: (i) the average of the closing sales process for the shares of Common Stock as reported on the principal trading exchange or the OTC BB for the Common Stock of the five (5) consecutive trading days immediately preceding such date, or if no sale price is so reported for such period, the last bid price for such period, or (ii) if the foregoing does not apply, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security on the last trading day immediately preceding such date, or if no sale price is so reported for such security, the average of the last bid and ask price for such security on the last trading day immediately preceding such date, or (iii) if market value cannot be calculated as such date on any of the foregoing bases, the Market Price shall be the fair market value as reasonably determined by an investment banking firm selected by the Company and reasonably acceptable to the Holder, with the costs of the appraisal to be borne by the Company.

“ Person ” or “ person ” shall mean all natural persons, corporations, business trusts, associations, companies, partnerships, joint ventures, governments, agencies, political subdivisions and other entities.

“ Piggyback Registration Right ” shall mean a right of the Holder under Appendix C(a)

“ Purchase Price ” shall mean $0.10 per share of Common Stock, as may be adjusted from time to time pursuant to Appendix B .

“ Registrable Securities ” shall mean the Warrant Shares issued or issuable with respect to the Warrant.

“ Registration Expenses ” shall mean all expenses incident to the Company’s performance of or compliance with the registration provisions of Appendix C herein, including without limitation (i) all fees and expenses of compliance with federal securities and state securities laws; (ii) all U.S. Securities and Exchange Commission and state securities laws filing fees; (iii) all printing expenses; (iv) all fees and disbursements of counsel for the Company; and (v) all fees and disbursements of accountants of the Company, but excluding (i) underwriter’s discounts, selling commissions and stock transfer taxes relating to securities sold by the Selling Holder; (ii) filings made with the NASD and counsel fees in connection therewith; and (iii) fees and disbursements of counsel for the Selling Holder.

“ Registration Rights ” shall mean the Piggyback, Demand and SB-2 registration rights set forth in Appendix C .

“ SB-2 Registration Right ” shall mean a right of the Holder under Appendix C(c) .

“ Selling Holder ” shall have the meaning specified in Appendix C(d)(ii) of the Warrant.

“ Warrant ” shall have the meaning specified in the initial paragraph of the Warrant.

“ Warrant Shares ” shall mean shares of Common Stock, as may be adjusted from time to time pursuant to Appendix B .

Appendix B — Antidilution Provisions

(a) Reserved.

(b) Recapitalizations. If outstanding shares of the Company’s Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Purchase Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If outstanding shares of Common Stock shall be combined into a smaller number of shares, the Purchase Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased. See also paragraph (c) of this Appendix B (“Adjustment in Number of Warrant Shares”).

(c) Adjustment in Number of Warrant Shares. When any adjustment is required to be made in the Purchase Price, the number of Warrant Shares purchasable upon the exercise of this Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Purchase Price in effect immediately prior to such adjustment, by (ii) the Purchase Price in effect immediately after such adjustment.

(d) Certificate of Adjustment. When any adjustment is required to be made pursuant to this Appendix B , the Company shall promptly mail to the Holder a certificate setting forth the Purchase Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Such certificate shall also set forth the kind and amount of stock or other securities or property into which this Warrant shall be exercisable following such adjustment.

(e) Other Notices. In case at any time:

(i) the Company shall declare any dividend upon the Common Stock payable in shares of stock of any class or make any other distribution (other than dividends or distributions payable in cash out of retained earnings consistent with the Company’s past practices with respect to declaring dividends and making distributions) to the holders of the Common Stock;

(ii) the Company shall offer for subscription pro rata to the holders of the Common Stock any additional shares of stock of any class or other rights;

(iii) there shall be any capital reorganization of the Company, or reclassification of the Common Stock, or consolidation or merger of the Company with or into, or sale of all or substantially all of its assets to, another corporation or entity; or

(iv) there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Company; then, in each such case, the Company shall give to the Holder (a) notice of the date on which the books of the Company shall close or a record shall be taken for determining the holders of Common Stock entitled to receive any such dividend, distribution, or subscription rights or for determining the holders of Common Stock entitled to vote in respect of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up and (b) in the case of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, notice of the date (or, if not then known, a reasonable estimate thereof by the Company) when the same shall take place. Such notice shall also specify the date on which the holders of Common Stock shall be entitled to receive such dividend, distribution, or subscription rights or to exchange their Common Stock for stock or other securities or property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding-up, as the case may be. Such notice shall be given at least thirty (30) days prior to the record date or the date on which the Company’s books are closed in respect thereto. Failure to give any such notice or any defect therein shall not affect the validity of the proceedings referred to in clauses (i), (ii), (iii) and (iv) above.

