SUBSCRIPTION AGREEMENT
 
This SUBSCRIPTION AGREEMENT (“Agreement”), dated as of November 8, 2011, is made
by and among TOP GEAR INC., a corporation organized under the laws of Delaware
(the “Company”) and each of the Persons listed on Schedule I hereto
(collectively, the “Investors,” and individually an “Investor”).  Each of the
Company and Investors are referred to herein individually as a “Party” and
collectively as the “Parties.”
 
RECITALS:
 
WHEREAS, the Company and each Investor 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 “Securities
Act”), Rule 506 of Regulation D promulgated by the U.S.  Securities and Exchange
Commission (the “SEC”) under the Securities Act (“Regulation D”) and Regulation
S promulgated by the SEC under the Securities Act (“Regulation S”);
 
WHEREAS, each Investor wishes to purchase, and the Company wishes to sell, upon
the terms and conditions stated in this Agreement, (i) the aggregate number of
shares of common stock, $0.0001 par value per share, of the Company (the “Common
Stock”) as set forth opposite such Investor’s name in column (3) on Schedule I
at a per share purchase price of $3.40 (which aggregate amount for all Investors
shall be 185,294 shares of Common Stock and shall collectively be referred to
herein as the “Shares”), (ii) a five year warrant to initially acquire  up to
that number of additional shares of Common Stock set forth opposite such
Investor’s name in column (4) on Schedule I at an exercise price of $5.10 per
share, in the form attached hereto as Exhibit B (the “Series A Warrants”) (as
exercised, collectively, the “Series A Warrant Shares”), and (iii) a five year
warrant to initially acquire up to that number of additional shares of Common
Stock set forth opposite such Investor’s name in column (5) on Schedule I at an
exercise price of $10.20 per share, in the form attached hereto as Exhibit C
(the “Series B Warrants” and, together with the Series A Warrants, the
“Warrants”) (as exercised, collectively, the “Series B Warrant Shares” and,
together with the Series A Warrant Shares, the “Warrant Shares”); and
 
WHEREAS, at the Closing, the Parties shall execute and deliver a Registration
Rights Agreement, in the form attached hereto as Exhibit D (the “Registration
Rights Agreement”), pursuant to which the Company has agreed to provide certain
registration rights with respect to the Registrable Securities, under the
Securities Act and the rules and regulations promulgated thereunder, and
applicable state securities laws.
 
NOW, THEREFORE, in consideration of the foregoing premises, and the covenants,
representations and warranties set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged and
accepted, the Parties, intending to be legally bound, hereby agree as follows:
 
 
 

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ARTICLE I
DEFINITIONS
 
Section 1.1            Definitions.  For all purposes of and under this
Agreement, the following terms shall have the following respective meanings:
 
“8-K Filing” has the meaning set forth in Section 5.7.
 
“Accredited Investor” has the meaning set forth in Rule 501 under the Securities
Act.
 
“Acquiree” has the meaning set forth in the definition of Acquisition.
 
“Acquisition” means the acquisition by the Company of all of the outstanding
equity securities of LY Retail LLC d/b/a Luxeyard.com, a limited liability
company organized under the laws of Texas (the “Acquiree”) pursuant to that
certain Securities Exchange Agreement, dated November 8, 2011, by and among the
Company, the Company’s principal shareholders, the Acquiree and the members of
the Acquiree (the “Securities Exchange Agreement”).
 
“Action” means any action, suit, inquiry, notice of violation, proceeding
(including any partial proceeding such as a deposition) or investigation pending
or threatened before or by any court, arbitrator, governmental or administrative
agency, regulatory authority (federal, state, county, local or foreign), stock
market, stock exchange or trading facility.
 
“Affiliate” has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Exchange Act.
 
“Agreement” has the meaning set forth in the preamble.
 
“Applicable Price” has the meaning set forth in Section 5.9.
 
“Approved Stock Plan” means any employee benefit plan which has been approved by
the board of directors of the Company prior to or subsequent to the date hereof
pursuant to which shares of Common Stock and standard options to purchase Common
Stock may be issued to any employee, officer or director for services provided
to the Company in their capacity as such.
 
“BHCA” has the meaning set forth in Section 4.26.
 
“Bridge Notes” means, collectively, (i) that certain Secured Promissory Note,
dated as of September 29, 2011, by the Acquiree in favor of Jinsun, LLC in the
principal amount of $75,000; (ii) that certain promissory note, dated as of
September 29, 2011, by the Company in favor of Amir Mireskandari and Khaled
Alattar in the principal amount of $75,000 (all of such principal amount being
payable to Khaled Alattar pursuant to that certain Assignment Agreement between
Amir Mireskandari and Khaled Alattar); (iii) that certain promissory note, dated
as of October 17, 2011, by the Company in favor of Amir Mireskandari in the
principal amount of $20,000 ($11,516.80 of such principal amount being payable
to Khaled Alattar pursuant to that certain Assignment Agreement between Amir
Mireskandari and Khaled Alattar); (iv) that certain promissory note, dated as of
October 18, 2011, by the Company in favor of Amir Mireskandari in the principal
amount of $10,000; (v) that certain promissory note, dated as of October 18,
2011, by the Company in favor of Khaled Alattar in the principal amount of
$10,000; (vi) that certain promissory note, dated as of October 25, 2011, by the
Company in favor of Jinsun, LLC in the principal amount of $40,000; and (vii)
that certain promissory note, dated as of October 25, 2011, by the Company in
favor of Huttner 1999 Partnership Ltd. in the principal amount of $50,000.  Each
of the Bridge Notes is referred to herein individually as a “Bridge Note.”
 
 
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“Bridge Investors” means the holders of the Bridge Notes.
 
“Business Day” shall mean any day other than a Saturday, Sunday or a day on
which commercial banks in New York, New York are required or authorized to be
closed.
 
“Closing” has the meaning set forth in Section 2.3.
 
“Closing Date” has the meaning set forth in Section 2.3.
 
“Code” means the Internal Revenue Code of 1986, as amended.
 
“Common Stock” has the meaning set forth in the recitals.
 
“Company” has the meaning set forth in the preamble.
 
“Company Disclosure Schedule” has the meaning set forth in Article IV.
 
“Company Most Recent Fiscal Year End” means December 31, 2010.
 
“Company Organizational Documents” has the meaning set forth in Section 4.6.
 
“Contract” means any written or oral contract, lease, license, indenture, note,
bond, agreement, arrangement, understanding, permit, concession, franchise or
other instrument.
 
“Convertible Securities” means any stock or other security (other than Options)
that is at any time and under any circumstances, directly or indirectly,
convertible into, exercisable or exchangeable for, or which otherwise entitles
the holder thereof to acquire, any shares of Common Stock.
 
“Dilutive Adjustment Time” has the meaning set forth in Section 5.9.
 
“Dilutive Issuance” has the meaning set forth in Section 5.9.
 
“Eligible Market” means the Principal Market, The New York Stock Exchange, the
NYSE Amex, the Nasdaq Capital Market, the Nasdaq Global Market or the Nasdaq
Global Select Market.
 
“Environmental Laws” has the meaning set forth in Section 4.17.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
 
 
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“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
similar federal statute, and the rules and regulations of the SEC thereunder,
all as the same will then be in effect.
 
“Excluded Securities” means (i) shares of Common Stock or standard options to
purchase Common Stock to directors, officers or employees of the Company in
their capacity as such pursuant to an Approved Stock Plan, provided that (A) all
such issuances (taking into account the shares of Common Stock issuable upon
exercise of such options) after the date hereof pursuant to this clause (i) do
not, in the aggregate, exceed more than 765,000 shares (as adjusted for any
share splits, share combinations, share dividends and similar transactions) (B)
such shares or options may not be sold or exercised, as the case may be, prior
to the 18 month anniversary of the Closing Date; (C) the number of shares or
such options issued to any one person do not exceed 191,250 (as adjusted for any
share splits, share combinations, share dividends and similar transactions) and
(B) 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 Investors; (ii) shares of Common Stock
issued upon the conversion or exercise of Convertible Securities (other than
standard options to purchase Common Stock issued pursuant to an Approved Stock
Plan that are covered by clause (i) above) issued prior to the date hereof,
provided that the conversion price of any such Convertible Securities (other
than standard options to purchase Common Stock issued pursuant to an Approved
Stock Plan that are covered by clause (i) above) is not lowered, none of such
Convertible Securities (other than standard options to purchase Common Stock
issued pursuant to an Approved Stock Plan that are covered by clause (i) above)
are amended to increase the number of shares issuable thereunder and none of the
terms or conditions of any such Convertible Securities (other than standard
options to purchase Common Stock issued pursuant to an Approved Stock Plan that
are covered by clause (i) above) are otherwise materially changed in any manner
that adversely affects any of the other Investors; (iii) the shares of Common
Stock issuable pursuant to this Agreement, (iv) the shares of Common Stock
issuable upon exercise of the Warrants, (v) any securities issued in connection
with strategic alliances, acquisitions, mergers, and strategic partnerships,
provided, that (1) the primary purpose of such issuance is not to raise capital,
(2) the purchaser or acquirer of the securities in such issuance solely consists
of either (x) the actual participants in such strategic alliance or strategic
partnership, (y) the actual owners of such assets or securities acquired in such
acquisition or merger or (z) the stockholders, partners or members of the
foregoing Persons and (3) the number or amount of securities issued to such
Person by the Company shall not be disproportionate to such Person’s actual
participation in such strategic alliance or strategic partnership or ownership
of such assets or securities to be acquired by the Company, as applicable.
 
“Federal Reserve” has the meaning set forth in Section 4.26.
 
“Forward Split” has the meaning set forth in Section 5.10.
 
“GAAP” means, with respect to any Person, generally accepted accounting
principles in the U.S.  applied on a consistent basis with such Person’s past
practices.
 
 
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“Governmental Authority” means any domestic or foreign, federal or national,
state or provincial, municipal or local government, governmental authority,
regulatory or administrative agency, governmental commission, department, board,
bureau, agency or instrumentality, political subdivision, commission, court,
tribunal, official, arbitrator or arbitral body.
 
“Hazardous Materials” has the meaning set forth in Section 4.17.
 
“Indebtedness” means without duplication, (a) all indebtedness or other
obligation of the Person for borrowed money, whether current, short-term, or
long-term, secured or unsecured, (b) all indebtedness of the Person for the
deferred purchase price for purchases of property outside the Ordinary Course of
Business, (c) all lease obligations of the Person under leases which are capital
leases in accordance with GAAP, (d) any off-balance sheet financing of the
Person including synthetic leases and project financing, (e) any payment
obligations of the Person in respect of banker’s acceptances or letters of
credit (other than stand-by letters of credit in support of ordinary course
trade payables), (f) any liability of the Person with respect to interest rate
swaps, collars, caps and similar hedging obligations, (g) any liability of the
Person under deferred compensation plans, phantom stock plans, severance or
bonus plans, or similar arrangements made payable as a result of the
transactions contemplated herein, (h) any indebtedness referred to in clauses
(a) through (g) above of any other Person which is either guaranteed by, or
secured by a security interest upon any property owned by, the Person and (i)
accrued and unpaid interest of, and prepayment premiums, penalties or similar
contractual charges arising as result of the discharge at Closing of, any such
foregoing obligation.
 
