WORLDWIDE ENERGY & MANUFACTURING USA INC
FORM OF SECURITIES PURCHASE AGREEMENT DATED JUNE 23, 2008
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>exh102.htm
<DESCRIPTION>FORM OF SECURITIES PURCHASE AGREEMENT DATED JUNE 23, 2008
<TEXT>
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align=center><B></B>&nbsp;</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; LINE-HEIGHT: 14pt"
align=center><B>SECURITIES PURCHASE AGREEMENT</B></P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>This Securities Purchase Agreement (this &#147;<U>Agreement</U>&#148;) is
dated as of June __, 2008, between Worldwide Energy and Manufacturing USA, Inc.,
a Colorado corporation (the &#147;<U>Company</U>&#148;), and each purchaser identified on
the signature pages hereto (each, including its successors and assigns, a
&#147;<U>Purchaser</U>&#148; and collectively, the &#147;<U>Purchasers</U>&#148;).</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>WHEREAS, subject to the terms and conditions set forth in this
Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended
(the &#147;<U>Securities Act</U>&#148;), and Rule 506 promulgated thereunder, the Company
desires to issue and sell to each Purchaser, and each Purchaser, severally and
not jointly, desires to purchase from the Company, securities of the Company as
more fully described in this Agreement.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained
in this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree
as follows:</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; LINE-HEIGHT: 14pt"
align=center>ARTICLE I.<BR>DEFINITIONS</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>1.1</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Definitions</U>. In addition to the terms defined elsewhere in
this Agreement, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>2008 10-K</U>&#148; shall have the meaning ascribed to such term in
Section 4.18(a).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>2008 Milestone</U>&#148; shall have the meaning ascribed to such
term in Section 4.18(a).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>2008 Milestone Date</U>&#148; shall have the meaning ascribed to
such term in Section 4.18(a).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>2008 Milestone Price</U>&#148; shall have the meaning ascribed to
such term in Section 4.18(a).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>2008 Milestone Shares</U>&#148; shall have the meaning ascribed to
such term in Section 4.18(a).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;&#147;<U>2009 10-K</U>&#148; shall have the meaning ascribed to such
term in Section 4.18(b).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>2009 Milestone</U>&#148; shall have the meaning ascribed to such
term in Section 4.18(b).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>2009 Milestone Date</U>&#148; shall have the meaning ascribed to
such term in Section 4.18(b).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>2009 Milestone Price</U>&#148; shall have the meaning ascribed to
such term in Section 4.18(b).</P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 1
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>2009 Milestone Shares</U>&#148; shall have the meaning ascribed to
such term in Section 4.18(b).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;&#147;<U>Acquiring Person</U>&#148; shall have the meaning ascribed to
such term in Section 4.5.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Action</U>&#148; shall have the meaning ascribed to such term in
Section 3.1(j).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Affiliate</U>&#148; means any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under
common control with a Person as such terms are used in and construed under Rule
405 under the Securities Act. &nbsp;</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Board of Directors</U>&#148; means the board of directors of the
Company.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Business Day</U>&#148; means any day except Saturday, Sunday, any
day which is a federal legal holiday in the United States or any day on which
banking institutions in the State of New York are authorized or required by law
or other governmental action to close.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Closing</U>&#148; means the closing of the purchase and sale of the
Securities pursuant to Section 2.1.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Closing Date</U>&#148; means the Trading Day when all of the
Transaction Documents have been executed and delivered by the applicable parties
thereto, and all conditions precedent to (i) the Purchasers&#146; obligations to pay
the Subscription Amount and (ii) the Company&#146;s obligations to deliver the
Securities have been satisfied or waived.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Closing Price</U>&#148; means on any particular date (a) the last
reported closing bid price per share of Common Stock on such date on the Trading
Market (as reported by Bloomberg L.P. at 4:15 p.m. (New York City time)), or (b)
if there is no such price on such date, then the closing bid price on the
Trading Market on the date nearest preceding such date (as reported by Bloomberg
L.P. at 4:15 p.m. (New York City time)), or (c) &nbsp;if the Common Stock is not
then listed or quoted on a Trading Market and if prices for the Common Stock are
then reported in the &#147;pink sheets&#148; published by Pink Sheets LLC (or a similar
organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of the Common Stock so reported, or (d) if the
shares of Common Stock are not then publicly traded the fair market value of a
share of Common Stock as determined by an independent appraiser selected in good
faith by the Purchasers of a majority in interest of the Shares then outstanding
and reasonably acceptable to the Company, the fees and expenses of which shall
be paid by the Company.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;&#147;<U>Closing Statement</U>&#148; means the Closing Statement in
the form <U>Annex A</U> attached hereto.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;&#147;<U>Commission</U>&#148; means the United States Securities and
Exchange Commission.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Common Stock</U>&#148; means the common stock of the Company, no
par value, and any other class of securities into which such securities may
hereafter be reclassified or changed into. </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 2
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Common Stock Equivalents</U>&#148; means any securities of the
Company or the Subsidiaries which would entitle the holder thereof to acquire at
any time Common Stock, including, without limitation, any debt, preferred stock,
rights, options, warrants or other instrument that is at any time convertible
into or exercisable or exchangeable for, or otherwise entitles the holder
thereof to receive, Common Stock.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Company Counsel</U>&#148; means Sichenzia Ross Friedman Ference
LLP, with offices located at 61 Broadway, New York, New York 10006.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Disclosure Schedules</U>&#148; means the Disclosure Schedules of
the Company delivered concurrently herewith. </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Discussion Time</U>&#148; shall have the meaning ascribed to such
term in Section 3.2(f). </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>EBITDA</U>&#148; means, for the applicable period, earnings before
interest, taxes, depreciation and amortization of the Company and its
consolidated Subsidiaries, determined in accordance with GAAP, consistently
applied, plus (i) any provision for (or less any benefit from) income taxes,
(ii) any deduction for interest expense, net of interest income, and (iii)
depreciation and amortization expense. All determinations of the components of
EBITDA shall be derived from the Company&#146;s most recently filed Form 10-Q or Form
10-K, as applicable.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;&#147;<U>Escrow Agent</U>&#148; means Sichenzia Ross Friedman Ference
LLP, with offices located at 61 Broadway, New York, New York 10006.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;&#147;<U>Escrow Agreement</U>&#148; shall mean the Escrow Agreement in
substantially the form of <U>Exhibit D</U> hereto executed and delivered
contemporaneously with this Agreement.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;&#147;<U>Evaluation Date</U>&#148; shall have the meaning ascribed to
such term in Section 3.1(r). </P>
<P
style="PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Exchange Act</U>&#148; means the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Exempt Issuance</U>&#148; means the issuance of (a) shares of
Common Stock or options to employees, officers, directors or consultants of the
Company pursuant to any stock or option plan duly adopted for such purpose, by a
majority of the non-employee members of the Board of Directors or a majority of
the members of a committee of non-employee directors established for such
purpose (provided, however, any such issuances to consultants shall not exceed
an aggregate of 100,000 shares, subject to adjustment for forward and reverse
stock splits, stock dividends and similar transactions of the Common Stock that
occur after the Closing Date, in any 12-month period), (b) securities upon the
exercise or exchange of or conversion of any Securities issued hereunder and/or
other securities exercisable or exchangeable for or convertible into shares of
Common Stock issued and outstanding on the date of this Agreement, provided that
such securities have not been amended since the date of this Agreement to
increase the number of such securities or to decrease the exercise, exchange or
conversion price of such securities, (c) securities issued pursuant to
acquisitions or strategic transactions approved by a majority of the
disinterested directors of the Company, provided that any such issuance shall
only </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 3
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>be to a Person which is, itself or through its subsidiaries, an
operating company in a business synergistic with the business of the Company and
in which the Company receives benefits in addition to the investment of funds,
but shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities and (d) the common stock purchase warrants
issued to the placement agent or its designees as set forth on <U>Schedule
3.1(s)</U> and the shares of common stock issuable upon exercise of such common
stock purchase warrants. </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>FWS</U>&#148; means Feldman Weinstein &amp; Smith LLP with offices
located at 420 Lexington Avenue, Suite 2620, New York, New York 10170-0002.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>GAAP</U>&#148; shall have the meaning ascribed to such term in
Section 3.1(h).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Indebtedness</U>&#148; shall have the meaning ascribed to such term
in Section 3.1(aa).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;&#147;<U>Intellectual Property Rights</U>&#148; shall have the meaning
ascribed to such term in Section 3.1(o).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Legend Removal Date</U>&#148; shall have the meaning ascribed to
such term in Section 4.1(c). </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Liens</U>&#148; means a lien, charge, security interest,
encumbrance, right of first refusal, preemptive right or other restriction.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Lock-Up Agreement</U>&#148; means the Lock-Up Agreement, dated as
of the date hereof, by and among the Company and each of the directors, officers
and 10% stockholders of the Company, in the form of <U>Exhibit C</U> attached
hereto. </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Material Adverse Effect</U>&#148; shall have the meaning assigned
to such term in Section 3.1(b).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Material Permits</U>&#148; shall have the meaning ascribed to such
term in Section 3.1(m).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Participation Maximum</U>&#148; shall have the meaning ascribed to
such term in Section 4.12(a). </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Per Share Purchase Price</U>&#148; equals $4.50, subject to
adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.</P>
<P
style="PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Permitted Indebtedness</U>&#148; means (a) the Indebtedness
existing on the date hereof and set forth on <U>Schedule 3.1(aa)</U> attached
hereto, (b) lease obligations and purchase money indebtedness incurred in
connection with the acquisition of capital assets and lease obligations with
respect to newly acquired or leased assets and (c) any unsecured debt incurred
after the date hereof.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 4
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Permitted Lien</U>&#148; means the individual and collective
reference to the following: (a) Liens for taxes, assessments and other
governmental charges or levies not yet due or Liens for taxes, assessments and
other governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves (in the good faith judgment
of the management of the Company) have been established in accordance with GAAP;
(b) Liens imposed by law which were incurred in the ordinary course of the
Company&#146;s business, such as carriers&#146;, warehousemen&#146;s and mechanics&#146; Liens,
statutory landlords&#146; Liens, and other similar Liens arising in the ordinary
course of the Company&#146;s business, and which (x) do not individually or in the
aggregate materially detract from the value of such property or assets or
materially impair the use thereof in the operation of the business of the
Company and its consolidated Subsidiaries or (y) are being contested in good
faith by appropriate proceedings, which proceedings have the effect of
preventing for the foreseeable future the forfeiture or sale of the property or
asset subject to such Lien; and (c) Liens incurred in connection with Permitted
Indebtedness.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;&#147;<U>Person</U>&#148; means an individual or corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;&#147;<U>Pre-Notice</U>&#148; shall have the meaning ascribed to such
term in Section 4.12(b). </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Pro Rata Portion</U>&#148; shall have the meaning ascribed to such
term in Section 4.12(e).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Proceeding</U>&#148; means an action, claim, suit, investigation or
proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Public Information Failure</U>&#148; shall have the meaning
ascribed to such term in Section 4.2(b).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Public Information Failure Payments</U>&#148; shall have the
meaning ascribed to such term in Section 4.2(b).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;&#147;<U>Purchaser Party</U>&#148; shall have the meaning ascribed to
such term in Section 4.8.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;&#147;<U>Required Approvals</U>&#148; shall have the meaning ascribed
to such term in Section 3.1(e).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Restriction Period</U>&#148; shall have the meaning ascribed to
such term in Section 4.14 </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Rule 144</U>&#148; means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule. </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>SEC Reports</U>&#148; shall have the meaning ascribed to such term
in Section 3.1(h).</P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 5
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Securities</U>&#148; means the Shares, the Warrants and the Warrant
Shares.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Securities Act</U>&#148; means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Series A Warrants</U>&#148; means, collectively, the Series A
Common Stock purchase warrants delivered to the Purchasers at the Closing in
accordance with Section 2.2(a) hereof, which Warrants shall be exercisable
immediately and have a term of exercise equal to 24 months, with an exercise
price equal to $7.00 per share, subject to adjustment therein, in the form of
<U>Exhibit A</U> attached hereto</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Series B Warrants</U>&#148; means, collectively, the Series B
Common Stock purchase warrants delivered to the Purchasers at the Closing in
accordance with Section 2.2(a) hereof, which Warrants shall be exercisable
immediately and have a term of exercise equal to 36 months, with an exercise
price equal to $9.00 per share, subject to adjustment therein, in the form of
<U>Exhibit A</U> attached hereto</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;&#147;<U>Shares</U>&#148; means the shares of Common Stock issued or
issuable to each Purchaser pursuant to this Agreement.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Short Sales</U>&#148; means all &#147;short sales&#148; as defined in Rule
200 of Regulation SHO under the Exchange Act (but shall not be deemed to include
