SECURITIES PURCHASE AGREEMENT
 
This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of May _____,
2013, is by and among Marathon Patent Group, Inc., a Nevada corporation
(the “Company”), and each investor identified on the signature pages hereto
(individually, a “Buyer” and collectively, the “Buyers”).
 
RECITALS
 
A.           The Company and each Buyer is executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”), and
Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States
Securities and Exchange Commission (the “SEC”) under the 1933 Act.
 
B.           The Company has authorized the issuance of a minimum of $3,000,000
and up to $8,000,000 of units (the “Units”), each Unit consisting of one (1)
share of Common Stock, par value $0.0001 per share (the “Common Stock” and such
shares of Common Stock issued, the “Shares”), and the Warrants described in
Recital C below, at a per Unit price equal to $0.40 per Unit (the “Per Unit
Purchase Price”).
 
C.           Each Buyer wishes to purchase, and the Company wishes to sell, upon
the terms and conditions stated in this Agreement, the aggregate number of Units
as is set forth on such Buyer’s signature page, which shall include (i) the
aggregate number of shares of Common Stock set forth on such Buyer’s signature
page and (ii) a warrant to acquire up to the aggregate number of shares of
Common Stock set forth on such Buyer’s signature page (which number of shares of
Common Stock shall equal fifty percent (50%) of the number of shares of Common
Stock purchased by such Buyer), in the form attached hereto as Exhibit A
(individually, a “Warrant” and, collectively, the “Warrants”) (as exercised,
collectively, the “Warrant Shares”).
 
D.           At the Closing (as defined below), the parties hereto shall execute
and deliver a Registration Rights Agreement, in the form attached hereto as
Exhibit B (the “Registration Rights Agreement”), pursuant to which the Company
has agreed to provide certain registration rights with respect to the
Registrable Securities (as defined in the Registration Rights Agreement), under
the 1933 Act and the rules and regulations promulgated thereunder, and
applicable state securities laws.
 
E.           The Shares and the Warrants are collectively referred to herein as
the “Initial Securities.” The Shares, the Warrants, and the Warrant Shares are
collectively referred to herein as the “Securities.
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each Buyer hereby
agree as follows:
 
 
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1.
PURCHASE AND SALE OF INITIAL SECURITIES.

 
(a)           Initial Securities. Subject to the satisfaction (or waiver) of the
conditions set forth in Sections 6 and 7 below, the Company shall issue and sell
to each Buyer, and each Buyer severally, but not jointly, shall purchase from
the Company on the Closing Date (as defined below), the number of Units as is
set forth on such Buyer’s signature page, which shall include (i) the number of
Shares as is set forth on such Buyer’s signature page and (ii) a Warrant to
initially acquire up to the aggregate number of Warrant Shares as is set forth
on such Buyer’s signature page.
 
(b)           Purchase Price.  The aggregate purchase price for the Initial
Securities to be purchased by each Buyer (the “Purchase Price”) shall be the
amount set forth on such Buyer’s signature page.
 
(c)           Closing. The closing (the “Closing”) of the purchase of the
Initial Securities by the Buyers shall occur at the offices of Mintz, Levin,
Cohn, Ferris, Glovsky and Popeo, PC, 666 Third Avenue, New York, New York 10017.
The date and time of the Closing (the “Closing Date”) shall be 10:00 a.m., New
York time, on the first (1st) Business Day on which the conditions to the
Closing set forth in Sections 6 and 7 below are satisfied or waived (or such
later date as is mutually agreed to by the Company and each Buyer). As used
herein, “Business Day” means any day other than a Saturday, Sunday or other day
on which commercial banks in New York, New York are authorized or required by
law to remain closed.  In addition, until June __, 2013, the Company shall have
the right to hold one or more additional closings, up to an aggregate amount of
Units equal to the difference between $8,000,000 and the aggregate Purchase
Price hereunder, on the same terms and conditions and prices as hereunder, with
investors executing definitive agreements for the purchase of such securities
and such transactions having closed by no later than five (5) Business Days
prior to the filing of the Registration Statement pursuant to Section 2(a) of
the Registration Rights Agreement.
 
(d)           Payment of Purchase Price on Closing Date; Delivery of Initial
Securities. On the Closing Date, (i) each Buyer shall pay its respective
Purchase Price to the Company for the respective Initial Securities to be issued
and sold to such Buyer at the Closing, by wire transfer of immediately available
funds in accordance with the instructions provided by the Company and (ii) the
Company shall deliver to each Buyer (A) a certificate representing the number of
Shares as is set forth on such Buyer’s signature page and (B) a Warrant pursuant
to which such Buyer shall have the right to initially acquire up to the
aggregate number of Warrant Shares as is set forth on such Buyer’s signature
page, in each case, duly executed on behalf of the Company and registered in the
name of such Buyer.
 
2.
BUYER’S REPRESENTATIONS AND WARRANTIES.

 
Each Buyer, severally and not jointly, represents and warrants to the Company
with respect to only itself that:
 
 
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(a)           Organization; Authority. Such Buyer is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with the requisite power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents to which
it is a party and otherwise to carry out its obligations hereunder and
thereunder.
 
(b)           No Public Sale or Distribution. Such Buyer is acquiring the
Securities for its own account and not with a view towards, or for resale in
connection with, the public sale or distribution thereof in violation of
applicable securities laws, except pursuant to sales registered or exempted
under the 1933 Act; provided, however, by making the representations herein,
such Buyer does not agree, or make any representation or warranty, to hold any
of the Securities for any minimum or other specific term and reserves the right
to dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act. Such Buyer does not
presently have any agreement or understanding, directly or indirectly, with any
Person to distribute any of the Securities in violation of applicable securities
laws.
 
(c)           Accredited Investor Status.  Such Buyer is an “accredited
investor” as that term is defined in Rule 501(a) of Regulation D.
 
(d)           Reliance on Exemptions. Such Buyer understands that the Securities
are being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Buyer’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of such Buyer
to acquire the Securities. Such Buyer is not purchasing the Securities as a
result of any advertisement, article, notice or other communication regarding
the Securities published in any newspaper, magazine or similar media or on the
internet or broadcast over television, radio or internet or presented at any
seminar or, to its knowledge, any other general solicitation or general
advertisement.
 
(e)           Information. Such Buyer and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Securities
which have been requested by such Buyer. Such Buyer and its advisors, if any,
have been afforded the opportunity to ask questions of the Company. Such Buyer
understands that its investment in the Securities involves a high degree of
risk. Such Buyer has sought such accounting, legal and tax advice as it has
considered necessary to make an informed investment decision with respect to its
acquisition of the Securities.
 
(f)           No Governmental Review.  Such Buyer understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
 
 
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(g)           Transfer or Resale. Such Buyer understands that except as provided
in the Registration Rights Agreement and Section 4(h) hereof: (i) the Securities
have not been and are not being registered under the 1933 Act or any state
securities laws, and may not be offered for sale, sold, assigned or transferred
unless (A) subsequently registered thereunder, (B) such Buyer shall have
delivered to the Company (if requested by the Company) an opinion of counsel to
such Buyer, in a form reasonably acceptable to the Company, to the effect that
such Securities to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration, or (C) such Buyer
provides the Company with reasonable assurance that such Securities can be sold,
assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the
1933 Act (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale
of the Securities made in reliance on Rule 144 may be made only in accordance
with the terms of Rule 144, and further, if Rule 144 is not applicable, any
resale of the Securities under circumstances in which the seller (or the Person
(as defined below) through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the 1933 Act) may require compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC promulgated thereunder; and (iii) except with respect to the obligations of
the Company under the Registration Rights Agreement, neither the Company nor any
other Person is under any obligation to register the Securities under the 1933
Act or any state securities laws or to comply with the terms and conditions of
any exemption thereunder.
 
(h)           Validity; Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of such Buyer and constitutes the
legal, valid and binding obligations of such Buyer enforceable against such
Buyer in accordance with their respective terms, except as such enforceability
may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation and other similar laws
relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies.
 
(i)           No Conflicts.  The execution, delivery and performance by such
Buyer of this Agreement and the consummation by such Buyer of the transactions
contemplated hereby will not (i) result in a violation of the organizational
documents of such Buyer, (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which such Buyer is a
party or (iii) result in a violation of any law, rule, regulation, order,
judgment  or decree (including federal and state securities laws) applicable to
such Buyer, except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of such Buyer to perform its obligations hereunder.
 
(j)           Certain Trading Activities. Such Buyer has not directly or
indirectly, nor has any Person acting on behalf of or pursuant to any
understanding with such Buyer, engaged in any transactions in the securities of
the Company (including, without limitation, any Short Sales (as defined below)
involving the Company’s securities) during the period commencing as of the time
that such Buyer received a term sheet (written or oral) from the Company in
respect of the specific investment in the Company contemplated by this Agreement
and ending immediately prior to the execution of this Agreement by such Buyer
(it being understood and agreed that for all purposes of this Agreement, and
without implication that the contrary would otherwise be true, neither
transactions nor purchases nor sales shall include the location and/or
reservation of borrowable shares of Common Stock). “Short Sales” means all
“short sales” as defined in Rule 200 promulgated under Regulation SHO under the
Securities Exchange Act of 1934, as amended (the “1934 Act”).
 
