EXHIBIT 10.2

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is dated as of July 30,
2008 between Medical Solutions Management Inc., a Nevada corporation (the
“Company”), and Vicis Capital Master Fund, a sub-trust of Vicis Capital Series
Master Trust, a unit trust organized and existing under the laws of the Cayman
Islands (the “Purchaser”).

WHEREAS, the Purchaser is the holder of interest bearing promissory notes in the
principal amount, together with accrued interest, and has advanced the Company
funds, as set forth on Exhibit A attached hereto (individually, an “Existing
Debt” and collectively, the “Existing Debts”);

WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
“Securities Act”) and Rule 506 promulgated thereunder, the Company desires to
issue and sell to Purchaser, and the Purchaser desires to purchase from the
Company, the securities of the Company as more fully described in Section 2.1 of
this Agreement for the consideration as more fully described in Section 2.1 of
this Agreement and the Company desires to issue the warrants as more fully
described in Section 2.2 of this Agreement.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and Purchaser agree as
follows:

ARTICLE I

DEFINITIONS

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement:
(a) capitalized terms that are not otherwise defined herein have the meanings
given to such terms in the Series D Designations (as defined herein), and
(b) the following terms have the meanings indicated in this Section 1.1:

“Affiliate” means any Person that, directly or indirectly through one (1) or
more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 144 under the
Securities Act. With respect to a Purchaser, any investment fund or managed
account that is managed on a discretionary basis by the same investment manager
as such Purchaser will be deemed to be an Affiliate of such Purchaser.

“Business Day” means any day except Saturday, Sunday, any day which shall be a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

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“Charter Amendment” means the proposed Second Amended and Restated Articles of
Incorporation of the Company to be filed with the Nevada Secretary of State to,
among other things, increase the number of authorized but unissued shares of
Common Stock from 200,000,000 to 2,175,000,000 shares.

“Closing” means the closing of the purchase and sale of the Securities pursuant
to Section 2.3.

“Closing Date” means the Trading Day when all of the Transaction Documents have
been executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the Purchaser’s obligations to pay the Cash Purchase
Price and deliver and discharge the Existing Debts and (ii) the Company’s
obligations to deliver the Securities have been satisfied or waived.

“Commission” means the Securities and Exchange Commission.

“Common Stock” means the common stock of the Company, par value $.0001 per
share, and any other class of securities into which such securities may
hereafter be reclassified or changed into.

“Common Stock Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.

“Disclosure Schedules” shall have the meaning ascribed to such term in
Section 3.1.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“Exempt Issuance” means: (a) shares of Common Stock or options to purchase
Common Stock issued to employees, officers, directors or consultants of the
Company pursuant to any stock or option plan duly adopted by a majority of the
non-employee members of the Board of Directors of the Company or a majority of
the members of a committee of non-employee directors established for such
purpose, (b) securities issued upon the exercise or exchange of or conversion of
any Securities issued hereunder and/or other securities (including the stock
rights set forth on Schedule 3.1(g)) exercisable or exchangeable for or
convertible into shares of Common Stock issued and outstanding on the date of
this Agreement, provided that, unless set forth on Schedule 3.1(g), such
securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise, exchange or
conversion price of any such securities, (c) shares of Common Stock issued or
deemed issued as a dividend or distribution on the Series D Convertible
Preferred Stock, and/ or other securities issued and outstanding on the date of
this Agreement, provided that such stock dividend or distribution shall be
issued pursuant to the terms of such other securities as of the date of this
Agreement, (d) securities issued pursuant to acquisitions or strategic
transactions

 

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approved by a majority of the directors, provided that any such issuance shall
only be to a Person which is, itself or through its subsidiaries, an operating
company in a business synergistic with the business of the Company, as
determined by a majority of the directors, and in which the Company receives
benefits in addition to the investment of funds, but shall not include a
transaction in which the Company is issuing securities primarily for the purpose
of raising capital or to an entity whose primary business is investing in
securities, (e) securities sold in connection with a firm commitment
underwritten public offering of shares of Common Stock that is intended,
pursuant to the Company’s Board of Directors resolution, to produce minimum
proceeds (after payment of underwriter’s fees and commissions) of not less than
$30,000,000 and (f) securities issued in connection with that certain Asset
Purchase Agreement and Plan of Reorganization dated as of July 25, 2008 by and
among the Company, Andover Medical, Inc. and Certified Diabetic Services, Inc.

“Existing Debts” shall have the meaning ascribed to such term in the preamble
above.

“Interim Balance Sheet” means the most recent quarterly report filed on Form
10-Q by the Company under the Exchange Act.

“Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.

“Material Adverse Effect” shall have the meaning assigned to such term in
Section 3.1(b).

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

“Registration Rights Agreement” means the Registration Rights Agreement, dated
the date hereof, between the Company and the Purchaser, in the form of Exhibit B
attached hereto.

“Registration Statement” means a registration statement meeting the requirements
set forth in the Registration Rights Agreement and covering the resale of the
Underlying Shares by Purchaser as provided for in the Registration Rights
Agreement.

