SECURITIES PURCHASE AGREEMENT
 
This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of December 17,
2013, is by and among WPCS International Incorporated, a Delaware corporation
with offices located at One East Uwchlan Avenue, Suite 301, Exton, Pennsylvania
19341 (the “Company”), and each of the investors listed on the Schedule of
Buyers attached hereto (individually, a “Buyer” and collectively, the “Buyers”).
 
RECITALS
 
A.           The Buyers have previously acquired 10,000 common equity units of
BTX Trader LLC, a Delaware limited liability company (the “BTX Common Equity
Units”) (100% of the share capital outstanding as of the date hereof), in such
amounts as set forth in column (3) on the Schedule of Buyers.
 
B.           Pursuant to the Securities Purchase Agreement (as amended or
modified from time to time in accordance with its terms, the “Existing
Securities Purchase Agreement”), dated as of December 4, 2012, by and among the
Company, and the investors listed on the Schedule of Buyers attached thereto
(the “Original Buyers”), which included certain of the Buyers (the
“Noteholders”), the Original Buyers purchased, for a purchase price of
$4,000,000, $4,000,000 in aggregate principal amount of senior secured
convertible notes, in the form of Exhibit A to the Existing Securities Purchase
Agreement (as amended, the “Notes”) and warrants to initially purchase
15,923,567 shares of the Company’s Common Stock (as defined below), in the form
of Exhibit B to the Existing Securities Purchase Agreement (the “Existing
Warrants”).
 
C.           The Company has authorized a new series of preferred stock
designated as Series E Convertible Preferred Stock (the “Series E Preferred
Stock”), the rights, preferences and other terms and provisions of which are set
forth in the Certificate of Designations, Preferences and Rights of Series E
Preferred Stock, in the form attached hereto as Exhibit A (the “Certificate of
Designations”), which Series E Preferred Stock shall be convertible into shares
of the Company’s Common Stock (as defined below), in accordance with the terms
of the Certificate of Designations.
 
D.           The Company and each Buyer is executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(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.
 
E.           Each Buyer wishes to purchase, and the Company wishes to sell, upon
the terms and conditions stated in this Agreement, (i) the aggregate number of
shares of Series E Preferred Stock (which aggregate number for all Buyers shall
not exceed 2,438) (collectively, the “Preferred Shares”) (as converted,
collectively, the “Conversion Shares”) set forth opposite such Buyer’s name in
column (4) on the Schedule of Buyers and (ii) a warrant to initially acquire up
to that number of additional shares of Common Stock set forth opposite such
Buyer’s name in column (5) on the Schedule of Buyers, in the form attached
hereto as Exhibit B (the “Warrants”) (as exercised, collectively, the “Warrant
Shares”).
 
 
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F.           The Preferred Shares may be entitled to dividends, which at the
option of the Company, subject to certain conditions, may be paid in shares of
Common Stock (the "Dividend Shares").
 
G.           At the Closing, the parties hereto shall execute and deliver a
Registration Rights Agreement, 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 Registrable Securities
(as defined in the Registration Rights Agreement), under the 1933 Act and the
rules and regulations promulgated thereunder, and applicable state securities
laws.
 
H.           The Preferred Shares, the Conversion Shares, Dividend Shares, the
Warrants and the Warrant Shares are collectively referred to herein as the
“Securities.”
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each Buyer hereby
agree as follows:
 
1.           PURCHASE AND SALE OF PREFERRED SHARES AND WARRANTS.
 
(a)           Preferred Shares and Warrants.  Subject to the satisfaction (or
waiver) of the conditions set forth in Sections 6 and 6(a)(iv) below, the
Company shall issue and sell to each Buyer, and each Buyer severally, but not
jointly, shall purchase from the Company on the Closing Date (as defined below),
the number of Preferred Shares as is set forth opposite such Buyer’s name in
column (4) on the Schedule of Buyers along with Warrants to acquire up to that
aggregate number of Warrant Shares as is set forth opposite such Buyer’s name in
column (5) on the Schedule of Buyers.
 
(b)           Closing.  The closing (the “Closing”) of the purchase of the
Preferred Shares and the Warrants by the Buyers shall occur at the offices of
Greenberg Traurig, LLP, MetLife Building, 200 Park Avenue, New York, NY
10166.  The date and time of the Closing (the “Closing Date”) shall be 10:00
a.m., New York time, on the first (1st) Business Day on which the conditions to
the Closing set forth in Sections 6 and 6(a)(iv) below are satisfied or waived
(or such other date as is mutually agreed to by the Company and each Buyer).  As
used herein “Business Day” means any day other than a Saturday, Sunday or other
day on which commercial banks in New York, New York are authorized or required
by law to remain closed.
 
(c)           Purchase Price.  The aggregate purchase price for the Preferred
Shares and the Warrants to be purchased by each Buyer (the “Purchase Price”)
shall be $1,624,408.06, which shall be deemed paid by transfer to the Company of
such percentage of BTX Common Equity Units as set forth opposite such Buyer’s
name in column (3) on the Schedule of Buyers (at a deemed value of approximately
$162.44 per each BTX Common Equity Unit being transferred to the Company by each
Buyer).
 
 
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(d)           Payment of Purchase Price; Delivery of Preferred Shares and
Warrants.  On the Closing Date, (i) the Buyers shall transfer the BTX Common
Equity Units to the Company as payment of the Purchase Price for the Preferred
Shares and the Warrants to be issued and sold to such Buyer at the Closing and
(ii) the Company shall issue and deliver to each Buyer (A) a certificate
representing the number of Preferred Shares as is set forth opposite such
Buyer’s name in column (4) on the Schedule of Buyers and (B) a Warrant pursuant
to which such Buyer shall have the right to initially acquire up to such
aggregate number of Warrant Shares as is set forth opposite such Buyer’s name in
column (5) on the Schedule of Buyers, in all cases, duly executed on behalf of
the Company and registered in the name of such Buyer or its designee.
 
(e)           Consent; Waivers
 
(i)           The Company hereby irrevocably waives any right of the Company to
redeem the Notes at the option of the Company, including, without limitation,
pursuant to Section 10 of the Notes.
 
(ii)           The Noteholders hereby consent to the issuance of the Securities
and the payment of dividends as required pursuant to the Certificate of
Designations and hereby irrevocably waive any provision of the (A) Existing
Securities Purchase Agreement and the Notes prohibiting the payment of such
dividends and (B) Existing Warrants that would result in an adjustment of the
exercise price or number of shares issuable upon exercise of the Existing
Warrants.
 
(iii)           The Noteholders hereby acknowledge and agree that a default by
BTX Trader LLC solely with respect to the $500,000 in senior secured notes
issued by BTX Trader LLC to Divya Thakur and Ilya Subkhankulov shall not
constitute an Event of Default (as defined in the Notes) under the Notes.
 
(iv)           The Noteholders hereby acknowledge and agree that,
notwithstanding anything in the Note or any other Transaction Document (as
defined in the Existing Securities Purchase Agreement) to the contrary, (A) any
cash held by BTX Trader LLC immediately following the Closing Date shall not be
required to be held in the Master Collection Account (as defined in the Notes)
and may be held in an Operating Account (as defined in the Notes) of BTX Trader
LLC, (B) the assets and liabilities of BTX Trader LLC shall be excluded for
purposes of calculating the Current Ratio (as defined in the Notes), (C) the
Company and its Subsidiaries (as defined in the Notes) may engage in the line of
business conducted, or proposed to be conducted, by BTX Trader LLC and (D) the
Company shall only be required to reserve 100% of the maximum number of shares
of common stock issuable upon conversion of the Notes and exercise of the
Existing Warrants.
 
(v)           The Noteholders hereby (A) waive the default that has occurred
pursuant to Section 3.1 under the Amendment Agreement, dated as of November 3,
2013 and effective as of October 31, 2013 pursuant to which the Company was
required to publicly disclose all material, non-public information delivered to
the Noteholders on or before December 15, 2013 and (B) acknowledge and agree
that the Company shall have until December 17, 2013 to publicly disclose all
material, non-public information delivered to the Noteholders.
 
 
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(f) Trading Restrictions.  Each Buyer hereby agrees, severally and not jointly,
for so long as such Buyer (or any of its Affiliates (as defined below)) owns any
Securities (as defined herein or as defined in the Existing Securities Purchase
Agreement), neither such Buyer nor any of its Affiliates shall:
 
(i) At any time during the ten (10) Trading Day period immediately following the
Closing Date (A) convert or exercise any Notes or Preferred Shares of the
Company or (B) sell any shares of Common Stock issued or issuable upon
conversion of any Notes or Preferred Shares of the Company upon any Trading Day
during such period, in either case, unless either (x) the Bid Price (as defined
in the Warrant) of the Common Stock exceeds $3.00 at the time of such
conversion, exercise or sale, as applicable, or (y) if the composite aggregate
trading volume of the Common Stock as reported on Bloomberg (as defined in the
Warrants) at such time on such Trading Day exceeds $5 million (such excess
amount, the “Trading Surplus Amount”), in an amount not to exceed the Maximum
Trading Percentage (as defined below) of such Trading Surplus Amount.
 
(ii) At any time after the ten (10) Trading Day period immediately following the
Closing Date until the four (4) month anniversary of the Closing Date, (A)
convert or exercise any Notes or Preferred Shares of the Company or (B) sell any
shares of Common Stock issued or issuable upon conversion of any Notes or
Preferred Shares of the Company in any Trading Day during such period, in either
case, except in an amount not to exceed the Maximum Trading Percentage of the
composite aggregate trading volume of the Common Stock as reported on Bloomberg
at such time for such Trading Day.
 
(iii) For the purposes of this Agreement, (x) “Maximum Trading Percentage”
means, at any time, if the Bid Price of the Common Stock as of such time (a) is
less than or equal to $3.00, 25%, (b) is greater than $3.00, but less than or
equal to $4.00, 35%, (c) is greater than $4.00, but less than or equal to $5.00,
40% or (d) is greater than $5.00, unlimited amount (in each case, with such
dollar amounts adjusted for any stock split, stock dividend, recapitalization or
similar event from and after the date hereof) and (y) “Affiliate” means, with
respect to any specified Person, (i) any other Person who or which, directly or
indirectly, controls, is controlled by, or is under common control with such
specified Person, including, without limitation, any partner, officer, director,
member of such Person and any fund now or hereafter existing that is controlled
by or under common control with one or more general partners or managing members
of, or shares the same management company with, such Person or (ii) if such
Person is a natural person, such Person’s spouse, lineal descendant (including
any adopted child or adopted grandchild) or other family member, or a custodian
or trustee of any trust, partnership or limited liability company for the
benefit of, in whole or in part, or the ownership interests of which are,
directly or indirectly, controlled by, such Person or any other member or
members of such Person’s family.
 
 
2.           BUYER’S REPRESENTATIONS AND WARRANTIES.
 
Each Buyer, severally and not jointly, represents and warrants to the Company
with respect to only itself that, as of the date hereof and as of the Closing
Date:
 
(a)           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 power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents (as
defined below) to which it is a party and otherwise to carry out its obligations
hereunder and thereunder.
 
 
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(b)           No Public Sale or Distribution.  Such Buyer (i) is acquiring the
Preferred Shares and Warrants, (ii) may acquire Dividend Shares in accordance
with the terms of the Certificate of Designations, (iii) upon conversion of the
Preferred Shares will acquire the Conversion Shares issuable upon conversion
thereof, and (iv) upon exercise of its Warrants will acquire the Warrant Shares
issuable upon exercise thereof, in each case, for its own account and not with a
view towards, or for resale in connection with, the public sale or distribution
thereof in violation of applicable securities laws, except pursuant to sales
registered or exempted under the 1933 Act; provided, however, by making the
representations herein, such Buyer does not agree, or make any representation or
warranty, to hold any of the Securities for any minimum 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 under the 1933
Act.  Such Buyer 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 in violation of applicable securities laws.
 
(c)           Accredited Investor Status.  Such Buyer is an “accredited
investor” as that term is defined in Rule 501(a) of Regulation D.
 
(d)           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.
 
(e)           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.  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.
 
(f)           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.
 
(g)           Transfer or Resale.  Such Buyer understands that except as
provided in the Registration Rights Agreement and Section 4(h) hereof:  (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 (if requested by the Company) an opinion of
counsel to such Buyer, 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 (or a successor rule thereto) (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 below) 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 promulgated 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.
 
 
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(h)           Validity; Enforcement.  This Agreement and the Registration Rights
Agreement have been duly and validly authorized, executed and delivered on
behalf of such Buyer and constitutes 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 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 this Agreement and the Registration Rights Agreement 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, (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 the jurisdiction specified
below its address on the Schedule of Buyers.
 
(k)           Certain Trading Activities.  Except as described on Schedule 2(k),
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 limitation, any Short Sales
(as defined below) involving the Company’s securities) during the period
commencing as of the time that such Buyer was first contacted regarding the
specific investment in the Company contemplated by this Agreement and ending
immediately prior to the execution of this Agreement by such Buyer (it being
understood and agreed that for all purposes of this Agreement, and, without
implication that the contrary would otherwise be true, that neither transactions
nor purchases nor sales shall include the location and/or reservation of
borrowable shares of Common Stock). “Short Sales” means all “short sales” as
defined in Rule 200 promulgated under Regulation SHO under the Securities
Exchange Act of 1934, as amended (the “1934 Act”).
 
