APOGEE TECHNOLOGY INC
EX-10.1
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<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">EXHIBIT 10.1</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SECURITIES PURCHASE AGREEMENT</font></b></p>

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<p style="margin:0in 0in .0001pt;text-indent:10.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This Securities Purchase Agreement (this &#147;<u>Agreement</u>&#148;) is dated
as of August 24, 2004, among Apogee Technology, Inc., a Delaware 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;); and</font></p>

<p style="margin:0in 0in .0001pt;text-indent:10.5pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:10.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">WHEREAS, subject to the terms and conditions set forth in this
Agreement and pursuant to Section 4(2) of the Securities Act (as defined
below), 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 in the aggregate, up to $4,000,000 of shares of
Common Stock and Warrants on the Closing Date.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:10.5pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:10.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">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
agrees as follows:</font></p>

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<h1 align="center" style="font-weight:normal;margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE I.</font></h1>

<h1 align="center" style="font-weight:normal;margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">DEFINITIONS</font></h1>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Definitions.&#160; In addition to the terms defined elsewhere in
this Agreement, for all purposes of this Agreement, the following terms have
the meanings indicated in this Section 1.1:</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Action</u>&#148;
shall have the meaning ascribed to such term in Section 3.1(j).</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#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 144.&#160; With respect to a Purchaser, any investment
fund or managed account that is managed on a discretionary basis by the same
investment manager as such Purchaser will be deemed to be an Affiliate of such
Purchaser.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Closing</u>&#148;
means the closing of the purchase and sale of the Common Stock and the Warrants
pursuant to Section 2.1.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#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.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#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 PM (New York time)
as the last reported closing bid price for regular session trading on such
day), 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 PM (New York time) as the closing bid price for regular
session trading on such day), or (c)&#160; if
the Common Stock is not then listed or quoted on</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">the
Trading Market and if prices for the Common Stock are then reported in the
&#147;pink sheets&#148; published by the National Quotation Bureau Incorporated (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 appraiser selected
in good faith by the Purchasers of a majority in interest of the Shares then
outstanding.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Commission</u>&#148; means the Securities and
Exchange Commission.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Common
Stock</u>&#148; means the common stock of the Company, par value $0.01 per share,
and any securities into which such common stock may hereafter be reclassified.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#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
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Company
Counsel</u>&#148; means Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Disclosure
Schedules</u>&#148; means the Disclosure Schedules of the Company delivered
concurrently herewith.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Effective
Date</u>&#148; means the date that the Registration Statement is first declared
effective by the Commission.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Exchange
Act</u>&#148; means the Securities Exchange Act of 1934, as amended.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Exempt Issuance</u>&#148; means the issuance of (a)
shares of Common Stock or options to employees, officers or directors of the
Company pursuant to any stock or option plan duly adopted by a majority of the
non-employee members of the Board of Directors of the Company or a majority of
the members of a committee of non-employee directors established for such
purpose, (b) securities upon the exercise of or conversion of any securities
issued hereunder, convertible securities, options or warrants 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, and (c) securities issued pursuant to acquisitions or
strategic transactions, provided any such issuance shall only be to a Person
which is, itself or through its subsidiaries, an operating company in the same
or a similar industry to that 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.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>FW</u>&#148; means Feldman
Weinstein LLP with offices located at 420 Lexington Avenue, Suite 2620, New
York, New York 10170-0002.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Intellectual
Property Rights</u>&#148; shall have the meaning ascribed to such term in Section
3.1(o).</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Liens</u>&#148;
means a lien, charge, security interest, encumbrance, right of first refusal,
preemptive right or other restriction.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Material
Adverse Effect</u>&#148; shall have the meaning ascribed to such term in Section
3.1(b).</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Material
Permits</u>&#148; shall have the meaning ascribed to such term in Section 3.1(m).</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Per Share
Purchase Price</u>&#148; equals $4.75, 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.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#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.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Proceeding</u>&#148;
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Registration
Rights Agreement</u>&#148; means the Registration Rights Agreement, dated as of the
date of this Agreement, among the Company and each Purchaser, in the form of <u>Exhibit
A</u> hereto.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Registration
Statement</u>&#148; means a registration statement meeting the requirements set
forth in the Registration Rights Agreement and covering the resale by the
Purchasers of the Shares and the Warrant Shares.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Required
Approvals</u>&#148; shall have the meaning ascribed to such term in Section 3.1(e).</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#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.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>SEC
Reports</u>&#148; shall have the meaning ascribed to such term in Section 3.1(h).</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Securities</u>&#148;
means the Shares, the Warrants and the Warrant Shares.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Securities
Act</u>&#148; means the Securities Act of 1933, as amended.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Shares</u>&#148;
means the shares of Common Stock issued or issuable to each Purchaser pursuant
to this Agreement.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Subscription
Amount</u>&#148; means, as to each Purchaser, the amounts set forth below such
Purchaser&#146;s signature block on the signature page hereto, in United States
dollars and in immediately available funds.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Subsidiary</u>&#148;
shall mean the subsidiaries of the Company, if any, set forth on <u>Schedule
3.1(a)</u>.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Trading
Day</u>&#148; means a day on which the Common Stock is traded on a Trading Market.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#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 New York Stock Exchange, the Nasdaq National Market or the Nasdaq
SmallCap Market.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Transaction
Documents</u>&#148; means this Agreement, the Warrants, the Additional Investment
Rights and the Registration Rights Agreement and any other documents or
agreements executed in connection with the transactions contemplated hereunder.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Warrants</u>&#148; means the Common Stock Purchase
Warrants, in the form of <u>Exhibit B</u>, delivered to the Purchasers at the
Closing in accordance with Section 2.2(a)(iii) hereof, which warrants shall be</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">exercisable
immediately upon issuance for a term of 5 years and have an exercise price
equal to <b><font style="font-weight:bold;">$5.70</font></b></font><b><sup><font face="Times New Roman" style="font-weight:bold;">(1)</font></sup></b><b><font style="font-weight:bold;">, </font></b>subject to adjustment as provided therein.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<u>Warrant Shares</u>&#148; means the shares of
Common Stock issuable upon exercise of the Warrants.</font></p>