“Required Approvals” shall have the meaning ascribed to such term in
Section 3.1(e).

“Required Minimum” means, as of any date, 110% of the maximum aggregate number
of shares of Common Stock then issued or potentially issuable in the future
pursuant to the Transaction Documents, including any Underlying Shares issuable
upon

 

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exercise or conversion in full of all Warrants and Series D Preferred Stock
(including a reasonable reserve for Underlying Shares issuable as payment of
dividends), ignoring any conversion or exercise limits set forth therein.

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

“Securities” means the Series D Preferred Stock, the Warrants, the Warrant
Shares and the Underlying Shares.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated hereunder.

“Series D Conversion Price” shall have the meaning ascribed to such term in the
Series D Designations.

“Series D Convertible Preferred Stock” means the Series D Convertible Preferred
Stock of the Company and such designations, preferences and limitations as are
set forth in the Series D Designations.

“Series D Designations” means the Certificate of Designation, Preferences and
Rights of Series D Convertible Preferred Stock as filed with the State of Nevada
on July 29, 2008 in the form attached hereto as Exhibit C.

“Short Sales” shall include all “short sales” as defined in Rule 200 of
Regulation SHO under the Exchange Act (but shall not be deemed to include the
location and/or reservation of borrowable shares of Common Stock).

“Stated Value” shall have the meaning ascribed to such term in the Series D
Designations.

“Subsidiary” means any subsidiary of the Company as set forth on Schedule
3.1(a).

“Trading Day” means a day on which the Common Stock is traded on a Trading
Market.

“Trading Market” means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the Nasdaq
Capital Market, the American Stock Exchange, the New York Stock Exchange, the
Nasdaq National Market, the OTC Bulletin Board, or “Pink Sheets” published by
Pink Sheets, LLC (or a similar organization or agency succeeding to its
functions of reporting prices).

“Transaction Documents” means this Agreement, the Series D Designations, the
Warrants, the Registration Rights Agreement, the Letter Agreement, and any other

 

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documents or agreements executed in connection with the transactions
contemplated hereunder.

“Underlying Shares” means the shares of Common Stock issued and issuable upon
conversion or redemption of the Series D Preferred Stock and upon exercise of
the Warrants and issued and issuable in lieu of the cash payment of dividends on
the Series D Preferred Stock in accordance with the terms of the Series D
Preferred Stock.

“VWAP” of a share of Common Stock as of a particular date (the “Determination
Date”) shall mean the price determined by the first of the following clauses
that applies: (a) if shares of Common Stock are traded on a national securities
exchange (an “Exchange”), the weighted average of the closing sale price of a
share of the Common Stock of the Company on the last five (5) Trading Days prior
to the Determination Date reported on such Exchange as reported in The Wall
Street Journal (weighted with respect to the trading volume with respect to each
such day); (b) if shares of Common Stock are not traded on an Exchange but trade
in the over-the-counter market and such shares are quoted on the National
Association of Securities Dealers Automated Quotations System (“NASDAQ”), the
weighted average of the closing sale price of a share of the Common Stock of the
Company on the last five (5) Trading Days prior to the Determination Date
reported on NASDAQ as reported in The Wall Street Journal (weighted with respect
to the trading volume with respect to each such day); (c) if such shares are an
issue for which last sale prices are not reported on NASDAQ, the average of the
closing sale price, in each case on the last five (5) Trading Days (or if the
relevant price or quotation did not exist on any of such days, the relevant
price or quotation on the next preceding Business Day on which there was such a
price or quotation) prior to the Determination Date as reported by the Over the
Counter Bulletin Board (the “OTCBB”), or any other successor organization;
(d) if no closing sales price is reported for the Common Stock by the OTCBB or
any other successor organization for such day, the average of the closing sale
price, in each case on the last five (5) Trading Days (or if the relevant price
or quotation did not exist on any of such days, the relevant price or quotation
on the next preceding business day on which there was such a price or quotation)
prior to the Determination Date as reported by the “pink sheets” by the Pink
Sheets, LLC, or any successor organization, (e) if no closing sales price is
reported for the Common Stock by the OTCBB or any other successor organization
for such day, then the average of the high and low bid and asked price of any of
the market makers for the Common Stock as reported on the OTCBB or in the “pink
sheets” by the Pink Sheets, LLC on the last five (5) Trading Days; or (e) in all
other cases, the fair market value of a share of Common Stock as determined by
an independent appraiser selected in good faith by the holder and reasonably
acceptable to the Company.

“Warrants” shall have the meaning assigned to such term in Section 2.2.

“Warrant Shares” means the shares of Common Stock issuable upon exercise of the
Warrants.

 

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ARTICLE II

PURCHASE AND SALE

2.1 Purchased Securities. On the Closing Date, upon the terms and subject to the
conditions set forth herein, concurrent with the execution and delivery of this
Agreement by the parties hereto:

(a) the Purchaser agrees to purchase, and the Company agrees to sell, for a cash
purchase price of $3,000,000 (the “Cash Purchase Price”), Series D Preferred
Stock having an aggregate Stated Value of $3,000,000.