the location and/or reservation of borrowable shares of Common Stock).&nbsp;</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;&#147;<U>Subscription Amount</U>&#148; means, as to each Purchaser,
the aggregate amount to be paid for Shares and Warrants purchased hereunder as
specified below such Purchaser&#146;s name on the signature page of this Agreement
and next to the heading &#147;Subscription Amount,&#148; in United States dollars and in
immediately available funds.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Subsequent Financing</U>&#148; shall have the meaning ascribed to
such term in Section 4.12(a).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Subsequent Financing Notice</U>&#148; shall have the meaning
ascribed to such term in Section 4.12(b). </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Subsidiary</U>&#148; means any subsidiary of the Company as set
forth on <U>Schedule 3.1(a)</U>, and shall, where applicable, also include any
direct or indirect subsidiary of the Company formed or acquired after the date
hereof.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;&#147;<U>Trading Day</U>&#148; means a day on which the New York Stock
Exchange is open for trading.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;&#147;<U>Trading Market</U>&#148; means the following markets or
exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the American Stock Exchange, the Nasdaq Capital Market, the Nasdaq
Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or
the OTC Bulletin Board.</P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 6
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Transaction Documents</U>&#148; means this Agreement, the Warrants,
the Escrow Agreement, the Lock-Up Agreement and any other documents or
agreements executed in connection with the transactions contemplated
hereunder.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Transfer Agent</U>&#148; means Corporate Stock Transfer &nbsp;the
current transfer agent of the Company, with a mailing address of 3200 Cherry
Creek Dr. South Suite 430, Denver Colorado 80209 and a facsimile number of (303)
282-5800, and any successor transfer agent of the Company.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Variable Rate Transaction</U>&#148; shall have the meaning ascribed
to such term in Section 4.13(b). </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;&#147;<U>VWAP</U>&#148; means, for any date, the price determined by
the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of
the Common Stock for such date (or the nearest preceding date) on the Trading
Market on which the Common Stock is then listed or quoted for trading as
reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City
time) to 4:02 p.m. (New York City time); (b)&nbsp; if the OTC Bulletin Board is
not a Trading Market, the volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the
Common Stock is not then listed or quoted for trading on the OTC Bulletin Board
and if prices for the Common Stock are then reported in the &#147;Pink Sheets&#148;
published by Pink Sheets, LLC (or a similar organization or agency succeeding to
its functions of reporting prices), the most recent bid price per share of the
Common Stock so reported; or (d)&nbsp;in all other cases, the fair market value
of a share of Common Stock as determined by an independent appraiser selected in
good faith by the Purchasers of a majority in interest of the Shares then
outstanding and reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company. </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Warrants</U>&#148; means the Series A Warrants and the Series B
Warrants.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>&#147;<U>Warrant Shares</U>&#148; means the shares of Common Stock issuable
upon exercise of the Warrants.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; LINE-HEIGHT: 14pt"
align=center>ARTICLE II.<BR>PURCHASE AND SALE</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>2.1</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Closing</U>. &nbsp;On the Closing Date, upon the terms and
subject to the conditions set forth herein, substantially concurrent with the
execution and delivery of this Agreement by the parties hereto, the Company
agrees to sell, and the Purchasers, severally and not jointly, &nbsp;agree to
purchase, up to an aggregate of $5,000,000 of Shares and Warrants. &nbsp;Each
Purchaser shall deliver to the Company via wire transfer or a certified check
immediately available funds equal to its Subscription Amount and the Company
shall deliver to each Purchaser its respective Shares and a Warrant as
determined pursuant to Section 2.2(a), and the Company and each Purchaser shall
deliver the other items set forth in Section 2.2 deliverable at the Closing.
&nbsp;Upon satisfaction of the covenants and conditions set forth in Sections
2.2 and 2.3, the Closing shall occur at the offices of FWS or such other
location as the parties shall mutually agree.</P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 7
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; PAGE-BREAK-BEFORE: always; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt">2.2</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"><U>Deliveries</U>.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(a)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>On or prior to the Closing Date, the Company shall deliver or
cause to be delivered to the Escrow Agent with respect to each Purchaser the
following:</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>(i)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>this Agreement duly executed by the Company;</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>(ii)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>a legal opinion of Company Counsel, substantially in the form of
<U>Exhibit B</U> attached hereto; </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>(iii)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>a copy of the irrevocable instructions to the Transfer Agent
instructing the Transfer Agent to deliver, on an expedited basis, a certificate
evidencing a number of Shares equal to such Purchaser&#146;s Subscription Amount
divided by the Per Share Purchase Price, registered in the name of such
Purchaser;</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>(iv)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>a Series A Warrant registered in the name of such Purchaser to
purchase up to a number of shares of Common Stock equal to 65% of such
Purchaser&#146;s Shares; </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>(v)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>a Series B Warrant registered in the name of such Purchaser to
purchase up to a number of shares of Common Stock equal to 35% of such
Purchaser&#146;s Shares; </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>(vi)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>the Escrow Agreement duly executed by the Company together with
the Share Deliveries (as defined in the Escrow Agreement); and</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>(vii)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>the Lock-Up Agreements.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(b)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>On or prior to the Closing Date, each Purchaser shall deliver or
cause to be delivered to the Escrow Agent the following:</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>(i)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>this Agreement duly executed by such Purchaser; </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>(ii)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>the Escrow Agreement duly executed by such Purchaser; and</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>(iii)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>such Purchaser&#146;s Subscription Amount by wire transfer to the
Escrow Agent.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt">2.3</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"><U>Closing
Conditions</U>.<U> </U></P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>(a)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>The obligations of the Company hereunder in connection with the
Closing are subject to the following conditions being met:</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>(i)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>the accuracy in all material respects when made and on the Closing
Date of the representations and warranties of the Purchasers contained herein;
</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>(ii)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>all obligations, covenants and agreements of each Purchaser
required to be performed at or prior to the Closing Date shall have been
performed; and</P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 8
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; PAGE-BREAK-BEFORE: always; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>(iii)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>the delivery by each Purchaser of the items set forth in Section
2.2(b) of this Agreement.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(b)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>The respective obligations of the Purchasers hereunder in
connection with the Closing are subject to the following conditions being
met:</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>(i)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>the accuracy in all material respects on the Closing Date of the
representations and warranties of the Company contained herein;</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>(ii)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>all obligations, covenants and agreements of the Company required
to be performed at or prior to the Closing Date shall have been performed; </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>(iii)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>the delivery by the Company of the items set forth in Section
2.2(a) of this Agreement; </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>(iv)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>there shall have been no Material Adverse Effect with respect to
the Company since the date hereof; and</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>(v)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>from the date hereof to the Closing Date, trading in the Common
Stock shall not have been suspended by the Commission or the Company&#146;s principal
Trading Market (except for any suspension of trading of limited duration agreed
to by the Company, which suspension shall be terminated prior to the Closing),
and, at any time prior to the Closing Date, trading in securities generally as
reported by Bloomberg L.P. shall not have been suspended or limited, or minimum
prices shall not have been established on securities whose trades are reported
by such service, or on any Trading Market, nor shall a banking moratorium have
been declared either by the United States or New York State authorities nor
shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or
any material adverse change in, any financial market which, in each case, in the
reasonable judgment of each Purchaser, makes it impracticable or inadvisable to
purchase the Securities at the Closing.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 192px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; LINE-HEIGHT: 14pt"
align=center>ARTICLE III.<BR>REPRESENTATIONS AND WARRANTIES</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>3.1</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Representations and Warranties of the Company</U>. Except as
set forth in the Disclosure Schedules, which Disclosure Schedules shall be
deemed a part hereof and shall qualify any representation or otherwise made
herein to the extent of the disclosure contained in the corresponding section of
the Disclosure Schedules, the Company hereby makes the following representations
and warranties to each Purchaser:</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(a)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Subsidiaries</U>. &nbsp;All of the direct and indirect
subsidiaries of the Company are set forth on <U>Schedule 3.1(a)</U>. &nbsp;The
Company owns, directly or indirectly, all of the capital stock or other equity
interests of each Subsidiary free and clear of any Liens, and all of the issued
and outstanding shares of capital stock of each Subsidiary are validly issued
and are fully paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities. &nbsp;If the Company has no subsidiaries,
then all other </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 9
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>references to the Subsidiaries or any of them in the Transaction
Documents shall be disregarded.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(b)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Organization and Qualification</U>. &nbsp;The Company and each
of the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, with the requisite power and authority to own and
use its properties and assets and to carry on its business as currently
conducted. &nbsp;Neither the Company nor any Subsidiary is in violation nor
default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. &nbsp;Each
of the Company and the Subsidiaries is duly qualified to conduct business and is
in good standing as a foreign corporation or other entity in each jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to result
in: (i) a material adverse effect on the legality, validity or enforceability of
any Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business, prospects or condition (financial or otherwise) of
the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company&#146;s ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii),
a &#147;<U>Material Adverse Effect</U>&#148;) and no Proceeding has been instituted in any
such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit
or curtail such power and authority or qualification.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(c)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Authorization; Enforcement</U>. &nbsp;The Company has the
requisite corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and otherwise to
carry out its obligations hereunder and thereunder. &nbsp;The execution and
delivery of each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary action on the part of the Company and no
further action is required by the Company, the Board of Directors or the
Company&#146;s stockholders in connection therewith other than in connection with the
Required Approvals. &nbsp;Each Transaction Document to which it is a party has
been (or upon delivery will have been) duly executed by the Company and, when
delivered in accordance with the terms hereof and thereof, will constitute the
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors&#146; rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(d)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>No Conflicts</U>. &nbsp;The execution, delivery and performance
by the Company of the Transaction Documents, the issuance and sale of the
Securities and the consummation by it to which it is a party of the other
transactions contemplated hereby and thereby do not and will not: (i) conflict
with or violate any provision of the Company&#146;s or any Subsidiary&#146;s certificate
or articles of incorporation, bylaws or other </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 10
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>organizational or charter documents, (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, result in the creation of any Lien upon any of
the properties or assets of the Company or any Subsidiary, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) subject to the Required Approvals, conflict with or result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company or a
Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such
as could not have or reasonably be expected to result in a Material Adverse
Effect.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(e)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Filings, Consents and Approvals</U>. &nbsp;The Company is not
required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in connection with
the execution, delivery and performance by the Company of the Transaction
Documents, other than: (i) the filings required pursuant to Section 4.4 of this
Agreement, (ii) the notice and/or application(s) to each applicable Trading
Market for the issuance and sale of the Securities and the listing of the
Securities for trading thereon in the time and manner required thereby, and
(iii) the filing of Form D with the Commission and such filings as are required
to be made under applicable state securities laws (collectively, the
&#147;<U>Required Approvals</U>&#148;).</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(f)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Issuance of the Securities</U>. &nbsp;The Securities are duly
authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company other than
restrictions on transfer provided for in the Transaction Documents. &nbsp;The
Warrant Shares, when issued in accordance with the terms of the Transaction
Documents, will be validly issued, fully paid and nonassessable, free and clear