(l)           Experience of Such Buyer.  Such Buyer, 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.  Such Buyer 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.
 
 
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(m)           Not a 10% Owner.  Such Buyer is not a “beneficial owner” of more
than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of
the 1934 Act).
 
(n)           BTX Common Equity
Units.                                                        Except as
described on Schedule 2(n), such Buyer is the sole record and beneficial owner
of the BTX Common Equity Units to be delivered to the Company pursuant to this
Agreement as payment of the Purchase Price for the Preferred Shares and Warrants
being purchased by such Buyer hereunder and owns such BTX Common Equity Units
free from all taxes, liens, claims, encumbrances and charges.  Except as
described on Schedule 2(n), there are no outstanding rights, options,
subscriptions or other agreements or commitments obligating such Buyer to sell
or transfer such BTX Common Equity Units and such BTX Common Equity Units are
not subject to any lock-up or other restriction on their transfer or on the
ability of the Buyer to sell or transfer such BTX Common Equity Units.
 
3.           REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
 
The Company represents and warrants to each of the Buyers that, as of the date
hereof and as of the Closing Date:
 
(a)           Organization and Qualification.  Each of the Company and each of
its Subsidiaries (as defined below) are entities duly organized and validly
existing and 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 and as presently proposed
to be conducted.  Each of the Company and each of 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 (i) the business, properties, assets, liabilities,
operations (including results thereof), condition (financial or otherwise) or
prospects of the Company and its Subsidiaries, taken as a whole, (ii) the
transactions contemplated hereby or in any of the other Transaction Documents or
(iii) the authority or ability of the Company to perform any of its obligations
under any of the Transaction Documents (as defined below).  Other than the
Persons (as defined below) set forth on Schedule 3(a) the Company has no
Subsidiaries.  “Subsidiaries” means any Person in which the Company, directly or
indirectly, (I) owns a majority of the outstanding capital stock or holds a
majority of equity or similar interest of such Person or (II) controls or
operates all or any part of the business, operations or administration of such
Person, and each of the foregoing, is individually referred to herein as a
“Subsidiary.”
 
 
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(b)           Authorization; Enforcement; Validity.  Subject to the Stockholder
Approval (as defined below), the Company has the requisite power and authority
to enter into and perform its obligations under this Agreement and the other
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 Preferred Shares and the reservation for issuance and issuance
of the Conversion Shares issuable upon conversion of the Preferred Shares and
the reservation for issuance and issuance any Dividend Shares issuable pursuant
to the terms of the Certificate of Designations and the issuance of the Warrants
and the reservation for issuance and issuance of the Warrant Shares issuable
upon exercise of the Warrants) have been duly authorized by the Company’s board
of directors and, other than, the Stockholder Approval, the filing with the SEC
of one or more Registration Statements in accordance with the requirements of
the Registration Rights Agreement, the 8-K Filing (as defined below), the filing
of the listing of additional securities with the Principal Market (as
hereinafter defined), a Form D with the SEC and any other filings as may be
required by any state securities agencies (collectively, the “Required
Approvals”)) no further filing, consent or authorization is required by the
Company, its board of directors or its stockholders or other governing
body.  This Agreement has been, and the other Transaction Documents to which it
is a party will be prior to the Closing, duly executed and delivered by the
Company, and each constitutes the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with its 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 and except as rights to
indemnification and to contribution may be limited by federal or state
securities law and public policy, and the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.  “Transaction Documents” means, collectively, this Agreement,
the Warrants, the Certificate of Designations, the Registration Rights
Agreement, the Irrevocable Transfer Agent Instructions (as defined below), the
Voting Agreements and each of the other agreements and instruments entered into
or delivered by any of the parties hereto in connection with the transactions
contemplated hereby and thereby, as may be amended from time to time.
 
(c)           Issuance of Securities.  The issuance of the Preferred Shares and
the Warrants are duly authorized and upon issuance in accordance with the terms
of the Transaction Documents shall be validly issued, fully paid and
non-assessable and free from all preemptive or similar rights, taxes, liens,
charges and other encumbrances with respect to the issue thereof.  The Company
shall not be required to reserve from its duly authorized capital stock any
Conversion Shares, the Dividend Shares and the Warrant Shares until the
Stockholder Approval is obtained. Subject to Stockholder Approval, upon issuance
or conversion in accordance with the Certificate of Designations or exercise in
accordance with the Warrants (as the case may be), the Conversion Shares, the
Dividend Shares and the Warrant Shares, respectively, when issued, will be
validly issued, fully paid and nonassessable and free from all preemptive or
similar rights, taxes, liens, charges and other encumbrances with respect to the
issue thereof, with the holders being entitled to all rights accorded to a
holder of Common Stock.  Subject to the accuracy of the representations and
warranties of the Buyers in this Agreement, the offer and issuance by the
Company of the Securities is exempt from registration under the 1933
Act.  “Common Stock” means (i) the Company’s shares of common stock, $0.001 par
value per share, and (ii) any capital stock into which such common stock shall
have been changed or any share capital resulting from a reclassification of such
common stock.
 
 
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(d)           No Conflicts.  The execution, delivery and performance of the
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 Preferred Shares, the Warrants, the Conversion Shares, the
Dividend Shares and the Warrant Shares and the reservation for issuance of the
Conversion Shares, the Dividend Shares and the Warrant Shares) will not (i)
result in a violation of the Certificate of Incorporation (as defined below)
(including, without limitation, any certificates of designation contained
therein) or other organizational documents of the Company or any of its
Subsidiaries, any capital stock of the Company or any of its Subsidiaries or
Bylaws (as defined below), (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 the Company or
any of its Subsidiaries is a party, or (iii) subject to the Required Approvals,
result in a violation of any law, rule, regulation, order, judgment or decree
(including foreign, federal and state securities laws and regulations and the
rules and regulations of the Nasdaq Capital Market (the “Principal Market”) and
including all applicable federal laws, rules and regulations) 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 except, in the case of
clause (ii) or (iii) above, to the extent such violations that would not
reasonably be expected to have a Material Adverse Effect.
 
(e)           Consents.  The Company is not required to obtain any consent from,
authorization or order of, or make any filing or registration with (other than
the Required Approvals), any Governmental Entity (as defined below) 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 at or prior to the Closing have been obtained
or effected on or prior to the Closing Date, and the Company is not aware of any
facts or circumstances which might prevent the Company from obtaining or
effecting any of the registration, application or filings contemplated by the
Transaction Documents.  Except as set forth on Schedule 3(e), the Company is not
in violation of the requirements of the Principal Market and has no knowledge of
any facts or circumstances which could reasonably lead to delisting or
suspension of the Common Stock in the foreseeable future.  “Governmental Entity”
means any nation, state, county, city, town, village, district, or other
political jurisdiction of any nature, federal, state, local, municipal, foreign,
or other government, governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal), multi-national organization or body; or body
exercising, or entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory, or taxing authority or power of any nature or
instrumentality of any of the foregoing, including any entity or enterprise
owned or controlled by a government or a public international organization or
any of the foregoing.
 
 
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(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 or any of its Subsidiaries, (ii) an “affiliate” (as
defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its
knowledge, a “beneficial owner” of more than 10% of the shares of Common Stock
(as defined for purposes of Rule 13d-3 of the 1934 Act.  The Company further
acknowledges that no Buyer is acting as a financial advisor or fiduciary of the
Company or any of its Subsidiaries (or in any similar capacity) with respect to
the 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 the 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; Placement Agent’s Fees.  Neither the
Company, nor any of its Subsidiaries or affiliates, nor 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.  Neither the Company nor
any of its Subsidiaries has engaged any placement agent or other agent in
connection with the offer or sale of the Securities.
 
(h)           No Integrated Offering.  None of the Company, its Subsidiaries or
any of their affiliates, nor, to the knowledge of the Company, any Person acting
on 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 the issuance of any of the Securities under the
1933 Act, whether through integration with prior offerings or otherwise, or
cause this offering of the Securities to require approval of stockholders of the
Company under 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 for quotation.  None of the Company, its Subsidiaries, their
affiliates nor, to the knowledge of the Company, any Person acting on their
behalf will take any action or steps that would require registration of the
issuance of any of the Securities under the 1933 Act or cause the offering of
any of the Securities to be integrated with other offerings of securities of the
Company.
 
(i)           Dilutive Effect.  The Company acknowledges that its obligation to
issue the Conversion Shares upon conversion of the Preferred Shares in
accordance with this Agreement and the Certificate of Designations, the Dividend
Shares in accordance with this Agreement and the Certificate of Designations and
the Warrant Shares upon exercise of the Warrants in accordance with this
Agreement and the Warrants is absolute and unconditional (other than the
conditions set forth herein, in the Certificate of Designations and in the
Warrants, respectively) regardless of the dilutive effect that such issuance may
have on the ownership interests of other stockholders of the Company.
 
 
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(j)           Application of Takeover Protections; Rights Agreement.  At or
prior to Closing, the Company and its board of directors shall have taken all
necessary action, if any, in order to render inapplicable any control share
acquisition, interested stockholder, business combination, poison pill
(including, without limitation, any distribution under a rights agreement),
stockholder rights plan or other similar anti-takeover provision under the
Certificate of Incorporation, Bylaws or other organizational documents or the
laws of the jurisdiction of its incorporation or otherwise 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.  At or prior to Closing,
the Company and its board of directors shall have taken all necessary action, if
any, in order to render inapplicable any stockholder rights plan or similar
arrangement relating to accumulations of beneficial ownership of shares of
Common Stock or a change in control of the Company or any of its Subsidiaries.
 
(k)           SEC Documents; Financial Statements.  During the two (2) years
prior to the date hereof, the Company has timely filed all reports, schedules,
forms, proxy statements, financial 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 and
appendices 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 made available to the
Buyers or their respective representatives true, correct and complete copies of
each of the SEC Documents not available on the EDGAR system.  As of their
respective dates, the SEC Documents 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, 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 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 as in effect as of the time of filing.  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 which will not be material, either individually or in the
aggregate).  No other information provided by or on behalf of the Company to any
of the Buyers which is not included in the SEC Documents (including, without
limitation, information referred to in Section 2(e) of this Agreement) contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein not misleading, in the light
of the circumstance under which they are or were made.  The Company is not
currently contemplating to amend or restate any of the financial statements
(including without limitation, any notes or any letter of the independent
accountants of the Company with respect thereto) included in the SEC Documents
(the “Financial Statements”), nor is the Company currently aware of facts or
circumstances which would require the Company to amend or restate any of the
Financial Statements, in each case, in order for any of the Financials
Statements to be in compliance with GAAP and the rules and regulations of the
SEC.  The Company has not been informed by its independent accountants that they
recommend that the Company amend or restate any of the Financial Statements or
that there is any need for the Company to amend or restate any of the Financial
Statements.
 
 
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(l)           Absence of Certain Changes.  Since the date of the Company’s most
recent audited financial statements contained in a Form 10-K except as set forth
on Schedule 3(l) or disclosed in the SEC Documents filed subsequent to such Form
10-K, there has been no material adverse change and no material adverse
development in the business, assets, liabilities, properties, operations
(including results thereof), condition (financial or otherwise) or prospects of
the Company and its Subsidiaries taken as a whole.  Since the date of the
Company’s most recent audited financial statements contained in a Form 10-K
except as disclosed in the SEC Documents filed subsequent to such Form 10-K,
neither the Company nor any of its Subsidiaries has (i) declared or paid any
dividends, (ii) sold any assets, individually or in the aggregate, outside of
the ordinary course of business or (iii) made any material capital expenditures,
individually or in the aggregate, outside the ordinary course of
business.  Neither the Company nor any of its Subsidiaries has taken any steps
to seek protection pursuant to any law or statute relating to bankruptcy,
insolvency, reorganization, receivership, liquidation or winding up, nor does
the Company or any Subsidiary have any knowledge or reason to believe that any
of their respective creditors intend to initiate involuntary bankruptcy
proceedings or any actual knowledge of any fact which would reasonably lead a
creditor to do so.
 
(m)           No Undisclosed Events, Liabilities, Developments or
Circumstances.  Except as disclosed in the SEC Documents, no event, liability,
development or circumstance has occurred or exists, or is reasonably expected to
exist or occur with respect to the Company, any of its Subsidiaries or any of
their respective businesses, properties, liabilities, prospects, operations
(including results thereof) or condition (financial or otherwise), that (i)
would be required to be disclosed by the Company under applicable securities
laws on a registration statement on Form S-1 filed with the SEC relating to an
issuance and sale by the Company of its Common Stock and which has not been
publicly announced, (ii) could have a material adverse effect on any Buyer’s
investment hereunder or (iii) could have a Material Adverse Effect.
 
