EXHIBIT 10.1
 
 
SECURITIES PURCHASE AGREEMENT
 
This Securities Purchase Agreement (this “Agreement”) is dated February 13, 2009
by and between Medis Technologies Ltd., a Delaware corporation (the “Company”)
and Ascendiant Capital Group, LLC (the “Purchaser”). Capitalized terms used in
this Agreement and not otherwise defined shall have the meanings ascribed to
them in Article 1.

WHEREAS, the parties desire that, upon the terms and subject to the conditions
contained herein, the Company shall have the right to issue and sell to
Purchaser from time to time as provided herein, and Purchaser shall be obligated
to purchase from the Company up to $6,000,000 worth of shares of Common Stock
pursuant to the Company’s effective registration statement under the Securities
Act, file no. 333-155574.
 
NOW, THEREFORE, in consideration of the foregoing premises, and the promises and
covenants herein contained, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the parties, intending to be legally bound,
hereby agree as follows:
 
ARTICLE I.
DEFINITIONS
 
1.1 Definitions.  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:
 
“Action” shall have the meaning ascribed to such term in Section 3.1(j).
 
“Affiliate” 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 under the
Securities Act.  With respect to the Purchaser, any investment fund or managed
account that is managed on a discretionary basis by the same investment manager
as the Purchaser will be deemed to be an Affiliate of the Purchaser.
 
“Business Day” means any day except Saturday, Sunday, any day which shall be a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.
 
“Closing Price” means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then listed or quoted
on a Trading Market, the closing bid price of the Common Stock for such date (or
the nearest preceding date) on the Trading Market on which the Common Stock is
then listed or quoted for trading as reported by Bloomberg Financial L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time); (b)  if the Common Stock is not listed or quoted on a Trading Market, but
is quoted on the OTC Bulletin Board, the closing bid price of the Common Stock
for such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if
the Common Stock is not then listed or quoted for trading on a Trading Market or
the OTC Bulletin Board and if prices for the Common Stock are then reported in
the “Pink Sheets” published by Pink Sheets, LLC (or
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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) in all other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by the Purchaser
and reasonably acceptable to the Company.
 
“Commission” means the Securities and Exchange Commission.
 
“Commencement Date” shall have the meaning assigned to such term in Section
6.1(e).

“Commitment Amount” shall have the meaning assigned to such term in Section 2.1
hereof.
 
“Commitment Period” shall mean the period of 24 consecutive months commencing
immediately after the date that the Company files a prospectus supplement
disclosing the terms hereunder.
 
“Common Stock” means the common stock of the Company, and any other class of
securities into which such securities may hereafter be reclassified or changed
into.
 
“Common Stock Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.
 
“Company Counsel” means Herrick, Feinstein LLP, with offices at 2 Park Avenue,
New York, New York 10016.
 
“Consolidation Event” shall mean a sale of all or substantially all of the
Company’s assets or a merger pursuant to which the holders of the voting
securities of the Company prior to the merger do not own a majority of the
voting securities of the surviving entity.
 
“Disclosure Schedules” means the Disclosure Schedules of the Company delivered
to the Purchaser concurrently herewith.
 
“Draw Down” shall have the meaning assigned to such term in Section 6.1(a)
hereof.
 
“Draw Down Notice” shall have the meaning assigned to such term in Section
6.1(e) hereof.
 
“Draw Down Pricing Period” shall mean each period of 10 consecutive Trading Days
following the delivery by the Company of a Draw Down Notice, the first of such
periods commencing on the date specified in the Draw Down Notice and subsequent
periods, if any, described in the Draw Down Notice, commencing  on the third
Trading Day following the immediately preceding Draw Down Pricing Period, such
subsequent
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periods, if any, continuing until such time that the Company delivers to the
Purchaser a subsequent suspension notice, which notice must be delivered on or
before the end of the prior Draw Down Pricing Period; provided, however, the
first Draw Down Pricing Period and any subsequent Draw Down Pricing Period
commencing after a suspension notice is delivered, shall not begin before the
day on which receipt of such notice is delivered to Purchaser pursuant to
Section 8.3 herein. “Draw Down Shares” or “Shares” shall mean the shares of
Common Stock issuable pursuant to a Draw Down.
 
“DTC” shall have the meaning assigned to such term in Section 6.1(f).
 
“DWAC” shall have the meaning assigned to such term in Section 6.1(f).
 
“Equity Conditions” shall mean, during the period described in Section 5.3(e) in
question, (i) there is an effective and available Registration Statement
pursuant to which the Company is permitted to utilize the prospectus thereunder
to sell all of the Draw Down Shares (issued and to be issued pursuant to the
applicable Draw Down), (ii) the Common Stock is trading on the Trading Market
and all of the shares issuable pursuant to the Transaction Documents are listed
or quoted (if applicable) for trading on a Trading Market (and the Company
believes, in good faith, that trading of the Common Stock on a Trading Market
will continue uninterrupted for the foreseeable future), (iii) there is a
sufficient number of authorized but unissued and otherwise unreserved shares of
Common Stock for the issuance of all of the Draw Down Shares (issued and to be
issued pursuant to the applicable Draw Down), (iv) the Company, directly or
indirectly, has not provided the Purchaser with any material, non-public
information that has not been made publicly available in a widely disseminated
release and (v) the Draw Down in question shall not exceed 4.9% of the then
issued and outstanding shares of Common Stock on the date that such Draw Down
Shares are issued.
 
“Evaluation Date” shall have the meaning ascribed to such term in Section
3.1(r).
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“FWS” means Feldman Weinstein & Smith LLP with offices located at 420 Lexington
Avenue, Suite 2620, New York, New York 10170-0002.
 
“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).
 
“Initial Closing” shall have the meaning assigned to such term in Section 2.2
hereof.
 
“Initial Closing Date” shall have the meaning assigned to such term in Section
2.2 hereof.
 
“Intellectual Property Rights” shall have the meaning ascribed to such term in
Section 3.1(o).
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“Investment Amount” shall have the meaning assigned to such term in Section
6.1(e) hereof.
 
“Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.
 
“Material Adverse Effect” shall have the meaning assigned to such term in
Section 3.1(b).
 
“Material Permits” shall have the meaning ascribed to such term in Section
3.1(m).
 