 
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3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 
Except as set forth in the Company’s Annual Report on Form 10-K as filed with
the Securities and Exchange Commission (the “SEC”) on March 28, 2013 (the “Form
10-K”), the Company’s Quarterly Report on form 10-Q as filed with the SEC on May
14, 2013 (the “Form 10-Q”) , the Company’s Definitive Proxy Statement on form
14A as filed with the SEC on May 17, 2013 (the “Proxy”), and Current Report on
Form 8-K as filed with the SEC on May 21, 2013 (the “Form 8-K,” and together
with the Form 10-K, the Form 10-Q, the Proxy and the Form 8-K, collectively, the
“SEC Reports”), which disclosures in the SEC Reports  shall be deemed a part
hereof and shall qualify any representation, warranty or otherwise made herein
to the extent of the disclosure contained therein, the Company represents and
warrants to each of the Buyers that:
 
(a)           Organization and Qualification. Each of the Company and each of
its Subsidiaries are entities duly organized and validly existing and in good
standing under the laws of the jurisdiction in which they are formed, and have
the requisite power and authorization to own their properties and to carry on
their business as now being conducted and as presently proposed to be conducted.
Each of the Company and each of its Subsidiaries is duly qualified as a foreign
entity to do business and is in good standing in every jurisdiction in which its
ownership of property or the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not, individually or in the aggregate,
have a Material Adverse Effect. “Material Adverse Effect” means any material
adverse effect on (i) the business, properties, assets, liabilities, operations
(including results thereof), condition (financial or otherwise) or prospects of
the Company or any Subsidiary, either individually or taken as a whole, (ii) the
transactions contemplated hereby or in any of the other Transaction Documents or
(iii) the authority or ability of the Company or any of its Subsidiaries to
perform any of their respective obligations under any of the Transaction
Documents (as defined below).  Other than CyberFone Systems, Relay IP, Bismarck
IP  Sampo IP LLC, Continental Resources Acquisition Sub, Inc., Secure Energy,
LLC and TQP Acquisition Sub, the Company has no Subsidiaries. “Subsidiaries”
means any Person in which the Company, directly or indirectly, (I) owns any of
the outstanding capital stock or holds any equity or similar interest of such
Person or (II) controls or operates all or any part of the business, operations
or administration of such Person, and each of the foregoing, is individually
referred to herein as a “Subsidiary.”
 
 
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(b)           Authorization; Enforcement; Validity. The Company has the
requisite power and authority to enter into and perform its obligations under
this Agreement and the other Transaction Documents and to issue the Securities
in accordance with the terms hereof and thereof. The execution and delivery of
this Agreement and the other Transaction Documents by the Company, and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance of the Initial Securities and the
issuance of the Warrants and the reservation for issuance and issuance of the
Warrant Shares issuable upon exercise of the Warrants) have been duly authorized
by the Company’s board of directors or other governing body, as applicable, and
(other than the filing with the SEC of one or more Registration Statements in
accordance with the requirements of the Registration Rights Agreement, a Form D
with the SEC and any other filings as may be required by any state securities
agencies) no further filing, consent or authorization is required by the
Company, its Subsidiaries, their respective boards of directors or their
stockholders or other governing body.  This Agreement has been, and the other
Transaction Documents will be prior to the Closing, duly executed and delivered
by the Company, and each constitutes the legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with its respective
terms, except as such enforceability may be limited by general principles of
equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement
of applicable creditors’ rights and remedies and except as rights to
indemnification and to contribution may be limited by federal or state
securities law (collectively, the “Enforceability Exceptions”). “Transaction
Documents” means, collectively, this Agreement, the Warrants and the
Registration Rights Agreement and each of the other agreements and instruments
entered into or delivered by any of the parties hereto in connection with the
transactions contemplated hereby and thereby, as may be amended from time to
time.
 
(c)           Issuance of Shares and Warrants. The Shares are duly authorized
and, when issued and paid for in accordance with this Agreement, will be validly
issued, fully paid and non-assessable and free from all preemptive or similar
rights, taxes, liens, charges and other encumbrances with respect to the issue
hereof.  The Warrants have been duly authorized by the Company, and, when duly
executed and delivered in accordance with their respective terms by each of the
parties thereto, will constitute a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by the Enforceability
Exceptions.
 
(d)           Issuance of the Warrant Shares. As of the Closing, the Company
shall have reserved from its duly authorized capital stock not less than the sum
of (i) the number of Shares and (ii) 100% of the maximum number of Warrant
Shares issuable upon exercise of the Warrants (assuming that all Warrants are
exercised and without taking into account any limitations on the exercise of the
Warrants set forth therein). Upon exercise in accordance with the Warrants, the
Warrant Shares when issued, will be validly issued, fully paid and
non-assessable and free from all preemptive or similar rights, taxes, liens,
charges and other encumbrances with respect to the issue thereof, with the
holders being entitled to all rights accorded to a holder of shares of Common
Stock.
 
(e)           Exemption from 1933 Act. Subject to the accuracy of the
representations and warranties of the Buyers in this Agreement, the offer and
issuance by the Company of the Securities is exempt from registration under the
1933 Act.
 
 
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(f)           No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and its Subsidiaries and the consummation
by the Company and its Subsidiaries of the transactions contemplated hereby and
thereby (including, without limitation, the issuance of the Initial Securities
and the issuance of the Warrants and the reservation for issuance and issuance
of the Warrant Shares issuable upon exercise of the Warrants) will not (i)
result in a violation of the Articles of Incorporation (as defined below)
(including, without limitation, any certificate of designation contained
therein) or other organizational documents of the Company or any of its
Subsidiaries, any capital stock of the Company or any of its Subsidiaries or
By-Laws (as defined below) of the Company or any of its Subsidiaries, (ii)
result in the adjustment of the exercise, conversion or exchange price and/or
ratio in respect of any securities of the Company or any of its Subsidiaries,
result in any such securities exercisable, convertible or exchangeable for a
greater number of underlying securities, or require the approval or the receipt
of waivers from any holders of any instrument or class of securities or
counterparties to any agreement or understanding to which the Company or any
Subsidiary is a party, (iii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, give
to others any rights of termination, amendment, acceleration or cancellation of,
any indenture, agreement, note, lease, mortgage, deed or other instrument to
which the Company or any of its Subsidiaries is a party, or (iv) result in a
violation of any law, rule, regulation, order, judgment or decree (including,
without limitation, foreign, federal and state securities laws and regulations)
applicable to the Company or any of its Subsidiaries or by which any property or
asset of the Company or any of its Subsidiaries is bound or affected except, in
the case of clause (ii), (iii) or (iv) above, to the extent such violations that
would not reasonably be expected to have a Material Adverse Effect.
 
(g)           No Violation. Neither the Company nor any of its Subsidiaries is
(i) in violation of its charter or by-laws or similar organizational documents;
(ii) in default, and no event has occurred that, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance of
any term, covenant or condition contained in any indenture, agreement, note,
lease, mortgage, deed or other instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound or to which any of the property or assets of the Company or any of its
Subsidiaries is subject; or (iii) in violation of any law, rule, regulation,
order, judgment or decree (including, without limitation, foreign, federal and
state securities laws and regulations) applicable to the Company or any of its
Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected except, in the case of clause (ii) or (iii)
above, to the extent such violations that would not reasonably be expected to
have a Material Adverse Effect.
 
(h)           Consents.  Neither the Company nor any Subsidiary is required to
obtain any consent from, authorization or order of, or make any filing or
registration with (other than the filing with the SEC of one or more
Registration Statements in accordance with the requirements of the Registration
Rights Agreement, a Form D with the SEC and any other filings as may be required
by any state securities agencies), any court, governmental agency or any
regulatory or self-regulatory agency or any other Person in order for it to
execute, deliver or perform any of its respective obligations under, or
contemplated by, the Transaction Documents, in each case, in accordance with the
terms hereof or thereof.  All consents, authorizations, orders, filings and
registrations which the Company or any Subsidiary is required to obtain have
been obtained or effected, and neither the Company nor any of its Subsidiaries
are aware of any facts or circumstances which might prevent the Company or any
Subsidiary from obtaining or effecting any of the registration, application or
filings contemplated by the Transaction Documents.
 
(i)           Acknowledgment Regarding Buyer’s Purchase of Securities. The
Company acknowledges and agrees that each Buyer is acting solely in the capacity
of an arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby. The Company further acknowledges
that no Buyer is acting as a financial advisor or fiduciary of the Company or
any of its Subsidiaries (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated hereby and thereby, and
any advice given by a Buyer or any of its representatives or agents in
connection with the Transaction Documents and the transactions contemplated
hereby and thereby is merely incidental to such Buyer’s purchase of the
Securities. The Company further represents to each Buyer that the Company’s and
each Subsidiary’s decision to enter into the Transaction Documents to which it
is a party has been based solely on the independent evaluation by the Company,
each Subsidiary and their respective representatives.
 
 
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(j)           No General Solicitation; Placement Agent’s Fees. Neither the
Company, nor any of its Subsidiaries or affiliates, nor any Person acting on its
or their behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with the offer or
sale of the Securities. The Company shall be responsible for the payment of any
placement agent’s fees, financial advisory fees, or brokers’ commissions (other
than for Persons engaged by any Buyer or its investment advisor) relating to or
arising out of the transactions contemplated hereby.  Except as set forth on
Schedule 3(j), neither the Company nor any of its Subsidiaries has engaged any
placement agent or other agent in connection with the offer or sale of the
Securities.
 
(k)           No Integrated Offering. None of the Company, its Subsidiaries or
any of their affiliates, nor any Person acting on their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of the
issuance of any of the Securities under the 1933 Act, whether through
integration with prior offerings or otherwise, or cause this offering of the
Securities to require approval of stockholders of the Company under any
applicable stockholder approval provisions. None of the Company, its
Subsidiaries, their affiliates nor any Person acting on their behalf will take
any action or steps that would require registration of the issuance of any of
the Securities under the 1933 Act or cause the offering of any of the Securities
to be integrated with other offerings of securities of the Company.
 
(l)           Dilutive Effect. The Company acknowledges that its obligation to
issue the Shares and the Warrant Shares upon exercise of the Warrants in
accordance with this Agreement and the Warrants is absolute and unconditional,
regardless of any dilutive effect that such issuance may have on the ownership
interests of other stockholders of the Company.
 
(m)           Application of Takeover Protections; Rights Agreement. The Company
and its board of directors have not  taken and will not take any action in order
to implement any control share acquisition, interested stockholder, business
combination, poison pill (including, without limitation, any distribution under
a rights agreement) or other similar anti-takeover provision under the Articles
of Incorporation, Bylaws or other organizational documents or the laws of the
jurisdiction of its incorporation or otherwise.
 
 
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(n)           SEC Documents; Financial Statements. Since November 20, 2012, the
Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting
requirements of the 1934 Act (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements, notes and
schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the “SEC Documents”). The Company has delivered to
the Buyers or their respective representatives true, correct and complete copies
of each of the SEC Documents not available on the EDGAR system. As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. As of
their respective dates, the financial statements of the Company included in the
SEC Documents complied in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto as in effect as of the time of filing. Such financial statements have
been prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments which will not be material, either individually or in the
aggregate). No other information provided by or on behalf of the Company to any
of the Buyers which is not included in the SEC Documents contains any untrue
statement of a material fact or omits to state any material fact necessary, in
order to make the statements therein not misleading, in light of the
circumstances under which they are or were made.
 
