PLACEMENT AGENCY AGREEMENT

December 1, 2010

Rodman & Renshaw, LLC
1251 Avenue of the Americas
20th Floor
New York, New York 10020

Gentlemen:

22nd Century Limited, LLC, a Delaware limited liability company (the “Company”),
hereby confirms its agreement with Rodman & Renshaw, LLC, a Delaware limited
liability company (the “Placement Agent”), as set forth herein (the
“Agreement”).  Unless the context otherwise requires, as used herein, all
references to “the Company” shall be deemed to refer to 22nd Century Limited,
LLC, a Delaware limited liability company, and each of its subsidiaries,
predecessors and successors, if any after giving retroactive effect to the
Offering and the Merger as such terms are defined below.

1.           Offering.

(a)           The Company will offer (the “Offering”) for sale through the
Placement Agent, as the exclusive agent for the Company, and its respective
selected dealers, a minimum of 4,000,000 Units (the “Minimum Units”), for
minimum gross proceeds of $4,000,000 (the “Minimum Amount”), and maximum of
8,000,000 Units (the “Maximum Units”), for maximum gross proceeds of $8,000,000
(the “Maximum Amount”).  In the event the Offering is over-subscribed, the
Company and the Placement Agent may, in their discretion, sell up to an
additional 1,000,000 Units (the “Over-allotment Units”) for gross proceeds of up
to $1,000,000 to cover over-allotments (the “Over-allotment”).  Each Unit shall
consist of (i) one membership unit in the Company (each a “Membership Unit” and
collectively the “Membership Units”) and (ii) a warrant, exercisable at any time
during the five-year period beginning on the date on which the Units are sold
(the “Closing Date”) to purchase one-half of a Membership Unit for $0.75 (the
“Investor Warrants”) based on a price of $1.50 for a full Membership
Unit.  Subscriptions for Units will be accepted by the Company at a price of
$1.00 per Unit (the “Purchase Price”), with a minimum investment of $100,000
(100,000 Units): provided, however, that subscriptions in lesser amounts may be
accepted in the Company’s and the Placement Agent’s discretion.
 
(b)          Placement of the Units by the Placement Agent will be made on a
reasonable efforts, “all-or-none” basis with respect to the Minimum Amount and
on a reasonable basis with respect to the Maximum Amount.  The Units will be
offered to potential subscribers, which may include related parties of the
Placement Agent or the Company, commencing on November 1, 2010, the date of the
preliminary Memorandum, and ending on January 19, 2011 unless extended by the
Company and the Placement Agent within their mutual discretion or terminated
earlier as provided herein (the “Offering Period”).  The date on which the
Offering shall terminate shall be referred to as the “Termination Date.”  The
closing of the Offering may be held up to ten days after the Termination Date.
 
 
 

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(c)           The Placement Agent shall only tender to, and the Company shall
only accept subscriptions from or sell Units to, persons or entities that either
(i) qualify as (or are reasonably believed to be) “accredited investors,” as
such term is defined in Rule 501 of Regulation D (“Regulation D”) promulgated
under Section 4(2) of the Securities Act of 1933, as amended (the “Act”) or (ii)
are not (or are reasonably believed not to be) “U.S. Persons” as such term is
defined in Regulation S (“Regulation S”) promulgated under the Act.
 
(d)           The offering of the Units will be made by the Placement Agent on
behalf of the Company solely pursuant to the Memorandum, which at all times will
be in form and substance acceptable to the Placement Agent and its counsel and
contain such legends and other information as the Placement Agent and its
counsel may, from time to time, deem necessary and desirable to be set forth
therein.  “Memorandum” as used in this Agreement means the Company’s
Confidential Private Placement Memorandum, dated November 1, 2010, inclusive of
all exhibits, and any and all amendments, supplements and appendices thereto,
including the final Memorandum, dated December 16, 2010, as amended and other
Company-approved documents that the Placement Agent may use on the Company’s
behalf to sell the Units.  Unless otherwise defined, each term used in this
Agreement will have the same meaning as shall be set forth in the Memorandum.
 
2.           Representations and Warranties of the Company.  The Company hereby
represents and warrants to the Placement Agent that, except as otherwise set
forth in the disclosure schedule provided by the Company to the Placement Agent
on the date hereof and as updated, if necessary, by the Company immediately
prior to the closing of the transactions contemplated hereby, and collectively
attached hereto as Exhibit A (the “Company Disclosure Schedule”), and assuming
that the conditions described in Section 6 hereof are satisfied, each of the
representations and warranties contained in this Section 2 is true in all
respects as of the date hereof and will be true in all respects as of the
Closing Date.  The Company Disclosure Schedule shall be arranged in paragraphs
corresponding to the numbered and lettered clauses contained in this Section 2,
and the disclosure of information on any paragraph of the Company Disclosure
Schedule shall not qualify for disclosure on any other paragraph of the Company
Disclosure Schedule under this Section 2.  For purposes of this Section 2, the
phrase “to the knowledge of the Company” or any phrase of similar import shall
be deemed to refer to the actual knowledge Joseph Pandolfino, C. Anthony Rider,
Michael R. Moynihan or Henry Sicignano III.
 
(a)           The Memorandum has been diligently prepared by the Company, at its
sole cost, in conformity with all applicable laws, and is in compliance with
Regulation D and the requirements of all other rules and regulations
(collectively, the “Regulations”) of the Securities and Exchange Commission (the
“SEC”) relating to offerings of the type contemplated by the Offering, and the
applicable securities laws and the rules and regulations of those jurisdictions
wherein the Units will be and have been offered and sold.  The Units will be
offered and sold pursuant to the registration exemption provided by Section 4(2)
and/or Section 4(6) of the Act or pursuant to Regulation D or Regulation S as a
transaction not involving a public offering and the requirements of any other
applicable state securities laws and the respective rules and regulations
thereunder in those United States jurisdictions in which the Placement Agent
notifies the Company that the Units are being offered for sale.  The Memorandum
describes all material aspects, including attendant risks, of an investment in
the Company.  The Company has not taken nor will it take any action that
conflicts with the conditions and requirements of, or that would make
unavailable with respect to the Offering, the exemption(s) from registration
available pursuant to Regulation D or Regulation S or Section 4(2) and/or
Section 4(6) of the Act and knows of no reason why any such exemption would be
otherwise unavailable to it.  Neither the Company nor its affiliates has been
subject to any order, judgment or decree of any court or governmental authority
of competent jurisdiction temporarily, preliminarily or permanently enjoining
such person for failing to comply with Section 503 of Regulation D.
 
 
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(b)           The Memorandum does not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.  None of the statements, documents,
certificates or other items prepared or supplied by the Company with respect to
the transactions contemplated hereby contains an untrue statement of a material
fact or omits a material fact necessary to make the statements contained therein
not misleading.  There is no fact that the Company has not disclosed in the
Memorandum and of which the Company is aware that materially and adversely
affects or could reasonably be expected to materially and adversely affect the
business prospects, financial condition, operations, or assets of the Company.
 
(c)           The Company is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware.  The
Company has no subsidiaries and does not have an equity interest in any other
firm, partnership, association or other entity except as otherwise described in
the Memorandum.  The Company is duly qualified to transact business as a foreign
corporation and is in good standing under the laws of each jurisdiction where
the location of its properties or the conduct of its business makes such
qualification necessary, except where the failure to be so qualified would not
have a material adverse effect on the business, condition (financial or
otherwise), operations, prospects or property of the Company (“Material Adverse
Effect”).
 