<h1 align="center" style="font-weight:normal;margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></h1>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE II.</font></p>

<h1 align="center" style="font-weight:normal;margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PURCHASE AND
SALE</font></h1>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Closing</u>.&#160; On the Closing Date, each Purchaser shall
purchase from the Company, severally and not jointly with the other Purchasers,
and the Company shall issue and sell to each Purchaser, (a) a number of Shares
equal to such Purchaser&#146;s Subscription Amount divided by the Per Share Purchase
Price and (b) the Warrants as determined pursuant to Section 2.2(a)(iii).&#160; The aggregate Subscription Amounts for the
Shares sold hereunder shall be no less than $1,750,000 and up to $4,000,000.&#160; Upon satisfaction of the conditions set forth
in Section 2.2, the Closing shall occur at the offices of FW or such other
location as the parties shall mutually agree.</font></h2>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Deliveries</u>.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; On the Closing Date,
the Company shall deliver or cause to be delivered to each Purchaser the
following:</font></h3>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; this
Agreement duly executed by the Company;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; a
copy of the irrevocable instructions to the Company&#146;s 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;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(iii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; within
3 Trading Days of the date hereof, a Warrant, registered in the name of such
Purchaser, pursuant to which such Purchaser shall have the right to acquire up
to the number of shares of Common Stock equal to 50% of the Shares to be issued
to such Purchaser;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(iv)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; intentionally
omitted;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(v)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; the
Registration Rights Agreement duly executed by the Company; and</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(vi)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; a
legal opinion of Company Counsel, in the form of <u>Exhibit C</u> attached
hereto.</font></h4>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; On the Closing Date,
each Purchaser shall deliver or cause to be delivered to the Company the
following:</font></h3>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; this
Agreement duly executed by such Purchaser;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; such
Purchaser&#146;s Subscription Amount by wire transfer to the account as specified in
writing by the Company; and</font></h4>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="1" width="25%" noshade color="black" align="left">

</font></div>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; 120%
of the Per Share Purchase Price.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>


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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(iii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; the
Registration Rights Agreement duly executed by such Purchaser.</font></h4>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.3&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Closing
Conditions</u>.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The obligations of
the Company hereunder in connection with the Closing are subject to the
following conditions being met:</font></h2>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; the
accuracy in all material respects when made and on the Closing Date of the
representations and warranties of the Purchasers contained herein;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; all
obligations, covenants and agreements of the Purchasers required to be
performed at or prior to the Closing Date shall have been performed; and</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(iii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; the
delivery by the Purchasers of the items set forth in Section 2.2(b) of this
Agreement.</font></h4>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The respective
obligations of the Purchasers hereunder in connection with the Closing are
subject to the following conditions being met:</font></h3>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; the
accuracy in all material respects on the Closing Date of the representations
and warranties of the Company contained herein;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; all
obligations, covenants and agreements of the Company required to be performed
at or prior to the Closing Date shall have been performed;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(iii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; the
delivery by the Company of the items set forth in Section 2.2(a) of this
Agreement;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(iv)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; there
shall have been no Material Adverse Effect with respect to the Company since
the date hereof; and</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(v)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; From
the date hereof to the Closing Date, trading in the Common Stock shall not have
been suspended by the Commission (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 Financial Markets 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 Shares at the
Closing.</font></h4>

<h1 align="center" style="font-weight:normal;margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></h1>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE III.</font></p>

<h1 align="center" style="font-weight:normal;margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">REPRESENTATIONS
AND WARRANTIES</font></h1>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Representations
and Warranties of the Company</u>.</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Except as set forth under the corresponding section of the Disclosure
Schedules which Disclosure Schedules shall be deemed a part hereof, the Company
hereby makes the representations and warranties set forth below to each
Purchaser:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Subsidiaries</u>.&#160; All of the direct and indirect subsidiaries
of the Company are set forth on <u>Schedule 3.1(a)</u>.&#160; 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 the issued and outstanding shares of capital stock of
each Subsidiary are validly issued and are fully paid, non-assessable and free
of</h3>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>


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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">preemptive and similar rights to subscribe for or purchase
securities.&#160; If the Company has no
subsidiaries, then references in the Transaction Documents to the Subsidiaries
will be disregarded.</font></h3>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Organization and Qualification</u>.&#160; Each of the Company and 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 (as applicable), with the requisite corporate power and authority
to own and use its properties and assets and to carry on its business as
currently conducted.&#160; Neither the Company
nor any Subsidiary is in violation or default of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other organizational
or charter documents.&#160; 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 or financial condition 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 the Company has not received
notice of the institution of any Proceeding in any such jurisdiction revoking,
limiting or curtailing or seeking to revoke, limit or curtail such power and
authority or qualification.</h3>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Authorization; Enforcement</u>.&#160; 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
thereunder.&#160; The execution and delivery
of each of the Transaction Documents by the Company and the consummation by it
of the transactions contemplated thereby have been duly authorized by all
necessary action on the part of the Company and no further action is required
by the Company in connection therewith other than in connection with the
Required Approvals.&#160; Each Transaction
Document has been (or upon delivery will have been) duly executed by the Company
and, when delivered in accordance with the terms hereof, will constitute the
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms except (i) as limited by 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) as limited by public policy.</h3>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>No Conflicts</u>.&#160; The execution, delivery and performance of
the Transaction Documents by the Company, the issuance and sale of the Shares
and the consummation by the Company of the other transactions contemplated
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 organizational or charter documents, or (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.</h3>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>