(f) Certain Events. If, at any time during the Exercise Period, any event occurs of the type contemplated by the adjustment provisions of this Appendix B but not expressly provided for by such provisions, the Company will give notice of such event, and the Board will make an appropriate adjustment in the Purchase Price and the number of shares of Common Stock acquirable upon exercise of this Warrant so that the rights of the Holder shall be neither enhanced nor diminished by such event.

Appendix C — Registration Rights

(a) Piggyback Registration.

(i) Participation. If the Company elects to file a registration statement under the Securities Act covering the offer and sale of any Common Stock (or equity securities converted into Common Stock) in connection with any public offering (other than a registration statement on Form S-8 or Form S-4, or their successors, or any other form for a similar limited purpose, or any registration statement covering only securities proposed to be issued in exchange for securities or assets of another corporation), the Company shall give written notice thereof to the Holder at least twenty business days before filing. The Holder shall have a Piggyback Registration Right to participate in such offering on a pro rata basis with the Company and any other Holders upon the giving of notice to the Company within ten business days of receipt by it of notice from the Company. If the Holder notifies the Company of its intent to exercise such Piggyback Registration Right, subject to (a)(ii) below, the Company shall include in such registration statement such number of shares of Registrable Securities as requested by the Holder. Such Registrable Securities shall be included in the underwriting for the public offering on the same terms and conditions as the securities otherwise being sold in such offering.

(ii) Underwriters’ Cutback. If, in the opinion of the managing underwriter of such offering the inclusion of all of the shares of Registrable Securities and other Common Stock requested to be registered would be inappropriate, then the number of shares of Registrable Securities and other Common Stock to be included in the offering shall be reduced, with the participation in such offering to be in the following order of priority: (1) first, securities to be issued by the Company shall be included, and (2) second, any other Common Stock required to be included pursuant to any demand registration right granted to such other holder of Common Stock shall be included, and (3) third Registrable Securities and any other Common Stock requested to be included, on a pro rata basis (based upon the number of registrable securities owned by the Holder and the holders of Common Stock requesting participation in the offering), shall be included.

(iii) Registrant Controls. The Company may decline to file a Registration Statement after giving notice to any Holder, or withdraw a Registration Statement after filing and after such notice, but prior to the effectiveness thereof, provided that such registrant shall promptly notify each Holder of Registrable Securities in writing of any such action and provided further that such registrant shall bear all reasonable expenses incurred by such Holder of Registrable Securities or otherwise in connection with such withdrawn Registration Statement.

(iv) Underwriting Agreement. In connection with any registration under this Section (a) involving an underwriting, the Company shall not be required to include any Registrable Shares in such registration unless the Holder accepts the terms of the underwriting as determined by the underwriters selected by the Company (provided that such terms must be consistent with this Agreement and provided, further, that any inability of the Holder to agree with the underwriters shall not restrict the ability of the Company to proceed with the registration).

(b) [Reserved]

(i) The Company will use its best efforts to qualify for the registration of its securities on Form SB-2 (or an alternative, acceptable form including only a Form 10-SB or Form SB-1). Subject to paragraph (iii) below, Holders owning or having the right to purchase a majority of the Registrable Securities may request on one occasion by written notice to the Company that the Company file a Registration Statement on Form SB-2 (or any successor form) for a public offering of Registrable Securities the reasonably anticipated aggregate price to the public of which, net of underwriting discounts and commissions, would exceed $100,000. The Company shall use its best efforts to cause such Registrable Shares to be registered for the offering on such form and to cause such Registrable Securities to be qualified in such jurisdictions as the Holder may reasonably request; provided , however , that the Company shall not be required to effect more than one (1) such registration at the request of the Holders. The Company shall prepare and file any amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all the Registrable Securities.

(ii) Notwithstanding the foregoing, the Company shall not be obligated to take any action pursuant to this section (c) during the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of filing of, and ending on a date one hundred eighty (180) days following the effective date of, a Company-initiated Registration Statement that is subject to paragraph (a) of this Appendix C , provided that the Company is actively employing in good faith all reasonable effort to cause such Registration Statement to become effective.

(iii) If the Company is requested to effect a Registration Statement on Form SB-2 and the Company furnishes to the Holders of Registrable Securities requesting such registration a notice certified by the President or Chief Financial Officer of the Company stating that in the good faith judgment of the Company it would be seriously detrimental to the Company and its stockholders for such registration statement to be filed, the Company shall have the right to defer such filing for a period of not more than 120 days after receipt of the request for such registration from the Holder or Holders of Registrable Securities requesting such registration; provided that during such time the Company may not file a registration statement (other than a registration statement on Form S-4 or Form S-8 or a registration statement already approved by the Board) for securities to be issued and sold for its own account or that of anyone other than the Holder or Holders of Registrable Securities requesting such registration.