(d)           The Company has all requisite power and authority (corporate and
other) to conduct its business as presently conducted and as proposed to be
conducted (as described in the Memorandum), to enter into and perform its
obligations under this Agreement and, immediately prior to the closing of this
Offering, the Agreement and Plan of Merger and Reorganization by and among 22nd
Century Group, Inc. (“Pubco”), 22nd Century Acquisition Subsidiary, LLC (“Merger
Sub”) and the Company, substantially in the form and substance of the draft
dated December 17, 2010 (the “Merger Agreement”), that will effect the Merger
and, under the Securities Purchase Agreement annexed to the Memorandum as
Exhibit A (the “Securities Purchase Agreement”), the Investor Warrants, the
Broker’s Warrants described in Section 3(e) below and in the Memorandum (the
“Broker’s Warrants”), and, collectively with this Agreement, the Merger
Agreement, the Securities Purchase Agreement and the Investor Warrants, the
“Transaction Documents”) and to issue, sell and deliver (i) the Units, including
the Membership Units and the Investor Warrants underlying the Units, (ii) the
Broker’s Warrants and (iii) Membership Units underlying the Investor Warrants
and the Broker’s Warrants (collectively the “Securities”).  The execution and
delivery of each of the Transaction Documents has been duly authorized by the
necessary corporate action.  This Agreement has been duly executed and delivered
and constitutes, and each of the other Transaction Documents, upon due execution
and delivery, will constitute, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms (i)
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting creditors’ rights generally, including the effect of
statutory and other laws regarding fraudulent conveyances and preferential
transfers, and except that no representation is made herein regarding the
enforceability of the Company’s obligations to provide indemnification and
contribution remedies under the securities laws and (ii) subject to the
limitations imposed by general equitable principles (regardless of whether such
enforceability is considered in a proceeding at law or in equity).
 
 
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(e)           None of the execution and delivery of, or performance by the
Company under, this Agreement or any of the other Transaction Documents or the
consummation of the transactions herein or therein contemplated conflicts with
or violates, or will result in the creation or imposition of any lien, charge or
other encumbrance upon any of the assets of the Company under, any agreement or
other instrument to which the Company is a party or by which the Company or its
assets may be bound, any term of the Company’s certificate of formation or its
limited liability company operating agreement, or any license, permit, judgment,
decree, order, statute, rule or regulation applicable to the Company or any of
its assets.
 
(f)           The Company’s total capitalization, both immediately before and
after the closing of the Offering, is accurately described in the
Memorandum.  Except as set forth in the Memorandum, all outstanding Membership
Units are duly authorized and validly issued and outstanding.  Except as set
forth in the Memorandum there are and, as of the Closing Date, will be no:  (i)
outstanding options, subscription agreements, warrants or other rights
permitting or requiring the Company or others to purchase or acquire any
Membership Units, or other equity securities of the Company, or to pay any
dividend or make any other distribution in respect thereof; (ii) securities
issued or outstanding that are convertible into or exchangeable for any of the
foregoing and there are no contracts, commitments or understandings, whether or
not in writing, to issue or grant any such option, warrant, right or convertible
or exchangeable security; (iii) Membership Units or other securities of the
Company will be reserved for issuance for any purpose; (iv)  voting trusts or
other contracts, commitments, understandings, arrangements or restrictions of
any kind with respect to the ownership, voting or transfer of Membership Units
or other securities of the Company, including without limitation, any preemptive
rights, rights of first refusal, proxies or similar rights; and (v) person
holding a right to require the Company to register any securities of the Company
under the Act or to participate in any such registration.  As of the Closing
Date, the issued and outstanding Membership Units of the Company will conform to
all statements in relation thereto contained in the Memorandum and the
Memorandum describes all material terms and conditions thereof.  All issuances
by the Company of its securities were at the time of their issuance exempt from
registration under the Act and any applicable state securities laws.
 
 
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(g)           Immediately after the closing of the Offering, the Company will
merge with Merger Sub a newly-formed Delaware limited liability company that is
a wholly-owned subsidiary of Pubco, a Nevada corporation whose stock is quoted
on the OTC Bulletin Board (the “Merger”).  Based solely on the representations
and warranties of Pubco contained in the Merger Agreement, together with the
Parent Disclosure Schedule (as defined in such Merger Agreement) thereto (the
“Pubco Representations”) and its review of the Pubco Representations, the
Company does not have knowledge of any facts or circumstances that would lead
the Company to believe that immediately prior to the effectiveness of the
Merger, Pubco will have any assets or any liabilities or will be engaged in any
trade or business.  In the Merger (i) each holder of a Membership Unit,
including purchasers of Units in the Offering, will receive one share of Pubco’s
common stock, par value $0.0001 per share (the “Common Stock”) in exchange for
each Membership Unit they own at the time of the Merger; (ii) each purchaser of
Units in the Offering will receive a warrant to purchase such number of shares
of Common Stock equal to the number of Membership Units subject to the Investor
Warrant held by such purchaser, exercisable at any time during the five year
period beginning on the closing date of the Merger, at an exercise price of
$1.50 per full share of Common Stock, in exchange for each Investor Warrant
owned at the time of the Merger; (iii) each holder of the Century Warrants (as
defined in the Memorandum) will receive a warrant to purchase such number of
shares of Common Stock equal to the number of Membership Units subject to the
Century Warrant so held, exercisable at any time during the five year period
beginning on the closing date of the Merger, at a price of $3.00 per full share
of Common Stock, in exchange for each Century Warrant owned at the time of the
Merger; and (iv) the holder of the Broker’s Warrants will receive a warrant to
purchase such number of shares of Common Stock equal to the number of Membership
Units subject to the Broker’s Warrant so held, exercisable at any time during
the five year period beginning on the closing date of the Merger, at an exercise
price of $1.50 per full share of Common Stock, in exchange for the Broker’s
Warrant owned at the time of the Merger.
 
(h)           The Merger Agreement provides that Pubco will assume all of the
Company’s obligations at the time of the Merger, including any and all
obligations arising under the Transaction Documents.
 
(i)            Based solely upon the Pubco Representations and its review of the
Pubco Representations, the Company does not have knowledge of any facts or
circumstances that would lead the Company to believe that: (i) Pubco’s
capitalization immediately following the Merger will not be as set forth in the
Memorandum; (ii) the Common Stock does not conform in all material respects to
the description thereof contained in the Memorandum; (iii) any of the issued and
outstanding shares of Common Stock were not duly authorized and validly issued,
are not fully paid and nonassessable and were not issued in compliance with
federal and state securities laws; (iv) any of the outstanding shares of Common
Stock were issued in violation of any preemptive rights, rights of first refusal
or other similar rights to subscribe for or purchase securities of the Pubco;
(v) except as described in the Memorandum, there are any authorized or
outstanding options, warrants, preemptive rights, rights of first refusal or
other rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of Pubco; and (vi) the
description of Pubco’s stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, are other than
as set forth or incorporated by reference in the Memorandum.
 
(j)            (i)           The Units (including the Over-allotment Units) and
the Membership Units included in the Units have been duly authorized for
issuance and sale pursuant and when issued will be validly issued and
outstanding and the holders of such Membership Units will have the same rights,
benefits, duties and obligations as the other members of the Company.
 
 
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(ii)          The Investor Warrants and the Broker’s Warrants have been duly and
validly authorized by all required corporate actions and will, when issued and
delivered by the Company be validly executed and delivered by, and will be valid
and binding agreements of, the Company, enforceable in accordance with their
respective terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles. The Membership Units issuable upon the exercise of the
Investor Warrants and the Broker’s Warrants, when issued and delivered in
accordance with the terms thereof, will be duly authorized and validly issued
and outstanding and the holders of such Membership Units will have the same
rights, benefits, duties and obligations as the other members of the Company.
 
(iii)         Based solely on the Pubco Representations and its review of the
Pubco Representations, the Company does not have knowledge of any facts or
circumstances that would lead the Company to believe that: (A) the shares of
Common Stock to be issued in the Merger will not be duly and validly authorized
by all required corporate actions and will not, when issued and delivered by
Pubco pursuant to the Merger Agreement, be fully paid and nonassessable; (B) any
of the warrants issued in the Merger, as well as the Advisor Warrants (as
defined and described in the Memorandum) will not be duly and validly authorized
by all required corporate actions and will not, when issued and delivered by the
Company be validly executed and delivered by, and will not be valid and binding
agreements of, Pubco, enforceable in accordance with their respective terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles; and (C) the
Common Stock issuable on exercise of the warrants to be issued by Pubco in the
Merger as well as the Advisor Warrants will not have been duly authorized and
reserved for issuance and sale pursuant to their terms and, when issued and
delivered by Pubco pursuant to such warrants, will not be validly issued, fully
paid and nonassessable.
 
(k)           No consent, authorization or filing of or with any court or
governmental authority is required in connection with the issuance of any of the
Securities (as defined in the Memorandum) or the consummation of the
transactions contemplated herein or in the other Transaction Documents, except
for required filings with the SEC and applicable “Blue Sky” or state securities
commissions relating specifically to the Offering (all of which will be duly
made on a timely basis).
 
(l)           The financial statements, together with the related notes thereto,
of the Company included in the Memorandum are true and complete and present
fairly, in all material respects, the financial position of the Company as of
the date specified and the results of its operations and changes in financial
position for the period covered thereby.  Such financial statements and related
notes were prepared in accordance with U.S. generally accepted accounting
principles (“GAAP”) throughout the periods indicated except as may be disclosed
in the notes thereto, and except that the unaudited financial statements omit
full notes and normal year-end adjustments.  Except as set forth in such
financial statements or in the Memorandum, the Company (i) has no material
liabilities of any kind, whether accrued, absolute, contingent or otherwise and
(ii) has not entered into any material transactions or commitments.  The other
financial and statistical information with respect to the Company included in
the Memorandum are true, correct and accurate and present fairly the information
shown therein on a basis consistent with the financial statements of the Company
included in the Memorandum.  Except as set forth in the Memorandum, the Company
does not know of any facts, circumstances or conditions (or any state of facts,
circumstances or conditions which management of the Company has concluded could
give rise thereto) that could reasonably be expected to have a Materially
Adverse Effect.
 
 
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(m)         The conduct of business by the Company as presently and proposed to
be conducted is not subject to continuing oversight, supervision, regulation or
examination by any governmental official or body of the United States or any
other jurisdiction wherein the Company conducts or proposes to conduct such
business, except as described in the Memorandum and except such regulation as is
applicable to commercial enterprises generally.  The Company has obtained all
requisite licenses, permits and other governmental authorization necessary to
conduct its business as presently, and as proposed to be, conducted.
 
(n)          Except as set forth in the Memorandum, no default by the Company
or, to the knowledge of the Company, any other party exists in the due
performance under any material agreement to which the Company is a party or to
which any of its assets is subject (collectively, the “Company
Agreements”).  The Company Agreements disclosed in the Memorandum are the only
material agreements to which the Company is bound or by which its assets are
subject and that are required to be disclosed in the Memorandum, are accurately
and fairly described in the Memorandum and are in full force and effect in
accordance with their respective terms.
 
(o)          There are no actions, proceedings, claims or investigations, before
or by any court or governmental authority (or any state of facts which
management of the Company has concluded could reasonably be expected to give
rise thereto), pending or, to the knowledge of the Company, threatened, against
the Company, or involving its assets or, to the knowledge of the Company,
involving any of its officers or directors which, if determined adversely to the
Company or such officer or director, could have a Material Adverse Effect or
materially and adversely affect the transactions contemplated by this Agreement
or the other Transaction Documents or the enforceability thereof.
 
(p)          The Company is not in violation of: (i) its certificate of
formation or limited liability company operating agreement; (ii) except as
disclosed in the Memorandum, any indenture, mortgage, deed of trust, note or
other agreement or instrument to which the Company is a party or by which it is
or may be bound or to which any of its assets may be subject; (iii) any statute,
rule or regulation currently applicable to the Company; or (iv) any judgment,
decree or order applicable to the Company, which violation or violations
individually, or in the aggregate, would result in a Material Adverse Effect.
 
(q)          The Company does not own any real property in fee simple, and the
Company has good and marketable title to all property (personal and tangible)
that it owns, free and clear of all security interests, liens and encumbrances.
 
 
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(r)           The Company either owns free and clear of all security interests,
liens and encumbrances all right, title and interest in, or possesses adequate
and enforceable rights to use, all patents, patent applications, trademarks,
trade names, service marks, copyrights, rights, licenses, franchises, trade
secrets, confidential information, processes, formulations, software and source
and object codes necessary for the conduct of its business (collectively, the
“Intangibles”).  To the Company’s knowledge, the Company has not infringed and
it is not infringing upon the rights of others with respect to the Intangibles
and the Company has not received notice that it has or may have infringed or is
infringing upon the rights of others with respect to the Intangibles, or any
notice of conflict with the asserted rights of others with respect to the
Intangibles.
 
(s)           The Company has operated its business diligently and only in the
ordinary course as theretofore conducted and since the date of the most recent
balance sheet included in the Memorandum and, except as disclosed in the
Memorandum, there has been no: (i) material adverse change in the business
condition (financial or otherwise) or prospects of the Company; (ii) transaction
by the Company otherwise than in the ordinary course of business; (iii) issuance
of any securities (debt or equity) or any rights to acquire any such securities;
(iv) damage, loss or destruction, whether or not covered by insurance, with
respect to any asset or property of the Company; or (v) agreement to permit any
of the foregoing.
 
(t)           The Company has filed, on a timely basis, each Federal, state,
local and foreign tax return which is required to be filed by it, or has
requested an extension therefor and has paid all taxes and all related
assessments, penalties and interest to the extent that the same have become due.
 
(u)          The Company is not obligated to pay, and has not obligated the
Placement Agent to pay, a finder’s or origination fee in connection with the
Offering and agrees to indemnify the Placement Agent from any such claim made by
any other person.  The Company has not offered for sale or solicited offers to
purchase the Units except for negotiations with the Placement Agent other than
with respect to the agreements that may be executed by and between the Placement
Agent and certain other registered broker-dealers introduced by the Company to
the Placement Agent.  Except as set forth in the Memorandum, no other person has
any right to participate in any offer, sale or distribution of the Company’s
securities to which the Placement Agent’s rights, described herein, shall apply.
 
(v)          The Company has and will maintain appropriate casualty and
liability insurance coverage, in scope and amounts reasonable and customary for
similar businesses.
 
3.           Placement Agent Appointment and Compensation.

(a)           The Company hereby appoints the Placement Agent as its exclusive
agent in connection with the Offering.  The Company acknowledges that the
Placement Agent may use selected dealers and sub-agents to fulfill its agency
hereunder provided that such dealers and sub-agents are compensated solely by
the Placement Agent.  The Company has not and will not make, or permit to be
made, any offers or sales of the Units other than through the Placement Agent
without the Placement Agent’s prior written consent.  The Placement Agent has no
obligation to purchase any of the Units.  The agency of the Placement Agent
hereunder shall continue until the earlier of the Termination Date or the
Closing Date.
 
 
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(b)          The Company will cause to be delivered to the Placement Agent
copies of the Memorandum and has consented, and hereby consents, to the use of
such copies for the purposes permitted by the Act and applicable securities
laws, and hereby authorizes the Placement Agent and its agents, employees and
selected dealers to use the Memorandum in connection with the sale of the Units
until the earlier of the Termination Date or the Closing Date, and no other
person or entity is or will be authorized to give any information or make any
representations other than those contained in the Memorandum or use any offering
materials other than those contained in the Memorandum in connection with the
sale of the Units.  The Company will provide at its own expense such quantities
of the Memorandum and other documents and instruments relating to the Offering
as the Placement Agent may reasonably request.
 
(c)          The Company will cooperate with the Placement Agent by making
available to its representatives such information as may be requested in making
a reasonable investigation of the Company and its affairs and shall provide
access to such employees as shall be reasonably requested.  Prior to the closing
of the Offering, if requested by the Placement Agent, the Company shall provide,
at its own expense, credit or similar reports on such key management persons as
the Placement Agent shall reasonably request.
 
(d)          At the closing of the Offering, the Company shall pay to the
Placement Agent a cash placement fee equal to eight percent (8%) of the
aggregate Purchase Price paid by each purchaser of Units in the Offering (the
“Placement Agent’s Fee”). The Placement Agent’s Fee will be deducted from the
gross proceeds of the Units sold at the closing.
 
(e)          As additional compensation, on the Closing Date the Company shall
sell to the Placement Agent or its designees, for nominal consideration,
warrants to purchase the number of Membership Units equal to eight percent (8%)
of the aggregate number of Membership Units included in the Units placed (the
“Broker’s Warrants”), at an exercise price of $1.50 per Membership Unit.  The
Broker’s Warrants shall be exercisable until the date five (5) years after the
Closing Date.  The holders of the Broker’s Warrants shall have “piggy-back”
registration rights.  The Broker’s Warrants shall provide for cashless
exercise.  In the Merger, the Broker’s Warrants will be exchanged for warrants
to purchase such number of shares of Common Stock equal to the number of
Membership Units subject to the Broker’s Warrants so held.  Other than that, the
terms of the warrants received in the Merger in exchange for the Broker’s
Warrants will be identical to the Broker’s Warrants.
 
(f)           The Company shall also pay the Placement Agent’s Fee to the
Placement Agent, and deliver warrants on a basis comparable to the delivery of
the Broker’s Warrants under this Agreement, with respect to, and based on, any
investment by an investor that invests in the Company at any time within two (2)
years from the later of the Termination Date and Closing Date (a “Post-Closing
Investor”).
 
 
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4.           Subscription and Closing Procedures.
 
(a)           Each prospective purchaser will be required to complete and
execute two (2) original omnibus signature pages for the Securities Purchase
Agreement, which will be forwarded or delivered to the Placement Agent at the
Placement Agent’s offices at the address set forth in Section 10 hereof,
together with executed copies of all other documents contemplated by the
Securities Purchase Agreement, any other documents reasonably requested by the
Company, and such prospective purchaser’s check, wire transfer or other good
funds in the full amount of the aggregate Purchase Price for the number of Units
desired to be purchased.
 
(b)           All funds for subscriptions received from the Offering will be
promptly forwarded by the Placement Agent or the Company, if received by it, to
and deposited into non-interest bearing escrow account (the “Escrow Account”)
established for such purpose with Bank of America (the “Escrow Agent”).  All
such funds for subscriptions will be held in the Escrow Account pursuant to the
terms of an escrow agreement among the Company, the Placement Agent and the
Escrow Agent, such agreement to be in form and substance satisfactory to the
Company and the Placement Agent.  The Company will pay all fees related to the
establishment and maintenance of the Escrow Account, regardless of whether a
closing occurs hereunder. Subject to the receipt of such subscriptions for the
Minimum Amount, the Company, or the Placement Agent on the Company’s behalf (any
such acceptance by the Placement Agent on the Company’s behalf to be subject to
such guidelines as shall be agreed upon by the Placement Agent and the Company)
will either accept or reject the Securities Purchase Agreement in a timely
fashion and at the closing of the Offering will countersign the Securities
Purchase Agreement and provide duplicate copies of such Agreements to the
Placement Agent for delivery to the purchasers.  The Company will give written
notice to the Placement Agent of its acceptance or rejection of each
subscription.  The Company, or the Placement Agent, on the Company’s behalf,
will promptly return to prospective purchasers of Units in this Offering
incomplete, improperly completed, improperly executed and rejected Securities
Purchase Agreements and give written notice thereof to the Placement Agent upon
such return.
 
(c)           If subscriptions for at least the Minimum Units have been accepted
prior to the Termination Date, the funds therefor have been collected by the
Escrow Agent and all of the conditions set forth elsewhere in this Agreement are
fulfilled, a closing shall occur within ten (10) days from the earlier of the
Termination Date or the sale of all Units offered.  Delivery of payment for the
accepted subscriptions from the funds held in the Escrow Account will be made by
wire transfer from the Escrow Agent to the Company at closing against delivery
by the Company of the Units, which wire transfer shall be net of amounts due to
the Placement Agent.  The Units and the Broker’s Warrants will be in such
authorized denominations and issued in such names as the Placement Agent may
request on or before the second full business day prior to the Closing Date.
 
(d)           If Securities Purchase Agreements for the Minimum Units have not
been received and accepted by the Company on or before the Termination Date for
any reason, the Offering will be terminated (the date of such termination being
referred to herein as the “Expiration Date”), no Units will be sold, and the
Escrow Agent will, at the request of the Placement Agent, cause all monies
received from prospective purchasers of Units in the Offering  to be promptly
returned to such subscribers without interest or offset.
 
 
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5.           Further Covenants.  The Company hereby covenants and agrees that:
 
(a)           Except with the prior written consent of the Placement Agent
(which consent shall not be unreasonably withheld), the Company shall not, at
any time prior to the Closing Date, take any action that would cause any of the
representations and warranties made by it in this Agreement not to be complete
and correct on and as of the Closing Date with the same force and effect as if
such representations and warranties had been made on and as of each such date.
 
(b)           If, at any time prior to the closing of this Offering, any event
shall occur that does or may materially affect the Company or as a result of
which it might become necessary to amend or supplement the Memorandum so that
the representations and warranties herein remain true, or in case it shall, in
the reasonable opinion of counsel to the Placement Agent, be necessary to amend
or supplement the Memorandum to comply with Regulation D or any other applicable
federal or state securities laws or regulations, the Company will promptly
notify the Placement Agent and shall, at its sole cost, prepare and furnish to
the Placement Agent copies of appropriate amendments and/or supplements in such
quantities as the Placement Agent may reasonably request.  The Company will not
at any time, whether before or after the closing of this Offering, prepare or
use any amendment or supplement to the Memorandum of which the Placement Agent
will not previously have been advised and furnished with a copy, or to which the
Placement Agent or its counsel will have reasonably objected in writing or
orally (confirmed in writing within 24 hours), or which is not in compliance in
all material respects with the Act, the Regulations and other applicable
securities laws.  As soon as the Company is advised thereof, the Company will
advise the Placement Agent and its counsel, and confirm the advice in writing,
of any order preventing or suspending the use of the Memorandum, or the
suspension of the qualification or registration of the Units or the Securities
for offering or the suspension of any exemption for such qualification or
registration of the Units or the Securities for offering in any jurisdiction, or
of the institution or threatened institution of any proceedings for any of such
purposes, and the Company will use its best efforts to prevent the issuance of
any such order, judgment or decree, and, if issued, to obtain as soon as
reasonably possible the lifting thereof.
 