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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Filings, Consents and Approvals</u>.&#160; 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) filings required pursuant to Section 4.4 of this Agreement, (ii) the
filing with the Commission of the Registration Statement, (iii) application(s)
to each applicable Trading Market for the listing of the Shares and Warrant
Shares for trading thereon in the time and manner required thereby, and (iv)
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;).</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(f)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Issuance of the Securities</u>.&#160; The Shares and Warrants are duly authorized
and, when issued and paid for in accordance with the 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.&#160;
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.&#160; 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.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(g)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Capitalization</u>.&#160; The capitalization of the Company is as
described in the Company&#146;s most recent periodic report filed with the
Commission.&#160; The Company has not issued
any capital stock since such filing other than pursuant to the exercise of
employee stock options under the Company&#146;s stock option plans, and pursuant to
the conversion or exercise of outstanding Common Stock Equivalents.&#160; No Person 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.&#160; Except as a result of the purchase and sale
of the Securities and except as set forth in the SEC Reports, there are no
outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving any Person any
right to subscribe for or acquire, any shares of Common Stock, 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 securities or rights convertible or exchangeable into shares of Common
Stock.&#160; The issue 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 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.&#160; No further approval
or authorization of any stockholder, the Board of Directors of the Company or
others is required for the issuance and sale of the Shares.&#160; Except as disclosed in the SEC Reports, 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.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(h)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>SEC Reports; Financial Statements</u>.&#160; The Company has filed all reports required to
be filed by it 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 to file
such material) (the foregoing materials, including the exhibits thereto, 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.&#160; As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and none of the SEC Reports, when filed, contained any
untrue statement of a material fact</h3>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7</font></p>

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<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">or omitted 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, not misleading.&#160; 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.&#160; 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 for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.</font></h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(i)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Material Changes</u>.&#160; Since the date of the latest audited
financial statements included within the SEC Reports, except as specifically
disclosed in the SEC Reports, (i) there has been no event, occurrence or
development that has had or that could reasonably be expected to result in a
Material Adverse Effect, (ii) the Company has 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 required to be 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.&#160; The Company does not have pending before the
Commission any request for confidential treatment of information.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(j)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Litigation</u>.&#160; Except as set forth in the SEC Reports, 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.&#160;
Neither the Company nor any Subsidiary, nor any current 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.&#160; 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 director or officer of the Company.&#160;
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.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(k)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Labor Relations</u>.&#160; 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.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(l)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Compliance</u>.&#160; 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</h3>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8</font></p>