“Indemnified Liabilities” has the meaning set forth in Section 7.2.
 
“Indemnitees” has the meaning set forth in Section 7.2.
 
“Intellectual Property” means all industrial and intellectual property,
including, without limitation, all U.S.  and non-U.S.  patents, patent
applications, patent rights, trademarks, trademark applications, common law
trademarks, Internet domain names, trade names, service marks, service mark
applications, common law service marks, and the goodwill associated therewith,
copyrights, in both published and unpublished works, whether registered or
unregistered, copyright applications, franchises, licenses, know-how, trade
secrets, technical data, designs, customer lists, confidential and proprietary
information, processes and formulae, all computer software programs or
applications, layouts, inventions, development tools and all documentation and
media constituting, describing or relating to the above, including manuals,
memoranda, and records, whether such intellectual property has been created,
applied for or obtained anywhere throughout the world.
 
“Investor” and “Investors” have the respective meanings set forth in the
preamble.
 
“Investor Questionnaires” means the investor questionnaires completed by the
Investors substantially in form attached hereto as Exhibit A, and each of the
foregoing, is individually referred to herein as an “Investor Questionnaire.”
 
 
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“Knowledge” shall mean, except as otherwise explicitly provided herein, actual
knowledge after reasonable investigation.  The Company shall be deemed to have
“Knowledge” of a matter if any of its officers or directors has Knowledge of
such matter.  Phrases such as “to the Knowledge of the Company” or the
“Company’s Knowledge” shall be construed accordingly.
 
“Laws” means, with respect to any Person, any U.S.  or non-U.S., federal,
national, state, provincial, local, municipal, international, multinational or
other Law (including common law), constitution, statute, code, ordinance, rule,
regulation or treaty applicable to such Person.
 
“Liability” means any liability (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), including
any liability for Taxes.
 
“License” means any security clearance, permit, license, variance, franchise,
order, approval, consent, certificate, registration or other authorization of
any Governmental Authority, judicial authority or regulatory body, and other
similar rights.
 
“Lien” means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind, including, without limitation, any conditional sale or other
title retention agreement, any lease in the nature thereof and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction and including any lien or charge arising by Law.
 
“Material Adverse Effect” means, with respect to any Person, a material adverse
effect on the business, financial condition, operations, results of operations,
assets, customer, supplier or employee relations or future prospects of such
Person.
 
“Money Laundering Laws” has the meaning set forth in Section 4.29.
 
“New Issuance Price” has the meaning set forth in Section 5.9.
 
“Options” means any rights, warrants or options to subscribe for or purchase
shares of Common Stock or Convertible Securities.
 
“Order” means any order, judgment, ruling, injunction, assessment, award, decree
or writ of any Governmental Authority.
 
“Ordinary Course of Business” means the ordinary course of business consistent
with past custom and practice (including with respect to quantity and
frequency).
 
“Party” and “Parties” have the meanings set forth in the preamble.
 
“Person” means all natural persons, corporations, business trusts, associations,
companies, partnerships, limited liability companies, joint ventures and other
entities, governments, agencies and political subdivisions.
 
 
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“Principal Market” means the OTC Bulletin Board.
 
“Purchase Price” has the meaning set forth in Section 2.2.
 
“Registrable Securities” has the meaning set forth in the Registration Rights
Agreement.
 
“Registration Rights Agreement” has the meaning set forth in the recitals.
 
“Registration Statements” has the meaning set forth in Section 4.18(b).
 
“Regulation D” has the meaning set forth in the recitals.
 
“Regulation S” has the meaning set forth in the recitals.
 
“Regulation SHO” has the meaning set forth in Section 3.7(d).
 
“Required Holders” means Investors holding greater than 50% of the Registrable
Securities issued pursuant to this Agreement on the Closing Date.
 
“Replacement Note” and “Replacement Notes” shall have the meaning set forth in
Section 2.2.
 
“Reporting Period” has the meaning set forth in Section 5.2.
 
“Rule 144” means Rule 144 promulgated by the SEC under the Securities Act, as
such rule may be amended from time to time, or any other similar or successor
rule or regulation of the SEC that may at any time permit the Investors to sell
securities of the Company to the public without registration.
 
“SEC” has the meaning set forth in the recitals.
 
“SEC Reports” has the meaning set forth in Section 4.18(a).
 
“Securities” means the Shares, the Warrants and the Warrant Shares.
 
“Securities Act” has the meaning set forth in the recitals.
 
“Securities Exchange Agreement” has the meaning set forth in the definition of
Acquisition.
 
“Series A Warrant Shares” has the meaning set forth in the recitals.
 
“Series A Warrants” has the meaning set forth in the recitals.
 
“Series B Warrant Shares” has the meaning set forth in the recitals.
 
“Series B Warrants” has the meaning set forth in the recitals.
 
 
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“Shares” has the meaning set forth in the recitals.
 
“Short Sales” has the meaning set forth in Section 3.7(d).
 
“Subsidiaries” means any Person in which the Company, directly or indirectly,
(a) owns any of the outstanding capital stock or holds any equity or similar
interest of such Person or (b) 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.”
 
“Tax” or “Taxes” means all taxes, assessments, duties, levies or other charge
imposed by any Governmental Authority of any kind whatsoever together with any
interest, penalties, fines or additions thereto and any liability for payment of
taxes whether as a result of (i) being a member of an affiliated, consolidated,
combined, unitary or similar group for any period, (ii) any tax sharing, tax
indemnity or tax allocation agreement or any other express or implied agreement
to indemnify any Person, (iii) being liable for another Person’s taxes as a
transferee or successor otherwise for any period, or (iv) operation of Law.
 
“Transaction Documents” means, collectively, this Agreement, the Series A
Warrant, the Series B Warrant, the Registration Rights Agreement and the
Investor Questionnaires and all agreements, certificates, instruments and other
documents to be executed and delivered in connection with the transactions
contemplated by this Agreement.
 
“Treasury Regulations” means the income tax regulations, including temporary
regulations, promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
 
“U.S.” means the United States of America.
 
“U.S. Person” has the meaning set forth in Regulation S under the Securities
Act.
 
“Warrant Shares” has the meaning set forth in the recitals.
 
ARTICLE II
PURCHASE AND SALE OF THE SHARES AND WARRANTS; CLOSING
 
Section 2.1           Purchase and Sale of the Shares and Warrants.  At the
Closing, the Company shall issue and sell to each Investor, and each Investor
severally, but not jointly, shall purchase from the Company on the Closing Date,
such aggregate number of Shares as is set forth opposite such Investor’s name in
column (3) on Schedule I along with (i) Series A Warrants to initially
acquire  up to that aggregate number of Series A Warrant Shares as is set forth
opposite such Investor’s name in column (4) on Schedule I and (ii) Series B
Warrants to initially acquire up to that aggregate number of Series B Warrant
Shares as is set forth opposite such Investor’s name in column (5) on Schedule
I.
 
 
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Section 2.2           Purchase Price; Form of Payment.  The aggregate purchase
price for the Shares and the Warrants to be purchased by each Investor (the
“Purchase Price”) shall be the amount set forth opposite such Investor’s name in
column (2) on Schedule I.  On the Closing Date, (i) each Investor shall pay its
respective Purchase Price to the Company for the Shares and the Warrants to be
issued and sold to such Investor at the Closing, by wire transfer of immediately
available funds in accordance with the Company’s written wire instructions;
provided however, each Bridge Investor shall pay its respective Purchase Price
in full by the delivery by such Bridge Investor to the Company of such Bridge
Investor’s Bridge Note; and provided further that if the principal amount of
such Bridge Investor’s Bridge Note is greater than such Bridge Investor’s
Purchase Price and such amount in excess of such Bridge Investor’s Purchase
Price is not paid by the Company on behalf of the Acquiree at Closing pursuant
to Section 5.4 hereof, the Acquiree shall issue a replacement promissory note
(each, a “Replacement Note” and collectively the “Replacement Notes”) on the
same terms and conditions as the Bridge Note for such balance amount; and (ii)
the Company shall deliver to each Investor certificates representing (A) such
aggregate number of Common Shares as is set forth opposite such Investor’s name
in column (3) of Schedule I, (B) a Series A Warrant pursuant to which such
Investor shall have the right to initially acquire up to such number of Series A
Warrant Shares as is set forth opposite such Investor’s name in column (4) of
Schedule I and (C) a Series B Warrant pursuant to which such Investor shall have
the right to initially acquire up to such number of Series B Warrant Shares as
is set forth opposite such Investor’s name in column (5) of Schedule I, in all
cases, duly executed on behalf of the Company and registered in the name of such
Investor or its designee.  Each of the Bridge Investors and the Company
acknowledge and agree that immediately following the Closing, the Bridge Notes
shall each be terminated or cancelled, as applicable; provided however that the
Replacement Notes, if any, shall remain in full force and effect.
 
Section 2.3            Closing.  Upon the terms and subject to the conditions of
this Agreement, the transactions contemplated by this Agreement shall take place
at a closing (the “Closing”) to be held at the offices of Anslow & Jaclin LLP
located at 195 Route 9 South, Manalapan, NJ 07726, at a time and date to be
specified by the Parties, which shall be no later than second (2nd) Business Day
following the satisfaction or, if permitted pursuant hereto, waiver of the
conditions set forth in Article VI, or at such other location, date and time as
Investors and the Company shall mutually agree.  The date and time of the
Closing is referred to herein as the “Closing Date.”
 
ARTICLE III
REPRESENTATIONS OF THE INVESTORS
 
The Investors severally, and not jointly, hereby represent and warrant to the
Company that the statements contained in this Article III are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date (as though made then and as thought the Closing Date were
substituted for the date of this Agreement throughout this Article III) (except
where another date or period of time is specifically stated herein for a
representation or warranty).
 
Section 3.1           Authority.  Such Investor has all requisite authority and
power to enter into and deliver this Agreement and any of the other Transaction
Documents to which such Investor is a party, and any other certificate,
agreement, document or instrument to be executed and delivered by such Investor
in connection with the transactions contemplated hereby and thereby and to
perform such Investor’s obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby.  This Agreement has been, and
each of the Transaction Documents to which such Investor is a party will be,
duly and validly authorized and approved, executed and delivered by such
Investor.
 
 
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Section 3.2            Binding Obligations.  Assuming this Agreement and the
Transaction Documents have been duly and validly authorized, executed and
delivered by the parties hereto and thereto other than such Investor, this
Agreement and each of the Transaction Documents to which such Investor is a
party are duly authorized, executed and delivered by such Investor, and
constitutes the legal, valid and binding obligations of such Investor,
enforceable against such Investor in accordance with their respective terms,
except as such enforcement is limited by general equitable principles, or by
bankruptcy, insolvency and other similar Laws affecting the enforcement of
creditors rights generally.
 
