EXHIBIT 10.1

PURCHASE AGREEMENT

PURCHASE AGREEMENT (this “Agreement”), dated as of September 17, 2010, by and
between ONSTREAM MEDIA CORPORATION, a Florida corporation, (the “Company”), and
LINCOLN PARK CAPITAL FUND, LLC, an Illinois limited liability company (the
“Investor”).

WHEREAS:
 
Subject to the terms and conditions set forth in this Agreement, the Company
wishes to sell to the Investor, and the Investor wishes to buy from the Company,
(i) shares of the Company's common stock, $0.0001 par value per share (the
“Common Stock”), (ii) shares of the Company’s Series A-14 Preferred Stock,
$0.0001 par value per share (the “Series A-14 Preferred Stock), which  Preferred
Shares (as defined below) shall have the rights and preferences set forth in the
Certificate of Designation attached hereto as Exhibit E (the “Certificate of
Designation”) and (iii) warrants to purchase Five Hundred Forty Thousand
(540,000) shares (subject to adjustment as set forth therein) of Common Stock
(the "Warrants" and the shares of Common Stock underlying such Warrants, the
"Warrant Shares") in the form of Exhibit F attached hereto.
 
NOW, THEREFORE, the Company and the Investor hereby agree as follows:
 
1.            CERTAIN DEFINITIONS.

For purposes of this Agreement, the following terms shall have the following
meanings:

(a)           “Available Amount” means initially 1,130,000 shares of Common
Stock in the aggregate (to be appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction)
which amount shall be reduced by the Purchase Amount each time the Investor
purchases shares of Common Stock pursuant to Section 2 hereof and as such amount
may be increased pursuant to Section 2.

(b)           “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal
or state law for the relief of debtors.

(c)           “Business Day” means any day on which the Principal Market is open
for trading including any day on which the Principal Market is open for trading
for a period of time less than the customary time.

(d)           “Closing Sale Price” means, for any security as of any date, the
last closing sale price for such security on the Principal Market as reported by
the Principal Market, or, if the Principal Market is not the principal
securities exchange or trading market for such security, the last closing sale
price of such security on the principal securities exchange or trading market
where such security is listed or traded as reported by the Principal Market.

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

 
 

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(f)           “Confidential Information” means any information disclosed by
either party to the other party, either directly or indirectly, in writing,
orally or by inspection of tangible objects (including, without limitation,
documents, prototypes, samples, plant and equipment), which is designated as
"Confidential," "Proprietary" or some similar designation. Information
communicated orally shall be considered Confidential Information if such
information is confirmed in writing as being Confidential Information within ten
(10) Business Days after the initial disclosure. Confidential Information may
also include information disclosed to a disclosing party by third parties.
Confidential Information shall not, however, include any information which (i)
was publicly known and made generally available in the public domain prior to
the time of disclosure by the disclosing party; (ii) becomes publicly known and
made generally available after disclosure by the disclosing party to the
receiving party through no action or inaction of the receiving party; (iii) is
already in the possession of the receiving party at the time of disclosure by
the disclosing party as shown by the receiving party’s files and records
immediately prior to the time of disclosure; (iv) is obtained by the receiving
party from a third party without a breach of such third party’s obligations of
confidentiality; (v) is independently developed by the receiving party without
use of or reference to the disclosing party’s Confidential Information, as shown
by documents and other competent evidence in the receiving party’s possession;
or (vi) is required by law to be disclosed by the receiving party, provided that
the receiving party gives the disclosing party prompt written notice of such
requirement prior to such disclosure and assistance in obtaining an order
protecting the information from public disclosure.

(g)           “Custodian” means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.

(h)           “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

(i)            “Maturity Date” means the date that is Five Hundred (500)
Business Days (Twenty-Five (25) Monthly Periods) from the Commencement Date or
the date of Termination of this Agreement, if sooner.

(j)            “Monthly Period” means each successive Twenty (20) Business Day
period commencing with the Commencement Date.

(k)           “Person” means an individual or entity including but not limited
to any limited liability company, a partnership, a joint venture, a corporation,
a trust, an unincorporated organization and a government or any department or
agency thereof.

(l)            “Preferred Shares” means those Four Hundred Twenty Thousand
(420,000) shares of Series A-14 Preferred Stock (as appropriately adjusted for
any reorganization, recapitalization, non-cash dividend, stock split or other
similar transaction) issued in connection with the transactions contemplated
hereby .

(m)          “Principal Market” means the Nasdaq Capital Market; provided
however, that in the event the Company’s Common Stock is ever listed or traded
on the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, the NYSE Amex, or the OTC Bulletin Board, then the “Principal Market”
shall mean such other market or exchange on which the Company’s Common Stock is
then listed or traded.

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

 
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(o)           “Purchase Amount” means, with respect to any particular purchase
made hereunder, the portion of the Available Amount to be purchased by the
Investor pursuant to Section 2 hereof.

(p)           “Purchase Date” means with respect to any particular purchase made
hereunder, the Business Day on which the Investor receives by 10:00 a.m. eastern
time of such Business Day a valid Purchase Notice that the Investor is to buy
Purchase Shares pursuant to Section 2 hereof.

(q)           “Purchase Price” means the lower of the (A) the lowest Sale Price
of the Common Stock on the Purchase Date and (B) the arithmetic average of the
three (3) lowest Closing Sale Prices for the Common Stock during the twelve (12)
consecutive Business Days ending on the Business Day immediately preceding such
Purchase Date (to be appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction).

(r)            “Purchase Shares” means the shares of Common Stock up to the
Available Amount (as appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction)
which may be sold to the Investor by the Company in accordance with the terms of
Section 2 of this Agreement.  For the avoidance of doubt, Purchase Shares do not
include Warrant Shares, Commitment Shares or Conversion Shares (as defined
below).

(s)           “Purchase Notice” shall mean an irrevocable written notice from
the Company to the Investor directing the Investor to buy such Regular Purchase
Amount in Purchase Shares as specified by the Company therein on the Purchase
Date.

(t)           “Sale Price” means any sale price for the shares of Common Stock
on the Principal Market as reported by the Principal Market.

(u)           “SEC” means the United States Securities and Exchange Commission.

(v)           “Securities Act” means the Securities Act of 1933, as amended.

(w)          “Transfer Agent” means the transfer agent of the Company as set
forth in Section 11(f) hereof or such other person who is then serving as the
transfer agent for the Company in respect of the Common Stock.

2.            PURCHASE OF SECURITIES.
 
Subject to the terms and conditions set forth in this Agreement, the Company has
the right to sell to the Investor, and the Investor has the obligation to
purchase from the Company, Purchase Shares, Preferred Shares and Warrants as
follows:
 
(a)              Initial Purchase and Commencement of Regular Sales of Common
Stock. Within one (1) Business Day following the satisfaction of the conditions
(the "Commencement") as set forth in Sections 7 and 8 below (the date of
satisfaction of such conditions, the "Commencement Date"), the Investor shall
purchase from the Company (i) Three Hundred Thousand (300,000) Purchase Shares
(such Purchase Shares are referred to herein as “Initial Purchase Shares”) (ii)
the Preferred Shares with the rights and preferences set forth in the
Certificate of Designation, and (iii) the Warrants, and upon receipt of such
Initial Purchase Shares, Preferred Shares and Warrants, pay to the Company as
the purchase price for such Initial Purchase Shares, Preferred Shares and
Warrants, the sum of $900,000, via wire transfer.  Thereafter, the Company shall
have the right but not the obligation to direct the Investor by its delivery to
the Investor of a Purchase Notice from time to time to buy up to Forty Five
Thousand (45,000) (the “Regular Purchase Amount”) Purchase Shares (each such
purchase a “Regular Purchase”) (to be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split or other
similar transaction) at the Purchase Price on the Purchase Date.  The Company
may deliver multiple Purchase Notices to the Investor so long as at least two
(2) Business Days have passed since the payment for the most recent Regular
Purchase was completed.