of all Liens imposed by the Company other than restrictions on transfer provided
for in the Transaction Documents. &nbsp;The Company has reserved from its duly
authorized capital stock the maximum number of shares of Common Stock issuable
pursuant to this Agreement and the Warrants.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(g)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Capitalization</U>. &nbsp;The capitalization of the Company is
as set forth on <U>Schedule 3.1(g)</U>, which <U>Schedule 3.1(g)</U> shall also
include the number of shares of Common Stock owned beneficially, and of record,
by Affiliates of the Company as of the date hereof. The Company has not issued
any capital stock since its most recently filed periodic report under the
Exchange Act, other than pursuant to the exercise of employee stock options
under the Company&#146;s stock option plans, the issuance of shares of Common Stock
to employees pursuant to the Company&#146;s employee stock purchase plans and
pursuant to the conversion and/or exercise of Common Stock Equivalents
outstanding as of the date of the most recently filed periodic report under the
Exchange Act. &nbsp;No Person </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 11
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. &nbsp;Except as a result of the
purchase and sale of the Securities, there are no outstanding options, warrants,
scrip rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or
exercisable or exchangeable for, or giving any Person any right to subscribe for
or acquire any shares of Common Stock, or contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock or Common Stock Equivalents. &nbsp;The
issuance and sale of the Securities will not obligate the Company to issue
shares of Common Stock or other securities to any Person (other than the
Purchasers) and will not result in a right of any holder of Company securities
to adjust the exercise, conversion, exchange or reset price under any of such
securities. All of the outstanding shares of capital stock of the Company are
validly issued, fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and none of such outstanding shares
was issued in violation of any preemptive rights or similar rights to subscribe
for or purchase securities. &nbsp;No further approval or authorization of any
stockholder, the Board of Directors or others is required for the issuance and
sale of the Securities. &nbsp;There are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company&#146;s capital
stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company&#146;s stockholders.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(h)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>SEC Reports; Financial Statements</U>. &nbsp;Except as set
forth on <U>Schedule 3.1(h)</U>, the Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the Company under
the Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as the Company was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as the
&#147;<U>SEC Reports</U>&#148;) on a timely basis or has received a valid extension of
such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. &nbsp;As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act, as applicable, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. &nbsp;Except as set forth on <U>Schedule 3.1(h)</U>, the Company has
never been an issuer subject to Rule 144(i) under the Securities Act. The
financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing. &nbsp;Such financial statements have been prepared in accordance with
United States generally accepted accounting principles applied on a consistent
basis during the periods involved (&#147;<U>GAAP</U>&#148;), except as may be otherwise
specified in such financial statements or the notes thereto and except that
unaudited financial statements may not contain all footnotes required by GAAP,
and fairly present in all material respects the financial position of the
Company and its consolidated Subsidiaries as of and for the dates thereof and
the results of operations and cash flows </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 12
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(i)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Material Changes; Undisclosed Events, Liabilities or
Developments</U>. &nbsp;Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
a subsequent SEC Report filed prior to the date hereof: (i) there has been no
event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company&#146;s
financial statements pursuant to GAAP or disclosed in filings made with the
Commission, (iii) the Company has not altered its method of accounting, (iv) the
Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) the Company has not
issued any equity securities to any officer, director or Affiliate, except
pursuant to existing Company stock option plans. &nbsp;The Company does not have
pending before the Commission any request for confidential treatment of
information. &nbsp;Except for the issuance of the Securities contemplated by
this Agreement or as set forth on <U>Schedule 3.1(i)</U>, no event, liability or
development has occurred or exists with respect to the Company or its
Subsidiaries or their respective business, properties, operations or financial
condition, that would be required to be disclosed by the Company under
applicable securities laws at the time this representation is made or deemed
made that has not been publicly disclosed at least 1 Trading Day prior to the
date that this representation is made.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(j)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Litigation</U>. &nbsp;There is no action, suit, inquiry, notice
of violation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company, any Subsidiary or any of
their respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an &#147;<U>Action</U>&#148;) which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities or (ii) could, if there were an unfavorable
decision, have or reasonably be expected to result in a Material Adverse Effect.
&nbsp;Neither the Company nor any Subsidiary, nor any director or officer
thereof, is or has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim of breach of
fiduciary duty. &nbsp;There has not been, and to the knowledge of the Company,
there is not pending or contemplated, any investigation by the Commission
involving the Company or any current or former director or officer of the
Company. &nbsp;The Commission has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company
or any Subsidiary under the Exchange Act or the Securities Act. &nbsp;</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(k)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Labor Relations</U>. &nbsp;No material labor dispute exists or,
to the knowledge of the Company, is imminent with respect to any of the
employees of the Company which could reasonably be expected to result in a
Material Adverse Effect. &nbsp;None of the Company&#146;s or its Subsidiaries&#146;
employees is a member of a union that relates to such </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 13
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>employee&#146;s relationship with the Company or such Subsidiary, and
neither the Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and its Subsidiaries believe that their
relationships with their employees are good. &nbsp;No executive officer, to the
knowledge of the Company, is, or is now expected to be, in violation of any
material term of any employment contract, confidentiality, disclosure or
proprietary information agreement or non-competition agreement, or any other
contract or agreement or any restrictive covenant in favor of any third party,
and the continued employment of each such executive officer does not subject the
Company or any of its Subsidiaries to any liability with respect to any of the
foregoing matters. &nbsp;The Company and its Subsidiaries are in compliance with
all U.S. federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(l)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Compliance</U>. &nbsp;Neither the Company nor any Subsidiary:
(i) is in default under or in violation of (and no event has occurred that has
not been waived that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the Company or any
Subsidiary received notice of a claim that it is in default under or that it is
in violation of, any indenture, loan or credit agreement or any other agreement
or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or governmental body or (iii) is
or has been in violation of any statute, rule or regulation of any governmental
authority, including without limitation all foreign, federal, state and local
laws applicable to its business and all such laws that affect the environment,
except in each case as could not have or reasonably be expected to result in a
Material Adverse Effect.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(m)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Regulatory Permits</U>. &nbsp;The Company and the Subsidiaries
possess all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct
their respective businesses as described in the SEC Reports, except where the
failure to possess such permits could not reasonably be expected to result in a
Material Adverse Effect (&#147;<U>Material Permits</U>&#148;), and neither the Company nor
any Subsidiary has received any notice of proceedings relating to the revocation
or modification of any Material Permit.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(n)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Title to Assets</U>. &nbsp;The Company and the Subsidiaries
have good and marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by them that is
material to the business of the Company and the Subsidiaries, in each case free
and clear of all Liens, except for Liens as do not materially affect the value
of such property and do not materially interfere with the use made and proposed
to be made of such property by the Company and the Subsidiaries and Liens for
the payment of federal, state or other taxes, the payment of which is neither
delinquent nor subject to penalties. &nbsp;Any real property and facilities held
under lease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with which the Company and the Subsidiaries
are in compliance.</P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 14
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; PAGE-BREAK-BEFORE: always; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(o)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Patents and Trademarks</U>. &nbsp;The Company and the
Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade secrets,
inventions, copyrights, licenses and other intellectual property rights and
similar rights as described in the SEC Reports as necessary or material for use
in connection with their respective businesses and which the failure to so have
could have a Material Adverse Effect (collectively, the &#147;<U>Intellectual
Property Rights</U>&#148;). &nbsp;Neither the Company nor any Subsidiary has received
a notice (written or otherwise) that any of the Intellectual Property Rights
used by the Company or any Subsidiary violates or infringes upon the rights of
any Person. &nbsp;To the knowledge of the Company, all such Intellectual
Property Rights are enforceable and there is no existing infringement by another
Person of any of the Intellectual Property Rights. &nbsp;The Company and its
Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties, except where
failure to do so could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(p)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Insurance</U>. &nbsp;The Company and the Subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in
which the Company and the Subsidiaries are engaged, including, but not limited
to, directors and officers insurance coverage at least equal to the aggregate
Subscription Amount. &nbsp;Neither the Company nor any Subsidiary has any reason
to believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business without a significant
increase in cost.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(q)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Transactions With Affiliates and Employees</U>. &nbsp;Except as
set forth in the SEC Reports, none of the officers or directors of the Company
and, to the knowledge of the Company, none of the employees of the Company is
presently a party to any transaction with the Company or any Subsidiary (other
than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner, in each case in excess of $120,000 other than for: (i) payment of
salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including
stock option agreements under any stock option plan of the Company.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(r)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Sarbanes-Oxley; Internal Accounting Controls</U>. &nbsp;The
Company is in material compliance with all provisions of the Sarbanes-Oxley Act
of 2002 which are applicable to it as of the Closing Date. &nbsp;The Company and
the Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that: (i) transactions are executed in accordance
with management&#146;s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 15
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>access to assets is permitted only in accordance with management&#146;s
general or specific authorization, and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The Company has
established disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls
and procedures to ensure that information required to be disclosed by the
Company in the reports it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Commission&#146;s rules and forms. &nbsp;The Company&#146;s certifying officers have
evaluated the effectiveness of the Company&#146;s disclosure controls and procedures
as of the end of the period covered by the Company&#146;s most recently filed
periodic report under the Exchange Act (such date, the &#147;<U>Evaluation
Date</U>&#148;). &nbsp;The Company presented in its most recently filed periodic
report under the Exchange Act the conclusions of the certifying officers about
the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. &nbsp;Since the Evaluation Date, there
have been no changes in the Company&#146;s internal control over financial reporting
(as such term is defined in the Exchange Act) that has materially affected, or
is reasonably likely to materially affect, the Company&#146;s internal control over
financial reporting.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(s)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Certain Fees</U>. &nbsp;Except as set forth in <U>Schedule
3.1(s)</U> attached hereto, no brokerage or finder&#146;s fees or commissions are or
will be payable by the Company to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by the Transaction Documents. &nbsp;The Purchasers
shall have no obligation with respect to any fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions contemplated by the
Transaction Documents.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(t)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Private Placement</U>. Assuming the accuracy of the Purchasers
representations and warranties set forth in Section 3.2, no registration under
the Securities Act is required for the offer and sale of the Securities by the
Company to the Purchasers as contemplated hereby. The issuance and sale of the
Securities hereunder does not contravene the rules and regulations of the
Trading Market.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(u)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Investment Company.</U> The Company is not, and is not an
Affiliate of, and immediately after receipt of payment for the Securities, will
not be or be an Affiliate of, an &#147;investment company&#148; within the meaning of the
Investment Company Act of 1940, as amended. &nbsp;The Company shall conduct its
business in a manner so that it will not become subject to the Investment
Company Act of 1940, as amended.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(v)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Registration Rights</U>. &nbsp;No Person has any right to cause
the Company to effect the registration under the Securities Act of any
securities of the Company.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(w)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Listing and Maintenance Requirements</U>. &nbsp;The Common
Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and
the Company has taken no action designed to, or which to its knowledge is likely
to have the effect of, terminating the registration of the Common Stock under
the Exchange Act nor has the Company </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 16
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>received any notification that the Commission is contemplating
terminating such registration. &nbsp;The Company has not, in the 12 months
preceding the date hereof, received notice from any Trading Market on which the
Common Stock is or has been listed or quoted to the effect that the Company is
not in compliance with the listing or maintenance requirements of such Trading
Market. The Company is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such listing and