(o)           Absence of Certain Changes. Since the date of the latest audited
financial statements contained in the Form 10-K and except as disclosed in the
SEC Reports,  there has been no material adverse change and no material adverse
development in the business, assets, liabilities, properties, operations
(including results thereof), condition (financial or otherwise) or prospects of
the Company or any of its Subsidiaries. Except as disclosed in the Form 10-K,
neither the Company nor any of its Subsidiaries has (i) declared or paid any
dividends, (ii) sold any assets, individually or in the aggregate, outside of
the ordinary course of business or (iii) made any material capital expenditures,
individually or in the aggregate. Neither the Company nor any of its
Subsidiaries has taken any steps to seek protection pursuant to any law or
statute relating to bankruptcy, insolvency, reorganization, receivership,
liquidation or winding up, nor does the Company or any Subsidiary have any
knowledge or reason to believe that any of their respective creditors intend to
initiate involuntary bankruptcy proceedings or any actual knowledge of any fact
which would reasonably lead a creditor to do so.
 
(p)           No Undisclosed Events, Liabilities, Developments or Circumstances.
No event, liability, development or circumstance has occurred or exists, or is
reasonably expected to occur or exist with respect to the Company, any of its
Subsidiaries or any of their respective businesses, properties, liabilities,
prospects, operations (including results thereof) or condition (financial or
otherwise), that has not been disclosed to the Buyers and could reasonably
likely have a Material Adverse Effect.
 
 
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(q)           Conduct of Business; Regulatory Permits; No Violations. Neither
the Company nor any of its Subsidiaries is in violation of any term of or in
default under its Articles of Incorporation, any certificate of designation,
preferences or rights of any other outstanding series of preferred stock of the
Company or any of its Subsidiaries or Bylaws or their organizational charter,
certificate of formation or certificate of incorporation or bylaws,
respectively. Neither the Company nor any of its Subsidiaries is in violation of
any judgment, decree or order or any statute, ordinance, rule or regulation
applicable to the Company or any of its Subsidiaries (including, without
limitation, foreign, federal and state securities laws and regulations), and
neither the Company nor any of its Subsidiaries will conduct its business in
violation of any of the foregoing, except in all cases for possible violations
which could not, individually or in the aggregate, have a Material Adverse
Effect. The Company and each of its Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate regulatory authorities
necessary to conduct their respective businesses, except where the failure to
possess such certificates, authorizations or permits would not have,
individually or in the aggregate, a Material Adverse Effect, and neither the
Company nor any such Subsidiary has received any notice of proceedings relating
to the revocation or modification of any such certificate, authorization or
permit.
 
(r)           Foreign Corrupt Practices.  Neither the Company nor any of its
Subsidiaries nor any director, officer, agent, employee or other Person acting
on behalf of the Company or any of its Subsidiaries has, in the course of its
actions for, or on behalf of, the Company or any of its Subsidiaries (i) used
any corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv)
made any unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or employee.
 
(s)           Transactions With Affiliates. Except as disclosed in the SEC
Reports, none of the officers, directors, employees or affiliates of the Company
or any of its Subsidiaries is presently a party to any transaction with the
Company or any of its Subsidiaries (other than for ordinary course services as
employees, officers or directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any such officer, director, employee or affiliate or, to the
knowledge of the Company or any of its Subsidiaries, any corporation,
partnership, trust or other Person in which any such officer, director, employee
or affiliate has a substantial interest or is an employee, officer, director,
trustee or partner.
 
 
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(t)           Equity Capitalization.  As of the date hereof, the issued capital
stock of the Company consists of 51,608,810 issued and outstanding shares of
Common Stock and 5,955,775 shares of Common Stock reserved for issuance pursuant
to capital stock or other securities of the Company or any of its Subsidiaries
that are at any time and under any circumstances directly or indirectly
convertible into, exercisable or exchangeable for, or which otherwise entitles
the holder thereof to acquire, any capital stock or other security of the
Company or any of its Subsidiaries (“Convertible Securities”) (other than
relating to the Securities). 5,350,178 shares of the Company’s issued and
outstanding shares of Common Stock, on a fully diluted basis, on the date hereof
are owned by a Person who is an “affiliate” (as defined in Rule 405 of the 1933
Act and calculated based on the assumption that only officers, directors and
holders of at least 10% of the Company’s issued and outstanding shares of Common
Stock are “affiliates” without conceding that any such Persons are “affiliates”
for purposes of federal securities laws) of the Company or any of its
Subsidiaries.  Except as disclosed in the SEC Reports or as set forth on
Schedule 5(t) attached hereto, (i) none of the Company’s or any Subsidiary’s
capital stock is subject to preemptive rights or any other similar rights or any
liens or encumbrances suffered or permitted by the Company or any Subsidiary;
(ii) there are no outstanding options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into, or exercisable or exchangeable for, any capital stock
of the Company or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional capital stock of the Company or any
of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any capital stock of the
Company or any of its Subsidiaries; (iii) there are no outstanding debt
securities, notes, credit agreements, credit facilities or other agreements,
documents or instruments evidencing Indebtedness of the Company or any of its
Subsidiaries or by which the Company or any of its Subsidiaries is or may become
bound; (iv) there are no financing statements securing obligations in any
amounts filed in connection with the Company or any of its Subsidiaries; (v)
there are no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of their securities under
the 1933 Act (except pursuant to the Registration Rights Agreement); (vi) there
are no outstanding securities or instruments of the Company or any of its
Subsidiaries which contain any redemption or similar provisions, and there are
no contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to redeem a security of the
Company or any of its Subsidiaries; (vii) there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Securities and (viii) neither the Company nor any Subsidiary has
any stock appreciation rights, restricted stock units or “phantom stock” plans
or agreements or any similar plan or agreement. The Company has furnished to the
Buyers true, correct and complete copies of the Company’s Articles of
Incorporation, as amended and as in effect on the date hereof (the “Articles of
Incorporation”), and the Company’s by-laws, as amended and as in effect on the
date hereof (the “By-Laws”), and the terms of all securities convertible into,
or exercisable or exchangeable for, shares of Common Stock and the material
rights of the holders thereof in respect thereto.
 
 
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(u)           Indebtedness and Other Contracts. Neither the Company nor any of
its Subsidiaries (i) has any outstanding Indebtedness (as defined below), (ii)
is a party to any contract, agreement or instrument, the violation of which, or
default under which, by the other party(ies) to such contract, agreement or
instrument could reasonably be expected to result in a Material Adverse Effect,
(iii) is in violation of any term of, or in default under, any contract,
agreement or instrument relating to any Indebtedness, except where such
violations and defaults would not result, individually or in the aggregate, in a
Material Adverse Effect, or (iv) is a party to any contract, agreement or
instrument relating to any Indebtedness, the performance of which, in the
judgment of the Company’s officers, has or is expected to have a Material
Adverse Effect. The Company has furnished to the Buyers true, correct and
complete copies of all indentures, agreements, notes, leases, mortgages, deeds
or other instruments to which the Company or any Subsidiary is a party or by
which the Company or any Subsidiary is bound or affected that is material to the
Company or any Subsidiary. “Indebtedness” of any Person means, without
duplication (A) all indebtedness for borrowed money, (B) all obligations issued,
undertaken or assumed as the deferred purchase price of property or services
(including, without limitation, “capital leases” in accordance with GAAP), other
than (i) trade payables entered into in the ordinary course of business, (ii)
trade payables entered into in the ordinary course of business and trade
payables relating to or arising from services provided by the Company’s counsel,
(C) all reimbursement or payment obligations with respect to letters of credit,
surety bonds and other similar instruments, (D) all obligations evidenced by
notes, bonds, debentures or similar instruments, or guarantees thereof,
including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (E) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with
the proceeds of such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property), (F) all monetary obligations under any
leasing or similar arrangement which, in connection with GAAP, consistently
applied for the periods covered thereby, is classified as a capital lease, (G)
all indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment of
such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (A) through (G)
above; provided, however, that, for the avoidance of doubt, any deferred
compensation in respect of any of the Company’s officers, directors, employees,
agents or consultants shall not be deemed to constitute
Indebtedness.  “Contingent Obligation” means, as to any Person, any direct or
indirect liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto.  “Person”
means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency thereof.
 
(v)           Absence of Litigation. Except as set forth on Schedule 3(v), 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, threatened against or affecting the Company
or any of its Subsidiaries, the Common Stock or any of the Company’s or its
Subsidiaries’ officers or directors which is outside of the ordinary course of
business or individually or in the aggregate material to the Company or any of
its Subsidiaries. There has not been, and to the knowledge of the Company, there
is not pending or contemplated, any investigation by the SEC involving the
Company, any of its Subsidiaries or any current or former director or officer of
the Company or any of its Subsidiaries.
 
(w)           Insurance. The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged. Neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for, and neither the Company nor any such
Subsidiary has any reason to believe that it will be unable to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.
 
 
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(x)           Employee Relations.  Neither the Company nor any of its
Subsidiaries is a party to any collective bargaining agreement or employs any
member of a union. The Company believes that its and its Subsidiaries’ relations
with their respective employees are good. No executive officer (as defined in
Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company
or any of its Subsidiaries has notified the Company or any such Subsidiary that
such officer intends to leave the Company or any such Subsidiary or otherwise
terminate such officer’s employment with the Company or any such Subsidiary. No
executive officer or other key employee of the Company or any of its
Subsidiaries is, or is now expected to be, in violation of any material term of
any employment contract, confidentiality, disclosure or proprietary information
agreement, non-competition agreement, or any other contract or agreement or any
restrictive covenant, and the continued employment of each such executive
officer or other key employee (as the case may be) does not subject the Company
or any of its Subsidiaries to any liability with respect to any of the foregoing
matters.  The Company and its Subsidiaries are in compliance with all federal,
state, local and foreign laws and regulations respecting labor, employment and
employment practices and benefits, terms and conditions of employment and wages
and hours, except where failure to be in compliance would not, either
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.
 