 
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(b)               Payment for Purchase Shares.   With respect to a Regular
Purchase, the Investor shall pay to the Company an amount equal to the Purchase
Amount multiplied by the Purchase Price with respect to such Purchase Shares as
full payment for such Purchase Shares via wire transfer of immediately available
funds on the same Business Day that the Investor receives such Purchase Shares
if they are received by the Investor before 1:00 p.m. eastern time or if
received by the Investor after 1:00 p.m. eastern time, the next Business Day.
The Company shall not issue any fraction of a share of Common Stock upon any
purchase. If the issuance would result in the issuance of a fraction of a share
of Common Stock, the Company shall round such fraction of a share of Common
Stock up or down to the nearest whole share. All payments made under this
Agreement shall be made in lawful money of the United States of America by wire
transfer of immediately available funds to such account as the Company may from
time to time designate by written notice in accordance with the provisions of
this Agreement. Whenever any amount expressed to be due by the terms of this
Agreement is due on any day that is not a Business Day, the same shall instead
be due on the next succeeding day that is a Business Day.
 
(c)              Purchase Price Floor.   The Company and the Investor shall not
effect any sales and purchases under this Agreement on any Purchase Date where
the Purchase Price for any purchases of Purchase Shares would be less than the
Floor Price. “Floor Price” means $0.75, which shall be appropriately adjusted
for any reorganization, recapitalization, non-cash dividend, stock split or
other similar transaction.
 
(d)              Compliance with Principal Market Rules.  “Market Price” shall
mean $1.02375, which is the Closing Sale Price of the Common Stock on the
Business Day immediately preceding the date of this Agreement, $0.93, increased
by $0.09375 per share to allow for the Warrants.  The Company shall not be
required or permitted to issue any shares of Common Stock under this Agreement
if such issuance would breach the Company's obligations under the rules or
regulations of the Principal Market.  The Company may not issue more than
1,600,000 shares of its Common Stock under this Agreement, including shares of
Common Stock issuable upon conversion of the Preferred Shares and the Commitment
Shares, without the approval of its stockholders exclusive of any shares of
Common Stock issuable upon exercise of the Warrants which Warrants are not
exercisable for six (6) months from the date hereof and may not be exercised at
a price per share less than the greater of Market Price and Book Value per
share.  Book Value per share is equal to $1.71.  The number of shares which may
be issued hereunder will be increased by an additional 1,900,000 shares of
Common Stock, when the Company, obtains the requisite shareholder approval and
the Company hereby covenants and agrees that it shall use its reasonable best
efforts to get such requisite shareholder approval for such 1,900,000 additional
Purchase Shares and the entire transaction contained herein within one hundred
and ninety (190) days from the date hereof.

 
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3.            INVESTOR'S REPRESENTATIONS AND WARRANTIES.

The Investor represents and warrants to the Company that as of the date hereof
and as of the Commencement Date:

(a)           Investment Purpose.   The Investor is acquiring the Purchase
Shares, Preferred Shares and Commitment Shares (“Securities”) as principal for
its own account and not with a view to or for distributing or reselling such
Securities or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of distributing any of
such Securities in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings with
any other persons to distribute or regarding the distribution of such Securities
in violation of the Securities Act or any applicable state securities law (this
representation and warranty not limiting the Investor’s right to sell the
Securities at any time in compliance with applicable federal and state
securities laws and with respect to the Commitment Shares, subject to Section
5(e) hereof).  The Investor is acquiring the Securities hereunder in the
ordinary course of its business.

(b)           Accredited Investor Status.  The Investor is an "accredited
investor" as that term is defined in Rule 501(a)(3) of Regulation D.

(c)           Reliance on Exemptions.  The Investor understands that the
Securities may be 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 the
Investor's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Investor set forth herein in order to
determine the availability of such exemptions and the eligibility of the
Investor to acquire the Securities.

(d)           Information.  The Investor understands that its investment in the
Securities involves a high degree of risk.  The Investor (i) is able to bear the
economic risk of an investment in the Securities including a total loss, (ii)
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the proposed investment in the
Securities and (iii) has had an opportunity to ask questions of and receive
answers from the officers of the Company concerning the financial condition and
business of the Company and others matters related to an investment in the
Securities.  Neither such inquiries nor any other due diligence investigations
conducted by the Investor or its representatives shall modify, amend or affect
the Investor's right to rely on the Company's representations and warranties
contained in Section 4 below.  The Investor has sought such accounting, legal
and tax advice as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Securities.

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

(f)           Transfer or Sale.  The Investor understands that (i) the
Securities may not be offered for sale, sold, assigned or transferred unless (A)
registered pursuant to the Securities Act or (B) an exemption exists permitting
such Securities to be sold, assigned or transferred without such registration;
(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 through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the SEC thereunder.

(g)           Validity; Enforcement.  This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Investor and is a valid and
binding agreement of the Investor enforceable against the Investor in accordance
with its terms, subject as to enforceability to general principles of equity and
to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
and other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies.

 
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(h)           Residency.  The Investor is a resident of the State of Illinois.

(i)            No Short Selling.  The Investor represents and warrants to the
Company that at no time has any of the Investor, its agents, representatives or
affiliates engaged in or effected or will engage in or effect, in any manner
whatsoever, directly or indirectly, any (i) "short sale" (as such term is
defined in Section 242.200 of Regulation SHO of the Exchange Act) of the Common
Stock or (ii) hedging transaction, which establishes a net short position with
respect to the Common Stock.

4.            REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to the Investor that as of the date hereof
and as of the Commencement Date:

(a)           Organization and Qualification. The Company and each of the
Subsidiaries (which for purposes of this Agreement means any entity in which the
Company, directly or indirectly, owns 50% or more of the voting stock or capital
stock or other similar equity interests) is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with the requisite corporate
power and authority to own and use its properties and assets and to carry on its
business as currently conducted.  Neither the Company nor any Subsidiary is in
violation nor default of any of the provisions of its respective certificate or
articles of incorporation, bylaws or other organizational or charter
documents.  Each of the Company and the Subsidiaries is duly qualified to
conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not
have or reasonably be expected to result in: (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Document; (ii) a
material adverse effect on the results of operations, assets, business or
financial condition of the Company and the Subsidiaries, taken as a whole,
provided, however, that a Company Material Adverse Effect shall not include
facts, circumstances, events, changes, effects or occurrences (a) generally
affecting the economy or the financial, debt, credit or securities markets in
the United States, including as a result of changes in geopolitical conditions,
(b) generally affecting any of the industries in which the Company or the
Company Subsidiaries operate, (c) resulting from the announcement of this
Agreement, (d) resulting from changes in any applicable laws or regulations or
applicable accounting regulations or principles or interpretations thereof, (e)
resulting from any actions taken pursuant to or in accordance with the terms of
this Agreement, (f) resulting from any outbreak or escalation of hostilities or
war or any act of terrorism, (g) resulting from any failure by the Company to
meet its internal or published projections, budgets, plans or forecasts of its
revenues, earnings or other financial performance or results of operations, in
and of itself (it being understood that the facts or occurrences giving rise or
contributing to such failure that are not otherwise excluded from the definition
of a “Company Material Adverse Effect” may be taken into account in determining
whether there has been a Company Material Adverse Effect), or (h) resulting from
a decline in the price of the Company Common Stock on its Principal Market (it
being understood that the facts or occurrences giving rise or contributing to
such decline that are not otherwise excluded from the definition of a “Company
Material Adverse Effect” may be taken into account in determining whether there
has been a Company Material Adverse Effect); or (iii) a material adverse effect
on the Company’s ability to perform in any material respect on a timely basis
its obligations under any Transaction Document (any of (i), (ii) or (iii), a
“Material Adverse Effect”) and no Proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.  The Company has no
Subsidiaries except as set forth on Schedule 4(a).