Section 3.3            No Conflicts.  Neither the execution or delivery by such
Investor of this Agreement or any Transaction Document to which such Investor is
a party, nor the consummation or performance by such Investor of the
transactions contemplated hereby or thereby will, directly or indirectly, (a)
contravene, conflict with, or result in a violation of any provision of the
organizational documents of such Investor (if such Investor is not a natural
person); (b) contravene, conflict with, constitute a default (or an event or
condition which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination or acceleration of, any agreement
or instrument to which such Investor is a party or by which the properties or
assets of such Investor are bound; or (c) contravene, conflict with, result in
any breach of, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, impair the rights of such Investor
under, or alter the obligations of any Person under, or create in any Person the
right to terminate, amend, accelerate or cancel, or require any notice, report
or other filing (whether with a Governmental Authority or any other Person)
pursuant to, or result in the creation of a Lien on any of the assets or
properties of the Company under, any note, bond, mortgage, indenture, Contract,
lease, License, permit, franchise or other instrument or obligation to which
such Investor is a party or any of such Investor’s assets and properties are
bound or affected, except, in the case of clauses (b) or (c) for any such
contraventions, conflicts, violations, or other occurrences as would not have a
Material Adverse Effect on such Investor.
 
Section 3.4             Certain Proceedings.  There is no Action pending
against, or to the Knowledge of such Investor, threatened against or affecting,
such Investor by any Governmental Authority or other Person with respect to such
Investor that challenges, or may have the effect of preventing, delaying, making
illegal, or otherwise interfering with, any of the transactions contemplated by
this Agreement.
 
Section 3.5             No Brokers or Finders.  No Person has, or as a result of
the transactions contemplated herein will have, any right or valid claim against
such Investor for any commission, fee or other compensation as a finder or
broker, or in any similar capacity, based upon arrangements made by or on behalf
of such Investor and such Investor will indemnify and hold the Company and its
Affiliates harmless against any liability or expense arising out of, or in
connection with, any such claim.
 
 
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Section 3.6           Investment Representations.  Each Investor severally, and
not jointly, hereby represents and warrants, solely with respect to itself and
not any other Investor, to the Company as follows:
 
(a)           Purchase Entirely for Own Account.  Such Investor is acquiring
such the Securities proposed to be acquired hereunder for investment for its own
account and not with a view to the resale or distribution of any part thereof,
and such Investor has no present intention of selling or otherwise distributing
such Securities, except in compliance with applicable securities Laws.
 
(b)           Restricted Securities.  Such Investor understands that the
Securities are characterized as “restricted securities” under the Securities Act
inasmuch as this Agreement contemplates that, if acquired by the Shareholder
pursuant hereto, the Securities would be acquired in a transaction not involving
a public offering.  The issuance of the Securities hereunder is being effected
in reliance upon an exemption from registration afforded under Section 4(2) of
the Securities Act, Rule 506 of Regulation D and Regulation S.  Such Investor
further acknowledges that if the Securities are issued to such Investor in
accordance with the provisions of this Agreement, such Securities may not be
resold without registration under the Securities Act or the existence of an
exemption therefrom.  Such Investor represents that he is familiar with Rule
144, as presently in effect, and understands the resale limitations imposed
thereby and by the Securities Act
 
(c)           Acknowledgment of Non-Registration.  Such Investor understands and
agrees that the Securities to be issued pursuant to this Agreement have not been
registered under the Securities Act or the securities Laws of any state of the
U.S.
 
(d)           Status.  By its execution of this Agreement, such Investor
represents and warrants to the Company as indicated on its signature page to
this Agreement, either that: (i) such Investor is an Accredited Investor; or
(ii) such Investor is not a U.S. Person.  Such Investor understands that the
Securities are being offered and sold to such Investor in reliance upon the
truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of such Investor set forth in this Agreement,
in order that the Company may determine the applicability and availability of
the exemptions from registration of the Securities on which the Company is
relying.
 
(e)           Additional Representations and Warranties.  Such Investor,
severally and not jointly, further represents and warrants to the Company as
follows: (i) such Person qualifies as an Accredited Investor; (ii) such Person
consents to the placement of a legend on any certificate or other document
evidencing the Securities substantially in the form set forth in Section 3.7(a);
(iii) such Person has sufficient knowledge and experience in finance,
securities, investments and other business matters to be able to protect such
Person’s or entity’s interests in connection with the transactions contemplated
by this Agreement; (iv) such Person has consulted, to the extent that it has
deemed necessary, with its tax, legal, accounting and financial advisors
concerning its investment in the Securities and can afford to bear such risks
for an indefinite period of time, including, without limitation, the risk of
losing its entire investment in the Securities; (v) such Person has had access
to the SEC Reports; (vi) such Person has been furnished during the course of the
transactions contemplated by this Agreement with all other public information
regarding the Company that such Person has requested and all such public
information is sufficient for such Person to evaluate the risks of investing in
the Securities; (vii) such Person has been afforded the opportunity to ask
questions of and receive answers concerning the Company and the terms and
conditions of the issuance of the Securities; (viii) such Person is not relying
on any representations and warranties concerning the Company made by the Company
or any officer, employee or agent of the Company, other than those contained in
this Agreement or the SEC Reports; (ix) such Person will not sell or otherwise
transfer the Securities, unless either (A) the transfer of such securities is
registered under the Securities Act or (B) an exemption from registration of
such securities is available; (x) other than as set forth in the Registration
Rights Agreement, such Person understands and acknowledges that the Company is
under no obligation to register the Securities for sale under the Securities
Act; (xi) such Person represents that the address furnished in Schedule I is the
principal residence if he is an individual or its principal business address if
it is a corporation or other entity; (xii) such Person understands and
acknowledges that the Securities have not been recommended by any federal or
state securities commission or regulatory authority, that the foregoing
authorities have not confirmed the accuracy or determined the adequacy of any
information concerning the Company that has been supplied to such Person and
that any representation to the contrary is a criminal offense; and (xiii) such
Person acknowledges that the representations, warranties and agreements made by
such Person herein shall survive the execution and delivery of this Agreement
and the purchase of the Securities.
 
 
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(f)           Additional Representations and Warranties of Non-U.S.
Persons.  Each Investor that is not a U.S. Person, severally and not jointly,
further represents and warrants to the Company as follows: (i) at the time of
(A) the offer by the Company and (B) the acceptance of the offer by such Person,
of the Securities, such Person was outside the U.S; (ii) no offer to acquire the
Securities or otherwise to participate in the transactions contemplated by this
Agreement was made to such Person or its representatives inside the U.S.; (iii)
such Person is not purchasing the Securities for the account or benefit of any
U.S. Person, or with a view towards distribution to any U.S. Person, in
violation of the registration requirements of the Securities Act; (iv) such
Person will make all subsequent offers and sales of the Securities either (A)
outside of the U.S.  in compliance with Regulation S; (B) pursuant to a
registration under the Securities Act; or (C) pursuant to an available exemption
from registration under the Securities Act; (v) such Person is acquiring the
Securities for such Person’s own account, for investment and not for
distribution or resale to others; (vi) such Person has no present plan or
intention to sell the Securities in the U.S.  or to a U.S. Person at any
predetermined time, has made no predetermined arrangements to sell the
Securities and is not acting as an underwriter or dealer with respect to such
securities or otherwise participating in the distribution of such securities;
(vii) neither such Person, its Affiliates nor any Person acting on behalf of
such Person, has entered into, has the intention of entering into, or will enter
into any put option, short position or other similar instrument or position in
the U.S.  with respect to the Securities at any time after the Closing Date
through the one year anniversary of the Closing Date except in compliance with
the Securities Act; (viii) such Person consents to the placement of a legend on
any certificate or other document evidencing the Securities substantially in the
form set forth in  Section 3.7(b) and (ix) such Person is not acquiring the
Securities in a transaction (or an element of a series of transactions) that is
part of any plan or scheme to evade the registration provisions of the
Securities Act.
 
 
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(g)           Opinion.  Such Investor will not transfer any or all of such
Investor’s Securities pursuant to Regulation S or absent an effective
registration statement under the Securities Act and applicable state securities
law covering the disposition of such Investor’s Securities, without first
providing the Company with an opinion of counsel (which counsel and opinion are
reasonably satisfactory to the Company) to the effect that such transfer will be
made in compliance with Regulation S or will be exempt from the registration and
the prospectus delivery requirements of the Securities Act and the registration
or qualification requirements of any applicable U.S.  state securities laws
 
(h)           Consent.  Such Investor understands and acknowledges that the
Company may refuse to transfer the Securities, unless such Investor complies
with Section 3.7 and any other restrictions on transferability set forth
herein.  Such Investor consents to the Company making a notation on its records
or giving instructions to any transfer agent of the Company’s Common Stock in
order to implement the restrictions on transfer of the Securities
 
Section 3.7            Stock Legends.  Such Investor hereby agrees with the
Company as follows:
 
(a)           The certificates evidencing the Securities issued to those
Investors who are Accredited Investors, and each certificate issued in transfer
thereof, will bear the following or similar legend:
 
[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE]
HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN]
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER
SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES; PROVIDED THAT IN CONNECTION WITH ANY
FORECLOSURE OR TRANSFER OF THE SECURITIES, THE TRANSFEROR SHALL COMPLY WITH THE
PROVISIONS HEREIN, IN THE SUBSCRIPTION AGREEMENT AND THE REGISTRATION RIGHTS
AGREEMENT, AND UPON FORECLOSURE OR TRANSFER OF THE SECURITIES, SUCH FORECLOSING
PERSON OR TRANSFEREE SHALL COMPLY WITH ALL PROVISIONS CONTAINED HEREIN, IN THE
SUBSCRIPTION AGREEMENT AND THE REGISTRATION RIGHTS AGREEMENT.
 
 
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(b)           The certificates evidencing the Securities issued to those
Investors who are not U.S. Persons, and each certificate issued in transfer
thereof, will bear the following legend:
 
[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE]
HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN]
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO THE PROVISIONS OF REGULATION
S 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; PROVIDED THAT IN CONNECTION WITH ANY
FORECLOSURE OR TRANSFER OF THE SECURITIES, THE TRANSFEROR SHALL COMPLY WITH THE
PROVISIONS HEREIN, IN THE SUBSCRIPTION AGREEMENT AND THE REGISTRATION RIGHTS
AGREEMENT, AND UPON FORECLOSURE OR TRANSFER OF THE SECURITIES, SUCH FORECLOSING
PERSON OR TRANSFEREE SHALL COMPLY WITH ALL PROVISIONS CONTAINED HEREIN, IN THE
SUBSCRIPTION AGREEMENT AND THE REGISTRATION RIGHTS AGREEMENT.
 
(c)           Other Legends.  The certificates representing such Securities, and
each certificate issued in transfer thereof, will also bear any other legend
required under any applicable Law, including, without limitation, any state
corporate and state securities law, or contract.
 