(y)           Title. The Company and its Subsidiaries have good and marketable
title in fee simple to all real property, and have good and marketable title to
all personal property, owned by them which is material to the business of the
Company and its Subsidiaries, in each case, free and clear of all liens,
encumbrances and defects except such as do not materially affect the value of
such property and do not interfere with the use made and proposed to be made of
such property by the Company and any of its Subsidiaries. Any real property and
facilities held under lease by the Company or any of its Subsidiaries are held
by them under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company or any of its Subsidiaries.
 
(z)           Intellectual Property Rights. To the best of the Company’s
knowledge, the Company and its Subsidiaries own or possess adequate rights or
licenses to use all trademarks, trade names, service marks, service mark
registrations, service names, patents, patent rights, copyrights, original
works, inventions, licenses, approvals, governmental authorizations, trade
secrets and other intellectual property rights and all applications and
registrations therefor (“Intellectual Property Rights”) necessary to conduct
their respective businesses as now conducted and as presently proposed to be
conducted.  Except as set forth on Schedule 3(z), none of the Company’s or its
Subsidiaries’ Intellectual Property Rights have expired, terminated or been
abandoned, or are expected to expire, terminate or be abandoned, within three
years from the date of this Agreement.  The Company has no knowledge of any
infringement by the Company or any of its Subsidiaries of Intellectual Property
Rights of others.  Except as set forth on Schedule 3(z), there is no claim,
action or proceeding being made or brought, or to the knowledge of the Company
or any of its Subsidiaries, being threatened, against the Company or any of its
Subsidiaries regarding their Intellectual Property Rights.  The Company is not
aware of any facts or circumstances which might give rise to any of the
foregoing infringements or claims, actions or proceedings. The Company and each
of its Subsidiaries have taken reasonable security measures to protect the
secrecy, confidentiality and value of all of their Intellectual Property Rights.
 
 
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(aa)           [Reserved.]
 
(bb)           Subsidiary Rights. The Company or one of its Subsidiaries has the
unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its
Subsidiaries as owned by the Company or such Subsidiary.
 
(cc)           Tax Status. The Company and each of its Subsidiaries (i) has
timely made or filed all foreign, federal and state income and all other tax
returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) has timely paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and (iii) has set aside on its books provision reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Company and its Subsidiaries know of no basis for any
such claim.  The Company is not operated in such a manner as to qualify as a
passive foreign investment company, as defined in Section 1297 of the U.S.
Internal Revenue Code of 1986, as amended.
 
(dd)           Investment Company Status. The Company is not, and upon
consummation of the sale of the Securities will not be, an “investment company,”
an affiliate of an “investment company,” a company controlled by an “investment
company” or an “affiliated person” of, or “promoter” or “principal underwriter”
for, an “investment company” as such terms are defined in the Investment Company
Act of 1940, as amended.
 
(ee)           No Additional Agreements. Except as set forth on Schedule 3(ee),
the Company does not have any agreement or understanding with any Buyer with
respect to the transactions contemplated by the Transaction Documents other than
as specified in the Transaction Documents.
 
(ff)           Illegal or Unauthorized Payments; Political
Contributions.  Neither the Company nor any of its Subsidiaries nor, to the best
of the Company’s knowledge (after reasonable inquiry of its officers and
directors), any of the officers, directors, employees, agents or other
representatives of the Company or any of its Subsidiaries or any other business
entity or enterprise with which the Company or any Subsidiary is or has been
affiliated or associated, has, directly or indirectly, made or authorized any
payment, contribution or gift of money, property, or services, whether or not in
contravention of applicable law, (a) as a kickback or bribe to any Person or (b)
to any political organization, or the holder of or any aspirant to any elective
or appointive public office except for personal political contributions not
involving the direct or indirect use of funds of the Company or any of its
Subsidiaries.
 
 
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(gg)           Disclosure.  The Company understands and confirms that each of
the Buyers will rely on the foregoing representations in effecting transactions
in securities of the Company. All disclosure provided to the Buyers regarding
the Company and its Subsidiaries, their businesses and the transactions
contemplated hereby, including the schedules to this Agreement, furnished by or
on behalf of the Company or any of its Subsidiaries is true and correct and does
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. Each
press release issued by the Company or any of its Subsidiaries during the six
(6) months preceding the date of this Agreement did not at the time of release
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading.  No event or circumstance has occurred or information exists with
respect to the Company or any of its Subsidiaries or its or their business,
properties, liabilities, prospects, operations (including results thereof) or
conditions (financial or otherwise), which, under applicable law, rule or
regulation, requires public disclosure at or before the date hereof or
announcement by the Company but which has not been so publicly disclosed. The
Company acknowledges and agrees that no Buyer makes or has made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 2.
 
4.
COVENANTS.

 
(a)           Reasonable Best Efforts. Each Buyer shall use its reasonable best
efforts to timely satisfy each of the conditions to be satisfied by it as
provided in Section 6 of this Agreement. The Company shall use its reasonable
best efforts to timely satisfy each of the conditions to be satisfied by it as
provided in Section 7 of this Agreement.
 
(b)           Form D and Blue Sky.  The Company shall file a Form D with respect
to the Securities as required under Regulation D. The Company shall, on or
before the Closing Date, take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for, or to, qualify the
Securities for sale to the Buyers at the Closing pursuant to this Agreement
under applicable securities or “Blue Sky” laws of the states of the United
States (or to obtain an exemption from such qualification), and shall provide
evidence of any such action so taken to the Buyers on or prior to the Closing
Date. Without limiting any other obligation of the Company under this Agreement,
the Company shall timely make all filings and reports relating to the offer and
sale of the Securities required under all applicable securities laws (including,
without limitation, all applicable federal securities laws and all applicable
“Blue Sky” laws), and the Company shall comply with all applicable federal,
foreign, state and local laws, statutes, rules, regulations and the like
relating to the offering and sale of the Securities to the Buyers.
 
(c)           Reporting Status. Until the earlier to occur of (i) the date on
which the Buyers shall have sold all of the Registrable Securities or (ii)
the  three (3) year anniversary of the date of this Agreement (such period is
referred to herein as the “Reporting Period”), the Company shall timely file all
reports required to be filed with the SEC pursuant to the 1934 Act, and the
Company shall not terminate its status as an issuer required to file reports
under the 1934 Act even if the 1934 Act or the rules and regulations thereunder
would no longer require or otherwise permit such termination.
 
 
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(d)           Financial Information. The Company agrees to send the following to
each Investor (as defined in the Registration Rights Agreement) during the
Reporting Period unless the following are publicly filed with the SEC through
EDGAR or are otherwise available to the public, (i) within  three (3) Business
Days after the filing thereof with the SEC, a copy of its Annual Reports on Form
10-K, any quarterly or interim reports or any consolidated balance sheets,
income statements, stockholders’ equity statements and/or cash flow statements
for any period other than annual, any Current Reports on Form 8-K and any
registration statements (other than on Form S-8) or amendments filed pursuant to
the 1933 Act, (ii) on the same day as the release thereof, facsimile copies of
all press releases issued by the Company or any of its Subsidiaries and (iii)
copies of any notices and other information made available or given to the
stockholders of the Company generally, contemporaneously with the making
available or giving thereof to the stockholders.  The Company’s filing on EDGAR
shall be deemed to satisfy this requirement.
 
(e)           Listing or Quotation.  The Common Stock is currently traded only
on the OTC Bulletin Board or OTCMarkets (OTCQB) (or any successor) (the
“Principal Market”) and the Company shall take all necessary actions to maintain
the trading of the Common Stock on the Principal Market.  If the Common Stock
becomes listed or designated for quotation on any other Eligible Market (as
defined below), then the Company shall promptly secure the listing or
designation for quotation (as the case may be) of all of the Registrable
Securities  upon each national securities exchange and automated quotation
system, if any, upon which the Common Stock is then listed or designated for
quotation (as the case may be) (subject to official notice of issuance) and
shall maintain such listing or designation for quotation (as the case may be) of
all Registrable Securities from time to time issuable under the terms of the
Transaction Documents on such then applicable national securities exchange or
automated quotation system. The Company shall take all necessary actions to
maintain the Common Stock’s trading on the Principal Market. If in the future,
the Common Stock becomes listed or designated for quotation on any of The New
York Stock Exchange, the NYSE MKT, the Nasdaq Global Select Market, the Nasdaq
Global Market or the Nasdaq Capital Market (each, together with the Principal
Market, an “Eligible Market”), the Company shall use its reasonable best efforts
to maintain the Common Stock’s listing or designation for quotation (as the case
may be) on such market. Neither the Company nor any of its Subsidiaries shall
take any action which could be reasonably expected to result in the delisting or
suspension of the Common Stock on an Eligible Market on which the Common Stock
is then traded, listed or designated for quotation. The Company shall pay all
fees and expenses in connection with satisfying its obligations under this
Section 4(e).
 
(f)           Fees; Expenses.  At Closing, the Company shall pay or reimburse
IPNav Capital, LLC or its designee(s) for all reasonable costs and expenses
incurred by it in connection with the transactions contemplated by the
Transaction Documents (including, without limitation, all reasonable legal fees
and disbursements in connection therewith, documentation and implementation of
the transactions contemplated by the Transaction Documents and due diligence and
regulatory filings in connection therewith), which amount shall be withheld by
IPNav Capital, LLC from its Purchase Price at the Closing or paid by the Company
on demand by IPNav Capital, LLC if IPNav Capital, LLC terminates its obligations
under this Agreement in accordance with Section 8 (as the case may be). The
Company shall be responsible for the payment of any placement agent’s fees,
financial advisory fees, or broker’s commissions (other than for Persons engaged
by any Buyer) claimed by any person or entity as a result of commitments made by
the Company and relating to or arising out of the transactions contemplated
hereby. The Company shall pay, and hold each Buyer harmless against, any
liability, loss or expense (including, without limitation, reasonable attorneys’
fees and out-of-pocket expenses) arising in connection with any claim relating
to any such payment, except for payments that are determined to be due to such
third parties as a result of commitments made by the Buyers. Except as otherwise
set forth in the Transaction Documents, each party to this Agreement shall bear
its own expenses in connection with the sale of the Securities to the Buyers.
 