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<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">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 except in each case as could not have a
Material Adverse Effect.</font></h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(m)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Regulatory Permits</u>.&#160; 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 have or 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.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(n)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Title to Assets</u>.&#160; The Company and the Subsidiaries have good
and marketable title in fee simple to all real property owned by them that is
material to the business of the Company and the Subsidiaries and good and
marketable title in all tangible 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.&#160; 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 material compliance.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(o)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Patents and Trademarks</u>. &#160;To the knowledge of the Company, the Company
and the Subsidiaries have, or have rights to use, all patents, patent
applications, trademarks, trademark applications, service marks, trade names,
copyrights, licenses and other similar rights necessary or material for use in
connection with their respective businesses as described in the SEC Reports and
which the failure to so have could have a Material Adverse Effect
(collectively, the &#147;<u>Intellectual Property Rights</u>&#148;).&#160; Neither the Company nor any Subsidiary has
received a written notice that the Intellectual Property Rights used by the
Company or any Subsidiary violates or infringes upon the rights of any
Person.&#160; 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 of
the Company.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(p)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Insurance</u>.&#160; 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.&#160; To the best of Company&#146;s knowledge, such
insurance contracts and policies are accurate and complete in all material
respects.&#160; 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.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(q)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Transactions With Affiliates and
Employees</u>.&#160; 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 $60,000 other than (i) for payment of salary
or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) for other employee benefits,
including stock option agreements under any stock option plan of the Company.</h3>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(r)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Sarbanes-Oxley; Internal
Accounting Controls</u>.&#160; 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.&#160; 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) 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 material
information relating to the Company, including its subsidiaries, is made known
to the certifying officers by others within those entities, particularly during
the period in which the Company&#146;s most recently filed periodic report under the
Exchange Act<strike>  </strike>was being prepared.&#160;
The Company&#146;s certifying officers have evaluated the effectiveness of
the Company&#146;s controls and procedures as of the end of the period covered by
the most recently filed periodic report under the Exchange Act (such date, the
&#147;<u>Evaluation Date</u>&#148;).&#160; 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.&#160; Since the Evaluation
Date, there have been no significant changes in the Company&#146;s internal control
over financial reporting (as such term is defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) or, to the Company&#146;s knowledge, in other factors that
could significantly affect the Company&#146;s internal control over financial
reporting.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(s)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Certain Fees</u>.&#160; 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
other than Jesup &amp; Lamont Securities Corporation (the &#147;<u>Placement Agent</u>&#148;)
with respect to the transactions contemplated by this Agreement.&#160; 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 this Agreement.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(t)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <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.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(u)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Investment Company.</u> The
Company is not, and is not an Affiliate of, and immediately after receipt of
payment for the Shares, 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.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(v)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Registration Rights</u>.&#160; No Person has any right to cause the Company
to effect the registration under the Securities Act of any securities of the
Company.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(w)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Listing and Maintenance
Requirements</u>.&#160; The Company&#146;s Common
Stock is registered pursuant to Section 12(b) 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 received any notification that the Commission
is contemplating terminating such registration.&#160;
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.</h3>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(x)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Application of Takeover
Protections</u>.&#160; The Company and its
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 the Company&#146;s issuance of
the Securities and the Purchasers&#146; ownership of the Securities.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(y)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Disclosure</u>.&#160; The Company confirms that, neither the
Company nor any other Person acting on its behalf has provided any of the
Purchasers or their agents or counsel with any information that constitutes or might
constitute material, non-public information.&#160;
The Company understands and confirms that the Purchasers will rely on
the foregoing representations and covenants in effecting transactions in
securities of the Company.&#160; All
disclosure provided to the Purchasers regarding the Company, its business and
the transactions contemplated hereby, including the Disclosure Schedules to
this Agreement, furnished by or on behalf of the Company with respect to the
representations and warranties made herein are true and correct with respect to
such representations and warranties and do 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 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 and/or on the Purchasers&#146; respective signature pages to this
Agreement.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(z)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <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 the Securities
Act or any applicable shareholder approval provisions, including, without
limitation, under the rules and regulations of any exchange or automated
quotation system on which any of the securities of the Company are listed or
designated.<u>  </u></h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(aa)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Solvency</u>.&#160; Based on the 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
Company&#146;s fair saleable value of its 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; and (ii)
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 currently anticipated uses of the cash, would be sufficient to pay
all amounts on or in respect of its debt when such amounts are required to be
paid.&#160; 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).</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(bb)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Form S-3 Eligibility</u>.&#160; The Company is eligible to register the
resale of its Common Stock by the Purchasers under Form S-3 promulgated under
the Securities Act and the Company hereby covenants and agrees to use its
commercially reasonable efforts to maintain its eligibility to use Form S-3
until the Registration Statement covering the resale of the Shares shall have
been filed with, and declared effective by, the Commission.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(cc)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Taxes</u>.&#160; 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, or has
filed appropriate</h3>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">11</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">extensions for the filing of such 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.</font></h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(dd)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>General Solicitation</u>.&#160; Neither the Company nor any person acting on
behalf of the Company has offered or sold any of the Shares by any form of
general solicitation or general advertising.&#160;
The Company has offered the Shares for sale only to the Purchasers and
certain other &#147;accredited investors&#148; within the meaning of Rule 501 under the
Securities Act.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(ee)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Foreign Corrupt Practices.</u>&#160; 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 corrupt funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is in violation of law, or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of
1977, as amended.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(ff)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Accountants</u>.&#160; The Company&#146;s accountants are set forth on <u>Schedule
3.1(ff)</u> of the Disclosure Schedule.&#160;
To the Company&#146;s knowledge, such accountants, who the Company expects
will express their opinion with respect to the financial statements to be
included in the Company&#146;s Annual Report on Form 10-K for the year ending
December 31, 2004, are an independent registered public accounting firm as
required by the Securities Act.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(gg)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Acknowledgment Regarding Purchasers&#146;
Purchase of Shares</u>.&#160; 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 hereby.&#160;
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 this Agreement and the transactions contemplated hereby and any
advice given by any Purchaser or any of their respective representatives or
agents in connection with this Agreement and the transactions contemplated
hereby is merely incidental to the Purchasers&#146; purchase of the Shares.&#160; The Company further represents to each
Purchaser that the Company&#146;s decision to enter into this Agreement has been
based solely on the independent evaluation of the transactions contemplated
hereby by the Company and its representatives.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Representations and
Warranties of the Purchasers.&#160; Each
Purchaser hereby, for itself and for no other Purchaser, represents and
warrants as of the date hereof and as of the Closing Date to the Company as
follows:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Organization; Authority</u>.&#160; 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 thereunder. The execution,
delivery and performance by such Purchaser of the transactions contemplated by
this Agreement have been duly authorized by all necessary corporate or similar
action on the part of such Purchaser.&#160;
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, 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.</h3>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Investment Intent</u>.&#160; 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, has no present intention of
distributing any of such Securities and has no arrangement or understanding
with any other persons regarding the distribution of such Securities (this
representation and warranty not limiting such Purchaser&#146;s right to sell the
Securities pursuant to the Registration Statement or otherwise in compliance
with applicable federal and state securities laws).&#160; Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business. Such Purchaser does not have
any agreement or understanding, directly or indirectly, with any Person to
distribute any of the Securities.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Purchaser Status</u>.&#160; At the time such Purchaser was offered the
Securities, it was, and at 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.&#160; Such
Purchaser is not required to be registered as a broker-dealer under Section 15
of the Exchange Act.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Experience of Such Purchaser</u>.&#160; 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.&#160;
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.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>General Solicitation</u>.&#160; 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.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(f)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Short Sales</u>.&#160; Each Purchaser represents that from the date
that it was approached to participate in the transaction contemplated by this
Agreement through the Closing Date, neither it nor its affiliates have engaged
in any trades with respect to, or made any net short sales of, or granted any
option for the purchase of or entered into any hedging or similar transaction
with the same economic effect as a net short sale of the Common Stock.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(g)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Registration Required</u>.&#160; Each Purchaser hereby covenants with the
Company not to make any sale of the Shares or Warrant Shares without complying
with the provisions hereof and of the Registration Rights Agreement, and
without effectively causing the prospectus delivery requirement under the
Securities Act to be satisfied (unless such Purchaser is selling such Shares or
Warrant Shares in a transaction not subject to the prospectus delivery
requirement), and such Purchaser acknowledges that the certificates evidencing
the Shares or Warrant Shares will be imprinted with a legend that prohibits
their transfer except in accordance therewith.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">(h)</font></u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>No Tax or Legal Advice</u>.&#160; Such Purchaser understands that nothing in
this Agreement, any other Transaction Document or any other materials presented
to such Purchaser in connection with the purchase and sale of the Securities
constitutes legal, tax or investment advice.&#160;
Such Purchaser has consulted such legal, tax and investment advisors as
it, in its sole discretion, has deemed necessary or appropriate in connection
with its purchase of Securities.</h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<p style="margin:0in 0in .0001pt;text-indent:10.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company acknowledges and agrees that each Purchaser does not make
or has not made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
this Section 3.2.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">13</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE
IV.</font></p>