(b) the Purchaser agrees to tender, deliver and forgive the Existing Debts to
the Company for cancellation of all the Existing Debts on Exhibit A in the
principal amount of $4,760,204.91 and accrued interest of $228,856.63, and the
Company shall issue and deliver to the Purchaser Series D Preferred Stock having
an aggregate Stated Value of $4,989,061.54.

2.2 Issuance of Warrants. Immediately upon and subject to the effectiveness of
the Charter Amendment in the State of Nevada, MSMI will issue (i) a common stock
purchase warrant exercisable for 90,000,000 shares of Common Stock, with an
exercise price equal to $0.10 and a term of exercise of five (5) years and
(ii) a common stock purchase warrant exercisable for 149,671,846 shares of
Common Stock, with an exercise price equal to $0.10 and a term of exercise of
five (5) years.

The warrants described in this Section 2.2 are referred to herein individually
as a “Warrant” and collectively as the “Warrants.”

2.3 Closing. Subject to satisfaction of the conditions set forth in Sections
2.4, 2.5, and 2.6, the Closing shall occur at the offices of the Company’s
counsel, Bush Ross, P.A., 1801 North Highland Avenue, Tampa, Florida 33602, or
such other location as the parties shall mutually agree. At the Closing, (a) the
Purchaser shall deliver (i) via wire transfer or a certified check immediately
available funds equal to the Cash Purchase Price, and (ii) the Existing Debts
held by such Purchaser, together with all documents necessary to validly and
duly tender, assign and convey such Existing Debts to the Company for
cancellation thereof, and (b) the Company shall deliver to the Purchaser the
Series D Preferred Stock, free and clear of all liens and restrictions of any
kind (except for those imposed by applicable securities laws), and a letter
agreement providing for the issuance of the warrants referred to in Section 2.2.

2.4 Cancellation of Existing Debts; Guarantees; Termination of Security
Interest. Upon receipt from Purchaser of the Existing Debts in accordance with
Sections 2.1, 2.2 and 2.3 hereof, the Company shall cancel each Existing Debt
immediately. The Company and Purchaser agree that upon such cancellation of each
Existing Debts: (a) the obligations of the Company, or its subsidiaries, as
applicable, to pay the principal of, interest on or redemption premium and
otherwise in respect of, such Existing Debts surrendered by the Purchaser to the
Company shall terminate; (b) all obligations of the Purchaser pursuant to the
Existing Debts shall terminate; (c) all obligations of the Company, or its
subsidiaries, as applicable, in respect of the cancelled Existing Debts shall
terminate, and (d) all obligations of guarantors guarantying repayment of the

 

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Existing Debts shall terminate. In addition, upon receipt from the Purchaser of
the Existing Debts in accordance with Section 2.3 hereof, the Purchaser agrees
and acknowledges that (x) all security interests and other liens granted to or
held by Purchaser in any collateral as security for such Existing Debts shall be
forever and irrevocably satisfied, released and discharged, (y) all share pledge
agreements and charges shall be forever and irrevocably terminated, cancelled,
released and satisfied, and (z) all mortgages of any trademarks, copyrights,
patents and other intellectual property shall be forever and irrevocably
terminated, cancelled, released and satisfied. Further, Purchaser agrees, at
Company’s expense, to take all reasonable additional steps requested by the
Company as may be necessary to release its security interests in the collateral
that may be identified after the date hereof, including but not limited to the
recording, filing and entering into any agreements, documents, forms or papers
needed to accomplish such release.

2.5 Deliveries.

(a) On the Closing Date, the Company shall deliver or cause to be delivered to
the Purchaser the following:

(i) this Agreement duly executed by the Company;

(ii) a certificate for the Series D Preferred Stock having an aggregate Stated
Value of $7,989,061.54;

(iii) a letter agreement providing for the issuance of the Warrants described in
Section 2.2 above (the “Letter Agreement”); and

(iv) the Registration Rights Agreement duly executed by the Company.

(b) On the Closing Date, the Purchaser shall deliver or cause to be delivered to
the Company the following:

(i) this Agreement duly executed by such Purchaser;

(ii) the Cash Purchase Price by wire transfer to the account as specified in
writing by the Company;

(iii) the Existing Debts for cancellation; and

(iv) the Registration Rights Agreement duly executed by such Purchaser.

2.6 Closing Conditions.

(a) The obligations of the Company hereunder in connection with the Closing are
subject to the following conditions being met:

(i) the accuracy in all material respects when made and on the Closing Date of
the representations and warranties of the Purchaser contained herein;

 

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(ii) all obligations, covenants and agreements of the Purchaser required to be
performed at or prior to the Closing Date shall have been performed; and

(iii) the delivery by the Purchaser of the items set forth in Section 2.5(b) of
this Agreement.