 
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(b)           Authorization; Enforcement; Validity.  (i) The Company has the
requisite corporate power and authority to enter into and perform its
obligations under this Agreement, the Registration Rights Agreement, the
Warrants, the Certificate of Designation and each of the other agreements
entered into by the parties on the Commencement Date and attached hereto as
exhibits to this Agreement (collectively, the “Transaction Documents”), and to
issue the Purchase Shares, Preferred Shares, the Commitment Shares, the
Conversion Shares, the Warrants and the Warrant Shares in accordance with the
terms hereof and thereof, (ii) the execution and delivery of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby, including without limitation, the issuance of
the Commitment Shares and the reservation for issuance and the issuance of the
Purchase Shares, the Warrants, the Warrant Shares, the Preferred Shares and the
Conversion Shares, have been duly authorized by the Company's Board of Directors
and no further consent or authorization is required by the Company, its Board of
Directors or its shareholders, (iii) this Agreement has been, and each other
Transaction Document shall be on the Commencement Date, duly executed and
delivered by the Company and (iv) this Agreement constitutes, and each other
Transaction Document upon its execution on behalf of the Company, shall
constitute, the valid and binding obligations of the Company enforceable against
the Company in accordance with their 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 creditors' rights and remedies.  The
Board of Directors of the Company has approved the resolutions (the “Signing
Resolutions”) substantially in the form as set forth as Exhibit C attached
hereto to authorize this Agreement and the transactions contemplated
hereby.  The Signing Resolutions are valid, in full force and effect and have
not been modified or supplemented in any respect.  No other approvals or
consents of the Company’s Board of Directors and/or shareholders is necessary
under applicable laws and the Company’s Articles of Incorporation and/or Bylaws
to authorize the execution and delivery of this Agreement or the other
Transaction Documents or any of the transactions contemplated hereby or thereby,
including, but not limited to, the issuance of the Commitment Shares, the
Warrants, the Warrant Shares, the Preferred Shares, the Conversion Shares and
the Purchase Shares.

(c)           Capitalization.  As of the date hereof, the authorized capital
stock of the Company is set forth on Schedule 4(c).  Except as disclosed in
Schedule 4(c), (i) no shares of the Company's capital stock are subject to
preemptive rights or any liens or encumbrances suffered or permitted by the
Company, (ii) there are no outstanding debt securities, (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, any shares of 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 shares of 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, any
shares of capital stock of the Company or any of its Subsidiaries, (iv) 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 Securities Act (except the Registration Rights Agreement), (v) 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, (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Commitment Shares, the Purchase Shares, the Warrants, the Warrant Shares,
the Preferred Shares or the Conversion Shares and (vii) the Company does not
have any stock appreciation rights or "phantom stock" plans or agreements or any
similar plan or agreement.  The Company has furnished to the Investor true and
correct copies of the Company's Articles of Incorporation, as amended and as in
effect on the date hereof (the “Articles of Incorporation”), and the Company's
By-laws, as amended and as in effect on the date hereof (the "By-laws") .

 
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(d)           Issuance of Securities.  Upon issuance and payment therefor in
accordance with the terms and conditions of this Agreement, the Purchase Shares,
shall be validly issued, fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issue thereof, with the holders being
entitled to all rights accorded to a holder of Common Stock.  The Initial
Purchase Shares have been duly authorized and, upon issuance in accordance with
the terms hereof, the Initial Purchase Shares shall be (i) validly issued, fully
paid and non-assessable and (ii) free from all taxes, liens and charges with
respect to the issue thereof.  The Preferred Shares have been duly authorized
and, upon issuance in accordance with the terms hereof, the Preferred Shares
shall be (i) validly issued, fully paid and non-assessable and (ii) free from
all taxes, liens and charges with respect to the issue thereof. The Commitment
Shares have been duly authorized and, upon issuance in accordance with the terms
hereof, the Commitment Shares shall be (i) validly issued, fully paid and
non-assessable and (ii) free from all taxes, liens and charges with respect to
the issue thereof.   The Warrant Shares have been duly authorized and reserved
for issuance upon exercise in accordance with the Warrants.  When issued in
accordance with the terms of the Warrants, the Warrant Shares shall be validly
issued, fully paid and non-assessable and, to our knowledge, free of all taxes,
liens, charges, restrictions, rights of first refusal and preemptive rights.
1,130,000 shares of Common Stock (subject to equitable adjustment for any
reorganization, recapitalization, non-cash dividend, stock split or other
similar transaction) have been duly authorized and reserved for issuance upon
purchase under this Agreement as Purchase Shares, and this amount will be
increased as appropriate for any increases in the Available Amount in accordance
with Section 2(d). When issued in accordance with this Agreement, the Purchase
Shares shall be validly issued, fully paid and non-assessable and, to our
knowledge, free of all taxes, liens, charges, restrictions, rights of first
refusal and preemptive rights.    420,000 shares of Common Stock (subject to
equitable adjustment for any reorganization, recapitalization, non-cash
dividend, stock split or other similar transaction) have been duly authorized
and reserved for issuance as Conversion Shares. When issued in accordance with
the Certificate of Designation, the Conversion Shares shall be validly issued,
fully paid and non-assessable, and, to our knowledge, free of all taxes, liens,
charges, restrictions, rights of first refusal and preemptive rights.

(e)           No Conflicts.  Except as disclosed in Schedule 4(e), 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 reservation for issuance and
issuance of the Purchase Shares, the Commitment Shares, the Warrants, the
Warrant Shares, the Preferred Shares and the Conversion Shares) will not (i)
result in a violation of the Articles of Incorporation, any Certificate of
Designations, Preferences and Rights of any outstanding series of preferred
stock of the Company or the By-laws or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any of its Subsidiaries is a party, or result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations and the rules and regulations of the
Principal Market applicable to the Company or any of its Subsidiaries) or by
which any property or asset of the Company or any of its Subsidiaries is bound
or affected, except in the case of conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations under clause (ii), which
could not reasonably be expected to result in a Material Adverse Effect.  Except
as disclosed in Schedule 4(e), neither the Company nor its Subsidiaries is in
violation of any term of or in default under its Articles of Incorporation, any
Certificate of Designation, Preferences and Rights of any outstanding series of
preferred stock of the Company or By-laws or their organizational charter or
by-laws, respectively.  Except as disclosed in Schedule 4(e), neither the
Company nor any of its Subsidiaries is in violation of any term of or is in
default under any material contract, agreement, mortgage, indebtedness,
indenture, instrument, judgment, decree or order or any statute, rule or
regulation applicable to the Company or its Subsidiaries, except for possible
conflicts, defaults, terminations, amendments or violations which could not
reasonably be expected to have a Material Adverse Effect.  The business of the
Company and its Subsidiaries is not being conducted, and shall not be conducted,
in violation of any law, ordinance, regulation of any governmental entity,
except for possible violations, the sanctions for which either individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect.  Except as specifically contemplated by this Agreement and as required
under the Securities Act or applicable state securities laws, the Company is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency or any regulatory or
self-regulatory agency in order for it to execute, deliver or perform any of its
obligations under or contemplated by the Transaction Documents in accordance
with the terms hereof or thereof.  Except as disclosed in Schedule 4(e), all
consents, authorizations, orders, filings and registrations which the Company is
required to obtain pursuant to the preceding sentence shall be obtained or
effected on or prior to the Commencement Date.  Except as listed in Schedule
4(e), since one year prior to the date hereof,  the Company has not received nor
delivered any notices or correspondence from or to the Principal Market to the
Company’s knowledge.  The Principal Market has not presently commenced any
delisting proceedings against the Company.