<h1 align="center" style="font-weight:normal;margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OTHER
AGREEMENTS OF THE PARTIES</font></h1>

<h1 align="center" style="font-weight:normal;margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></h1>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Transfer
Restrictions.</u></font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The Securities may
only be disposed of in compliance with state and federal securities laws.&#160; 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.&#160; 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
and the Registration Rights Agreement.</font></h2>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The Purchasers agree
to the imprinting, so long as is required by this Section 4.1(b), of a legend
on any of the Securities in the following form:</font></h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<p style="margin:0in 0in .0001pt 25.65pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">THESE SECURITIES HAVE NOT BEEN 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.&#160;
THESE SECURITIES 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 RULE 501(a) UNDER
THE SECURITIES ACT.</font></p>

<p style="margin:0in 0in .0001pt 25.65pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">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 the Registration Rights Agreement and, if
required under the terms of such arrangement, such Purchaser may transfer
pledged or secured Securities to the pledgees or secured parties.&#160; 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.&#160; Further, no notice shall be
required of such pledge.&#160; 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, including,
if the Securities are subject to registration pursuant to the Registration
Rights Agreement, the preparation and filing of any required prospectus
supplement under Rule 424(b)(3) under the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of Selling
Stockholders thereunder.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Certificates
evidencing the Shares and Warrant Shares shall not contain any legend
(including the legend set forth in Section 4.1(b)), (i) while a registration
statement (including the Registration Statement) covering the resale of such
security is effective under the Securities Act, or (ii) following any sale of
such Shares or Warrant Shares pursuant to Rule 144, or (iii) if such Shares or
Warrant Shares are eligible for sale under Rule 144(k), or (iv) if such legend
is not required under applicable requirements of the Securities Act (including
judicial interpretations and</font></h3>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

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</font></div>


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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">pronouncements issued by the Staff of the Commission).&#160; The Company shall cause its counsel to issue
a legal opinion to the Company&#146;s transfer agent promptly after the Effective
Date if required by the Company&#146;s transfer agent to effect the removal of the
legend hereunder.&#160; 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, such Warrant Shares shall
be issued free of</font></h3>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">15</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>


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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">all legends.&#160; The Company agrees
that following the Effective Date or 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 Company&#146;s transfer
agent of a certificate representing Shares or Warrant Shares, as the case may
be, issued with a restrictive legend (such date, the &#147;<u>Legend Removal Date</u>&#148;),
deliver or cause to be delivered to such Purchaser a certificate representing
such Securities that is free from all restrictive and other legends.&#160; The Company may not make any notation on its
records or give instructions to any transfer agent of the Company that enlarge
the restrictions on transfer set forth in this Section.</font></h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; 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 Closing Price of the Common Stock on the
date such Securities are submitted to the Company&#146;s transfer agent) 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. 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.</font></h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Each Purchaser,
severally and not jointly with the other Purchasers, agrees 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 that the
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.</font></h3>

<h3 style="font-weight:normal;margin:0in 0in .0001pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h3>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Furnishing of Information</u>.&#160; As long as any Purchaser owns Securities, the
Company covenants 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.&#160; As long as any Purchaser owns Securities, 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, all to the extent required from time to time to enable such Person to
sell such Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.3&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Integration</u>.&#160; 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 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 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.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.4&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Securities Laws
Disclosure; Publicity</u>.&#160; The Company
shall, by 8:30 a.m. Eastern time on the Trading Day following the date hereof,
issue a press release or file a Current Report on Form 8-K, in each case
reasonably acceptable to the Placement Agent on behalf of the Purchasers,
disclosing the material terms of the transactions contemplated hereby.&#160; The Company and the Placement Agent shall
consult with each other</font></h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">16</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>


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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">in issuing any
other press releases with respect to the transactions contemplated hereby, and
neither the Company nor the Placement Agent shall issue any such press release
or otherwise make any such public statement without the prior consent of the
Company, with respect to any press release of the Placement Agent, or without
the prior consent of the Placement Agent, with respect to any press release of
the Company, which consent shall not unreasonably be withheld, 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.&#160; 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 (i) as required by federal securities law in connection with
the registration statement contemplated by the Registration Rights Agreement
and (ii) to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior
notice of such disclosure permitted under subclause (i) or (ii).</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.5&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Shareholder
Rights Plan</u>.&#160; No claim will be made
or enforced by the Company or, to the knowledge of the Company, any other
Person that any Purchaser is an &#147;Acquiring Person&#148; under any shareholder rights
plan or similar 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.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.6&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Non-Public
Information</u>.&#160; 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.&#160;
The Company understands and confirms that each Purchaser shall be relying
on the foregoing representations in effecting transactions in securities of the
Company.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.7&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Use of Proceeds</u>.&#160; 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 not for 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), to redeem
any Company equity or equity-equivalent securities or to settle any outstanding
litigation.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.8&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>No Liability of
Purchaser</u>.&#160; The Company agrees that
neither the Purchasers nor any such affiliates, partners, directors, agents,
employees or controlling persons of a Purchaser shall have any liability to the
Company or any Person asserting claims on behalf of or in right of the Company
solely as a result of acquiring the Securities under this Agreement.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.9&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Indemnification
of Purchasers</u>.&#160; Subject to the
provisions of this Section 4.9, the Company will indemnify and hold the
Purchasers and their directors, officers, shareholders, partners, employees and
agents (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, 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 fraud, gross negligence, willful
misconduct or malfeasance).&#160; 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</font></h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">17</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>