(d) Indemnification.

(i) Indemnification by the Company. The Company agrees to indemnify and hold harmless any Holder of Registrable Securities which has included Registrable Securities in a registration statement, its officers, directors and agents and each Person, if any, who controls such Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages, liabilities and expenses (including reasonable attorneys fees and costs of investigation) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement or final prospectus relating to the Registrable Securities or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses arise out of, or are based upon, any such untrue statement or omission based upon information furnished in writing to Company by the Holder of the Registrable Securities or on such Holder’s behalf expressly for use therein; provided, that with respect to any untrue statement or omission made in any preliminary prospectus, the indemnity agreement contained in this paragraph shall not apply to the extent that any such loss, claim, damage, liability or expense results from the fact that a current copy of the prospectus was not sent or given to the person asserting any such loss, claim, damage, liability or expense at or prior to the written confirmation of the sale of the Registrable Securities concerned if it is determined that it was the responsibility of the Holder of such Registrable Securities to provide such person with a current copy of the prospectus and such current copy of the prospectus would have cured the defect giving rise to such loss, claim, damage, liability or expense. It is agreed that the foregoing indemnity shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or expense if such settlement is effected without the consent of the Company. The Company also agrees to indemnify any underwriters of the Registrable Securities, their officers and directors and each person who controls such underwriters on substantially the same basis as that of the indemnification of the Holder of such Registrable Securities provided in this section (d).

(ii) Indemnification by the Holder of Registrable Securities. The Holder of Registrable Securities, to the extent it is selling Registrable Securities (“ Selling Holder ”), agrees to indemnify and hold harmless the Company, its directors and officers and each Person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to the Selling Holder, but only with respect to, and to the extent that, information furnished in writing by the Selling Holder or on the Selling Holder’s behalf expressly for use in any registration statement or final prospectus relating to the Registrable Securities (or any amendment or supplement thereto, or any preliminary prospectus) which contained an untrue statement or alleged untrue statement of a material fact or omitted or allegedly omitted to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading. It is agreed that the foregoing indemnity shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or expense if such settlement is effected without the consent of the Selling Holder. Notwithstanding anything to the contrary contained herein, the liability of the Holder hereunder shall be limited to the proportion of any such loss, claim, damage, liability or expense that is equal to the proportion that the public offering price of the shares of Registrable Securities sold by the Holder bears to the total public offering price of all securities sold in such offering. The Selling Holder also agrees to indemnify and hold harmless the underwriters on substantially the same basis of that of the indemnification of the Company provided in the preceding subsection.

(e) Contribution. If the indemnification provided for in this Appendix C is unavailable to the Company, the Selling Holder or the underwriters in respect of any losses, claims, damages, liabilities, expenses or judgments referred to herein, then each such indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities, expenses and judgments (i) as between the Company and the Selling Holder on the one hand and the underwriters on the other, in such proportion as is appropriate to reflect the relative benefits received by the Company and the Selling Holder on the one hand and the underwriters on the other from the offering of the Registrable Securities, or if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and the Selling Holder on the one hand and of the underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities, expenses or judgments, as well as any other relevant equitable considerations and (ii) as between the Company on the one hand and each Selling Holder on the other, in such proportion as is appropriate to reflect the relative fault of the Company and of each Selling Holder in connection with such statements or omissions, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Selling Holder on the one hand and the underwriters on the other shall be deemed to be in the same proportion as the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by the Company and the Selling Holder bear to the total underwriting discounts and commissions received by the underwriters, in each case as set forth in the table on the cover page of the prospectus. The relative fault of the Company on the one hand and of each Selling Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the party’s relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Holder agree that it would not be just and equitable if contribution pursuant to this section were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities, expenses or judgments referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this section, no underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, and no Selling Holder shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities of such Selling Holder were offered to the public exceeds the amount of any damages which such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(f) Registration Expenses and Enforcement.

(i) Registrations Rights. The Company shall bear all Registration Expenses incurred in connection with Piggyback Registration Rights, the Demand Registration Right and the SB-2 Registration Right.

(ii) Expenses of Registrant. The Company shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in connection with any listing of the securities to be registered on a securities exchange, and the fees and expenses of any person, including special experts, retained by the Company.

(iii) Enforcement of Registration Rights. Notwithstanding anything to the contrary contained herein, the Company hereby agrees that each Holder of Registrable Securities shall be entitled to specific performance of the registration rights hereunder.