(d)           Certain Trading Activities.  Such Investor has not directly or
indirectly, nor has any person acting on behalf of or pursuant to any
understanding with such Investor, engaged in any transactions in the securities
of the Company (including, without limitation, Short Sales involving the
Company’s securities) since the time that such Investor was first contacted by
the Company regarding the investment in the Company contemplated herein.  “Short
Sales” include, without limitation, all “short sales” as defined in Rule 200
promulgated under Regulation SHO under the Exchange Act (“Regulation SHO”) and
all types of direct and indirect stock pledges, forward sales contracts,
options, puts, calls, swaps and similar arrangements (including on a total
return basis), and sales and other transactions through non-U.S.  broker dealers
or foreign regulated brokers (but shall not be deemed to include the location
and/or reservation of borrowable shares of Common Stock).
 
 
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(e)            Residency; Foreign Securities Laws.  Unless such Investor
resides, in the case of individuals, or is headquartered or formed, in the case
of entities, in the U.S., such Investor acknowledges that the Company will not
issue any Securities in compliance with the laws of any jurisdiction outside of
the U.S.  and the Company makes no representation or warranty that any
Securities issued outside of the U.S.  have been offered or sold in compliance
with the laws of the jurisdiction into which such Securities were issued.  Any
Investor not a resident of or formed in the U.S.  warrants to the Company that
no filing is required by the Company with any governmental authority in such
Investor’s jurisdiction in connection with the transactions contemplated
hereby.  If such Investor is domiciled or was formed outside of the U.S., such
Investor has satisfied itself as to the full observance of the laws of its
jurisdiction in connection with the acquisition of the Securities or any use of
this Agreement, including (i) the legal requirements within its jurisdiction for
the purchase of the Securities, (ii) any foreign exchange restrictions
applicable to such purchase, (iii) any governmental or other consents that may
need to be obtained and (iv) the income tax and other tax consequences, if any,
that may be relevant to the purchase, holding, redemption, sale or transfer of
the Securities.  If such Investor is domiciled or was formed outside the U.S.,
such Investor’s acquisition of and payment for, and its continued ownership of
the Securities, will not violate any applicable securities or other laws of his,
her or its jurisdiction.
 
Section 3.8            Disclosure.  No representation or warranty of such
Investor contained in this Agreement or any other Transaction Document and no
statement or disclosure made by or on behalf of such Investor to the Company or
any of its Subsidiaries pursuant to this Agreement or any other Transaction
Document herein contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading.
 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
The Company represents and warrants to the Investors, subject to the exceptions
and qualifications specifically set forth or disclosed in writing in the
disclosure schedule delivered by the Company to the Investors simultaneously
herewith (the “Company Disclosure Schedule”), that the statements contained in
this Article IV are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date (as though made then and as
thought the Closing Date were substituted for the date of this Agreement
throughout this Article IV) (except where another date or period of time is
specifically stated herein for a representation or warranty).  The Company
Disclosure Schedule shall be arranged according to the numbered and lettered
paragraphs of this Article IV and any disclosure in the Company Disclosure
Schedule shall qualify the corresponding paragraph in this Article IV.
 
 
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Section 4.1            Organization and Qualification.  Each of the Company and
its Subsidiaries is an entity duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its organization, has all
requisite corporate authority and power, governmental Licenses, authorizations,
consents and approvals to carry on its business as presently conducted and to
own, hold and operate its properties and assets as now owned, held and operated
by it, and is duly qualified to do business and in good standing in each
jurisdiction in which the failure to be so qualified would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect on
the Company.
 
Section 4.2            Authority.  The Company and each of its Subsidiaries has
all requisite authority and power, governmental Licenses, authorizations,
consents and approvals to enter into and deliver this Agreement and any of the
other Transaction Documents to which the Company and such Subsidiary is a party
and any other certificate, agreement, document or instrument to be executed and
delivered by the Company or such Subsidiary in connection with the transactions
contemplated hereby and thereby and to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and
thereby.  The execution and delivery of this Agreement and the other Transaction
Documents by the Company and any of its Subsidiaries and the performance by the
Company and any of its Subsidiaries of their respective obligations hereunder
and thereunder and the consummation by the Company and any of its Subsidiaries
of the transactions contemplated hereby and thereby have been duly authorized by
all necessary action on the part of the Company and such Subsidiary.  Neither
the Company nor any of its Subsidiaries needs to give any notice to, make any
filing with, or obtain any authorization, consent or approval of any Person or
Governmental Authority in order for the Parties to execute, deliver or perform
this Agreement or the transactions contemplated hereby.  This Agreement has
been, and each of the Transaction Documents to which the Company and any of its
Subsidiaries is a party will be, duly and validly authorized and approved,
executed and delivered by the Company and such Subsidiary.
 
Section 4.3            Binding Obligations.  Assuming this Agreement and the
Transaction Documents have been duly and validly authorized, executed and
delivered by the parties hereto and thereto other than the Company and its
Subsidiaries, this Agreement and each of the Transaction Documents to which the
Company and any of its Subsidiaries is a party are duly authorized, executed and
delivered by the Company and such Subsidiary and constitutes the legal, valid
and binding obligations of the Company and such Subsidiary enforceable against
the Company and such Subsidiary in accordance with their respective terms,
except as such enforcement is limited by general equitable principles, or by
bankruptcy, insolvency and other similar Laws affecting the enforcement of
creditors rights generally.
 
 
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Section 4.4            No Conflicts.  Neither the execution nor the delivery by
the Company or any of its Subsidiaries of this Agreement or any Transaction
Document to which the Company or any of its Subsidiaries is a party, nor the
consummation or performance by the Company or any of its Subsidiaries of the
transactions contemplated hereby or thereby will, directly or indirectly, (a)
contravene, conflict with, or result in a violation of any provision of the
Company Organizational Documents, (b) contravene, conflict with or result in a
violation of any Law, Order, charge or other restriction or decree of any
Governmental Authority or any rule or regulation of the Principal Market
applicable to the Company or any of its Subsidiaries, or by which the Company or
any of its Subsidiaries or any of their respective assets and properties are
bound or affected, (c) contravene, conflict with, result in any breach of, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, impair the rights of the Company under, or alter
the obligations of any Person under, or create in any Person the right to
terminate, amend, accelerate or cancel, or require any notice, report or other
filing (whether with a Governmental Authority or any other Person) pursuant to,
or result in the creation of a Lien on any of the assets or properties of the
Company or any of its Subsidiaries under, any note, bond, mortgage, indenture,
Contract, agreement, lease, License, permit, franchise or other instrument or
obligation to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or any of their respective assets
and properties are bound or affected; or (d) contravene, conflict with, or
result in a violation of, the terms or requirements of, or give any Governmental
Authority the right to revoke, withdraw, suspend, cancel, terminate or modify,
any Licenses, permits, authorizations, approvals, franchises or other rights
held by the Company or any of its Subsidiaries or that otherwise relate to the
business of, or any of the properties or assets owned or used by, the Company or
any of its Subsidiaries, except, in the case of clauses (b), (c), or (d), for
any such contraventions, conflicts, violations, or other occurrences as would
not have a Material Adverse Effect on the Company as a whole.
 
Section 4.5            Subsidiaries.  Other than as set forth on Schedule 4.5 of
the Company Disclosure Schedule, the Company does not own, directly or
indirectly, any equity or other ownership interest in any corporation,
partnership, joint venture or other entity or enterprise.  Except for this
Agreement, there are no Contracts or other obligations (contingent or otherwise)
of the Company to retire, repurchase, redeem or otherwise acquire any
outstanding shares of capital stock of, or other ownership interests in, any
other Person or to provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in any other Person.
 
Section 4.6            Organizational Documents.  The Company has delivered or
made available to the Investors a true and correct copy of the Certificate of
Incorporation and Bylaws of the Company and any other organizational documents
of the Company and any of its Subsidiaries, each as amended, and each such
instrument is in full force and effect (the “Company Organizational
Documents”).  Neither the Company nor any of its Subsidiaries is in violation of
any of the provisions of its respective Company Organizational Documents.
 
 
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Section 4.7            Capitalization.
 
(a)           The authorized capital stock of the Company consists of
100,000,000 shares of Company Common Stock, $0.0001 par value per share of which
(i) 3,405,294 shares of Company Common Stock are issued and outstanding; and
(ii) 7,000,000 shares of Company Common Stock are held by the Company in its
treasury subject to cancellation.  Except as set forth above, no shares of
capital stock or other voting securities of the Company were issued, reserved
for issuance or outstanding.  All outstanding shares of the capital stock of the
Company are, and all such shares that may be issued prior to the Closing Date
will be when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to or issued in violation of any purchase option,
call option, right of first refusal, preemptive right, subscription right or any
similar right under any provision of the Laws of the jurisidication of the
Company’s organization, the Company Organizational Documents or any Contract to
which the Company is a party or otherwise bound.  There are not any bonds,
debentures, notes or other Indebtedness of the Company having the right to vote
(or convertible into, or exchangeable for, securities having the right to vote)
on any matters on which holders of Company Common Stock may vote.  There are no
options, warrants, rights, convertible or exchangeable securities, “phantom”
stock rights, stock appreciation rights, stock-based performance units,
commitments, Contracts, arrangements or undertakings of any kind to which the
Company is a party or by which it is bound (x) obligating the Company to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other equity interests in, or any security convertible or
exercisable for or exchangeable into any capital stock of or other equity
interest in, the Company, (y) obligating the Company to issue, grant, extend or
enter into any such option, warrant, call, right, security, commitment,
Contract, arrangement or undertaking or (z) that give any Person the right to
receive any economic benefit or right similar to or derived from the economic
benefits and rights occurring to holders of the capital stock of the
Company.  There are no outstanding Contracts or obligations of the Company to
repurchase, redeem or otherwise acquire any shares of capital stock of the
Company.  There are no registration rights, proxies, voting trust agreements or
other agreements or understandings with respect to any class or series of any
capital stock or other security of the Company.
 
(b)           The issuance of the Securities to the Investors has been duly
authorized and, upon delivery to the Investors of certificates therefor in
accordance with the terms of this Agreement, the Securities will have been
validly issued and fully paid, and will be nonassessable, have the rights,
preferences and privileges specified, will be free of preemptive rights and will
be free and clear of all Liens and restrictions, other than Liens created by the
Investors and restrictions on transfer imposed by this Agreement and the
Securities Act.
 
Section 4.8            Compliance with Laws.  The business and operations of the
Company and its Subsidiaries have been and are being conducted in accordance
with all applicable Laws and Orders.  The Company is not conflict with, or in
default or violation of and, to the Knowledge of the Company or any of its
Subsidiaries, is not under investigation with respect to and has not been
threatened to be charged with or given notice of any violation of or default
under, any (i) Law, rule, regulation, judgment or Order, or (ii) note, bond,
mortgage, indenture, Contract, lease, License, permit, franchise or other
instrument or obligation to which the Company is a party or by which the Company
or any of its assets and properties are bound or affected.  There is no
agreement, judgment or Order binding upon the Company which has, or could
reasonably be expected to have, the effect of prohibiting or materially
impairing any business practice of the Company or its Subsidiaries or the
conduct of business by the Company or its Subsidiaries as currently conducted.
 