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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">assume the defense
thereof with counsel of its own choosing.&#160;
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.&#160; The
Company will not be liable to any Purchaser Party under this Agreement (i) 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 (ii)
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 the Purchasers in this Agreement or
in the other Transaction Documents.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.10&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <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.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.11&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Listing of Common Stock</u>.&#160; The Company hereby agrees to use commercially
reasonable 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 earlier of the Effective Date and 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 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.&#160;
The Company will comply in all material respects with the Company&#146;s
reporting, filing and other obligations under the bylaws or rules of the
Trading Market.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.12&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Equal Treatment of
Purchasers</u>.&#160; No consideration 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.&#160; 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 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.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.13&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Participation in Future Financing</u>.&#160; From the date hereof until 12 months after
the Effective Date, upon any financing by the Company of its Common Stock or
Common Stock Equivalents (a &#147;Subsequent Financing&#148;), each Purchaser shall have
the right to participate in up to 100% of such Subsequent Financing (the &#147;<u>Participation
Maximum</u>&#148;).&#160; 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;).&#160; 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.&#160; 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, the Person with whom
such Subsequent Financing is proposed to be effected, and attached to which
shall be a term sheet or similar document relating thereto.&#160; If by 6:30 p.m. (New York City time) on the
second 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 Subsequent Financing, then the
Company may effect the remaining portion of such Subsequent Financing on the
terms and to the Persons set forth in the Subsequent Financing Notice.&#160; If the Company receives no notice from a
Purchaser as of such 2<sup>nd</sup> Trading Day, such Purchaser shall be deemed
to have notified the Company that it does not elect to participate.&#160; 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 4.13, 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 60 Trading Days after the date of the initial Subsequent Financing
Notice.&#160; In the event the Company
receives responses to Subsequent Financing Notices from Purchasers seeking to
purchase more than the aggregate amount of the Subsequent Financing, each such
Purchaser shall have the right to purchase their Pro Rata Portion (as defined
below) of the Participation Maximum.&#160; &#147;<u>Pro
Rata Portion</u>&#148; is the ratio of (x) the Subscription Amount of Securities
purchased by a participating Purchaser and (y) the sum of the aggregate
Subscription Amount of all participating Purchasers.&#160; Notwithstanding the foregoing, this Section
4.13 shall not apply in respect of an Exempt Issuance.</font></p>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.14&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Subsequent Equity
Sales</u>.&#160; From the date hereof until 90
days after the Effective Date, neither the Company nor any Subsidiary shall
issue shares of Common Stock or Common Stock Equivalents; <u>provided</u>, <u>however</u>,
the 90 day period set forth in this Section 4.14 shall be extended for the
number of Trading Days during such period in which (y) trading in the Common
Stock is suspended by any Trading Market, or (z) following the Effective Date,
the Registration Statement is not effective or the prospectus included in the
Registration Statement may not be used by the Purchasers for the resale of the
Shares and Warrant Shares.&#160;
Notwithstanding the foregoing, this Section 4.14 shall not apply in
respect of an Exempt Issuance. In addition to the limitations set forth herein,
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 &#147;<u>Variable Rate
Transaction</u>&#148; or an &#147;<u>MFN Transaction</u>&#148; (each as defined below).&#160; The term &#147;<u>Variable Rate Transaction</u>&#148;
shall mean a transaction in which the Company issues or sells (i) any debt or
equity securities that are convertible into, exchangeable or exercisable for,
or include the right to receive additional shares of Common Stock either (A) at
a conversion,</font></h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">18</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>


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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">exercise or
exchange rate or other price that is based upon and/or varies with the trading
prices of or quotations for the shares of Common Stock at any time after the
initial issuance of such debt or equity securities, or (B) with a conversion,
exercise or exchange price that is subject to being reset at some future date
after the initial issuance of such debt or equity security 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.&#160; The term &#147;<u>MFN Transaction</u>&#148; shall mean
a transaction in which the Company issues or sells any securities in a capital
raising transaction or series of related transactions which grants to an
investor the right to receive additional shares based upon future transactions
of the Company on terms more favorable than those granted to such investor in
such offering.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.15&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Delivery of
Securities After Closing</u>.&#160; The
Company shall deliver, or cause to be delivered, the respective Shares and
Warrants purchased by each Purchaser to such Purchaser within 3 Trading Days of
the Closing Date.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h1 align="center" style="font-weight:normal;margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE V.</font></h1>

<h1 align="center" style="font-weight:normal;margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">MISCELLANEOUS</font></h1>