(g) Assignment of Registration Rights. Any of the rights of the Holders under this Appendix C, including the right to have the Company register Registrable Securities pursuant to this Agreement, may be assigned by each Holder to any permitted transferee if: (i) the Holder agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company after such assignment, (ii) the Company is furnished with written notice of (A) the name and address of such transferee or assignee, and (B) the securities with respect to which such registration rights are being transferred or assigned, (iii) following such transfer or assignment, the further disposition of such securities by the transferee or assignee is restricted under the Securities Act and applicable state securities laws, and (iv) such transfer shall have been made in accordance with the applicable requirements of the Warrant. The transferee, by acceptance of the transfer of any registration rights hereunder, acknowledges that it takes such rights subject to the terms and conditions hereof. Upon any transfer of less than all of its Registrable Securities, the Holder retains registration rights with respect to Registrable Securities held by it.

“BUSINESS DEVELOPMENT AGREEMENT”

This Business Development Agreement (the “BDA” or the “ Agreement ”) is entered into as of this the ____ day of ______________, 2006, with an effective date of November 1, 2006, (the “Effective Date”) by and between Performance Capital Corporation, a Delaware corporation (hereinafter referred to as “PCC”), and Pure Capital Incorporated, a Canadian Federal corporation (hereinafter referred to as “Client”). PCC and Client are occasionally referred to herein individually as a “Party” and collectively as the “ Parties .”

WHEREAS , Client wishes to engage PCC to assist in identifying, developing, qualifying and/or advising with respect to prospective and/or actual business opportunities (hereinafter referred to as the “Engagement”).

WHEREAS , PCC hereby agrees to serve Client as a liaison and referral source for the purpose of securing additional business opportunities for Client and Client related persons and/or entities (“Affiliates”) in a number of fashions, including, without limitation, mergers and acquisitions, collateralized debt obligations, partnering, licensing, co-branding and other business related affiliations, serve as a non-exclusive finder for Client and its Affiliates with respect to related ventures, and such other lawful purposes as the undersigned shall determine from time to time (the “Transaction” or “Transactions”).

NOW, THEREFORE , in consideration of the mutual promises hereinafter set forth, the sufficiency of which are hereby acknowledged, PCC and Client agree as follows:

Appointment as Client's Finder . Client hereby authorizes PCC, on a non-exclusive basis, to identify merger or acquisition candidates, investors, underwriters, lenders, guarantors and/or similarly situated persons and/or entities (collectively, the “Investors”) interested in providing funds or capital (“Financing”) to Client (the term “Financing is fully defined below in paragraph “F”), Client’s Affiliates or portfolio companies (collectively, the “Client Entities”) on terms acceptable to the Client Entities and the Investors. It is agreed that PCC shall have no role and shall play no part in any negotiations and/or relationship by and between any Investors and Client Entities; and that PCC is not now, nor shall it ever be, an agent of the Client Entities with respect to any Financing. It is further understood that PCC is acting solely as a finder, is not a licensed securities or real estate broker or dealer, and shall have no authority to enter into any Financing commitments on behalf of Client and/or Client Entities, Client affiliates or portfolio companies, or to negotiate the terms of any potential Financing or to hold any funds or securities in connection with any potential Financing or to perform any act which would require PCC to become licensed as a securities or real estate broker or dealer.

B.	Acceptance of Opportunities . Client shall have the sole and absolute right to make, accept or reject any potential Transaction or Transactions arising from this BDA.

C.	Terms of Client Submission to Success Fees . Client guaranties to PCC that if a Transaction is effectuated by and between any Client Entities and any Investors, then Client will pay PCC a fee of 4,000,000 restricted common shares (“Success Fee”), which shall have a value of $40,000.

D.	Method and Terms of Payment of Success Fees . Any Success Fee owed to PCC by Client Entities shall be paid in cash concurrent to the time of the Closing of any such Transaction(s).

Disclosure of Success Fee in Transaction Documents . Client Entities shall include language describing the Client Entities’ fee responsibility to PCC in the documents for any Transaction(s). Upon request, the Client Entities shall provide PCC with copies of all such documents and give PCC adequate advance notice of the time and place of Closing, which PCC shall have the right to attend.

F. Financing . Financing shall mean all amounts furnished to, or for use by, Client Entities from any Investors, regardless of whether said Investors were directly or indirectly introduced by, or through the efforts of, PCC to Client Entities after the date of this Agreement, and regardless of whether said Financing amounts are tendered by Investors in equity or debt securities, loans, loan commitments, guarantees of indebtedness, leasing, sale and leaseback, joint ventures or licenses.