Section 4.9            Certain Proceedings.  There is no Action pending against,
or to the Knowledge of the Company or any of its Subsidiaries, threatened
against or affecting, the Company or any of its Subsidiaries by any Governmental
Authority or other Person with respect to the Company or any of its Subsidiaries
or any of their respective businesses or that challenges, or may have the effect
of preventing, delaying, making illegal, or otherwise interfering with, any of
the transactions contemplated by this Agreement.  Neither the Company nor any of
its Subsidiaries is in violation of and, to the Knowledge of Company or any of
its Subsidiaries, is under investigation with respect to and has not been
threatened to be charged with or given notice of any violation of, any
applicable Law, rule, regulation, judgment or Order.  Neither the Company, any
of its Subsidiaries nor any director or officer (in his or her capacity as such)
of the Company or any of its Subsidiaries, is or has been the subject of any
Action involving a claim or violation of or liability under federal or state
securities Laws or a claim of breach of fiduciary duty.
 
 
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Section 4.10          No Brokers or Finders.  No Person has, or as a result of
the transactions contemplated herein will have, any right or valid claim against
the Company or any of its Subsidiaries for any commission, fee or other
compensation as a finder or broker, or in any similar capacity, based upon
arrangements made by or on behalf of the Company or any of its Subsidiaries, and
the Company will indemnify and hold the Investors and harmless against any
liability or expense arising out of, or in connection with, any such claim.
 
Section 4.11          Contracts.  Except as disclosed in the SEC Reports or on
Schedule 4.11 of the Company Disclosure Schedule, there are no Contracts that
are material to the business, properties, assets, condition (financial or
otherwise), results of operations or prospects of the Company or any of its
Subsidiaries.  Neither the Company nor any of its Subsidiaries is in violation
of or in default under (nor does there exist any condition which upon the
passage of time or the giving of notice would cause such a violation of or
default under) any material Contract to which it is a party or to which it or
any of its properties or assets is subject, except for violations or defaults
that would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect of the Company.
 
Section 4.12          Tax Matters.  The Company and each Subsidiary (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, except in each case where the failure to
file, pay or set aside would not have a Material Adverse Effect on the
Company.  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.
 
Section 4.13          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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Section 4.14          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.  To the Company’s Knowledge, 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), to the Company’s knowledge, 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 material 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 on the Company.
 
Section 4.15          Title to Assets.  The Company and each Subsidiary has
sufficient title to, or valid leasehold interests in, all of its properties and
assets used in the conduct of their respective businesses.  All such assets and
properties, other than assets and properties in which the Company or any of its
Subsidiaries has leasehold interests, are free and clear of all Liens, except
for Liens that, in the aggregate, do not and will not materially interfere with
the ability of the Company or such Subsidiary to conduct business as currently
conducted.
 
Section 4.16          Intellectual Property.  The Company and its Subsidiaries
own or possess adequate rights or licenses to use all Intellectual Property
necessary to conduct their respective businesses as now conducted and as
presently proposed to be conducted.  None of the Company’s or any of its
Subsidiaries’ Intellectual Property has expired, terminated or been abandoned,
or is expected to expire, terminate or be abandoned, within two years from the
date of this Agreement.  Neither the Company nor any of its Subsidiaries has
Knowledge of any infringement by the Company or any of its Subsidiaries of
Intellectual Property of other Persons.  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 its Intellectual Property.  To the Knowledge of the Company or any of
its Subsidiaries, there are no facts or circumstances which might give rise to
any of the foregoing infringements or claims, actions or proceedings.  The
Company and each Subsidiary has taken reasonable security measures to protect
the secrecy, confidentiality and value of all of their respective Intellectual
Property.
 
 
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Section 4.17          Environmental Laws.  The Company and its Subsidiaries (A)
are in compliance with all Environmental Laws (as defined below), (B) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (C) are
in compliance with all terms and conditions of any such permit, license or
approval where, in each of the foregoing clauses (A), (B) and (C), the failure
to so comply could be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company.  The term “Environmental
Laws” means all federal, state, local or foreign laws relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata),
including, without limitation, laws relating to emissions, discharges, releases
or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.
 
Section 4.18          SEC Reports.
 
(a)           The Company has filed all reports, schedules, forms, statements
and other documents required to be filed by it with the SEC since February 3,
2011, pursuant to the Exchange Act (the “SEC Reports”).
 
(b)           As of their respective dates, the SEC Reports and any registration
statements filed by the Company under the Securities Act (the “Registration
Statements”) complied in all material respects with the requirements of the
Exchange Act and the Securities Act, as applicable, and the rules and
regulations of the SEC promulgated thereunder, and none of the SEC Reports or
Registration Statements, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.  All material
Contracts to which the Company or any of its Subsidiaries is a party or to which
the property or assets of the Company or any of its Subsidiaries are subject
have been filed as exhibits to the SEC Reports and the Registration Statements
as and to the extent required under the Exchange Act and the Securities Act, as
applicable.  The financial statements of the Company included in the SEC Reports
and the Registration Statements comply in all respects with applicable
accounting requirements and the rules and regulations of the SEC with respect
thereto as in effect at the time of filing, were prepared in accordance with
GAAP applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto, or, in the case of unaudited statements as
permitted by Form 10-Q), and fairly present in all material respects (subject in
the case of unaudited statements, to normal, recurring audit adjustments) the
financial position of the Company as at the dates thereof and the results of its
operations and cash flows for the periods then ended.
 
 
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Section 4.19          Internal Accounting Controls.  Except as set forth in the
SEC Reports or in the Section 4.19 of the Company Disclosure Schedule, the
Company maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (a) transactions are executed in accordance with
management’s general or specific authorizations, (b) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability,
(c) access to assets is permitted only in accordance with management’s general
or specific authorization, and (d) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.  The Company has established
disclosure controls and procedures for the Company and designed such disclosure
controls and procedures to ensure that material information relating to the
Company is made known to the officers by others within the Company.  The
Company’s officers have evaluated the effectiveness of the Company’s controls
and procedures.  Since the Company Most Recent Fiscal Year End, there have been
no significant changes in the Company’s internal controls or, to the Knowledge
of the Company, in other factors that could significantly affect the Company’s
internal controls.
 
Section 4.20          Listing and Maintenance Requirements.  The Company is, and
has no reason to believe that it will not in the foreseeable future continue to
be, in compliance with the listing and maintenance requirements for continued
listing or quotation of the Company Common Stock on the trading market on which
the Company Common Stock is currently listed or quoted.  The issuance and sale
of the Securities under this Agreement does not contravene the rules and
regulations of the trading market on which the Company Common Stock is currently
listed or quoted, and no approval of the stockholders of the Company is required
for the Company to issue and deliver to the Investors the Securities
contemplated by this Agreement.
 
Section 4.21          Application of Takeover Protections.  The Company and each
Subsidiary has taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under its Company Organizational Documents or the Laws
of its state of incorporation that is or could become applicable to the
transactions contemplated hereby.
 
Section 4.22          Transactions With Affiliates and Employees.  Except as
disclosed in the SEC Reports, no officer, director, employee or stockholder of
the Company or any Affiliate of any such Person, has or has had, either directly
or indirectly, an interest in any transaction with the Company (other than for
services as employees, officers and directors), including any Contract 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 Person or, to the Knowledge of the Company, any entity in
which any such Person has an interest or is an officer, director, trustee or
partner.
 
Section 4.23          Liabilities.  Other than the Bridge Notes and Liabilities
incurred in the Ordinary Course of Business of the Company, the Company has no
Liability (and there is no Action pending, or to the Knowledge of the Company,
threatened against the Company that would reasonably be expected to give rise to
any Liability), except for Liabilities set forth in the SEC Reports.  The
Company is not a guarantor nor is it otherwise liable for any Liability or
obligation (including Indebtedness) of any other Person.
 
 
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Section 4.24          Investment Company.  The Company is not, and is not an
affiliate of, and immediately following the Closing will not have become, an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.
 
Section 4.25          Not a U.S.  Real Property Holding Corporation.  The
Company is not and has not been a U.S.  real property holding corporation within
the meaning of Section 897(c)(2) of the Code at any time during the applicable
period specified in Section 897(c)(1)(A)(ii) of the Code.
 
Section 4.26          Bank Holding Company Act.  The Company is not subject to
the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation
by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”).  Neither the Company nor any of its Affiliates owns or controls,
directly or indirectly, five percent (5%) or more of the outstanding shares of
any class of voting securities or twenty-five percent (25%) or more of the total
equity of a bank or any equity that is subject to the BHCA and to regulation by
the Federal Reserve.  Neither the Company nor Affiliates exercises a controlling
influence over the management or policies of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve.
 
Section 4.27          Public Utility Holding Act.  Neither the Company nor any
of its Subsidiaries is a “holding company,” or an “affiliate” of a “holding
company,” as such terms are defined in the Public Utility Holding Act of 2005.
 
Section 4.28          Federal Power Act.  Neither the Company nor any of its
Subsidiaries is subject to regulation as a “public utility” under the Federal
Power Act, as amended.
 
Section 4.29          Money Laundering Laws.  The operations of the Company and
its Subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all U.S.  and non-U.S.  jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any Governmental Authority (collectively, the “Money
Laundering Laws”) and no Action involving the Company or any of its Subsidiaries
with respect to the Money Laundering Laws is pending or, to the Knowledge of the
Company or any of its Subsidiaries, threatened.
 
Section 4.30          Foreign Corrupt Practices.  Neither the Company nor any of
its Subsidiaries, nor, to the Knowledge of the Company or any of its
Subsidiaries, 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 (a) used
any corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity; (b) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (c) violated or is in violation of any provision
of the U.S.  Foreign Corrupt Practices Act of 1977, as amended; or (d) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to any foreign or domestic government official or employee.
 
 
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Section 4.31          Absence of Certain Changes or Events.  Except as set forth
in the SEC Reports, from the Company Most Recent Fiscal Year End, 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.  Since the date of the Company’s most recent audited financial
statements contained in a 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 of
the Company 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 of its Subsidiaries 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.
 
Section 4.32          No General Solicitation.  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 Investor or its investment advisor) relating to or
arising out of the transactions contemplated hereby.
 
Section 4.33          No Integrated Offering.  Assuming the accuracy of the
Investors representations and warranties set forth in this Agreement, 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
Securities Act, whether through integration with prior offerings or otherwise,
or cause this offering of the Securities to require approval of stockholders of
the Company under any applicable stockholder approval provisions, including,
without limitation, under the rules and regulations of any exchange or automated
quotation system on which any of the securities of the Company are listed or
designated for quotation.
 