(c)           The Company, at its own cost and expense, shall comply with the
Act, the Regulations, the Securities and Exchange Act of 1934, as amended (the
“1934 Act”), and the rules and regulations thereunder, all applicable state
securities laws and the rules and regulations thereunder in the states in which
the Units are to be offered and in which the Company’s counsel has advised the
Placement Agent that the Units are qualified or registered for sale or exempt
from such qualification or registration, so as to permit the continuance of the
sales of the Units, and will file with the SEC, and shall promptly thereafter
forward to the Placement Agent, any and all reports on Form D as are required.
 
(d)           The Company, at its own cost and expense, shall use its reasonable
best efforts to qualify the Units for sale (or seek exemption therefrom) under
the securities laws of such jurisdictions in the United States as may be
mutually agreed to by the Company and the Placement Agent, and the Company will
(through Blue Sky counsel) make such applications and furnish information as may
be required for such purposes.  The Company will, from time to time, prepare and
file such statements and reports as are or may be required to continue such
qualifications in effect for so long a period as the Placement Agent may
reasonably request.
 
 
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(e)          The Company shall place a legend on the certificates representing
any of the Securities stating that the securities evidenced thereby have not
been registered under the Act or applicable state securities laws and setting
forth or referring to the applicable restrictions on transferability and sale of
such securities under the Act and applicable state laws.  The Company shall
cause Pubco to place a similar legend on all certificates evidencing shares of
Common Stock and warrants issued in the Merger as well as any shares of Common
Stock issuable upon exercise of the Pubco warrants issued in the Merger.
 
(f)           The Company shall apply the net proceeds from the sale of the
Units for such purposes as are described under “Use of Proceeds” in the
Memorandum.  Except as shall be specifically set forth in the Memorandum or as
approved by the Board of Directors of the Company, the net proceeds of the
Offering shall not be used to repay indebtedness to officers, directors or
stockholders of the Company without the prior written consent of the Placement
Agent.
 
(g)          During the Offering Period, the Company shall make available for
review by prospective purchasers of Units in the Offering during normal business
hours at the Company’s offices, upon their request, copies of the Company
Agreements to the extent that such disclosure shall not violate any obligation
on the part of the Company to maintain the confidentiality thereof and shall
afford each prospective purchaser of Units the opportunity to ask questions of
and receive answers from an officer of the Company concerning the terms and
conditions of the Offering and the opportunity to obtain such other additional
information necessary to verify the accuracy of the Memorandum to the extent it
possesses such information or can acquire it without unreasonable expense.
 
(h)          Except with the prior written consent of the Placement Agent (which
shall not be unreasonably withheld) or as set forth in the Memorandum, the
Company shall not, at any time prior to the earlier of the Closing Date or the
Termination Date, engage in or commit to engage in any transaction outside the
ordinary course of business, including without limitation the incurrence of
material indebtedness, materially change its business or operations as described
in the Memorandum, or issue, agree to issue or set aside for issuance any
securities (debt or equity) or any rights to acquire any such securities except
as shall be contemplated by the Memorandum.
 
(i)           Whether or not the transactions contemplated hereby are
consummated, or this Agreement is terminated, the Company hereby agrees to pay
all fees, costs and expenses incident hereto and to the Offering, including,
without limitation, those in connection with (i) preparing, printing,
duplicating, filing, distributing and binding the Memorandum and any and all
amendments and/or supplements thereto and any and all agreements, contracts and
other documents related hereto and thereto; (ii) the creation, authorization,
issuance, transfer and delivery of any of the Securities as well as any shares
of Common Stock and Pubco warrants issued in the Merger and any shares of Common
Stock issuable upon exercise of the Pubco warrants issued in the Merger,
including, without limitation, fees and expenses of any transfer agent or
registrar; (iii) the fees and expenses of the Escrow Agent (subject to Section
4(b) hereof); (iv) the formation, organization and qualification of one or more
investment vehicles for the purchasers of the Units; (v) all fees and expenses
of legal, accounting and other advisers to the Company; (vi) all filing fees,
costs and legal fees and expenses for Blue Sky services and related filings with
respect to Blue Sky exemptions and qualifications (the “Blue Sky Fees”); and
(vii) subject to Section 8 hereof, a non-accountable expense allowance equal to
$100,000, which amount may be increased with the prior written approval of the
Company, shall be deducted from the gross proceeds of the Units sold at the
closing of the offering, to cover, without limitation, the legal fees, mailing,
telephone, travel, due diligence and similar expenses of the Placement Agent.
 
 
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(j)           Until the earlier of the Closing Date or the Termination Date,
neither the Company nor any person or entity acting on its behalf will negotiate
or enter into any agreement with any other placement agent or underwriter with
respect to a private or public offering of the Company’s or any subsidiary’s
debt or equity securities.  Neither the Company nor anyone acting on its behalf
will, until the earlier of the Closing Date or the Termination Date, without the
prior written consent of the Placement Agent, offer for sale to, or solicit
offers to subscribe for Units or other securities of the Company from, or
otherwise approach or negotiate in respect thereof with, any other person.
 
(k)          Until the earlier of (x) the Expiration Date (if applicable) or (y)
the fifth anniversary of the Closing Date, in the event that no employee of the
Placement Agent is a member of the Board of Directors of the Company, then the
Placement Agent shall be entitled to appoint one observer to attend meetings of
the Board of Directors (subject to exclusion with respect to any matter in which
it would present, in the reasonable opinion of the Board of Directors, a
conflict of interest for such observer to participate in a Board of Directors
discussion with respect to such matter).
 
(l)           Placement Agent shall be entitled to a placement agent’s fee and
warrants, calculated pursuant to the terms set forth in Sections 3(d) and 3(e)
above with respect to any subsequent public or private offering or other
financing or capital-raising transaction of any kind (“Subsequent Financing”) to
the extent that such financing or capital is provided to the Company, or to any
Affiliate of the Company, by investors whom Placement Agent had “introduced” (as
defined below), directly or indirectly, to the Company if such Subsequent
Financing is consummated at any time within the 18-month period following the
Termination Date or the Closing Date, if an Offering is consummated (the “Tail
Period”).  A party “introduced” by Placement Agent shall mean an investor who
either (i) met with the Company and/or had a conversation with the Company
either in person or via telephone regarding the Offering, (ii) was provided by
Placement Agent with a copy of the Memorandum based upon such investor
expressing an interest, directly or indirectly, to Placement Agent in investing
in the Offering, or (iii) purchased Units; and, in each instance as listed on an
exhibit that Placement Agent shall provide in written form at the closing of the
Offering, if an Offering is consummated, or within ten (10) business days
following the termination of the Offering.  An “Affiliate” of an entity shall
mean any individual or entity controlling, controlled by or under common control
with such entity and any officer, director, employee, stockholder, partner,
member or agent of such entity.  Pubco is an Affiliate.
 