“Person” 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.
 
“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
 
“Purchase Price” shall mean, with respect to Draw Down Shares purchased during
each applicable Settlement Period, 89.5% of the VWAP on the date in question.
 
“Purchaser Party” shall have the meaning ascribed to such term in Section 4.7.
 
“Registration Statement” means the registration statement file no. 333-155574,
covering the sale by the Company to the Purchaser of the Draw Down Shares and
the shares issuable pursuant to Section 5.2(f) below.
 
“Required Approvals” shall have the meaning ascribed to such term in Section
3.1(e).
 
“Rule 144” 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.
 
“Rule 424” means Rule 424 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.
 
“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).
 
“Securities” means the Draw Down Shares, and the shares of Common Stock issuable
to the Purchaser pursuant to Section 2.2(a)(iv) and 5.2(f) below.
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“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
 
“Settlement” shall mean the delivery of the Draw Down Shares into the
Purchaser’s DTC account via DTC’s DWAC system and the Purchaser’s delivery of
payment therefor.
 
“Settlement Date” shall have the meaning assigned to such term in Section
6.1(b).
 
“Settlement Period” shall have the meaning assigned to such term in Section
6.1(b).
 
“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act; provided, however, that in no event shall either the
sale of Draw Down Shares to be received but not yet delivered pursuant to a
pending Draw Down during a Draw Down Pricing Period be deemed a Short Sale or
the sale of any Securities issued under this Agreement after the date hereof be
deemed a Short Sale.
 
“Subsidiary” means any subsidiary of the Company as set forth on Schedule
3.1(a).
 
“Threshold Price” shall mean a price specified by the Company in each Draw Down
Notice.
 
“Trading Cushion” shall mean the mandatory 2 Trading Days between Draw Down
Pricing Periods.

 
“Trading Day” means a day on which the Common Stock is traded on a Trading
Market.
 
“Trading Market” means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the Nasdaq
Capital Market, the American Stock Exchange, the New York Stock Exchange or the
Nasdaq Global Market.
 
“Transaction Documents” means this Agreement and any other documents or
agreements executed in connection with the transactions contemplated hereunder.
 
“VWAP” means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted for trading as reported by Bloomberg
Financial L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to
4:02 p.m. (New York City time); (b)  if the Common Stock is not then listed or
quoted on a Trading Market, but is quoted on the OTC Bulletin Board, the volume
weighted average price of the Common Stock for such date (or the nearest
preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then
listed or quoted for trading on a Trading Market or the OTC Bulletin Board
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and if prices for the Common Stock are then reported in the “Pink Sheets”
published by Pink Sheets, LLC (or a similar organization or agency succeeding to
its functions of reporting prices), the most recent bid price per share of the
Common Stock so reported; or (d) in all other cases, the fair market value of a
share of Common Stock as determined by an independent appraiser selected in good
faith by the Purchaser and reasonably acceptable to the Company.
 
ARTICLE II.
PURCHASE AND SALE
 
2.1 Purchase and Sale of Draw Down Shares. Upon the terms and subject to the
conditions of this Agreement, at its discretion, the Company may sell and issue
to the Purchaser and the Purchaser shall be obligated to purchase from the
Company, up to an aggregate of $6,000,000 worth of shares of Common Stock (the
“Commitment Amount”), provided that in no event shall the Commitment Amount and
the shares of Common Stock issuable to the Purchaser pursuant to Section
2.2(a)(iv) and 5.2(f), exceed 9,170,494 shares of Common Stock without first
obtaining approval of the stockholders of the Company of such excess
issuance.  It is acknowledged and agreed that the Company is under no obligation
to seek to obtain such stockholder approval.
 
2.2 Initial Closing.  The initial closing of the transactions referred to herein
(the “Initial Closing”) shall take place at the offices of FWS, 420 Lexington
Avenue, Suite 2620, New York, New York 10170 (i) at 10:00 a.m. local time within
5 Trading Days of the date hereof, or (ii) at such other time and place or on
such date as the Purchaser and the Company may agree upon (the “Initial Closing
Date”). Each party shall deliver the following documents, instruments and
writings at or prior to the Initial Closing:
 
(a) the Company shall deliver or cause to be delivered to the Purchaser the
following:
 
(i) this Agreement duly executed by the Company;
 
(ii) the legal opinion from Company Counsel, in the form attached hereto as
Exhibit A;
 
(iii) the base prospectus in the Registration Statement shall be accepted by
FINRA under Rule 5110, to the extent necessary; and
 
(iv) 266,667 shares of Common Stock, which shares shall be delivered without
legend to the DTC account specified by the Purchaser in writing to the Company.
 
(b) the Purchaser shall deliver or cause to be delivered to the Company this
Agreement duly executed by the Purchaser.
 
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES
 
3.1 Representations and Warranties of the Company.  Except as set forth under
the corresponding section of the Disclosure Schedules which Disclosure Schedules
shall be deemed a part hereof and to qualify any representation or warranty
otherwise made herein to the extent of such disclosure, the Company hereby makes
the representations and warranties set forth below to the Purchaser:
 
(a) Subsidiaries.  All of the direct and indirect subsidiaries of the Company
are set forth on Schedule 3.1(a).  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
preemptive and similar rights to subscribe for or purchase securities.
 
(b) Organization and Qualification.  The Company and each of the Subsidiaries is
an entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
(as applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted.  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.  Each of the
Company and the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to result
in (i) a material adverse effect on the legality, validity or enforceability of
any Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business, prospects or condition (financial or otherwise) of
the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company’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 “Material Adverse Effect”) and no Proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.
 
(c) Authorization; Enforcement.  The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
each of the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder.  The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company, its board of directors or its stockholders in connection therewith
other than in connection with the Required
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Approvals.  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 and thereof, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms except (i)
as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ 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.
 
(d) No Conflicts.  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 hereby and
thereby do not and will not (i) conflict with or violate any provision of the
Company’s or any Subsidiary’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 would not have or reasonably be expected to result in a Material Adverse
Effect.
 
(e) Filings, Consents and Approvals.  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 a prospectus supplement to the Registration Statement
describing the transactions contemplated hereby, (iii) application(s) to each
applicable Trading Market for the listing of the Securities for trading thereon
in the time and manner required thereby, and (iv) such filings as are required
to be made under applicable state securities laws (collectively, the “Required
Approvals”).
 