(b) The obligations of the Purchaser hereunder in connection with the Closing
are subject to the following conditions being met:

(i) the accuracy in all material respects on the Closing Date of the
representations and warranties of the Company contained herein;

(ii) all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed;

(iii) the delivery by the Company of the items set forth in Section 2.5(a) of
this Agreement; and

(iv) there shall have been no Material Adverse Effect with respect to the
Company since the date of the Interim Balance Sheet [NOT DEFINED].

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Company. Except as set forth under the
corresponding section of the disclosure schedules delivered to the Purchaser
concurrently herewith (the “Disclosure Schedules”) which Disclosure Schedules
shall be deemed a part hereof and to qualify any representation or warranty
otherwise made herein to the extent of such disclosure, the Company hereby makes
the representations and warranties set forth below to Purchaser.

(a) Subsidiaries. All of the direct and indirect subsidiaries of the Company are
set forth on Schedule 3.1(a). The Company owns, directly or indirectly, all of
the capital stock or other equity interests of each Subsidiary free and clear of
any Liens, and all the issued and outstanding shares of capital stock of each
Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase securities. If the
Company has no Subsidiaries, then all other references in the Transaction
Documents to the Subsidiaries or any of them will be disregarded.

(b) Organization and Qualification. The Company and each of the Subsidiaries is
an entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
(as applicable), with the requisite corporate power and authority to own and use
its properties and assets and to carry on its business as currently conducted.
Neither the Company nor any Subsidiary is in violation or default of any of the
provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. The Company and each of the
Subsidiaries is duly qualified to conduct

 

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business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, could not have or
reasonably be expected to result in (i) a material adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii), a
“Material Adverse Effect”) and no Proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such corporate power and authority or qualification.

(c) Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
each of the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of the Company and no further action is required by
the Company, its board of directors or its stockholders in connection therewith
other than in connection with the Required Approvals. Each Transaction Document
has been (or upon delivery will have been) duly executed by the Company and,
when delivered in accordance with the terms hereof and thereof, will constitute
the valid and binding obligation of the Company enforceable against the Company
in accordance with its terms except (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.

(d) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the other
transactions contemplated hereby and thereby do not and will not: (i) subject to
the Required Approvals, conflict with or violate any provision of the Company’s
or any Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) subject to the Required Approvals,
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any Subsidiary, or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) subject to the Required Approvals, conflict with or
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Company or a Subsidiary is subject

 

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(including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected; except in
the case of each of clauses (ii) and (iii), such as could not have or reasonably
be expected to result in a Material Adverse Effect.

(e) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other than
(i) the filing with the Commission of the Registration Statement, (ii) the
notice and/or application(s) to each applicable Trading Market for the issuance
and sale of the Securities and the listing of the Underlying Shares for trading
thereon in the time and manner required thereby, (iii) the filing of Form D with
the Commission and such filings as are required to be made under applicable
state securities laws and (iv) the delivery of the notices and the receipt of
the approvals set forth on Schedule 3.1(e) (collectively, the “Required
Approvals”).

(f) Issuance of the Securities. The Securities are duly authorized and, when
issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company other than restrictions on transfer provided
for in the Transaction Documents. The Underlying Shares, when issued in
accordance with the terms of the Transaction Documents, will be validly issued,
fully paid and nonassessable, free and clear of all Liens imposed by the
Company. The Company has reserved from its duly authorized capital stock a
number of shares of Common Stock for issuance of the Underlying Shares at least
equal to the Required Minimum on the date hereof.

(g) Capitalization. Immediately before the Closing, the capitalization of the
Company is as set forth on Schedule 3.1(g). Except as set forth on Schedule
3.1(g), no Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. Except as a result of the purchase
and sale of the Securities or as set forth on Schedule 3.1(g), there are no
outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to issue additional shares of Common Stock
or Common Stock Equivalents. Except as set forth on Schedule 3.1(g), the
issuance and sale of the Securities will not obligate the Company to issue
shares of Common Stock or other securities to any Person (other than the
Purchaser) and will not result in a right of any holder of Company securities to
adjust the exercise, conversion, exchange or reset price under any of such
securities. All of the outstanding shares of capital stock of the Company are
validly issued, fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and none of such outstanding shares
was issued in violation of any preemptive rights or similar rights to subscribe
for or purchase securities. Except as set forth on Schedule 3.1(g), no further
approval or

 

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authorization of any stockholder, the Board of Directors of the Company or
others is required for the issuance and sale of the Securities. Except as set
forth on Schedule 3.1(g), there are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s stockholders.

(h) SEC Reports; Financial Statements. Except as set forth on Schedule 3.1(h),
the Company has filed all SEC Reports required to be filed by it under the
Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for two years preceding the Closing Date (or such shorter period
as the Company was required by law or regulation to file such materials) (the
foregoing materials, including the exhibits thereto and documents incorporated
by reference therein, being collectively referred to herein as the “SEC
Reports”) on a timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, each SEC Report (i) were prepared in
accordance and complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such SEC Reports, and (ii) did
not at the time they were filed (or if amended or superseded by a filing prior
the date of this Agreement then on the date of such filing) 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. None of
the Subsidiaries are required to file any forms, reports or other documents with
the SEC. The consolidated financial statements of the Company and the
Subsidiaries included in the SEC Reports complied in all material respects with
applicable accounting requirements and the rules and regulations of the SEC with
respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with GAAP, except as may be otherwise specified
in such financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the consolidated financial position of the
Company and the Subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.