<h1 align="center" style="font-weight:normal;margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></h1>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Fees and Expenses</u>.&#160; The Company shall reimburse Bonanza Capital
Ltd. (&#147;<u>Bonanza</u>&#148;) the sum of $10,000, of which receipt is acknowledged,
and the Placement Agent, the sum of $15,000 plus $500 per state for blue sky
filings, for their respective legal fees and expenses. Bonanza may pay itself
such fees by set-off from the amount of its investment. The Company shall
deliver, prior to the Closing, a completed and executed copy of the Closing
Statement, attached hereto as Annex A. Except as otherwise set forth in this
Agreement, 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.&#160; The
Company shall pay all stamp and other taxes and duties levied in connection
with the sale of the Securities.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Entire Agreement</u>.&#160; 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.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.3&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Notices</u>. &#160;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 6:30
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 6:30 p.m. (New York City time) on
any Trading Day, (c) the second 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.&#160; The address for such notices and
communications shall be as set forth on the signature pages attached hereto.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.4&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Amendments;
Waivers</u>.&#160; No provision of this
Agreement may be waived or amended except in a written instrument signed, in
the case of an amendment, by the Company and each Purchaser or, in the case of
a waiver, by the party against whom enforcement of any such waiver is
sought.&#160; 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 either party to exercise any right hereunder
in any manner impair the exercise of any such right.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.5&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Construction</u>.&#160; 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.&#160; The
language used in this</font></h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">19</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>


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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Agreement will
be deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.6&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Successors and
Assigns</u>.&#160; This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns.&#160; The Company may not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of each Purchaser.&#160; 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
such transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions hereof that apply to the &#147;Purchasers&#148;.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.7&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>No Third-Party
Beneficiaries</u>.&#160; 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, nor may any provision
hereof be enforced by, any other Person, except as otherwise set forth in
Section 4.9.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.8&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Governing Law</u>.&#160; 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.&#160; 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 inconvenient venue for such proceeding.&#160; 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.&#160; Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner
permitted by law.&#160; The parties hereby waive
all rights to a trial by jury.&#160; 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 attorneys&#146; fees and other costs
and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.9&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Survival</u>.&#160; The representations and warranties herein
shall survive the Closing and delivery of the Shares and Warrant Shares.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.10&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Execution</u>.&#160; 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.&#160;
In the event that any signature is delivered by facsimile transmission,
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 signature page were an original thereof.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.11&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Severability</u>.&#160; If any provision of this Agreement is held to
be invalid or unenforceable in any respect, the validity and enforceability of
the remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.12&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Rescission and
Withdrawal Right</u>.&#160; Notwithstanding
anything to the contrary contained in (and without limiting any similar
provisions of) the 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</font></h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">20</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>


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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">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.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.13&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Replacement of
Securities</u>.&#160; 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, 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 and customary and reasonable
indemnity, if requested.&#160; The applicants
for a new certificate or instrument under such circumstances shall also pay any
reasonable third-party costs associated with the issuance of such replacement
Securities.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.14&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Remedies</u>.&#160; 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.&#160; The parties
agree that monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance of
any such obligation the defense that a remedy at law would be adequate.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.15&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Payment Set Aside</u>.&#160; 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.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.16&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Independent Nature
of Purchasers&#146; Obligations and Rights</u>.&#160;
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 of the obligations
of any other Purchaser under any Transaction Document.&#160; Nothing contained herein or in any
Transaction Document, and no action taken by any 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 Document.&#160; 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.&#160; Each Purchaser has been represented by its
own separate legal counsel in their review and negotiation of the Transaction
Documents.&#160; For reasons of administrative
convenience only, Purchasers and their respective counsel have chosen to
communicate with the Company through FW.&#160;
FW does not represent all of the Purchasers but only Bonanza, who has
acted as placement agent to the transaction.&#160;
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.</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.17&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Liquidated Damages</u>.&#160; 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.</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">(Signature Page Follows)</font></i></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">21</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>


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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">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.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:10.5pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

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  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">APOGEE TECHNOLOGY, INC.</font></b></p>
  </td>
  <td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.22%;">
  <p style="margin:0in 0in .0001pt;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">Address for Notice:</font></u></p>
  </td>
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  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.22%;">
  <p style="margin:0in 0in .0001pt;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;"><font style="text-decoration:none;">&nbsp;</font></font></u></p>
  </td>
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  <td width="4%" valign="top" style="padding:0in 0in 0in 0in;width:4.12%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="38%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:38.34%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Herbert M. Stein</font></p>
  </td>
  <td width="7%" valign="top" style="padding:0in 0in 0in 0in;width:7.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.22%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">129
  Morgan Drive</font></p>
  </td>
 </tr>
 <tr>
  <td width="4%" valign="top" style="padding:0in 0in 0in 0in;width:4.12%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="45%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:45.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name: Herbert M. Stein</font></p>
  </td>
  <td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.22%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Norwood,
  MA 02062</font></p>
  </td>
 </tr>
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  <td width="4%" valign="top" style="padding:0in 0in 0in 0in;width:4.12%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="45%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:45.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title: President and Chief Executive Officer</font></p>
  </td>
  <td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.22%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
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  <td width="49%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:49.78%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.22%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
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  <td width="49%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:49.78%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">With a copy to (which shall not constitute notice):&nbsp; </font></p>
  </td>
  <td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.22%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
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  <td width="49%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:49.78%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.22%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="49%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:49.78%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mintz,
  Levin, Cohn, Ferris, Glovsky and Popeo, P.C.<br>
  One Financial Center<br>
  Boston, MA 02111<br>
  Attn:&nbsp; Megan N. Gates, Esq.<br>
  Tel:&nbsp; 617-348-4443<br>
  Fax: 617-542-2241</font></p>
  </td>
  <td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.22%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK<br>
SIGNATURE PAGES FOR PURCHASERS FOLLOW]</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">22</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>