(f) Issuance of the Securities.  The Securities are duly authorized and, when
issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company other than restrictions on transfer provided
for in the Transaction Documents.  The Draw Down Shares and the other shares of
Common Stock issuable
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hereunder will be, upon issuance, duly registered under the Securities Act and
will be freely tradable by the Purchaser, subject to any prospectus delivery
requirements under Rule 172 under the Securities Act.
 
(g) Capitalization.  The capitalization of the Company is as set forth in the
SEC Reports as of the dates thereof.  The Company has not issued any capital
stock since its most recently filed periodic report under the Exchange Act,
other than pursuant to the exercise of stock options under the Company’s equity
incentive plans, the issuance of shares of Common Stock to directors, employees
and consultants pursuant to the Company’s equity incentive plan and pursuant to
the conversion or exercise of Common Stock Equivalents outstanding as of the
date of the most recently filed periodic report under the Exchange Act.  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.  Other than as set forth in the SEC Reports, except as a
result of the purchase and sale of the Securities, 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 exercisable or exchangeable for, or giving any Person any
right to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock or
Common Stock Equivalents.  The issuance and sale of the Securities will not
obligate the Company to issue shares of Common Stock or other securities to any
Person (other than the Purchaser) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset
price under any of such securities. All of the outstanding shares of capital
stock of the Company are validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, and none of
such outstanding shares was issued in violation of any preemptive rights or
similar rights to subscribe for or purchase securities.  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 Securities.  There are no
stockholders agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company is a party.
 
(h) SEC Reports; Financial Statements.  The Company has filed all reports,
schedules, forms, statements, registration statements and other documents
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 or regulation to file such material) (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Reports”) 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.  As of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as applicable, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.  The financial statements of
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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.  Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis during
the periods involved (“GAAP”), 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, year-end audit adjustments.
 
(i) Material Changes; Undisclosed Events, Liabilities or Developments.  Since
the date of the latest audited financial statements included within the
Registration Statement or the SEC Reports, except as specifically disclosed in a
subsequent SEC Report, (i) there has been no event, occurrence or development
that has had or that would 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’s financial statements pursuant to
GAAP or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company equity
incentive plans.  The Company does not have pending before the Commission any
request for confidential treatment of information.  Except for the issuance of
the Securities contemplated by this Agreement or as set forth on Schedule
3.1(i), no event, liability or development has occurred or exists with respect
to the Company or its Subsidiaries or their respective business, properties,
operations or financial condition, that would be required to be disclosed by the
Company under applicable securities laws at the time this representation is made
that has not been publicly disclosed at least 1 Trading Day prior to the date
that this representation is made.
 
(j) Litigation.  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 “Action”) 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.  Neither the
Company nor any Subsidiary, nor any director or officer thereof, is or has been
the subject of any Action involving a claim of violation of or liability under
federal or state securities laws or a claim of breach of fiduciary duty.  There
has not been, and to the knowledge of the Company, there is not pending or
contemplated, any investigation by the Commission involving the Company or any
current or former director or officer of the Company.  The
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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.
 
(k) Labor Relations.  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.  None
of the Company’s or its Subsidiaries’ employees is a member of a union that
relates to such employee’s relationship with the Company, and neither the
Company or any of its Subsidiaries is a party to a collective bargaining
agreement, and the Company and its Subsidiaries believe that their relationships
with their employees are good.  No executive officer, to the knowledge of the
Company, is, or is now expected to be, in violation of any material term of any
employment contract, confidentiality, disclosure or proprietary information
agreement or non-competition agreement, or any other contract or agreement or
any restrictive covenant, and the continued employment of each such executive
officer does not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters.  The Company and its Subsidiaries
are in compliance with all U.S. federal, state, local and foreign laws and
regulations relating to employment and employment practices, terms and
conditions of employment and wages and hours, except where the failure to be in
compliance would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
 
(l) Compliance.  Neither the Company nor any Subsidiary (i) is in default under
or in violation of (and no event has occurred that has not been waived that,
with notice or lapse of time or both, would result in a default by the Company
or any Subsidiary under), nor has the Company or any Subsidiary received notice
of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (ii) is in violation of any
order of any court, arbitrator or governmental body, or (iii) is or has been in
violation of any statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws
applicable to its business and all such laws that affect the environment, except
in each case as would not have or reasonably be expected to result in a Material
Adverse Effect.
 
(m) Regulatory Permits.  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 (“Material Permits”), and neither the Company nor any
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any Material Permit.
 
(n) Title to Assets.  The Company and the Subsidiaries have good and marketable
title in all personal property owned by them that is material to the business of
the Company and the Subsidiaries, in each case free and clear of all Liens,
except for Liens as do not materially affect the value of such property and do
not materially
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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.  Neither the Company nor its Subsidiaries own any real property.  Any
real property and facilities held under lease by the Company and the
Subsidiaries are held by them under valid, subsisting and enforceable leases
with which the Company and the Subsidiaries are in compliance.
 
(o) Patents and Trademarks.  The Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights 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 “Intellectual Property Rights”).  Neither the Company
nor any Subsidiary has received a notice (written or otherwise) that the
Intellectual Property Rights used by the Company or any Subsidiary violates or
infringes upon the rights of any Person.  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.  The
Company and its Subsidiaries have taken reasonable security measures to protect
the secrecy, confidentiality and value of all of their intellectual properties,
except where failure to do so would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
 
(p) Insurance.  The Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and
the Subsidiaries are engaged, including, but not limited to, directors and
officers insurance coverage at least equal to the aggregate Commitment
Amount.  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.
 
(q) Transactions With Affiliates and Employees.  Except as set forth in the SEC
Reports, none of the officers or directors of the Company and, to the knowledge
of the Company, none of the employees of the Company is presently a party to any
transaction with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Company, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner, in each
case in excess of $120,000 other than (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 or restricted shares under any equity incentive plan of the Company.
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(r) Sarbanes-Oxley; Internal Accounting Controls.  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.  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’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’s general or specific authorization, and (iv)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under
the Exchange Act is recorded, processed, summarized and reported, within the
time periods specified in the Commission’s rules and forms.  The Company’s
certifying officers have evaluated the effectiveness of the Company’s disclosure
controls and procedures as of the end of the period covered by the Company’s
most recently filed periodic report under the Exchange Act (such date, the
“Evaluation Date”).  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.  Since the Evaluation Date, there have
been no changes in the Company’s internal control over financial reporting (as
such term is defined in the Exchange Act) that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over
financial reporting.
 