 
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(f)           SEC Documents; Financial Statements. Except as disclosed in
Schedule 4(f) the Company has filed all reports, schedules, forms, statements
and other documents required to be filed by the Company under the Securities Act
and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for
the two (2) years preceding the date hereof (or such shorter period as the
Company was required by law or regulation to file such material) (the foregoing
materials, including the exhibits thereto and documents incorporated by
reference therein, being collectively referred to herein as the “SEC Documents”)
on a timely basis or has received a valid extension of such time of filing and
has filed any such SEC Documents prior to the expiration of any such
extension.  As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, and none of the SEC Documents, when filed, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Documents comply in all
material respects with applicable accounting requirements and the rules and
regulations of the SEC with respect thereto as in effect at the time of
filing.  Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis
during the periods involved (“GAAP”), except as may be otherwise specified in
such financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.  Except
as listed in Schedule 4(f), the Company has received no notices or
correspondence from the SEC for the one year preceding the date hereof.  The SEC
has not commenced any enforcement proceedings against the Company or any of its
Subsidiaries.

(g)           Absence of Certain Changes.  Except as disclosed in Schedule 4(g),
since June 30, 2010, there has been no Material Adverse Effect in the business,
properties, operations, financial condition or results of operations of the
Company or its Subsidiaries.  The Company has not taken any steps, and does not
currently expect to take any steps, to seek protection pursuant to any
Bankruptcy Law nor does the Company or any of its Subsidiaries have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy or insolvency proceedings.

 
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(h)           Absence of Litigation. Except as set forth in Schedule 4(h), there
is no action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the Company or any of its Subsidiaries, threatened
against or affecting the Company, the Common Stock, the Company’s preferred
stock or any of the Company's Subsidiaries or any of the Company's or the
Company's Subsidiaries' officers or directors in their capacities as such, which
could reasonably be expected to have a Material Adverse Effect.   A description
of each material action, suit, proceeding, inquiry or investigation before or by
any court, public board, government agency, self-regulatory organization or body
which, as of the date of this Agreement, is pending or was threatened in writing
within the last twelve months against or affecting the Company, the Common
Stock, the Company’s preferred stock or any of the Company's Subsidiaries or any
of the Company's or the Company's Subsidiaries' officers or directors in their
capacities as such, is set forth in Schedule 4(h).

(i)            Acknowledgment Regarding Investor's Status.  The Company
acknowledges and agrees that the Investor is acting solely in the capacity of
arm's length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby.  The Company further acknowledges
that the Investor is not acting as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to the Transaction Documents
and the transactions contemplated hereby and thereby and any advice given by the
Investor or any of its representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is
merely incidental to the Investor's acquisition of the Commitment Shares, the
Purchase Shares, the Warrants, the Warrant Shares, the Preferred Shares and the
Conversion Shares.  The Company further represents to the Investor 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 and
advisors.

(j)            No General Solicitation.  Neither the Company, nor any of its
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 under the Securities Act) in connection with the offer or sale of
the Commitment Shares, the Purchase Shares, the Warrants, the Warrant Shares or
the Preferred Shares.

(k)           Intellectual Property Rights.  The Company and its Subsidiaries
own or possess adequate rights or licenses to use all material trademarks, trade
names, service marks, service mark registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their respective
businesses as now conducted.  Except as set forth on Schedule 4(k), none of the
Company's material trademarks, trade names, service marks, service mark
registrations, service names, patents, patent rights, copyrights, inventions,
licenses, approvals, government authorizations, trade secrets or other
intellectual property rights have expired or terminated needed to presently own
or operate the business of the Company.  The Company and its Subsidiaries do not
have any knowledge of any infringement by the Company or its Subsidiaries of any
material trademark, trade name rights, patents, patent rights, copyrights,
inventions, licenses, service names, service marks, service mark registrations,
trade secret.

(l)            Environmental Laws.  The Company and its Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (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, except where, in each of the
three foregoing clauses, the failure to so comply could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.

 
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(m)          Title.  Except as set forth on Schedule 4(m), the Company and the
Subsidiaries have good title in all personal property owned by them that is
material to the business of the Company and the Subsidiaries, in each case free
and clear of all liens, encumbrances and defects (“Liens”) and, except for Liens
as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company and the Subsidiaries, Liens for the payment of federal, state or other
taxes, the payment of which is neither delinquent nor subject to penalties.  Any
real property and facilities held under lease by the Company and the
Subsidiaries are held by them under valid, subsisting and enforceable leases
with which the Company and the Subsidiaries are in compliance 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 and its
Subsidiaries. Any real property and facilities held under lease by the Company
and any of its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its Subsidiaries.

(n)           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.

(o)           Regulatory Permits.  The Company and its Subsidiaries possess all
material certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such Subsidiary has
received any written notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit.

(p)           Tax Status.  The Company and each of its Subsidiaries has made or
filed all federal and state income and all other material tax returns, reports
and declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and 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 know of no basis for any such claim.

(q)           Transactions With Affiliates.   Except as set forth in the SEC
Documents, none of the executive officers or directors of the Company is
presently a party to any transaction with the Company or any Subsidiary (other
than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner, in each case in excess of $100,000 other than for (i) payment of salary
or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including
stock option agreements under any stock option plan of the Company.

(r)           Application of Takeover Protections.  The Company and its board of
directors have taken or will take prior to the Commencement Date all necessary
action, if any, in order to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Articles of
Incorporation or the laws of the state of its incorporation which is or could
become applicable to the Investor as a result of the transactions contemplated
by this Agreement, including, without limitation, the Company's issuance of the
Securities and the Investor's ownership of the Securities.

 
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(s)            Disclosure.  Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the
Company confirms that neither it nor any other Person acting on its behalf has
provided the Investor or its agents or counsel with any information that it
believes constitutes or might constitute material, non-public information which
is not otherwise disclosed in the Registration Statement (as defined below) or
prospectus supplements thereto or in any SEC Reports.  The Company understands
and confirms that the Investor will rely on the foregoing representation in
effecting purchases and sales of securities of the Company.  All of the
disclosure furnished by or on behalf of the Company to the Investor regarding
the Company, its business and the transactions contemplated hereby, including
the disclosure schedules to this Agreement, is true and correct and does not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.  The press releases
disseminated by the Company during the twelve months preceding the date of this
Agreement taken as a whole do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made and when made, not misleading.  The Company acknowledges
and agrees that the Investor neither makes nor has made any representations or
warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 3 hereof.

(t)            Foreign Corrupt Practices.   Neither the Company, nor to the
knowledge of the Company, any agent or other person acting on behalf of the
Company, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to
foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (iii) failed to
disclose fully any contribution made by the Company (or made by any person
acting on its behalf of which the Company is aware) which is in violation of
law, or (iv) violated in any material respect any provision of the Foreign
Corrupt Practices Act of 1977, as amended.

(u)           Registration Statements.  The Company’s shelf registration
statement on Form S-3 (no. 333-165258) (the “Registration Statement”) has been
declared effective by the SEC and no stop order has been issued or is pending or
threatened with respect thereto.

(v)           DTC Eligible.  The Company through its transfer agent currently
participates in the Depository Trust Company Fast Automated Securities Transfer
Program (“DTC FAST System”) and the Company’s Common Stock can be transferred
electronically to third parties via the DTC FAST System.

5.            COVENANTS.

(a)           Filing of Form 8-K and Registration Statement.  The Company agrees
that it shall, within the time required under the Exchange Act file a Report on
Form 8-K disclosing this Agreement and the transactions contemplated hereby.
 The Company shall also file within ten (10) Business Days from the date hereof
prospectus supplements to the Registration Statement covering the sale of the
Purchase Shares, Commitment Shares and any shares of Common Stock issuable upon
conversion of the Preferred Shares (“Conversion Shares”) in accordance with the
terms of the Registration Rights Agreement between the Company and the Investor,
dated as of the date hereof (“Registration Rights Agreement”).  The Company
shall use best efforts to keep the Registration Statement effective pursuant to
Rule 415 under the Securities Act and available for sale of all of the Purchase
Shares, Conversion Shares, and Commitment Shares (“Registrable
Securities”).   The Company shall not register any securities under the
Registration Statement other than the Registrable Securities, via prospectus
supplement or otherwise, if the registration of such other securities would, in
any way, limit, prevent or restrict any of the Registerable Securities from
being covered by the Registration Statement. Any securities issuable under this
Agreement that have not been registered under the Securities Act shall bear the
following restrictive legend (the “Restrictive Legend”):

 
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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 HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF HOLDER’S COUNSEL,
IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS.