(i) Material Changes. Since the date of the Interim Balance Sheet, except as
specifically disclosed on Schedule 3.1(i), (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to
result in a Material Adverse Effect, (ii) the Company has not incurred any
material liabilities (contingent or otherwise) other than (A) trade payables and
accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or disclosed in filings made with the
Commission, (iii) the Company has not materially altered its method of
accounting, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has

 

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not issued any equity securities to any officer, director or Affiliate, except
pursuant to existing Company stock option or stock grant plans.

(j) Litigation. Except as set forth on Schedule 3.1(j), there is no action,
suit, inquiry, notice of violation, proceeding or investigation pending or, to
the knowledge of the Company, threatened against or affecting the Company, any
Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which
(i) adversely affects or challenges the legality, validity or enforceability of
any of the Transaction Documents or the Securities or (ii) could, if there were
an unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any Subsidiary, nor, to the knowledge of
the Company, any director or officer thereof, is or has been the subject of any
Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty.

(k) Certain Fees. Except as set forth on Schedule 3.1(s), no brokerage or
finder’s fees or commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by
the Transaction Documents. The Purchaser shall have no obligation with respect
to any fees or with respect to any claims made by or on behalf of other Persons
for fees of a type contemplated in this Section that may be due in connection
with the transactions contemplated by the Transaction Documents.

(l) Disclosure. All disclosure furnished by or on behalf of the Company to the
Purchaser regarding the Company, its business and the transactions contemplated
hereby, including the Disclosure Schedules to this Agreement, with respect to
the representations and warranties made herein are true and correct with respect
to such representations and warranties and do not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements made therein, in light of the circumstances under which they were
made, not misleading. The Company acknowledges and agrees that Purchaser has not
made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3.2
hereof.

(m) Acknowledgment Regarding Purchaser’s Purchase of Securities. The Company
acknowledges and agrees that the Purchaser is acting solely in the capacity of
an arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated thereby. The Company further acknowledges that no
Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by Purchaser or any of
their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the
Purchaser’s purchase of the Securities. The Company further represents to
Purchaser that the Company’s decision to enter into this Agreement and the other

 

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Transaction Documents has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its representatives.

3.2 Representations and Warranties of the Purchaser. Purchaser hereby represents
and warrants as of the date hereof and as of the Closing Date to the Company as
follows:

(a) Organization; Authority. Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with full right, corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution, delivery and performance by such Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate or similar action on the part of Purchaser. Each Transaction Document
to which it is a party has been duly executed by Purchaser, and when delivered
by Purchaser in accordance with the terms hereof, will constitute the valid and
legally binding obligation of Purchaser, enforceable against it in accordance
with its terms, except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.

(b) Own Account. Purchaser understands that the Securities are “restricted
securities” and have not been registered under the Securities Act or any
applicable state securities law and is acquiring the Securities as principal for
its own account and not with a view to or for distributing or reselling such
Securities or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of distributing any of
such Securities in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings with
any other persons to distribute or regarding the distribution of such Securities
(this representation and warranty not limiting such Purchaser’s right to sell
the Securities pursuant to the Registration Statement or otherwise in compliance
with applicable federal and state securities laws) in violation of the
Securities Act or any applicable state securities law. Purchaser is acquiring
the Securities hereunder in the ordinary course of its business.

(c) Purchaser Status. At the time Purchaser was offered the Securities, it was,
and at the date hereof it is, and on each date on which it exercises any
Warrants or converts any Series D Preferred Stock it will be either: (i) an
“accredited investor” as defined in Rule 501 under the Securities Act or (ii) a
“qualified institutional buyer” as defined in Rule 144A(a) under the Securities
Act. Such Purchaser is not required to be registered as a broker-dealer under
Section 15 of the Exchange Act.

(d) Experience of Such Purchaser. Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment.

 

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Purchaser is able to bear the economic risk of an investment in the Securities
and, at the present time, is able to afford a complete loss of such investment.

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

(f) Short Sales and Confidentiality Prior To The Date Hereof. Other than the
transaction contemplated hereunder, Purchaser has not directly or indirectly,
nor has any Person acting on behalf of or pursuant to any understanding with
Purchaser, executed any disposition, including Short Sales, in the securities of
the Company during the period commencing from the time that Purchaser first
received a term sheet (written or oral) from the Company or any other Person
setting forth the material terms of the transactions contemplated hereunder
until the date hereof (“Discussion Time”). Notwithstanding the foregoing, in the
case of a Purchaser that is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of Purchaser’s assets and the
portfolio managers have no direct knowledge of the investment decisions made by
the portfolio managers managing other portions of Purchaser’s assets, the
representation set forth above shall only apply with respect to the portion of
assets managed by the portfolio manager that made the investment decision to
purchase the Securities covered by this Agreement. Other than to other Persons
party to this Agreement, Purchaser has maintained the confidentiality of all
disclosures made to it in connection with this transaction (including the
existence and terms of this transaction).