(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, any certificate of designations, preferences or
rights of any other outstanding series of preferred stock of the Company or any
of its Subsidiaries or Bylaws or their organizational charter, certificate of
formation or certificate of incorporation or bylaws, respectively.  Except as
disclosed in the SEC Documents, neither the Company nor any of its Subsidiaries
is in violation of any judgment, decree or order or any statute, ordinance, rule
or regulation applicable to the Company or any of its Subsidiaries, and neither
the Company nor any of its Subsidiaries will conduct its business in violation
of any of the foregoing, except in all cases for possible violations which could
not, individually or in the aggregate, have a Material Adverse Effect.  Except
as set forth on Schedule 3(n), without limiting the generality of the 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 that
could reasonably lead to delisting or suspension of the Common Stock by the
Principal Market in the foreseeable future.  Since January 1, 2010, (i) the
Common Stock has been listed or designated for quotation on the Principal Market
or the Nasdaq Global Market, (ii) trading in the Common Stock has not been
suspended by the SEC or the Principal Market and (iii) except as disclosed in
the SEC Documents, the Company has received no communication, written or oral,
from the SEC or the Principal Market regarding the suspension or delisting of
the Common Stock from the Principal Market.  The Company and each of 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.
 
 
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(o)           Foreign Corrupt Practices.  Neither the Company nor any of its
Subsidiaries nor to the knowledge of the Company, any director, officer, agent,
employee, nor any other person acting for or on behalf of the foregoing
(individually and collectively, a “Company Affiliate”) have violated the U.S.
Foreign Corrupt Practices Act (the “FCPA”) or any other applicable anti-bribery
or anti-corruption laws, nor has, to the Company’s knowledge, any Company
Affiliate offered, paid, promised to pay, or authorized the payment of any
money, or offered, given, promised to give, or authorized the giving of anything
of value, to any officer, employee or any other person acting in an official
capacity for any Governmental Entity to any political party or official thereof
or to any candidate for political office (individually and collectively, a
“Government Official”) or to any person under circumstances where such Company
Affiliate knew or was aware of a high probability that all or a portion of such
money or thing of value would be offered, given or promised, directly or
indirectly, to any Governmental Official, for the purpose of:
 
(i)           (A) influencing any act or decision of such Government Official in
his/her official capacity, (B) inducing such Government Official to do or omit
to do any act in violation of his/her lawful duty, (C) securing any improper
advantage, or (D) inducing such Government Official to influence or affect any
act or decision of any Governmental Entity, or
 
(ii)           assisting the Company or its Subsidiaries in obtaining or
retaining business for or with, or directing business to, the Company or its
Subsidiaries.
 
(p)           Sarbanes-Oxley Act.  The Company and each Subsidiary is in
material compliance with all applicable requirements of the Sarbanes-Oxley Act
of 2002, and all applicable rules and regulations promulgated by the SEC
thereunder.
 
(q)           Transactions With Affiliates.  Except as disclosed in the SEC
Documents, none of the officers, directors or employees or affiliates 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, employee or affiliate or, to the
knowledge of the Company or any of its Subsidiaries, any corporation,
partnership, trust or other Person in which any such officer, director, employee
or affiliate has a substantial interest or is an employee, officer, director,
affiliate, trustee or partner.
 
 
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(r)           Equity Capitalization.  As of the date hereof, the authorized
capital stock of the Company consists of (i) 14,285,714 shares of Common Stock,
of which, 1,558,669 are issued and outstanding and 12,727,045 shares are
reserved for issuance pursuant to securities (other than the Preferred Shares
and the Warrants) exercisable or exchangeable for, or convertible into, shares
of Common Stock and (ii) 5,000,000 shares of preferred stock, none of which are
issued and outstanding.  No shares of Common Stock are held in treasury.  All of
such outstanding shares are duly authorized and have been, or upon issuance will
be, validly issued and are fully paid and nonassessable.  To the Company’s
knowledge, 12,119 shares of the Company’s issued and outstanding Common Stock on
the date hereof are owned by Persons who are “affiliates” (as defined in Rule
405 of the 1933 Act and calculated based on the assumption that only executive
officers, directors and holders of at least 10% of the Company’s issued and
outstanding Common Stock are “affiliates” without conceding that any such
Persons are “affiliates” for purposes of federal securities laws) of the Company
or any of its Subsidiaries.  Except as disclosed in the SEC Documents, to the
Company’s knowledge, no Person owns 10% or more of the Company’s issued and
outstanding shares of Common Stock (calculated based on the assumption that all
Convertible Securities (as defined below), whether or not presently exercisable
or convertible, have been fully exercised or converted (as the case may be)
taking account of any limitations on exercise or conversion (including
“blockers”) contained therein without conceding that such identified Person is a
10% stockholder for purposes of federal securities laws).  (i) None of the
Company’s or any Subsidiary’s capital stock is subject to preemptive rights or
any other similar rights or any liens or encumbrances suffered or permitted by
the Company or any Subsidiary; (ii) except as disclosed in Schedule 3(r)(iii),
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) except as disclosed in
Schedule 3(r)(iii), there are no outstanding debt securities, notes, credit
agreements, credit facilities or other agreements, documents or instruments
evidencing Indebtedness 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 amounts 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 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) neither the Company nor any Subsidiary has any stock
appreciation rights or “phantom stock” plans or agreements or any similar plan
or agreement; and (ix) neither the Company nor any of its Subsidiaries have any
liabilities or obligations required to be disclosed in the SEC Documents which
are not so disclosed in the SEC Documents, other than those incurred in the
ordinary course of the Company’s or its Subsidiaries’ respective businesses and
which, individually or in the aggregate, do not or could not have a Material
Adverse Effect.  The Company has furnished to the Buyers true, correct and
complete copies of the Company’s Certificate of Incorporation, as amended and as
in effect on the date hereof (the “Certificate 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.
 
 
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(s)           Indebtedness and Other Contracts.  Neither the Company nor any of
its Subsidiaries, (i) except as disclosed on Schedule 3(s), has any outstanding
Indebtedness (as defined below), (ii) is a party to any contract, agreement or
instrument, the violation of which, or default under which, by the other
party(ies) to such contract, agreement or instrument could reasonably be
expected to result in a Material Adverse Effect, (iii) 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 which, in the judgment of the Company’s officers, has or is
expected to have a Material Adverse Effect.  For purposes of this
Agreement:  (x) “Indebtedness” of any Person means, without duplication (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,
claim, lien, tax, right of first refusal, 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, any other
entity and any Governmental Entity or any department or agency thereof.
 
 
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(t)           Absence of Litigation.  Except as disclosed in the SEC Documents,
there is no action, suit, proceeding, inquiry or investigation before or by the
Principal Market, any court, public board, other Governmental Entity,
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 or its Subsidiaries’ officers or
directors which is outside of the ordinary course of business or individually or
in the aggregate material to the Company or any of its Subsidiaries.  To the
Company’s knowledge, except as set forth on Schedule 3(t), no director, officer
or employee of the Company or any of its subsidiaries has willfully violated 18
U.S.C. §1519 or engaged in spoliation in reasonable anticipation of
litigation.  Without limitation of the foregoing, there has not been, and to the
knowledge of the Company, there is not pending or contemplated, any
investigation by the SEC involving the Company, any of its Subsidiaries or any
current or former director or executive officer of the Company or any of its
Subsidiaries.  The SEC has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company under the
1933 Act or the 1934 Act.
 
(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 be unable to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.
 
(v)           Employee Relations.  Except as disclosed in the SEC Documents,
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 believes
that its and its Subsidiaries’ relations with their respective employees are
good.  Except as set forth on Schedule 3(v), no executive officer (as defined in
Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company
or any of its Subsidiaries 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.  To
the knowledge of the Company, no executive officer or other key employee of the
Company or any of its Subsidiaries 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 the continued employment
of each such executive officer or other key employee (as the case may be) does
not subject the Company or any of its Subsidiaries to any liability with respect
to any of the foregoing matters.  The Company and its Subsidiaries are in
compliance with all 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.
 
 
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(w)           Title.  The Company and its Subsidiaries have good and marketable
title in fee simple to all real property and have 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, 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 or any of its Subsidiaries are held
by them under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company or any of 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, original works, inventions, licenses, approvals,
governmental authorizations, trade secrets and other intellectual property
rights and all applications and registrations therefor (“Intellectual Property
Rights”) necessary to conduct their respective businesses as now conducted and
as presently proposed to be conducted.  Except as disclosed on Schedule 3(x),
none of the Company’s or its Subsidiaries’ Intellectual Property Rights have
expired, terminated or been abandoned, or are expected to expire, terminate or
be abandoned, within two years from the date of this Agreement.  The Company has
no knowledge of any infringement by the Company or any of its Subsidiaries of
Intellectual Property Rights of others.  There is no claim, action or proceeding
being made or brought, or to the knowledge of the Company or any of its
Subsidiaries, being threatened, against the Company or any of its Subsidiaries
regarding their Intellectual Property Rights.  The Company is not aware of any
facts or circumstances which might give rise to any of the foregoing
infringements or claims, actions or proceedings.  The Company and each of its
Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their Intellectual Property Rights, except
where failure to take such measures would not, either individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
 
(y)           Environmental Laws.  The Company and its Subsidiaries (i) are in
compliance with all Environmental Laws (as defined below), (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.
 
 
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(z)           Subsidiary Rights.  Except as set forth on Schedule 3(z), 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)           Tax Status.  Except as set forth on Schedule 3(aa), the Company
and each of its Subsidiaries (i) has timely 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 timely 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.  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 and its Subsidiaries know of
no basis for any such claim.  The Company is not operated in such a manner as to
qualify as a passive foreign investment company, as defined in Section 1297 of
the U.S. Internal Revenue Code of 1986, as amended (the “Code”).
 
(bb)           Internal Accounting and Disclosure Controls.  The Company and
each of its Subsidiaries maintains internal control over financial reporting (as
such term is defined in Rule 13a-15(f) under the 1934 Act) that is effective to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles, including 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 Company maintains disclosure controls and procedures (as such
term is defined in Rule 13a-15(e) 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 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 or officers and
its principal financial officer or officers, as appropriate, to allow timely
decisions regarding required disclosure.  Neither the Company nor any of its
Subsidiaries has received any notice or correspondence from any accountant or
other Person relating to any potential material weakness or significant
deficiency in any part of the internal controls over financial reporting of the
Company or any of its Subsidiaries, that has not been cured or otherwise
resolved prior to the date hereof.
 
(cc)           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 1934 Act filings and is not so
disclosed or that otherwise could be reasonably likely to have a Material
Adverse Effect.
 
 
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(dd)           Investment Company Status.  The Company is not, and upon
consummation of the sale of the Securities will not be, an “investment company,”
an affiliate of an “investment company,” a company controlled by an “investment
company” or an “affiliated person” of, or “promoter” or “principal underwriter”
for, an “investment company” as such terms are defined in the Investment Company
Act of  1940, as amended.
 
(ee)           Acknowledgement Regarding Buyers’ Trading Activity.  It is
understood and acknowledged by the Company that (i) following the public
disclosure of the transactions contemplated by the Transaction Documents, in
accordance with the terms thereof, none of the Buyers have been asked by the
Company or any of its Subsidiaries to agree, nor has any Buyer agreed with the
Company or any of its Subsidiaries, to desist from effecting any transactions in
or with respect to (including, without limitation, purchasing or selling, long
and/or short) any securities of the Company, or “derivative” securities based on
securities issued by the Company or to hold any of the Securities for any
specified term; (ii) any Buyer, and counterparties in “derivative” transactions
to which any such Buyer is a party, directly or indirectly, presently may have a
“short” position in the Common Stock which was established prior to such Buyer’s
knowledge of the transactions contemplated by the Transaction Documents; and
(iii) each Buyer shall not be deemed to have any affiliation with or control
over any arm’s length counterparty in any “derivative” transaction.  The Company
further understands and acknowledges that following the public disclosure of the
transactions contemplated by the Transaction Documents pursuant to the Press
Release (as defined below) one or more Buyers may engage in hedging and/or
trading activities at various times during the period that the Securities are
outstanding, including, without limitation, during the periods that the value
and/or number of the Warrant Shares, the Dividend Shares or Conversion Shares,
as applicable, deliverable with respect to the Securities are being determined
and such hedging and/or trading activities, if any, can reduce the value of the
existing stockholders’ equity interest in the Company both at and after the time
the hedging and/or trading activities are being conducted.  The Company
acknowledges that such aforementioned hedging and/or trading activities do not
constitute a breach of this Agreement, the Certificate of Designations, the
Warrants or any other Transaction Document or any of the documents executed in
connection herewith or therewith.
 
(ff)           Manipulation of Price.  Neither the Company nor any of its
Subsidiaries has, and, to the knowledge of the Company, no Person acting on
their behalf has, directly or indirectly, (i) taken any action designed to cause
or to result in the stabilization or manipulation of the price of any security
of the Company or any of its Subsidiaries to facilitate the sale or resale of
any of the Securities, (ii) sold, bid for, purchased, or paid any compensation
for soliciting purchases of, any of the Securities, or (iii) paid or agreed to
pay to any Person any compensation for soliciting another to purchase any other
securities of the Company or any of its Subsidiaries.
 
(gg)           U.S. Real Property Holding Corporation.  Neither the Company nor
any of its Subsidiaries is, or has ever been, and so long as any of the
Securities are held by any of the Buyers, shall become, a U.S. real property
holding corporation within the meaning of Section 897 of the Code, and the
Company and each Subsidiary shall so certify upon any Buyer’s request.
 
(hh)           Registration Eligibility.  The Company is eligible to register
the Registrable Securities for resale by the Buyers using Form S-3 promulgated
under the 1933 Act.
 