Expiration of the BDA . The expiration of this BDA shall be 18 months after the date hereof or thirty days after written notice of termination from Client received by PCC at PCC's address below, whichever is later. However, Client's Success Fee obligations to PCC arising out of this BDA from a Transaction by Client to a business introduced to, or dealt with on behalf of, Client by PCC during the term hereof, shall survive for five (5) years after the expiration of this BDA.

H.	Assignment . The Success Fee is assignable, in whole or in part, at the discretion of PCC.

I.	Waiver . No delay in exercising, no course of dealing with respect to, or no partial exercise of any right or remedy hereunder shall constitute a waiver of any other right or remedy, or future exercise thereof.

Severability . If any term or provision of this BDA is held by a court of competent jurisdiction to be invalid, void, or unenforceable, all terms, provisions, covenants, and conditions and all applications not held invalid, void, or unenforceable will continue in full force and will in no way be affected, impaired, or invalidated.

Notice . Written notice by any Party to the other shall be deemed to have been given when received via certified mail by the intended recipient thereof at its address shown on the signature page hereof, or to such other address as such intended recipient may specify in a written notice pursuant hereto.

Governing Law . This BDA shall be governed in all respects by the laws of the State of California, without reference to conflicts of law rules. This BDA shall be considered made and entered into in the State of California. The parties agree that the United Nations Convention on Contracts for the International Sale of Goods is specifically excluded from application to this Agreement. Any lawsuits or other legal actions brought to enforce this BDA, or otherwise related to this BDA shall be brought exclusively in the federal or state courts within California. Each Party hereby waives its right to a trial by jury.

Entire Agreement; Amendment . This BDA, together with any Exhibits and Schedules hereto, constitutes the entire BDA among the parties with respect to the subject matter hereof and supersedes in all respects all prior proposals, negotiations, conversations, discussions and agreements between the parties. This BDA may not be modified or amended except by express written amendment signed by authorized representatives of all parties.

Attorneys' Fees . If any party hereto commences an action against another party to enforce any of the terms hereof or because of the breach by such other party of any of the terms hereof, the prevailing party shall be entitled, in addition to any other relief granted, to all actual out-of-pocket costs and expenses incurred by such prevailing party in connection with such action and the enforcement and collection of any judgment rendered therein, including, without limitation, all reasonable attorneys' fees, consultant fees and expert witness fees, and a right to such costs and expenses shall be deemed to have accrued upon the commencement of such action and shall be enforceable whether or not such action is prosecuted to judgment.

O.	Facsimile Certification . A facsimile copy of this BDA signed by any and/or all Parties shall have the same binding and legal effect as an original of the same.

Counterparts . This BDA may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one in the same instrument. Regardless of whether this BDA is executed in one or more counterparts, each such counterpart may be executed by actual or facsimile signature(s).

IN WITNESS WHEREOF , the parties hereto, through their duly authorized officers, have executed this Agreement, which shall be binding as of the Effective Date.

PURE CAPITAL INCORPORATED By: Title: Address:______________________________________ _____________________________________________ Tel No:__________________________ Fax No: _________________________	PERFORMANCE CAPITAL CORPORATION By: Title: Address:______________________________________ _____________________________________________ Tel No:__________________________ Fax No: _________________________

THIS CONVERTIBLE PROMISSORY NOTE AND THE SECURITIES THAT MAY BE ACQUIRED PURSUANT TO THIS CONVERTIBLE PROMISSORY NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THIS CONVERTIBLE PROMISSORY NOTE AND SUCH OTHER SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF A REGISTRATION STATEMENT AND LISTING APPLICATION IN EFFECT WITH RESPECT TO THIS CONVERTIBLE PROMISSORY NOTE OR SUCH OTHER SECURITIES UNDER THE SECURITIES ACT AND ANY OTHER APPLICABLE SECURITIES LAW, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND LISTING NOT REQUIRED PURSUANT TO A VALID EXEMPTION THEREFROM UNDER THE SECURITIES ACT AND THE APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION.

CONVERTIBLE PROMISSORY NOTE

USD $100,000

Effective Date: November 1, 2006

Date Executed: December ___, 2006

FOR VALUE RECEIVED, Pure Capital Incorporated, a Canadian Federal corporation (the “Company”), hereby promises to pay to the order of Performance Capital Corporation, a Delaware corporation (the “Holder”) the aggregate principal amount of up to One Hundred Thousand Dollars ($100,0000), together with interest on the unpaid principal amount hereof, upon the terms and conditions hereinafter set forth.