(s) Certain Fees.  No brokerage or finder’s fees or commissions are or will be
payable by the Company to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents.  The Purchaser shall
have no obligation with respect to any fees or with respect to any claims made
by or on behalf of other Persons for fees of a type contemplated in this Section
that may be due in connection with the transactions contemplated by the
Transaction Documents.
 
(t) Investment Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Securities, will not be or be an
Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.  The Company shall conduct its business in a
manner so that it will not become subject to the Investment Company Act.
 
(u) Listing and Maintenance Requirements.  The Company’s Common Stock is
registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to
have the effect of, terminating the registration of the Common Stock under the
Exchange Act nor has the Company received any notification that the Commission
is contemplating terminating such registration.  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
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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.
 
(v) Application of Takeover Protections.  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’s Certificate of Incorporation (or similar charter documents)
or the laws of its state of incorporation that is or could become applicable to
the Purchaser as a result of the Purchaser and the Company fulfilling their
obligations or exercising their rights under the Transaction Documents,
including without limitation as a result of the Company’s issuance of the
Securities and the Purchaser’s ownership of the Securities.
 
(w) Disclosure.  Except with respect to the material terms and conditions of the
transactions contemplated by the Transaction Documents, the Company confirms
that, neither it nor any other Person acting on its behalf has provided any of
the Purchaser or their agents or counsel with any information that it believes
constitutes or might constitute material, non-public information.   The Company
understands and confirms that the Purchaser will rely on the foregoing
representation in effecting transactions in securities of the Company.  All
disclosure furnished by or on behalf of the Company to the Purchaser regarding
the Company, its business and the transactions contemplated hereby, including
the Disclosure Schedules to this Agreement, 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 press releases disseminated by the Company during the
twelve months preceding the date of this Agreement taken as a whole do not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements, in
light of the circumstances under which they were made and when 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.
 
(x) No Integrated Offering. 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 any applicable
shareholder approval provisions of any Trading Market on which any of the
securities of the Company are listed or designated.
 
(y) Indebtedness.  For the purposes of this Agreement, “Indebtedness” shall mean
(a) any liabilities for borrowed money or amounts owed in excess of $50,000
(other than trade accounts payable incurred in the ordinary course of business),
(b) all guaranties, endorsements and other contingent obligations in respect of
Indebtedness of
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others, whether or not the same are or should be reflected in the Company’s
balance sheet (or the notes thereto), except guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business; and (c) the present value of any lease payments in
excess of $50,000 due under leases required to be capitalized in accordance with
GAAP.  Neither the Company nor any Subsidiary is in default with respect to any
Indebtedness.
 
(z) Tax Status.  Except for matters that would not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and each Subsidiary has filed all necessary federal, state
and foreign income and franchise tax returns and has paid or accrued all taxes
shown as due thereon, and the Company has no knowledge of a tax deficiency which
has been asserted or threatened against the Company or any Subsidiary.
 
(aa) Foreign Corrupt Practices.  Neither the Company, nor to the knowledge of
the Company, any agent or other person acting on behalf of the Company, has (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any 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.
 
(bb) Accountants.  The Company’s accountants are set forth in the Registration
Statement.  To the knowledge of the Company, such accountants, who the Company
expects will express their opinion with respect to the financial statements to
be included in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2008, are a registered public accounting firm as required by the
Exchange Act.
 
(cc) Acknowledgment Regarding Purchaser’s Purchase of Securities.  The Company
acknowledges and agrees that each of the Purchaser is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated thereby.  The Company further acknowledges
that no Purchaser is acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by any Purchaser or any
of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the
Purchaser’s purchase of the Securities.  The Company further represents to the
Purchaser that the Company’s decision to enter into this Agreement and the other
Transaction Documents has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its representatives.
 
(dd) Acknowledgement Regarding Purchaser’s Trading Activity.  Anything in this
Agreement or elsewhere herein to the contrary notwithstanding (other than
Section 4.14), it is understood and acknowledged by the Company (i) that the
Purchaser has not
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been asked to agree, nor has Purchaser agreed, to desist from purchasing or
selling securities of the Company; and (ii) that past or future open market or
other transactions by Purchaser before or after the closing of this Agreement or
future private placement transactions, may negatively impact the market price of
the Company’s publicly-traded securities.  The Company further understands and
acknowledges that (a) the Purchaser may engage in selling activities at various
times during the period that the Securities are outstanding, including, without
limitation, during the periods that the value of the Draw Down Shares are being
determined and (b) such selling activities could reduce the value of the
existing stockholders' equity interests in the Company at and after the time
that the selling activities are being conducted.  The Company acknowledges that
such aforementioned selling activities do not constitute a breach of any of the
Transaction Documents.
 
(ee) Regulation M Compliance.  The Company has not, and will not during the term
of this Agreement, and to its knowledge no one acting on its behalf has, or will
during the term of this Agreement, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or, paid any compensation for
soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay
to any person any compensation for soliciting another to purchase any other
securities of the Company.
 
3.2 Representations and Warranties of the Purchaser.  Purchaser hereby
represents and warrants as of the date hereof and as of each Closing Date to the
Company as follows:
 
(a) Organization; Authority.  Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with full right, corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution, delivery and performance by the Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate or similar action on the part of the Purchaser.  Each Transaction
Document to which it is a party has been duly executed by the Purchaser, and
when delivered by the Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of the 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’ 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.
 
(b) Ordinary Course of Business.  Purchaser is acquiring the Securities
hereunder in the ordinary course of its business.
 
(c) Purchaser Status.  At the time the Purchaser was offered the Securities, it
was, and at the date hereof it is, either: (i) an “accredited investor” as
defined in Rule
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501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
“qualified institutional buyer” as defined in Rule 144A(a) under the Securities
Act.
 
(d) Experience of Purchaser.  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.  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.
 
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
 
4.1 No Transfer Restrictions; DWAC Delivery.
 
Securities issued hereunder shall not contain any legend.  The Company may not
make any notation on its records or give instructions to any transfer agent of
the Company that place restrictions on the Securities.   All Securities shall be
transmitted by the transfer agent of the Company to the Purchaser by crediting
the account of the Purchaser’s prime broker with the DTC system.

4.2 THIS SECTION HAS BEEN INTENTIONALLY OMITTED.
 
4.3 Integration.  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 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.
 
4.4 Securities Laws Disclosure; Publicity.  The Company shall, by 8:30 a.m.
Eastern time on the second Trading Day immediately following the date hereof,
issue a Current Report on Form 8-K, disclosing the material terms of the
transactions contemplated hereby, and shall attach this Agreement thereto, and,
within the time periods required by Rule 424, file a prospectus supplement
containing all information required to be contained therein.  Other than as
required by this Agreement, the Company and the Purchaser shall consult with
each other in issuing any other press releases with respect to the transactions
contemplated hereby, and neither the Company nor the Purchaser 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 Purchaser, or
without the prior consent of the Purchaser, with respect to any press release of
the Company, which consent shall not unreasonably be withheld or delayed, except
if such disclosure is required by law, in which case the disclosing party shall
promptly provide the other party with prior notice of such public statement or
communication.
 
4.5 Shareholder Rights Plan.  No claim will be made or enforced by the Company
or, with the consent of the Company, any other Person, that the Purchaser is an
“Acquiring Person” under any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or similar
anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that the Purchaser could be deemed to trigger the provisions of any
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such plan or arrangement, by virtue of receiving Securities under the
Transaction Documents or under any other agreement between the Company and the
Purchaser.
 
4.6 Non-Public Information.  Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the
Company covenants and agrees that neither it nor any other Person acting on its
behalf will provide the Purchaser or its agents or counsel with any information
that the Company believes constitutes material non-public information, unless
prior thereto the Purchaser shall have executed a written agreement regarding
the confidentiality and use of such information.  The Company understands and
confirms that the Purchaser shall be relying on the foregoing representations in
effecting transactions in securities of the Company.
 
4.7 Indemnification of Purchaser.   Subject to the provisions of this Section
4.7, the Company will indemnify and hold the Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other
Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls the Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any 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 the Purchaser, or any
of its Affiliates, by any stockholder of the Company who is not an Affiliate of
the Purchaser, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based upon a breach of the
Purchaser’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings the Purchaser may have with any
such stockholder or any violations by the Purchaser of state or federal
securities laws or any conduct by the Purchaser which constitutes fraud, gross
negligence, willful misconduct or malfeasance).  If any action shall be brought
against any Purchaser Party in respect of which indemnity may be sought pursuant
to this Agreement, the Purchaser Party shall promptly notify the Company in
writing, and the Company shall have the right to assume the defense thereof with
counsel of its own choosing reasonably acceptable to the Purchaser Party.  Any
Purchaser Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the 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 the Purchaser
Party, in which case the Company shall be responsible for the reasonable fees
and expenses of no more than one such separate counsel.  The Company will not be
liable to any Purchaser Party under this Agreement (i) for any settlement by the
Purchaser Party effected without the Company’s prior written consent, which
shall not be unreasonably withheld or delayed; or (ii) to the extent, but only
to the extent that a
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loss, claim, damage or liability is attributable to any Purchaser Party’s breach
of any of the representations, warranties, covenants or agreements made by the
Purchaser Party in this Agreement or in the other Transaction Documents.
 
4.8 Reservation of Common Stock. 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 Draw Down Shares pursuant to this
Agreement.
 
4.9 Listing of Common Stock.  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 Initial Closing to
notify such Trading Market of the transactions provided for herein. 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
will take such other action as is necessary to cause all of the Shares to be
listed on such other Trading Market as promptly as possible.  The Company will
take all action reasonably necessary to continue the listing and trading of its
Common Stock on a Trading Market and will comply in all respects with the
Company’s reporting, filing and other obligations under the bylaws or rules of
the Trading Market.
 
4.10 Blue Sky Filings. The Company shall take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for, or to
qualify the Securities for, sale to the Purchaser at the Closing under
applicable securities or “Blue Sky” laws of the states of the United States, and
shall provide evidence of such actions promptly upon request of Purchaser.
 
4.11 Accuracy of Registration Statement. On each Settlement Date, the
Registration Statement and the prospectus therein (including any prospectus
supplement) shall not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading in light of the circumstances under
which they were made; and on such Settlement Date the Registration Statement and
the prospectus included therein will not include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, the Company makes no representations or
warranties as to the information contained in or omitted from the Registration
Statement and the prospectus included therein in reliance upon and in conformity
with the information furnished in writing to the Company by the Purchaser
specifically for inclusion in the Registration Statement and the prospectus
therein.
 
4.12 Notice of Certain Events Affecting Registration; Suspension of Right to
Request a Draw Down.  The Company will promptly notify the Purchaser in writing
upon the occurrence of any of the following events: (a) when any Prospectus
supplement or post-effective amendment to the Registration Statement is proposed
to be filed; (b) of any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to the Registration
Statement or prospectus or for additional information; (c) of the issuance by
the Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of a Registration Statement covering any or
all of the Securities or the initiation of any
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Proceedings for that purpose; (d) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Securities for sale in any jurisdiction, or the
initiation or threatening of any Proceeding for such purpose; (e) of the
occurrence of any event or passage of time that makes the financial statements
included in a Registration Statement ineligible for inclusion therein or any
statement made in the Registration Statement or prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to the Registration Statement,
prospectus or other documents so that, in the case of the Registration Statement
or the prospectus, as the case may be, it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and (f) the occurrence
or existence of any pending corporate development with respect to the Company
that the Company believes may be material and that, in the determination of the
Company, makes it not in the best interest of the Company to allow continued
availability of the Registration Statement or prospectus; provided that the
Company shall not disclose the substance of such corporate development to the
Purchaser. The Company shall not deliver to the Purchaser any Draw Down Notice
during the continuation of any of the foregoing events.  The Company shall
promptly make available to the Purchaser any such supplements or amendments to
the prospectus, at which time, provided that the registration statement and any
supplements and amendments thereto are then effective, the Company may
recommence the delivery of Draw Down Notices.
 
4.13 Minimum Use of Facility.  Subject to the limitation described in Section
2.1 and Article V, prior to the one year anniversary of the date hereof, the
Company shall have sold to the Purchaser not less than $3 million of Draw Down
Shares pursuant to this Agreement.
 
4.14 Short Sales.  After the date hereof and prior to the termination of this
Agreement, the Purchaser hereby agrees not to execute any Short Sales of the
Common Stock.
 
ARTICLE V.
CONDITIONS TO INITIAL CLOSING AND DRAW DOWNS
 
5.1 Conditions Precedent to the Obligation of the Company to Sell the
Shares.  The obligation hereunder of the Company to proceed to close this
Agreement and to issue and sell the Shares to the Purchaser is subject to the
satisfaction or waiver, at or before the Initial Closing, and as of each
Settlement Date of each of the conditions set forth below.  These conditions are
for the Company's sole benefit and may be waived by the Company in writing at
any time in its sole discretion.
 
(a) Accuracy of the Purchaser’s Representations and Warranties.  The
representations and warranties of the Purchaser shall be true and correct in all
material respects as of the date when made and as of the Initial Closing and as
of each Settlement Date as though made at that time (except for representations
and warranties that speak as of a particular date, which shall be true and
correct in all material respects as of such dates).
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(b) Performance by the Purchaser.  The Purchaser shall have performed, satisfied
and complied in all material respects with all covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by the Purchaser at or prior to the Initial Closing and as of each
Settlement Date.
 
(c) No Injunction.  No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this Agreement.
 
(d) No Proceedings or Litigation.  No material Action shall have been commenced
after the date hereof against the Purchaser or the Company or any Subsidiary, or
any of the officers, directors or affiliates of the Company or any Subsidiary,
seeking to restrain, prevent or change the transactions contemplated by this
Agreement, or seeking damages in connection with such transactions.
 
5.2 Conditions Precedent to the Obligation of the Purchaser to Close.  The
obligation hereunder of the Purchaser to perform its obligations under this
Agreement and to purchase the Shares is subject to the satisfaction or waiver,
at or before the Initial Closing, of each of the conditions set forth
below.  These conditions are for the Purchaser's sole benefit and may be waived
by the Purchaser in writing at any time in its sole discretion.
 
(a) Accuracy of the Company’s Representations and Warranties.  Each of the
representations and warranties of the Company shall be true and correct in all
material respects as of the date when made and as of the Initial Closing as
though made at that time (except for representations and warranties that speak
as of a particular date, which shall be true and correct in all material
respects as of such date).
 
(b) Performance by the Company.  The Company shall have performed, satisfied and
complied in all material respects with all material covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Initial Closing.
 
(c) No Injunction.  No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this Agreement.
 
(d) No Proceedings or Litigation.  No material Action shall have been commenced,
against the Purchaser or the Company or any subsidiary, or any of the officers,
directors or affiliates of the Company or any subsidiary seeking to restrain,
prevent or change the transactions contemplated by this Agreement, or seeking
damages in connection with such transactions.
 
(e) Initial Closing Deliveries.  The delivery by the Company of the items set
forth in Section 2.2(a) of this Agreement.
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(f) Commitment Shares.  On the Trading Day immediately prior to the commencement
of the first Draw Down Pricing Period, in consideration for agreeing to the
terms of this Agreement and no additional consideration at such time, the
Company shall have delivered to the Purchaser a number of shares of Common Stock
equal to $90,000 divided by the Closing Price of the Company’s Common Stock on
the Trading Day immediately prior to issuance, which shares shall be delivered
without legend to the DTC account specified by the Purchaser in writing to the
Company.
 
5.3 Conditions Precedent to the Obligation of the Purchaser to Accept a Draw
Down and Purchase the Shares.  The obligation hereunder of the Purchaser to
accept a Draw Down request and to acquire and pay for the Shares is subject to
the satisfaction at or before each Settlement Date, of each of the conditions
set forth below.
 
(a) Satisfaction of Conditions to Initial Closing.  The Company shall have
satisfied at the Initial Closing, or the Purchaser shall have waived at the
Initial Closing, the conditions set forth in Section 5.2 hereof.
 
(b) No Suspension.  Trading in the Common Stock shall not have been suspended by
the Commission or the Trading Market (except for any suspension of trading of
limited duration agreed to by the Company, which suspension shall be terminated
prior to the delivery of each Draw Down Notice), and, at any time prior to such
Draw Down Notice, trading in securities generally as reported on the Trading
Market shall not have been suspended or limited, or minimum prices shall not
have been established on securities whose trades are reported on the Trading
Market unless the general suspension or limitation shall have been terminated
prior to the delivery of such Draw Down Notice.
 
(c) Material Adverse Effect.  No Material Adverse Effect and no Consolidation
Event where the successor entity has not agreed to deliver to the Purchaser such
shares of stock and/or securities as the Purchaser is entitled to receive
pursuant to this Agreement.
 
(d) Opinion of Counsel.  The Purchaser shall have received an opinion of Company
Counsel, substantially in the form of Exhibit A hereto.
 
(e) Equity Conditions.  During the Draw Down Pricing Period through the
Settlement Date, all of the Equity Conditions shall have been met.
 

ARTICLE VI.
DRAW DOWN TERMS
 
6.1 Draw Down Terms.  Subject to the satisfaction of the conditions set forth in
this Agreement, the parties agree as follows:
 
(a)  The Company may, in its sole discretion, issue and exercise draw downs
against the Commitment Amount (each a “Draw Down”) during the Commitment Period,
which Draw Downs the Purchaser shall be obligated to accept, subject to the
terms and
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conditions of this Agreement. Before the Company shall exercise a Draw Down, the
Company shall have caused a sufficient number of shares of Common Stock to be
registered to cover the Draw Down Shares to be issued in connection with such
Draw Down.
 
(b) Only one Draw Down shall be allowed in each Draw Down Pricing Period and any
subsequent Draw Down Pricing Period shall not commence until the Trading Cushion
has elapsed since the end of the previous Draw Down Pricing Period. The number
of shares of Common Stock purchased by the Purchaser with respect to each Draw
Down shall be determined as set forth in Section 6.1(d) herein and settled on
the second Trading Day immediately following the end of the applicable Draw Down
Pricing period (each such settlement period and each such settlement date shall
be referred to as a “Settlement Period” and a “Settlement Date”, respectively).
 