 
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(g)           Pledge of Securities. Notwithstanding anything to the contrary
contained in this Agreement, the Company acknowledges and agrees that the
Securities may be pledged by a Buyer in connection with a bona fide margin
agreement or other loan or financing arrangement that is secured by the
Securities. The pledge of Securities shall not be deemed to be a transfer, sale
or assignment of the Securities hereunder, and no Buyer effecting a pledge of
Securities shall be required to provide the Company with any notice thereof or
otherwise make any delivery to the Company pursuant to this Agreement or any
other Transaction Document. The Company hereby agrees to execute and deliver
such documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by a Buyer.
 
(h)           Disclosure of Transactions and Other Material Information. The
Company shall, on or before 8:30 a.m., New York time, on the first (1st)
Business Day after the date of this Agreement, file a Current Report on Form 8-K
describing all the material terms of the transactions contemplated by the
Transaction Documents in the form required by the 1934 Act and attaching all the
material Transaction Documents (including, without limitation, this Agreement
(and all exhibits and schedules to this Agreement, other than the Disclosure
Schedules), the form of the Warrants and the form of the Registration Rights
Agreement) (including all attachments, the “8-K Filing”); provided, however,
that if the Company issues a press release on or before 8:30 a.m., New York
time, on the first (1st) Business Day after the date of this Agreement, which
press release contains a description of all material terms of the transactions
contemplated by the Transaction Documents, the Company shall be permitted to
make the 8-K Filing on or before 5:30 p.m., New York time, on the fourth (4th)
Business Day after the date of this Agreement. From and after the issuance of
the press release or 8-K Filing, whichever is earlier, the Company shall have
disclosed all material, non-public information (if any) delivered to any of the
Buyers by the Company or any of its Subsidiaries, or any of their respective
officers, directors, employees or agents in connection with the transactions
contemplated by the Transaction Documents. The Company shall not, and the
Company shall cause each of its Subsidiaries and each of its and their
respective officers, directors, employees and agents not to, provide any Buyer
with any material, non-public information regarding the Company or any of its
Subsidiaries from and after the issuance of the press release or 8-K Filing, as
the case may be, without the express prior written consent of such Buyer. In the
event of a breach of any of the foregoing covenants or any of the covenants
contained in Section 4(o) by the Company, any of its Subsidiaries, or any of its
or their respective officers, directors, employees and agents (as determined in
the reasonable good faith judgment of such Buyer), in addition to any other
remedy provided herein or in the Transaction Documents, such Buyer shall have
the right to make a public disclosure, in the form of a press release, public
advertisement or otherwise, of such material, non-public information without the
prior approval by the Company, any of its Subsidiaries, or any of its or their
respective officers, directors, employees or agents. No Buyer shall have any
liability to the Company, any of its Subsidiaries, or any of its or their
respective officers, directors, employees, stockholders or agents, for any such
disclosure. Subject to the foregoing, neither the Company, its Subsidiaries nor
any Buyer shall issue any press releases or any other public statements with
respect to the transactions contemplated hereby; provided, however, the Company
shall be entitled, without the prior approval of any Buyer, to make any press
release or other public disclosure with respect to such transactions (i) in
substantial conformity with the press release or the 8-K Filing and
contemporaneously therewith and (ii) as is required by applicable law and
regulations (provided that in the case of clause (i) each Buyer shall be
consulted by the Company in connection with any such press release or other
public disclosure prior to its release). Without the prior written consent of
the applicable Buyer, the Company shall not (and shall cause each of its
Subsidiaries and affiliates to not) disclose the name of such Buyer in any
filing (other than the 8-K Filing), announcement, release or otherwise, except
as may be required by applicable law and regulations. Notwithstanding anything
contained in this Agreement to the contrary and without implication that the
contrary would otherwise be true, the Company expressly acknowledges and agrees
that no Buyer has had, and no Buyer shall have (unless expressly agreed to by a
particular Buyer after the date hereof in a written definitive and binding
agreement executed by the Company and such particular Buyer (it being understood
and agreed that no Buyer may bind any other Buyer with respect thereto)), any
duty of confidentiality with respect to, or a duty not to trade on the basis of,
any information regarding the Company or any of its Subsidiaries..
 
 
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(i)           Reservation of Shares. So long as any of the Warrants remain
outstanding or unexpired and unexercised, the Company shall take all action
necessary to at all times have authorized, and reserved for the purpose of
issuance, 100% of the aggregate of the maximum number of Warrant Shares issuable
upon exercise of the Warrants (assuming that all Warrants are exercised and
without taking into account any limitations on the exercise of the Warrants set
forth therein).
 
(j)           Conduct of Business.  The business of the Company and its
Subsidiaries shall not be conducted in violation of any law, ordinance or
regulation of any governmental entity, except where such violations would not
result, either individually or in the aggregate, in a Material Adverse Effect.
 
(k)           Passive Foreign Investment Company. The Company shall use its
commercially reasonable efforts to conduct its business in such a manner as will
ensure that the Company will not be deemed to constitute a passive foreign
investment company within the meaning of Section 1297 of the U.S. Internal
Revenue Code of 1986, as amended.
 
(l)           Corporate Existence. For so long as any of the Warrants remain
outstanding or unexpired and unexercised, the Company shall not be party to any
Fundamental Transaction (as defined in the Warrants) unless the Company is in
compliance with the applicable provisions governing Fundamental Transactions set
forth in the Warrants.
 
 
(m)
Per Share Price Protection.

 
 
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(i)           As to each Buyer, from the date hereof until the date upon which
the Company completes a financing or series of related financings of equity or
equity-linked securities with aggregate gross proceeds to the Company of at
least $10,000,000 (the “Expiration Date”), if any issuance, offer, sale, grant
of any option or right to purchase or other disposition of any equity security
or any equity-linked or related security (including, without limitation, any
“equity security” (as that term is defined under Rule 405 promulgated under the
1933 Act), any Convertible Securities, any preferred stock or any purchase
rights) (any such issuance, offer, sale, grant or disposition is referred to as
a “Subsequent Placement”) is for a consideration per share that is less
than  the Per Unit Purchase Price (adjusted for stock splits, combinations,
dividends and the like occurring after the Closing Date) (such lesser price is
referred to herein as the “Discounted Per Share Purchase Price”) (the foregoing,
a “Dilutive Issuance”), other than Excluded Securities, then immediately after
such Dilutive Issuance, the Company shall issue to such Buyer solely with
respect to Common Stock acquired pursuant to this Agreement or in connection
with a Dilutive Issuance, without the payment of additional consideration, in
connection with such Dilutive Issuance, a number of additional shares of Common
Stock (the “Additional Shares”) equal to the result of subtracting (B) from (A)
where (A) is the number of shares of Common Stock the Buyer would have received
if the Buyer had paid the Discounted Per Share Purchase Price instead of the Per
Unit Purchase Price (adjusted for stock splits, combinations, dividends and the
like occurring after the Closing Date), and (B) is the number of shares of
Common Stock initially issued to the Buyer at the Closing (adjusted for stock
splits, combinations, dividends and the like occurring after the Closing Date)
plus any shares of Common Stock previously received by Buyer under this Section
4(m) in respect of a Dilutive Issuance (adjusted for stock splits, combinations,
dividends and the like occurring after the Closing Date).  For the absence of
doubt, no adjustment shall be made to any Warrants or Warrant Shares as a result
of any Dilutive Issuance.  Upon any issuance of Additional Shares hereunder,
such Additional Shares shall be included as Registrable Securities (as defined
in the Registration Rights Agreement).  In the event that the Registration
Statement is then effective, the Additional Shares received hereunder shall be
issued pursuant to the Registration Statement free of any restrictions or
legends, and be delivered via the DWAC system to a Depository Trust Company
(“DTC”) account specified by the Buyer, and if not, in certificated form.
 
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(ii)           In implementation of Section 4(m)(i), to the extent that an
issuance of Additional Shares would result in a Buyer or any of its affiliates
beneficially owning in excess of 9.99% (the “Maximum Percentage”) of the Common
Stock, then the Company shall initially issue only such number of Additional
Shares that would result in such Buyer (together with such Buyer’s affiliates)
beneficially owning the Maximum Percentage of the Common Stock, and, except as
otherwise provided below, no other Additional Shares shall be issuable under
this Section 4(m). After such initial issuance, and until all Additional Shares
which otherwise would have been issued under this Section 4(m) have been issued,
from time to time the Company will issue such number of such unissued Additional
Shares so that such Buyer (together such Buyer’s affiliates) will beneficially
own only the Maximum Percentage of the Common Stock. Such Buyer shall make
written representations and warranties to the Company regarding its (together
with its affiliates’) beneficial ownership to effectuate the foregoing.  The
Maximum Percentage limitation contained in this paragraph, Section 4(m) herein
and the limitation on exercise contained in Section 1(f) of the Warrants issued
to such Buyer pursuant to this Agreement shall be coordinated so that the
aggregate beneficial ownership of such Buyer (together with its affiliates) does
not exceed the Maximum Percentage limitation.  In connection therewith,
issuances pursuant to this Section 4(m) shall take precedence over issuances of
any Warrant Shares issuable to such Buyer. The provisions of this paragraph
shall be implemented in a manner otherwise than in strict conformity with the
terms this paragraph to correct this paragraph (or any portion hereof) which may
be defective or inconsistent with the intended Maximum Percentage beneficial
ownership limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such Maximum Percentage
limitation. The limitations contained in this paragraph shall apply to assignees
of such Buyer hereunder. For the purposes of this paragraph, beneficial
ownership and all determinations and calculations (including, without
limitation, with respect to calculations of percentage ownership) shall be
determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder.
 