1. Draw Down; Availability .

(a) Draw Down . The Company may, in its sole discretion subject to the Draw Down Limitation (defined below), draw upon up to One Hundred Thousand Dollars ($100,000), which shall be made available by the Holder for a period of twenty-four (24) months, for use as operating capital and for general corporate purposes (the drawn down portion is referred to herein as “Principal”). The terms and conditions set forth herein shall only apply to the Principal.

(b) Availability . The Principal shall be made available immediately upon the closing of this transaction, subject to the following:

(i) The Company may not draw down in excess of Thirty Thousand Dollars ($30,000) during any thirty (30) day period following the execution of this Note (the “Draw Down Limitation”).

(ii) The Company may request, in writing, that additional Principal be made available during the Draw Down Limitation and Holder shall, in his sole discretion, make the requested funds available.

2. Payment Terms . The Company promises to pay to Holder the balance of Principal, together with accrued and unpaid interest, on or before December 15, 2008 (“Conversion Date”), unless this Note is earlier prepaid as herein provided or earlier converted into Common Stock (as hereinafter defined) of the Company pursuant to Section 4 hereof. All payments hereunder shall be made in lawful money of the United States of America. Payment shall be credited first to the accrued interest then due and payable and the remainder to Principal.

3. Interest .

(a) Interest on the outstanding portion of Principal of this Note shall accrue at a rate of eleven percent (11%) per annum. All computations of interest shall be made on the basis of a 365-day year for actual days elapsed.

(b) Such interest shall be paid by the Company to the Holder, at the Holder’s option either (i) in cash or (ii) such amount then due and owing shall be converted to shares of the Company’s Common Stock at $0.10 per share, all such interest shall be paid within 30 days from receipt by the Company of such request by the Holder.

4. Conversion of this Note .

(a) Conversion Rights. Subject to and in accordance with the provisions of this Section 4, at any time on or prior to the Conversion Date, the Holder may elect, in its sole discretion, to effect the conversion (the "Conversion") of all or any portion of the outstanding principal and interest due on this Note into shares of Common Stock. The number of shares of Common Stock into which the outstanding principal and accrued but unpaid interest (or portion thereof) shall be converted pursuant to this Section 4(a) shall be determined by dividing the amount of outstanding principal and interest the Holder has elected to convert by $0.10 (the “Conversion Price”). The Conversion Price is subject to adjustment as provided in Section 5 hereof.

(b) Manner of Effecting the Conversion. If the Holder elects to effect the Conversion pursuant to Section 4(a) hereof, the Holder shall deliver a duly executed written notice to the Company of such election (the "Conversion Notice"), and in such event the Conversion shall be deemed to have been effected at the close of business on the date such Conversion Notice is given. Upon any Conversion of this Note in accordance with the terms hereof, the rights of the Holder with respect to the outstanding principal and all interest pursuant to this Note shall cease and the Holder shall be deemed to have become the holder of record of the shares of Common Stock into which this Note shall have been converted, provided that, if the Holder elects to convert only a portion of the outstanding principal and interest pursuant to Section 4(a) hereof, then the Company will deliver a new note to the Holder, on the same terms and conditions as this Note, with respect to the portion of the outstanding principal and interest that is not converted (the "New Note"). Concurrently with the delivery of a Conversion Notice, the Holder shall surrender this Note to the Company. Promptly upon its receipt of a Conversion Notice, the Company shall (i) deliver to or upon the written order of the Holder, a certificate or certificates for the number of shares of Common Stock issuable upon such Conversion, (ii) make a cash payment in respect of any fraction of a share as provided in Section 4(c) hereof and (iii) if applicable, deliver a New Note as set forth in this Section 4(b).

(c) Fractional Shares. No fractional shares shall be issued upon any Conversion. Instead of any fractional share which would otherwise be issuable upon a Conversion, the Company shall pay a cash amount in respect of such fractional share in an amount based upon the Closing Price of the Common Stock on the trading day immediately preceding such Conversion.

5. Merger, Reclassification, Etc .

(a) Merger, Sale of Assets, etc. If the Company at any time shall consolidate with or merge into or sell or convey all or substantially all its assets to any other corporation, this Note, as to the unpaid principal portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase such number and kind of shares or other securities and property as would have been issuable or distributable on account of such consolidation, merger, sale or conveyance, upon or with respect to the securities subject to the conversion or purchase right immediately prior to such consolidation, merger, sale or conveyance. The foregoing provision shall similarly apply to successive transactions of a similar nature by any such successor or purchaser. Without limiting the generality of the foregoing, the anti-dilution provisions of this Section shall apply to such securities of such successor or purchaser after any such consolidation, merger, sale or conveyance.

(b) Reclassification, etc. If the Company at any time shall, by reclassification or otherwise, change the Common Stock into the same or a different number of securities of any class or classes, this Note, as to the unpaid principal portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change.