Section 4.34          Disclosure.  All documents and other papers delivered or
made available by or on behalf of the Company or any of its Subsidiaries in
connection with this Agreement are true, complete, correct and authentic in all
material respects.  No representation or warranty of the Company or any of its
Subsidiaries contained in this Agreement and no statement or disclosure made by
or on behalf of the Company or any of its Subsidiaries to any Investor pursuant
to this Agreement or any other agreement contemplated herein contains an untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained herein or therein not misleading.
 
 
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Section 4.35          Undisclosed Events.  No event, Liability, development or
circumstance has occurred or exists, or is contemplated to occur with respect to
the Company, any of the Subsidiaries or their respective businesses, properties,
prospects, operations or financial condition, that would be required to be
disclosed by the Company under applicable securities laws on a registration
statement on Form S-1 filed with the SEC relating to an issuance and sale by the
Company of its common stock and which has not been publicly announced or will
not be publicly announced in a current report on Form 8-K filed by the Company
filed within four (4) Business Days after the Closing.
 
ARTICLE V
COVENANTS
 
Section 5.1            Form D; 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 Investors 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).  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, state and local
laws, statutes, rules, regulations and the like relating to the offering and
sale of the Securities to the Investors.
 
Section 5.2            Reporting Status.  Until the date on which the Investors
shall have sold all of the Registrable Securities (the “Reporting Period”), the
Company shall use its reasonable best efforts to timely file all reports
required to be filed with the SEC pursuant to the Exchange Act, and the Company
shall not terminate its status as an issuer required to file reports under the
Exchange Act.
 
Section 5.3            Listing.  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 national securities exchange or automated
quotation system. The Company shall maintain the Common Stock’s listing or
authorization for quotation (as the case may be) on an Eligible Market. Neither
the Company nor any of its Subsidiaries shall take any action which could be
reasonably expected to result in the delisting or suspension of the Common Stock
on an Eligible Market.
 
Section 5.4            Use of Proceeds.  The Company will use the proceeds from
the sale of the Securities for general corporate purposes, but not, directly or
indirectly, for (a) the satisfaction of any Indebtedness of the Company or any
of its Subsidiaries other than satisfaction of any outstanding amount due and
owing under any Bridge Note or Replacement Note issued in replacement thereof,
(b) the redemption or repurchase of any securities of the Company or any of its
Subsidiaries or (c) the settlement of any outstanding litigation.
 
 
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Section 5.5            Reservation of Shares.  So long as any Warrants remain
outstanding, the Company shall take reasonable best efforts to at all times have
authorized, and reserved for the purpose of issuance, no less than 100% of the
maximum number of shares of Common Stock issuable upon exercise of all the
Warrants as of the date hereof (without regard to any limitations on the
exercise of the Warrants set forth therein), less the number of Warrant Shares
represented by any such Warrants that have been exercised.
 
Section 5.6            Passive Foreign Investment Company.  The Company shall
conduct its business in such a manner as will ensure that the Company will not
be deemed to constitute a passive foreign investment company within the meaning
of Section 1297 of the U.S.  Internal Revenue Code of 1986, as amended.
 
Section 5.7            Disclosure of Transactions and Other Material
Information.  On or before the fourth (4th) Business Day after the date of this
Agreement, the Company shall file a Current Report on Form 8-K describing all
the material terms of the transactions contemplated by the Transaction Documents
in the form required by the Exchange Act and attaching all the material
Transaction Documents (including, without limitation, this Agreement (and all
schedules to this Agreement), the form of the Warrants and the form of the
Registration Rights Agreement) (including all attachments, the “8-K
Filing”).  From and after the filing of the 8-K Filing, the Company shall have
disclosed all material, non-public information (if any) provided to any of the
Investors 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.
 
Section 5.8            Corporate Existence.  So long as any Investor owns any
Warrants, 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.
 
Section 5.9            Anti-Dilution.  If and whenever during the period
commencing after the Closing and ending on the twelve month anniversary of the
Closing Date, the Company issues or sells any shares of Common Stock (including
the issuance or sale of shares of Common Stock owned or held by or for the
account of the Company, but excluding any Excluded Securities issued or sold or
deemed to have been issued or sold) for a consideration per share (the “New
Issuance Price”) less than a price equal to $5.10 (as adjusted for any stock
dividend, stock split, stock combination or other similar transaction) (the
“Applicable Price”) (the foregoing a “Dilutive Issuance,” and the time of
Dilutive Issuance, the “Dilutive Adjustment Time”), then promptly after such
Dilutive Issuance, the Company shall issue to each Investor that number of
shares of Common Stock equal to the greater of (I) zero and (II) the difference
of (i) the quotient of (x) the Purchase Price of such Investor divided by (y)
the New Issuance Price, less (ii) the number of shares of Common Stock
previously issued to such Investor pursuant to this Agreement (as adjusted for
any stock dividend, stock split, stock combination or other similar
transaction).
 
 
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Section 5.10          Forward Split.  As soon as reasonably practicable
following the Closing, the Company shall take all reasonable action necessary to
be taken by it to effectuate a 17:1 forward stock split of the Common Stock (the
“Forward Split”).  For purposes of clarity, all share amounts and per share
prices set forth in the Transaction Documents are on a pre-Forward Split basis
and, accordingly, (i) the post-Forward Split equivalent per share price of the
Shares shall be $0.20; (ii) the post-Forward Split exercise price of the Series
A Warrants shall be $0.30 (assuming no other adjustments to the exercise price
of the Series A Warrants as provided for in the Series A Warrants); (iii) the
post-Forward Split exercise price of the Series B Warrants shall be $0.60
(assuming no other adjustments to the exercise price of the Series B Warrants as
provided for in the Series B Warrants); (iv) the post-Forward Split number of
shares or options for purposes of clause (i)(A) of the definition of Excluded
Securities shall be 13,000,000; (v) the post-Forward Split number of shares or
options for purposes of clause (i)(C) of the definition of Excluded Securities
shall be 3,251,250; and (v) the post-Forward Split Applicable Price shall be
$0.30 (assuming no other adjustments to the Applicable Price as provided for in
Section 5.9).
 
ARTICLE VI
CONDITIONS TO CLOSING
 
Section 6.1            Conditions to Obligation of the Parties Generally.  The
Parties shall not be obligated to consummate the transactions to be performed by
each of them in connection with the Closing if, on the Closing Date, (i) any
Action shall be pending or threatened before any Governmental Authority wherein
an Order or charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement or (B) cause any of the transactions contemplated
by this Agreement to be rescinded following consummation, or (ii) any Law or
Order which would have any of the foregoing effects shall have been enacted or
promulgated by any Governmental Authority.
 
Section 6.2            Conditions to Obligation of the Investors.  The
obligations of the Investors to enter into and perform their respective
obligations under this Agreement are subject, at the option of the Investors, to
the fulfillment on or prior to the Closing Date of the following conditions, any
one or more of which may be waived by the Investors in writing:
 
(a)           The representations and warranties of the Company set forth in
this Agreement shall be true and correct in all material respects as of the
Closing Date (except to the extent such representations and warranties are
specifically made as of a particular date, in which case such representations
and warranties shall be true and correct as of such date);
 
(b)           Company shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing, except to the
extent that such covenants are qualified by terms such as “material” and
“Material Adverse Effect,” in which case the Company shall have performed and
complied with all of such covenants in all respects through the Closing;
 
(c)           No action, suit, or proceeding shall be pending or, to the
Knowledge of the Company, threatened before any Governmental Authority wherein
an Order or charge would (A) affect adversely the right of the Investors to own
the Securities, or (B) affect adversely the right of the Company to own its
assets or to operate its business (and no such Order or charge shall be in
effect), nor shall any Law or Order which would have any of the foregoing
effects have been enacted or promulgated by any Governmental Authority;
 
 
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(d)           No event, change or development shall exist or shall have occurred
since the date of this Agreement that has had or is reasonably likely to have a
Material Adverse Effect on the Company;
 
(e)           All consents, waivers, approvals, authorizations or orders
required to be obtained, and all filings required to be made, by the Company for
the authorization, execution and delivery of this Agreement and the consummation
by it of the transactions contemplated by this Agreement, shall have been
obtained and made by the Company and Company shall have delivered proof of same
to the Investors;
 
(f)           Company shall have filed all reports and other documents required
to be filed by it under the U.S.  federal securities laws through the Closing
Date;
 
(g)           Company shall have maintained its status as a company whose common
stock is quoted on the Principal Market and no reason shall exist as to why such
status shall not continue immediately following the Closing;
 
(h)           Trading in the Company Common Stock shall not have been suspended
by the SEC or any trading market (except for any suspensions of trading of not
more than one trading day solely to permit dissemination of material information
regarding the Company) at any time since the date of execution of this
Agreement, and the Company Common Stock shall have been at all times since such
date listed for trading on a trading market;
 
(i)           Company shall have delivered to the Investors a certificate, dated
the Closing Date, executed by an officer of the Company, certifying the
satisfaction of the conditions specified in Sections 6.2(a) through 6.2(h),
inclusive, relating to the Company.
 
(j)           Company shall have delivered to the Investors a certified copy of
the Certificate of Incorporation of the Company as certified by the Secretary of
State (or comparable office) of the Company’s jurisdiction of formation within
five (5) days of the Closing Date;
 
(k)           Company shall have delivered to the Investors (i) a certificate
evidencing the formation and good standing of the Company in its jurisdiction of
formation issued by the Secretary of State (or comparable office) of such
jurisdiction of formation as of a date within five (5) days of the Closing Date;
and (ii) a certificate evidencing the Company’s qualification as a foreign
corporation and good standing issued by the Secretary of State (or comparable
office) of each jurisdiction in which the Company conducts business and is
required to so qualify, as of a date within five (5) days of the Closing Date;
 
(l)           Company shall have delivered to the Investors a certificate duly
executed by the Secretary of the Company and dated as of the Closing Date, as to
(i) the resolutions as adopted by the Company’s board of directors approving
this Agreement and the Transaction Documents to which it is a party and the
transactions contemplated hereby and thereby; (ii) the Company Organizational
Documents, each as in effect at the Closing; and (iii) the incumbency of each
authorized officer of the Company signing this Agreement and any other agreement
or instrument contemplated hereby to which the Company is a party;
 
 
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(m)          The Company shall have delivered a duly executed lock up agreements
in the form of Exhibit E-1 hereto with the Persons set forth on Schedule II(a)
and lock up agreements in the form of Exhibit E-2 hereto with the Persons set
forth on Schedule II(b);
 
(n)           The Company and each Subsidiary (as the case may be) shall have
duly executed and delivered to each Investor each of the Transaction Documents
to which it is a party and the Company shall have duly executed and delivered to
such Investor the Shares in such aggregate number of Shares as is set forth
across from such Investor’s name in column (3) of Schedule I and the related
Series A Warrants and Series B Warrants (initially for such aggregate number of
shares of Warrant Shares as is set forth across from such Investor’s name in
columns (4) and (5) of Schedule I, respectively) being purchased by such
Investor at the Closing pursuant to this Agreement;
 
(o)           The closing of the Acquisition shall have occurred; and
 
(p)           All actions to be taken by the Company in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby shall be reasonably satisfactory in form and substance to
the Investors.
 