(c)  The maximum Investment Amount as to each Draw Down shall be equal to A
multiplied by B, where A equals a number of shares of Common Stock equal to 15%
of the total trading volume during the 10 Trading Days immediately prior to the
applicable Draw Down Pricing Period and B equals the average of each of the
VWAPs during such 10 Trading Day period, or an amount mutually agreed upon in
writing by the Company and the Purchaser.
 
(d) The number of shares of Common Stock to be issued on each Settlement Date
shall be a number of shares equal to the sum of the quotients (for each Trading
Day within the Settlement Period) of (x) 10% of the Investment Amount, and (y)
the Purchase Price on each Trading Day within the Settlement Period, subject to
the following adjustments:
 
(i) if the Purchase Price on a given Trading Day is less than the applicable
Threshold Price, then such Trading Day shall be withdrawn from the Draw Down
Pricing Period; and
 
(ii) if during any Trading Day during the Draw Down Pricing Period trading of
the Common Stock on the Trading Market is suspended for more than 3 hours, in
the aggregate, or if any Trading Day during the Draw Down Pricing Period is
shortened because of a public holiday, then such Trading Day shall be withdrawn
from the Draw Down Pricing Period; and
 
(iii) if during any Trading Day during the Draw Down Pricing Period sales of
Draw Down Shares pursuant to the Registration Statement are suspended by the
Company for more than three (3) hours, in the aggregate, then such Trading Day
shall be withdrawn from the Draw Down Pricing Period.
 
(e) The Company must inform the Purchaser by delivering a draw down notice, in
the form of Exhibit B hereto (the “Draw Down Notice”), via facsimile
transmission in accordance with Section 8.3, as to the amount of the Draw Down
(the “Investment Amount”) the Company wishes to exercise. The Draw Down Notice
shall also inform the Purchaser of the first day of the Draw Down Pricing
Period, which,
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unless otherwise agreed to in writing by the parties, shall be the first Trading
Day following the date such Draw Down Notice is received (the “Commencement
Date”).  At no time shall the Purchaser be required to purchase more than the
maximum Investment Amount for a given Draw Down Pricing Period.  The Company
shall have the right to notify the Purchaser that Draw Downs shall be continuous
pursuant to a Draw Down Notice until such time that the Company elects to
suspend such Draw Down Notice.  In the event of a continuous Draw Down Notice,
the Company must give at least 2 Trading Days’ written notice of suspension to
the Purchaser and in no event shall a suspension of a Draw Down occur prior to
the end of any pending Draw Down Pricing Periods.  On or before any Trading Day
that a Draw Down Notice is delivered or notice of suspension of Draw Downs is
delivered, the Company shall have filed with the Commission a prospectus
supplement pursuant to Rule 424 under the Securities Act setting forth the terms
of the Draw Down Notice or suspension notice.
 
(f) On the Trading Day immediately following the last day of the Settlement
Period, the Company shall deliver and the Purchaser shall acknowledge a
settlement statement (the “Settlement Statement”) setting forth the number of
Draw Down Shares issuable and the aggregate Purchase Price as to such Settlement
Period.  On the Settlement Date as to such Draw Down, the Draw Down Shares
purchased pursuant to such Settlement Statement shall be delivered to the
Depository Trust Company (“DTC”) account of the Purchaser, or its designees, as
designated by the Purchaser in the Settlement Statement, via DTC’s Deposit
Withdrawal Agent Commission system (“DWAC”).  Upon the Company electronically
delivering such Draw Down Shares to the DTC account of the Purchaser, or its
designees, via DWAC by 1:00 p.m. ET, the Purchaser shall, on the same day (or
the next Business Day if such day is not a Business Day) wire transfer
immediately available funds to the Company’s bank account, as designated by the
Company in the Settlement Statement, for the amount of the aggregate Purchase
Price of such Draw Down Shares. Upon the Company electronically delivering the
Draw Down Shares to the Purchaser or its designee’s DTC account via DWAC after
1:00 p.m. ET, the Purchaser shall wire transfer next day available funds to the
Company’s designated account on such day.
 
(g) The Company understands that a delay in the delivery of the Shares to the
Purchaser beyond the Settlement Date could result in economic loss to the
Purchaser.  In addition to the Purchaser’s other available remedies, the Company
shall pay to the Purchaser, in cash, as partial liquidated damages and not as a
penalty, for each $1,000 of Shares (based on the Closing Price of the Common
Stock on the applicable Settlement Date) required to be delivered on the
Settlement Date, $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 Settlement Date until such Shares are delivered pursuant to this Article
VI.  Nothing herein shall limit the Purchaser’s right to pursue actual damages
for the Company’s failure to deliver certificates representing any Securities as
required by the Transaction Documents, including but not limited to the cost of
any buy-in to the Purchaser, and the 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.
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ARTICLE VII.
TERMINATION
 
7.1 Term.  The term of this Agreement shall begin on the date hereof and shall
end 24 months from the date hereof or as otherwise set forth in Section 7.2.
 
7.2 Other Termination. 
 
(a) This Agreement shall terminate (i) if the Common Stock is de-listed from the
Trading Market unless such de-listing is in connection with a subsequent listing
on another Trading Market, (ii) if the Company files for protection from
creditors under any applicable law, (iii) if the Company withdraws the
Registration Statement or (iv) upon the written mutual consent of the parties
hereto.
 
(b) The Company may terminate this Agreement upon 5 Trading Day’s notice if the
Purchaser shall fail to fund a properly noticed Draw Down within 5 Trading Days
of the end of the applicable Settlement Period.
 
(c) This Agreement shall automatically terminate upon the date that the entire
Commitment Amount has been drawn down.
 
(d) This Agreement may be terminated by the Company in its sole discretion,
subject to the minimum Draw Down described in Section 4.13 hereof, upon five (5)
Business Days’ notice, provided that such termination shall not occur during a
Draw Down Pricing Period or prior to a Settlement Date.
 