(c) Stock Splits, Combinations and Dividends . If the shares of Common Stock are subdivided or combined into a greater or smaller number of shares of Common Stock, or if a dividend is paid on the Common Stock in shares of Common Stock, the Conversion Price shall be proportionately reduced in case of subdivision of shares or stock dividend or proportionately increased in the case of combination of shares, in each such case by the ratio which the total number of shares of Common Stock outstanding immediately after such event bears to the total number of shares of Common Stock outstanding immediately prior to such event.

(d) Reserved Shares . During the period the conversion right exists, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the full conversion of this Note. The Company represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. The Company agrees that its issuance of this Note shall constitute full authority to its officers, agents, and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note.

6. Subordination . The indebtedness evidenced hereby is subordinate in right of payment to all existing and future bank indebtedness, including lease and equipment finance obligations. The indebtedness represented hereby is senior in right of payment to all classes and series of the Company’s capital stock. The indebtedness represented hereby is pari passu with any and all convertible debt securities issued by the Company.

7. Redemption . This Note may be redeemed by the Company by payment of the entire Principal and Accrued Interest outstanding under this Note. The Company must provide notice to Holder not less than thirty (30) days prior to effecting such redemption. During the period from providing of such notice to Holder and the Company effecting the redemption, the Company may cancel such redemption by providing notice of such cancellation to Holder.

8. Representations and Warranties of the Company . The Company represents and warrants to Holder as follows:

(a) The execution and delivery by the Company of this Note (i) are within the Company’s corporate power and authority, and (ii) have been duly authorized by all necessary corporate action.

(b) This Note is a legally binding obligation of the Company, enforceable against the Company in accordance with the terms hereof, except to the extent that (i) such enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and (ii) the availability of the remedy of specific performance or in injunctive or other equitable relief is subject to the discretion of the court before which any proceeding therefore may be brought.

9. Representations, Warranties and Covenants of Holder . Holder represents and warrants to Company as of the date hereof as follows:

(a) Investment Intent: Authority . This Agreement is made with Holder in reliance upon Holder’s representation to Company, evidenced by Holder’s execution of this Agreement, that Holder is acquiring the Notes and the Warrant for investment for Holder’s own account, not as nominee or agent, for investment and not with a view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the Securities Act of 1933. Holder has the full right, power, authority and capacity to enter into and perform this Agreement and the Agreement will constitute a valid and binding obligation upon Holder or, except as the same may be limited by bankruptcy, insolvency, moratorium, and other laws of general application affecting the enforcement of creditors’ rights.

(b) Knowledge and Experience . Holder (i) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of Holder’s prospective investment in the Securities; (ii) has the ability to bear the economic risks of Holder’s prospective investment; (iii) has had all questions which have been asked by Holder satisfactorily answered by Company; and (iv) has not been offered the Securities by any form of advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any such media. Holder represents and warrants that it is an “accredited investor” within the meaning of Rule 501 of Regulation D of the Securities Act.

10. Piggyback Registration Rights . If, at any time after the date of this Note, the Company proposes to register any of its securities under the Securities Act of 1933 (the “Act”) or the Securities Exchange Act of 1934 (the “Exchange Act”), either for its own account or for the account of others, in connection with the public offering of such equity securities solely for cash, on a registration form that would also permit the registration of the common stock issuable upon conversion of this Note, the Company shall promptly give the Holder written notice of such proposal. Within thirty (30) days after the notice is given, the Holder shall give notice as to the number of Conversion Shares which the Holder requests be registered simultaneously with such registration by the Company. The Company shall use its best efforts to include such Conversion Shares in such registration statement (or in a separate registration statement concurrently filed) which the Holder requests to be so included and to cause such registration statement to become effective with respect to such shares in accordance with the registration procedures set forth in Section 11 hereof. If at any time after giving written notice of its intention to register equity securities and before the effectiveness of the registration statement filed in connection with such registration, the Company determines for any reason either not to effect such registration or to delay such registration, the Company may, at its election, by delivery of written notice to the Holder, (i) in the case of a determination not to effect registration, relieve itself of its obligation to register the Conversion Shares under this Section 10 in connection with such registration, or (ii) in the case of a determination to delay registration, delay the registration of the Conversion Shares under this Section 10 for the same period as the delay in the registration of such other equity securities. Each Holder of Conversion Shares requesting inclusion in a registration pursuant to this Section 10 may, at any time before the effective date of the registration statement relating to such registration, revoke such request by delivering written notice of such revocation to the Company (which notice shall be effective only upon receipt by the Company); provided , however, that if the Company, in consultation with its financial and legal advisors, determines that such revocation would require a recirculation of the prospectus contained in the registration statement, then such Holder of Conversion Shares shall have no right to revoke said request.