Section 6.3            Conditions to Obligation of the Company.  The obligations
of the Company to enter into and perform its obligations under this Agreement
are subject, at the option of the Company, to the fulfillment on or prior to the
Closing Date of the following conditions, any one or more of which may be waived
by the Company:
 
(a)           The representations and warranties of the Investors set forth in
this Agreement shall be true and correct in all material respects as of the
Closing Date (except to the extent such representations and warranties are
specifically made as of a particular date, in which case such representations
and warranties shall be true and correct as of such date);
 
(b)           The Investors shall have performed and complied with all of their
covenants hereunder in all material respects through the Closing, except to the
extent that such covenants are qualified by terms such as “material” and
“Material Adverse Effect,” in which case the Investors shall have performed and
complied with all of such covenants in all respects through the Closing;
 
(c)           Each Investor shall have executed each of the Transaction
Documents to which it is a party and delivered the same to the Company;
 
(d)           Each Investor shall have delivered to the Company the Purchase
Price for the Shares and the related Warrants being purchased by such Investor
at the Closing by wire transfer of immediately available funds pursuant to the
wire instructions provided by the Company (except to the extent such Bridge
Investor’s Purchase Price s deemed to be paid by delivery of such Bridge
Investor’s Bridge Note); and
 
 
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(e)           All actions to be taken by the Investors in connection with
consummation of the transactions contemplated hereby and all payments,
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby shall be reasonably satisfactory in form and
substance to the Company.
 
ARTICLE VII
SURVIVAL; INDEMNIFICATION
 
Section 7.1            Survival.  All representations, warranties, covenants,
and obligations in this Agreement shall survive the Closing.
 
Section 7.2            Indemnification.  In consideration of each Investor’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 Investor 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 of its Subsidiaries in any of the Transaction Documents, (b) any
breach of any covenant, agreement or obligation of the Company or any of its
Subsidiaries contained in any of the Transaction Documents or (c) any cause of
action, suit 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 of its Subsidiaries) and arising out of or resulting from the
execution, delivery, performance or enforcement of any of the Transaction
Documents other than due to such Investor’s misconduct or gross negligence.
 
ARTICLE VIII
TERMINATION
 
Section 8.1            Termination.  In the event that the Closing shall not
have occurred with respect to an Investor within five (5) days of the date
hereof, then such Investor 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 Investor to any other party;
provided, however, (i) the right to terminate this Agreement under this Section
8.1 shall not be available to such Investor if the failure of the transactions
contemplated by this Agreement to have been consummated by such date is the
result of such Investor’s breach of this Agreement and (ii) the abandonment of
the sale and purchase of the Common Shares and the Warrants shall be applicable
only to such Investor providing such written notice.  Nothing contained in this
Section 8.1 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.
 
 
30

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ARTICLE IX
MISCELLANEOUS PROVISIONS
 
Section 9.1            Expenses.  Except as otherwise expressly provided in this
Agreement, each Party will bear its respective expenses incurred in connection
with the preparation, execution, and performance of this Agreement and the
transactions contemplated by this Agreement, including all fees and expenses of
agents, representatives, counsel, and accountants.  In the event of termination
of this Agreement, the obligation of each Party to pay its own expenses will be
subject to any rights of such Party arising from a breach of this Agreement by
another Party.
 
Section 9.2            Confidentiality.
 
(a)           The Parties will maintain in confidence, and will cause their
respective directors, officers, employees, agents, and advisors to maintain in
confidence, any written, oral, or other information obtained in confidence from
another Person in connection with this Agreement or the transactions
contemplated by this Agreement, unless (i) such information is already known to
such Party or to others not bound by a duty of confidentiality or such
information becomes publicly available through no fault of such Party, (ii) the
use of such information is necessary or appropriate in making any required
filing with the SEC, or obtaining any consent or approval required for the
consummation of the transactions contemplated by this Agreement, or (iii) the
furnishing or use of such information is required by or necessary or appropriate
in connection with legal proceedings.
 
(b)           In the event that any Party is required to disclose any
information of another Person pursuant to clause (ii) or (iii) of Section 9.2(a)
above, the Party requested or required to make the disclosure (the “disclosing
party”) shall provide the Person that provided such information (the “providing
party”) with prompt notice of any such requirement so that the providing party
may seek a protective Order or other appropriate remedy and/or waive compliance
with the provisions of this Section 9.2.  If, in the absence of a protective
Order or other remedy or the receipt of a waiver by the providing party, the
disclosing party is nonetheless, in the opinion of counsel, legally compelled to
disclose the information of the providing party, the disclosing party may,
without liability hereunder, disclose only that portion of the providing party’s
information which such counsel advises is legally required to be disclosed,
provided that the disclosing party exercises its reasonable efforts to preserve
the confidentiality of the providing party’s information, including, without
limitation, by cooperating with the providing party to obtain an appropriate
protective Order or other relief assurance that confidential treatment will be
accorded the providing party’s information.
 
(c)           If the transactions contemplated by this Agreement are not
consummated, each Party will return or destroy all of such written information
each party has regarding the other Parties.
 
 
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Section 9.3            Independent Nature of Investors’ Obligations and
Rights.  The obligations of each Investor under the Transaction Documents are
several and not joint with the obligations of any other Investor, and no
Investor shall be responsible in any way for the performance of the obligations
of any other Investor under any Transaction Document.  Nothing contained herein
or in any other Transaction Document, and no action taken by any Investor
pursuant hereto or thereto, shall be deemed to constitute the Investors as, and
the Company acknowledges that the Investors 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 Investors 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
Investors 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 Investor to
purchase Securities pursuant to the Transaction Documents has been made by such
Investor independently of any other Investor.  Each Investor acknowledges that
no other Investor has acted as agent for such Investor in connection with such
Investor making its investment hereunder and that no other Investor will be
acting as agent of such Investor in connection with monitoring such Investor’s
investment in the Securities or enforcing its rights under the Transaction
Documents.  The Company and each Investor confirms that each Investor 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 Investor 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 Investor 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 Investor, 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 Investor.  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 an
Investor, solely, and not between the Company, its Subsidiaries and the
Investors collectively and not between and among the Investors.
 
Section 9.4            Notices.  All notices, demands, consents, requests,
instructions and other communications to be given or delivered or permitted
under or by reason of the provisions of this Agreement or in connection with the
transactions contemplated hereby shall be in writing and shall be deemed to be
delivered and received by the intended recipient as follows: (i) if personally
delivered, on the Business Day of such delivery (as evidenced by the receipt of
the personal delivery service), (ii) if mailed certified or registered mail
return receipt requested, two (2) Business Days after being mailed, (iii) if
delivered by overnight courier (with all charges having been prepaid), on the
Business Day of such delivery (as evidenced by the receipt of the overnight
courier service of recognized standing), or (iv) if delivered by facsimile
transmission or other electronic means, including email, on the Business Day of
such delivery if sent by 6:00 p.m.  in the time zone of the recipient, or if
sent after that time, on the next succeeding Business Day.  If any notice,
demand, consent, request, instruction or other communication cannot be delivered
because of a changed address of which no notice was given (in accordance with
this Section 9.4), or the refusal to accept same, the notice, demand, consent,
request, instruction or other communication shall be deemed received on the
second business day the notice is sent (as evidenced by a sworn affidavit of the
sender).  All such notices, demands, consents, requests, instructions and other
communications will be sent to the following addresses or facsimile numbers as
applicable:
 
 
32

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If to the Company, to:
 
LY Retail LLC d/b/a Luxeyard.com
4063 Glencoe Avenue, Suite A
Marina Del Rey, California 90292
Attention: Braden Richter, Chief Executive Officer
Telephone No.: 323-855-7044
Facsimile No.:                                                     
     
With copies to:
 
Anslow & Jaclin, LLP
195 Route 9 South, Suite 204
Manalapan, New Jersey 07726
Attention: Richard I Anslow, Esq.
Telephone No.: 732-409-1212
Facsimile No.: 732-577-1188
     
If to the Investors, to:
 
The applicable address set forth in column (1) on Schedule I.

 
or such other addresses as shall be furnished in writing by any Party in the
manner for giving notices hereunder.
 
Section 9.5            Further Assurances.  The Parties agree (a) to furnish
upon request to each other such further information, (b) to execute and deliver
to each other such other documents, and (c) to do such other acts and things,
all as the other Parties may reasonably request for the purpose of carrying out
the intent of this Agreement and the documents referred to in this Agreement.
 
Section 9.6            Amendment and Waivers.  The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, or waived unless the same shall be in writing and signed by the
Company and the Required Holders, provided that any Party may give a waiver as
to itself.  The rights and remedies of the Parties are cumulative and not
alternative.  Neither the failure nor any delay by any Party in exercising any
right, power, or privilege under this Agreement or the documents referred to in
this Agreement will operate as a waiver of such right, power, or privilege, and
no single or partial exercise of any such right, power, or privilege will
preclude any other or further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege.  To the maximum extent
permitted by applicable Law, (a) no claim or right arising out of this Agreement
or the documents referred to in this Agreement can be discharged by one Party,
in whole or in part, by a waiver or renunciation of the claim or right unless in
writing signed by the other Parties; (b) no waiver that may be given by a Party
will be applicable except in the specific instance for which it is given; and
(c) no notice to or demand on one Party will be deemed to be a waiver of any
obligation of such Party or of the right of the Party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.
 
 
33

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Section 9.7            Entire Agreement.  This Agreement, the other Transaction
Documents, the schedules and exhibits attached hereto and thereto and the
instruments referenced herein and therein constitute the entire agreement among
the parties hereto and thereto solely with respect to the subject matter hereof
and thereof. There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein and therein. This Agreement,
the other Transaction Documents, the schedules and exhibits attached hereto and
thereto and the instruments referenced herein and therein supersede all prior
agreements and understandings among the parties hereto solely with respect to
the subject matter hereof and thereof; 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 Investor has entered into with the
Company or any of its Subsidiaries prior to the date hereof with respect to any
prior investment made by such Investor in the Company, (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 Investor 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 Investor and all such agreements shall
continue in full force and effect or (iii) limit any obligations of the Company
under any of the other Transaction Documents.
 
Section 9.8            Assignments, Successors, and No Third-Party Rights.  No
Party may assign any of its rights under this Agreement without the prior
consent of the other Parties.  Subject to the preceding sentence, this Agreement
will apply to, be binding in all respects upon, and inure to the benefit of and
be enforceable by the respective successors and permitted assigns of the
Parties.  Except as set forth in Article VII hereof, nothing expressed or
referred to in this Agreement will be construed to give any Person other than
the Parties any legal or equitable right, remedy, or claim under or with respect
to this Agreement or any provision of this Agreement.
 