maintenance requirements.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(x)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Application of Takeover Protections</U>. &nbsp;The Company and
the Board of Directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company&#146;s certificate of incorporation (or
similar charter documents) or the laws of its state of incorporation that is or
could become applicable to the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights under the
Transaction Documents, including without limitation as a result of the Company&#146;s
issuance of the Securities and the Purchasers&#146; ownership of the Securities.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(y)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Disclosure</U>. &nbsp;Except with respect to the material terms
and conditions of the transactions contemplated by the Transaction Documents,
the Company confirms that neither it nor any other Person acting on its behalf
has provided any of the Purchasers or their agents or counsel with any
information that it believes constitutes or might constitute material,
non-public information. &nbsp;&nbsp;The Company understands and confirms that
the Purchasers will rely on the foregoing representation in effecting
transactions in securities of the Company. &nbsp;All disclosure furnished by or
on behalf of the Company to the Purchasers regarding the Company, its business
and the transactions contemplated hereby, including the Disclosure Schedules to
this Agreement, is true and correct and does not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements made therein, in light of the circumstances under which they were
made, not misleading. The press releases disseminated by the Company during the
twelve months preceding the date of this Agreement taken as a whole do not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made and when made,
not misleading. &nbsp;The Company acknowledges and agrees that no Purchaser
makes or has made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Section 3.2 hereof.</P><A name=_Toc430524909></A><A name=_Toc449254780></A>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(z)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>No Integrated Offering</U>. Assuming the accuracy of the
Purchasers&#146; representations and warranties set forth in Section 3.2, neither the
Company, nor any of its Affiliates, nor any Person acting on its or their behalf
has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would cause
this offering of the Securities to be integrated with prior offerings by the
Company for purposes of (i) the Securities Act which would require the
registration of any such securities under the Securities Act, or (ii) any
applicable shareholder approval provisions of any Trading Market on which any of
the securities of the Company are listed or designated.<U> </U></P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 17
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; PAGE-BREAK-BEFORE: always; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(aa)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Solvency</U>. &nbsp;Based on the consolidated financial
condition of the Company as of the Closing Date, after giving effect to the
receipt by the Company of the proceeds from the sale of the Securities
hereunder: (i) the fair saleable value of the Company&#146;s assets exceeds the
amount that will be required to be paid on or in respect of the Company&#146;s
existing debts and other liabilities (including known contingent liabilities) as
they mature, (ii) the Company&#146;s assets do not constitute unreasonably small
capital to carry on its business as now conducted and as proposed to be
conducted including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, and projected capital
requirements and capital availability thereof, and (iii) the current cash flow
of the Company, together with the proceeds the Company would receive, were it to
liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its
liabilities when such amounts are required to be paid. &nbsp;The Company does
not intend to incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be payable on or in
respect of its debt). &nbsp;The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for reorganization or
liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year from the Closing Date. &nbsp;<U>Schedule 3.1(aa)</U> sets forth
as of the date hereof all outstanding secured and unsecured Indebtedness of the
Company or any Subsidiary, or for which the Company or any Subsidiary has
commitments. &nbsp;For the purposes of this Agreement, &#147;<U>Indebtedness</U>&#148;
means (x) any liabilities for borrowed money or amounts owed in excess of
$50,000 (other than trade accounts payable incurred in the ordinary course of
business), (y) all guaranties, endorsements and other contingent obligations in
respect of indebtedness of others, whether or not the same are or should be
reflected in the Company&#146;s balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; and (z) the present
value of any lease <A name=_Toc497644622></A>payments in excess of $50,000 due
under leases required to be capitalized in accordance with GAAP. &nbsp;Neither
the Company nor any Subsidiary is in default with respect to any
Indebtedness.</P><A name=_DV_C40></A>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(bb)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Tax Status</U>. &nbsp;Except for matters that would not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and each Subsidiary has filed all necessary
federal, state and foreign income and franchise tax returns and has paid or
accrued all taxes shown as due thereon, and the Company has no knowledge of a
tax deficiency which has been asserted or threatened against the Company or any
Subsidiary.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(cc)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>No General Solicitation</U>. &nbsp;Neither the Company nor any
person acting on behalf of the Company has offered or sold any of the Securities
by any form of general solicitation or general advertising. &nbsp;The Company
has offered the Securities for sale only to the Purchasers and certain other
&#147;accredited investors&#148; within the meaning of Rule 501 under the Securities
Act.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(dd)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Foreign Corrupt Practices.</U> &nbsp;Neither the Company, nor
to the knowledge of the Company, any agent or other person acting on behalf of
the Company, has: (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to
foreign or domestic political activity, (ii) made any </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 18
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) failed to disclose fully any contribution made by the
Company (or made by any person acting on its behalf of which the Company is
aware) which is in violation of law or (iv) violated in any material respect any
provision of the Foreign Corrupt Practices Act of 1977, as amended.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(ee)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Accountants</U>. &nbsp;The Company&#146;s accounting firm is set
forth on <U>Schedule 3.1(ee)</U> of the Disclosure Schedules. &nbsp;To the
knowledge and belief of the Company, such accounting firm: (i) is a registered
public accounting firm as required by the Exchange Act and (ii) shall express
its opinion with respect to the financial statements to be included in the
Company&#146;s Annual Report for the year ending December 31, 2008. </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(ff)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>No Disagreements with Accountants and Lawyers.</U></P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 480px; LINE-HEIGHT: 14pt"
align=justify>There are no disagreements of any kind presently existing, or
reasonably anticipated by the Company to arise, between the Company and the
accountants and lawyers formerly or presently employed by the Company which
could affect the Company&#146;s ability to perform any of its obligations under any
of the Transaction Documents, and the Company is current with respect to any
fees owed to its accountants and lawyers. &nbsp;&nbsp;&nbsp;</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(gg)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;<U>Acknowledgment Regarding Purchasers&#146; Purchase of
Securities</U>. &nbsp;The Company acknowledges and agrees that each of the
Purchasers is acting solely in the capacity of an arm&#146;s length purchaser with
respect to the Transaction Documents and the transactions contemplated thereby.
&nbsp;The Company further acknowledges that no Purchaser is acting as a
financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to the Transaction Documents and the transactions contemplated thereby
and any advice given by any Purchaser or any of their respective representatives
or agents in connection with the Transaction Documents and the transactions
contemplated thereby is merely incidental to the Purchasers&#146; purchase of the
Securities. &nbsp;The Company further represents to each Purchaser that the
Company&#146;s decision to enter into this Agreement and the other Transaction
Documents has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its representatives.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(hh)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U> Acknowledgment Regarding Purchaser&#146;s Trading Activity.

</U> &nbsp;Anything in this Agreement or elsewhere herein to the contrary
notwithstanding (except for Sections 3.2(f) and 4.15 hereof), it is understood
and acknowledged by the Company that: (i) none of the Purchasers has been asked
to agree by the Company, nor has any Purchaser agreed, to desist from purchasing
or selling, long and/or short, securities of the Company, or &#147;derivative&#148;
securities based on securities issued by the Company or to hold the Securities
for any specified term, (ii) past or future open market or other transactions by
any Purchaser, specifically including, without limitation, Short Sales or
&#147;derivative&#148; transactions, before or after the closing of this or future private
placement transactions, may negatively impact the market price of the Company&#146;s
publicly-traded securities, (iii) any Purchaser, and counter-parties in
&#147;derivative&#148; transactions to which any such Purchaser is a party, directly or
indirectly, may presently have a &#147;short&#148; position in the Common Stock and (iv)
each Purchaser shall not be deemed to have any affiliation with
</P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 19
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>or control over any arm&#146;s length counter-party in any &#147;derivative&#148;
transaction. &nbsp;
The Company further understands and acknowledges that
(y) one or more Purchasers may engage in hedging activities at various times
during the period that the Securities are outstanding, including, without
limitation, during the periods that the value of the Warrant Shares deliverable
with respect to Securities are being determined, and (z) such hedging activities
(if any) could reduce the value of the existing stockholders' equity interests
in the Company at and after the time that the hedging activities are being
conducted.&nbsp; The Company acknowledges that such aforementioned hedging
activities do not constitute a breach of any of the Transaction Documents.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(ii)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Regulation M Compliance.</U>&nbsp; The Company has not, and to
its knowledge no one acting on its behalf has, (i) taken, directly or
indirectly, any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any
compensation for soliciting purchases of, any of the securities of the Company,
or (iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of the Company, other than, in the case
of clauses (ii) and (iii), compensation paid to the Company&#146;s placement agent in
connection with the placement of the Securities.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(jj)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Stock Option Plans</U>. Each stock option granted by the
Company under the Company&#146;s stock option plan was granted (i) in accordance with
the terms of the Company&#146;s stock option plan and (ii) with an exercise price at
least equal to the fair market value of the Common Stock on the date such stock
option would be considered granted under GAAP and applicable law. No stock
option granted under the Company&#146;s stock option plan has been backdated.
&nbsp;The Company has not knowingly granted, and there is no and has been no
Company policy or practice to knowingly grant, stock options prior to, or
otherwise knowingly coordinate the grant of stock options with, the release or
other public announcement of material information regarding the Company or its
Subsidiaries or their financial results or prospects.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>3.2</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Representations and Warranties of the Purchasers</U>.
&nbsp;Each Purchaser, for itself and for no other Purchaser, hereby represents
and warrants as of the date hereof and as of the Closing Date to the Company as
follows:</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(a)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Organization; Authority</U>. &nbsp;Such Purchaser is an entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with full right, corporate or partnership power
and authority to enter into and to consummate the transactions contemplated by
the Transaction Documents and otherwise to carry out its obligations hereunder
and thereunder. The execution and delivery of the Transaction Documents and
performance by such Purchaser of the transactions contemplated by the
Transaction Documents have been duly authorized by all necessary corporate or
similar action on the part of such Purchaser. &nbsp;Each Transaction Document to
which it is a party has been duly executed by such Purchaser, and when delivered
by such Purchaser in accordance with the terms hereof, will constitute the valid
and legally binding obligation of such Purchaser, enforceable against it in
accordance with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 20
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors&#146; rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(b)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Own Account</U>. &nbsp;Such Purchaser understands that the
Securities are &#147;restricted securities&#148; and have not been registered under the
Securities Act or any applicable state securities law and is acquiring the
Securities as principal for its own account and not with a view to or for
distributing or reselling such Securities or any part thereof in violation of
the Securities Act or any applicable state securities law, has no present
intention of distributing any of such Securities in violation of the Securities
Act or any applicable state securities law and has no direct or indirect
arrangement or understandings with any other persons to distribute or regarding
the distribution of such Securities (this representation and warranty not
limiting such Purchaser&#146;s right to sell the Securities in compliance with
applicable federal and state securities laws) in violation of the Securities Act
or any applicable state securities law. &nbsp;Such Purchaser is acquiring the
Securities hereunder in the ordinary course of its business.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(c)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Purchaser Status</U>. &nbsp;At the time such Purchaser was
offered the Securities, it was, and as of the date hereof it is, and on each
date on which it exercises any Warrants, it will be either: (i) an &#147;accredited
investor&#148; as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under
the Securities Act or (ii) a &#147;qualified institutional buyer&#148; as defined in Rule
144A(a) under the Securities Act. &nbsp;Such Purchaser is not required to be
registered as a broker-dealer under Section 15 of the Exchange Act. &nbsp;</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(d)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Experience of Such Purchaser</U>. &nbsp;Such Purchaser, either
alone or together, with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of
evaluating the merits and risks of the prospective investment in the Securities,
and has so evaluated the merits and risks of such investment. &nbsp;Such
Purchaser is able to bear the economic risk of an investment in the Securities
and, at the present time, is able to afford a complete loss of such
investment.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(e)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>General Solicitation</U>. &nbsp;Such Purchaser is not
purchasing the Securities as a result of any advertisement, article, notice or
other communication regarding the Securities published in any newspaper,
magazine or similar media or broadcast over television or radio or presented at
any seminar or any other general solicitation or general advertisement.</P><A
name=_DV_C18></A>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(f)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify><U>Short Sales and Confidentiality Prior To The Date Hereof</U>.