11. Expenses and Procedures .

(a) Expenses of Registration . All registration expenses (exclusive of underwriting discounts and commissions) shall be borne by the Company; provided, however, that if Holder revokes the registration request pursuant to the last sentence of Section 10, the registration expenses in connection with such revoked registration shall be borne by Holder. The Holder shall bear all underwriting discounts, selling commissions, sales concessions and similar expenses applicable to the sale of the Conversion Shares sold by Holder.

(b) Registration Procedures . In the case of the registration, qualification or compliance effected by the Company pursuant to Section 10 hereof, the Company will keep the Holder advised as to the initiation of registration, qualification and compliance and as to the completion thereof. At its expense, the Company will furnish such number of prospectuses and other documents incident thereto as the Holder from time to time may reasonably request.

12. Representations, Warranties and Covenants of Holder . Holder represents and warrants to the Company, and agrees, as follows:

(a) This Note and any Conversion Shares issuable upon conversion of this Note are being acquired by Holder for its own account for investment and not with a view to, or for sale in connection with, any distribution thereof.

(b) Holder is an “accredited investor” within the meaning of Rule 501 under the Securities Act.

(c) Holder has sufficient knowledge and experience in financial and business matters and is capable of evaluating the risks and merits of Holder’s investment in the Company; Holder believes that Holder has received or had access to all information Holder considers necessary or appropriate to make an informed investment decision with respect to this Note; and Holder is able financially to bear the risk of losing Holder’s full investment in this Note.

(d) Holder understands that this Note and any Conversion Shares have not been registered under the Securities Act or registered or qualified under any the securities laws of any state or other jurisdiction, are “restricted securities,” and cannot be resold or otherwise transferred unless they are registered under the Securities Act, and registered or qualified under any other applicable securities laws, or an exemption from such registration and qualification is available. Prior to any proposed transfer of this Note or any Conversion Shares, Holder shall, among other things, give written notice to the Company of its intention to effect such transfer, identifying the transferee and describing the manner of the proposed transfer and, if requested by the Company, accompanied by (i) investment representations by the transferee similar to those made by Holder in this Section 12 and (ii) an opinion of counsel satisfactory to the Company to the effect that the proposed transfer may be effected without registration under the Securities Act and without registration or qualification under applicable state or other securities laws. Each certificate for any Conversion Shares shall bear a legend to the foregoing effect.

13. Use of Proceeds . The proceeds received by the Company from the sale of this Note shall be used by the Company for working capital or other general corporate purposes.

14. No Waiver in Certain Circumstances . No course of dealing of Holder nor any failure or delay by Holder to exercise any right, power or privilege under this Note shall operate as a waiver hereunder and any single or partial exercise of any such right, power or privilege shall not preclude any later exercise thereof or any exercise of any other right, power or privilege hereunder.

15. Certain Waivers by the Company . Except as expressly provided otherwise in this Note, the Company and every endorser or guarantor, if any, of this Note waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note, and assent to any extension or postponement of the time of payment or any other indulgence, to any substitution, exchange or release of collateral available to Holder, if any, and to the addition or release of any other party or person primarily or secondarily liable.

16. No Unlawful Interest . Notwithstanding anything herein to the contrary, payment of any interest or other amount hereunder shall not be required if such payment would be unlawful. In any such event, this Note shall automatically be deemed amended so that interest charges and all other payments required hereunder, individually and in the aggregate, shall be equal to but not greater than the maximum permitted by law.

17. Miscellaneous . No modification, rescission, waiver, forbearance, release or amendment of any provision of this Note shall be made, except by a written agreement duly executed by the Company and Holder. This Note may not be assigned by Holder without the prior written consent of the Company. The Company and Holder each hereby submits to personal jurisdiction in the State of California, consents to the jurisdiction of any competent state or federal district court sitting in the City or County of San Diego, California, and waives any and all rights to raise lack of personal jurisdiction as a defense in any action, suit or proceeding in connection with this Note or any related matter. This Note shall be governed by, and construed and interpreted in accordance with, the laws of the State of California, without reference to conflicts of law provisions of such state.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF , the undersigned have caused this Convertible Note to be executed and delivered by a duly authorized officer as of the Effective Date.

				Pure Capital Incorporated


				By:
				Name: Alan M. Brown
				Title: Chief Executive Officer Dated:

ACCEPTED AND AGREED:

Performance Capital Corporation


By:
Name: John J. Formicola Title: Chief Executive Officer Dated: