Exhibit 10.118

SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of September 25, 2006,
by and among VCampus Corporation, a Delaware corporation, with headquarters
located at 1850 Centennial Park Drive, Suite 200, Reston, VA 20191
(the ”Company”), and the investors listed on the Schedule of Buyers attached
hereto (individually, a “Buyer” and collectively, the “Buyers”).

WHEREAS:

A.  The Company and each Buyer is executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of
Regulation D (“Regulation D”) as promulgated by the United States Securities and
Exchange Commission (the “SEC”) under the 1933 Act.

B.  The Company has authorized a new series of senior secured convertible notes
of the Company which notes shall be convertible into the Company’s common stock,
par value $0.01 per share (the ”Common Stock”), in accordance with the terms of
the Notes (as defined below).

C.  Each Buyer wishes to purchase, and the Company wishes to sell, upon the
terms and conditions stated in this Agreement, (i) that aggregate principal
amount of the Notes, in substantially the form attached hereto as Exhibit A 
(the “Notes”), set forth opposite such Buyer’s name in column (3) on the
Schedule of Buyers attached hereto (which aggregate amount for all Buyers shall
be $3,000,000) (as converted into Common Stock, collectively, the “Conversion
Shares”), and (ii) warrants, in substantially the form attached hereto as
Exhibit B (the “Warrants”), to acquire that number of shares of Common Stock set
forth opposite such Buyer’s name in column (4) on the Schedule of Buyers.

D.  Contemporaneously with the execution and delivery of this Agreement, the
parties hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit C (the “Registration Rights
Agreement”), pursuant to which the Company has agreed to provide certain
registration rights with respect to the Conversion Shares and the Warrant Shares
under the 1933 Act and the rules and regulations promulgated thereunder, and
applicable state securities laws.

E.  The Notes, the Conversion Shares, the Warrants and the Warrant Shares
collectively are referred to herein as the “Securities”.

F.  The Notes will rank senior to all future indebtedness of the Company,
subject to Permitted Senior Indebtedness (as defined in the Notes) and will be
secured by a perfected security interest in all of the assets of the Company and
each of the Company’s subsidiaries, as evidenced by the security agreement
attached hereto as Exhibit D (the “Security Agreement”) and together with the
Pledge Agreement, and any ancillary documents related thereto, collectively the
“Security Documents”).

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NOW, THEREFORE, the Company and each Buyer hereby agree as follows:

1.             PURCHASE AND SALE OF NOTES AND WARRANTS.

(a)           Purchase of Notes and Warrants.

(b)           Subject to the satisfaction (or waiver) of the conditions set
forth in Sections 6 and 7 below, the Company shall issue and sell to each Buyer,
and each Buyer severally, but not jointly, will purchase from the Company on the
Closing Date (as defined below), (x) a principal amount of Notes as is set forth
opposite such Buyer’s name in column (3) on the Schedule of Buyers and (y)
Warrants to acquire that number of Warrant Shares as is set forth opposite such
Buyer’s name in column (4) on the Schedule of Buyers (the “Closing”).

(i)            Closing.  The date and time of the Closing (the “Closing Date”)
shall be 10:00 a.m., New York City Time, on September 25, 2006 (or such later
date as is mutually agreed to by the Company and the Required Holders (as
defined in the Note)) after notification of satisfaction (or waiver) of the
conditions to the Closing set forth in Sections 6 and 7 below at the offices of
Gottbetter & Partners, LLP, 488 Madison Avenue, New York, NY 10022.

(ii)           Purchase Price.  The aggregate purchase price for the Notes and
the Warrants to be purchased by each Buyer at the Closing (the “Purchase Price”)
shall be the amount set forth opposite such Buyer’s name in column (5) of the
Schedule of Buyers.  Each Buyer shall pay $0.94 for each $1.00 of principal
amount of Notes and related Warrants to be purchased by such Buyer at the
Closing.

(c)           Form of Payment.  On the Closing Date, (i) each Buyer shall pay
its Purchase Price to the Company for the Notes and the Warrants to be issued
and sold to such Buyer at the Closing by wire transfer of immediately available
funds in accordance with the Company’s written wire instructions and (ii) the
Company shall deliver to each Buyer (A) the Notes (in the principal amounts as
such Buyer shall have requested prior to the Closing) which such Buyer is then
purchasing and (B) the Warrants (in the amounts as such Buyer shall have
requested prior to the Closing) which such Buyer is purchasing, in each case
duly executed on behalf of the Company and registered in the name of such Buyer
or its permitted designee.

2.                                       BUYER’S REPRESENTATIONS AND WARRANTIES.

Each Buyer represents and warrants with respect to only itself that:

(a)           No Public Sale or Distribution.  Such Buyer is (i) acquiring the
Notes and the Warrants and (ii) upon conversion of the Notes and exercise of the
Warrants will acquire the Conversion Shares issuable upon conversion of the
Notes and the Warrant Shares issuable upon exercise of the Warrants, for its own
account and not with a view towards, or for resale in connection with, the
public sale or distribution thereof, except pursuant to sales registered or
exempt from registration under the 1933 Act; provided, however, that by making
the representations herein, such Buyer does not agree to hold any of the
Securities for any minimum

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or other specific term and reserves the right to dispose of the Securities at
any time in accordance with or pursuant to a registration statement or an
exemption from registration under the 1933 Act.  Such Buyer is not a broker
dealer or an entity engaged in the business of being a broker dealer and is
acquiring the Securities hereunder in the ordinary course of its business.  Such
Buyer does not presently have any agreement or understanding, directly or
indirectly, with any Person to distribute any of the Securities.

(b)           Accredited Investor Status.  Such Buyer is an “accredited
investor” as that term is defined in Rule 501(a) under the 1933 Act.  Such Buyer
is not a registered broker-dealer under Section 15 of the 1934 Act (as defined
herein).

(c)           Reliance on Exemptions.  Such Buyer understands that the
Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying in part upon the truth and accuracy of, and
such Buyer’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of such Buyer
to acquire the Securities.

(d)           Information.  Such Buyer and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Securities
which have been requested by such Buyer.  Such Buyer and its advisors, if any,
have been afforded the opportunity to ask questions of the Company and has
received and read the SEC Documents filed via Edgar.  Neither such inquiries nor
any other due diligence investigations conducted by such Buyer or its advisors,
if any, or its representatives shall modify, amend or affect such Buyer’s right
to rely on the Company’s representations and warranties contained herein.  Such
Buyer understands that its investment in the Securities involves a high degree
of risk.  Such Buyer has sought such accounting, legal and tax advice as it has
considered necessary to make an informed investment decision with respect to its
acquisition of the Securities.

(e)           No Governmental Review.  Such Buyer understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.

(f)            Transfer or Resale.  Such Buyer understands that except as
provided in the Registration Rights Agreement: (i) the Securities have not been
and are not being registered under the 1933 Act or any state securities laws,
and may not be offered for sale, sold, assigned or transferred unless (A)
subsequently registered thereunder, (B) such Buyer shall have delivered to the
Company an opinion of counsel, in a form reasonably acceptable to the Company,
to the effect that such Securities to be sold, assigned or transferred may be
sold, assigned or transferred pursuant to an exemption from such registration,
or (C) such Buyer provides the Company with reasonable assurance that such
Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule
144A promulgated under the 1933 Act, as amended, (or a successor rule thereto)

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(collectively, “Rule 144”); (ii) any sale of the Securities made in reliance on
Rule 144 may be made only in accordance with the terms of Rule 144 and further,
if Rule 144 is not applicable, any resale of the Securities under circumstances
in which the seller (or the Person (as defined in Section 3(s)) through whom the
sale is made) may be deemed to be an underwriter (as that term is defined in the
1933 Act) may require compliance with some other exemption under the 1933 Act or
the rules and regulations of the SEC thereunder; and (iii) neither the Company
nor any other Person is under any obligation to register the Securities under
the 1933 Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder.  The Securities may be pledged in
connection with a bona fide margin account or other loan or financing
arrangement secured by the Securities and such pledge of Securities shall not be
deemed to be a transfer, sale or assignment of the Securities hereunder, and no
Buyer effecting a pledge of Securities shall be required to provide the Company
with any notice thereof or otherwise make any delivery to the Company pursuant
to this Agreement or any other Transaction Document (as defined in Section
3(b)), including, without limitation, this Section 2(f).

(g)           Legends.  Such Buyer understands that the certificates or other
instruments representing the Notes and the Warrants and, until such time as the
resale of the Conversion Shares and the Warrant Shares have been registered
under the 1933 Act as contemplated by each of the Registration Rights Agreement,
the stock certificates representing the Conversion Shares and the Warrant
Shares, except as set forth below, shall bear any legend as required by federal
law and the “blue sky” laws of any state and a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of such stock certificates):

[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE]
HAVE BEEN] [THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] 
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.

The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped, if, unless otherwise required by federal or state securities laws, (i)
such Securities are registered for resale under the 1933 Act,

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(ii) in connection with a sale, assignment or other transfer, such holder
provides the Company with an opinion of counsel, in a form reasonably acceptable
to the Company, to the effect that such sale, assignment or transfer of the
Securities may be made without registration under the applicable requirements of
the 1933 Act, or (iii) such holder provides the Company with reasonable
assurance that the Securities can be sold, assigned or transferred pursuant to
Rule 144 or Rule 144A.

(h)           Validity; Enforcement.  The Transaction Documents (as defined
below) to which such Buyer is a party have been duly and validly authorized,
executed and delivered on behalf of such Buyer and shall constitute the legal,
valid and binding obligations of such Buyer enforceable against such Buyer in
accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies.

(i)            No Conflicts.  The execution, delivery and performance by such
Buyer of the Transaction Documents to which such Buyer is a party and the
consummation by such Buyer of the transactions contemplated hereby and thereby
will not (i) result in a violation of the organizational documents of such Buyer
or (ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which such Buyer is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment  or decree
(including federal and state securities laws) applicable to such Buyer, except
in the case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ability of such
Buyer to perform its obligations hereunder.

(j)            Residency.  Such Buyer is a resident of that jurisdiction
specified below its address on the Schedule of Buyers.

(k)           Independent Investment Decision.  Such Buyer has independently
evaluated the merits of its decision to purchase the Securities pursuant to the
Transaction Documents, and such Buyer confirms that it has not relied on the
advice of any other Buyer’s business and/or legal counsel in making such
decision.