(g) Risk Factors. Purchaser hereby agrees and acknowledges that it has been
informed of the following: (i) there are factors relating to the subsequent
transfer of any Securities acquired hereunder that could make the resale of such
Securities difficult; and (ii) there is no guarantee that Purchaser will realize
any gain from the purchase of the Securities. The purchase of the Securities
involves a high degree of risk and is subject to many uncertainties. These risks
and uncertainties may adversely affect the Company’s business, operating results
and financial condition. In such an event, the trading price for the Common
Stock could decline substantially and Purchaser could lose all or part of its
investment.

(h) Due Diligence. Purchaser hereby agrees and acknowledges that Purchaser has
had an opportunity to meet with representatives of the Company and to ask
questions and receive answers to Purchaser’s satisfaction regarding the
Company’s proposed business and the Company’s financial condition in order to
assist Purchaser in evaluating the merits and risks of purchasing the
Securities. All material documents and information pertaining to the Company and
the purchase of Securities hereunder that have been requested by Purchaser have
been made available to Purchaser.

(i) Certain Fees. Except for investment banking fees payable to Midtown
Partners & Co., LLC, Purchaser has not employed any broker or finder or incurred
any liability for any brokerage or investment banking fees, commissions,
finders’ structuring

 

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fees, financial advisory fees or other similar fees in connection with the
Transaction Documents.

ARTICLE IV

OTHER AGREEMENTS OF THE PARTIES

4.1 Transfer Restrictions.

(a) The Securities may only be disposed of in compliance with state and federal
securities laws. In connection with any transfer of Securities other than
pursuant to an effective registration statement or Rule 144, to the Company or
to an Affiliate of Purchaser or in connection with a pledge as contemplated in
Section 4.1(b), the Company may require the transferor thereof to provide to the
Company an opinion of counsel selected by the transferor and reasonably
acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration of such transferred Securities under the Securities
Act. As a condition of transfer, any such transferee shall agree in writing to
be bound by the terms of this Agreement and shall have the rights of a Purchaser
under this Agreement and the Registration Rights Agreement.

(b) The Purchaser agrees to the imprinting, so long as is required by this
Section 4.1, of a legend on any of the Securities in the following form:

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS
[EXERCISABLE] [CONVERTIBLE] HAVE BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON
[EXERCISE] [CONVERSION] OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

The Company acknowledges and agrees that Purchaser may from time to time pledge
pursuant to a bona fide margin agreement with a registered broker-dealer or
grant a security interest in some or all of the Securities to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and who agrees to be bound by the provisions of this Agreement
and the Registration Rights Agreement

 

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and, if required under the terms of such arrangement, Purchaser may transfer
pledged or secured Securities to the pledgees or secured parties. Such a pledge
or transfer would not be subject to approval of the Company and no legal opinion
of legal counsel of the pledgee, secured party or pledgor shall be required in
connection therewith. Further, no notice shall be required of such pledge. At
Purchaser’s expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Securities may reasonably request
in connection with a pledge or transfer of the Securities, including, if the
Securities are subject to registration pursuant to the Registration Rights
Agreement, the preparation and filing of any required prospectus supplement
under Rule 424(b)(3) under the Securities Act or other applicable provision of
the Securities Act to appropriately amend the list of selling stockholders
thereunder.

4.2 Integration. The Company shall not sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in Section 2
of the Securities Act) that would be integrated with the offer or sale of the
Securities in a manner that would require the registration under the Securities
Act of the sale of the Securities to the Purchaser.

4.3 Use of Proceeds. Except as set forth on Schedule 4.5 attached hereto, the
Company shall use the net proceeds from the sale of the Securities hereunder for
working capital purposes and not for the satisfaction of any portion of the
Company’s debt (other than payment of trade payables in the ordinary course of
the Company’s business and prior practices, including attorney’s and
professional fees), to redeem any Common Stock or Common Stock Equivalents or to
settle any outstanding litigation.

4.4 Reimbursement. If Purchaser becomes involved in any capacity in any
Proceeding by or against any Person who is a stockholder of the Company (except
as a result of sales, pledges, margin sales and similar transactions by such
Purchaser to or with any other stockholder), solely as a result of Purchaser’s
acquisition of the Securities from the Company under this Agreement, the Company
will reimburse Purchaser for its reasonable legal and other expenses (including
the cost of any investigation preparation and travel in connection therewith)
incurred in connection therewith, as such expenses are incurred. The
reimbursement obligations of the Company under this paragraph shall be in
addition to any liability which the Company may otherwise have, shall extend
upon the same terms and conditions to any Affiliates of the Purchaser who are
actually named in such action, proceeding or investigation, and partners,
directors, agents, employees and controlling persons (if any), as the case may
be, of the Purchaser and any such Affiliate, and shall be binding upon and inure
to the benefit of any successors, assigns, heirs and personal representatives of
the Company, the Purchaser and any such Affiliate and any such Person. The
Company also agrees that neither the Purchaser nor any such Affiliates,
partners, directors, agents, employees or controlling persons shall have any
liability to the Company or any Person asserting claims on behalf of or in right
of the Company solely as a result of acquiring the Securities under this
Agreement.