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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">[PURCHASER SIGNATURE PAGES TO ATA SECURITIES PURCHASE AGREEMENT]</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">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.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr>
  <td width="20%" valign="top" style="padding:0in 0in 0in 0in;width:20.22%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name
  of Investing Entity:</font></p>
  </td>
  <td width="57%" colspan="5" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:57.26%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="22%" valign="top" style="padding:0in 0in 0in 0in;width:22.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" style="border:none;font-size:1.0pt;padding:0in 0in 0in 0in;"><p style="margin:0in 0in .0001pt;">&nbsp;</p></td>
 </tr>
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  <td width="40%" colspan="5" valign="top" style="padding:0in 0in 0in 0in;width:40.52%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Signature of Authorized Signatory of Investing Entity</font></i>:</p>
  </td>
  <td width="36%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:36.96%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="22%" valign="top" style="padding:0in 0in 0in 0in;width:22.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" style="border:none;font-size:1.0pt;padding:0in 0in 0in 0in;"><p style="margin:0in 0in .0001pt;">&nbsp;</p></td>
 </tr>
 <tr>
  <td width="24%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:24.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name
  of Authorized Signatory:</font></p>
  </td>
  <td width="53%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:53.48%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="22%" valign="top" style="padding:0in 0in 0in 0in;width:22.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" style="border:none;font-size:1.0pt;padding:0in 0in 0in 0in;"><p style="margin:0in 0in .0001pt;">&nbsp;</p></td>
 </tr>
 <tr>
  <td width="23%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:23.12%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title
  of Authorized Signatory:</font></p>
  </td>
  <td width="54%" colspan="4" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:54.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="22%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:22.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
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  <td width="27%" colspan="4" valign="top" style="padding:0in 0in 0in 0in;width:27.74%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Email
  Address of Authorized Entity:</font></p>
  </td>
  <td width="49%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:49.74%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="22%" valign="top" style="padding:0in 0in 0in 0in;width:22.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" style="border:none;font-size:1.0pt;padding:0in 0in 0in 0in;"><p style="margin:0in 0in .0001pt;">&nbsp;</p></td>
 </tr>
 <tr height="0">
  <td width="151" style="border:none;"></td>
  <td width="22" style="border:none;"></td>
  <td width="7" style="border:none;"></td>
  <td width="28" style="border:none;"></td>
  <td width="96" style="border:none;"></td>
  <td width="276" style="border:none;"></td>
  <td width="167" style="border:none;"></td>
  <td width="1" style="border:none;"></td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Address
for Notice of Investing Entity:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Address
for Delivery of Securities for Investing Entity (if not same as above):</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Subscription
Amount:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Shares:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Warrant
Shares:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">EIN
Number<b><font style="font-weight:bold;">:&#160;
[PROVIDE THIS UNDER SEPARATE COVER]</font></b></font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">[SIGNATURE PAGES CONTINUE]</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">23</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>


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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Annex A</font></b></p>

<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">CLOSING STATEMENT</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant
to the attached Securities Purchase Agreement, dated as of the date hereto, the
purchasers shall purchase up to $4,000,000 of Common Stock and Warrants from
Apogee Technology, Inc. (the &#147;<u>Company</u>&#148;).&#160;
All funds will be wired into a trust account maintained by Continental
Stock Transfer &amp; Trust Company, the escrow agent for the transaction.&#160; All funds will be disbursed in accordance with
this Closing Statement.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0in 0in .0001pt 89.7pt;text-indent:-89.7pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Disbursement Date:</font></b><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>August ____, 2004</p>

<p style="margin:0in 0in .0001pt 89.7pt;text-indent:-89.7pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="80%" style="border-collapse:collapse;width:80.0%;">
 <tr>
  <td width="84%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:84.5%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">I.<u> PURCHASE PRICE</u></font></b></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:12.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="84%" valign="top" style="padding:0in 0in 0in 0in;width:84.5%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="bottom" style="padding:0in 0in 0in 0in;width:12.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
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  <td width="84%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:84.5%;">
  <p style="margin:0in 0in .0001pt 60.0pt;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Gross Proceeds to be Received in Trust</font></b></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:12.0%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="84%" valign="top" style="padding:0in 0in 0in 0in;width:84.5%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="bottom" style="padding:0in 0in 0in 0in;width:12.0%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="84%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:84.5%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">II. <u>DISBURSEMENTS</u></font></b></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:12.0%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="84%" valign="top" style="padding:0in 0in 0in 0in;width:84.5%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0in 0in 0in 0in;width:12.0%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="84%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:84.5%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:12.0%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="84%" valign="top" style="padding:0in 0in 0in 0in;width:84.5%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0in 0in 0in 0in;width:12.0%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="84%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:84.5%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:12.0%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="84%" valign="top" style="padding:0in 0in 0in 0in;width:84.5%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0in 0in 0in 0in;width:12.0%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="84%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:84.5%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:12.0%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="84%" valign="top" style="padding:0in 0in 0in 0in;width:84.5%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Total Amount Disbursed:</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="bottom" style="padding:0in 0in 0in 0in;width:12.0%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0in 0in .0001pt -.4pt;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">WIRE INSTRUCTIONS</font></u>:</b></p>

<p style="margin:0in 0in .0001pt -.4pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.96%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">To:</font></b></p>
  </td>
  <td width="33%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:33.48%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="63%" valign="top" style="padding:0in 0in 0in 0in;width:63.56%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.96%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">To:</font></b></p>
  </td>
  <td width="33%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:33.48%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="63%" valign="top" style="padding:0in 0in 0in 0in;width:63.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">24</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

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