(b)           Blue Sky. The Company shall take such action, if any, as is
reasonably necessary in order to obtain an exemption for or to qualify (i) the
initial sale of the Commitment Shares, the Warrants, the Preferred Shares and
any Purchase Shares to the Investor under this Agreement and (ii) any subsequent
resale of the Commitment Shares, Conversion Shares, Warrant Shares and any
Purchase Shares by the Investor, in each case, under applicable securities or
“Blue Sky” laws of the states of the United States in such states as is
reasonably requested by the Investor from time to time, and shall provide
evidence of any such action so taken to the Investor.

(c)           Listing/DTC.  The Company shall promptly secure the listing of all
of the Purchase Shares, Conversion Shares, Warrant Shares and Commitment Shares
upon each national securities exchange and automated quotation system, if any,
upon which shares of Common Stock are then listed (subject to official notice of
issuance) and shall maintain, so long as any other shares of Common Stock shall
be so listed, such listing of all such securities from time to time issuable
under the terms of the Transaction Documents.  The Company shall use its
reasonable best efforts to maintain the Common Stock's authorization for
quotation on the Principal Market.  Neither the Company nor any of its
Subsidiaries shall take any action that would be reasonably expected to result
in the delisting or suspension of the Common Stock on the Principal Market.  The
Company shall promptly, and in no event later than the following Business Day,
provide to the Investor copies of any notices it receives from the Principal
Market regarding the continued eligibility of the Common Stock for listing on
such automated quotation system or securities exchange.  The Company shall pay
all fees and expenses in connection with satisfying its obligations under this
Section.  The Company shall take all action necessary to ensure that its Common
Stock can be transferred electronically via the DTC FAST System.

(d)           Limitation on Short Sales and Hedging Transactions.  The Investor
agrees that beginning on the date of this Agreement and ending on the date of
termination of this Agreement as provided in Section 11, the Investor and its
agents, representatives and affiliates shall not in any manner whatsoever enter
into or effect, directly or indirectly, any (i) “short sale” (as such term is
defined in Section 242.200 of Regulation SHO of the Exchange Act) of the Common
Stock or (ii) hedging transaction, which establishes a net short position with
respect to the Common Stock.

(e)           Issuance of Commitment Shares.  Immediately upon the execution of
this Agreement, the Company shall pay to the Investor a structuring fee of
$26,250 as consideration for the Investor entering into this Agreement.  Upon
the earlier of the Commencement or twenty (20) days from the date hereof, the
Company shall pay to the Investor a commitment fee payable in 50,000 shares of
Common Stock (the “Commitment Shares”).

 
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(f)           Due Diligence.  The Investor shall have the right, from time to
time as the Investor may reasonably deem appropriate, to perform reasonable due
diligence on the Company during normal business hours.  The Company and its
officers and employees shall provide information and reasonably cooperate with
the Investor in connection with any reasonable request by the Investor related
to the Investor's due diligence of the Company.  Each party hereto agrees not to
disclose any Confidential Information of the other party to any third party and
shall not use the Confidential Information for any purpose other than in
connection with, or in furtherance of, the transactions contemplated
hereby.  Each party hereto acknowledges that the Confidential Information shall
remain the property of the disclosing party and agrees that it shall take all
reasonable measures to protect the secrecy of any Confidential Information
disclosed by the other party.  The Company confirms that neither it nor any
other Person acting on its behalf shall provide the Investor or its agents or
counsel with any information that it believes constitutes or might constitute
material, non-public information which is not otherwise disclosed in the
Registration Statement or prospectus supplements thereto.
 
(g)           Purchase Records. The Investor and the Company shall each maintain
records showing the remaining Available Amount at any given time and the dates
and Purchase Amounts for each purchase or shall use such other method,
reasonably satisfactory to the Investor and the Company.
 
(h)           Taxes.  The Company shall pay any and all transfer, stamp or
similar taxes that may be payable with respect to the issuance and delivery of
the Warrants, any Preferred Shares or any shares of Common Stock to the Investor
made under this Agreement.

(i)            No Variable Rate Transactions.  From the date hereof until the
later of (i) the Maturity Date and (ii) one year from the date hereof, the
Company shall be prohibited from effecting or entering into an agreement to
effect any issuance by the Company or any of its Subsidiaries of Common Stock or
Common Stock Equivalents for cash consideration (or a combination of units
thereof) involving a Variable Rate Transaction other than in connection with an
Exempt Issuance.  “Variable Rate Transaction” means a transaction in which the
Company (i) issues or sells any debt or equity securities that are convertible
into, exchangeable or exercisable for, or include the right to receive
additional shares of Common Stock either (A) at a conversion price, exercise
price or exchange rate or other price that is based upon and/or varies with the
trading prices of or quotations for the shares of Common Stock at any time after
the initial issuance of such debt or equity securities, or (B) with a
conversion, exercise or exchange price that is subject to being reset at some
future date after the initial issuance of such debt or equity security or upon
the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Common Stock or (ii) enters
into any agreement, including, but not limited to, an equity line of credit,
whereby the Company may sell securities at a future determined price. “Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to
employees, officers, directors or vendors of the Company pursuant to any stock
or option plan duly adopted for such purpose, by a majority of the non-employee
members of the Board of Directors or a majority of the members of a committee of
non-employee directors established for such purpose, (b) securities upon the
exercise or exchange of or conversion of any Securities issued hereunder and/or
other securities exercisable or exchangeable for or convertible into shares of
Common Stock issued and outstanding on the date of this Agreement, provided that
such securities have not been amended since the date of this Agreement to
increase the number of such securities or to decrease the exercise price,
exchange price or conversion price of such securities (other than as a result of
stock split or similar transaction), and (c) securities issued pursuant to
acquisitions or strategic transactions approved by a majority of the
“independent” directors of the Company, which acquisitions or strategic
transactions can have a Variable Rate Transaction component,  provided that any
such issuance shall only be to a Person (or to the equity holders of a Person)
which is, itself or through its subsidiaries, an operating company or an asset
in a business synergistic with the business of the Company and shall provide to
the Company additional benefits in addition to the investment of funds, but
shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities.

 
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(j)            Reserve.  The Company shall maintain a reserve from its duly
authorized shares of Common Stock for issuance pursuant to the Transaction
Documents in such amount as may be required to fulfill its obligations in full
under the Transaction Documents.