6.           Conditions of Placement Agent’s Obligations.  The obligations of
the Placement Agent hereunder are subject to the fulfillment, at or before the
closing of the Offering, of the following additional conditions:
 
 
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(a)          Each of the representations and warranties of the Company shall be
true and correct in all material respects, other than representations and
warranties that contain materiality or knowledge standards or qualifications
(which representations and warranties shall be true and correct in all respects)
when made on the date hereof and on and as of the Closing Date as though made on
and as of the Closing Date.
 
(b)          The Company shall have performed and complied in all material
respects with all agreements, covenants and conditions that it is required to
perform and/or comply under the Transaction Documents at or before the closing
of the Offering.
 
(c)          No order suspending the use of the Memorandum or enjoining the
offering or sale of the Units shall have been issued, and no proceedings for
that purpose or a similar purpose shall have been initiated and pending, or, to
the Company’s knowledge, are contemplated or threatened.
 
(d)          Immediately at the closing of the Offering, the Company shall have,
and upon the closing of the Merger Pubco shall have, an outstanding
capitalization as described in the Memorandum.  In the case of the Company, all
Membership Units currently outstanding and the Units and the Membership Units
included in the Units that may be issued at the closing of the Offering will be,
upon issuance, validly issued, fully paid, and non-assessable.  In the case of
Pubco, all shares of capital stock outstanding immediately prior to the Merger
are, and all shares which may be issued the Merger will be upon issuance,
validly issued, fully paid, and non-assessable.  Prior to the closing of the
Merger, neither the Company nor Pubco will issue any securities upon the
exercise of warrants or options, without the written authorization of the
Placement Agent, except those warrants and options as set forth in the
Memorandum.
 
(e)          The Placement Agent shall have received certificates of the
Managing Member of the Company, dated as of the Closing Date, certifying on
behalf of the Company, in such detail as the Placement Agent may reasonably
request, as to the fulfillment of the conditions set forth in subparagraphs (a),
(b), (c) and (d) above.
 
(f)           The Company shall have delivered to the Placement Agent (i) with
respect to the Company, a currently dated good standing certificate from the
Secretary of State of Delaware and each jurisdiction in which the Company is
qualified to do business as a foreign corporation, (ii) with respect to Pubco, a
currently dated good standing certificate from the Secretary of State of Nevada
and each jurisdiction in which the Pubco is qualified to do business as a
foreign corporation, (iii) a certificate from the Company’s Managing member that
this Agreement and the other Transaction Documents, and the transactions and
agreements contemplated by this Agreement and the other Transaction Documents
have been approved by all requisite corporate and member action and (iv)
certified resolutions of  Pubco’s Board of Directors approving the Merger
Agreement and the other documents related to the Merger as identified in the
Merger Agreement, and the transactions and agreements contemplated by the Merger
Agreement and those other documents.
 
 
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(g)          On or prior to the date hereof and at the closing of the Offering,
the Managing Member of the Company shall have provided a certificate to the
Placement Agent confirming on behalf of the Company that there have been no
undisclosed material and adverse changes in the business condition (financial or
otherwise) or prospects of the Company from the date of the latest financial
statements included in the Memorandum, the absence of undisclosed liabilities
(other than liabilities arising in the ordinary course of business subsequent to
the date of the most recent balance sheet included in the Memorandum) and such
other matters relating to the financial condition and prospects of the Company
that the Placement Agent may reasonably request.
 
(h)          At the closing of this Offering, the Company shall have (i) paid to
the Placement Agent its Placement Agent’s Fee in respect of all Units sold at
the closing, (ii) paid all fees, costs and expenses as set forth in Section 5(i)
hereof, and (iii) executed and delivered to the Placement Agent the Broker’s
Warrants.
 
(i)           There shall have been delivered to the Placement Agent a signed
opinion of counsel (including a 10(b)-5 opinion in customary form) to the
Company (“Company Counsel”), dated as of the Closing Date, in the form
reasonably satisfactory to counsel for the Placement Agent.
 
(j)           Prior to the closing of the Offering, Pubco shall have engaged
Continental Stock Transfer & Trust Company as its transfer agent for purposes of
handling the transfers of its capital stock and other securities.
 
(k)          All proceedings taken at or prior to the closing of the Offering in
connection with the authorization, issuance and sale of the Units, the Investor
Warrants and the Broker’s Warrants will be reasonably satisfactory in form and
substance to the Placement Agent and its counsel, and such counsel shall have
been furnished with all such documents, certificates and opinions as they may
reasonably request upon reasonable prior notice in connection with the
transactions contemplated hereby.
 
(l)           On or immediately prior to the closing of the Offering, Pubco and
the Placement Agent shall have entered into a Financial Services Advisory
Agreement (the “Advisory Agreement”) in a form acceptable to the Company and the
Placement Agent and their respective counsels, which Advisory Agreement will
become effective immediately upon the closing of the Merger.  The Advisory
Agreement shall provide that the Placement Agent, or an affiliate thereof, shall
provide Pubco with such advisory services regarding Pubco’s financing needs and
capitalization as Pubco shall request from time to time and that in
consideration for the obligation to provide such services, Pubco, immediately
upon the closing of the Merger shall issue to the Placement Agent a warrant
entitling the holder thereof to purchase up to 500,000 shares of Common Stock
for $1.50 per share at any time during the five-year period beginning on the
date of issuance of such warrant.  The Advisory Agreement shall also provide
that for a period of two (2) years from the Closing Date, Pubco shall give the
Placement Agent the irrevocable preferential right of first refusal to purchase
for the Placement Agent’s account or to act as agent for any proposed private
offering of Pubco’s securities by Pubco.  The Advisory Agreement shall further
provide the Placement Agent the opportunity to purchase or sell such securities
on terms no less favorable than it can obtain elsewhere.  If within 20 business
days of the receipt of such notice of intention and statement of terms the
Placement Agent does not accept in writing such offer to purchase such
securities or to act as agent with respect to such offering upon the terms
proposed, Pubco shall be free to negotiate terms with third parties with respect
to such offering and to effect such offering on such proposed terms. Before
Pubco shall accept any proposal materially less favorable to it than as
originally proposed to the Placement Agent, the Placement Agent’s preferential
rights shall be applied, and the procedure set forth above with respect to such
modified proposal adopted. The Placement Agent’s failure to exercise these
preferential rights in any situation shall not affect the Placement Agent’s
preferential rights to any subsequent offering during the term of the right of
first refusal agreement.  The Company represents and warrants that it has not
granted any preferential rights similar to those set forth in this Section 6(l)
to any party other than the Placement Agent with regard to the transactions
contemplated by this Section 6(l) and, to its knowledge, no other person has any
right to participate in any offer, sale or distribution of the Pubco’s
securities to which the Placement Agent’s preferential rights shall apply.
 
 
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6A.        Mutual Condition. The obligations of the Placement Agent and the
Company hereunder are subject to the execution and delivery by the prospective
purchaser of Units in this Offering of a Securities Purchase Agreement, all
other documents contemplated thereby and any other documents reasonably
requested by the Company.
 
7.           Indemnity and Contribution

(a)   The Company hereby agrees to indemnify and hold harmless Placement Agent
and its affiliates, and the respective controlling persons, directors, officers,
shareholders, agents and employees of any of the foregoing (collectively the
“Indemnified Persons”), from and against any and all claims, actions, suits,
proceedings (including those of members or shareholders), damages, liabilities
and expenses incurred by any of them (including the reasonable fees and expenses
of counsel), as incurred, (collectively a “Claim”), that are (A) related to or
arise out of (i) any actions taken or omitted to be taken (including any untrue
statements made or any statements omitted to be made) by the Company, or (ii)
any actions taken or omitted to be taken by any Indemnified Person in connection
with the Company’s engagement of Placement Agent, or (B) otherwise relate to or
arise out of Placement Agent’s activities on the Company’s behalf under
Placement Agent’s engagement, and the Company shall reimburse any Indemnified
Person for all expenses (including the reasonable fees and expenses of counsel)
as incurred by such Indemnified Person in connection with investigating,
preparing or defending any such Claim, whether or not in connection with pending
or threatened litigation in which any Indemnified Person is a
party.  Notwithstanding anything in this Agreement to the contrary, the Company
will not, however, be responsible for any Claim, to the extent that such claim
is finally judicially determined to have resulted from the gross negligence or
willful misconduct of any person seeking indemnification for such Claim, in
which case the Indemnified Persons for whom the Company has paid any amounts
shall be liable for the prompt repayment to the Company of all amounts paid by
the Company for the benefit of such Indemnified Persons, and Placement Agent
shall cause all such Indemnified Persons to sign and deliver to the Company
written agreements, in form and substance reasonably determined by Placement
Agent, memorializing this result prior to the Company being obligated to expend
any amounts to indemnify any such Indemnified Persons (the “Indemnification
Reimbursement Agreements”).  The Company further agrees that no Indemnified
Person shall have any liability to the Company for or in connection with the
Company’s engagement of Placement Agent except for any Claim incurred by the
Company as a result of such Indemnified Person’s gross negligence or willful
misconduct.
 
 
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(b)   The Company further agrees that it will not, without the prior written
consent of Placement Agent, settle, compromise or consent to the entry of any
judgment in any pending or threatened Claim in respect of which indemnification
may be sought hereunder (whether or not any Indemnified Person is an actual or
potential party to such Claim), unless such settlement, compromise or consent
includes an unconditional, irrevocable release of each Indemnified Person from
any and all liability arising out of such Claim.

(c)   Promptly upon receipt by an Indemnified Person of notice of any complaint
or the assertion or institution of any Claim with respect to which
indemnification is being sought hereunder, such Indemnified Person shall notify
the Company in writing of such complaint or of such assertion or institution but
failure to so notify the Company shall not relieve the Company from any
obligation it may have hereunder, except and only to the extent such failure
results in the forfeiture by the Company of substantial rights and defenses;
provided, however, that the Company shall not have any obligation to commence
any indemnification of any Indemnified Person unless and until Placement Agent
has delivered to the Company the signed Indemnification Reimbursement Agreement
from such Indemnified Person.  If the Company so elects or is requested by such
Indemnified Person, the Company will assume the defense of such Claim, including
the employment of counsel reasonably satisfactory to such Indemnified Person and
the payment of the fees and expenses of such counsel. In the event, however,
that legal counsel to such Indemnified Person reasonably determines that having
common counsel would present such counsel with a conflict of interest or if the
defendant in, or target of, any such Claim, includes an Indemnified Person and
the Company, and legal counsel to such Indemnified Person reasonably concludes
that there may be legal defenses available to it or other Indemnified Persons
different from or in addition to those available to the Company, then such
Indemnified Person may employ its own separate counsel to represent or defend
him, her or it in any such Claim and the Company shall pay the reasonable fees
and expenses of such counsel.  Subject to the other terms and conditions of this
Agreement, if the Company fails timely or diligently to defend, contest, or
otherwise protect against any Claim, the relevant Indemnified Party shall have
the right, but not the obligation, to defend, contest, compromise, settle,
assert crossclaims, or counterclaims or otherwise protect against the same, and
shall be fully indemnified by the Company therefor, including without
limitation, for the reasonable fees and expenses of its counsel and all amounts
paid as a result of such Claim or the compromise or settlement thereof, so long
as any such compromise or settlement includes a full and complete release of the
Company and all of its affiliates.  In addition, with respect to any Claim in
which the Company assumes the defense, the Indemnified Person shall have the
right to participate in such Claim and to retain his, her or its own counsel
therefor at his, her or its own expense.

(d)   Subject to the other terms and conditions of this Agreement, the Company
agrees that if any indemnity sought by an Indemnified Person hereunder is held
by a court to be unavailable for any reason then (whether or not Placement Agent
is the Indemnified Person), the Company and Placement shall contribute to the
Claim for which such indemnity is held unavailable in such proportion as is
appropriate to reflect the relative benefits to the Company, on the one hand,
and Placement Agent on the other, in connection with Placement Agent’s
engagement referred to above, subject to the limitation that in no event shall
the amount of Placement Agent’s contribution to such Claim exceed the amount of
fees actually received by Placement Agent from the Company pursuant to Placement
Agent’s engagement.  The Company hereby agrees that the relative benefits to the
Company, on the one hand, and Placement Agent on the other, with respect to
Placement Agent’s engagement shall be deemed to be in the same proportion as (a)
the total value paid or committed to be paid or received by the Company or its
stockholders as the case may be, pursuant to the Offering (whether or not
consummated) for which Placement Agent is engaged to render Services bears to
(b) the fee paid or proposed to be paid to Rodman in connection with such
engagement.
 
 
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(e)   The Company’s indemnity, reimbursement and contribution obligations under
this Agreement (a) shall be in addition to, and shall in no way limit or
otherwise adversely affect any rights that any Indemnified Party may have at law
or at equity and (b) shall be effective whether or not the Company is at fault
in any way.
 
8.           Termination.
 
(a)           The Offering may be terminated by the Placement Agent at any time
prior to the expiration of the Offering Period in the event that (i) any of the
representations or warranties of the Company contained herein shall prove to
have been false or misleading in any material respect when made or deemed made,
(ii) the Company shall have failed to perform any of its material obligations
hereunder, (iii) the Company shall have determined for any reason not to
continue with the Offering or (iv) the Placement Agent shall determine in its
sole discretion that it is reasonably likely that any of the conditions to
closing set forth herein will not, or cannot, be satisfied.  In the event of any
such termination occasioned by or arising out of or in connection with the
matters set forth in clauses (i)-(iii) above, or occasioned by or arising out of
or in connection with a matter set forth in clause (iv) above due to any breach
or failure hereunder on the part of the Company, the Placement Agent shall be
entitled to receive, in addition to other rights and remedies it may have
hereunder, at law or otherwise, an amount equal to the sum of: (A) all
applicable Placement Agent’s Fees earned through the Termination Date, (B) an
amount equal to three percent (3%) of the Offering Price of all Units sold in
the Offering (deeming, for this purpose, all Units offered (other than Units
available for over-subscriptions) as having been sold), less any amounts
theretofore paid in respect of the Placement Agent’s Placement Agent Expenses,
and all other expenses set forth in Section 5(i) hereof and (C) all amounts that
may become payable in respect of Post-Closing Investors pursuant to Section 3(f)
hereof.  In addition to the sum of the amounts in clauses (A)-(C) in the
previous sentence, in the event that (a) the Company is sold (in a stock or
asset sale), merged or otherwise acquired or combined, or (b) the Company enters
into a letter of intent or agreement with respect to the foregoing, or (c) the
Company completes a public or private offering of its securities, in each case
within one year after the Offering is terminated because the Company has
breached any representation, warranty or covenant made by it herein or because
the Company has determined prior to the Expiration Date (if applicable) not to
proceed with the Offering, the Company shall pay to the Placement Agent, as
applicable, (x) if the Placement Agent has not exercised its rights under
Section 8(a) hereof, an investment banking fee equal to five percent (5%) of the
total consideration received by the Company and/or its stockholders in
connection with such sale, merger, acquisition or sale of securities or (y) if
the Placement Agreement has exercised its rights under Section 8(a) hereof,
applicable Placement Agent commissions, fees and expenses described in Sections
3(d) and 5(i) hereof as if the Minimum Amount had been sold.
 