 
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(ii)           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 issuance, 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 laws imposing such taxes will be or will have been complied
with.
 
(jj)           Bank Holding Company Act.  Neither the Company nor any of its
Subsidiaries is subject to the Bank Holding Company Act of 1956, as amended (the
“BHCA”) and to regulation by the Board of Governors of the Federal Reserve
System (the “Federal Reserve”).  Neither the Company nor any of its Subsidiaries
or affiliates owns or controls, directly or indirectly, five percent (5%) or
more of the outstanding shares of any class of voting securities or twenty-five
percent (25%) or more of the total equity of a bank or any equity that is
subject to the BHCA and to regulation by the Federal Reserve.  Neither the
Company nor any of its Subsidiaries or affiliates exercises a controlling
influence over the management or policies of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve.
 
(kk)           Shell Company Status.  The Company is not currently, and has not
been within the last 12 months, an issuer identified in, or subject to, Rule
144(i).
 
(ll)           Illegal or Unauthorized Payments; Political
Contributions.  Neither the Company nor any of its Subsidiaries nor, to the
Company’s knowledge (after reasonable inquiry of its executive officers and
directors), any of the officers, directors, employees, agents or other
representatives of the Company or any of its Subsidiaries or any other business
entity or enterprise with which the Company or any Subsidiary is or has been
affiliated or associated, has, directly or indirectly, made or authorized any
payment, contribution or gift of money, property, or services, whether or not in
contravention of applicable law, (a) as a kickback or bribe to any Person or (b)
to any political organization, or the holder of or any aspirant to any elective
or appointive public office except for personal political contributions not
involving the direct or indirect use of funds of the Company or any of its
Subsidiaries.
 
(mm)           Money Laundering.  The Company and its Subsidiaries are in
compliance with, and have not previously violated, the USA Patriot Act of 2001
and all other applicable U.S. and non-U.S. anti-money laundering laws and
regulations, including, but not limited to, the laws, regulations and Executive
Orders and sanctions programs administered by the U.S. Office of Foreign Assets
Control, including, but not limited, to (i) Executive Order 13224 of September
23, 2001 entitled, “Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079
(2001)); and (ii) any regulations contained in 31 CFR, Subtitle B, Chapter V.
 
(nn)           Management.  Except as set forth in Schedule 3(nn) hereto, during
the past five year period, no current officer or director or, to the knowledge
of the Company, former officer or director of the Company or any of its
Subsidiaries has been the subject of:
 
(i)           a petition under bankruptcy laws or any other insolvency or
moratorium law or the appointment by a court of a receiver, fiscal agent or
similar officer for such Person, or any partnership in which such person was a
general partner at or within two years before the filing of such petition or
such appointment, or any corporation or business association of which such
person was an executive officer at or within two years before the time of the
filing of such petition or such appointment;
 
 
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(ii)           a conviction in a criminal proceeding or a named subject of a
pending criminal proceeding (excluding traffic violations, including those
relating to driving while intoxicated or driving under the influence);
 
(iii)           any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining any such person from, or otherwise limiting, the following
activities:
 
(1)           Acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States Commodity
Futures Trading Commission or an associated person of any of the foregoing, or
as an investment adviser, underwriter, broker or dealer in securities, or as an
affiliated person, director or employee of any investment company, bank, savings
and loan association or insurance company, or engaging in or continuing any
conduct or practice in connection with such activity;
 
(2)           Engaging in any type of business practice; or
 
(3)           Engaging in any activity in connection with the purchase or sale
of any security or commodity or in connection with any violation of securities
laws or commodities laws;
 
(iv)           any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any authority barring, suspending or otherwise limiting
for more than 60 days the right of any such person to engage in any activity
described in the preceding sub paragraph, or to be associated with persons
engaged in any such activity;
 
(v)           a finding by a court of competent jurisdiction in a civil action
or by the SEC or other authority to have violated any securities law, regulation
or decree and the judgment in such civil action or finding by the SEC or any
other authority has not been subsequently reversed, suspended or vacated; or
 
(vi)           a finding by a court of competent jurisdiction in a civil action
or by the Commodity Futures Trading Commission to have violated any federal
commodities law, and the judgment in such civil action or finding has not been
subsequently reversed, suspended or vacated.
 
(oo)           Stock Option Plans  Since January 1, 2010, each stock option
granted by the Company was granted (i) in accordance with the terms of the
applicable stock option plan of the Company or outside of the Company’s stock
option plan as an inducement to employment or the engagement as a director of
the Company and (ii) with an exercise price at least equal to the fair market
value of the Common Stock on the date such stock option would be considered
granted under GAAP and applicable law.  To the Company’s knowledge, no stock
option granted under the Company's stock option plan has been backdated.  Since
January 1, 2010, the Company has not knowingly granted, and there is no and has
been no policy or practice of the Company to knowingly grant, stock options
prior to, or otherwise knowingly coordinate the grant of stock options with, the
release or other public announcement of material information regarding the
Company or its Subsidiaries or their financial results or prospects.
 
 
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(pp)           No Disagreements with Accountants and Lawyers.  There are no
material disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers
formerly or presently employed by the Company, and except as set forth on
Schedule 3(pp), the Company is current with respect to any fees owed to its
accountants and lawyers which could affect the Company's ability to perform any
of its obligations under any of the Transaction Documents.  In addition, on or
prior to the date hereof, the Company had discussions with its accountants about
its financial statements previously filed with the SEC.  Based on those
discussions, the Company has no reason to believe that it will need to restate
any such financial statements or any part thereof.
 
(qq)           No Disqualification Events.  None of the Company, any of its
predecessors, any affiliated issuer, any director, executive officer, other
officer of the Company participating in the offering contemplated hereby, any
beneficial owner of 20% or more of the Company's outstanding voting equity
securities, calculated on the basis of voting power, nor any promoter (as that
term is defined in Rule 405 under the 1933 Act) connected with the Company in
any capacity at the time of sale (each, an “Issuer Covered Person”) is subject
to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to
(viii) under the 1933 Act (a “Disqualification Event”), except for a
Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has
exercised reasonable care to determine whether any Issuer Covered Person is
subject to a Disqualification Event.
 
(rr)           No Additional Agreements.  The Company does not have any
agreement or understanding with any Buyer with respect to the transactions
contemplated by the Transaction Documents other than as specified in the
Transaction Documents.
 
(ss)           Public Utility Holding Act.  None of the Company nor any of its
Subsidiaries is a “holding company,” or an “affiliate” of a “holding company,”
as such terms are defined in the Public Utility Holding Act of 2005.
 
(tt)           Federal Power Act.  None of the Company nor any of its
Subsidiaries is subject to regulation as a “public utility” under the Federal
Power Act, as amended.
 
 
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(uu)           Disclosure.  From and after the filing of the 8-K Filing, 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, non-public
information concerning the Company or any of its Subsidiaries, other than the
existence of the transactions contemplated by this Agreement and the other
Transaction Documents.  The Company understands and confirms that each of the
Buyers will rely on the foregoing representations in effecting transactions in
securities of the Company.  All disclosure provided to the Buyers regarding the
Company and its Subsidiaries, their businesses and the transactions contemplated
hereby, including the schedules to this Agreement, furnished by or on behalf of
the Company or any of its Subsidiaries is true and correct in all material
respects and does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not
misleading.  Each press release issued by the Company or any of 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
are made, not misleading.  No event or circumstance has occurred or information
exists with respect to the Company or any of its Subsidiaries or its or their
business, properties, liabilities, prospects, operations (including results
thereof) or conditions (financial or otherwise), which, under applicable law,
rule or regulation, requires public disclosure at or before the date hereof or
announcement by the Company but which has not been so publicly disclosed.  The
Company acknowledges and agrees that no Buyer makes or has made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 1(a).
 
4.           COVENANTS.
 
(a)           Reasonable Best Efforts.  Each Buyer shall use its reasonable best
efforts to timely satisfy each of the conditions to be satisfied by it as
provided in Section 6 of this Agreement.  The Company shall use its reasonable
best efforts to timely satisfy each of the conditions to be satisfied by it as
provided in Section 6(a)(iv) of this Agreement.
 
(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
immediately after 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 immediately
after the Closing Date.  Without limiting any other obligation of the Company
under this Agreement, the Company shall timely make all filings and reports
relating to the offer and sale of the Securities required under all applicable
securities laws (including, without limitation, all applicable federal
securities laws and all applicable “Blue Sky” laws), and the Company shall
comply in all material respects with all applicable federal, state and local
laws, statutes, rules, regulations and the like relating to the offering and
sale of the Securities to the Buyers.
 
(c)           Reporting Status.  Until the date on which the Buyers shall have
sold all of the Registrable Securities (the “Reporting Period”), the Company
shall timely file all reports required to be filed with the SEC pursuant to the
1934 Act, and the Company shall 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 no longer require or otherwise permit such
termination.
 
 
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(d)           Use of Proceeds.  The Company will use the proceeds from the sale
of the Securities for general corporate purposes, but not for (i) except as set
forth on Schedule 4(d), the repayment of any outstanding Indebtedness of the
Company or any of its Subsidiaries, (ii) the redemption or repurchase of any
securities of the Company or any of its Subsidiaries, or (iii) the settlement of
any outstanding litigation.
 
(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 and Quarterly Reports on Form 10-Q, 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, and (ii) 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.
 
(f)           Listing.  The Company shall promptly secure the listing or
designation for quotation (as the case may be) of all of the Conversion Shares,
Dividend Shares and Warrant Shares upon each national securities exchange and
automated quotation system, if any, upon which the Common Stock is then listed
or designated for quotation (as the case may be) (subject to official notice of
issuance) and shall maintain such listing or designation for quotation (as the
case may be) of all Conversion Shares, Dividend Shares and Warrant Shares from
time to time issuable under the terms of the Transaction Documents on such
national securities exchange or automated quotation system.  The Company shall
use its best efforts to maintain the Common Stock’s listing or authorization for
quotation (as the case may be) on the Principal Market, The New York Stock
Exchange, the NYSE MKT, the Nasdaq Global Market or the Nasdaq Global Select
Market (each, an “Eligible Market”).  Neither the Company nor any of its
Subsidiaries shall take any action which could be reasonably expected to result
in the delisting or suspension of the Common Stock on an Eligible Market. The
Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section 4(f).
 
(g)           Fees.  The Company shall reimburse each Buyer for all reasonable
costs and expenses incurred by it or its affiliates in connection with the
transactions contemplated by the Transaction Documents (including, without
limitation, as applicable, all reasonable legal fees and disbursements of
Greenberg Traurig, LLP, counsel to the lead Buyer, any other reasonable fees and
expenses in connection with the structuring, documentation and implementation of
the transactions contemplated by the Transaction Documents and due diligence and
regulatory filings in connection therewith) (the “Expense Amount”), which amount
shall not exceed, in the aggregate, $55,000 (with such non-legal fees and
expenses not to exceed, in the aggregate, $5,000), without prior written notice
to the Company and shall be promptly paid by the Company (x) following
termination of this Agreement on demand by any such Buyer and/or Greenberg
Traurig, LLP, as applicable, so long as such termination did not occur as a
result of a material breach by the applicable Buyer of any of its obligations
hereunder (as the case may be) or (y) on or after the Closing Date on demand by
any such Buyer and/or Greenberg Traurig, LLP, as applicable, for such Expense
Amount not so reimbursed by the Company on the date hereof or through such
withholding at the Closing.  The Company shall be responsible for the payment of
any placement agent’s fees, financial advisory fees, transfer agent fees, DTC
(as defined below) fees or broker’s commissions (other than for Persons engaged
by any Buyer) 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, reasonable attorneys’
fees and out-of-pocket expenses) arising in connection with any claim 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.
 
 
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(h)           Pledge of Securities.  Notwithstanding anything to the contrary
contained in this Agreement, the Company acknowledges and agrees that the
Securities may be pledged by a Buyer 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 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.  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 a Buyer.
 
(i)           Disclosure of Transactions and Other Material Information.  The
Company shall, on or before 8:30 a.m., New York time, on the first (1st)
Business Day after the date of this Agreement, issue a press release (the “Press
Release”) reasonably acceptable to the Buyers disclosing all the material terms
of the transactions contemplated by the Transaction Documents.  On or before
8:30 a.m., New York time, on the first (1st) Business Day after the date of this
Agreement, the Company shall file a Current Report on Form 8-K describing all
the material terms of the transactions contemplated by the Transaction Documents
in the form required by the 1934 Act and attaching all the material Transaction
Documents (including, without limitation, this Agreement (and all schedules to
this Agreement), the Certificate of Designation, the form of the Warrants and
the form of the Registration Rights Agreement) (including all attachments, the
“8-K Filing”).  From and after the filing of the 8-K Filing, the Company shall
have disclosed all material, non-public information (if any) provided to any of
the Buyers by the Company or any of its Subsidiaries or any of their respective
officers, directors, employees or agents in connection with the transactions
contemplated by the Transaction Documents.  The Company shall not, and the
Company shall cause each of its Subsidiaries and each of its and their
respective officers, directors, employees and agents not to, provide any Buyer
with any material, non-public information regarding the Company or any of its
Subsidiaries from and after the issuance of the Press Release without the
express prior written consent of such Buyer.  In the event of a breach of any of
the foregoing covenants, including, without limitation, Section 4(o) of this
Agreement, or any of the covenants or agreements contained in any other
Transaction Document, by the Company, any of its Subsidiaries, or any of its or
their respective officers, directors, employees and agents (as determined in the
reasonable good faith judgment of such Buyer), in addition to any other remedy
provided herein or in the Transaction Documents, such Buyer shall have the right
to make a public disclosure, in the form of a press release, public
advertisement or otherwise, of such breach or such material, non-public
information, as applicable, without the prior approval by the Company, any of
its Subsidiaries, or any of its or their respective officers, directors,
employees or agents.  No Buyer shall have any liability to the Company, any of
its Subsidiaries, or any of its or their respective officers, directors,
employees, stockholders or agents, for any such disclosure.  Subject to the
foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue any
press releases or any other public statements with respect to the transactions
contemplated hereby; provided, however, the Company shall be entitled, without
the prior approval of any Buyer, to make the Press Release and any press release
or other public disclosure with respect to such transactions (i) in substantial
conformity with the 8-K Filing and contemporaneously therewith and (ii) as is
required by applicable law and regulations (provided that in the case of clause
(i) each Buyer 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 the applicable Buyer, the Company shall not (and shall
cause each of its Subsidiaries and affiliates to not) disclose the name of such
Buyer in any filing, announcement, release or otherwise (other than the 8-K
Filing or as required by applicable law).  Notwithstanding anything contained in
this Agreement to the contrary and without implication that the contrary would
otherwise be true, the Company expressly acknowledges and agrees that  upon
filing of the Form 8-K, no Buyer shall have (unless expressly agreed to by a
particular Buyer after the date hereof in a written definitive and binding
agreement executed by the Company and such particular Buyer (it being understood
and agreed that no Buyer may bind any other Buyer with respect thereto)), any
duty of confidentiality with respect to, or a duty not to trade on the basis of,
any material, non-public information regarding the Company or any of its
Subsidiaries.
 
 
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(j)           Additional Registration Statements.  Until the Applicable Date (as
defined below) and at any time thereafter while any Registration Statement is
not effective or the prospectus contained therein is not available for use, the
Company shall not file a registration statement under the 1933 Act relating to
securities that are not the Registrable Securities.  “Applicable Date” means the
first date on which the resale by the Buyers of all Registrable Securities is
covered by one or more effective Registration Statements (as defined in the
Registration Rights Agreement) (and each prospectus contained therein is
available for use on such date).
 
 
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(k)           Additional Issuance of Securities.  So long as any Buyer
beneficially owns any Securities, the Company will not, without the prior
written consent of Buyers holding a majority in aggregate of number of Preferred
Shares then outstanding, issue any Preferred Shares (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 Certificate of Designations or the
Warrants.  The Company agrees that for the period commencing on the date hereof
and ending on the date immediately following the one hundred twenty (120)
Trading Day (as defined in the Warrants) anniversary of the Applicable Date
(provided that such period shall be extended by the number of Trading Days
during such period and any extension thereof contemplated by this proviso on
which any Registration Statement is not effective or any prospectus contained
therein is not available for use) (the “Restricted Period”), neither the Company
nor any of its Subsidiaries shall directly or indirectly issue, offer, sell,
grant any option or right to purchase, or otherwise dispose of (or announce any
issuance, offer, sale, grant of any option or right to purchase or other
disposition of) any equity security or any equity-linked or related security
(including, without limitation, any “equity security” (as that term is defined
under Rule 405 promulgated under the 1933 Act), any Convertible Securities (as
defined below), any debt, any preferred stock or any purchase rights) (any such
issuance, offer, sale, grant, disposition or announcement (whether occurring
during the Restricted Period or at any time thereafter) is referred to as a
“Subsequent Placement”).  Notwithstanding the foregoing, this Section 4(k) shall
not apply in respect of the issuance of (A) shares of Common Stock or standard
options to purchase Common Stock to directors, officers or employees of the
Company in their capacity as such pursuant to an Approved Stock Plan (as defined
below), provided that (1) all such issuances (taking into account the shares of
Common Stock issuable upon exercise of such options) after the date hereof
pursuant to this clause (A) do not, in the aggregate, exceed more than 10% of
the Common Stock issued and outstanding immediately prior to the date hereof and
(2) the exercise price of any such options is not lowered, none of such options
are amended to increase the number of shares issuable thereunder and none of the
terms or conditions of any such options are otherwise materially changed in any
manner that adversely affects any of the Buyers; (B) shares of Common Stock
issued upon the conversion or exercise of Convertible Securities (other than
standard options to purchase Common Stock issued pursuant to an Approved Stock
Plan that are covered by clause (A) above) issued prior to the date hereof,
provided that the conversion, exercise or other method of issuance (as the case
may be) of any such Convertible Security is made solely pursuant to the
conversion, exercise or other method of issuance (as the case may be) provisions
of such Convertible Security that were in effect on the date immediately prior
to the date of this Agreement, the conversion, exercise or issuance price of any
such Convertible Securities (other than standard options to purchase Common
Stock issued pursuant to an Approved Stock Plan that are covered by clause (A)
above) is not lowered, none of such Convertible Securities (other than standard
options to purchase Common Stock issued pursuant to an Approved Stock Plan that
are covered by clause (A) above) are amended to increase the number of shares
issuable thereunder and none of the terms or conditions of any such Convertible
Securities (other than standard options to purchase Common Stock issued pursuant
to an Approved Stock Plan that are covered by clause (A) above) are otherwise
materially changed in any manner that adversely affects any of the Buyers; (C)
the Conversion Shares, (D) the Dividend Shares, (E) the Warrant Shares, and (F)
shares of Common Stock issued in connection with strategic mergers and
acquisitions, provided that (I) the primary purpose of such issuance is not to
raise capital, (II) the acquirer of such shares of Common Stock in such issuance
solely consists of either (1) the actual owners of such assets or securities
acquired in such merger or acquisition or (2) the stockholders, partners or
members of the foregoing Persons, (III) the number or amount (as the case may
be) of such shares of Common Stock issued to each such Person by the Company
shall not be disproportionate to such Person’s actual ownership of such assets
or securities to be acquired by the Company (as applicable) and (IV) all such
issuances of Common Stock after the date hereof pursuant to this clause (E) do
not, in the aggregate, exceed more than 10% of the Common Stock issued and
outstanding immediately prior to the date hereof (each of the foregoing in
clauses (A) through (E), collectively the “Excluded Securities”).  “Approved
Stock Plan” means any employee benefit plan which has been approved by the board
of directors of the Company prior to or subsequent to the date hereof pursuant
to which shares of Common Stock and standard options to purchase Common Stock
may be issued to any employee, officer or director for services provided to the
Company in their capacity as such.  “Convertible Securities” means any capital
stock or other security of the Company or any of its Subsidiaries that is at any
time and under any circumstances directly or indirectly convertible into,
exercisable or exchangeable for, or which otherwise entitles the holder thereof
to acquire, any capital stock or other security of the Company (including,
without limitation, Common Stock) or any of its Subsidiaries.
 
 
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(l)           Reservation of Shares.  Commencing on the Stockholder Approval
Date (as defined below), so long as any of the Preferred Shares or Warrants
remain outstanding, the Company shall take all action necessary to at all times
have authorized, and reserved for the purpose of issuance, as of any given date,
100% of the sum of (i) the maximum number of shares of Common Stock issuable
upon conversion of all of the Preferred Shares (assuming for purposes hereof
that the Preferred Shares is convertible at the Conversion Price (as defined in
the Certificate of Designations) and without regard to any limitations on the
conversion of the Preferred Shares set forth in the Certificate of Designation),
(ii) the maximum number of Dividend Shares issuable pursuant to the terms of
this Certificate of Designations from the Initial Issuance Date through the
seventh anniversary of such given date (assuming for purposes hereof, that all
the Preferred Shares issuable pursuant to the Securities Purchase Agreement have
been issued and without taking into account any limitations on the issuance of
securities set forth herein) and (iii) the maximum number of Warrant Shares
initially issuable upon exercise of the Warrants (without taking into account
any limitations on the exercise of the Warrants set forth therein).
 
(m)           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 Governmental Entity, except where such violations would not
reasonably be expected to result, either individually or in the aggregate, in a
Material Adverse Effect.
 
(n)           Variable Rate Transaction.  Until none of the Preferred Shares are
outstanding, the Company and each Subsidiary shall be prohibited from effecting
or entering into an agreement to effect any Subsequent Placement involving a
Variable Rate Transaction.  “Variable Rate Transaction” means a transaction in
which the Company or any Subsidiary (i) issues or sells any Convertible
Securities either (A) at a conversion, exercise or exchange rate or other price
that is based upon and/or varies with the trading prices of or quotations for
the shares of Common Stock at any time after the initial issuance of such
Convertible Securities, or (B) with a conversion, exercise or exchange price
that is subject to being reset at some future date after the initial issuance of
such Convertible Securities or upon the occurrence of specified or contingent
events directly or indirectly related to the business of the Company or the
market for the Common Stock, other than pursuant to a customary “weighted
average” anti-dilution provision or (ii) enters into any agreement (including,
without limitation, an equity line of credit or an “at-the-market” offering)
whereby the Company or any Subsidiary may sell securities at a future determined
price (other than standard and customary “preemptive” or “participation”
rights).  Each Buyer shall be entitled to obtain injunctive relief against the
Company and its Subsidiaries to preclude any such issuance, which remedy shall
be in addition to any right to collect damages.
 
(o)           Participation Right.  From the date hereof through the five (5)
year anniversary of the Closing Date, neither the Company nor any of its
Subsidiaries shall, directly or indirectly, effect any Subsequent Placement
unless the Company shall have first complied with this Section 4(o).  The
Company acknowledges and agrees that the right set forth in this Section 4(o) is
a right granted by the Company, separately, to each Buyer.
 
 
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(i)           At least three (3) Trading Days prior to any proposed or intended
Subsequent Placement, the Company shall deliver to each Buyer a written notice
of its proposal or intention to effect a Subsequent Placement (each such notice,
a “Pre-Notice”), which Pre-Notice shall not contain any information (including,
without limitation, material, non-public information) other than:  (i) a
statement that the Company proposes or intends to effect a Subsequent Placement,
(ii) a statement that the statement in clause (i) above does not constitute
material, non-public information and (iii) a statement informing such Buyer that
it is entitled to receive an Offer Notice (as defined below) with respect to
such Subsequent Placement upon its written request.  Upon the written request of
a Buyer within two (2) Trading Days after the Company’s delivery to such Buyer
of such Pre-Notice, and only upon a written request by such Buyer, the Company
shall promptly, but no later than one (1) Trading Day after such request,
deliver to such Buyer an irrevocable 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 (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 Buyer in accordance with the terms of
the Offer such Buyer’s pro rata portion of 66% of the Offered Securities,
provided that the number of Offered Securities which such Buyer shall have the
right to subscribe for under this Section 4(o) shall be (a) based on such
Buyer’s pro rata portion of the aggregate number of Preferred Shares purchased
hereunder by all Buyers (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”).
 
(ii)           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 third (3rd) 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 such 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, 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”), such 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 it deems reasonably
necessary.  Notwithstanding the foregoing, if the Company desires to modify or
amend the terms and conditions of the Offer prior to the expiration of the Offer
Period, the Company may deliver to each Buyer a new Offer Notice and the Offer
Period shall expire on the third (3rd) Business Day after such Buyer’s receipt
of such new Offer Notice.
 
 
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(iii)           The Company shall have five (5) Business Days from the
expiration of the Offer Period above (i) 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 a Buyer (the “Refused Securities”) pursuant to a definitive
agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees
described in the Offer Notice (if so described therein) 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 and (ii) to publicly
announce (a) the execution of such Subsequent Placement Agreement, and (b)
either (x) the consummation of the transactions contemplated by such Subsequent
Placement Agreement or (y) the termination of such Subsequent Placement
Agreement, which shall be filed with the SEC on a Current Report on Form 8-K
with such Subsequent Placement Agreement and any documents contemplated therein
filed as exhibits thereto.
 
(iv)           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) above), then such 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 Section 4(o)(ii) 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 this Section 4(o) 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)(i) above.
 
(v)           Upon the closing of the issuance, sale or exchange of all or less
than all of the Refused Securities, such Buyer shall acquire from the Company,
and the Company shall issue to such Buyer, the number or amount of Offered
Securities specified in its Notice of Acceptance.  The purchase by such Buyer of
any Offered Securities is subject in all cases to the preparation, execution and
delivery by the Company and such Buyer of a separate purchase agreement relating
to such Offered Securities reasonably satisfactory in form and substance to such
Buyer and its counsel.
 
(vi)           Any Offered Securities not acquired by a Buyer or other Persons
in accordance with this Section 4(o) may not be issued, sold or exchanged until
they are again offered to such Buyer under the procedures specified in this
Agreement.
 
 
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(vii)           The Company and each Buyer agree that if any Buyer elects to
participate in the Offer, neither the Subsequent Placement Agreement with
respect to such Offer nor any other transaction documents related thereto
(collectively, the “Subsequent Placement Documents”) shall include any term or
provision whereby such Buyer shall be required to agree to any restrictions on
trading as to any securities of the Company (except for any restrictions imposed
by any existing laws, rules or regulations) or be required to consent to any
amendment to or termination of, or grant any waiver, release or the like under
or in connection with, any agreement previously entered into with the Company or
any instrument received from the Company.
 
(viii)           Notwithstanding anything to the contrary in this Section 4(o)
and unless otherwise agreed to by such Buyer, the Company shall either confirm
in writing to such Buyer that the transaction with respect to the Subsequent
Placement has been abandoned or shall publicly disclose its intention to issue
the Offered Securities, in either case, in such a manner such that such Buyer
will not be in possession of any material, non-public information, by the fifth
(5th) Business Day following the expiration of the Offer Period.  If by such
fifth (5th) Business Day, no public disclosure regarding a transaction with
respect to the Offered Securities has been made, and no notice regarding the
abandonment of such transaction has been received by such Buyer, such
transaction shall be deemed to have been abandoned and such Buyer shall not be
in possession of any material, non-public information with respect to the
Company or any of its Subsidiaries.  Should the Company decide to pursue such
transaction with respect to the Offered Securities, the Company shall provide
such Buyer with another Offer Notice and such Buyer will again have the right of
participation set forth in this Section 4(o).  The Company shall not be
permitted to deliver more than one such Offer Notice to such Buyer in any sixty
(60) day period, except as expressly contemplated by the last sentence of
Section 4(o)(ii).
 
(ix)           The restrictions contained in this Section 4(o) shall not apply
in connection with the issuance of any Excluded Securities.  The Company shall
not circumvent the provisions of this Section 4(o) by providing terms or
conditions to one Buyer that are not provided to all.
 
(p)           Dilutive Issuances.  At any time prior to the Stockholder Approval
Date, the Company shall not consummate any Subsequent Placement at a price per
share of Common Stock (as determined in accordance with the terms of the WPCS
Notes (as defined in the Second Amended and Restated Limited Liability Company
Agreement of BTX Trader LLC) as if such Subsequent Placement was a Dilutive
Issuance (as defined in the WPCS Notes) thereunder) below the lower of the
Conversion Price (as defined in the Certificate of Designations) and the
Exercise Price (as defined in Warrants), in each case, at such time.
 
(q)           Passive Foreign Investment Company.  The Company shall conduct its
business in such a manner as will ensure that the Company will not be deemed to
constitute a passive foreign investment company within the meaning of Section
1297 of the Code.
 
(r)           Restriction on Redemption and Cash Dividends.  So long as any
Preferred Shares are outstanding, the Company shall not, directly or indirectly,
redeem, or declare or pay any cash dividend or distribution on, any securities
of the Company (other than any of the Securities) without the prior express
written consent of the Buyers.
 
 
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(s)           Corporate Existence.  So long as any Buyer beneficially owns any
Preferred Shares or Warrants, the Company shall not be party to any Fundamental
Transaction (as defined in the Certificate of Designations) unless the Company
is in compliance with the applicable provisions governing Fundamental
Transactions set forth in the Certificate of Designations and the Warrants.
 
(t)           Stockholder Approval.  The Company shall provide each stockholder
entitled to vote at either (x) the next annual meeting of stockholders of the
Company or (y) a special meeting of stockholders of the Company (the
“Stockholder Meeting”), which shall be promptly called and held not later than
April 30, 2014 (the “Stockholder Meeting Deadline”), a proxy statement,
soliciting each such stockholder’s affirmative vote at the Stockholder Meeting
for approval of resolutions (“Stockholder Resolutions”) providing for (I) the
increase of the authorized shares of Common Stock of the Company from 14,285,714
to 75,000,000 shares of Common Stock and (II) the issuance of all of the
Securities as described in the Transaction Documents in accordance with
applicable law and the rules and regulations of the Principal Market (such
affirmative approval being referred to herein as the “Stockholder Approval”, and
the date such Stockholder Approval is obtained, the “Stockholder Approval
Date”), and the Company shall use its reasonable best efforts to solicit its
stockholders’ approval of such resolutions and to cause the Board of Directors
of the Company to recommend to the stockholders that they approve such
resolutions.  The Company shall be obligated to seek to obtain the Stockholder
Approval by the Stockholder Meeting Deadline.  If, despite the Company’s
reasonable best efforts the Stockholder Approval is not obtained on or prior to
the Stockholder Meeting Deadline, the Company shall cause an additional
Stockholder Meeting to be held annually thereafter at the annual meeting of
stockholders of the Company (or if no annual meeting of stockholders of the
Company is held in any given year, at a special meeting of stockholders of the
Company in such given year) until such Stockholder Approval is obtained.
 
(u)           No Waiver of Voting Agreements.  The Company shall not amend,
waive or modify any provision of any of the Voting Agreements (as defined
below).
 
(v)           Stock Splits.  Until the Preferred Shares and Warrants and all
preferred shares and warrants issued pursuant to the terms thereof are no longer
outstanding, the Company shall not effect any stock combination, reverse stock
split or other similar transaction (or make any public announcement or
disclosure with respect to any of the foregoing) without the prior written
consent of the Required Buyers (as defined below), provided, however, that no
consent of the Required Buyers shall be required for a reverse stock split of
the Common Stock that the Board of Directors of the Company, in the good faith
exercise of its business judgment, determines to be necessary or advisable to
list or continue listing the Common Stock on the Principal Market or another
trading market.
 
(w)           Conversion and Exercise Procedures.  Each of the form of Notice of
Exercise included in the Warrants and the form of Notice of Conversion included
in the Certificate of Designations set forth the totality of the procedures
required of the Buyers in order to exercise the Warrants or convert the
Preferred Shares.  Except as provided in Section 5(d), no additional legal
opinion, other information or instructions shall be required of the Buyers to
exercise their Warrants or convert their Preferred Shares.  The Company shall
honor exercises of the Warrants and conversions of the Preferred Shares and
shall deliver the Conversion Shares and Warrant Shares in accordance with the
terms, conditions and time periods set forth in the Certificate of Designations
and Warrants.
 
 
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(x)           Closing Documents.  On or prior to fourteen (14) calendar days
after the Closing Date, the Company agrees to deliver, or cause to be delivered,
to each Buyer and Greenberg Traurig, LLP executed copies of the Transaction
Documents, Securities and other document required to be delivered to any party
pursuant to Section 6(a)(iv) hereof.
 
5.           REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.
 
(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 Preferred Shares and
the Warrants in which the Company shall record the name and address of the
Person in whose name the Preferred Shares and the Warrants have been issued
(including the name and address of each transferee), the number of Preferred
Shares held by such Person, the number of Conversion Shares issuable upon
conversion of the Preferred Shares held by such Person 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.
 
(b)           Transfer Agent Instructions.  The Company shall issue irrevocable
instructions to its transfer agent and any subsequent transfer agent in a form
acceptable to each of the Buyers (the “Irrevocable Transfer Agent Instructions”)
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, the Dividend Shares and the
Warrant Shares in such amounts as specified from time to time by each Buyer to
the Company upon conversion of the Preferred Shares or the exercise of the
Warrants (as the case may be).  The Company represents and 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 with respect to
the Securities, and that the Securities shall otherwise be freely transferable
on the books and records of the Company, as applicable, 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(g),
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, Dividend Shares or
Warrant Shares sold, assigned or transferred pursuant to an effective
registration statement or in compliance with Rule 144 or another exemption from
registration, the transfer agent shall issue such shares to such Buyer, assignee
or transferee (as the case may be) without any restrictive legend in accordance
with Section 5(d) below.  The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to each 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 of a breach
or threatened breach by the Company of the provisions of this Section 5(b), that
each 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.  The Company shall cause its counsel to
issue the legal opinion referred to in the Irrevocable Transfer Agent
Instructions to the Company’s transfer agent on each Effective Date (as defined
in the Registration Rights Agreement).  Any fees (with respect to the transfer
agent, counsel to the Company or otherwise) associated with the issuance of such
opinion or the removal of any legends on any of the Securities shall be borne by
the Company.
 
 
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(c)           Legends.  Each Buyer understands that the Securities have been
issued (or will be issued in the case of the Conversion Shares, Dividend Shares
and the Warrant Shares) pursuant to an exemption from registration or
qualification under the 1933 Act and applicable state securities laws, and
except as set forth below, the Securities shall bear any legend as required by
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 TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD OR ELIGIBLE TO BE 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.
 
(d)           Removal of Legends.  Certificates evidencing Securities shall not
be required to contain the legend set forth in Section 5(c) above or any other
legend (i) while a registration statement (including a Registration Statement)
covering the resale of such Securities is effective under the 1933 Act, (ii)
following any sale of such Securities pursuant to Rule 144 (assuming the
transferor is not an affiliate of the Company), (iii) if such Securities are
eligible to be sold, assigned or transferred under Rule 144 (provided that a
Buyer provides the Company with reasonable assurances that such Securities are
eligible for sale, assignment or transfer under Rule 144 which shall not include
an opinion of counsel), (iv) in connection with a sale, assignment or other
transfer (other than under Rule 144), provided that such Buyer provides the
Company with an opinion of counsel to such Buyer, in a generally acceptable
form, 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 (v) if such legend is not required under applicable requirements of the 1933
Act (including, without limitation, controlling judicial interpretations and
pronouncements issued by the SEC).  If a legend is not required pursuant to the
foregoing, the Company shall no later than three (3) Trading Days following the
delivery by a Buyer to the Company or the transfer agent (with notice to the
Company) of a legended certificate representing such Securities (endorsed or
with stock powers attached, signatures guaranteed, and otherwise in form
necessary to affect the reissuance and/or transfer, if applicable), together
with any other deliveries from such Buyer as may be required above in this
Section 5(d), as directed by such Buyer, either:  (A) provided that the
Company’s transfer agent is participating in the DTC Fast Automated Securities
Transfer Program and such Securities are Conversion Shares, Dividend Shares or
Warrant Shares, credit the aggregate number of shares of Common Stock to which
such Buyer shall be entitled to such Buyer’s or its designee’s balance account
with DTC through its Deposit/Withdrawal at Custodian system or (B) if the
Company’s transfer agent is not participating in the DTC Fast Automated
Securities Transfer Program, issue and deliver (via reputable overnight courier)
to such Buyer, a certificate representing such Securities that is free from all
restrictive and other legends, registered in the name of such Buyer or its
designee (the date by which such credit is so required to be made to the balance
account of such Buyer’s or such Buyer’s nominee with DTC or such certificate is
required to be delivered to such Buyer pursuant to the foregoing is referred to
herein as the “Required Delivery Date”).  The Company shall be responsible for
any transfer agent fees or DTC fees with respect to any issuance of Securities
or the removal of any legends with respect to any Securities in accordance
herewith.
 
 
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(e)           Failure to Timely Deliver; Buy-In.  If the Company fails to (i)
issue and deliver (or cause to be delivered) to a Buyer by the Required Delivery
Date a certificate representing the Securities so delivered to the Company by
such Buyer that is free from all restrictive and other legends or (ii) credit
the balance account of such Buyer’s or such Buyer’s nominee with DTC for such
number of Conversion Shares or Warrant Shares so delivered to the Company, then,
in addition to all other remedies available to such Buyer, the Company shall pay
in cash to such Buyer on each day after the Required Delivery Date that the
issuance or credit of such shares is not timely effected an amount equal to 1%
of the product of (A) the number of shares of Common Stock not so delivered or
credited (as the case may be) to such Buyer or such Buyer’s nominee multiplied
by (B) the Closing Sale Price (as defined in the Warrants) of the Common Stock
on the Trading Day (as defined in the Warrants) immediately preceding the
Required Delivery Date.  In addition to the foregoing, if the Company fails to
so properly deliver such unlegended certificates or so properly credit the
balance account of such Buyer’s or such Buyer’s nominee with DTC by the Required
Delivery Date, and if on or after the Required Delivery Date such Buyer
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by such Buyer of shares of Common Stock that
such Buyer anticipated receiving from the Company without any restrictive
legend, then, in addition to all other remedies available to such Buyer, the
Company shall, within three (3) Trading Days after such Buyer’s request and in
such Buyer’s sole discretion, either (i) pay cash to such Buyer in an amount
equal to such Buyer’s total purchase price (including brokerage commissions and
other out-of-pocket expenses, if any) for the shares of Common Stock so
purchased (including brokerage commissions and other out-of-pocket expenses, if
any) (the “Buy-In Price”), at which point the Company’s obligation to deliver
such certificate or credit such Buyer’s balance account shall terminate and such
shares shall be cancelled, or (ii) promptly honor its obligation to deliver to
such Buyer a certificate or certificates or credit such Buyer’s DTC account
representing such number of shares of Common Stock that would have been issued
if the Company timely complied with its obligations hereunder and pay cash to
such Buyer in an amount equal to the excess (if any) of the Buy-In Price over
the product of (A) such number of shares of Conversion Shares, Dividend Shares
or Warrant Shares (as the case may be) that the Company was required to deliver
to such Buyer by the Required Delivery Date multiplied by (II) the lowest
Closing Sale Price (as defined in the Warrants) of the Common Stock on any
Trading Day during the period commencing on the date of the delivery by such
Buyer to the Company of the applicable Conversion Shares or Warrant Shares (as
the case may be) and ending on the date of such delivery and payment under this
clause (ii).
 
 
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6.           CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.
 
(a)           The obligation of the Company hereunder to issue and sell the
Preferred Shares and the 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 other Transaction
Documents to which it is a party and delivered the same to the Company.
 
(ii)           Such Buyer and each other Buyer shall have transferred all of the
BTX Common Equity Units to the Company as payment of the Purchase for the
Preferred Shares and the Warrants being purchased by such Buyer at the Closing.
 
(iii)           The representations and warranties of such Buyer shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though originally made at that time (except for representations
and warranties that speak as of a specific date, which shall be true and correct
as of such 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.
 
(iv)           BTX Trader LLC shall have delivered to the Company a certificate
evidencing the formation and good standing of BTX Trader LLC in its jurisdiction
of formation issued by the Secretary of State (or comparable office) of such
jurisdiction of formation as of a date within fifteen (15) days of the Closing
Date.
 
(v)           BTX Trader LLC shall have delivered to the Company a certificate,
in the form reasonably acceptable to the Company, executed by the Secretary of
BTX Trader LLC and dated as of the Closing Date, as to (i) resolutions
consistent with Section 2(b) as adopted by BTX Trader LLC’s managing member and
members in a form reasonably acceptable to the Company, (ii) the Articles of
Association of BTX Trader LLC, and (iii) the operating agreement of BTX Trader
LLC, each as in effect at the Closing.
 
(vi)           Divya Thakur and Ilya Subkhankulov shall have delivered into
escrow with counsel to the Company their respective signature pages to
employment agreements with BTX Trader LLC and lock-up agreements with the
Company, in each case, in form and substance reasonably satisfactory to the
Company, to be released from escrow to the Company and BTX Trader LLC
immediately following the Closing Date.
 
 
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(vii)           BTX Trader LLC shall have delivered to the Company a
certificate, in the form reasonably acceptable to the Company, dated as of the
Closing Date certifying that (A) it has no indebtedness other than an aggregate
of $500,000 secured promissory notes payable to Divya Thakur and Ilya
Subkhankulov and (B) it has a minimum of $1,185,000 of cash and cash
equivalents, and attach such other evidence as reasonably requested by the
Company.
 
7.           CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.
 
(a)           The obligation of each Buyer hereunder to purchase its Preferred
Shares and 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 duly executed and delivered to such Buyer
each of the Transaction Documents to which it is a party and the Company shall
have duly executed and delivered to such Buyer a certificate representing the
number of Preferred Shares as is set forth across from such Buyer’s name in
column (4) of the Schedule of Buyers) and the Warrants (for such aggregate
number of Warrant Shares as is set forth across from such Buyer’s name in column
(5) of the Schedule of Buyers) being purchased by such Buyer at the Closing
pursuant to this Agreement.
 
(ii)           [Intentionally Omitted].
 
(iii)           The Company shall have delivered to such Buyer a copy of the
Irrevocable Transfer Agent Instructions, in the form reasonably acceptable to
such Buyer, 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 certificate
evidencing the formation and good standing of the Company in its jurisdiction of
formation issued by the Secretary of State (or comparable office) of such
jurisdiction of formation as of a date within fifteen (15) days of the Closing
Date.
 
(v)           The Company shall have delivered to such Buyer a 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 and is required to so
qualify, as of a date within fifteen (15) days of the Closing Date.
 
(vi)           The Company shall have delivered to such Buyer a certified copy
of any amendments to the Certificate of Incorporation filed since December 1,
2012, including, without limitation, the Certificate of Designations, as
certified by the Delaware Secretary of State within fifteen (15) days of the
Closing Date.
 
(vii)           The Company shall have delivered to such Buyer a certificate, in
the form reasonably acceptable to such Buyer, executed by the Secretary 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,
including, without limitation, the Certificate of Designation, and (iii) the
Bylaws, each as in effect at the Closing.
 
 
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(viii)           The representations and warranties of the Company shall be true
and correct as of the date when made and as of the Closing Date as though
originally made at that time (except for representations and warranties that
speak as of a specific date, which shall be true and correct as of such specific
date) and the Company shall have performed, satisfied and complied in all
respects with the covenants, agreements and conditions required to be performed,
satisfied or complied with by the Company at or prior to the Closing Date.  Such
Buyer shall have received a certificate, duly 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 acceptable to such Buyer.
 
(ix)           The Company shall have delivered to such Buyer a report from the
Company’s transfer agent identifying the number of shares of Common Stock
outstanding on the Closing Date immediately prior to the Closing.
 
(x)           The Common Stock (I) shall be designated for quotation or listed
(as applicable) 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 (except as already disclosed in the SEC Documents), as of the
Closing Date, either (A) in writing by the SEC or the Principal Market or (B) by
falling below the minimum maintenance requirements of 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, including without limitation, those required by the Principal
Market.
 
(xii)           No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority or other Governmental Entity of competent
jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.
 
(xiii)           Since the date of execution of this Agreement, no event or
series of events shall have occurred that reasonably would have or result in a
Material Adverse Effect.
 
(xiv)           The Company shall have obtained approval of the Principal Market
to list or designate for quotation (as the case may be) the Conversion Shares,
the Dividend Shares and the Warrant Shares.
 
(xv)           The Company shall have duly executed and delivered to such Buyer
the voting agreements in the forms of Exhibit F hereof (the “Voting
Agreements”), by and between the Company and Sebastian Giordano, Joseph Heater,
Myron Polulak, Kevin Coyle, Norm Dumbroff, Neil Hebenton, Charles Benton, Edward
Gildea and Harvey Kesner (the “Stockholders”) and the Stockholders shall have
duly executed and delivered to such Buyer the Voting Agreement.
 
 
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(xvi)           The Certificate of Designations in the form attached hereto as
Exhibit A shall have been filed with the Secretary of State of the State of
Delaware and shall be in full force and effect, enforceable against the Company
in accordance with its terms and shall not have been amended.
 
(xvii)           Divya Thakur and Ilya Subkhankulov shall have delivered into
escrow with counsel to the Company their respective signature pages to
employment agreements with BTX Trader LLC and lock-up agreements with the
Company, in each case, in form and substance reasonably satisfactory to such
Buyer, to be released from escrow to the Company and BTX Trader LLC immediately
following the Closing Date.
 
(xviii)           The Company shall have delivered to such Buyer such other
documents, instruments or certificates 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
within five (5) Business Days of the date hereof, then such Buyer shall have the
right to terminate its obligations under this Agreement with respect to itself
at any time on or after the close of business on such date without liability of
such Buyer to any other party; provided, however, (a) the right to terminate its
obligations under this Agreement under this Section 8 shall not be available to
such Buyer if the failure of the transactions contemplated by this Agreement to
have been consummated by such date is the result of such Buyer’s breach of this
Agreement and (b) the abandonment of the sale and purchase of the Preferred
Shares and the Warrants shall be applicable only to such Buyer providing such
written notice, provided further that no such termination shall affect any
obligation of the Company under this Agreement to reimburse such Buyer for the
expenses described in Section 4(g) above.  Nothing contained in this Section 8
shall be deemed to release any party from any liability for any breach by such
party of the terms and provisions of this Agreement or the other Transaction
Documents or to impair the right of any party to compel specific performance by
any other party of its obligations under this Agreement or the other Transaction
Documents.
 
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 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.  Nothing contained herein shall
be deemed or operate to preclude any Buyer from bringing suit or taking other
legal action against the Company in any other jurisdiction to collect on the
Company’s obligations to such Buyer or to enforce a judgment or other court
ruling in favor of such Buyer. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT
MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH
OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
 
 
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(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.  In the event that any signature is
delivered by facsimile transmission or by an e-mail which contains a portable
document format (.pdf) file of an executed signature page, such signature page
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
signature page were an original thereof.
 
(c)           Headings; Gender.  The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.  Unless the context clearly indicates
otherwise, each pronoun herein shall be deemed to include the masculine,
feminine, neuter, singular and plural forms thereof.  The terms “including,”
“includes,” “include” and words of like import shall be construed broadly as if
followed by the words “without limitation.”  The terms “herein,” “hereunder,”
“hereof” and words of like import refer to this entire Agreement instead of just
the provision in which they are found.
 
(d)           Severability; Maximum Payment Amounts.  If any provision of this
Agreement is prohibited by law or otherwise determined to be invalid or
unenforceable by a court of competent jurisdiction, the provision that would
otherwise be prohibited, invalid or unenforceable shall be deemed amended to
apply to the broadest extent that it would be valid and enforceable, and the
invalidity or unenforceability of such provision shall not affect the validity
of the remaining provisions of this Agreement so long as this Agreement as so
modified continues to express, without material change, the original intentions
of the parties as to the subject matter hereof and the prohibited nature,
invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of
the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties.  The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s).  Notwithstanding
anything to the contrary contained in this Agreement or any other Transaction
Document (and without implication that the following is required or applicable),
it is the intention of the parties that in no event shall amounts and value paid
by the Company and/or any of its Subsidiaries (as the case may be), or payable
to or received by any of the Buyers, under the Transaction Documents (including
without limitation, any amounts that would be characterized as “interest” under
applicable law) exceed amounts permitted under any applicable law.  Accordingly,
if any obligation to pay, payment made to any Buyer, or collection by any Buyer
pursuant the Transaction Documents is finally judicially determined to be
contrary to any such applicable law, such obligation to pay, payment or
collection shall be deemed to have been made by mutual mistake of such Buyer,
the Company and its Subsidiaries and such amount shall be deemed to have been
adjusted with retroactive effect to the maximum amount or rate of interest, as
the case may be, as would not be so prohibited by the applicable law.  Such
adjustment shall be effected, to the extent necessary, by reducing or refunding,
at the option of such Buyer, the amount of interest or any other amounts which
would constitute unlawful amounts required to be paid or actually paid to such
Buyer under the Transaction Documents.  For greater certainty, to the extent
that any interest, charges, fees, expenses or other amounts required to be paid
to or received by such Buyer under any of the Transaction Documents or related
thereto are held to be within the meaning of “interest” or another applicable
term to otherwise be violative of applicable law, such amounts shall be
pro-rated over the period of time to which they relate.
 
 
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(e)           Entire Agreement; Amendments.  This Agreement, the other
Transaction Documents and the schedules and exhibits attached hereto and thereto
and the instruments referenced herein and therein supersede all other prior oral
or written agreements between the Buyers, the Company, their affiliates and
Persons acting on their behalf solely with respect to the matters contained
herein and therein, and this Agreement, the other Transaction Documents, the
schedules and exhibits attached hereto and thereto and the instruments
referenced herein and therein contain the entire understanding of the parties
solely with respect to the matters covered herein and therein; provided,
however, nothing contained in this Agreement or any other Transaction Document
shall (or shall be deemed to) (i) have any effect on any agreements any Buyer
has entered into with, or any instruments any Buyer has received from, the
Company or any of its Subsidiaries prior to the date hereof with respect to any
prior investment made by such Buyer in the Company or (ii) waive, alter, modify
or amend in any respect any obligations of the Company or any of its
Subsidiaries, or any rights of or benefits to any Buyer or any other Person, in
any agreement entered into prior to the date hereof between or among the Company
and/or any of its Subsidiaries and any Buyer, or any instruments any Buyer
received from the Company and/or any of its Subsidiaries prior to the date
hereof, and all such agreements and instruments shall continue in full force and
effect. 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.  For clarification purposes, the Recitals are part of
this Agreement.  No provision of this Agreement may be amended other than by an
instrument in writing signed by the Company and the Required Holders (as defined
below), and any amendment to any provision of 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, provided that no such amendment shall be
effective to the extent that it (1) applies to less than all of the holders of
the Securities then outstanding or (2) imposes any obligation or liability on
any Buyer without such Buyer’s prior written consent (which may be granted or
withheld in such Buyer’s sole discretion).  No waiver shall be effective unless
it is in writing and signed by an authorized representative of the waiving
party, provided that the Required Holders may waive any provision of this
Agreement, and any waiver of any provision of 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, provided that no such waiver shall be
effective to the extent that it (1) applies to less than all of the holders of
the Securities then outstanding (unless a party gives a waiver as to itself
only) or (2) imposes any obligation or liability on any Buyer without such
Buyer’s prior written consent (which may be granted or withheld in such Buyer’s
sole discretion).  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, all holders of the Preferred Shares or
all 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.  Without limiting the foregoing, the
Company confirms that, except as set forth in this Agreement, no Buyer has made
any commitment or promise or has any other obligation to provide any financing
to the Company, any Subsidiary or otherwise.  As a material inducement for each
Buyer to enter into this Agreement, the Company expressly acknowledges and
agrees that (i) no due diligence or other investigation or inquiry conducted by
a Buyer, any of its advisors or any of its representatives shall affect such
Buyer’s right to rely on, or shall modify or qualify in any manner or be an
exception to any of, the Company’s representations and warranties contained in
this Agreement or any other Transaction Document and (ii) unless a provision of
this Agreement or any other Transaction Document is expressly preceded by the
phrase “except as disclosed in the SEC Documents,” nothing contained in any of
the SEC Documents shall affect such Buyer’s right to rely on, or shall modify or
qualify in any manner or be an exception to any of, the Company’s
representations and warranties contained in this Agreement or any other
Transaction Document.  “Required Holders” means (i) prior to the Closing Date,
such Buyer entitled to purchase at least 1,000 Preferred Shares at the Closing
and (ii) on or after the Closing Date, holders of 2/3rds of the Registrable
Securities (excluding any Registrable Securities held by the Company or any of
its Subsidiaries) issued or issuable hereunder or pursuant to the Preferred
Shares and/or the Warrants.
 