(l)            Certain Trading Activities.  Such Buyer has not directly or
indirectly, nor has any Person acting on behalf of or pursuant to any
understanding with such Buyer, engaged in any transactions in the securities of
the Company (including, without limitations, any Short Sales involving the
Company’s securities) since the time that such Buyer was first contacted by the
Company regarding the transactions contemplated hereby.  Such Buyer covenants
that neither it nor any Person acting on its behalf or pursuant to any
understanding with it will engage in any transactions in the securities of the
Company (including Short Sales) prior to the Maturity Date on the Notes.  For
the purpose of this Agreement, “Short Sales” include, without limitation, all
“short sales” as defined in Rule 200 promulgated under Regulation SHO under the
1934 Act and all types of direct and indirect stock pledges, forward sale
contracts, options, puts, calls, swaps and similar arrangements (including on a
total return basis), and sales and other transactions through non-US broker
dealers or foreign regulated brokers.

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(m)          Limited Ownership.  The purchase by such Buyer of the Securities
issuable to it at the Closing will not result in such Buyer or in the aggregate
with other Buyers (individually or together with other Persons with whom such
Buyer has identified, or will have identified, itself as part of a “group” in a
public filing made with the SEC involving the Company’s securities) acquiring,
or obtaining the right to acquire, in excess of 19.999% of the outstanding
shares of Common Stock or the voting power of the Company on a post transaction
basis that assumes that the Closing shall have occurred. Such Buyer does not
presently intend to, alone or together with others, make a public filing with
the SEC to disclose that it has (or that it together with such other Persons
have) acquired, or obtained the right to acquire, as a result of the Closing
(when added to any other securities of the Company that it or they then own or
have the right to acquire), in excess of 19.999% of the outstanding shares of
Common Stock or the voting power of the Company on a post transaction basis that
assumes that the Closing shall have occurred.

(n)           General Solicitation.  Such Buyer is not purchasing the Securities
as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media
or broadcast over television or radio or presented at any seminar.

(o)           Organization; Authority.  Such Buyer is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with the requisite corporate or partnership or other entity power
and authority to enter into and to consummate the transactions contemplated by
the applicable Transaction Documents and otherwise to carry out its obligations
thereunder.

(p)           Prohibited Transactions.  Since the time the Buyer was first
contracted by the Company regarding the transactions contemplated hereby,
including during the last ten (10) days prior to the date  hereof,  neither 
such  Buyer  nor any  Person  acting on behalf of or pursuant  to any 
understanding  with such Buyer has,  directly  or  indirectly, effected  or
agreed to effect any short  sale,  whether or not  against the box, established
any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange 
Act) with  respect  to the  Common  Stock,  granted  any  other  right
(including,  without  limitation,  any put or call  option)  with respect to the
Common  Stock or with  respect  to any  security  that  includes,  relates to or
derived any  significant  part of its value from the Common  Stock or  otherwise
sought to hedge its position in the Securities (but not including any actions to
secure  available  shares to borrow in order to effect  short  sales or  similar
transactions  in the future)  (each, a “Prohibited  Transaction”).  Prior to the
termination of this Agreement such Buyer shall not, and shall cause any Person
acting on behalf of or pursuant to any understanding  with such Buyer not to,
engage, directly or indirectly, in a Prohibited Transaction.  Such Buyer
acknowledges that the representations, warranties and covenants contained in
this Section 2(p) are being made for the benefit of the Buyers as well as the
Company.

3.             REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each of the Buyers that, except as set
forth in the Disclosure Schedule attached hereto (the “Disclosure Schedule”) or
as disclosed in the SEC Documents:

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(a)           Organization and Qualification.  The Company and its
“Subsidiaries” (which for purposes of this Agreement means any joint venture or
any entity in which the Company, directly or indirectly, owns capital stock or
holds an equity or similar interest of more than 50%) are entities duly
organized and validly existing in good standing under the laws of the
jurisdiction in which they are formed, and have the requisite power and
authority to own their properties and to carry on their business as now being
conducted.  Each of the Company and its Subsidiaries is duly qualified as a
foreign entity to do business and is in good standing in every jurisdiction in
which its ownership of property or the nature of the business conducted by it
makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not have a Material Adverse Effect.
 As used in this Agreement, “Material Adverse Effect” means any material adverse
effect on the business, properties, assets, operations, results of operations,
condition (financial or otherwise) of the Company and its Subsidiaries, taken as
a whole, or on the transactions contemplated hereby and the other Transaction
Documents or by the agreements and instruments to be entered into in connection
herewith or therewith, or on the authority or ability of the Company to perform
its obligations under the Transaction Documents (as defined below).  The Company
has no Subsidiaries except as set forth on Schedule 3(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 (except as listed on Schedule 3(a)),
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)           Authorization; Enforcement; Validity.  The Company has the
requisite power and authority to enter into and perform its obligations under
this Agreement, the Notes, the Warrants, the Registration Rights Agreement, the
Security Documents, the Irrevocable Transfer Agent Instructions (as defined in
Section 5(b)), and each of the other agreements entered into by the Company in
connection with the transactions contemplated by this Agreement (collectively,
the “Transaction Documents”) and to issue the Securities in accordance with the
terms hereof and thereof.  The execution and delivery of this Agreement and the
other Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby, including, without
limitation, the issuance of the Notes and the Warrants, the reservation for
issuance and the issuance of the Conversion Shares issuable upon conversion of
the Notes, the reservation for issuance and issuance of Warrant Shares issuable
upon exercise of the Warrants, and the granting of a security interest in the
Collateral (as defined in the Security Documents) have been duly authorized by
the Company’s Board of Directors and (other than (i) the filing of appropriate
UCC financing statements with the appropriate states and other authorities
pursuant to the Security Agreement, (ii) the filing of a Form D under
Regulation D of the 1933 Act, (iii) the filing with the SEC of one or more
Registration Statements in accordance with the requirements of the Registration
Rights Agreement and (iv) as described in Schedule 3(b)) no further filing,
consent, or authorization is required by the Company, its Board of Directors or
its stockholders.  This Agreement and the other Transaction Documents of even
date herewith have been duly executed and delivered by the Company, and
constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with

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their respective terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of applicable creditors’ rights and remedies.

(c)           Issuance of Securities.  The issuance of the Notes and the
Warrants are duly authorized and are free from all taxes, liens and charges with
respect to the issue thereof.  As of the Closing, a number of shares of Common
Stock shall have been duly authorized and reserved for issuance which equals
100% of the maximum number of shares Common Stock issuable upon conversion of
the Notes and upon exercise of the Warrants.  Upon conversion in accordance with
the Notes or exercise in accordance with the Warrants, as the case may be, the
Conversion Shares and the Warrant Shares, respectively, will be validly issued,
fully paid and nonassessable and free from all preemptive or similar rights,
taxes, liens and charges imposed by or through the Company with respect to the
issue thereof, with the holders being entitled to all rights accorded to a
holder of Common Stock.  The offer and issuance by the Company of the Securities
is exempt from registration under the 1933 Act.

(d)           No Conflicts.  The execution, delivery and performance of this
Agreement and the other Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance of the Notes and the Warrants, the
granting of a security interest in the Collateral and reservation for issuance
and issuance of the Conversion Shares and the Warrant Shares) will not (i)
result in a violation of the Certificate of Incorporation (as defined in Section
3(r)) of the Company or any of its Subsidiaries, any capital stock of the
Company or Bylaws (as defined in Section 3(r)) of the Company or any of its
Subsidiaries or (ii) except as set forth in Schedule 3(d), conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company or any of its Subsidiaries is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations and the rules and
regulations of the Over-The-Counter Bulletin Board (the “Principal Market”)
applicable to the Company or any of its Subsidiaries or by which any property or
asset of the Company or any of its Subsidiaries is bound or affected.

(e)           Consents.  Other than as set forth in Schedule 3(b) hereof or in
Schedule 3(e), the Company is not required to obtain any consent, authorization
or order of, or make any filing or registration with, any court, governmental
agency or any regulatory or self-regulatory agency or any other Person in order
for it to execute, deliver or perform any of its obligations under or
contemplated by the Transaction Documents, in each case in accordance with the
terms hereof or thereof.  All consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the Closing Date, and the
Company and its Subsidiaries are unaware of any facts or circumstances which
might prevent the Company from obtaining or effecting any of the registration,
application or filings pursuant to the preceding sentence.  The Company is not
in violation of the applicable trading requirements of the Principal Market and
has no knowledge of any facts which would reasonably lead to suspension of the
Common Stock from trading thereon

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in the foreseeable future.  The issuance by the Company of the Securities shall
not have the effect of suspending the Common Stock from trading on the Principal
Market.

(f)            Acknowledgment Regarding Buyer’s Purchase of Securities.  The
Company acknowledges and agrees that each Buyer is acting solely in the capacity
of an arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and that no Buyer is (i) an officer
or director of the Company, (ii) to the knowledge of the Company, an “affiliate”
of the Company (as defined in Rule 144) or (iii) to the knowledge of the
Company, a “beneficial owner” of more than 10% of the shares of Common Stock (as
defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended (the “1934 Act”).   The Company further acknowledges that no Buyer is
acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the other Transaction Documents and
the transactions contemplated hereby and thereby, and any advice given by a
Buyer or any of its representatives or agents in connection with this Agreement
and the other Transaction Documents and the transactions contemplated hereby and
thereby is merely incidental to such Buyer’s purchase of the Securities.  The
Company further represents to each Buyer that the Company’s decision to enter
into the Transaction Documents has been based solely on the independent
evaluation by the Company and its representatives.

(g)           No General Solicitation.  Neither the Company, nor any of its
Subsidiaries or Affiliates, nor, to the Company’s knowledge, any Person acting
on its or their behalf, has engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with the
offer or sale of the Securities.  The Company shall be responsible for the
payment of any placement agent’s fees, financial advisory fees, or brokers’
commissions (other than for persons engaged by any Buyer or its investment
advisor) relating to or arising out of the transactions contemplated hereby. 
The Company shall pay, and hold each Buyer harmless against, any liability, loss
or expense (including, without limitation, attorney’s fees and out-of-pocket
expenses) arising in connection with any such claim (including any claim from
the Placement Agent (as defined below)).  The Company acknowledges that it has
engaged Carter Securities, LLC, as placement agent (the “Placement Agent”) in
connection with the sale of the Securities.  Other than the Placement Agent, the
Company has not engaged any placement agent or other agent in connection with
the sale of the Securities.

(h)           No Integrated Offering.  None of the Company, its Subsidiaries, or
to its knowledge any of their affiliates, or any Person acting on its or their
behalf has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would require
registration of any of the Securities under the 1933 Act or cause this offering
of the Securities to be integrated with prior offerings by the Company for
purposes of the 1933 Act or any applicable stockholder approval provisions,
including, without limitation, under the rules and regulations of any exchange
or automated quotation system on which any of the securities of the Company are
listed or designated.  None of the Company, its Subsidiaries, their Affiliates
or any Person acting on its or their behalf will take any action or steps
referred to in the preceding sentence that would require registration of any of
the Securities under the 1933 Act or cause the offering of the Securities to be
integrated with other offerings in a manner that would require such
registration.

 

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(i)            Dilutive Effect.  The Company understands and acknowledges that
the number of Conversion Shares issuable upon conversion of the Notes and the
Warrant Shares issuable upon exercise of the Warrants will increase in certain
circumstances.  The Company further acknowledges that its obligation to issue
Conversion Shares upon conversion of the Notes in accordance with this Agreement
and the Notes and its obligation to issue the Warrant Shares upon exercise of
the Warrants in accordance with this Agreement and the Warrant is, in each case,
absolute and unconditional regardless of the dilutive effect that such issuance
may have on the ownership interests of other stockholders of the Company.

(j)            Application of Takeover Protections; Rights Agreement.  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 Articles of Incorporation or
the laws of the jurisdiction of its formation which is or could become
applicable to any Buyer as a result of the transactions contemplated by this
Agreement, including, without limitation, the Company’s issuance of the
Securities and any Buyer’s ownership of the Securities.  The Company has not
adopted a stockholder rights plan or similar arrangement relating to
accumulations of beneficial ownership of Common Stock or a change in control of
the Company.

(k)           SEC Documents; Financial Statements.  Except as disclosed in
Schedule 3(k), during the two (2) years prior to the date hereof, the Company
has filed all reports, schedules, forms, statements and other documents required
to be filed by it with the SEC pursuant to the reporting requirements of the
1934 Act (all of the foregoing filed prior to the date hereof and all exhibits
included therein and financial statements, notes and schedules thereto and
documents incorporated by reference therein being hereinafter referred to as the
“SEC Documents”).  The Company has delivered to the Buyers or their respective
representatives true, correct and complete copies of the SEC Documents not
available on the EDGAR system if such SEC Documents have been requested in
writing by Buyers.  As of their respective filing dates, the SEC Documents, as
they may have been subsequently amended by filings made by the Company with the
SEC prior to the date hereof complied in all material respects with the
requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, as they may have been
subsequently amended by filings made by the Company with the SEC prior to the
date hereof 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.  As of their respective filing dates, the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto.  Such financial
statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).  No other  information  provided by or on behalf of the Company to

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the Buyers in connection with the transactions  contemplated hereby which is not
included  in the  SEC  Documents,  including,  without  limitation,  information
referred to in Section 2(d) of this  Agreement or in any  disclosure  schedules,
contains any untrue  statement of a material fact or omits to state any material
fact  necessary  in order to make the  statements  therein,  in the light of the
circumstance under which they are or were made, not misleading.

(l)            Absence of Certain Changes.  Except as disclosed in Schedule 3(l)
or in the SEC Documents, since the date of the Company’s most recent audited
financial statements contained in a Form 10-K, there has been no material
adverse change and no material adverse development in the business, assets,
properties, operations, condition (financial or otherwise), or results of
operations of the Company. Except as disclosed in Schedule 3(l), since the date
of the Company’s most recent audited financial statements contained in a Form
10-K, neither the Company nor any of its Subsidiaries has (i) declared or paid
any dividends on its Common Stock, (ii) except as disclosed in the SEC
Documents, sold any assets, individually or in the aggregate, in excess of
$100,000 outside of the ordinary course of business or (iii) except as set forth
in Schedule 3(l) or in the SEC Documents, had capital expenditures, individually
or in the aggregate, in excess of $100,000.  Except as set forth in Schedule
3(l), neither the Company nor any of its Subsidiaries has taken any steps to
seek protection pursuant to any bankruptcy law nor does the Company have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings or any actual knowledge of any fact which would
reasonably lead a creditor to do so. The Company and its Subsidiaries,
individually and on a consolidated basis, are not as of the date hereof, and
after giving effect to the transactions contemplated hereby to occur at the
Closing, will not be Insolvent (as defined below). For purposes of this
Section 3(l), “Insolvent” means (i) the present fair saleable value of the
Company’s assets is less than the amount required to pay the Company’s total
Indebtedness (as defined in Section 3(s)), (ii) the Company is unable to pay its
debts and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured, or (iii) the Company intends to incur
or believes that it will incur debts that would be beyond its ability to pay as
such debts mature.

(m)          No Undisclosed Events, Liabilities, Developments or Circumstances.
 Except as disclosed in the Disclosure Schedules, no event, liability,
development or circumstance has occurred or exists, or is contemplated to occur
with respect to the Company, its Subsidiaries or their respective business,
properties, prospects, operations or financial condition, that would be required
to be disclosed by the Company under applicable securities laws on a
registration statement on Form SB-2 or any other appropriate form filed with the
SEC relating to an issuance and sale by the Company of its Common Stock and
which has not been publicly announced.

(n)           Conduct of Business; Regulatory Permits.  Neither the Company nor
any of its Subsidiaries is in violation of any term of or in default under its
Certificate of Incorporation or Bylaws or their organizational charter or
certificate of incorporation or bylaws, respectively.  Neither the Company nor
any of its Subsidiaries is in violation of any judgment, decree or order or any
law, statute, ordinance, rule or regulation applicable to the Company or its
Subsidiaries, and neither the Company nor any of its Subsidiaries will knowingly
conduct its business in violation of any of the foregoing, except for possible
violations which would not, individually or in the aggregate, have a Material
Adverse Effect.  Without limiting the generality of the

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foregoing, the Company is not in violation of any of the rules, regulations or
requirements of the Principal Market and has no knowledge of any facts or
circumstances which would reasonably lead to suspension of the Common Stock from
trading by the Principal Market in the foreseeable future.  Except as set forth
in Schedule 3(n), during the two (2) years prior to the date hereof, (i) the
Common Stock has been designated for quotation on the Principal Market, (ii)
trading in the Common Stock has not been suspended by the SEC or the Principal
Market and (iii) the Company has received no communication, written or oral,
from the SEC or the Principal Market regarding the suspension of the Common
Stock from trading on the Principal Market.  The Company and its Subsidiaries
possess all certificates, authorizations and permits issued by the appropriate
regulatory authorities necessary to conduct their respective businesses, except
where the failure to possess such certificates, authorizations or permits would
not have, individually or in the aggregate, a Material Adverse Effect, and
neither the Company nor any such Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit.

(o)           Foreign Corrupt Practices.  Neither the Company, nor any of its
Subsidiaries, nor, to their knowledge, any director, officer, agent, employee or
other Person acting on behalf of the Company or any of its Subsidiaries has, in
the course of its actions for, or on behalf of, the Company or any of its
Subsidiaries (i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity; (ii)
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as
amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government
official or employee.

(p)           Sarbanes-Oxley Act.  The Company is in compliance with any and all
applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as
of the date hereof, and any and all applicable rules and regulations promulgated
by the SEC thereunder that are effective as of the date hereof.

(q)            Transactions With Affiliates.  Except as set forth in the SEC
Documents filed at least ten days prior to the date hereof and other than the
grant of stock options disclosed on Schedule 3(q), none of the officers,
directors or employees of the Company or any of its Subsidiaries is presently a
party to any transaction with the Company or any of its Subsidiaries (other than
for ordinary course services as employees, officers or 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 such officer, director or
employee or, to the knowledge of the Company or any of its Subsidiaries, any
corporation, partnership, trust or other entity in which any such officer,
director, or employee has a substantial interest or is an officer, director,
trustee or partner.

(r)            Equity Capitalization.  As of immediately prior to Closing, the
authorized capital stock of the Company consists of (i) 50,000,000 shares of
Common Stock, of which as of the date hereof, 10,075,424 are issued and
outstanding, up to 3,348,346 shares are reserved for issuance pursuant to the
Company’s stock option plans and 7,510,318 shares are reserved for

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issuance pursuant to warrants (other than the Warrants and the options covered
above) exercisable for shares of Common Stock, 667,831 shares of Common Stock
issuable upon conversion of outstanding convertible debt and (ii) a total of
6,008,536 shares of Common Stock issuable upon conversion of preferred stock.
 All of such outstanding shares have been, or upon issuance will be, validly
issued and are fully paid and nonassessable.  Except as disclosed herein or in
the Company’s filings with the SEC as available on EDGAR (the “SEC Filings”) or
as disclosed in Schedule 3(r): (i) none of the Company’s capital stock is
subject to preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company; (ii) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or
exercisable or exchangeable for, any capital stock of the Company or any of its
Subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its Subsidiaries is or may become bound to issue
additional capital stock of the Company or any of its Subsidiaries or options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable
or exchangeable for, any capital stock of the Company or any of its
Subsidiaries; (iii) there are no outstanding debt securities, notes, credit or
loan agreements, credit facilities or other agreements, documents or instruments
evidencing Indebtedness (as defined below) of the Company or any of its
Subsidiaries or by which the Company or any of its Subsidiaries is or may become
bound; (iv) there are no financing statements securing obligations in any
material amounts, either singly or in the aggregate, filed in connection with
the Company or any of its Subsidiaries; (v) there are no agreements or
arrangements under which the Company or any of its Subsidiaries is obligated to
register the sale of any of their securities under the 1933 Act (except pursuant
to the Registration Rights Agreement); (vi) there are no outstanding securities
or instruments of the Company or any of its Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to purchase, repurchase, retire or redeem a security of
the Company or any of its Subsidiaries; (vii) there are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the Securities; (viii) the Company does not have
any stock appreciation rights or “phantom stock” plans or agreements or any
similar plan or agreement; and (ix) the Company and its Subsidiaries have no
liabilities or obligations required to be disclosed in the SEC Documents but not
so disclosed in the SEC Documents, other than those which, individually or in
the aggregate, do not or would not have a Material Adverse Effect.  The Company
has furnished to the Buyer true, correct and complete copies of the Company’s
Articles of Incorporation, as amended and as in effect on the date hereof (the
“Articles of Incorporation”), and the Company’s Bylaws, as amended and as in
effect on the date hereof (the “Bylaws”), and the terms of all securities
convertible into, or exercisable or exchangeable for, shares of Common Stock and
the material rights of the holders thereof in respect thereto are disclosed in
the SEC Filings.

(s)           Indebtedness and Other Contracts.  Except as disclosed in Schedule
3(s) or in the SEC Documents, neither the Company nor any of its Subsidiaries
(i) has any outstanding Indebtedness (as defined below), (ii) is in violation of
any term of or in default under any contract, agreement or instrument relating
to any Indebtedness, except where such violations and defaults would not result,
individually or in the aggregate, in a Material Adverse Effect, or (iv) is a
party to any contract, agreement or instrument relating to any Indebtedness, the
performance of

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which, in the judgment of the Company’s officers, has or is expected to have a
Material Adverse Effect. Schedule 3(s) provides a detailed description of the
material terms of any such outstanding Indebtedness.  For purposes of this
Agreement:  (x) “Indebtedness” of any Person means, without duplication and to
the extent material (A) all indebtedness for borrowed money, (B) all obligations
issued, undertaken or assumed as the deferred purchase price of property or
services including (without limitation) “Capital Leases” in accordance with
generally accepted accounting principles (other than trade payables entered into
in the ordinary course of business), (C) all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar
instruments, (D) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses, (E) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to any property
or assets acquired with the proceeds of such indebtedness (even though the
rights and remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property), (F) all monetary
obligations under any leasing or similar arrangement which, in connection with
generally accepted accounting principles, consistently applied for the periods
covered thereby, is classified as a capital lease, (G) all indebtedness referred
to in clauses (A) through (F) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any mortgage, lien, pledge, charge, security interest or other encumbrance upon
or in any property or assets (including accounts and contract rights) owned by
any Person, even though the Person which owns such assets or property has not
assumed or become liable for the payment of such indebtedness, and (H) all
Contingent Obligations in respect of indebtedness or obligations of others of
the kinds referred to in clauses (A) through (G) above; (y) “Contingent
Obligation” means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any indebtedness, lease,
dividend or other obligation of another Person if the primary purpose or intent
of the Person incurring such liability, or the primary effect thereof, is to
provide assurance to the obligee of such liability that such liability will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such liability will be protected (in whole or in
part) against loss with respect thereto; and (z) “Person” means an individual, a
limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any department or
agency thereof.

(t)            Absence of Litigation.  There is no action, suit, proceeding,
inquiry or investigation before or by the Principal Market, any court, public
board, government agency, self-regulatory organization or body pending or, to
the knowledge of the Company, threatened against or affecting the Company or any
of its Subsidiaries, the Common Stock or any of the Company’s Subsidiaries or
any of the Company’s or its Subsidiaries’ officers or directors, except as set
forth in Schedule 3(t).

(u)           Insurance.  The Company and each of its Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged.  Neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for and neither the Company nor any such
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance

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coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect.

(v)           Employee Relations.

(i)  Neither the Company nor any of its Subsidiaries is a party to any
collective bargaining agreement or employs any member of a union. The Company
and its Subsidiaries believe that their relations with their employees are good.
Except as disclosed in Schedule 3(v), no executive officer of the Company or any
of its Subsidiaries (as defined in Rule 501(f) of the 1933 Act) has notified the
Company or any such Subsidiary that such officer intends to leave the Company or
any such Subsidiary or otherwise terminate such officer’s employment with the
Company or any such Subsidiary. No executive officer of the Company or any of
its Subsidiaries, to the knowledge of the Company or any such Subsidiary, is, or
is now expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or any restrictive
covenant, and, to the Company’s knowledge, the continued employment of each such
executive officer does not, in any material respect, subject the Company or any
of its Subsidiaries to any liability with respect to any of the foregoing
matters.

(ii)  The Company and its Subsidiaries are in compliance with all federal,
state, local and foreign laws and regulations respecting labor, employment and
employment practices and benefits, terms and conditions of employment and wages
and hours, except where failure to be in compliance would not, either
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.

(w)          Title.  The Company and its Subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and its Subsidiaries, in each case, except as disclosed in Schedule 3(w), free
and clear of all liens, encumbrances and defects except such as do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and any of its
Subsidiaries. Any real property and facilities held under lease by the Company
and any of its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
substantially interfere with the use made and proposed to be made of such
property and facilities by the Company and its Subsidiaries.

(x)            Intellectual Property Rights.  The Company and its Subsidiaries
own or possess adequate rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and other intellectual property rights necessary
to conduct their respective businesses as now conducted (“Intellectual Property
Rights”).  Except as set forth in Schedule 3(x), none of the Company’s
Intellectual Property Rights have expired or terminated, or are expected to
expire or terminate, within three years from the date of this Agreement, except
where such expirations or terminations would not result in a Material Adverse
Effect.  The Company does not have any knowledge of any infringement by the

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Company or its Subsidiaries of Intellectual Property Rights of others where such
infringement may cause a Material Adverse Effect.  There is no claim, action or
proceeding being made or brought, or to the knowledge of the Company, being
threatened, against the Company or any of its Subsidiaries regarding its
Intellectual Property Rights.  The Company is unaware of any facts or
circumstances which might give rise to any of the foregoing infringements or
claims, actions or proceedings.  The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value
of all of their Intellectual Property Rights.

(y)           Environmental Laws.  The Company and its Subsidiaries (i) are in
compliance with any and all Environmental Laws (as hereinafter defined), (ii)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit, license or
approval where, in each of the foregoing clauses (i), (ii) and (iii), the
failure to so comply could be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect.  The term “Environmental Laws” means
all federal, state, local or foreign laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.

(z)            Subsidiary Rights.  The Company or one of its Subsidiaries has
the unrestricted right to vote, and (subject to limitations imposed by
applicable law) to receive dividends and distributions on, all capital
securities of its Subsidiaries as owned by the Company or such Subsidiary.

(aa)         Investment Company.  The Company is not, and is not an affiliate
of, an “investment company” within the meaning of the Investment Company Act of
1940, as amended.

(bb)         Tax Status.  Except as disclosed on Schedule 3(bb), the Company and
each of its Subsidiaries (i) has made or filed all foreign, federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject, (ii) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and (iii) has set aside on its books provision
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply.  Except as
disclosed on Schedule 3(bb), there are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers
of the Company know of no basis for any such claim.  Except as disclosed on
Schedule 3(bb), no liens have been filed and no claims are being asserted by or
against the Company or any of its Subsidiaries with respect to any taxes of a
material amount (other than liens for taxes not yet due and payable). Neither
the Company nor it Subsidiaries has received notice of assessment or proposed

16

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assessment of any taxes of a material amount claimed to be owed by it or any
other Person on its behalf. Except as disclosed on Schedule 3(bb), neither the
Company nor any Subsidiary is a party to any tax sharing or tax indemnity
agreement or any other agreement of a similar nature that remains in effect.
Except as disclosed on Schedule 3(bb), each of the Company and its Subsidiaries
has complied in all material respects with all applicable legal requirements
relating to the payment and withholding of taxes and, within the time and in the
manner prescribed by law, has withheld from wages, fees and other payments and
paid over to the proper governmental or regulatory authorities all amounts
required.

(cc)         Internal Accounting and Disclosure Controls.  The Company and each
of its 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 generally accepted accounting principles and to maintain asset
and liability accountability, (iii) access to assets or incurrence of
liabilities is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for assets and
liabilities is compared with the existing assets and liabilities at reasonable
intervals and appropriate action is taken with respect to any difference (the
“Internal Accounting Controls”).  The Company maintains disclosure controls and
procedures (as such term is defined in Rule 13a-14 under the 1934 Act) that are
effective in ensuring that information required to be disclosed by the Company
in the reports that it files or submits under the 1934 Act is recorded,
processed, summarized and reported, within the time periods specified in the
rules and forms of the SEC, including, without limitation, controls and
procedures designed in to ensure that information required to be disclosed by
the Company in the reports that it files or submits under the 1934 Act is
accumulated and communicated to the Company’s management, including its
principal executive officer and its principal financial officer, as appropriate,
to allow timely decisions regarding required disclosure.

(dd)         Off Balance Sheet Arrangements.  There is no transaction,
arrangement, or other relationship between the Company or any of its
Subsidiaries and an unconsolidated or other off balance sheet entity that is
required to be disclosed by the Company in its Exchange Act filings and is not
so disclosed or that otherwise would be reasonably likely to have a Material
Adverse Effect.

(ee)         Ranking of Notes.  Except as set forth on Schedule (ee), no
Indebtedness of the Company is senior to or ranks  pari passu  with the Notes in
right of payment, whether with respect of payment of redemptions, interest,
damages or upon liquidation or dissolution or otherwise.

(ff)           Transfer Taxes.  On the Closing Date, all stock transfer or other
taxes (other than income or similar taxes) which are required to be paid in
connection with the sale and transfer of the Securities to be sold to each Buyer
hereunder will be, or will have been, fully paid or provided for by the Company,
and all material laws imposing such taxes will be or will have been complied
with.

(gg)         Manipulation of Price.  The Company and its Subsidiaries have not,
and to its

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knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result or that could reasonably be expected
to cause or 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) other than the Placement Agent, sold, bid for, purchased, or
paid any compensation for soliciting purchases of, any of the Securities, or
(iii) other than the Placement Agent, paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company.

(hh)         U.S. Real Property Holding Corporation.  The Company is not, nor
has ever been, a U.S. real property holding corporation within the meaning of
Section 897 of the Internal Revenue Code of 1986, as amended, and the Company
shall so certify upon Buyer’s request.