(k)          Participation Rights.  From the date hereof until the later of (i)
the Maturity Date and (ii) one year from the date hereof, the Company hereby
grants to the Investor a right to participate in the purchase of any New
Securities (as defined below) that the Company may, from time to time, propose
to issue and sell in connection with any financing transaction, as follows.  Not
later than 3 Business Days prior to the execution of any definitive
documentation relating to the sale of any New Securities to any persons or
entities other than the Investor or an Affiliate of the Investor (a “New
Person”), the Company shall deliver written notice to Investor of its intent to
enter into any such transaction, describing each of the New Persons and the type
of New Securities in reasonable detail, and attaching to such notice copies of
such definitive documentation.  The Investor shall have 3 Business Days after
receipt of such notice to purchase up to 50% of such New Securities or any
portion thereof, at the price and on the terms specified in such notice by
giving written notice to the Company specifying the amount of New Securities to
be purchased by the Investor.  In the event the Company has not sold such New
Securities to the New Persons within 30 Business Days after notice thereof to
the Investor, the Company shall not thereafter issue or sell any New Securities
to any New Persons without first again complying with this Section.  “New
Securities” shall mean any shares of Common Stock, preferred stock or any other
equity securities of the Company or Common Stock Equivalents, provided, however,
that New Securities shall not include, (i) shares of Common Stock issuable upon
conversion or exercise of any securities outstanding as of the date hereof, (ii)
shares, options or warrants for Common Stock granted to officers, directors and
employees and consultants of the Company pursuant to incentive compensation
plans approved by the Board of Directors of the Company, (iii) shares of Common
Stock or securities convertible or exchangeable for Common Stock issued pursuant
to the acquisition of another company by consolidation, merger, or purchase of
all or substantially all of the assets of such company and pursuant to any
related acquisition financing or (iv) shares of Common Stock or securities
convertible or exchangeable into shares of Common Stock issued in connection
with a strategic transaction involving  the Company and issued to an entity or
an affiliate of such entity that is engaged in the same or substantially related
business as the Company.  The Investor’s rights hereunder shall not prohibit or
limit the Company from selling any New Securities so long as the Company makes
the same offer to the Investor as provided herein.  Otherwise the Company shall
be prohibited from selling any New Securities to any New Person until it fully
complies herewith

6.            TRANSFER AGENT INSTRUCTIONS.

On the Commencement Date, the Company shall issue the Initial Purchase Shares
and Commitment Shares without restrictive legend, and any Purchase Shares,
Warrant Shares and Conversion Shares to be issued under this Agreement or
pursuant to the Warrants or Certificate of Designation shall be issued without
any restrictive legend unless the Investor expressly consents otherwise.  The
Company shall issue irrevocable instructions to the Transfer Agent, and any
subsequent transfer agent, to issue the Commitment Shares, Purchase Shares,
Conversion Shares, and Warrant Shares in the name of the Investor (the
“Irrevocable Transfer Agent Instructions”).  Except as required by applicable
Securities laws, the Company warrants to the Investor that no instruction other
than the Irrevocable Transfer Agent Instructions referred to in this Section 6,
will be given by the Company to the Transfer Agent with respect to the
Commitment Shares, Purchase Shares, Warrant Shares and Conversion Shares and
that the Purchase Shares, Warrant Shares, Conversion Shares and Commitment
Shares shall otherwise be freely transferable on the books and records of the
Company as and to the extent provided in this Agreement.

 
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7.
CONDITIONS TO THE COMPANY'S RIGHT TO COMMENCE SALES OF SHARES OF COMMON STOCK.

The right of the Company hereunder to commence sales of the Purchase Shares is
subject to the satisfaction of each of the following conditions:

(a)          The Investor shall have executed each of the Transaction Documents
and delivered the same to the Company; and

(b)          No stop order with respect to the Registration Statement shall be
pending or threatened by the SEC.

 
8.
CONDITIONS TO THE INVESTOR'S OBLIGATION TO PURCHASE.

The obligation of the Investor to buy Purchase Shares, Warrants and Preferred
Shares under this Agreement is subject to the satisfaction of each of the
following conditions and once such conditions have been initially satisfied,
there shall not be any ongoing obligation to satisfy such conditions after the
Commencement has occurred:

(a)          The Company shall have executed each of the Transaction Documents
and delivered the same to the Investor and shall have filed the Certificate of
Designation in the form of Exhibit F hereto with the Secretary of State of the
State of Florida;

(b)          The Company shall have issued to the Investor the Commitment Shares
and Initial Purchase Shares without restrictive legend by crediting the
Investor’s account with DTC through its Deposit Withdrawal At Custodian (“DWAC”)
system and shall have issued the Warrants and Preferred Shares to the Investor;

(c)          The Common Stock shall be authorized for quotation on the Principal
Market, trading in the Common Stock shall not have been within the last 365 days
suspended by the SEC or the Principal Market and the Purchase Shares, the
Warrant Shares, the Conversion Shares and the Commitment Shares shall be
approved for listing upon the Principal Market;

(d)          The Investor shall have received the opinions of the Company's
legal counsel dated as of the Commencement Date substantially in the form of
Exhibit A attached hereto;

(e)          The representations and warranties of the Company shall be true and
correct in all material respects (except to the extent that any of such
representations and warranties is already qualified as to materiality in Section
4 above, in which case, such representations and warranties shall be true and
correct without further qualification) as of the date when made and as of the
Commencement Date as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied with the covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by the Company at or prior to the Commencement Date.  The Investor shall
have received a certificate, executed by the CEO, President or CFO of the
Company, dated as of the Commencement Date, to the foregoing effect in the form
attached hereto as Exhibit B;

 
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(f)           The Board of Directors of the Company shall have adopted
resolutions in the form attached hereto as Exhibit C which shall be in full
force and effect without any amendment or supplement thereto as of the
Commencement Date;

(g)           As of the Commencement Date, the Company shall have reserved out
of its authorized and unissued Common Stock, (A) solely for the purpose of
effecting purchases of Purchase Shares hereunder, 1,130,000 shares of Common
Stock, (B) as Warrant Shares 540,000 shares of Common Stock and (C) as
Conversion Shares 420,000 shares of Common Stock;

(h)           The Irrevocable Transfer Agent Instructions, in form acceptable to
the Investor shall have been delivered to and acknowledged in writing by the
Company and the Company's Transfer Agent;

(i)            The Company shall have delivered to the Investor a certificate
evidencing the incorporation and good standing of the Company in the State of
Florida issued by the Secretary of State of the State of Florida as of a date
within ten (10) Business Days prior to the Commencement Date;

(j)            The Company shall have delivered to the Investor a certified copy
of the Articles of Incorporation as certified by the Secretary of State of the
State of Florida within ten (10) Business Days prior to the Commencement Date
and that reflect the filing of the Certificate of Designation with the Secretary
of State of the State of Florida;

(k)           The Company shall have delivered to the Investor a secretary's
certificate executed by the Secretary of the Company, dated as of the
Commencement Date, in the form attached hereto as Exhibit D;

(l)            The Registration Statement shall continue to be effective and a
prospectus supplement shall have been filed with the SEC covering the sale by
the Company to the Investor of all of the Purchase Shares, Conversion Shares,
and Commitment Shares and no stop order with respect to the Registration
Statement shall be pending or threatened by the SEC.  The Company shall have
prepared and delivered to the Investor a final and complete form of prospectus
supplement, dated and current as of the Commencement Date, to be used by the
Company in connection with any sales of any Purchase Shares, Conversion Shares
or Commitment Shares to the Investor, and to be filed by the Company. The
Company shall have made all filings under all applicable federal and state
securities laws necessary to consummate the issuance of the Commitment Shares,
Purchase Shares, the Warrants, the Warrant Shares, the Preferred Shares and the
Conversion Shares pursuant to this Agreement in compliance with such laws;

(m)          No Event of Default as defined in Section 10 has occurred, or any
event which, after notice and/or lapse of time, would become an Event of Default
has occurred;

(n)           On or prior to the Commencement Date, the Company shall take all
necessary action, if any, and such actions as reasonably requested by the
Investor, in order to render inapplicable any control share acquisition,
business combination, shareholder rights plan or poison pill (including any
distribution under a rights agreement) or other similar anti-takeover provision
under the Articles of Incorporation or the laws of the state of its
incorporation which is or could become applicable to the Investor as a result of
the transactions contemplated by this Agreement, including, without limitation,
the Company's issuance of the Securities and the Commitment Shares and the
Investor's ownership of the Securities and the Commitment Shares; and

(o)           The Company shall have provided the Investor with the information
requested by the Investor in connection with its due diligence requests made
prior to, or in connection with, the Commencement, in accordance with the terms
of Section 5(f) hereof.