(iii)           If Common Stock or Common Stock Equivalents are issued for a
consideration other than cash, the per share price shall be the fair value of
such consideration as determined in good faith by the Board of Directors of the
Company. For the purposes of this Section 4(m), the “price per share for which
one share of Common Stock is issuable upon the conversion, exercise or exchange
of any Common Stock Equivalents” shall be equal to the sum of the lowest amounts
of consideration (if any) received or receivable by the Company with respect to
one share of Common Stock upon the issuance or sale of such Common Stock
Equivalents and upon conversion, exercise or exchange of such Common Stock
Equivalents.  The Company may not refuse to issue to a Buyer Additional Shares
hereunder based on any claim that such Buyer or anyone associated or affiliated
with such Buyer has been engaged in any violation of law, agreement or for any
other reason, unless, an injunction from a court, on notice, restraining and or
enjoining an issuance hereunder shall have been sought and obtained.  Nothing
herein shall limit a Buyer’s right to pursue actual damages for the Company’s
failure to deliver Additional Shares hereunder, and such Buyer shall have the
right to pursue all remedies available to it at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief.
 
 
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(iv)           The Company shall provide each Buyer with at least five (5)
Trading Days prior notice of the closing of the Subsequent Placement, which
notice shall include written details on the financing so as to confirm the
calculations above to the satisfaction of the Buyer.  Notwithstanding anything
to the contrary herein in this Section 4(m), this Section 4(m) shall not apply
to an issuance of Excluded Securities (as defined below). The Company
acknowledges and agrees that the right set forth in this Section 4(m) is a right
granted by the Company, separately, to each Buyer. “Excluded Securities” means
(x) the issuance of (A) shares of Common Stock or options to purchase shares of
Common Stock to directors, officers, employees, consultants or agents of the
Company in their capacity as such pursuant to an Approved Share Plan (as defined
below) or pursuant to a unanimous written consent of the Company’s Board of
Directors outside of an Approved Share Plan in an amount not to exceed 3,550,000
shares of Common Stock or options to purchase shares of Common Stock in the
aggregate to be issued solely to directors and officers, provided that the
exercise price of any such options is not lowered, none of such options are
amended to increase the number of shares issuable thereunder and none of the
terms or conditions of any such options are otherwise materially changed in any
manner that adversely affects any of the Buyers; (B) shares of Common Stock
issued upon the conversion or exercise of Convertible Securities (other than
standard options to purchase shares of Common Stock issued pursuant to an
Approved Share Plan that are covered by clause (A) above) issued prior to the
date hereof, provided that the conversion or exercise (as the case may be) of
any such Convertible Security is made solely pursuant to the conversion or
exercise (as the case may be) provisions of such Convertible Security that were
in effect on the date immediately prior to the date of this Agreement, the
conversion or exercise price of any such Convertible Securities (other than
standard options to purchase shares of Common Stock issued pursuant to an
Approved Share Plan that are covered by clause (A) above) is not lowered
(whether via amendment or through the operation of the terms of such Convertible
Security or any agreement relating thereto, including anti-dilution provisions),
none of such Convertible Securities are (other than standard options to purchase
shares of Common Stock issued pursuant to an Approved Share Plan that are
covered by clause (A) above) (nor is any provision of any such Convertible
Securities) amended or waived in any manner (whether by the Company or the
holder thereof) to increase the number of shares issuable thereunder or decrease
the conversion or exercise price thereof and none of the terms or conditions of
any such Convertible Securities (other than standard options to purchase shares
of Common Stock issued pursuant to an Approved Share Plan that are covered by
clause (A) above) are otherwise materially changed or waived (whether by the
Company or the holder thereof) in any manner that adversely affects any of the
Buyers; (C) securities issued pursuant to acquisitions or strategic transactions
approved by a majority of the disinterested directors of the Company, provided
that any such issuance shall only be to a Person (or to the equityholders 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; (D) the Warrants; and (E) the
Warrant Shares and (F) pursuant to the terms of any Securiites outstanding on
the date hereof. “Approved Share Plan” means the Company’s existing stock
incentive plan or any other benefit plan which has been approved by the board of
directors of the Company prior to or subsequent to the date hereof pursuant to
which shares of Common Stock and standard options to purchase shares of Common
Stock may be issued to any employee, officer, consultant or director for
services provided to the Company in their capacity as such.
 
 
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5.
REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.

 
(a)           Register. The Company shall maintain at its principal executive
offices (or such other office or agency of the Company as it may designate by
notice to each holder of Securities), a register for the Warrants in which the
Company shall record the name and address of the Person in whose name the
Warrants have been issued (including the name and address of each transferee)
and the number of Warrant Shares issuable upon exercise of the Warrants held by
such Person. The Company shall keep the register open and available at all times
during business hours for inspection of any Buyer or its legal representatives.
 
(b)           Transfer Agent Instructions. As promptly as practicable after
Closing, the Company shall issue instructions to its transfer agent and any
subsequent transfer agent in a form acceptable to each of the Buyers (the
“Transfer Agent Instructions”) to issue certificates or, if eligible, credit
shares to the applicable balance accounts at The Depository Trust Company
(“DTC”), registered in the name of each Buyer or its respective nominee(s), for
the Shares and the Warrant Shares in such amounts as specified from time to time
by each Buyer to the Company upon the exercise of the Warrants. If Rule 144 is
available and a Buyer or any subsequent holder of the Securities proposes to
transfer the Securities held by such Person pursuant to Rule 144, then the
Company shall provide for the Company’s counsel to furnish  at the Company’s
sole cost and expense opinions to its transfer agent, if requested, provided
that such Buyer or such subsequent holder and brokers, as the case may be,
provides the representations as requested by the Company’s counsel and Buyer
complies with the requirements of Rule 144 in connection with such sales. Any
fees (with respect to the transfer agent, counsel to the Company or otherwise)
associated with the issuance of such opinion or the removal of any legends on
any of the Securities shall be borne by the Company.
 
(c)           Legends. Each Buyer understands that the Securities have been
issued (or will be issued in the case of the Warrant Shares) pursuant to an
exemption from registration or qualification under the 1933 Act and applicable
state securities laws, and except as set forth in Section 5(d) below, the
Securities shall bear any legend as required by the “blue sky” laws of any state
and a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of such stock certificates):
 
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN][THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER
(IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE
TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
 
 
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(d)           Removal of Legends. Certificates evidencing Securities shall not
be required to contain the legend set forth in Section 5(c) above or any other
legend (i) while a registration statement (including a Registration Statement)
covering the resale of such Securities is effective under the 1933 Act, (ii)
following any sale of such Securities pursuant to Rule 144 (assuming the
transferor is not an affiliate of the Company), (iii) if such Securities are
eligible to be sold, assigned or transferred without restriction under Rule 144
(provided that a Buyer provides the Company with reasonable assurances
acceptable to the Company’s counsel that such Securities are eligible for sale,
assignment or transfer under Rule 144 which shall not include an opinion of
counsel), (iv) in connection with a sale, assignment or other transfer (other
than under Rule 144), provided that such Buyer provides the Company with an
opinion of counsel to such Buyer, in a form reasonably acceptable to the
Company, to the effect that such sale, assignment or transfer of the Securities
may be made without registration under the applicable requirements of the 1933
Act or (v) if such legend is not required under applicable requirements of the
1933 Act (including, without limitation, controlling judicial interpretations
and pronouncements issued by the SEC). If a legend is not required pursuant to
the foregoing, the Company shall no later than three (3) Trading Days following
the delivery by a Buyer to the Company or the transfer agent (with notice to the
Company) of a legended certificate representing such Securities (endorsed or
with stock powers attached, signatures guaranteed, and otherwise in form
necessary to affect the reissuance and/or transfer, if applicable), together
with any other deliveries from such Buyer as may be required above in this
Section 5(d), as directed by such Buyer, either: (A) provided that the Company’s
transfer agent is participating in the DTC Fast Automated Securities Transfer
Program and such Securities are Shares or Warrant Shares, credit the aggregate
number of shares of Common Stock to which such Buyer shall be entitled to such
Buyer’s or its designee’s balance account with DTC through its
Deposit/Withdrawal at Custodian system or (B) if the Company’s transfer agent is
not participating in the DTC Fast Automated Securities Transfer Program, issue
and deliver (via reputable overnight courier) to such Buyer, a certificate
representing such Securities that is free from all restrictive and other
legends, registered in the name of such Buyer or its designee (the date by which
such credit is so required to be made to the balance account of such Buyer’s or
such Buyer’s nominee with DTC or such certificate is required to be delivered to
such Buyer pursuant to the foregoing is referred to herein as the “Required
Delivery Date”).
 
(e)           Failure to Timely Deliver. If the Company fails to (i) issue and
deliver (or cause to be delivered) to a Buyer by the Required Delivery Date a
certificate representing the Securities so delivered to the Company by such
Buyer that is free from all restrictive and other legends or (ii) credit the
balance account of such Buyer’s or such Buyer’s nominee with DTC for such number
of Warrant Shares so delivered to the Company, then, in addition to all other
remedies available to such Buyer, the Company shall pay in cash to such Buyer on
each Trading Day beginning on the 5th Trading Day after the Required Delivery
Date that the issuance or credit of such shares is not timely effected an amount
equal to 1% of the product of (A) the number of shares of Common Stock not so
delivered or credited (as the case may be) to such Buyer or such Buyer’s nominee
multiplied by (B) the Closing Sale Price of the Common Stock on the Trading Day
immediately preceding the Required Delivery Date.
 
 
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6.
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

 
(a)           The obligation of the Company hereunder to issue and sell the
applicable Securities to each Buyer at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the Company’s sole benefit
and may be waived by the Company at any time in its sole discretion by providing
each Buyer with prior written notice thereof:
 
(i)           Such Buyer and each other Buyer shall have executed each of the
other Transaction Documents to which it is a party and delivered the same to the
Company.
 
(ii)           Such Buyer and each other Buyer shall have delivered to the
Company the Purchase Price for the Securities being purchased by such Buyer at
the Closing by wire transfer of immediately available funds pursuant to the wire
transfer instructions attached hereto as Exhibit C.
 
(iii)           The representations and warranties of such Buyer shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though originally made at that time (except for representations
and warranties that speak as of a specific date, which shall be true and correct
as of such date), and such Buyer shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by such Buyer at or
prior to the Closing Date.
 
 
(iv)
The aggregate Purchase Price shall be at least $3,000,000.