&nbsp;Other than consummating the transactions contemplated hereunder, such
Purchaser has not, nor has any Person acting on behalf of or pursuant to any
understanding with such Purchaser, directly or indirectly executed any purchases
or sales, including Short Sales,&nbsp;of the securities of the Company during
the period commencing from the time that such Purchaser first received a term
sheet (written or oral) from the Company or any other Person representing the
Company setting forth the material terms of the transactions contemplated
hereunder until the date hereof (&#147;
<U> Discussion Time
</U> &#148;)<A
name=_DV_M122></A>
. &nbsp;Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 21
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>separate portfolio managers manage separate portions of such
Purchaser&#146;s assets and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other portions of
such Purchaser&#146;s assets, the representation set forth above shall only apply
with respect to the portion of assets managed by the portfolio manager that made
the investment decision to purchase the Securities covered by this Agreement.
&nbsp;Other than to other Persons party to this Agreement, such Purchaser has
maintained the confidentiality of all disclosures made to it in connection with
this transaction (including the existence and terms of this transaction).</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; LINE-HEIGHT: 14pt"
align=center>ARTICLE IV.<BR>OTHER AGREEMENTS OF THE PARTIES</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.1</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Transfer Restrictions</U>. &nbsp;</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(a)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>The Securities may only be disposed of in compliance with state
and federal securities laws. &nbsp;In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the
Company or to an Affiliate of a Purchaser or in connection with a pledge as
contemplated in Section 4.1(b), the Company may require the transferor thereof
to provide to the Company an opinion of counsel selected by the transferor and
reasonably acceptable to the Company, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Securities under the
Securities Act. &nbsp;As a condition of transfer, any such transferee shall
agree in writing to be bound by the terms of this Agreement and shall have the
rights of a Purchaser under this Agreement. </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(b)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>The Purchasers agree to the imprinting, so long as is required by
this Section 4.1, of a legend on any of the Securities in the following
form:</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; LINE-HEIGHT: 14pt"
align=justify>THIS SECURITY HAS NOT BEEN &nbsp;REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE &#147;SECURITIES ACT&#148;), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. &nbsp;THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A
FINANCIAL INSTITUTION THAT IS AN &#147;ACCREDITED INVESTOR&#148; AS DEFINED IN </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 22
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 96px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH
SECURITIES.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>The Company acknowledges and agrees that a Purchaser may from time
to time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Securities to a
financial institution that is an &#147;accredited investor&#148; as defined in Rule 501(a)
under the Securities Act and who agrees to be bound by the provisions of this
Agreement and, if required under the terms of such arrangement, such Purchaser
may transfer pledged or secured Securities to the pledgees or secured parties.
&nbsp;Such a pledge or transfer would not be subject to approval of the Company
and no legal opinion of legal counsel of the pledgee, secured party or pledgor
shall be required in connection therewith. &nbsp;Further, no notice shall be
required of such pledge. &nbsp;At the appropriate Purchaser&#146;s expense, the
Company will execute and deliver such reasonable documentation as a pledgee or
secured party of Securities may reasonably request in connection with a pledge
or transfer of the Securities.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(c)</P>
<P
style="PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN: 0px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>Certificates evidencing the Shares and Warrant Shares shall not
contain any legend (including the legend set forth in Section 4.1(b) hereof),
(i) while a registration statement covering the resale of such security is
effective under the Securities Act, (ii) following any sale of such Shares or
Warrant Shares pursuant to Rule 144, (iii) if such Shares or Warrant Shares are
eligible for sale under Rule 144, without the requirement for the Company to be
in compliance with the current public information required under Rule 144 as to
such Underlying Shares and without volume or manner-of-sale restrictions, or
(iv) if such legend is not required under applicable requirements of the
Securities Act (including judicial interpretations and pronouncements issued by
the staff of the Commission). &nbsp;The Company shall cause its counsel to issue
a legal opinion to the Transfer Agent if required by the Transfer Agent to
effect the removal of the legend hereunder. &nbsp;If all or any portion of a
Warrant is exercised at a time when there is an effective registration statement
to cover the resale of the Warrant Shares, or if such Warrant Shares may be sold
under Rule 144, without the requirement for the Company to be in compliance with
the current public information required under Rule 144 as to such Underlying
Shares and without volume or manner-of-sale restrictions or if such legend is
not otherwise required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of
the Commission) then such Warrant Shares shall be issued free of all legends.
The Company agrees that at such time as such legend is no longer required under
this Section 4.1(c), it will, no later than three Trading Days following the
delivery by a Purchaser to the Company or the Transfer Agent of a certificate
representing Shares or Warrant Shares, as the case may be, issued with a
restrictive legend (such third Trading Day, the &#147;<U>Legend Removal Date</U>&#148;),
deliver or cause to be delivered to such Purchaser a certificate representing
such shares that is free from all restrictive and other legends. &nbsp;The
Company may not make any notation on its records or give instructions to the
Transfer Agent that enlarge the restrictions on transfer set forth in this
Section 4. &nbsp;Certificates for Securities subject to legend removal hereunder
shall be transmitted by the Transfer Agent to the Purchaser by crediting the
account of the Purchaser&#146;s prime broker with the Depository Trust Company System
as directed by such Purchaser.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 23
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; PAGE-BREAK-BEFORE: always; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(d)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>In addition to such Purchaser&#146;s other available remedies, the
Company shall pay to a Purchaser, in cash, as partial liquidated damages and not
as a penalty, for each $1,000 of Shares or Warrant Shares (based on the VWAP of
the Common Stock on the date such Securities are submitted to the Transfer
Agent) delivered for removal of the restrictive legend and subject to Section
4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading
Days after such damages have begun to accrue) for each Trading Day after the
Legend Removal Date until such certificate is delivered without a legend.
Nothing herein shall limit such Purchaser&#146;s right to pursue actual damages for
the Company&#146;s failure to deliver certificates representing any Securities as
required by the Transaction Documents, and such Purchaser shall have the right
to pursue all remedies available to it at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(e)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>Each Purchaser, severally and not jointly with the other
Purchasers, agrees that such Purchaser will sell any Securities pursuant to
either the registration requirements of the Securities Act, including any
applicable prospectus delivery requirements, or an exemption therefrom, and that
if Securities are sold pursuant to an effective registration statement, they
will be sold in compliance with the plan of distribution set forth therein, and
acknowledges that the removal of the restrictive legend from certificates
representing Securities as set forth in this Section 4.1 is predicated upon the
Company&#146;s reliance upon this understanding.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.2</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Furnishing of Information; Public Information</U>. &nbsp;</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(a)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 156px; LINE-HEIGHT: 14pt"
align=justify>If the Common Stock is not registered under Section 12(b) or 12(g)
of the Exchange Act on the date hereof, the Company agrees to cause the Common
Stock to be registered under Section 12(g) of the Exchange Act on or before the
60<SUP>th</SUP> calendar day following the date hereof. Until the time that no
Purchaser owns Securities (other than Warrants that have expired pursuant to
their terms), the Company covenants to maintain the registration of the Common
Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or
obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act. &nbsp;As long as any Purchaser owns Securities
(other than Warrants that have expired pursuant to their terms), if the Company
is not required to file reports pursuant to the Exchange Act, it will prepare
and furnish to the Purchasers and make publicly available in accordance with
Rule 144(c) such information as is required for the Purchasers to sell the
Securities under Rule 144. The Company further covenants that it will take such
further action as any holder of Securities may reasonably request, to the extent
required from time to time to enable such Person to sell such Securities without
registration under the Securities Act within the requirements of the exemption
provided by Rule 144.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(b)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>At any time during the period commencing from the six (6) month
anniversary of the date hereof and ending at such time that all of the
Securities may be sold without the requirement for the Company to be in
compliance with Rule 144(c)(1) and otherwise without restriction or limitation
pursuant to Rule 144, if the Company shall fail for any reason to satisfy the
current public information requirement under Rule </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 24
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>144(c) (a &#147;<U>Public Information Failure</U>&#148;) then, in addition
to such Purchaser&#146;s other available remedies, the Company shall pay to a
Purchaser, in cash, as partial liquidated damages and not as a penalty, by
reason of any such delay in or reduction of its ability to sell the Securities,
an amount in cash equal to two percent (2.0%) of the aggregate Subscription
Amount of such Purchaser&#146;s Securities on the day of a Public Information Failure
and on every thirtieth (30<SUP>th</SUP>) day (pro rated for periods totaling
less than thirty days) thereafter until the earlier of (a) the date such Public
Information Failure is cured and (b) such time that such public information is
no longer required&nbsp; for the Purchasers to transfer the Underlying Shares
pursuant to Rule 144.&nbsp; The payments to which a Purchaser shall be entitled
pursuant to this Section 4.2(b) are referred to herein as &#147;<U>Public Information
Failure Payments</U>.&#148;&nbsp; Public Information Failure<B> </B>Payments shall be
paid on the earlier of (i) the last day of the calendar month during which such
Public Information Failure<B> </B>Payments are incurred and (ii) the third
(3<SUP>rd</SUP>) Business Day after the event or failure giving rise to the
Public Information Failure<B> </B>Payments is cured.&nbsp; In the event the
Company fails to make Public Information Failure<B> </B>Payments in a timely
manner, such Public Information Failure<B> </B>Payments shall bear interest at
the rate of 1.5% per month (prorated for partial months) until paid in full.
Nothing herein shall limit such Purchaser&#146;s right to pursue actual damages for
the Public Information Failure, and such Purchaser shall have the right to
pursue all remedies available to it at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.3</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Integration</U>. &nbsp;The Company shall not sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in Section 2 of the Securities Act) that would be integrated with
the offer or sale of the Securities to the Purchasers in a manner that would
require the registration under the Securities Act of the sale of the Securities
to the Purchasers or that would be integrated with the offer or sale of the
Securities to the Purchasers for purposes of the rules and regulations of any
Trading Market such that it would require shareholder approval prior to the
closing of such other transaction unless shareholder approval is obtained before
the closing of such subsequent transaction.<U> </U></P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.4</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Securities Laws Disclosure; Publicity</U>. &nbsp;The Company
shall, by 8:30 a.m. (New York City time) on the Trading Day immediately
following the date hereof, issue a Current Report on Form 8-K, disclosing the
material terms of the transactions contemplated hereby, and including the
Transaction Documents as exhibits thereto. &nbsp;The Company and each Purchaser
shall consult with each other in issuing any other press releases with respect
to the transactions contemplated hereby, and neither the Company nor any
Purchaser shall issue any such press release nor otherwise make any such public
statement without the prior consent of the Company, with respect to any press
release of any Purchaser, or without the prior consent of each Purchaser, with
respect to any press release of the Company, which consent shall not
unreasonably be withheld or delayed, except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or communication.
&nbsp;Notwithstanding the foregoing, the Company shall not publicly disclose the
name of any Purchaser, or include the name of any Purchaser in any filing with
the Commission or any regulatory agency or Trading Market, without the prior
written consent of such Purchaser, except (a) as required by federal securities
law in connection with the filing of final Transaction Documents (including
signature pages thereto) with the Commission and (b) to the extent such
disclosure is required by law or Trading Market regulations, in which case the
</P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 25
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>Company shall provide the Purchasers with prior notice of such
disclosure permitted under this clause (b).</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.5</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Shareholder Rights Plan</U>. &nbsp;No claim will be made or
enforced by the Company or, with the consent of the Company, any other Person,
that any Purchaser is an &#147;Acquiring Person&#148; under any control share acquisition,
business combination, poison pill (including any distribution under a rights
agreement) or similar anti-takeover plan or arrangement in effect or hereafter
adopted by the Company, or that any Purchaser could be deemed to trigger the
provisions of any such plan or arrangement, by virtue of receiving Securities
under the Transaction Documents or under any other agreement between the Company
and the Purchasers.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.6</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Non-Public Information</U>. &nbsp;Except with respect to the
material terms and conditions of the transactions contemplated by the
Transaction Documents, the Company covenants and agrees that neither it, nor any
other Person acting on its behalf, will provide any Purchaser or its agents or
counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto such Purchaser shall have executed
a written agreement regarding the confidentiality and use of such information.
&nbsp;The Company understands and confirms that each Purchaser shall be relying
on the foregoing covenant in effecting transactions in securities of the
Company.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.7</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Use of Proceeds</U>. &nbsp;Except as set forth on <U>Schedule
4.7</U> attached hereto, the Company shall use the net proceeds from the sale of
the Securities hereunder for working capital purposes and shall not use such
proceeds for: (a) the satisfaction of any portion of the Company&#146;s debt (other
than payment of trade payables in the ordinary course of the Company&#146;s business
and prior practices), (b) the redemption of any Common Stock or Common Stock
Equivalents or (c) the settlement of any outstanding litigation.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.8</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Indemnification of Purchasers</U>. &nbsp;&nbsp;Subject to the
provisions of this Section 4.8, the Company will indemnify and hold each
Purchaser and its directors, officers, shareholders, members, partners,
employees and agents (and any other Persons with a functionally equivalent role
of a Person holding such titles notwithstanding a lack of such title or any
other title), each Person who controls such Purchaser (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, shareholders, agents, members, partners or employees (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title) of such
controlling persons (each, a &#147;<U>Purchaser Party</U>&#148;) harmless from any and all
losses, liabilities, obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements, court costs and
reasonable attorneys&#146; fees and costs of investigation that any such Purchaser
Party may suffer or incur as a result of or relating to (a) any breach of any of
the representations, warranties, covenants or agreements made by the Company in
this Agreement or in the other Transaction Documents or (b) any action
instituted against a Purchaser in any capacity, or any of them or their
respective Affiliates, by any stockholder of the Company who is not an Affiliate
of such Purchaser, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based upon a breach of such
Purchaser&#146;s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser may have with any
such stockholder or any violations by the Purchaser of state or federal
securities laws or any conduct by such Purchaser which constitutes </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 26
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>fraud, gross negligence, willful misconduct or malfeasance).
&nbsp;If any action shall be brought against any Purchaser Party in respect of
which indemnity may be sought pursuant to this Agreement, such Purchaser Party
shall promptly notify the Company in writing, and the Company shall have the
right to assume the defense thereof with counsel of its own choosing reasonably
acceptable to the Purchaser Party. &nbsp;Any Purchaser Party shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of
such separate counsel, a material conflict on any material issue between the
position of the Company and the position of such Purchaser Party, in which case
the Company shall be responsible for the reasonable fees and expenses of no more
than one such separate counsel. &nbsp;The Company will not be liable to any
Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party
effected without the Company&#146;s prior written consent, which shall not be
unreasonably withheld or delayed; or (z) to the extent, but only to the extent
that a loss, claim, damage or liability is attributable to any Purchaser Party&#146;s
breach of any of the representations, warranties, covenants or agreements made
by such Purchaser Party in this Agreement or in the other Transaction
Documents.<A name=_Toc430524929></A><A name=_Toc449254796></A></P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.9</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Reservation of Common Stock</U>. As of the date hereof, the
Company has reserved and the Company shall continue to reserve and keep
available at all times, free of preemptive rights, a sufficient number of shares
of Common Stock for the purpose of enabling the Company to issue Shares pursuant
to this Agreement and Warrant Shares pursuant to any exercise of the
Warrants.<U> &nbsp;&nbsp;</U></P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.10</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>L<A name=_Toc430524930></A><A name=_Toc449254797></A>isting of
Common Stock</U>. The Company hereby agrees to use best efforts to maintain the
listing of the Common Stock on a Trading Market, and as soon as reasonably
practicable following the Closing (but not later than the first anniversary of
the Closing Date) to list all of the Shares and Warrant Shares on such Trading
Market. The Company further agrees, if the Company applies to have the Common
Stock traded on any other Trading Market, it will then include in such
application all of the Shares and Warrant Shares, and will take such other
action as is necessary to cause all of the Shares and Warrant Shares to be
listed on such other Trading Market as promptly as possible. &nbsp;The Company
will then take all action reasonably necessary to continue the listing and
trading of its Common Stock on a Trading Market and will comply in all respects
with the Company&#146;s reporting, filing and other obligations under the bylaws or
rules of the Trading Market. </P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.11</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Equal Treatment of Purchasers</U>. &nbsp;No consideration
(including any modification of any Transaction Document) shall be offered or
paid to any Person to amend or consent to a waiver or modification of any
provision of any of the Transaction Documents unless the same consideration is
also offered to all of the parties to the Transaction Documents. &nbsp;For
clarification purposes, this provision constitutes a separate right granted to
each Purchaser by the Company and negotiated separately by each Purchaser, and
is intended for the Company to treat the Purchasers as a class and shall not in
any way be construed as the Purchasers acting in concert or as a group with
respect to the purchase, disposition or voting of Securities or otherwise.</P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 27
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; PAGE-BREAK-BEFORE: always; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.12</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Participation in Future Financing</U>. &nbsp;</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(a)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>From the date hereof until the date that is the 24 month
anniversary of the date hereof, upon any issuance by the Company or any of its
Subsidiaries of Common Stock, Common Stock Equivalents for cash consideration,
Indebtedness (or a combination of units hereof) (a &#147;<U>Subsequent
Financing</U>&#148;), each Purchaser shall have the right to participate in up to an
amount of the Subsequent Financing equal to 50% of the Subsequent Financing (the
&#147;<U>Participation Maximum</U>&#148;) on the same terms, conditions and price provided
for in the Subsequent Financing.&nbsp;</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(b)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>At least 5 Trading Days prior to the closing of the Subsequent
Financing, the Company shall deliver to each Purchaser a written notice of its
intention to effect a Subsequent Financing (&#147;<U>Pre-Notice</U>&#148;), which
Pre-Notice shall ask such Purchaser if it wants to review the details of such
financing (such additional notice, a &#147;<U>Subsequent Financing
Notice</U>&#148;).&nbsp; Upon the request of a Purchaser, and only upon a request by
such Purchaser, for a Subsequent Financing Notice, the Company shall promptly,
but no later than 1 Trading Day after such request, deliver a Subsequent
Financing Notice to such Purchaser.&nbsp; The Subsequent Financing Notice shall
describe in reasonable detail the proposed terms of such Subsequent Financing,
the amount of proceeds intended to be raised thereunder and the Person or
Persons through or with whom such Subsequent Financing is proposed to be
effected and shall include a term sheet or similar document relating thereto as
an attachment.&nbsp;&nbsp;&nbsp;</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(c)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>Any Purchaser desiring to participate in such Subsequent Financing
must provide written notice to the Company by not later than 5:30 p.m. (New York
City time) on the fifth (5<SUP>th)</SUP> Trading Day after all of the Purchasers
have received the Pre-Notice that the Purchaser is willing to participate in the
Subsequent Financing, the amount of the Purchaser&#146;s participation, and that the
Purchaser has such funds ready, willing, and available for investment on the
terms set forth in the Subsequent Financing Notice. &nbsp;If the Company
receives no notice from a Purchaser as of such fifth (5<SUP>th)</SUP> Trading
Day, such Purchaser shall be deemed to have notified the Company that it does
not elect to participate.&nbsp; </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(d)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>If by 5:30 p.m. (New York City time) on the fifth (5<SUP>th)</SUP>
Trading Day after all of the Purchasers have received the Pre-Notice,
notifications by the Purchasers of their willingness to participate in the
Subsequent Financing (or to cause their designees to participate) is, in the
aggregate, less than the total amount of the Participation Maximum of such
Subsequent Financing, then the Company may effect the remaining portion of such
Subsequent Financing on the terms and with the Persons set forth in the
Subsequent Financing Notice.&nbsp; </P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(e)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>If by 5:30 p.m. (New York City time) on the fifth (5<SUP>th)</SUP>
Trading Day after all of the Purchasers have received the Pre-Notice, the
Company receives responses to a Subsequent Financing Notice from Purchasers
seeking to purchase more than the aggregate amount of the Participation Maximum,
each such Purchaser shall have the right to purchase its Pro Rata Portion (as
defined below) of the Participation Maximum.&nbsp; &#147;<U>Pro Rata Portion</U>&#148;
means the ratio of (x) the Subscription Amount of Securities purchased on </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 28
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>the Closing Date by a Purchaser participating under this Section
4.12 and (y) the sum of the aggregate Subscription Amounts of Securities
purchased on the Closing Date by all Purchasers participating under this Section
4.12.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(f)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>The Company must provide the Purchasers with a second Subsequent
Financing Notice, and the Purchasers will again have the right of participation
set forth above in this Section 4.12, if the Subsequent Financing subject to the
initial Subsequent Financing Notice is not consummated for any reason on the
terms set forth in such Subsequent Financing Notice within 30 Trading Days after
the date of the initial Subsequent Financing Notice.</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(g)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>Notwithstanding the foregoing, this Section 4.12 shall not apply
in respect of <A name=_DV_C91></A> (i) <A name=_DV_M220></A>
an Exempt
Issuance<A name=_DV_C92></A>, or (ii) an underwritten public offering of
Common Stock<A name=_DV_M221></A>
.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt">4.13</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"><U>Subsequent
Equity Sales. &nbsp;</U></P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(a)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>From the date hereof until 180 days after the date hereof, neither
the Company nor any Subsidiary shall issue shares of Common Stock or Common
Stock Equivalents; <U>provided</U>, <U>however</U>, that the 180 day period set
forth in this Section 4.13 shall be extended for the number of Trading Days
during such period in which trading in the Common Stock is suspended by any
Trading Market; <U>provided</U>, <U>further</U>, <U>however</U>, after the
90<SUP>th</SUP> day following the date hereof but prior to the 180<SUP>th</SUP>
day following the date hereof, the Company may issue shares of Common Stock or
Common Stock Equivalents at a per share purchase price that is greater than
$5.50 per share (subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common
Stock that occur after the date of this Agreement) and provided that such
issuance has no registration rights. &nbsp;</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(b)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>From the date hereof until such time as no Purchaser holds any of
the Securities, the Company shall be prohibited from effecting or entering into
an agreement to effect any Subsequent Financing involving a Variable Rate
Transaction. &nbsp;&#147;<U>Variable Rate Transaction</U>&#148; means a transaction in
which the Company issues or sells (i) any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the right to
receive additional shares of Common Stock either (A) at a conversion price,
exercise price or exchange rate or other price that is based upon and/or varies
with the trading prices of or quotations for the shares of Common Stock at any
time after the initial issuance of such debt or equity securities or (B) with a
conversion, exercise or exchange price that is subject to being reset at some
future date after the initial issuance of such debt or equity security or upon
the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Common Stock or (ii) enters
into any agreement, including, but not limited to, an equity line of credit,
whereby the Company may sell securities at a future determined price. &nbsp;Any
Purchaser shall be entitled to obtain injunctive relief against the Company to
preclude any such issuance, which remedy shall be in addition to any right to
collect damages. </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 29
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; PAGE-BREAK-BEFORE: always; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(c)</P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 144px; LINE-HEIGHT: 14pt"
align=justify>Notwithstanding the foregoing, this Section 4.13 shall not apply
in respect of an Exempt Issuance, except that no Variable Rate Transaction shall
be an Exempt Issuance.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.14</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Short Sales and Confidentiality After The Date Hereof</U>. Each
Purchaser, severally and not jointly with the other Purchasers, covenants that
neither it, nor any Affiliate acting on its behalf or pursuant to any
understanding with it, will execute any Short Sales during the period commencing
with the Discussion Time until the earlier of (a) the effective date of a
registration statement registering all of the Shares and Warrant Shares and (b)
the one year anniversary of the date hereof (the &#147;<U>Restriction Period</U>&#148;).
&nbsp;Each Purchaser, severally and not jointly with the other Purchasers,
covenants that until such time as the transactions contemplated by this
Agreement are publicly disclosed by the Company as described in Section 4.4,
such Purchaser will maintain the confidentiality of the existence and terms of
this transaction and the information included in the Transaction Documents and
the Disclosure Schedules. &nbsp;Notwithstanding the foregoing, no Purchaser
makes any representation, warranty or covenant hereby that it will not engage in
Short Sales in the securities of the Company after the Restriction Period.
&nbsp;Notwithstanding the foregoing, in the case of a Purchaser that is a
multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser&#146;s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser&#146;s assets, the covenant set forth above
shall only apply with respect to the portion of assets managed by the portfolio
manager that made the investment decision to purchase the Securities covered by
this Agreement.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.15</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Form D; Blue Sky Filings</U>. &nbsp;The Company agrees to
timely file a Form D with respect to the Securities as required under Regulation
D and to provide a copy thereof, promptly upon request of any Purchaser. The
Company shall take such action as the Company shall reasonably determine is
necessary in order to obtain an exemption for, or to qualify the Securities for,
sale to the Purchasers at the Closing under applicable securities or &#147;Blue Sky&#148;
laws of the states of the United States, and shall provide evidence of such
actions promptly upon request of any Purchaser.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.16</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Capital Changes</U>. &nbsp;Until the two year anniversary of
the date hereof, the Company shall not undertake a reverse or forward stock
split or reclassification of the Common Stock without the prior written consent
of the Purchasers holding a majority in interest of the Shares.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.17</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Delivery of Securities After Closing</U>. &nbsp;The Company
shall deliver, or cause to be delivered, the respective Securities purchased by
each Purchaser to such Purchaser within 3 Trading Days of the Closing Date.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.18</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>EBITDA Milestones</U>. &nbsp;</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(a)</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 120px; LINE-HEIGHT: 14pt"
align=justify>If (a) the Company fails to report at least $1,700,000 in EBITDA
less noncash expenditures for the fiscal year ending December 31, 2008, as
disclosed in the Company&#146;s Form 10-K for the fiscal year ending December 31,
2008 (the &#147;<U>2008 Milestone</U>&#148;, the date of disclosure of such 2008
Milestone, the &#147;<U>2008 Milestone Date</U>&#148; and such 10-K, the &#147;<U>2008
10-K</U>&#148;) and (b) if the average of the ten Closing Prices for each of the ten
Trading Days immediately following the 2008 Milestone Date is less than the Per
Share Purchase Price (such </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 30
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>lower price, the &#147;<U>2008 Milestone Price</U>&#148;), then, within 13
Trading Days of the 2008 Milestone Date, the Company shall issue to each
Purchaser a number of shares of Common Stock equal to the difference between (i)
the number of shares of Common Stock issued to such Purchaser on the Closing
Date and (ii) the number of shares of Common Stock that would otherwise have
been issuable to such Purchaser on the Closing Date if the Per Share Purchase
Price was equal to the 2008 Milestone Price (the &#147;<U>2008 Milestone
Shares</U>&#148;). &nbsp;In the event the Company fails to file the 2008 10-K on or
before the last date such form is required to be filed (after any permitted
extensions under the Exchange Act) with financial information for such period
evidencing satisfaction of the 2008 Milestone, the Company shall irrevocably be
deemed to have failed to achieve the 2008 Milestone, and in such a event, the
2008 Milestone Date shall be deemed to be March 31, 2009 (or April 15, 2009 if
the Company files an extension under the Exchange Act). &nbsp;</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(b)</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 120px; LINE-HEIGHT: 14pt"
align=justify>If (a) the Company fails to report at least $2,500,000 in EBITDA
less noncash expenditures for the fiscal year ending December 31, 2009, as
disclosed in the Company&#146;s Form 10-K for the fiscal year ending December 31,
2009 (the &#147;<U>2009 Milestone</U>&#148;, the date of disclosure of such 2009
Milestone, the &#147;<U>2009 Milestone Date</U>&#148; and such 10-K, the &#147;<U>2009
10-K</U>&#148;) and (b) if the average of the ten Closing Prices for each of the ten
Trading Days immediately following the 2009 Milestone Date is less than the
lesser of the Per Share Purchase Price and the 2008 Milestone Price, if any
(such lower price, the &#147;<U>2009 Milestone Price</U>&#148;), then, within 13 Trading
Days of the 2009 Milestone Date, the Company shall issue to each Purchaser a
number of shares of Common Stock equal to the difference between (i) the number
of shares of Common Stock issued to such Purchaser on the Closing Date along
with any 2008 Milestone Shares issued pursuant to the 2008 Milestone Date and
(ii) the number of shares of Common Stock that would otherwise have been
issuable to such Purchaser on the Closing Date if the Per Share Purchase Price
was equal to the 2009 Milestone Price (the &#147;<U>2009 Milestone Shares</U>&#148;).
&nbsp;In the event the Company fails to file the 2009 10-K on or before the last
date such form is required to be filed (after any permitted extensions under the
Exchange Act) with financial information for such period evidencing satisfaction
of the 2009 Milestone, the Company shall irrevocably be deemed to have failed to
achieve the 2009 Milestone, and in such a event, the 2009 Milestone Date shall
be deemed to be March 31, 2010 (or April 15, 2010 if the Company files an
extension under the Exchange Act). &nbsp;</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.19</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Per Share Purchase Price Protection</U>. &nbsp;From the date
hereof until the 18 month anniversary of the Closing Date, if in connection with
a Subsequent Financing, the Company or any Subsidiary shall issue any Common
Stock or Common Stock Equivalents entitling any person or entity to acquire
shares of Common Stock at an effective price per share less than the lesser of
the Per Share Purchase Price and, if applicable, the 2008 Milestone Price
(subject to reverse and forward stock splits and the like) (the &#147;<U>Discounted
Purchase Price</U>,&#148; as further defined below), the Company shall issue to such
Purchaser that number of additional shares of Common Stock equal to (a) the
Subscription Amount paid by such Purchaser at the Closing divided by the
Discounted Purchase Price, less (b) the Shares issued to such Purchaser at the
Closing pursuant to this Agreement plus the 2008 Milestone Shares, if any.
&nbsp;The term &#147;<U>Discounted Purchase Price</U>&#148; shall mean the amount actually
paid in consideration, in cash or kind, by third parties for each share of
Common Stock. &nbsp;The sale of Common Stock Equivalents shall be deemed to have
occurred at the time of the issuance of the Common Stock Equivalents and the
Discounted Purchase Price covered thereby shall also include the actual exercise
or conversion price thereof at the time of the conversion or exercise (in
addition to the consideration per share of Common Stock underlying </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 31
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>the Common Stock Equivalents received by the Company upon such
sale or issuance of the Common Stock Equivalents). &nbsp;If shares are issued
for a consideration other than cash, the per share selling price shall be the
fair value of such consideration as determined in good faith by the Board of
Directors. &nbsp;The Company shall not refuse to issue a Purchaser additional
Shares hereunder based on any claim that such Purchaser or any one associated or
affiliated with such Purchaser has been engaged in any violation of law,
agreement or for any other reason, unless an injunction from a court, on notice,
restraining and or enjoining an issuance hereunder shall have been sought and
obtained and the Company posts a surety bond for the benefit of such Purchaser
in the amount of 150% of the market value of such Shares (based on the VWAP of
the Common Stock on the date of the event giving rise to the Company&#146;s
obligation hereunder), which is subject to the injunction, which bond shall
remain in effect until the completion of litigation of the dispute and the
proceeds of which shall be payable to the Purchaser to the extent it obtains
judgment. &nbsp;Nothing herein shall limit a Purchaser&#146;s right to pursue actual
damages for the Company's failure to deliver Shares hereunder and such Purchaser
shall have the right to pursue all remedies available to it at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief. &nbsp;On the date of closing of any transaction pursuant to
which securities are issued for a Discounted Purchase Price, the Company shall
give the Purchasers written notice thereof. &nbsp;Notwithstanding anything to
the contrary herein, this Section 4.19 shall not apply to an Exempt
Issuance.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>4.20</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Negative Covenants</U>. From the date hereof until the one year
anniversary of the date hereof, the Company shall not, and shall not permit any
of its Subsidiaries (whether or not a Subsidiary on the date hereof) to,
directly or indirectly:</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(a)</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 120px; LINE-HEIGHT: 14pt"
align=justify>other than Permitted Indebtedness, enter into, create, incur,
assume, guarantee or suffer to exist any indebtedness for borrowed money of any
kind, including, but not limited to, a guarantee, on or with respect to any of
its property or assets now owned or hereafter acquired or any interest therein
or any income or profits therefrom; and</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>(b)</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 120px; LINE-HEIGHT: 14pt"
align=justify>other than Permitted Liens, enter into, create, incur, assume or
suffer to exist any Liens of any kind, on or with respect to any of its property
or assets now owned or hereafter acquired or any interest therein or any income
or profits therefrom.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; LINE-HEIGHT: 14pt"
align=center>ARTICLE V.<BR>MISCELLANEOUS</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.1</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Termination</U>.&nbsp; This Agreement may be terminated by any
Purchaser, as to such Purchaser&#146;s obligations hereunder only and without any
effect whatsoever on the obligations between the Company and the other
Purchasers, by written notice to the other parties, if the Closing has not been
consummated on or before June 15, 2008; <U>provided</U>, <U>however</U>, that no
such termination will affect the right of any party to sue for any breach by the
other party (or parties).</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.2</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Fees and Expenses</U>. &nbsp;At the Closing, the Company has
agreed to reimburse Whalehaven Capital Management Fund Ltd.
(&#147;<U>Whalehaven</U>&#148;) the non-accountable sum of $20,000 for its legal fees and
expenses, $5,000 of which has been paid prior to the Closing. &nbsp;The Company
shall deliver, prior to the Closing, a completed and executed copy of the
Closing Statement, attached hereto as <U>Annex A</U>. &nbsp;Except as expressly
set forth in the Transaction </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 32
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>Documents to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. &nbsp;The
Company shall pay all Transfer Agent fees, stamp taxes and other taxes and
duties levied in connection with the delivery of any Securities to the
Purchasers.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.3</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Entire Agreement</U>. &nbsp;The Transaction Documents, together
with the exhibits and schedules thereto, contain the entire understanding of the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.4</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Notices</U>. &nbsp;Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of: (a) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto prior to 5:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth on the signature pages attached hereto on a
day that is not a Trading Day or later than 5:30 p.m. (New York City time) on
any Trading Day, (c) the 2<SUP>nd</SUP> Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service or (d)
upon actual receipt by the party to whom such notice is required to be given.
&nbsp;The address for such notices and communications shall be as set forth on
the signature pages attached hereto.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.5</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Amendments; Waivers</U>. &nbsp;No provision of this Agreement
may be waived, modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and the Purchasers holding
at least 67% in interest of the Shares then outstanding or, in the case of a
waiver, by the party against whom enforcement of any such waived provision is
sought. &nbsp;No waiver of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver in
the future or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.6</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Headings</U>. &nbsp;The headings herein are for convenience
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.7</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Successors and Assigns</U>. &nbsp;This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns. &nbsp;The Company may not assign this Agreement or any rights
or obligations hereunder without the prior written consent of each Purchaser
(other than by merger). &nbsp;Any Purchaser may assign any or all of its rights
under this Agreement to any Person to whom such Purchaser assigns or transfers
any Securities, provided that such transferee agrees in writing to be bound,
with respect to the transferred Securities, by the provisions of the Transaction
Documents that apply to the &#147;Purchasers.&#148;</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.8</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>No Third-Party Beneficiaries</U>. &nbsp;This Agreement is
intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 33
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>nor may any provision hereof be enforced by, any other Person,
except as otherwise set forth in Section 4.8.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.9</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 72px; LINE-HEIGHT: 14pt"
align=justify><U>Governing Law</U>. &nbsp;All questions concerning the
construction, validity, enforcement and interpretation of the Transaction
Documents shall be governed by and construed and enforced in accordance with the
internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. &nbsp;Each party agrees that all legal proceedings
concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether
brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or is an inconvenient venue for such
proceeding. &nbsp;Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof.