 
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9.
INDEMNIFICATION.

In consideration of the Investor's execution and delivery of the Transaction
Documents and acquiring the Securities hereunder and in addition to all of the
Company's other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless the Investor and all of its
affiliates, shareholders, officers, directors, employees and direct or indirect
investors and any of the foregoing person's agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the “Indemnified Liabilities”), incurred by
any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby, or
(c) any cause of action, suit or claim brought or made against such Indemnitee
and arising out of or resulting from the execution, delivery, performance or
enforcement of the Transaction Documents or any other certificate, instrument
or  document contemplated hereby or thereby, other than with respect to
Indemnified Liabilities which directly and primarily result from the gross
negligence or willful misconduct of the Indemnitee.  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.  Payment under this indemnification shall be made within thirty (30) days
from the date Investor makes written request for it. A certificate containing
reasonable detail as to the amount of such indemnification submitted to the
Company by Investor shall be conclusive evidence, absent manifest error, of the
amount due from the Company to Investor.  The Company shall have no liability
for any special, consequential, punitive, treble or similar Indemnifiable
Damages.

 
10. 
EVENTS OF DEFAULT.

An “Event of Default” shall be deemed to have occurred at any time as any of the
following events occurs:

(a)          the effectiveness of a registration statement registering the
Purchase Shares, Conversion Shares or Commitment Shares lapses for any reason
(including, without limitation, the issuance of a stop order) or is unavailable
to the Investor for sale of any or all of the Purchase Shares, Conversion Shares
or Commitment Shares, and such lapse or unavailability continues for a period of
twenty (20) consecutive Business Days or for more than an aggregate of forty
(40) Business Days in any 365-day period;

(b)          the suspension from trading or failure of the Common Stock to be
listed on the Principal Market for a period of two (2) consecutive Business
Days;

(c)          the delisting of the Company’s Common Stock from the Principal
Market, provided, however, that the Common Stock is not immediately thereafter
trading on the New York Stock Exchange, the Nasdaq Global Market, the Nasdaq
Global Select Market, the OTC Bulletin Board, or NYSE Amex;

(d)           the failure for any reason by the Transfer Agent to issue Purchase
Shares to the Investor within five (5) Business Days after the applicable
Purchase Date which the Investor is entitled to receive;

 
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(e)           the Company breaches any representation, warranty, covenant or
other term or condition under any Transaction Document if such breach would have
a Material Adverse Effect and except, in the case of a breach of a covenant
which is reasonably curable, only if such breach continues for a period of at
least five (5) Business Days;

(f)            if any Person commences a proceeding against the Company pursuant
to or within the meaning of any Bankruptcy Law;

(g)           if the Company pursuant to or within the meaning of any Bankruptcy
Law; (A) commences a voluntary case, (B) consents to the entry of an order for
relief against it in an involuntary case, (C) consents to the appointment of a
Custodian of it or for all or substantially all of its property, (D) makes a
general assignment for the benefit of its creditors or is generally unable to
pay its debts as the same become due;

(h)           a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that (A) is for relief against the Company in an involuntary
case, (B) appoints a Custodian of the Company or for all or substantially all of
its property, or (C) orders the liquidation of the Company or any Subsidiary;

(i)            If at any time the Company is not eligible to transfer its Common
Stock electronically via the DTC FAST System as well as the continued lack of
such eligibility for three (3) Business Days;

(j)            a Material Adverse Effect occurs in the Company; or

(k)           if at any time after the Commencement Date, there are insufficient
shares of Common Stock, either pursuant to the Company’s charter documents or
the regulations of the Principal Market, to effect the issuance of the
Conversion Shares or the Warrant Shares.

In addition to any other rights and remedies under applicable law and this
Agreement, including the Investor termination rights under Section 11 hereof, so
long as an Event of Default has occurred and is continuing, or if any event
which, after notice and/or lapse of time, would become an Event of Default, has
occurred and is continuing, or so long as the Purchase Price is below the Floor
Price, the Investor shall not be permitted or obligated to purchase any shares
of Common Stock under this Agreement.  If pursuant to or within the meaning of
any Bankruptcy Law, the Company commences a voluntary case or any Person
commences a proceeding against the Company, a Custodian is appointed for the
Company or for all or substantially all of its property, or the Company makes a
general assignment for the benefit of its creditors, (any of which would be an
Event of Default as described in Sections 10(f), 10(g) and 10(h) hereof) this
Agreement shall automatically terminate without any liability or payment to the
Company without further action or notice by any Person.  No such termination of
this Agreement under Section 11(a) or 11(d) shall affect the Company's or the
Investor's obligations under this Agreement with respect to pending purchases
and the Company and the Investor shall complete their respective obligations
with respect to any pending purchases under this Agreement.

 
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11. 
TERMINATION

This Agreement may be terminated only as follows:

(a)          By the Investor any time an Event of Default exists, and continues
to exist after any notice or cure period provided, without any liability or
payment to the Company.  However, if pursuant to or within the meaning of any
Bankruptcy Law, the Company commences a voluntary case or any Person commences a
Proceeding against the Company a Custodian is appointed for the Company or for
all or substantially all of its property, or the Company makes a general
assignment for the benefit of its creditors, (any of which would be an Event of
Default as described in Sections 10(f), 10(g) and 10(h) hereof) this Agreement
shall automatically terminate without any liability or payment to the Company
without further action or notice by any Person.  No such termination of this
Agreement under this Section 11(a) shall affect the Company's or the Investor's
obligations under this Agreement with respect to pending purchases and the
Company and the Investor shall complete their respective obligations with
respect to any pending purchases under this Agreement.

(b)          In the event that the Commencement shall not have occurred, the
Company shall have the option to terminate this Agreement for any reason or for
no reason without any liability whatsoever of any party to any other party under
this Agreement (provided that the Company has paid Investor all amounts owed
under Section 5(e) of this Agreement).

(c)          In the event that the Commencement shall not have occurred on or
before September 30, 2010, due to the failure to satisfy the conditions set
forth in Sections 7 and 8 above with respect to the Commencement, the
non-breaching party shall have the option to terminate this Agreement at the
close of business on such date or thereafter without liability of any party to
any other party.

(d)          At any time one (1) year after the Commencement Date, the Company
shall have the option to terminate this Agreement for any reason or for no
reason by delivering notice (a “Company Termination Notice”) to the Investor
electing to terminate this Agreement without any liability whatsoever of any
party to any other party under this Agreement.  The Company Termination Notice
shall not be effective until ten (10) Business Days after it has been received
by the Investor. No such termination of this Agreement under this Section 11(d)
shall affect the Company's or the Investor's obligations under this Agreement
with respect to pending purchases and the Company and the Investor shall
complete their respective obligations with respect to any pending purchases
under this Agreement.

(e)          This Agreement shall automatically terminate on the date that the
Company sells and the Investor purchases the full Available Amount as provided
herein, without any action or notice on the part of any party and without any
liability whatsoever of any party to any other party under this Agreement.

(f)           If by the Maturity Date for any reason or for no reason the full
Available Amount under this Agreement has not been purchased as provided for in
Section 2 of this Agreement, this Agreement shall automatically terminate on the
Maturity Date, without any action or notice on the part of any party and without
any liability whatsoever of any party to any other party under this Agreement.

(g)          By the Company at any time if Investor has failed to perform its
purchase obligations hereunder by failing to purchase the Purchase Shares in
accordance with the terms hereof.