(ii)           Disclosure.  The Company confirms that neither it nor any other
Person acting on its behalf has provided any of the Buyers or their agents or
counsel with any information that constitutes or could reasonably be expected to
constitute material, nonpublic information other than the existence of the
transactions contemplated by this Agreement or the other Transaction Documents.
 The Company understands and confirms that each of the Buyers will rely on the
foregoing representations in effecting transactions in the Securities.  All
disclosure provided to the Buyers regarding the Company, its business and the
transactions contemplated by this Agreement and the other Transaction Documents,
including the Schedules and Exhibits hereto and thereto, furnished by or on
behalf of the Company is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made herein or herein, in the light of the
circumstances under which they were made, not misleading.  Each press release
issued by the Company or its Subsidiaries during the twelve (12) months
preceding the date of this Agreement did not at the time of release contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.

(jj)           Lien Searches. Within 6 Business Days prior to the date hereof,
the Company shall have delivered or caused to be delivered to each Buyer
certified copies of UCC financing statement search results listing any and all
effective financing statements filed within five years prior to such date in any
applicable jurisdiction that name the Company or any of its Subsidiaries as a
debtor to perfect an interest in any of the assets thereof, together with copies
of such financing statements, none of which financing statements, except for any
financing statements filed with respect to the Senior Indebtedness and as
otherwise agreed to in writing by the Buyers, shall cover any of the
“Collateral” (as defined in the Security Documents), and the results of searches
for any effective tax liens and judgment liens filed against any such Person or
its property in any applicable jurisdiction, which results, except as otherwise
agreed to in writing by the Buyers, shall not show any such effective tax liens
and judgment liens.

4.             COVENANTS.

(a)           Best Efforts.  Each party shall use its best efforts timely to
satisfy each of the conditions to be satisfied by it as provided in Sections 6
and 7 of this Agreement.

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(b)           Form D and Blue Sky.  The Company agrees to file a Form D with
respect to the Securities as required under Regulation D and to provide a copy
thereof to each Buyer promptly after such filing.  The Company shall, on or
before the Closing Date, 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 Buyers at the Closing pursuant to this Agreement
under applicable securities or “Blue Sky” laws of the states of the United
States (or to obtain an exemption from such qualification), and shall provide
evidence of any such action so taken to the Buyers on or prior to the Closing
Date.  The Company shall make all filings and reports relating to the offer and
sale of the Securities required under applicable securities or “Blue Sky” laws
of the states of the United States following the Closing Date.

(c)           Reporting Status.  Until the date on which the Investors (as
defined in the Registration Rights Agreement) shall have sold all the Conversion
Shares and Warrant Shares and none of the Notes or Warrants is outstanding (the
“Reporting Period”), the Company shall undertake best efforts to file all
reports required to be filed with the SEC pursuant to the 1934 Act, and the
Company shall undertake best efforts to not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would otherwise permit such termination.

(d)           Use of Proceeds.  The Company will use the proceeds from the sale
of the Securities as set forth on Schedule 4(d).

(e)           Financial Information.  The Company agrees to send the following
to each Investor (as defined in the Registration Rights Agreement) during the
Reporting Period (i) unless the following are filed with the SEC through EDGAR
and are available to the public through the EDGAR system, within one (1)
Business Day after the filing thereof with the SEC, a copy of its Annual Reports
on Form 10-K or 10-KSB, any interim reports or any consolidated balance sheets,
income statements, stockholders’ equity statements and/or cash flow statements
for any period other than annual, any Current Reports on Form 8-K and any
registration statements (other than on Form S-8) or amendments filed pursuant to
the 1933 Act, (ii) on the same day as the release thereof, facsimile or e-mailed
copies of all press releases issued by the Company or any of its Subsidiaries,
and (iii) copies of any notices and other information made available or given to
the stockholders of the Company generally, contemporaneously with the making
available or giving thereof to the stockholders.  As used herein “Business Day”
means any other day other than a Saturday, Sunday, or other day on which
commercial banks in The City of New York are authorized or required by law to
remain closed.

(f)            Listing.  The Company shall promptly secure the listing of all of
the Registrable Securities (as defined in the Registration Rights Agreement)
upon each national securities exchange and automated quotation system, if any,
upon which the Common Stock is then listed (subject to official notice of
issuance) and shall maintain such listing of all Registrable Securities from
time to time issuable under the terms of the Transaction Documents.  The Company
shall maintain the Common Stock’s authorization for quotation on the Principal
Market.  Neither the Company nor any of its Subsidiaries shall take any action
which would be reasonably expected to result in the delisting or suspension of
the Common Stock on the Principal Market.  The Company shall pay all fees and
expenses in connection with satisfying its obligations under this Section 4(f).

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(g)           Fees.  The Company shall (i) pay Gottbetter & Partners, LLP
(“G&P”) $25,000 in legal fees plus reasonable expenses and (ii) shall pay
Gottbetter Capital Master, Ltd. (a Buyer) (“GCF”) or its designee(s) $10,000 for
due diligence and all reasonable expenses incurred in connection with the
transactions contemplated by the Transaction Documents (including all reasonable
legal fees and disbursements in connection therewith, documentation and
implementation of the transactions contemplated by the Transaction Documents and
due diligence in connection therewith), which amounts shall be withheld by such
Buyer from its Purchase Price at the Closing. GCF and G&P acknowledge receipt of
$22,500 delivered prior to the date hereof as an advance against GCF and G&P
fees. The Company shall be responsible for the payment of any placement agent’s
fees, financial advisory fees, or broker’s commissions (other than for Persons
engaged by any Buyer) relating to or arising out of the transactions
contemplated by the Transaction Documents including, without limitation, any
fees or commission payable to the Placement Agent. The Company shall pay, and
hold each Buyer harmless against, any liability, loss or expense (including,
without limitation, reasonable attorney’s fees and out-of-pocket expenses)
arising in connection with any claim against a Buyer relating to any such
payment.  Except as otherwise set forth in the Transaction Documents, each party
to this Agreement shall bear its own expenses in connection with the sale of the
Securities to the Buyers.

(h)           Pledge of Securities.  The Company acknowledges and agrees that
the Securities may be pledged by an Investor (as defined in the Registration
Rights Agreement) in connection with a bona fide margin agreement or other loan
or financing arrangement that is secured by the Securities.  The pledge of
Securities shall not be deemed to be a transfer, sale or assignment of the
Securities hereunder, and no Investor effecting a pledge of Securities shall be
required to provide the Company with any notice thereof or otherwise make any
delivery to the Company pursuant to this Agreement or any other Transaction
Document, including, without limitation, Section 2(f) hereof; provided that an
Investor and its pledgee shall be required to comply with the provisions of
Section 2(f) hereof in order to effect a sale, transfer or assignment of
Securities to such pledgee.  The Company hereby agrees to execute and deliver
such documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by an Investor.

(i)            Disclosure of Transactions and Other Material Information.  On or
before 5:00 p.m., New York Time, on the fourth Business Day following the date
of this Agreement, the Company shall file a Current Report on Form 8-K
describing the terms of the transactions contemplated by the Transaction
Documents in the form required by the 1934 Act and attaching the material
Transaction Documents (including, without limitation, this Agreement, the form
of each of the Notes, the form of Warrant, the Registration Rights Agreement and
the Security Documents) as exhibits to such filing (the “8-K Filing”).  From and
after the filing of the 8-K Filing with the SEC, to the knowledge of the
Company, no Buyer shall be in possession of any material, nonpublic information
received from the Company, any of its Subsidiaries or any of their respective
officers, directors, employees, stockholders, representatives or agents, that is
not disclosed in the 8-K Filing.  The Company shall not, and shall not knowingly
cause any of its Subsidiaries or its and each of their respective officers,
directors, employees and agents, not to,

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provide any Buyer with any material, nonpublic information regarding the Company
or any of its Subsidiaries from and after the filing of the 8-K Filing with the
SEC without the express written consent of such Buyer. In the event of a breach
of the foregoing covenant by the Company, any of their Subsidiaries, or any of
their respective officers, directors, employees and agents, in addition to any
other remedy provided herein or in the Transaction Documents, a Buyer shall have
the right to make a public disclosure, in the form of a press release, public
advertisement or otherwise, of such material, nonpublic information without the
prior approval by the Company, their Subsidiaries, or any of their respective
officers, directors, employees or agents.  No Buyer shall have any liability to
the Company, its Subsidiaries, or any of its or their respective officers,
directors, employees, stockholders or agents for any such disclosure.  Subject
to the foregoing, none of the Company, its Subsidiaries or any Buyer shall issue
any press releases or any other public statements with respect to the
transactions contemplated hereby without the approval of all of the Buyers;
provided, however, that the Company shall be entitled, without the prior
approval of any Buyer, to make any press release or other public disclosure with
respect to such transactions (i) in substantial conformity with the 8-K Filing
and contemporaneously therewith or (ii) as is required by applicable law and
regulations (provided that in the case of clause (i) the Required Holders shall
be consulted by the Company in connection with any such press release or other
public disclosure prior to its release).  Without the prior written consent of
any applicable Buyer, the Company shall not disclose the name of any Buyer in
any filing, announcement, release or otherwise.

(j)            Restriction on Redemption and Cash Dividends.  So long as any
Notes are outstanding, the Company shall not, directly or indirectly, redeem, or
declare or pay any cash dividend or distribution on, the Common Stock without
the prior express written consent of the Required Holders (as defined in the
Notes) (except for any redemptions or repurchases of shares from employees
pursuant to the terms of employment agreements or other benefit plans).

(k)           Additional Notes; Variable Securities; Dilutive Issuances.  So
long as any Buyer beneficially owns any Securities, the Company will not issue
any Notes (other than to the Buyers as contemplated hereby) and the Company
shall not issue any other securities that would cause a breach or default under
the Notes.  For so long as any Notes or Warrants remain outstanding, the Company
shall not, in any manner, enter into or affect any Dilutive Issuance (as defined
in the Notes) if the effect of such Dilutive Issuance is to cause the Company to
be required to issue upon conversion of any Note or exercise of any Warrant any
shares of Common Stock in excess of that number of shares of Common Stock which
the Company has authorized and reserved for purposes of such conversions or
exercises or which the Company may issue upon conversion of the Notes and
exercise of the Warrants without breaching the Company’s obligations under the
rules or regulations of the Principal Market.

(l)            Corporate Existence.  So long as any Buyer beneficially owns any
Securities, the Company shall not be party to any Fundamental Transaction (as
defined in the Notes) unless the Company is in compliance with the applicable
provisions governing Fundamental Transactions set forth in the Notes and the
Warrants.

(m)          Reservation of Shares.  So long as any Buyer owns any Securities,
the Company shall take all action necessary to at all times have authorized, and
reserved for the purpose of

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issuance, no less than 100% of the number of shares of Common Stock issuable
upon conversion of all of the Notes and issuable upon exercise of the Warrants
then outstanding (without taking into account any limitations on the conversion
of the Notes or exercise of the Warrants set forth in the Notes and Warrants,
respectively); provided, however that this number will be increased to 125% July
1, 2007.

(n)           Conduct of Business.  The business of the Company and its
Subsidiaries shall not be conducted in violation of any law, ordinance or
regulation of any government, or any department or agency thereof or
governmental entity, except where such violations would not result, either
individually or in the aggregate, in a Material Adverse Effect.

(o)           Additional Issuances of Securities.

(i)            For purposes of this Section 4(o), the following definitions
shall apply.

(1)           “Convertible Securities” means any stock or securities (other than
Options) convertible into or exercisable or exchangeable for shares of Common
Stock.

(2)           “Options” means any rights, warrants or options to subscribe for
or purchase shares of Common Stock or Convertible Securities.

(3)           “Common Stock Equivalents” means, collectively, Options and
Convertible Securities.

(ii)           From the date hereof until the date that is 30 Trading Days (as
defined in the Notes) following the Effective Date (as defined in the
Registration Rights Agreement) (the “Trigger Date”), the Company will not,
directly or indirectly, offer, sell, grant any option to purchase, or otherwise
dispose of (or announce any offer, sale, grant or any option to purchase or
other disposition of) any of its or its Subsidiaries’ equity or equity
equivalent securities, including without limitation any debt, preferred stock or
other instrument or security that is, at any time during its life and under any
circumstances, convertible into or exchangeable or exercisable for shares of
Common Stock or Common Stock Equivalents (any such offer, sale, grant,
disposition or announcement being referred to as a “Subsequent Placement”).

(iii)          From the Trigger Date until the date on which none of the Notes
is outstanding, the Company will not, directly or indirectly, effect any
Subsequent Placement unless the Company shall have first complied with this
Section 4(o)(iii).

(1)           The Company shall deliver to each Buyer who still holds Notes a
written notice (the “Offer Notice”) of any proposed or intended issuance or sale
or exchange (the “Offer”) of the securities being offered (the “Offered
Securities”) in a Subsequent Placement, which Offer Notice shall (w) identify
and describe the Offered Securities, (x) describe the price and other terms upon
which they are to be issued, sold or exchanged, and the number or amount of the
Offered Securities to be issued, sold or exchanged, (y) identify the persons or

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entities (if known) to which or with which the Offered Securities are to be
offered, issued, sold or exchanged and (z) offer to issue and sell to or
exchange with such Buyers all of the Offered Securities, allocated among such
Buyers (a) based on such Buyer’s pro rata portion of the aggregate principal
amount of Notes purchased hereunder (the “Basic Amount”), and (b) with respect
to each Buyer that elects to purchase its Basic Amount, any additional portion
of the Offered Securities attributable to the Basic Amounts of other Buyers as
such Buyer shall indicate it will purchase or acquire should the other Buyers
subscribe for less than their Basic Amounts (the “Undersubscription Amount”).

(2)           To accept an Offer, in whole or in part, such Buyer must deliver a
written notice to the Company prior to the end of the tenth (10th ) Business Day
after such Buyer’s receipt of the Offer Notice (the “Offer Period”), setting
forth the portion of such Buyer’s Basic Amount that such Buyer elects to
purchase and, if such Buyer shall elect to purchase all of its Basic Amount, the
Undersubscription Amount, if any, that such Buyer elects to purchase (in either
case, the “Notice of Acceptance”).  If the Basic Amounts subscribed for by all
Buyers are less than the total of all of the Basic Amounts, then each Buyer who
has set forth an Undersubscription Amount in its Notice of Acceptance shall be
entitled to purchase, in addition to the Basic Amounts subscribed for, the
Undersubscription Amount it has subscribed for; provided, however , that if the
Undersubscription Amounts subscribed for exceed the difference between the total
of all the Basic Amounts and the Basic Amounts subscribed for (the “Available
Undersubscription Amount”), each Buyer who has subscribed for any
Undersubscription Amount shall be entitled to purchase only that portion of the
Available Undersubscription Amount as the Basic Amount of such Buyer bears to
the total Basic Amounts of all Buyers that have subscribed for Undersubscription
Amounts, subject to rounding by the Company to the extent its deems reasonably
necessary.

(3)           The Company shall have twenty (20) Business Days from the
expiration of the Offer Period above to offer, issue, sell or exchange all or
any part of such Offered Securities as to which a Notice of Acceptance has not
been given by the Buyers (the “Refused Securities”), but only to the offerees
described in the Offer Notice (if so described therein) or any investor
introduced to the Company by a placement agent described in the Offer Notice and
only upon terms and conditions (including, without limitation, unit prices and
interest rates) that are not more favorable to the acquiring person or persons
or less favorable to the Company than those set forth in the Offer Notice.

(4)           In the event the Company shall propose to sell less than all the
Refused Securities (any such sale to be in the manner and on the terms specified
in Section 4(o)(iii)(3) above), then each Buyer may, at its sole option and in
its sole discretion, reduce the number or amount of the Offered Securities
specified in its Notice of Acceptance to an amount that shall be not less than
the number or amount of the Offered Securities that such Buyer elected to
purchase pursuant to

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Section 4(o)(iii)(2) above multiplied by a fraction, (i) the numerator of which
shall be the number or amount of Offered Securities the Company actually
proposes to issue, sell or exchange (including Offered Securities to be issued
or sold to Buyers pursuant to Section 4(o)(iii)(3) above prior to such
reduction) and (ii) the denominator of which shall be the original amount of the
Offered Securities.  In the event that any Buyer so elects to reduce the number
or amount of Offered Securities specified in its Notice of Acceptance, the
Company may not issue, sell or exchange more than the reduced number or amount
of the Offered Securities unless and until such securities have again been
offered to the Buyers in accordance with Section 4(o)(iii)(1) above.

(5)           Upon the closing of the issuance, sale or exchange of all or less
than all of the Refused Securities, the Buyers shall acquire from the Company,
and the Company shall issue to the Buyers, the number or amount of Offered
Securities specified in the Notices of Acceptance, as reduced pursuant to
Section 4(o)(iii)(3) above if the Buyers have so elected, upon the terms and
conditions specified in the Offer.  The purchase by the Buyers of any Offered
Securities is subject in all cases to the preparation, execution and delivery by
the Company and the Buyers of a purchase agreement relating to such Offered
Securities which, with respect to terms not set forth in the Offer Notice, must
be reasonably satisfactory in form and substance to the Buyers and their
respective counsel and to the Company and its counsel.

(6)           Any Offered Securities not acquired by the Buyers or other persons
in accordance with Section 4(o)(iii)(3) above may not be issued, sold or
exchanged until they are again offered to the Buyers under the procedures
specified in this Agreement.

(iv)          The restrictions contained in subsections (ii) and (iii) of this
Section 4(o) shall not apply in connection with the issuance of: (A) any
Excluded Securities (as defined in the Notes); (B) any shares of the Company’s
preferred stock or common stock issued to the Company’s holders of preferred
stock in payment of existing dividend obligations; or (C) up to 500,000 shares
of common stock for other valid corporate purposes approved by the Board of
Directors.

(p)           Additional Registration Statements.  Until the Effective Date (as
defined in the Registration Rights Agreement), the Company will not file a
registration statement under the 1933 Act relating to securities that are not
the Securities; provided, however, that the Company shall have the right to
include the securities listed on Schedule 4(p).

(q)           No Short Position. Each of the Buyers and any of its Affiliates do
not have an open short position in the Common Stock.

(r)            Account Control Agreements.  Upon the continuance of an Event of
Default, the Company shall deliver to the Buyer(s) within five (5) Business Days
following the Buyer’s request, a deposit account control agreement, in form and
substance reasonably satisfactory to

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the Buyer(s), duly executed by the Company, the Buyer(s) and Wachovia Bank, N.A.
(the “Depository Bank”) with respect to the accounts of the Company and, if
applicable, the accounts of its Subsidiaries maintained at the respective
depository banks.

(S)           TRANSACTIONS WITH AFFILIATES.  SO LONG AS ANY NOTE OR WARRANT IS
OUTSTANDING, THE COMPANY SHALL NOT, AND SHALL CAUSE EACH OF ITS SUBSIDIARIES NOT
TO, ENTER INTO, AMEND, MODIFY OR SUPPLEMENT, OR PERMIT ANY SUBSIDIARY TO ENTER
INTO, AMEND, MODIFY OR SUPPLEMENT ANY AGREEMENT, TRANSACTION, COMMITMENT, OR
ARRANGEMENT WITH ANY OF ITS OR ANY SUBSIDIARY’S OFFICERS, DIRECTORS, PERSON WHO
WERE OFFICERS OR DIRECTORS AT ANY TIME DURING THE PREVIOUS TWO (2) YEARS,
STOCKHOLDERS WHO BENEFICIALLY OWN FIVE PERCENT (5%) OR MORE OF THE COMMON STOCK,
OR AFFILIATES (AS DEFINED BELOW) OR WITH ANY INDIVIDUAL RELATED BY BLOOD,
MARRIAGE, OR ADOPTION TO ANY SUCH INDIVIDUAL OR WITH ANY ENTITY IN WHICH ANY
SUCH ENTITY OR INDIVIDUAL OWNS A FIVE PERCENT (5%) OR MORE BENEFICIAL INTEREST
(EACH A “RELATED PARTY”), EXCEPT FOR (A) CUSTOMARY EMPLOYMENT ARRANGEMENTS AND
BENEFIT PROGRAMS ON REASONABLE TERMS, (B) ANY INVESTMENT IN AN AFFILIATE OF THE
COMPANY,  (C) ANY AGREEMENT, TRANSACTION, COMMITMENT, OR ARRANGEMENT ON AN
ARMS-LENGTH BASIS ON TERMS NO LESS FAVORABLE THAN TERMS WHICH WOULD HAVE BEEN
OBTAINABLE FROM A PERSON OTHER THAN SUCH RELATED PARTY, (D) ANY AGREEMENT
TRANSACTION, COMMITMENT, OR ARRANGEMENT WHICH IS APPROVED BY A MAJORITY OF THE
DISINTERESTED DIRECTORS OF THE COMPANY, FOR PURPOSES HEREOF, ANY DIRECTOR WHO IS
ALSO AN OFFICER OF THE COMPANY OR ANY SUBSIDIARY OF THE COMPANY SHALL NOT BE A
DISINTERESTED DIRECTOR WITH RESPECT TO ANY SUCH AGREEMENT, TRANSACTION,
COMMITMENT, OR ARRANGEMENT.  “AFFILIATE” FOR PURPOSES HEREOF MEANS, WITH RESPECT
TO ANY PERSON OR ENTITY, ANOTHER PERSON OR ENTITY THAT, DIRECTLY OR INDIRECTLY,
(I) HAS A TEN PERCENT (10%) OR MORE EQUITY INTEREST IN THAT PERSON OR ENTITY,
(II) HAS TEN PERCENT (10%) OR MORE COMMON OWNERSHIP WITH THAT PERSON OR ENTITY,
(III) CONTROLS THAT PERSON OR ENTITY, OR (IV) SHARES COMMON CONTROL WITH THAT
PERSON OR ENTITY.  “CONTROL” OR “CONTROLS” FOR PURPOSES HEREOF MEANS THAT A
PERSON OR ENTITY HAS THE POWER, DIRECT OR INDIRECT, TO CONDUCT OR GOVERN THE
POLICIES OF ANOTHER PERSON OR ENTITY.

(T)            RESTRICTION ON ISSUANCE OF THE CAPITAL STOCK. EXCEPT FOR EXCLUDED
SECURITIES (AS DEFINED IN THE CONVERTIBLE DEBENTURES), THE COMPANY SHALL NOT,
WITHOUT THE PRIOR WRITTEN CONSENT OF THE BUYER, (I) ENTER INTO ANY SECURITY
INSTRUMENT GRANTING THE HOLDER A SENIOR SECURITY INTEREST IN ANY AND ALL ASSETS
OF THE COMPANY, (II) FILE ANY REGISTRATION STATEMENT ON FORM S-8 PRIOR TO 90
DAYS FOLLOWING THE EFFECTIVENESS OF THE REGISTRATION STATEMENT OR (III) FILE ANY
REGISTRATION STATEMENT ON FORM S-8 FOR EXECUTIVES OR MEMBERS OF THE BOARD OF
DIRECTORS

 (u)          Removal of Legend.  In addition to the Buyer’s other available
remedies, the Company shall pay to the Buyer, in cash, as partial liquidated
damages and not as a penalty, for each $1,000 of Warrant Shares and/or
Conversion Shares (based on the closing price of the Common Stock on the date
such Warrant Shares and/or Conversion Shares are submitted to the Company’s
transfer agent), $5 per trading day (increasing to $10 per trading day five (5)
trading days after such damages have begun to accrue) for each trading day after
the third (3rd) trading day following delivery by a Buyer to the Company or the
Company’s transfer agent of a certificate representing Warrant Shares and/or
Conversion Shares issued with a restrictive legend, until such certificate is
delivered to the Buyer with such legend removed (but only to the extent legend
removal is authorized pursuant to this Agreement or the Registration Rights
Agreement). Nothing herein shall limit the Buyer’s right to pursue actual
damages for the failure of the Company and its transfer agent to deliver
certificates representing any securities as required hereby or by the
Irrevocable Transfer Agent Instructions, and the Buyer shall have the

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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.

(v)           Conduct of Business.  Neither the Company nor its Subsidiaries
will conduct its business in material violation of any term of or in default
under its Certificate or Articles of Incorporation or Bylaws.  Neither the
Company nor any of its Subsidiaries will conduct its business in material
violation of any judgment, decree or order or any statute, ordinance, rule or
regulation applicable to the Company or its Subsidiaries, except for possible
violations which would not, individually or in the aggregate, have a Material
Adverse Effect.

5.             REGISTER; TRANSFER AGENT INSTRUCTIONS.

(a)           Register.  The Company shall maintain at its principal executive
offices (or such other office or agency of the Company as it may designate by
notice to each holder of Securities), a register for the Notes and the Warrants
in which the Company shall record the name and address of the Person in whose
name the Notes and the Warrants have been issued (including the name and address
of each transferee), the principal amount of Notes held by such Person, the
number of Conversion Shares issuable upon conversion of the Notes and the number
of Warrant Shares issuable upon exercise of the Warrants held by such Person.
 The Company shall keep the register open and available at all times during
business hours for inspection of any Buyer or its legal representatives
following reasonable written notice of not less than two Business Days.

(b)           Transfer Agent Instructions.  The Company shall issue irrevocable
instructions to its transfer agent, and any subsequent transfer agent, to issue
certificates or credit shares to the applicable balance accounts at The
Depository Trust Company (“DTC”), registered in the name of each Buyer or its
respective nominee(s), for the Conversion Shares and the Warrant Shares issued
at the Closing or upon conversion of the Notes or exercise of the Warrants in
such amounts as specified from time to time by each Buyer to the Company upon
conversion of the Notes or exercise of the Warrants in the form of Exhibit E
attached hereto (the “Irrevocable Transfer Agent Instructions”). Except as may
be required by applicable law or court order, the Company warrants that no
instruction other than the Irrevocable Transfer Agent Instructions referred to
in this Section 5(b), and stop transfer instructions to give effect to Section
2(g) hereof, will be given by the Company to its transfer agent, and that the
Securities shall otherwise be freely transferable on the books and records of
the Company as and to the extent provided in this Agreement and the other
Transaction Documents.  If a Buyer effects a sale, assignment or transfer of the
Securities in accordance with Section 2(f), the Company shall permit the
transfer and shall promptly instruct its transfer agent to issue one or more
certificates or credit shares to the applicable balance accounts at DTC in such
name and in such denominations as specified by such Buyer to effect such sale,
transfer or assignment.  In the event that such sale, assignment or transfer
involves Conversion Shares or Warrant Shares sold, assigned or transferred
pursuant to an effective registration statement or pursuant to Rule 144, the
transfer agent shall issue such Securities to the Buyer, assignee or transferee,
as the case may be, without any restrictive legend.  The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to
a Buyer.  Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations under this Section 5(b) will be inadequate and agrees,
in the event

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of a breach or threatened breach by the Company of the provisions of this
Section 5(b), that a Buyer shall be entitled, in addition to all other available
remedies, to an order and/or injunction restraining any breach and requiring
immediate issuance and transfer, without the necessity of showing economic loss
and without any bond or other security being required.

6.             CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

Closing Date.  The obligation of the Company hereunder to issue and sell the
Notes and the related Warrants to each Buyer at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the Company’s sole benefit
and may be waived by the Company at any time in its sole discretion by providing
each Buyer with prior written notice thereof:

(i)            Such Buyer shall have executed each of the Transaction Documents
to which it is a party and delivered the same to the Company.

(ii)           Such Buyer and each other Buyer shall have delivered to the
Company the Purchase Price (less, in the case of GCF, the amounts withheld
pursuant to Section 4(g)) for the Notes and the related Warrants being purchased
by such Buyer at the Closing by wire transfer of immediately available funds
pursuant to the wire instructions provided by the Company.

(iii)          The representations and warranties of such Buyer shall be true
and correct in all material respects (other than reps and warranties that are
already qualified by materiality or Material Adverse Effect, which shall be true
and correct in all respects) as of the date when made and as of the Closing Date
as though made at that time (except for representations and warranties that
speak as of a specific date), and such Buyer shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by such
Buyer at or prior to the Closing Date.

7.             CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.

Closing Date.  The obligation of each Buyer hereunder to purchase the Notes and
the related Warrants at the Closing is subject to the satisfaction, at or before
the Closing Date, of each of the following conditions, provided that these
conditions are for each Buyer’s sole benefit and may be waived by such Buyer at
any time in its sole discretion by providing the Company with prior written
notice thereof:

(i)            The Company shall have executed and delivered to such Buyer
(A) each of the Transaction Documents, (B) the Notes (in such principal amounts
as such Buyer shall request) being purchased by such Buyer at the Closing
pursuant to this Agreement, and (C) the Warrants (in such amounts as such Buyer
shall request) being purchased by such Buyer at the Closing pursuant to this
Agreement.

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(ii)           Such Buyer shall have received the opinion of Maupin Taylor,
P.A., the Company’s outside counsel, dated as of the Closing Date, in
substantially the form of Exhibit F  attached hereto and a letter stating that
the Company is in good standing with its attorneys.

(iii)          The Company shall have delivered to such Buyer a true copy of the
Irrevocable Transfer Agent Instructions, in the form of Exhibit E  attached
hereto, which instructions shall have been delivered to and acknowledged in
writing by the Company’s transfer agent.

(iv)          The Company shall have delivered to such Buyer a true copy of
certificate evidencing the formation and good standing of the Company and each
of its Subsidiaries in such entity’s jurisdiction of formation issued by the
Secretary of State (or comparable office) of such jurisdiction, as of a date
within 10 days of the Closing Date.

(v)           The Company shall have delivered to such Buyer a true copy of
certificate evidencing the Company’s qualification as a foreign corporation and
good standing issued by the Secretary of State (or comparable office) of each
jurisdiction in which the Company conducts business, as of a date within 10 days
of the Closing Date.

(vi)          The Company shall have delivered to such Buyer a certified copy of
the Certificate of Incorporation as certified by the Secretary of State of the
State of Delaware within ten (10) days of the Closing Date.

(vii)         The Company shall have delivered to such Buyer a certificate,
executed by the Chief Executive Officer of the Company and dated as of the
Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted
by the Company’s Board of Directors in a form reasonably acceptable to such
Buyer, (ii) the Certificate of Incorporation and (iii) the Bylaws, each as in
effect at the Closing, in the form attached hereto as  Exhibit G .

(viii)        The representations and warranties of the Company shall be true
and correct in all material respects (other than representations and warranties
that are already qualified by materiality or Material Adverse Effect which shall
be true and correct in all respects) as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Closing Date.  Such
Buyer shall have received a certificate, executed by the Chief Executive Officer
of the Company, dated as of the Closing Date, to the foregoing effect and as to
such other matters as may be reasonably requested by such Buyer in the form
attached hereto as Exhibit H .

(ix)           The Company shall have delivered to such Buyer a letter from the
Company’s transfer agent certifying the number of shares of Common Stock
outstanding as of a date within five days of the Closing Date.