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

 
(a)           The obligation of each Buyer hereunder to purchase the applicable
Securities at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for each Buyer’s sole benefit and may be waived by such Buyer at
any time in its sole discretion by providing the Company with prior written
notice thereof:
 
(i)           The Company shall have duly executed and delivered to such Buyer
each of the Transaction Documents to which it is a party and the Company shall
have duly executed and delivered to such Buyer the Securities being purchased by
such Buyer at the Closing pursuant to this Agreement (which, in relation to the
Closing, shall be (A) the aggregate number of Shares set forth on such Buyer’s
signature page,  and (B) a Warrant to initially acquire up to the aggregate
number of Warrant Shares as is set forth on such Buyer’s signature page).
 
 
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(ii)           Such Buyer shall have received the opinion of Sichenzia Ross
Friedman Ference LLP, the Company’s counsel, dated as of the Closing Date, in
the form and substance acceptable to such Buyer and addressing such legal
matters as such Buyers may reasonably request.
 
(iii)           The aggregate Purchase Price shall be at least $3,000,000.
 
(iv)           The Company shall have delivered to such Buyer a certificate
evidencing the formation, qualification and/or good standing of the Company in
such entity’s jurisdiction of formation and jurisdiction in which it is
qualified (or should be qualified) to do business, issued by the Secretary of
State (or comparable office) of such jurisdictions, of formation, qualification
and/or good standing as of a date within ten (10) days of the Closing Date.
 
(v)           The Company shall have delivered to such Buyer a certified copy of
the Certificate of Incorporation as certified by the Secretary of State of the
Company’s jurisdiction of incorporation within ten (10) days of the Closing
Date.
 
(vi)           The Company shall have delivered to such Buyer certificates, in
the form acceptable to such Buyer, executed by the Secretary of the Company (or
another officer, if such entity does not have a secretary) and dated as of the
Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted
by the board of directors in a form reasonably acceptable to such Buyer, (ii)
the Articles of Incorporation of the Company and (iii) the Bylaws of the
Company, each as in effect at the Closing.
 
(vii)           Each and every representation and warranty of the Company shall
be true and correct as of the date when made and as of the Closing Date as
though originally made at that time (except for representations and warranties
that speak as of a specific date, which shall be true and correct as of such
date) and the Company shall have performed, satisfied and complied in all
respects with the covenants, agreements and conditions required to be performed,
satisfied or complied with by the Company at or prior to the Closing Date. Such
Buyer shall have received a certificate, executed by the President of the
Company, dated as of the Closing Date, to the foregoing effect and as to such
other matters as may be reasonably requested by such Buyer in the form
acceptable to such Buyer.
 
(viii)           The Company shall have delivered to such Buyer a certificate
from the Company’s transfer agent (which, for the avoidance of doubt, may be the
Company) certifying the number of shares of Common Stock outstanding on the
Closing Date immediately prior to the Closing and certain other matters
typically covered by a transfer agent’s certificate
 
(ix)           The Company shall have obtained all governmental, regulatory or
third party consents and approvals, if any, necessary for the sale of the
Securities, including without limitation, those required by the Principal
Market, if any.
 
(x)           No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction that prohibits the
consummation of any of the transactions contemplated by the Transaction
Documents.
 
 
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(xi)           Since the date of execution of this Agreement, no event or series
of events shall have occurred that reasonably would have or result in a Material
Adverse Effect.
 
(xii)           The Company and its Subsidiaries shall have delivered to such
Buyer such other documents, instruments or certificates relating to the
transactions contemplated by this Agreement as such Buyer or its counsel may
reasonably request.
 
8.
TERMINATION.

 
In the event that the Closing shall not have occurred with respect to a Buyer
within ten (10) days after the date hereof, then such Buyer shall have the right
to terminate its obligations under this Agreement with respect to itself at any
time on or after the close of business on such date without liability of such
Buyer to any other party; provided, however, (i) the right to terminate this
Agreement under this Section 8 shall not be available to such Buyer if the
failure of the transactions contemplated by this Agreement to have been
consummated by such date is the result of such Buyer’s breach of this Agreement
and (ii) the abandonment of the sale and purchase of the Shares and the Warrants
shall be applicable only to such Buyer providing such written notice, provided
further that no such termination shall affect any obligation of the Company
under this Agreement to reimburse such Buyer for the expenses described in
Section 4(g) above. Nothing contained in this Section 8 shall be deemed to
release any party from any liability for any breach by such party of the terms
and provisions of this Agreement or the other Transaction Documents or to impair
the right of any party to compel specific performance by any other party of its
obligations under this Agreement or the other Transaction Documents.
 
9.
MISCELLANEOUS.

 
(a)           Governing Law; Jurisdiction; Jury Trial. All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Nothing contained herein shall
be deemed or operate to preclude any Buyer from bringing suit or taking other
legal action against the Company in any other jurisdiction to collect on the
Company’s obligations to such Buyer or to enforce a judgment or other court
ruling in favor of such Buyer. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT
MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
 
 
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(b)           Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party. In the event that any signature is
delivered by facsimile transmission or by an e-mail which contains a portable
document format (.pdf) file of an executed signature page, such signature page
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
signature page were an original thereof.
 
(c)           Headings; Gender. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement. Unless the context clearly indicates
otherwise, each pronoun herein shall be deemed to include the masculine,
feminine, neuter, singular and plural forms thereof. The terms “including,”
“includes,” “include” and words of like import shall be construed broadly as if
followed by the words “without limitation.”  The terms “herein,” “hereunder,”
“hereof” and words of like import refer to this entire Agreement instead of just
the provision in which they are found.
 
(d)           Severability. If any provision of this Agreement is prohibited by
law or otherwise determined to be invalid or unenforceable by a court of
competent jurisdiction, the provision that would otherwise be prohibited,
invalid or unenforceable shall be deemed amended to apply to the broadest extent
that it would be valid and enforceable, and the invalidity or unenforceability
of such provision shall not affect the validity of the remaining provisions of
this Agreement so long as this Agreement as so modified continues to express,
without material change, the original intentions of the parties as to the
subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties.
The parties will endeavor in good faith negotiations to replace the prohibited,
invalid or unenforceable provision(s) with a valid provision(s), the effect of
which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s). Notwithstanding anything to the contrary contained
in this Agreement or any other Transaction Document (and without implication
that the following is required or applicable), it is the intention of the
parties that in no event shall amounts and value paid by the Company and/or its
Subsidiaries (as the case may be), or payable to or received by any of the
Buyers, under the Transaction Documents (including without limitation, any
amounts that would be characterized as “interest” under applicable law) exceed
amounts permitted under any applicable law. Accordingly, if any obligation to
pay, payment made to any Buyer, or collection by any Buyer pursuant the
Transaction Documents is finally judicially determined to be contrary to any
such applicable law, such obligation to pay, payment or collection shall be
deemed to have been made by mutual mistake of such Buyer, the Company and its
Subsidiaries and such amount shall be deemed to have been adjusted with
retroactive effect to the maximum amount or rate of interest, as the case may
be, as would not be so prohibited by the applicable law. Such adjustment shall
be effected, to the extent necessary, by reducing or refunding, at the option of
such Buyer, the amount of interest or any other amounts which would constitute
unlawful amounts required to be paid or actually paid to such Buyer under the
Transaction Documents. For greater certainty, to the extent that any interest,
charges, fees, expenses or other amounts required to be paid to or received by
such Buyer under any of the Transaction Documents or related thereto are held to
be within the meaning of “interest” or another applicable term to otherwise be
violative of applicable law, such amounts shall be pro-rated over the period of
time to which they relate.
 
 
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(e)           Entire Agreement; Amendments. This Agreement, the other
Transaction Documents, the Disclosure Schedules and the schedules and exhibits
attached hereto and thereto and the instruments referenced herein and therein
supersede all other prior oral or written agreements between the Buyers, the
Company, its Subsidiaries, their affiliates and Persons acting on their behalf
solely with respect to the matters contained herein and therein, and this
Agreement, the other Transaction Documents, the Disclosure Schedules and the
schedules and exhibits attached hereto and thereto and the instruments
referenced herein and therein contain the entire understanding of the parties
solely with respect to the matters covered herein and therein; provided,
however, nothing contained in this Agreement or any other Transaction Document
shall (or shall be deemed to) (i) have any effect on any agreements any Buyer
has entered into with, or any instruments any Buyer has received from, the
Company or any of its Subsidiaries prior to the date hereof with respect to any
prior investment made by such Buyer in the Company or (ii) waive, alter, modify
or amend in any respect any obligations of the Company or any of its
Subsidiaries, or any rights of or benefits to any Buyer or any other Person, in
any agreement entered into prior to the date hereof between or among the Company
and/or any of its Subsidiaries and any Buyer, or any instruments any Buyer
received from the Company and/or any of its Subsidiaries prior to the date
hereof, and all such agreements and instruments shall continue in full force and
effect. Except as specifically set forth herein or therein, neither the Company
nor any Buyer makes any representation, warranty, covenant or undertaking with
respect to such matters. For clarification purposes, the Recitals are part of
this Agreement. No provision of this Agreement may be amended other than by an
instrument in writing signed by the Company and the Required Buyers (as defined
below), and any amendment to any provision of this Agreement made in conformity
with the provisions of this Section 9(e) shall be binding on all Buyers and
holders of Securities, as applicable, provided that no such amendment shall be
effective to the extent that it (1) applies to less than all of the holders of
the Securities then outstanding or (2) imposes any obligation or liability on
any Buyer without such Buyer’s prior written consent (which may be granted or
withheld in such Buyer’s sole discretion). No waiver shall be effective unless
it is in writing and signed by an authorized representative of the waiving
party, provided that the Required Buyers may waive any provision of this
Agreement, and any waiver of any provision of this Agreement made in conformity
with the provisions of this Section 9(e) shall be binding on all Buyers and
holders of Securities, as applicable, provided that no such waiver shall be
effective to the extent that it (1) applies to less than all of the holders of
the Securities then outstanding (unless a party gives a waiver as to itself
only) or (2) imposes any obligation or liability on any Buyer without such
Buyer’s prior written consent (which may be granted or withheld in such Buyer’s
sole discretion). No consideration shall be offered or paid to any Person to
amend or consent to a waiver or modification of any provision of any of the
Transaction Documents unless the same consideration also is offered to all of
the parties to the Transaction Documents, all holders of Shares or all holders
of the Warrants (as the case may be). The Company has not, directly or
indirectly, made any agreements with any Buyers relating to the terms or
conditions of the transactions contemplated by the Transaction Documents except
as set forth in the Transaction Documents. Without limiting the foregoing, the
Company confirms that, except as set forth in this Agreement, no Buyer has made
any commitment or promise or has any other obligation to provide any financing
to the Company, any Subsidiary or otherwise. As a material inducement for each
Buyer to enter into this Agreement, the Company expressly acknowledges and
agrees that no due diligence or other investigation or inquiry conducted by a
Buyer, any of its advisors or any of its representatives shall affect such
Buyer’s right to rely on, or shall modify or qualify in any manner or be an
exception to any of, the Company’s representations and warranties contained in
this Agreement or any other Transaction Document. “Required Buyers” means Buyers
having Purchase Prices in the aggregate that are at least equal to a majority of
the aggregate Purchase Prices for all Buyers.
 
 
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(f)           Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, if
delivered personally; (ii) when sent, if sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); (iii) when sent, if sent by e-mail (provided
that such sent e-mail is kept on file (whether electronically or otherwise) by
the sending party and the sending party does not receive an automatically
generated message from the recipient’s e-mail server that such e-mail could not
be delivered to such recipient) and (iv) if sent by overnight courier service,
one (1) Business Day after deposit with an overnight courier service with next
day delivery specified, in each case, properly addressed to the party to receive
the same. The addresses, facsimile numbers and e-mail addresses for such
communications shall be:
 
If to the Company:
 
Marathon Patent Group, Inc.2331 Mill Road, Suite 100
Alexandria, VA 22314
Telephone: (703) 232-1701
Facsimile:  703-997-7320
Email: doug@marathonpg.com
Attn: Douglas Croxall
 
With a copy (for informational purposes only) to:
 
Sichenzia Ross Friedman Ference LLP
61 Broadway, 32nd Floor
New York, NY 10006
Telephone: (212) 930-9700
Facsimile:  (212) 930-9725
Email: hkesner@srff.com
Attn: Harvey Kesner, Esq.
 
If to a Buyer, to its address, facsimile number or e-mail address set forth on
such buyer’s signature page hereto.
 
 
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or to such other address, facsimile number or e-mail address and/or to the
attention of such other Person as the recipient party has specified by written
notice given to each other party five (5) days prior to the effectiveness of
such change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine containing the time,
date and recipient facsimile number or (C) provided by an overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from an overnight courier service in accordance with clause (i), (ii)
or (iv) above, respectively. A copy of the e-mail transmission containing the
time, date and recipient e-mail address shall be rebuttable evidence of receipt
by e-mail in accordance with clause (iii) above.
 
(g)           Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns,
including, as contemplated below, any assignee of any of the Securities. The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Required Buyers, including, without
limitation, by way of a Fundamental Transaction (as defined in the Warrants)
(unless the Company is in compliance with the applicable provisions governing
Fundamental Transactions set forth in the  Warrants). On or prior to the Closing
Date, a Buyer shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Company.
 
(h)           No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, other than the Indemnitees referred to in Section 9(k).
 
(i)           Survival. The representations, warranties, agreements and
covenants shall survive the Closing. Each Buyer shall be responsible only for
its own representations, warranties, agreements and covenants hereunder.
 
(j)           Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
 
 
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(k)           Indemnification.  In consideration of each Buyer’s execution and
delivery of the Transaction Documents and acquiring the Securities thereunder
and in addition to all of the Company’s other obligations under the Transaction
Documents, the Company shall defend, protect, indemnify and hold harmless each
Buyer and each holder of any Securities and all of their stockholders, partners,
members, officers, directors, employees and direct or indirect investors and any
of the foregoing Persons’ agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by
this Agreement) (collectively, the “Indemnitees”) from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages, and expenses in connection therewith (irrespective of
whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys’ fees and disbursements
(the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company or any Subsidiary in any of the
Transaction Documents, (b) any breach of any covenant, agreement or obligation
of the Company or any Subsidiary contained in any of the Transaction Documents
or (c) any cause of action, suit, proceeding or claim brought or made against
such Indemnitee by a third party (including for these purposes a derivative
action brought on behalf of the Company or any Subsidiary) or which otherwise
involves such Indemnitee that arises out of or results from the following
(except that the Company shall not have any obligations hereunder to such Buyer
as a result of a breach of any of the Transaction Documents by such Buyer): (i)
the execution, delivery, performance or enforcement of any of the Transaction
Documents, (ii) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of the issuance of the Securities, or
(iii) the status of such Buyer or holder of the Securities either as an investor
in the Company pursuant to the transactions contemplated by the Transaction
Documents or as a party to this Agreement (including, without limitation, as a
party in interest or otherwise in any action or proceeding for injunctive or
other equitable relief). To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. Except as otherwise set
forth herein, the mechanics and procedures with respect to the rights and
obligations under this Section 9(k) shall be the same as those set forth in
Section 6 of the Registration Rights Agreement.
 
(l)           Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party. No specific
representation or warranty shall limit the generality or applicability of a more
general representation or warranty. Each and every reference to share prices,
shares of Common Stock and any other numbers in this Agreement that relate to
the Common Stock shall be automatically adjusted for stock splits, stock
combinations and other similar transactions that occur with respect to the
Common Stock after the date of this Agreement.
 
(m)           Remedies.  Each Buyer and each holder of any Securities shall have
all rights and remedies set forth in the Transaction Documents and all rights
and remedies which such holders have been granted at any time under any other
agreement or contract and all of the rights which such holders have under any
law. Any Person having any rights under any provision of this Agreement shall be
entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law. Furthermore, the
Company recognizes that in the event that it or any Subsidiary fails to perform,
observe, or discharge any or all of its or such Subsidiary’s (as the case may
be) obligations under the Transaction Documents, any remedy at law may prove to
be inadequate relief to the Buyers. The Company therefore agrees that the Buyers
shall be entitled to seek specific performance and/or temporary, preliminary and
permanent injunctive or other equitable relief from any court of competent
jurisdiction in any such case without the necessity of proving actual damages
and without posting a bond or other security.
 
 
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(n)           Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option
under a Transaction Document and the Company or any Subsidiary does not timely
perform its related obligations within the periods therein provided, then such
Buyer may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company or such Subsidiary (as the case may be), any
relevant notice, demand or election in whole or in part without prejudice to its
future actions and rights.
 
(o)           Payment Set Aside; Currency. To the extent that the Company makes
a payment or payments to any Buyer hereunder or pursuant to any of the other
Transaction Documents or any of the Buyers enforce or exercise their rights
hereunder or thereunder, and such payment or payments or the proceeds of such
enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without
limitation, any bankruptcy law, foreign, state or federal law, common law or
equitable cause of action), then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred. Unless otherwise expressly
indicated, all dollar amounts referred to in this Agreement and the other
Transaction Documents are in United States Dollars (“U.S. Dollars”), and all
amounts owing under this Agreement and all other Transaction Documents shall be
paid in U.S. Dollars.
 
(p)           Independent Nature of Buyers’ Obligations and Rights.  The
obligations of each Buyer under the Transaction Documents are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible
in any way for the performance of the obligations of any other Buyer under any
Transaction Document.  Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall be
deemed to constitute the Buyers as, and the Company acknowledges that the Buyers
do not so constitute, a partnership, an association, a joint venture or any
other kind of group or entity, or create a presumption that the Buyers are in
any way acting in concert or as a group or entity with respect to such
obligations or the transactions contemplated by the Transaction Documents or any
matters, and the Company acknowledges that the Buyers are not acting in concert
or as a group, and the Company shall not assert any such claim, with respect to
such obligations or the transactions contemplated by the Transaction Documents.
The decision of each Buyer to purchase Securities pursuant to the Transaction
Documents has been made by such Buyer independently of any other Buyer. Each
Buyer acknowledges that no other Buyer has acted as agent for such Buyer in
connection with such Buyer making its investment hereunder and that no other
Buyer will be acting as agent of such Buyer in connection with monitoring such
Buyer’s investment in the Securities or enforcing its rights under the
Transaction Documents. The Company and each Buyer confirms that each Buyer has
independently participated with the Company and its Subsidiaries in the
negotiation of the transaction contemplated hereby with the advice of its own
counsel and advisors. Each Buyer shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights arising out of
this Agreement or out of any other Transaction Documents, and it shall not be
necessary for any other Buyer to be joined as an additional party in any
proceeding for such purpose. The use of a single agreement to effectuate the
purchase and sale of the Securities contemplated hereby was solely in the
control of the Company, not the action or decision of any Buyer, and was done
solely for the convenience of the Company and its Subsidiaries and not because
it was required or requested to do so by any Buyer.  It is expressly understood
and agreed that each provision contained in this Agreement and in each other
Transaction Document is between the Company, each Subsidiary and a Buyer,
solely, and not between the Company, its Subsidiaries and the Buyers
collectively and not between and among the Buyers.
 
[signature pages follow]
 
 
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IN WITNESS WHEREOF, Buyer and the Company have caused their respective signature
page to this Agreement to be duly executed as of the date first written above.
 
 

 
COMPANY:
 
 
MARATHON PATENT GROUP, INC.
 
 
By: __________________________
Name:
Title:

 
 
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[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
 
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Buyer: ________________________________________________________
 
Signature of Authorized Signatory of Buyer: __________________________________
 
Name of Authorized Signatory: ____________________________________________
 
Title of Authorized Signatory: _____________________________________________
 
Email Address of Authorized Signatory: _____________________________________
 
Facsimile Number of Authorized Signatory: ___________________________________
 
Address for Notice to Buyer:
 
 
Address for Delivery of Securities to Buyer (if not same as address for notice):
 
 
Subscription Amount: USD$_________________
 
Units: __________________
 
Shares: _________________
 
Warrant Shares: __________________
 
EIN Number: _______________________
 
 
[SIGNATURE PAGES CONTINUE]
 
 
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Exhibit A
 
Warrant
 
 
35

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Exhibit B
 
Registration Rights Agreement
 
 
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Exhibit C
 
WIRE INSTRUCTIONS
 
 
34