Section 9.9            Severability.  If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect.  Any
provision of this Agreement held invalid or unenforceable only in part or degree
will remain in full force and effect to the extent not held invalid or
unenforceable.
 
Section 9.10          Section Headings.  The headings of Articles and Sections
in this Agreement are provided for convenience only and will not affect its
construction or interpretation.  All references to “Article” or “Articles” or
“Section” or “Sections” refer to the corresponding Article or Articles or
Section or Sections of this Agreement, unless the context indicates otherwise.
 
Section 9.11          Construction.  The Parties have participated jointly in
the negotiation and drafting of this Agreement.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement.  Any reference to any federal, state, local,
or foreign statute or Law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires
otherwise.  Unless otherwise expressly provided, the word “including” shall mean
including without limitation.  The Parties intend that each representation,
warranty, and covenant contained herein shall have independent significance.  If
any Party has breached any representation, warranty, or covenant contained
herein in any respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the Party has not breached shall not
detract from or mitigate the fact that the Party is in breach of such
representation, warranty, or covenant.  All words used in this Agreement will be
construed to be of such gender or number as the circumstances require.
 
 
34

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Section 9.12          Counterparts.  This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.  In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the Party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.
 
Section 9.13          Specific Performance.  Each of the Parties acknowledges
and agrees that the other Parties would be damaged irreparably in the event any
of the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached.  Accordingly, each of the Parties
agrees that the other Parties shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the U.S.  or any state thereof having jurisdiction
over the Parties and the matter (subject to the provisions set forth in Section
9.14 below), in addition to any other remedy to which they may be entitled, at
Law or in equity.
 
Section 9.14          Governing Law; Submission to Jurisdiction.  This Agreement
shall be governed by and construed in accordance with the Laws of the State of
Texas, without regard to conflicts of Laws principles.  Each of the Parties
submits to the jurisdiction of any state or federal court sitting in the State
of Texas, in any action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of the action or proceeding may
be heard and determined in any such court.  Each of the Parties waives any
defense of inconvenient forum to the maintenance of any action or proceeding so
brought and waives any bond, surety, or other security that might be required of
any other Party with respect thereto.  Any Party may make service on any other
Party by sending or delivering a copy of the process to the Party to be served
at the address and in the manner provided for the giving of notices in Section
9.4 above.  Nothing in this Section 9.14, however, shall affect the right of any
Party to serve legal process in any other manner permitted by Law or at
equity.  Each Party agrees that a final judgment in any action or proceeding so
brought shall be conclusive and may be enforced by suit on the judgment or in
any other manner provided by Law or at equity.
 
 
35

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Section 9.15          Waiver of Jury Trial.  EACH OF THE PARTIES HEREBY
IRREVOCABLY WANES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

 
[Signatures follow on next page]
 
 
36

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IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
COMPANY:
 
TOP GEAR INC.
 
By:
 
Name:
Braden Richter
Title:
President and Chief Executive Officer

 
[Signatures Continue on Next Page]
 
[Company Signature Page to Subscription Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
INVESTOR:
 
/s/ Amir Mireskandari
Amir Mireskandari

 
[Investor Signature Page to Subscription Agreement]

 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
INVESTOR:
 
/s/ David S. Nagelberg
David S. Nagelberg

 
[Investor Signature Page to Subscription Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
INVESTOR:
 
/s/ Jonathan Friedlander
Equity Highrise, Inc.
By Jonathan Friedlander President

 
[Investor Signature Page to Subscription Agreement]

 
 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
INVESTOR:
 
/s/ Frederick Huttner
Frederick Huttner
Huttner 1999 Partnership Ltd.

 
[Investor Signature Page to Subscription Agreement]

 
 

--------------------------------------------------------------------------------

 

 
IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
INVESTOR:
 
/s/ Jeff Lamont
Jeff Lamont

 
[Investor Signature Page to Subscription Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
INVESTOR:
 
/s/ Jeffrey A. Sater
Jeffrey A. Sater

 
[Investor Signature Page to Subscription Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
INVESTOR:
 
/s/ Kevan Casey
Jinsun LLC
Kevan Casey - Manager

 
[Investor Signature Page to Subscription Agreement]

 
 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
INVESTOR:
 
/s/ Joseph R. Lee POA Scott B. Gann
Joseph R. Lee

 
[Investor Signature Page to Subscription Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
INVESTOR:
 
/s/ Robert B. Wheat.
Kay Holdings, Inc.

 
[Investor Signature Page to Subscription Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
INVESTOR:
 
/s/ Kevin Lisman
Kevin Lisman

[Investor Signature Page to Subscription Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
INVESTOR:
 
/s/ Khaled Alattar
Khaled Alattar

[Investor Signature Page to Subscription Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
INVESTOR:
 
/s/ Lance Baral
Lance Baral

[Investor Signature Page to Subscription Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
INVESTOR:
 
/s/ Scott B. Gann
Lee Bear I, LLC
By: Lazy Bear, LLC, its member
By: Oso Capital, LLC, its member
By: Scott B. Gann, its member

[Investor Signature Page to Subscription Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
INVESTOR:
 
/s/ Mark Trotter
Mark Trotter

[Investor Signature Page to Subscription Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
INVESTOR:
 
/s/ Lawrence D. Isen
MarketByte LLC Defined Benefit and Trust
Lawrence D. Isen, Trustee

[Investor Signature Page to Subscription Agreement]

 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
INVESTOR:
 
/s/ Scott B. Gann
Sun Bear LLC
 
By: Scott B. Gann, its member

[Investor Signature Page to Subscription Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
INVESTOR:
 
/s/ Thomas Hudson
Thomas Hudson

[Investor Signature Page to Subscription Agreement]

 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company and the Investors have caused their respective
signature pages to this Subscription Agreement to be duly executed as of the
date first written above.
 
INVESTOR:
 
/s/ William W. Bartlett Jr.
William W. Bartlett Jr.

[Investor Signature Page to Subscription Agreement]

 
 

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SCHEDULE I
 
Investors
 

          
PRE-SPLIT
   
POST-SPLIT
 
Investor
 
Purchase
Price
   
Shares
   
Series A
Warrant
Shares
   
Series B
Warrant
Shares
   
Shares
   
Series A
Warrant
Shares
   
Series B
Warrant
Shares
 
(1)
  (2)     (3)     (4)     (5)                    
Amir Mireskandari
4550 Post Oak Place,
Suite 210
Houston, TX 77027
  $ 33,483 *     9,848       4,924       4,924       167,416       83,708      
83,708  
David S. Nagelberg
939 Coast Blvd., Unit 31 DE
La Jolla, CA  92037
    20,000       5,882       2,941       2,941       99,994       49,997      
49,997  
Equity Highrise Inc.
Attn: Jonathan  Friedlander
5348 Vegas Dr. #761
Las Vegas, NV 89108
    50,000       14,706       7,353       7,353       250,002       125,001    
  125,001  
Huttner 1999 Partnership Ltd.
22 Latigo Road
Durango, CO 81301
Attention: Frederick Huttner
    25,000 *     7,353       3,677       3,677       125,001       62,501      
62,501  
Jeff Lamont
5750 Wilshire Boulevard
Suite 600
Los Angeles, CA 90036
    25,000       7,353       3,677       3,677       125,001       62,501      
62,501  
Jeffrey A. Sater
24061 North Church Road
 Scottsdale, AZ 85255
    50,000       14,706       7,353       7,353       250,002       125,001    
  125,001  
Jinsun LLC
Attn: Kevan Casey
2710 Thomes Ave.
Cheyenne, WY 82001
    77,500 *     22,794       11,397       11,397       387,498       193,749  
    193,749  
Joseph R. Lee
5220 Spring Valley, Suite 195
Dallas, TX 75254
    50,000       14,706       7,353       7,353       250,002       125,001    
  125,001  
Kay Holdings, Inc.
5405 Soledad Road
La Jolla, CA 92037
    10,000       2,941       1,471       1,471       49,997       24,999      
24,999  
Kevin Lisman
2621 Talbot
Houston, TX  77005
    25,000       7,353       3,677       3,677       125,001       62,501      
62,501  
Khaled Alattar
706 Alkire Lake Drive
Sugarland, TX  77478
    96,517 *     28,387       14,194       14,194       482,584       241,292  
    241,292  
Lance Baral
2304 Cedardale Place
Las Vegas, NV 89134
    20,000       5,882       2,941       2,941       99,994       49,997      
49,997  
Lee Bear I, LLC
5220 Spring Valley, Suite 195
Dallas, TX 75254
    25,000       7,353       3,677       3,677       125,001       62,501      
62,501  
Mark Trotter
5420 La Jolla Blvd., b-102
San Diego, CA 92037
    22,500       6,618       3,309       3,309       112,506       56,253      
56,253  

 
 
 

--------------------------------------------------------------------------------

 
 

          
PRE-SPLIT
   
POST-SPLIT
 
Investor
 
Purchase
Price
   
Shares
   
Series A
Warrant
Shares
   
Series B
Warrant
Shares
   
Shares
   
Series A
Warrant
Shares
   
Series B
Warrant
Shares
 
(1)
 
(2)
   
(3)
   
(4)
   
(5)
                   
MarketByte LLC Defined Benefit and Trust
4653 Carmel Mtdn. Rd.
Suite 308-402
San Diego, CA 92130
    25,000       7,353       3,677       3,677       125,001       62,501      
62,501  
Sun Bear, LLC
5220 Spring Valley, Suite 195
Dallas, TX 75254
    25,000       7,353       3,677       3,677       125,001       62,501      
62,501  
Thomas Hudson
5250 N. Sam Houston Pkwy West, Suite 100
Houston, TX  77086
    25,000       7,353       3,677       3,677       125,001       62,501      
62,501  
William W. Bartlett Jr.
506 Ramblewood
Houston, TX 77079
    25,000       7,353       3,677       3,677       125,001       62,501      
62,501  
TOTAL:
    630,000       185,294       92,652       92,652       3,150,003      
1,575,006       1,575,006  

 
* Denotes a Bridge Investor.  Each Bridge Investor’s Purchase Price shall be
deemed to be paid in full by the delivery at the Closing by such Bridge Investor
to the Company of the Bridge Notes issued to such Bridge Investor.
 
 
 

--------------------------------------------------------------------------------

 
 
SCHEDULE II
 
Lock-Up Parties
 
(a) Khaled Alattar, 
Braden Richter, Kevin Walker, Jerry Wilkerson and Joshua Thompson
 
(b) Amir Mireskandari
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT A
 
Form of Investor Questionnaire
 
See attached.
 
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT B
 
Form of Series A Warrant
 
See attached.
 
 
 

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EXHIBIT C
 
Form of Series B Warrant
 
See attached.
 
 
 

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EXHIBIT D
 
Form of Registration Rights Agreement
 
See attached.
 
 
 

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EXHIBIT E-1
 
Form of Lock-Up Agreement
 
See attached.
 
 
 

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EXHIBIT E-2
 
Form of Lock-Up Agreement
 
See attached.
 
 
 

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