 

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(x)            The Common Stock (I) shall be designated for quotation on the
Principal Market and (II) shall not have been suspended, as of the Closing Date,
by the SEC or the Principal Market from trading on the Principal Market nor
shall suspension by the SEC or the Principal Market have been threatened, as of
the Closing Date, either (A) in writing by the SEC or the Principal Market.

(xi)           The Company shall have obtained all governmental, regulatory or
third party consents and approvals, if any, necessary for the sale of the
Securities.

(xii)          Within six (6) Business Days prior to the Closing, the Company
shall have delivered or caused to be delivered to each Buyer (A) true copies of
UCC search results, listing all effective financing statements which name as
debtor the Company or any of its Subsidiaries filed in the prior five years to
perfect an interest in any assets thereof, together with copies of such
financing statements, none of which, except for any financing statements filed
with respect to the Senior Indebtedness and as otherwise agreed in writing by
the Buyers, shall cover any of the Collateral (as defined in the Security
Documents) and the results of searches for any tax lien and judgment lien filed
against such Person or its property, which results, except as otherwise agreed
to in writing by the Buyers shall not show any such Liens (as defined in the
Security Documents); and (B) a perfection opinion in form and substance
satisfactory to the Buyers.

(xiii)         The Company shall have provided to the Buyer an acknowledgement,
to the satisfaction of the Buyer, from the Company’s certified public accountant
as to its ability to provide all consents required in order to file a
registration statement in connection with this transaction and that the Company
is in good standing with its auditors.

(xiv)        The Company shall have delivered to such Buyer such other documents
relating to the transactions contemplated by this Agreement as such Buyer or its
counsel may reasonably request.

8.             TERMINATION.  In the event that the Closing shall not have
occurred with respect to a Buyer on or before five (5) Business Days from the
date hereof due to the Company’s or such Buyer’s failure to satisfy the
conditions set forth in Sections 6 and 7 above (and the nonbreaching party’s
failure to waive such unsatisfied condition(s)), the nonbreaching party shall
have the option to terminate this Agreement with respect to such breaching party
at the close of business on such date without liability of any party to any
other party; provided, however, that if this Agreement is terminated pursuant to
this Section 8 (except by virtue of a breach of the Agreement by the Buyer), the
Company shall remain obligated to reimburse the non-breaching Buyers for the
expenses described in Section 4(g) above.

9.             MISCELLANEOUS.

(a)           Governing Law; Jurisdiction; Jury Trial.  All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would

29

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cause the application of the laws of any jurisdictions other than the State 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, 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 brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper.  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 to such party at the address for such 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 manner permitted by law.  
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.

(b)           Counterparts.  This Agreement may be executed in two or more
identical counterparts, all of which 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; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.

(c)           Headings.  The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

(d)           Severability.  If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

(e)           Entire Agreement; Amendments.  This Agreement and the other
Transaction Documents supersede all other prior oral or written agreements
between the Buyers, the Company, their Affiliates and Persons acting on their
behalf with respect to the matters discussed herein, and this Agreement, the
other Transaction Documents and the instruments referenced herein and therein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters.  No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the Required Holders, and any amendment to this Agreement made in
conformity with the provisions of this Section 9(e) shall be binding on all
Buyers and holders of Securities, as applicable.  No provision hereof may be
waived other than by an instrument in writing signed by the party against whom
enforcement is sought.  No such amendment shall be effective to the extent that
it applies to less than all of the holders of the

30

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applicable Securities then outstanding.  No consideration shall be offered or
paid to any Person to amend or consent to a waiver or modification of any
provision of any of the Transaction Documents unless the same consideration also
is offered to all of the parties to the Transaction Documents, holders of Notes
or holders of the Warrants, as the case may be.  The Company has not, directly
or indirectly, made any agreements with any Buyers relating to the terms or
conditions of the transactions contemplated by the Transaction Documents except
as set forth in the Transaction Documents.

(f)            Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered:  (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
an overnight courier service, in each case properly addressed to the party to
receive the same.  The addresses and facsimile numbers for such communications
shall be:

 

 

 

 

 

 

If to the Company:

 

 

 

 

 

 

 

VCampus Corporation

 

 

 

 

 

1850 Centennial Park Drive

 

 

 

Suite 200

 

 

 

 

 

Reston, VA 20191

 

 

 

Telephone:

 

703-893-7800

 

 

 

Facsimile:

 

703-893-1905

 

 

 

Attention:

 

Chief Executive Officer

 

 

 

 

 

 

 

Copy to (for informational purposes only):

 

 

 

 

 

 

 

 

 

Maupin Taylor, P.A.

 

 

 

 

 

3200 Beechleaf Court

 

 

 

Suite 500

 

 

 

 

 

Raleigh, NC 27604

 

 

 

Telephone:

 

919-981-4314

 

 

 

Facsimile:

 

919-981-4300

 

 

 

Attention:

 

Kevin A. Prakke

 

 

 

 

 

 

 

If to the Transfer Agent:

 

American Stock Transfer & Trust

 

 

 

6201 15th Avenue

 

 

 

Brooklyn, NY 11219

 

 

 

Telephone:

 

718-921-8522

 

 

 

Facsimile:

 

718-765-8743

 

 

 

Attention:

 

Topaze Miller

 

If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers, with copies to such Buyer’s representatives as set forth on the Schedule
of Buyers, with a copy (for informational purposes only) to:

31

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Gottbetter & Partners, LLP  

 

  

 

 

  

 

  

 

488 Madison Avenue, 12th Floor  

 

  

 

 

  

 

  

 

New York, New York 10022  

 

  

 

 

  

 

  

 

Telephone:

(212) 400-6900  

 

  

  

 

  

 

Facsimile:

(212) 400-6901  

 

  

  

 

  

 

Attention:

Jason M. Rimland, Esq.  

 

  

 

or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
 Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C)
provided by an overnight courier service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from an overnight courier
service in accordance with clause (i), (ii) or (iii) above, respectively.

(g)           Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns,
including any purchasers of the Notes or the Warrants.  The Company shall not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the Required Holders (unless the Company is in compliance
with the applicable provisions governing Fundamental Transactions set forth in
the Notes and the Warrants).  A Buyer may assign some or all of its rights
hereunder without the consent of the Company, in which event such assignee shall
be deemed to be a Buyer hereunder with respect to such assigned rights; provided
that such assignee agrees in writing to be bound by all of the provisions
contained herein.

(h)           No Third Party Beneficiaries.  This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.

(i)            Survival.  Unless this Agreement is terminated under Section 8,
the representations and warranties of the Company and the Buyers contained in
Sections 2 and 3 and the agreements and covenants set forth in Sections 4, 5 and
9 shall survive the Closing.  Each Buyer shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.

(j)            Further Assurances.  Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

(k)           Indemnification.  In consideration of each Buyer’s execution and
delivery of the Transaction Documents and acquiring the Securities thereunder
and in addition to all of the

32

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Company’s other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless each Buyer and each other holder of
the Securities and all of their stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing
Persons’ agents or other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Indemnitees”) from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the
“Indemnified Liabilities”), incurred by any Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(b) any breach of any covenant, agreement or obligation of the Company contained
in the Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby or (c) any cause of action, suit or claim brought
or made against such Indemnitee by a third party (including for these purposes a
derivative action brought on behalf of the Company) and arising out of or
resulting from (i) the execution, delivery, performance or enforcement of the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (ii) any transaction financed or to be financed
in whole or in part, directly or indirectly, with the proceeds of the issuance
of the Securities, (iii) any disclosure made by such Buyer pursuant to Section
4(i), or (iv) the status of such Buyer or holder of the Securities as an
investor in the Company pursuant to the transactions contemplated by the
Transaction Documents.  To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.  Except as otherwise set
forth herein, the mechanics and procedures with respect to the rights and
obligations under this Section 9(k) shall be the same as those set forth in
Section 6 of the Registration Rights Agreement.

(l)            No Strict Construction.  The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.

(m)          Remedies.  Each Buyer and each holder of the Securities shall have
all rights and remedies set forth in the Transaction Documents and all rights
and remedies which such holders have been granted at any time under any other
agreement or contract and all of the rights which such holders have under any
law.  Any Person having any rights under any provision of this Agreement shall
be entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law.  Furthermore, the
Company recognizes that in the event that it fails to perform, observe, or
discharge any or all of its obligations under the Transaction Documents, any
remedy at law may prove to be inadequate relief to the Buyers.  The Company
therefore agrees that the Buyers shall be entitled to seek temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages and without posting a bond or other security.

33

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(n)           Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Buyer exercises a right, election, demand or
option under a Transaction Document and the Company does not timely perform its
related obligations within the periods therein provided, then such Buyer may
rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and rights.

(o)           Payment Set Aside.  To the extent that the Company makes a payment
or payments to the Buyers hereunder or pursuant to any of the other Transaction
Documents or the Buyers enforce or exercise their rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other Person under any law (including, without limitation, any
bankruptcy law, foreign, state or federal law, common law or equitable cause of
action), then to the extent of any such restoration the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.

[Signature Page Follows]

34

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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

COMPANY:

 

VCAMPUS CORPORATION

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

35

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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

 

BUYERS:

 

GOTTBETTER CAPITAL MASTER, LTD.

 

 

 

 

 

 

 

By:

 

 

Name:

  Adam S. Gottbetter

 

Title:

  Director

 

36

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SCHEDULE OF BUYERS

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

(6)

 

Buyer

 

 

 

Address and
Facsimile Number

 

Aggregate
Principal
of Note

 

Aggregate
Number of
Warrant
Shares

 

Purchase
Price

 

Legal Representative’s
Address and
Facsimile Number

 

 

 

 

 

 

 

 

 

 

 

 

 

Gottbetter Capital Master, Ltd.

 

488 Madison Avenue

 

3,000,000

 

2,500,000

 

$   2,820,000

 

Jason M. Rimland, Esq. :

 

 

 

12th Floor

 

 

 

 

 

 

 

Gottbetter & Partners, LLP 

 

 

 

New York, NY 10022

 

 

 

 

 

 

 

488 Madison Avenue

 

 

 

Facsimile: 212.400.6999

 

 

 

 

 

 

 

12th Floor New

 

 

 

 

 

 

 

 

 

 

 

York, NY 10022

 

 

 

 

 

 

 

 

 

 

 

Facsimile:  212.400.6901

 

 

 

37

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