4.5 Indemnification of Purchaser. Subject to the provisions of this Section 4.5,
the Company will indemnify and hold Purchaser and its directors, officers,
shareholders, members, partners, employees and agents (and any other Persons
with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls Purchaser (within the meaning of Section 15 of the Securities Act and
Section 20 of

 

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the Exchange Act), and the directors, officers, shareholders, agents, members,
partners or employees (and any other Persons with a functionally equivalent role
of a Person holding such titles notwithstanding a lack of such title or any
other title) of such controlling person (each, a “Purchaser Party”) harmless
from any and all losses, liabilities, obligations, claims, contingencies,
damages, costs and expenses, including all judgments, amounts paid in
settlements, court costs and reasonable attorneys’ fees and costs of
investigation that any such Purchaser Party may suffer or incur as a result of
or relating to (a) any breach of any of the representations, warranties,
covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents or (b) any action instituted against Purchaser, or any of
its Affiliates, by any stockholder of the Company who is not an Affiliate of
such Purchaser, solely as a result of such Purchaser’s acquisition of the
Securities pursuant to this Agreement (unless such action is based upon a breach
of such Purchaser’s representations, warranties or covenants under the
Transaction Documents or any agreements or understandings such Purchaser may
have with any such stockholder or any violations by the Purchaser of state or
federal securities laws or any conduct by such Purchaser which constitutes
fraud, gross negligence, willful misconduct or malfeasance). If any action shall
be brought against any Purchaser Party in respect of which indemnity may be
sought pursuant to this Agreement, such Purchaser Party shall promptly notify
the Company in writing, and the Company shall have the right to assume the
defense thereof with counsel of its own choosing reasonably acceptable to the
Purchaser Party. Any Purchaser Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Purchaser Party
except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a
reasonable period of time to assume such defense and to employ counsel or
(iii) in such action there is, in the reasonable opinion of such separate
counsel, a material conflict on any material issue between the position of the
Company and the position of such Purchaser Party, in which case the Company
shall be responsible for the reasonable fees and expenses of no more than one
(1) such separate counsel. The Company will not be liable to any Purchaser Party
under this Agreement (i) for any settlement by a Purchaser Party effected
without the Company’s prior written consent, which shall not be unreasonably
withheld or delayed; or (ii) to the extent, but only to the extent that a loss,
claim, damage or liability is attributable to any Purchaser Party’s breach of
any of the representations, warranties, covenants or agreements made by such
Purchaser Party in this Agreement or in the other Transaction Documents.

4.6 Participation in Future Financing.

(a) From the date hereof until the date that is the one (1) year anniversary of
the Closing Date, upon any issuance by the Company or any of its Subsidiaries of
Common Stock or Common Stock Equivalents other than an Exempt Issuance (a
“Subsequent Financing”), Purchaser shall have the pro-rata right to participate
(with any other holders identified as having a contractual right of first
refusal on Schedule 3.1(g)) in the Subsequent Financing on the same terms,
conditions and price provided for in the Subsequent Financing.

(b) At least ten (10) Trading Days prior to the closing of the Subsequent
Financing, the Company shall deliver to Purchaser a written notice of its
intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice
shall ask Purchaser if it

 

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wants to review the details of such financing (such additional notice, a
“Subsequent Financing Notice”). Upon the request of Purchaser, and only upon a
request by such Purchaser, for a Subsequent Financing Notice, the Company shall
promptly, but no later than one (1) Trading Day after such request, deliver a
Subsequent Financing Notice to Purchaser. The Subsequent Financing Notice shall
describe in reasonable detail the proposed terms of such Subsequent Financing,
the amount of proceeds intended to be raised thereunder, the Person or Persons
through or with whom such Subsequent Financing is proposed to be effected, and
attached to which shall be a term sheet or similar document relating thereto.

(c) Any Purchaser desiring to participate in such Subsequent Financing must
provide written notice to the Company by not later than 5:30 p.m. (New York City
time) on the 10th Trading Day after all of the Purchaser have received the
Pre-Notice that the Purchaser is willing to participate in the Subsequent
Financing, the amount of the Purchaser’s participation, and that the Purchaser
has such funds ready, willing, and available for investment on the terms set
forth in the Subsequent Financing Notice. If the Company receives no notice from
a Purchaser as of such tenth (10th) Trading Day, such Purchaser shall be deemed
to have notified the Company that it does not elect to participate.