7.3 Effect of Termination.
 
In the event of termination of this Agreement pursuant to Section 7.2 herein,
written notice thereof shall forthwith be given to the other party and the
transactions contemplated by this Agreement shall be terminated without further
action by either party.  If this Agreement is terminated as provided in Section
7.1 or 7.2 herein, this Agreement shall become void and of no further force and
effect, except for Section 4.7 and Article 8 herein and any payments due and
owing to the Company hereunder, which shall survive the termination of this
Agreement.  Nothing in this Section 7.3 shall be deemed to release the Company
or the Purchaser from any liability for any breach under this Agreement, or to
impair the rights of the Company or the Purchaser to compel specific performance
by the other party of its obligations under this Agreement.

ARTICLE VIII.
MISCELLANEOUS

8.1 Fees and Expenses.  At the Initial Closing, the Company has agreed to
reimburse the Purchaser for its legal fees and expenses, $10,000 of which was
paid prior to the Initial Closing; provided, however, if such legal fees and
expenses exceed $10,000, the Purchaser shall have received the consent of the
Company with respect to any reimbursement.  Except as expressly set forth in the
Transaction Documents to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and
all other
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expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement.  The Company shall pay
all transfer agent fees, stamp taxes and other taxes and duties levied in
connection with the delivery of any Securities to the Purchaser.
 
8.2 Entire Agreement.  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.
 
8.3 Notices.  Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto prior to 5:30 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number set forth on the signature pages attached hereto on a day that is not a
Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c)
the 2nd Trading Day following the date of transmission 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.  The address for such
notices and communications shall be as set forth on the signature pages attached
hereto.
 
8.4 Amendments; Waivers.  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 the Purchaser or, in the case of a waiver, by the party against
whom enforcement of any such waived provision is sought.  No waiver of any
default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right.
 
8.5 Headings.  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.
 
8.6 Successors and Assigns.  This Agreement shall be binding upon and inure to
the benefit of the parties and their successors.  Neither party may assign this
Agreement or any rights or obligations hereunder (other than by merger).
 
8.7 No Third-Party Beneficiaries.  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 4.7.
 
8.8 Governing Law.  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.  Each
party agrees that all legal proceedings concerning the
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interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City
of New York, borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is
improper or is an inconvenient venue for such proceeding.  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.  Nothing contained herein shall be deemed to limit
in any way any right to serve process in any other manner permitted by law.  The
parties hereby waive all rights to a trial by jury.  If either party shall
commence an action or proceeding to enforce any provisions of the Transaction
Documents, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its reasonable attorneys’ fees and other costs
and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding.
 
8.9 Survival.  The representations and warranties contained herein shall survive
the Closing and the delivery of the Securities.
 
8.10 Execution.  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.  In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.
 
8.11 Severability.  If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
 
8.12 Replacement of Securities.  If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), or in lieu
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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.  The applicant for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs (including
providing customary indemnity) associated with the issuance of such replacement
Securities.
 
8.13 Remedies.  In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of the Purchaser
and the Company will be entitled to specific performance under the Transaction
Documents.  The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agrees to waive and not to
assert in any action for specific performance of any such obligation the defense
that a remedy at law would be adequate.
 
8.14 Liquidated Damages.  The Company’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.
 
8.15 Construction. The parties agree that each of them and/or their respective
counsel has reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of the Transaction Documents or any amendments hereto. In
addition, each and every reference to share prices and shares of Common Stock in
any Transaction Document shall be 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.
 
(Signature Pages Follow)
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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.
 

MEDIS TECHNOLOGIES LTD.
 
 
 
Address for Notice:
805 Third Avenue
New York, New York 10022
Facsimile: (212) 935-9216
By:  /s/ Jose Mejia

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Name: Jose Mejia
Title: President and CEO
 
 
With a copy to (which shall not constitute notice):
 
Herrick, Feinstein LLP
2 Park Avenue
New York, New York 10016
Attention: Stephen E. Fox, Esq.
Facsimile: (212) 545-3476
 
 
 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
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[PURCHASER SIGNATURE PAGES TO MDTL SECURITIES PURCHASE AGREEMENT]

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.

 
Name of Purchaser:  Ascendiant Capital Group, LLC

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Signature of Authorized Signatory of Purchaser:  /s/ Mark Bergendahl

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Name of Authorized Signatory:  Mark Bergendahl

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Title of Authorized Signatory:   Managing Director

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Email Address of Purchaser:  mbergendahl@ascendiant.com

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Fax Number of Purchaser:  (949) 756-1090

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Address for Notice of Purchaser:  18881 Von Karman, Ste. 1600, Irvine, CA 92612

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Address for Delivery of Securities for Purchaser (if not same as above):

Commitment Amount:
Shares:

[SIGNATURE PAGES CONTINUE]
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EXHIBIT B
 
DRAW DOWN NOTICE/COMPLIANCE CERTIFICATE
 
MEDIS TECHNOLOGIES LTD.
 
The undersigned hereby certifies, with respect to shares of Common Stock of
Medis Technologies Ltd. (the “Company”) issuable in connection with this Draw
Down Notice and Compliance Certificate dated _____________ (the “Notice”),
delivered pursuant to the Securities Purchase Agreement dated as of ______, 2009
(the “Agreement”), as follows:

1.           The undersigned is the duly appointed Chief Executive Officer or
Chief Financial Officer of the Company.
 
 
2.           Except as set forth on the schedules attached hereto or in the SEC
Reports (as defined in the Agreement), the representations and warranties of the
Company set forth in the Agreement are true and correct in all material respects
as though made on and as of the date hereof, except for representations and
warranties expressly made as of a particular date.
 
3.           The Company has performed in all material respects all covenants
and agreements and conditions required under the Agreement to be performed by
the Company on or prior to the date of this Draw Down Notice.
 
4.           The Investment Amount is $___________.
 
5.           Draw Downs shall commence on ____________ and end after [check
one]:
 
a.           ______ the completion of ___ Draw Down Pricing Periods.
 
b.           ______ until written notice to you that Draw Downs have been
suspended provided that no pending Draw Down may be suspended.
 
6.           The Threshold Price for purposes of this Draw Down is $_____.
 
The undersigned has executed this Certificate this ____ day of ________, _____.
 
 

 
MEDIS TECHNOLOGIES LTD.
         
 
By:
        Name        Title           

 

 
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