 
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(b)           This Offering may be terminated by the Company at any time prior
to the Termination Date in the event that (i) the Placement Agent shall have
failed to perform any of its material obligations hereunder or (ii) there shall
occur any event described in Section 8(a) above not occasioned by or arising out
of or in connection with any breach or failure hereunder on the part of the
Company.  In the event of any termination by the Company pursuant to clause (i)
above, the Placement Agent shall be entitled to receive all Placement Agent
Expenses accrued through the Termination Date (subject to the Placement Agent
Expense Limitation), but shall be entitled to no other amounts whatsoever except
as may be due under any indemnity or contribution obligation provided herein or
any other Transaction Document, at law or otherwise.  On such Termination Date,
the Company shall pay all such unpaid costs and expenses incurred by the
Placement Agent in connection with the Offering; provided, however, that such
costs and expenses shall not exceed the maximum Placement Agent Expense
Allowance, and all unpaid Blue Sky Fees and other expenses set forth in Section
5(i) hereof.
 
(c)           Upon any such termination, the Escrow Agent will cause, at the
request of the Placement Agent, all money received from prospective purchasers
of Units in the offering in respect of subscriptions for Units not accepted by
the Company to be promptly returned to such prospective purchasers without
interest, penalty, expense or deduction.  Any interest earned thereon shall be
applied to the payment of the Escrow Agent’s fees and expenses.
 
9.           Survival.
 
(a)           The obligations of the parties to pay any costs and expenses
hereunder and to provide indemnification and contribution as provided herein
shall survive any termination hereunder.
 
(b)           The respective indemnities, agreements, representations,
warranties and other statements of the Company set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of, and regardless of any access to
information by, the Company or the Placement Agent, or any of their officers or
directors or any controlling person thereof, and will survive the sale of the
Units.
 
10.         Notices.  All communications hereunder will be in writing and,
except as otherwise expressly provided herein or after notice by one party to
the other of a change of address, if sent to the Placement Agent, will be
mailed, delivered or telefaxed and confirmed to Rodman & Renshaw, LLC, 1251
Avenue of the Americas, 20th Floor, New York, New York 10020, Attention: General
Counsel, Telefax number (212) 356-0536, with a copy to Morse, Zelnick, Rose &
Lander LLP, 405 Park Avenue, Suite 1401, New York, New York 10022,
Attention:  Kenneth S. Rose, Esq., and if sent to the Company, will be mailed,
delivered or telefaxed and confirmed to 8201 Main Street, Suite 6, Willamsville,
NY 14221, Attention: Joseph Pandolfino, with a copy to Foley & Lardner LLP, 3000
K Street N.W., Suite 600, Washington, D.C. 20007, Attention Thomas L. James,
Esq.
 
 
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11.         ARBITRATION, CHOICE OF LAW; COSTS. THE PARTIES HERETO AGREE TO
SUBMIT ALL CONTROVERSIES TO ARBITRATION IN ACCORDANCE WITH THE PROVISIONS SET
FORTH BELOW AND UNDERSTAND THAT (A) ARBITRATION IS FINAL AND BINDING ON THE
PARTIES, (B) THE PARTIES ARE WAIVING THEIR RIGHTS TO SEEK REMEDIES IN COURT,
INCLUDING THE RIGHT TO A JURY TRIAL, (C) PRE-ARBITRATION DISCOVERY IS GENERALLY
MORE LIMITED AND DIFFERENT FROM COURT PROCEEDINGS, (D) THE ARBITRATOR’S AWARD IS
NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING AND ANY PARTY’S
RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULES BY ARBITRATORS IS STRICTLY
LIMITED, (E) THE PANEL OF FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC.
(“FINRA”) ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO WERE
OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY, AND (F) ALL CONTROVERSIES WHICH
MAY ARISE BETWEEN THE PARTIES CONCERNING THIS AGREEMENT SHALL BE DETERMINED BY
ARBITRATION PURSUANT TO THE RULES THEN PERTAINING TO FINRA.  JUDGMENT ON ANY
AWARD OF ANY SUCH ARBITRATION MAY BE ENTERED IN THE SUPREME COURT OF THE STATE
OF NEW YORK OR IN ANY OTHER COURT HAVING JURISDICTION OVER THE PERSON OR PERSONS
AGAINST WHOM SUCH AWARD IS RENDERED.  THE PARTIES AGREE THAT THE DETERMINATION
OF THE ARBITRATORS SHALL BE BINDING AND CONCLUSIVE UPON THEM.  THE PREVAILING
PARTY, AS DETERMINED BY SUCH ARBITRATORS, IN A LEGAL PROCEEDING SHALL BE
ENTITLED TO COLLECT ANY COSTS, DISBURSEMENTS AND REASONABLE ATTORNEY’S FEES FROM
THE OTHER PARTY.
 
12.         Confidentiality.  The Company hereby agrees to hold confidential the
identities of the purchasers in the Offering and shall not disclose their names
and addresses without the prior written consent of the Placement Agent, unless
required by law.  The Company hereby consents to the granting of an injunction
against it by any court of competent jurisdiction to enjoin it from violating
the foregoing confidentiality provisions.  The Company hereby agrees that the
Placement Agent will have an adequate remedy at law in the event that the
Company breaches these confidentiality provisions contained herein, and that the
Placement Agent will suffer irreparable damage and injury as a result of any
such breach.  Resort to such equitable relief shall not, however, be construed
to be a waiver of any other rights or remedies which the Placement Agent may
have. Notwithstanding the foregoing, the Company shall not be deemed to be in
violation of this Section 12 by virtue of revealing the identities of such
purchasers to the Company’s transfer agent and professional advisors.
 
13.         Miscellaneous.  No provision of this Agreement may be changed or
terminated except by a writing signed by the party or parties to be charged
therewith.  Unless expressly so provided, no party to this Agreement will be
liable for the performance of any other party’s obligations hereunder.  Any
party hereto may waive compliance by the other with any of the terms, provisions
and conditions set forth herein; provided, however, that any such waiver shall
be in writing specifically setting forth those provisions waived thereby.  No
such waiver shall be deemed to constitute or imply waiver of any other term,
provision or condition of this Agreement.  This Agreement contains the entire
agreement between the parties hereto and is intended to supersede any and all
prior agreements between the parties relating to the same subject matter.  This
Agreement may be executed in counterparts, each of which shall be deemed an
original and all of which shall constitute a single agreement.
 
 
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14.         Entire Agreement.  This Agreement together with any other agreement
referred to herein is intended to supersede all prior agreements between the
parties with respect to the Units purchased hereunder and the subject matter
hereof.
 
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return this Agreement, whereupon it will become a binding
agreement between the Company and the Placement Agent in accordance with its
terms.
 

 
Very truly yours,
     
22ND CENTURY LIMITED, LLC
     
By:
/s/ Joseph Pandolfino
   
Name: Joseph Pandolfino
   
Title: Chief Executive Officer
     
Accepted and agreed to as of the 1st
 
day of December, 2010.
     
RODMAN & RENSHAW, LLC
     
By:
/s/ John Borer
   
Name: John Borer
   
Title: Senior Managing Director

 
 
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