(d) If by 5:30 p.m. (New York City time) on the tenth (10th) Trading Day after
all of the Purchaser have received the Pre-Notice, notifications by Purchaser of
its willingness to participate in the Subsequent Financing (or to cause their
designees to participate) is, in the aggregate, less than the total amount of
the Subsequent Financing, then the Company may effect the remaining portion of
such Subsequent Financing on the terms and with the Persons set forth in the
Subsequent Financing Notice.

(e) Notwithstanding the foregoing, this Section 4.6 shall not apply in respect
of (i) an Exempt Issuance, and (ii) shares of Common Stock issued solely in
connection with dividends required to be paid under the terms and conditions of
the Series D Convertible Preferred Stock or the Series D Convertible Preferred
Stock.

4.7 Form D; Blue Sky Filings. The Company agrees to timely file a Form D with
respect to the Securities as required under Regulation D and to provide a copy
thereof, promptly upon request of Purchaser. The Company shall take such action
as the Company shall reasonably determine is necessary in order to obtain an
exemption for, or to qualify the Securities for, sale to the Purchaser at the
Closing under applicable securities or “Blue Sky” laws of the states of the
United States, and shall provide evidence of such actions promptly upon request
of Purchaser.

ARTICLE V

MISCELLANEOUS

5.1 Fees and Expenses. At the Closing, the Company has agreed to reimburse the
Purchaser the non-accountable sum of $50,000 for its legal fees and expenses.
Except as expressly set forth in the Transaction Documents to the contrary, each
party shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and

 

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performance of this Agreement. The Company shall pay all transfer agent fees,
stamp taxes and other taxes and duties levied in connection with the delivery of
any Securities to the Purchaser.

5.2 Entire Agreement. The Transaction Documents, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

5.3 Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto prior to 5:30 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number set forth on the signature pages attached hereto on a day that is not a
Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day,
(c) the second (2nd) Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual receipt by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as set forth on the signature pages attached
hereto.

5.4 Amendments; Waivers. No provision of this Agreement may be waived, modified,
supplemented or amended except in a written instrument signed, in the case of an
amendment, by the Company and the Purchaser or, in the case of a waiver, by the
party against whom enforcement of any such waived provision is sought. No waiver
of any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right.

5.5 Headings. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.

5.6 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of Purchaser (other than by merger). Purchaser
may assign any or all of its rights under this Agreement to any Person to whom
such Purchaser assigns or transfers any Securities, provided such transferee
agrees in writing to be bound, with respect to the transferred Securities, by
the provisions of the Transaction Documents that apply to the “Purchaser”.

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

5.8 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and

 

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enforced in accordance with the internal laws of the State of Florida, without
regard to the principles of conflicts of law thereof. Each party agrees that all
legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in Hillsborough County, Florida. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in Hillsborough County, Florida for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the
enforcement of any of the Transaction Documents), and hereby irrevocably waives,
and agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is improper or is an inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other
manner permitted by law. The parties hereby waive all rights to a trial by jury.
If either party shall commence an action or proceeding to enforce any provisions
of the Transaction Documents, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.

5.9 Survival. The representations, warranties, covenants and other agreements
contained herein shall survive the Closing and the delivery, exercise and/or
conversion of the Securities, as applicable for a period of two (2) years from
the date of this Agreement.

5.10 Execution. This Agreement may be executed in two (2) or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.

5.11 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

 

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5.12 Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, the Purchaser and the
Company will be entitled to specific performance under the Transaction
Documents. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agrees to waive and not to
assert in any action for specific performance of any such obligation the defense
that a remedy at law would be adequate.

5.13 Construction. The parties agree that each of them and/or their respective
counsel has reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of the Transaction Documents or any amendments hereto.

(Remainder of Page Intentionally Left Blank)

(Signature Pages Follow)

 

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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

Medical Solutions Management Inc.    Address for Notice: By:  

/s/ Lowell M. Fisher

  

237 Cedar Hill Street

Marlboro, MA 01752

Name:   Lowell M. Fisher    Title:   Interim Chief Executive Officer   

With a copy to (which shall not constitute notice):

(Remainder of Page Intentionally Left Blank)

(Signature Page For Purchaser Follows)

 

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[PURCHASER SIGNATURE PAGES TO SECURITIES

PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

Name of Purchaser: VICIS CAPITAL MASTER FUND
Signature of Authorized Signatory of Purchaser:    /s/ Chris Phillips

Name of Authorized Signatory:    /s/ Chris Phillips, Managing Director

Title of Authorized Signatory:    Vicis Capital, LLC , sole voting unitholder of
Vicis Capital Master Fund and delegate of Caledonian Bank & Trust Limited

Email Address of Purchaser:   

 

Facsimile Number of Purchaser:    (212) 909-4601

Jurisdiction of Organization of Purchaser:    a trust organized under the laws
of the Cayman Islands

Address for Notice of Purchaser:

Vicis Capital Master Fund

Attn: Keith Hughes

445 Park Avenue, 16th Floor

New York, NY 10022

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

Vicis Capital Master Fund

Attn: Keith Hughes

445 Park Avenue, 16th Floor

New York, NY 10022

 

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