&nbsp;Nothing contained herein shall be deemed to limit in any way any right to
serve process in any other manner permitted by law. &nbsp;If either party shall
commence an action or proceeding to enforce any provisions of the Transaction
Documents, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its reasonable attorneys&#146; fees and other costs
and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.10</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Survival</U>. &nbsp;The representations and warranties shall
survive the Closing and the delivery of the Securities for the applicable
statute of limitations.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.11</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Execution</U>. &nbsp;This Agreement may be executed in two or
more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. &nbsp;In the event that any
signature is delivered by facsimile transmission or by e-mail delivery of a
&#147;.pdf&#148; format data file, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or &#147;.pdf&#148;
signature page were an original thereof.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.12</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Severability</U>. &nbsp;If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 34
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>covenant or restriction. It is hereby stipulated and declared to
be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.13</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Rescission and Withdrawal Right</U>. &nbsp;Notwithstanding
anything to the contrary contained in (and without limiting any similar
provisions of) any of the other Transaction Documents, whenever any Purchaser
exercises a right, election, demand or option under a Transaction Document and
the Company does not timely perform its related obligations within the periods
therein provided, then such Purchaser may rescind or withdraw, in its sole
discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future
actions and rights; <U>provided</U>, <U>however</U>, that in the case of a
rescission of an exercise of a Warrant, the Purchaser shall be required to
return any shares of Common Stock subject to with any such rescinded exercise
notice.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.14</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Replacement of Securities</U>. &nbsp;If any certificate or
instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for
and upon cancellation thereof (in the case of mutilation), or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction. &nbsp;The applicant for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs (including
customary indemnity) associated with the issuance of such replacement
Securities.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.15</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Remedies</U>. &nbsp;In addition to being entitled to exercise
all rights provided herein or granted by law, including recovery of damages,
each of the Purchasers and the Company will be entitled to specific performance
under the Transaction Documents. &nbsp;The parties agree that monetary damages
may not be adequate compensation for any loss incurred by reason of any breach
of obligations contained in the Transaction Documents and hereby agrees to waive
and not to assert in any action for specific performance of any such obligation
the defense that a remedy at law would be adequate.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.16</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Payment Set Aside</U>. &nbsp;To the extent that the Company
makes a payment or payments to any Purchaser pursuant to any Transaction
Document or a Purchaser enforces or exercises its rights thereunder, and such
payment or payments or the proceeds of such enforcement or exercise or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside, recovered from, disgorged by or are required to be refunded, repaid
or otherwise restored to the Company, a trustee, receiver or any other person
under any law (including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the extent of any
such restoration the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.17</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Independent Nature of Purchasers&#146; Obligations and Rights</U>.
&nbsp;The obligations of each Purchaser under any Transaction Document are
several and not joint with the obligations of any other Purchaser, and no
Purchaser shall be responsible in any way for the performance or non-performance
of the obligations of any other Purchaser under any Transaction Document.
&nbsp;Nothing contained herein or in any other Transaction Document, and no
action taken by any </P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 35
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 14pt"
align=justify>Purchaser pursuant thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Purchasers are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Documents. &nbsp;Each Purchaser shall be
entitled to independently protect and enforce its rights including, without
limitation, the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose. &nbsp;Each
Purchaser has been represented by its own separate legal counsel in their review
and negotiation of the Transaction Documents. &nbsp;For reasons of
administrative convenience only, Purchasers and their respective counsel have
chosen to communicate with the Company through FWS. &nbsp;FWS does not represent
all of the Purchasers but only Whalehaven. The Company has elected to provide
all Purchasers with the same terms and Transaction Documents for the convenience
of the Company and not because it was required or requested to do so by the
Purchasers.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.18</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Liquidated Damages</U>. &nbsp;The Company&#146;s obligations to pay
any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate
until all unpaid partial liquidated damages and other amounts have been paid
notwithstanding the fact that the instrument or security pursuant to which such
partial liquidated damages or other amounts are due and payable shall have been
canceled.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.19</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Saturdays, Sundays, Holidays, etc.</U></P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 336px; LINE-HEIGHT: 14pt"
align=justify>If the last or appointed day for the taking of any action or the
expiration of any right required or granted herein shall not be a Business Day,
then such action may be taken or such right may be exercised on the next
succeeding Business Day.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.20</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><U>Construction</U>. The parties agree that each of them and/or
their respective counsel has reviewed and had an opportunity to revise the
Transaction Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any
amendments hereto.</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>5.21</P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify><B><U>WAIVER OF JURY TRIAL</U>. &nbsp;<U>IN ANY ACTION, SUIT, OR
PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY
APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY. </U></B></P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR></P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; LINE-HEIGHT: 14pt"
align=center><I>(Signature Pages Follow)</I></P>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 16px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 36
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 16px; PAGE-BREAK-BEFORE: always; TEXT-INDENT: 96px; LINE-HEIGHT: 14pt"
align=justify>IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.</P>
<P style="MARGIN: 0px"><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=391></TD>
<TD width=247></TD></TR>
<TR>
<TD vAlign=top width=391>
<P
style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt; FONT-FAMILY: Times New Roman Bold"><B>WORLDWIDE
ENERGY AND MANUFACTURING USA, INC.</B></P>
<P style="MARGIN: 0px"><BR></P></TD>
<TD vAlign=top width=247>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt">Address for
Notice:</P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt">Mr. Jimmy Wang
</P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt">President and
Chief Executive Officer</P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt">Worldwide
Energy and Manufacturing USA, Inc. </P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt">42 Cherry
Avenue</P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt">San Bruno, CA
94066<U> </U></P></TD></TR>
<TR>
<TD vAlign=top width=391>
<P
style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt">By:__________________________________________</P>
<P
style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</P>
<P
style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt">With a copy to
(which shall not constitute notice):</P></TD>
<TD vAlign=top width=247>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt">Fax: 650
794-9878 </P>
<P style="MARGIN: 0px"><BR></P></TD></TR>
<TR>
<TD vAlign=top width=391>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P></TD>
<TD vAlign=top width=247>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"><B>David B.
Manno</B></P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"><B>Sichenzia
Ross Friedman Ference LLP </B></P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"><B>61 Broadway,
New York, New York 10006</B></P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"><B>Fax (212 )
930-9725</B></P></TD></TR></TABLE>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center>[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK</P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center>SIGNATURE PAGE FOR PURCHASER FOLLOWS]</P>
<P style="MARGIN: 0px" align=center><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 37
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="FONT-SIZE: 12pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center>[PURCHASER SIGNATURE PAGES TO WEMU SECURITIES PURCHASE
AGREEMENT]</P>
<P style="MARGIN: 0px"><BR></P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 32px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"
align=justify>IN WITNESS WHEREOF, the undersigned have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.</P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 26pt" align=justify>Name of
Purchaser: ________________________________________________________</P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 26pt"
align=justify><I>Signature of Authorized Signatory of Purchaser</I>:
__________________________________</P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 26pt" align=justify>Name of
Authorized Signatory: ________________________________________________</P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 26pt" align=justify>Title
of Authorized Signatory: _________________________________________________</P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 26pt" align=justify>Email
Address of Authorized Signatory: __________________________________________</P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 26pt">Facsimile Number of
Authorized Signatory: _______________________________________</P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt">Address for Notice of
Purchaser:</P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt">Address for Delivery
of Securities for Purchaser (if not same as address for notice):</P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt">Subscription Amount:
$_________________</P>
<P style="MARGIN: 0px"><BR></P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt">Shares:
_________________</P>
<P style="MARGIN: 0px"><BR></P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt">Warrant Shares:
__________________</P>
<P style="MARGIN: 0px"><BR></P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt">EIN Number:
&nbsp;<B>[PROVIDE THIS UNDER SEPARATE COVER]</B></P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center>[SIGNATURE PAGES CONTINUE]</P>
<P style="MARGIN: 0px" align=right><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 38
-</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="FONT-SIZE: 12pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=right><B>Annex A </B></P>
<P style="MARGIN: 0px" align=right><BR></P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center><B>CLOSING STATEMENT</B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=justify>Pursuant to the attached Securities Purchase Agreement, dated as
of the date hereto, the purchasers shall purchase up to $5,000,000 of Common
Stock and Warrants from Worldwide Energy and Manufacturing USA, Inc., a Colorado
corporation (the &#147;<U>Company</U>&#148;). &nbsp;All funds will be wired into an
account maintained by the Company. &nbsp;All funds will be disbursed in
accordance with this Closing Statement. &nbsp;</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 119px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; TEXT-INDENT: -119px; LINE-HEIGHT: 14pt"
align=justify><B>Disbursement Date:</B></P>
<P
style="PADDING-LEFT: 119px; FONT-SIZE: 12pt; MARGIN: 0px; TEXT-INDENT: 24px; LINE-HEIGHT: 14pt"
align=justify>May ___, 2008</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=161></TD>
<TD width=296></TD>
<TD width=132></TD></TR>
<TR>
<TD vAlign=top colSpan=2>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=justify><B>I. &nbsp;&nbsp;<U>PURCHASE PRICE</U></B></P></TD>
<TD vAlign=top width=132>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=161>
<P>&nbsp;</P></TD>
<TD vAlign=top width=296>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=justify><B>Gross Proceeds to be Received </B></P></TD>
<TD vAlign=top width=132>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=justify>$</P></TD></TR>
<TR>
<TD vAlign=top colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=132>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top colSpan=2>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; LINE-HEIGHT: 14pt"
align=justify><B>II.</B></P>
<P
style="FONT-SIZE: 12pt; MARGIN: 0px; TEXT-INDENT: 24px; LINE-HEIGHT: 14pt"
align=justify><B><U>DISBURSEMENTS</U></B></P></TD>
<TD vAlign=top width=132>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=161>
<P>&nbsp;</P></TD>
<TD vAlign=top width=296>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;</P></TD>
<TD vAlign=top width=132>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=justify>$</P></TD></TR>
<TR>
<TD vAlign=top width=161>
<P>&nbsp;</P></TD>
<TD vAlign=top width=296>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=justify>&nbsp;</P></TD>
<TD vAlign=top width=132>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=justify>$</P></TD></TR>
<TR>
<TD vAlign=top width=161>
<P>&nbsp;</P></TD>
<TD vAlign=top width=296>
<P>&nbsp;</P></TD>
<TD vAlign=top width=132>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=justify>$</P></TD></TR>
<TR>
<TD vAlign=top width=161>
<P>&nbsp;</P></TD>
<TD vAlign=top width=296>
<P>&nbsp;</P></TD>
<TD vAlign=top width=132>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=justify>$</P></TD></TR>
<TR>
<TD vAlign=top width=161>
<P>&nbsp;</P></TD>
<TD vAlign=top width=296>
<P>&nbsp;</P></TD>
<TD vAlign=top width=132>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=justify>$</P></TD></TR>
<TR>
<TD vAlign=top colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=132>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top colSpan=2>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=justify><B>Total Amount Disbursed:</B></P></TD>
<TD vAlign=top width=132>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=justify><B>$</B></P></TD></TR>
<TR>
<TD vAlign=top colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=132>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=132>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=132>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top colSpan=2>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=justify><B><U>WIRE INSTRUCTIONS</U>:</B></P>
<P style="MARGIN: 0px" align=justify><BR></P></TD>
<TD vAlign=top width=132>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top colSpan=2>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=justify>To: _____________________________________</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px" align=justify><BR></P></TD>
<TD vAlign=top width=132>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top colSpan=2>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=justify>To: _____________________________________</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px" align=justify><BR></P></TD>
<TD vAlign=top width=132>
<P>&nbsp;</P></TD></TR></TABLE>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px" align=justify><BR><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt" align=center>- 39
-</P>
<P
style="MARGIN: 0px"><BR></P></DIV></BODY>
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