Except as set forth in Sections 11(a) (in respect of an Event of Default under
Sections 10(f), 10(g) and 10(h)) and 11(f), any termination of this Agreement
pursuant to this Section 11 shall be effected by written notice from the Company
to the Investor, or the Investor to the Company, as the case may be, setting
forth the basis for the termination hereof.  The representations and warranties
and covenants of the Company and the Investor contained in Sections 3, 4, 5, and
6 hereof, the indemnification provisions set forth in Section 9 hereof and the
agreements and covenants set forth in Sections 10 and 11, shall survive the
Commencement and any termination of this Agreement.  No termination of this
Agreement shall affect the Company's or the Investor's rights or obligations
under (i) the Registration Rights Agreement which shall survive any such
termination or (ii) under this Agreement with respect to pending purchases and
the Company and the Investor shall complete their respective obligations with
respect to any pending purchases under this Agreement.

 
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12. 
MISCELLANEOUS.

(a)          Governing Law; Jurisdiction; Jury Trial.  The corporate laws of the
State of Florida shall govern all issues concerning the relative rights of the
Company and its shareholders. All other questions concerning the construction,
validity, enforcement and interpretation of this Agreement and the other
Transaction Documents shall be governed by the internal laws of the State of
Illinois, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Illinois or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of Illinois.  Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of Chicago, for
the adjudication of any dispute hereunder or under the other Transaction
Documents or in connection herewith or therewith, or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper.  Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT
OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

(b)          Counterparts.  This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature or
signature delivered by e-mail in a “.pdf” format data file shall be considered
due execution and shall be binding upon the signatory thereto with the same
force and effect as if the signature were an original, not a facsimile signature
or a signature in a “.pdf” format data file.

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

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

(e)          Entire Agreement.  This Agreement supersedes all other prior oral
or written agreements between the Investor, the Company, their affiliates and
persons acting on their behalf with respect to the matters discussed herein, and
this Agreement, the other Transaction Documents and the instruments referenced
herein contain the entire understanding of the parties with respect to the
matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor the Investor makes any representation,
warranty, covenant or undertaking with respect to such matters.  The Company
acknowledges and agrees that is has not relied on, in any manner whatsoever, any
representations or statements, written or oral, other than as expressly set
forth in this Agreement.

 
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(f)           Notices.  Any notices, consents or other communications required
or permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered: (i) upon receipt when delivered
personally; (ii) upon receipt when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one (1) Business Day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such
communications shall be:

If to the Company:

Onstream Media Corporation
1291 SW 29th Avenue
Pompano Beach, FL 33069
Telephone:        954-917-6655
Facsimile:          954-917-6660
Attention:         Chief Executive Officer

With a copy to:

Roetzel & Andress, LPA
350 East Las Olas Boulevard, Suite 1150
Fort Lauderdale, FL 33301
Telephone:       954-462-4150
Facsimile:         954-462-4260
Attention:        Joel D. Mayersohn, Esq.

If to the Investor:

Lincoln Park Capital Fund, LLC
440 North Wells, Suite 620
Chicago, IL 60654
Telephone:        312-822-9300
Facsimile:          312-822-9301
Attention:          Josh Scheinfeld/Jonathan Cope

With a copy to:

K&L Gates LLP
200 South Biscayne Blvd.
Miami, FL 33131
Telephone: 305-539-3300
Facsimile:  305-358-7095
Attention: Clayton Parker, Esq.

If to the Transfer Agent:

Interwest Transfer Co.
1981 E 4800 South, Ste. 100
Salt Lake City, UT 84117 Telephone:         801-272-9294
Facsimile:          801-277-3147
Attention:         Melinda Orth

 
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or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party three (3) Business Days prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of such
notice, consent or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, and
recipient facsimile number or (C) provided by a nationally recognized overnight
delivery service, shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.

(g)           Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
assigns.  The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Investor,
including by merger or consolidation.  The Investor may not assign its rights or
obligations under this Agreement.

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

(i)            Publicity.  The Investor shall have the right to approve before
issuance any press release, SEC filing or any other public disclosure made by or
on behalf of the Company whatsoever with respect to, in any manner, the
Investor, its purchases hereunder or any aspect of this Agreement or the
transactions contemplated hereby; provided, however, that the Company shall be
entitled, without the prior approval of the Investor, to make any press release
or other public disclosure (including any filings with the SEC) with respect to
such transactions as is required by applicable law and regulations so long as
the Company and its counsel consult with the Investor in connection with any
such press release or other public disclosure at least two (2) Business Days
prior to its release.  The Investor must be provided with a copy thereof at
least two (2) Business Days prior to any release or use by the Company thereof.

(j)            Further Assurances.  Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the 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)           No Financial Advisor, Placement Agent, Broker or Finder.    The
Company represents and warrants to the Investor that it has not engaged any
financial advisor, placement agent, broker or finder in connection with the
transactions contemplated hereby.  The Investor represents and warrants to the
Company that it has not engaged any financial advisor, placement agent, broker
or finder in connection with the transactions contemplated hereby.  The Company
shall be responsible for the payment of any fees or commissions, if any, of any
financial advisor, placement agent, broker or finder relating to or arising out
of the transactions contemplated hereby.  The Company shall pay, and hold the
Investor harmless against, any liability, loss or expense (including, without
limitation, attorneys' fees and out of pocket expenses) arising in connection
with any such claim.

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

 
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(m)          Remedies, Other Obligations, Breaches and Injunctive Relief.  The
Investor’s remedies provided in this Agreement shall be cumulative and in
addition to all other remedies available to the Investor under this Agreement,
at law or in equity (including a decree of specific performance and/or other
injunctive relief), no remedy of the Investor contained herein shall be deemed a
waiver of compliance with the provisions giving rise to such remedy and nothing
herein shall limit the Investor's right to pursue actual damages for any failure
by the Company to comply with the terms of this Agreement.  The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Investor and that the remedy at law for any such breach
may be inadequate.  The Company therefore agrees that, in the event of any such
breach or threatened breach, the Investor shall be entitled, in addition to all
other available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being
required.

(n)           Enforcement Costs.  If: (i) this Agreement is placed by the
Investor or the Company in the hands of an attorney for enforcement or is
enforced by the Investor or the Company through any legal proceeding; or (ii) an
attorney is retained to represent the Investor or the Company in any bankruptcy,
reorganization, receivership or other proceedings affecting creditors' rights
and involving a claim under this Agreement; or (iii) an attorney is retained to
represent the Investor or the Company in any other proceedings whatsoever in
connection with this Agreement, then the non-prevailing party shall pay to the
prevailing party, as incurred by the prevailing party, all reasonable costs and
expenses including attorneys' fees incurred in connection therewith, in addition
to all other amounts due hereunder.

(o)           Failure or Indulgence Not Waiver.  No failure or delay in the
exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege.

*     *     *     *     *

 
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IN WITNESS WHEREOF, the Investor and the Company have caused this Purchase
Agreement to be duly executed as of the date first written above.

THE COMPANY:
 
ONSTREAM MEDIA CORPORATION
   
By:
/s/ Randy S. Selman
Name: Randy S. Selman
Title:  CEO
 
INVESTOR:
 
LINCOLN PARK CAPITAL FUND, LLC
BY: LINCOLN PARK CAPITAL, LLC
BY: ROCKLEDGE CAPITAL CORPORATION
   
By:
/s/ Josh Scheinfeld
Name: Josh Scheinfeld
Title: President

 
 
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SCHEDULES
   
Schedule 4(a)
Subsidiaries
Schedule 4(c)
Capitalization
Schedule 4(e)
Conflicts
Schedule 4(f)
Exchange Act Filings
Schedule 4(g)
Material Changes
Schedule 4(h)
Litigation
Schedule 4(k)
Intellectual Property
Schedule 4(m)
Liens
   
EXHIBITS
   
Exhibit A
Form of Company Counsel Opinion
Exhibit B
Form of Officer’s Certificate
Exhibit C
Form of Resolutions of Board of Directors of the Company
Exhibit D
Form of Secretary’s Certificate
Exhibit E
Form of Certificate of Designation
Exhibit F
Form of Warrant

The above Schedules and Exhibits have been redacted from this Exhibit 10.1.

 
 

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