 
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(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, if
delivered personally; (ii) when sent, if sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); (iii) when sent, if sent by e-mail (provided
that such sent e-mail is kept on file (whether electronically or otherwise) by
the sending party and the sending party does not receive an automatically
generated message from the recipient’s e-mail server that such e-mail could not
be delivered to such recipient) and (iv) if sent by overnight courier service,
one (1) Business Day after deposit with an overnight courier service with next
day delivery specified, in each case, properly addressed to the party to receive
the same. The addresses, facsimile numbers and e-mail addresses for such
communications shall be:
 
If to the Company:
 
One East Uwchlan Avenue
Suite 301
Exton, Pennsylvania 19341
Telephone:  (610) 903-0400
Facsimile:  (610) 903-0401
E-mail address: Sebastian.Giordano@wpcs.com
Attention:  Chief Executive Officer
 
 
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With a copy (for informational purposes only) to:

Sichenzia Ross Friedman Ference LLP
61 Broadway, 32nd Floor
New York, New York 10006
Telephone:  (212) 930-9700
Facsimile:  (212) 930-9725
E-mail address: trose@srff.com
Attention:  Thomas A. Rose, Esq.

If to the Transfer Agent:

Interwest Transfer Co., Inc.
1981 Murray Holladay Road, Suite 100
Salt Lake City Utah 84117
Telephone:  (801) 272-9294
Facsimile:  (801) 277-3147
E-mail address: melinda@interwesttc.com
Attention:  Melinda Orth

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:

Greenberg Traurig, LLP
MetLife Building
200 Park Avenue
New York, NY 10166
Telephone:  (212) 801-9200
Facsimile:  (212) 805-9222
E-mail address: adelsteinm@gtlaw.com
Attention:  Michael A. Adelstein, Esq.

or to such other address, facsimile number or e-mail address 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, provided that Greenberg Traurig, LLP shall only be provided copies
of notices sent to the lead Buyer.  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 (iv) above,
respectively. A copy of the e-mail transmission containing the time, date and
recipient e-mail address shall be rebuttable evidence of receipt by e-mail in
accordance with clause (iii) above.
 
 
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(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 any of the Securities.  The Company shall not assign
this Agreement or any rights or obligations hereunder without the prior written
consent of the Required Holders, including, without limitation, by way of a
Fundamental Transaction (as defined in the Warrants) (unless the Company is in
compliance with the applicable provisions governing Fundamental Transactions set
forth in the Warrants) or a Fundamental Transaction (as defined in the
Certificate of Designations) (unless the Company is in compliance with the
applicable provisions governing Fundamental Transactions set forth in the
Certificate of Designations).  A Buyer may assign some or all of its rights
hereunder in connection with any transfer of any of its Securities 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.
 
(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, other than the Indemnitees referred to in Section 9(k).
 
(i)           Survival.  The representations, warranties, agreements and
covenants 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 use its reasonable best
efforts to 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 Company’s other obligations under the Transaction
Documents, the Company shall defend, protect, indemnify and hold harmless each
Buyer and each holder of any 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 (i) any misrepresentation or breach of any
representation or warranty made by the Company or any Subsidiary in any of the
Transaction Documents, (ii) any breach of any covenant, agreement or obligation
of the Company or any Subsidiary contained in any of the Transaction Documents
or (iii) any cause of action, suit, proceeding 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 or any Subsidiary) or which otherwise
involves such Indemnitee that arises out of or results from (A) the execution,
delivery, performance or enforcement of any of the Transaction Documents, (B)
any transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Securities, (C) any
disclosure properly made by such Buyer pursuant to Section 4(i), or (D) the
status of such Buyer or holder of the Securities either as an investor in the
Company pursuant to the transactions contemplated by the Transaction Documents
or as a party to this Agreement (including, without limitation, as a party in
interest or otherwise in any action or proceeding for injunctive or other
equitable relief).   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.
 
 
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(l)           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.  No specific
representation or warranty shall limit the generality or applicability of a more
general representation or warranty. Each and every reference to share prices,
shares of Common Stock and any other numbers in this Agreement that relate to
the Common Stock shall be automatically adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions
that occur with respect to the Common Stock after the date of this Agreement.
 
(m)           Remedies.  Each Buyer and in the event of assignment by Buyer of
its rights and obligations hereunder, each holder of 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 or any Subsidiary fails to perform,
observe, or discharge any or all of its or such Subsidiary’s (as the case may
be) 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 specific performance and/or temporary,
preliminary and permanent injunctive or other equitable relief from any court of
competent jurisdiction in any such case without the necessity of proving actual
damages and without posting a bond or other security.  The remedies provided in
this Agreement and the other Transaction Documents shall be cumulative and in
addition to all other remedies available under this Agreement and the other
Transaction Documents, at law or in equity (including a decree of specific
performance and/or other injunctive relief).
 
(n)           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 or any Subsidiary 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 or such Subsidiary (as the case may be), any
relevant notice, demand or election in whole or in part without prejudice to its
future actions and rights.
 
 
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(o)           Payment Set Aside; Currency.  To the extent that the Company makes
a payment or payments to any Buyer hereunder or pursuant to any of the other
Transaction Documents or any of 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.  Unless otherwise expressly
indicated, all dollar amounts referred to in this Agreement and the other
Transaction Documents are in United States Dollars (“U.S. Dollars”), and all
amounts owing under this Agreement and all other Transaction Documents shall be
paid in U.S. Dollars.  All amounts denominated in other currencies (if any)
shall be converted into the U.S. Dollar equivalent amount in accordance with the
Exchange Rate on the date of calculation.  “Exchange Rate” means, in relation to
any amount of currency to be converted into U.S. Dollars pursuant to this
Agreement, the U.S. Dollar exchange rate as published in the Wall Street Journal
on the relevant date of calculation.
 
(p)           Judgment Currency.
 
(i)           If for the purpose of obtaining or enforcing judgment against the
Company in connection with this Agreement or any other Transaction Document in
any court in any jurisdiction it becomes necessary to convert into any other
currency (such other currency being hereinafter in this Section 9(p) referred to
as the “Judgment Currency”) an amount due in US Dollars under this Agreement,
the conversion shall be made at the Exchange Rate prevailing on the Trading Day
immediately preceding:
 
(1)           the date actual payment of the amount due, in the case of any
proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date:  or
 
(2)           the date on which the foreign court determines, in the case of any
proceeding in the courts of any other jurisdiction (the date as of which such
conversion is made pursuant to this Section 9(p)(i)(2) being hereinafter
referred to as the “Judgment Conversion Date”).
 
(ii)           If in the case of any proceeding in the court of any jurisdiction
referred to in Section 9(p)(i)(2)  above, there is a change in the Exchange Rate
prevailing between the Judgment Conversion Date and the date of actual payment
of the amount due, the applicable party shall pay such adjusted amount as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the Exchange Rate prevailing on the date of payment, will produce
the amount of US Dollars which could have been purchased with the amount of
Judgment Currency stipulated in the judgment or judicial order at the Exchange
Rate prevailing on the Judgment Conversion Date.
 
 
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(iii)           Any amount due from the Company under this provision shall be
due as a separate debt and shall not be affected by judgment being obtained for
any other amounts due under or in respect of this Agreement or any other
Transaction Document.
 
(q)           Independent Nature of Buyers’ Obligations and Rights.  The
obligations of each Buyer under the Transaction Documents are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible
in any way for the performance of the obligations of any other Buyer under any
Transaction Document.  Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall be
deemed to constitute the Buyers as, and the Company acknowledges that the Buyers
do not so constitute, a partnership, an association, a joint venture or any
other kind of group or entity, or create a presumption that the Buyers are in
any way acting in concert or as a group or entity with respect to such
obligations or the transactions contemplated by the Transaction Documents or any
matters, and the Company acknowledges that the Buyers are not acting in concert
or as a group, and the Company shall not assert any such claim, with respect to
such obligations or the transactions contemplated by the Transaction
Documents.  The decision of each Buyer to purchase Securities pursuant to the
Transaction Documents has been made by such Buyer independently of any other
Buyer.  Each Buyer acknowledges that no other Buyer has acted as agent for such
Buyer in connection with such Buyer making its investment hereunder and that no
other Buyer will be acting as agent of such Buyer in connection with monitoring
such Buyer’s investment in the Securities or enforcing its rights under the
Transaction Documents.  The Company and each Buyer confirms that each Buyer has
independently participated with the Company and its Subsidiaries in the
negotiation of the transaction contemplated hereby with the advice of its own
counsel and advisors.  Each Buyer shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights arising out of
this Agreement or out of any other Transaction Documents, and it shall not be
necessary for any other Buyer to be joined as an additional party in any
proceeding for such purpose.  The use of a single agreement to effectuate the
purchase and sale of the Securities contemplated hereby was solely in the
control of the Company, not the action or decision of any Buyer, and was done
solely for the convenience of the Company and its Subsidiaries and not because
it was required or requested to do so by any Buyer.  It is expressly understood
and agreed that each provision contained in this Agreement and in each other
Transaction Document is between the Company, each Subsidiary and a Buyer,
solely, and not between the Company, its Subsidiaries and the Buyers
collectively and not between and among the Buyers.
 
[signature pages follow]
 
 
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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Agreement to be duly executed as of the date first
written above.
 

COMPANY:
 
WPCS INTERNATIONAL INCORPORATED
 
By:
Name:
Title:

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

 
BUYER:
 
 
HUDSON BAY MASTER FUND LTD.
 
By:
Name:
Title:

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

 
BUYER:
 
 
IROQUOIS MASTER FUND LTD.
 
By:
Name:
Title:

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

 
BUYER:
 
 
AMERICAN CAPITAL MANAGEMENT LLC
 
By:
Name:
Title:

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

 
BUYER:
 
 
GRQ CONSULTANTS, INC. ROTH 401K FBO BARRY HONIG
 
By:
Name:
Title:

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

 
BUYER:
 
 
HS CONTRARIAN INVESTMENTS, LLC
 
By:
Name:
Title:

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

 
BUYER:
 
 
 
 
BARRY HONIG
 

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

 
BUYER:
 
 
 
 
RICHARD MOLINSKY
 

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

 
BUYER:
 
 
 
 
AIG CAPITAL LLC
 
By:
Name: John O’Rourke
Title:   Managing Member

 

   

   

 
 
56

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

 
BUYER:
 
 
 
 
JOHN FORD
 

 
 
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SCHEDULE OF BUYERS
 

(1)
(2)
 
(3)
(4)
(5)
(7)
           
 
Buyer
 
Address and Facsimile Number
 
 
Aggregate Number of BTX Common Equity Units
 
Aggregate Number of Shares of Preferred Stock
 
Aggregate Number of
 Warrant Shares
Legal Representative’s
Address and Facsimile Number
           
Hudson Bay Master Fund Ltd.
777 Third Avenue, 30th Floor
New York, NY 10017
Attention:  Yoav Roth
Facsimile:  (212) 571-1279
E-mail:  investments@hudsonbaycapital.com
Residence:  Cayman Islands
3,258
794
488,603
 
N/A
Iroquois Master Fund Ltd.
 
c/o Iroquois Capital Management, LLC
641 Lexington Avenue
26th Floor
New York, NY 10022
Attention:  Joshua Silverman
Facsimile:  (646) 274-1728
Telephone:  (212) 974-3070
Email:  jsilverman@icfunds.com
Residence:  Cayman Islands
 
3,007
733
451,103
N/A
American Capital Management LLC
 
c/o Iroquois Capital Management, LLC
641 Lexington Avenue
26th Floor
New York, NY 10022
Attention:  Joshua Silverman
Facsimile:  (646) 274-1728
Telephone:  (212) 974-3070
Email:  jsilverman@icfunds.com
Residence:  Cayman Islands
 
294
72
44,117
N/A
GRQ CONSULTANTS, INC. ROTH 401K FBO BARRY HONIG
 
c/o Barry Honig
555 S Federal Highway
#450
Boca Raton, FL 33432
Email:  BRHonig@aol.com
554
135
83,107
N/A
HS Contrarian Investments, LLC
c/o John Stetson
347 N New River Drive East
 #804
Fort Lauderdale, FL 33301
Email:  stetson.john@gmail.com
 
1,430
349
214,517
N/A
Barry Honig
c/o Barry Honig
555 S Federal Highway
#450
Boca Raton, FL 33432
Email:  BRHonig@aol.com
1,163
283
174,435
N/A
Richard Molinsky
51 Lords Hwy East
Weston,CT 06883
Email: rmol15@aol.com
Residence: Connecticut
250
61
37,500
N/A
AIG CAPITAL LLC
511 SE 5th Ave
Suite 613
Fort Lauderdale, FL 33301
Email: tagjohn@gmail.com
Attn: John O'Rourke
29
7
4,412
N/A
John Ford
90 Horseshoe Hill Rd
Bolinas, CA, 94924
E-mail: bajarest@gmail.com
Attention: John Ford
15
4
2,206
N/A
TOTAL
 
10,000
2,438
1,500,000
 

58